California Cannabis Retailers Sue Over Alleged Delta-9 THC Violations By Illegal Competitors and More

In the days of the Armada, a fleet of warships, the scuttlebutt was the rumor or gossip that would spread throughout the ship. Today, Armada Law Corp presents The Scuttlebutt, a daily summery of news articles that people within the cannabis, hemp and plant medicine industries are chatting about along with links to the full articles.

In today’s news:

California Cannabis Retailers Sue Over Alleged Delta-9 THC Violations By Illegal Competitors

#californiacannabis – “A group of cannabis companies in San Diego County has initiated legal action against rival dispensaries and manufacturers, alleging the sale of chemically synthesized marijuana products that contravene state laws.

According to The San Diego Union-Tribune, the plaintiffs argue that these businesses are deliberately evading the state’s cannabis regulations by producing hemp-based products with elevated levels of delta-9 THC.”

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Colorado: Compliance Check Data Confirms That Retailers Aren’t Selling Marijuana to Minors

#cannabisindustry – “Data for the year 2022 shows that underage operatives were denied access to retail cannabis products 99 percent of time, up from 94 percent in 2016.

The findings are consistent with results from other states. For example, a 2022 inspection study of licensed retailers in California reported that marijuana businesses were “100 percent” compliant with the state’s ID verification policy. Authors of the study concluded, “Underage youth are not obtaining marijuana at licensed recreational outlets.”

Another study, published in the Journal of Studies of Alcohol and Drugs, assessed retailers’ compliance in California, Colorado, and New Mexico. The study’s authors concluded, “Compliance with laws restricting marijuana sales to individuals age 21 years or older with a valid ID was extremely high and possibly higher than compliance with restrictions on alcohol sales.”

Data gathered from point-of-sale audits of randomly selected retailers in Denver, Los Angeles, Las Vegas, and Seattle similarly reported near 100 percent compliance with the law…”

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Cannabis Firms Seeks Freedom from Heavy Tax Burden

IRS rule 280E forces cannabis companies to pay an effective tax rate of up to 70%.

#cannabistaxes – “As the Biden continues its review of cannabis prohibition, business leaders in the regulated cannabis industry are looking to the possible rescheduling of marijuana under federal drug laws to end the potentially crippling taxes they face. So far, the review has resulted in a recommendation from the Department of Health and Human Services in August to move cannabis from Schedule I to Schedule III of the Controlled Substances Act, a move that would ease restrictions on cannabis that have been in place for more than half a century. A key result of such rescheduling would have a dramatic effect on the financial health of the legal cannabis industry, which, because of an Internal Revenue Service (IRS) rule—Section 280E—faces an effective tax rate of up to 70% for some businesses….”

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9th Circ. To Hear Args In Psilocybin Rescheduling Challenge

#Psychedelics – “A Ninth Circuit panel will hear oral arguments Friday on whether the U.S. Drug Enforcement Administration erred when it said that psilocybin, the active ingredient in psychedelic mushrooms, had no medical value and denied a petition to reconsider its legal status.

The hearing marks the culmination of a multiyear battle waged by a Seattle-based physician to assert terminally ill patients’ right to use psilocybin, which has shown efficacy to treat major depression in clinical trials, but remains a Schedule I drug under federal law, the category for drugs with no accepted medical use and a high potential for abuse.

Dr. Sunil Aggarwal, the petitioner in the action, has alleged the DEA ignored his arguments in favor of rescheduling psilocybin and violated the law by not consulting the U.S. Food and Drug Administration to assess psilocybin’s potential medical uses.

In an interview earlier this year, Aggarwal, a co-founder of the Advanced Integrative Medical Science Institute, the clinic that requested the reclassification, said that his formal request to move psilocybin to the less restrictive Schedule II tier represented a “very simple humanitarian request.””

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Psychedelics-Using Church Can Sue for Tax Exemption, Groups Say

#Psychedelics – “An Iowa church that offered ceremonial ayahuasca, which contains a federally illegal drug, to its members has standing to sue the IRS for tax-exempt status, psychedelic plant advocacy groups told the US Court of Appeals for the D.C. Circuit.

The Iowaska Church of Healing has standing under the Religious Freedom Restoration Act “because the Church suffered concrete religious, reputational, and economic injuries” traceable to the IRS and redressable by the court, according to an amicus brief filed by the Chacruna Institute for Psychedelic Plant Medicines and the Sacred Plant Alliance.

The IRS injured the church by refusing to recognize it …”

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Illegal marijuana grow of any size only a misdemeanor in Michigan, court rules

#cannabislaw – “The likelihood of black-market marijuana growers in Michigan facing full-blown, paramilitary-style raids featuring battering rams and heavily armed narcotics teams has diminished.

Growing illegal marijuana in Michigan, even potentially thousands of plants, is only a misdemeanor crime, the state Court of Appeals ruled on Oct. 5.

The severe prison terms tacked onto marijuana prohibition laws of the past have been eliminated by newer, more lenient laws, the court said….”

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2 employees of Israeli cannabis producer InterCure kidnapped by Hamas

#cannabisindustry – “Two employees of Israeli cannabis producer InterCure were among those kidnapped by Hamas when the militants infiltrated Israel’s southern border earlier this month, the company disclosed this week.

InterCure’s main facility, located in Kibbutz Nir Oz, roughly 1.2 miles from the Gaza border, was affected in the attack.

However, the area encompassing the facility has been designated by the Israeli government as a closed military region, so the company hasn’t been able to determine whether there’s any damage.

“At this point, the company is unable to assess the extent of the damage to the (facility), and the scope of the rehabilitation that will be required,” InterCure said in a news release….”

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DEA Process For Drug Rescheduling Unlawful, 9th Circ. Hears

#druglaws – “The process the U.S. Drug Enforcement Administration uses to consider petitions to reclassify controlled substances has no basis in federal law and should be struck down lest the agency in effect be allowed to regulate medicine, a Ninth Circuit panel heard Friday.

The DEA’s so-called five-factor test was at the crux of oral arguments over whether the agency erred when it summarily denied a physician’s request to move psilocybin, the active ingredient in psychedelic mushrooms, down to Schedule II from Schedule I, the tier for drugs with no accepted medical use and a high potential for abuse.

“The correct result in this case is to hold DEA’s denial of the rescheduling petition at issue to be unlawful, to set it aside and to direct DEA to send the petition to FDA to get its recommendations, as the statute prescribes,” Matthew Zorn, an attorney for the physician, told the circuit panel, referring to the U.S. Food and Drug Administration….”

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Cannabis Industry Sales Trends: Is Momentum Building or Slowing? A State-By-State Analysis For 3Q23

#cannabisindustry – “According to a report by analyst Pablo Zuanic at research firm Z&A, a comprehensive analysis of sales trends across 17 states reveals a wide variance in the cannabis industry’s performance.

While seven states witnessed a sequential decline in sales, the other ten posted growth in the third quarter of 2023….”

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