Subscriptions - Maximum Yield Cannabis USA November/December 2020 | Page 84

canna
BUZZ
U.S. Election
Could be Huge
for Cannabis
Legalization
Cannabis legalization
will likely be an
important issue for the
2020 U.S. presidential
election and Bank of
America Securities
analysts Bryan Spillane
and Lisa Lewandowski
say the COVID pandemic
is a factor. Their analysis
includes an idea that has been gaining momentum in recent
months: cannabis legalization could inject a much-needed
boost into states’ fiscal shortfalls (because of COVID) of 2020.
According their report, the Center on Budget and Policy Priorities
estimates U.S. state budget shortfalls will amount to about
$615 billion from fiscal year 2020 to 2022, and that doesn’t include
local governments or U.S. territories. “While legal cannabis will
not fully fill these budget gaps, it could be part of the solution,”
Spillane and Lewandowski wrote. Meanwhile, up to seven states —
Arizona, Mississippi, Montana, Nebraska, New Jersey, Oklahoma,
and South Dakota — are expected to include cannabis reform
measures on the 2020 ballot.
FDA Hiring Contractor
to Study CBD
The U.S. Food and Drug
Administration (FDA)
is looking to award a
contract to help further
study CBD as the agency
develops regulations
for products containing
the non-intoxicating
cannabinoid. The FDA
says the chosen company
will provide support
with “collecting samples
and assessing the quantities of CBD and related cannabinoids, as
well as potential associated contaminants such as toxic elements,
pesticides, industrial chemicals, processing solvents, and microbial
contaminants, in foods and cosmetics through surveys of these
commodities.” The FDA notes the results of the studies “will not
only be reported to Congress but will also be used to guide
the development of future policy” and will help to “develop a
better understanding of the quantities of CBD and associated
cannabinoids.” This announcement comes one month after the
FDA submitted a report to Congress on the state of the CBD
marketplace, outlining studies the agency has performed on the
contents and quality of cannabis-derived products it has tested
over the past six years.
Rioting Takes Toll on
Cannabis Retailers
The recent rioting across
America was tough
on marijuana outlets
as millions of dollars
worth of product was
stolen and stores were
damaged. According
to reports, more than
40 marijuana companies
across the U.S. suffered
an array of vandalism,
robberies, or looting.
National retailer MedMen, for instance, closed all its shops
nationwide during the protests after two of its Southern California
stores were looted. Some retailers suffered only cosmetic
damage, though it could cost a few thousand dollars to repair. But
others lost millions in inventory and aren’t yet sure how much of
the losses will be covered by insurance — if at all, given marijuana’s
illegal status under federal law. California operator Nug has five
outlets as well as three cultivation facilities. All five locations
were targeted during the protests. According to Nug CEO John
Oram, the losses reached at least in the low millions, not including
property damage or lost sales hours.
COVID Becomes
White Knight for Cali
Weed Companies
In late 2019, many in
the California cannabis
industry confidently
predicted a rash of
companies would go
under in 2020, citing
the market’s harsh
business conditions,
nonexistent profit
margins, and a dearth
of investors. But that
hasn’t happened in the nation’s largest cannabis market. If
anything, the reverse seems to have come to pass and that may
be because the cannabis industry being deemed “essential”
through COVID-19. Also, steady sales have been realized thanks
to unemployed workers getting $600 in federal stimulus payment.
In fact, California boasted record retail cannabis sales in July
with $348 million in recreational sales, topping the previous
record of $332 million set in March. As of Aug. 7, active marijuana
business license numbers were up in nearly every category over
2019, according to California Registries. The only exception is
manufacturer licenses, which shrunk slightly from 976 in
August 2019 to 937 in July.
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