Cannabis Legislative Recap: April 5th, 2024

The end of March brought about a mixed bag of cannabis legislation. As some states expanded access, others doubled down on keeping cannabis illegal. Arkansas, California, and Virginia all took a step back in normalizing cannabis legalization. Delaware, New York, and South Dakota all took steps to strengthen their respective cannabis markets.

Preliminary Approval of a 100% Tax Rate for Hemp Products in Arkansas  

Arkansas remains one of the very few states (four, to be exact) in which cannabis is fully illegal for medical and recreational use. Even with strict cannabis laws, the state saw an explosion of hemp-derived, intoxicating cannabinoid products such as delta-8-THC. Last week, Nebraska’s Legislature Revenue Committee gave preliminary approval to a bill aimed at taxing hemp and CBD products at an unprecedented rate of 100%. 

If enacted, LB 388 would have the highest tax rate in any state for hemp or cannabis products. The legislation also includes reversing the states’ current tax exemptions on candy, soda, lottery tickets, pet services, and advertising revenue over one billion dollars. The combination of these tax changes is part of an effort to increase state income to offset property tax bills, as claimed by the bill’s author, Senator. Lou Ann Linehan (R), and reported by Marijuana Moment

California Looks to Amend the Cannabis Employment Protection Law   

In late 2023, California passed a new law to ensure workers’ employment protection for legal cannabis use. Six months later, California lawmakers are looking to roll back these protections for various law enforcement positions. The amendment, SB 1264, was proposed by Senator Shannon Grove (R) last week.

Ganjapreneur posted a list of the proposed positions that would have these protections repealed. The rather extensive list includes workers involved in “the apprehension, incarceration, or correction of criminal offenders,” those involved in civil enforcement, dispatching public safety communications, evidence accrual and processing, as well as those who create and handle law enforcement records. The list goes on to include those in animal control, those with community service duties, and any public administrator. 

Delaware Looks to Strengthen Protections for Cannabis Businesses  

Delaware legislators from the House of Economic Development/Banking/Insurance & Commerce Committee have approved a bill that would create state-level protections for financial institutions that offer services to legal cannabis businesses. The bill was proposed by Senators Ed Osienski (D) and Trey Paradee (D), with support from State Treasurer Colleen Davis (D).  

HB 355 would “provide state-level legal protection and a clear legal framework for banks, payment processors, and other financial service providers to follow,” as reported by Marijuana Moment. The bill intends to bring clarity to banks, credit unions, accounting services, and armored transportation that are looking to get involved with legal cannabis businesses in the First State. Ideally, this would eliminate the cash-only constraints placed on the legal cannabis industry and create a safer environment for the cannabis industry to thrive in.

Cannabis Cultivation License Fees Waived for Two Years in New York  

New York’s legal cannabis roll-out has faced scrutiny since the beginning. The Empire State is struggling to come back from lawsuits and mismanaged governmental agencies that have caused a negative ripple effect in the industry, with cannabis farmers taking the brunt of the legislative challenges. Many farmers were stuck with more cannabis products than could be sold at the small number of legal dispensaries across the state.

While New York had a massive supply of cannabis and an equally big demand for the plant, the red tape surrounding the roll-out stopped the supply from meeting the demand. In the wake of an oversupply, many cannabis farmers were left with big bills and no way to pay them, causing them to take on extensive debt or be forced to exit the cannabis industry entirely.

New York cannabis regulators have decided to waive the licensing fees for adult-use cultivators for the next two years. Cannabis Business Times reports that these fees “range from $4,500 to $40,000 depending on the licensing tier and canopy size.” This financial relief is much needed for cannabis farmers still in operation. Time will tell if this cannabis branch from the New York Cannabis Control Board will be enough to keep the industry moving forward.

South Dakota Bans Delta-8-THC and Other Synthetic Intoxicating Cannabinoids 

Governor Kristi Neom signed into law a bill banning the sale of intoxicating hemp products in the Artesian state. The list of illegal products includes delta8-THC, delta-9-THC derived from hemp, delta-10-THC, HHC, THCP, and THC-O-acetate. Going a step further, the bill outlaws “all other THC isomers, derivatives, or analogs” to stop any attempts at developing new intoxicating chemicals from hemp. The new law takes aim at hemp-derived smokable flowers, pre-rolled joints, vapes, and gummies that contain these intoxicating cannabinoids.   

Medical cannabis became legal in South Dakota in 2021, but recreational cannabis remains illegal. As such, intoxicating hemp-derived products have proliferated in the state following the 2018 Farm Bill.

In response, South Dakota House Bill 1125 was introduced earlier this year to put an end to the intoxicating hemp industry that operates through the legal loophole. Those who violate this new law could face a $2,000 fine, up to a year in jail, or both.  

Virginia Governor Vetoes Legalizing Cannabis 

In an unfortunate but expected turn of events, Governor Youngkin has vetoed HB 698. As a result, Virginians will not be able to purchase cannabis for adult use anytime soon. The bill was introduced earlier this year to set up a regulatory body and framework that would allow the sale and distribution of adult-use or recreational cannabis.  

Virginia legalized adult-use cannabis in 2021 but has been unable to pass the necessary legislation to create the retail cannabis market. This has led to Virginians crossing state lines to obtain non-medical cannabis, resulting in a lot of lost revenue for the Old Dominion State. Legislators were eager to present HB 698 with bipartisan support to get the legal cannabis market up and running. Sadly, Governor Youngkin vetoed the cannabis legalization legislation along with six other bills this session.

Staying Informed on the Latest Cannabis News

Check back next week and stay up to date on the latest movements in cannabis legislation. As the temperature rises, so do our hopes for continued progress in the cannabis industry. Leave a comment below with your thoughts on the cannabis legislation in your state! We’re optimistic that 2024 is shaping up to be a landmark year for the cannabis community.

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