The Marijuana Industry Pulls Victory From the Jaws of a DEA Defeat

Despite the DEA’s failure to reschedule marijuana, the cannabis industry has plenty of positives to look forward to.

August began with plenty of promise for the marijuana industry, but those high hopes went up in smoke on Aug. 11, when the U.S. Drug Enforcement Agency released its long-awaited decision on whether it would reclassify marijuana.

The DEA denies the marijuana industry a victory

For months, the marijuana industry, cannabis supporters, and medical patients had hoped that the U.S. regulatory agency, with the recommendation of the Department of Health and Human Services, would reschedule marijuana from its current status of Schedule 1 — which deems it an illicit drug with no accepted medical use — to Schedule 2. This would have recognized that cannabis has an accepted medical benefit, and it would have allowed physicians around the country to prescribe medical marijuana to patients with very specific ailments.

However, the decision by the DEA denied the two petitions seeking to reschedule the still-illicit drug. The DEA leaned on three points in its explanation of the decision.

First, the DEA believes marijuana has a high potential for abuse. Both the evaluation from the Department of Health and Human Services and the DEA’s own observations appeared to confirm that.

Second, the DEA pointed out that cannabis has no currently accepted medical use, listing five reasons why that is. Most notably, the drug’s chemistry isn’t known and reproducible, and there are no well-controlled studies to back up cannabis supporters’ claims that it can treat pain, epilepsy, or any other number of ailments.

Finally, the agency believes marijuana lacks an acceptable safety profile. Without any approved cannabis products, the benefits of marijuana don’t appear to outweigh its risks.

For these reasons, marijuana will continue to remain a Schedule 1 drug, and approvals at the medical and recreational level will still be conducted at the state level. The ruling took the wind out of the sails of supporters.

But the marijuana industry succeeds anyway

However, it’s not all bad news for the cannabis industry. The DEA’s decision came with one notable caveat that will allow for easier access into medical marijuana research. Currently, the only approved grow farm in the U.S. is in Mississippi. New regulations could open the door for researchers to gain easier access to cannabis for medical research. Presumably, the sooner researchers can present a series of well-controlled studies on cannabis to the Food and Drug Administration and/or the DEA, the better chance they’ll have of getting the latter to reclassify marijuana in the future.

Even more recently, on Aug. 16, the Ninth Circuit Court of Appeals ruled in favor of the cannabis industry by protecting legal recreational and medical marijuana users against federal prosecution. In effect, the 3-0 verdict by the federal court prevents the federal government from providing funding for the prosecution of recreational or medical marijuana users in states where recreational or medical marijuana is legal. With nine states set to vote on whether to legalize cannabis this November, millions of Americans could soon be protected from federal prosecution, according to this ruling. It should be noted that the Appeals Court could change its mind at any time. But for the time being, federal prosecutors will have better ways to spend their money than prosecuting consumers who are using marijuana in accordance with their states’ laws.

There’s also a bright side to the DEA’s decision. Had the DEA rescheduled cannabis, the substance could have been exposed to a laundry list of FDA regulations. For example, the FDA could have placed requirements on packaging and marketing, or it could have demanded consistent levels of THC from each crop of marijuana. Even more importantly, FDA oversight may have forced the cannabis industry to run clinical trials in order to demonstrate the efficacy of the drug for treating certain ailments. These added costs could have put smaller players out of business and essentially handed the industry over to bigger businesses. Given less competition and more regulation, legal marijuana prices would likely rise rapidly.

In other words, marijuana’s DEA defeat is, in many ways, a victory.

The lone loser of the DEA decision

Perhaps the biggest loser here is the individual investor looking to take advantage of the marijuana industry’s incredible growth.

According to ArcView Market Research, a cannabis research firm, legal marijuana sales hit $5.4 billion in 2015, and they’re slated to grow by roughly 30% per year throughout the remainder of the decade. If this trend were to continue, then legal marijuana sales would total nearly $22 billion by 2020. An investment that could grow at 30% per year for five straight years is a real rarity for stock investors, so you can imagine how closely some investors are watching the marijuana industry. Unfortunately, keeping cannabis as a Schedule 1 substance will probably keep big business from gaining substantial market share within the industry. This leaves investors little to no opportunity to profit from the growing legal marijuana market.

Making matters worse for investors is the fact that the vast majority of publicly traded marijuana stocks are penny stocks that trade on over-the-counter exchanges. While reporting standards are improving on the OTC exchanges, it can still be difficult to get accurate financial information on cannabis stocks. Nonetheless, losses remain common among marijuana stocks, and that’s all the more reason to watch the advancement of the industry safely from the sidelines.

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Source: The Marijuana Industry Pulls Victory From the Jaws of a DEA Defeat — The Motley Fool

Church parishioners discuss marijuana retail concerns with city, state leaders | Spokane – KXLY.com

Leaders of Our Lady of Lourdes Cathedral downtown say they won’t back down in its fight over the Lucky Leaf marijuana shop, meeting with Spokane city leaders and state lawmakers during a forum Thursday.

The church says since the Lucky Leaf pot shop opened a few blocks away, criminal activity in the area has increased and many parishioners feel the store should never have been allowed to open so close to their campus in the first place.

Recently one of the pastors found marijuana packaging in one of the church stairwells. They feel this shows people were smoking marijuana out in the open on the church campus, however church leaders say the issue of substance use and abuse is much bigger than that one wrapper.

“It just seems to me that it’s common sense not to add another drug to an area that is already suffering with substance abuse,” said Father Darrin Connall with Our Lady of Lourdes Cathedral.

The church leaders say this all could’ve been prevented if the city and state laws were different. During the meeting Spokane city leaders and state lawmakers took turns pointing fingers at each other over that point.

State Senator Michael Baumgartner said the city can create ordinances to include churches in marijuana shop zoning regulations. Spokane city council member Lori Kinnear said the city shouldn’t have to do that, but rather the legislature should be fixing loopholes so marijuana regulation doesn’t fall on local governments.

Right now the law states that marijuana retailers must be more than 1,000 feet from schools, playgrounds, childcare centers and recreation facilities. Our Lady of Lourdes Cathedral has several youth programs which is why they feel churches should be included in that zoning law.

Another takeaway from the meeting was that this is an alcohol impact area, which means the city can restrict what kind of alcohol is sold here. Baumgartner said he is working on legislation that would let cities and counties ban marijuana stores in alcohol impact areas.

Lucky Leaf owners have spoken at length on this issue in the past, saying they feel caught in the middle and while they understand the church’s concerns, the shop owners say they have followed all the laws that are in place.

Source: Church parishioners discuss marijuana retail concerns with city, state leaders | Spokane – KXLY.com

Proposal to ban marijuana with strong alcohol gets public hearing in Spokane

Sen. Michael Baumgartner headed a meeting of local and state legislators Thursday discussing the potential to ban sales of marijuana where strong alcoholic drinks are already outlawed. But it’s unlikely that would occur in Spokane, where the majority of the City Council has no desire to limit sales.

Source: Proposal to ban marijuana with strong alcohol gets public hearing in Spokane

Lawmakers considering new regulations on marijuana retail industry

People against the downtown marijuana retailer Lucky Leaf had their chance to talk about it before the Washington Senate Commerce and Labor Committee as it considers new policies regulating the marijuana industry.

Source: Lawmakers considering new regulations on marijuana retail industry

Study: No scientific basis for laws on marijuana and driving – Spokane, North Idaho News & Weather KHQ.com

The nation’s largest automobile club says six states that allow marijuana use have legal tests for driving while impaired by the drug that have no scientific basis, and it’s calling for scrapping those laws.

Source: Study: No scientific basis for laws on marijuana and driving – Spokane, North Idaho News & Weather KHQ.com

Legal marijuana’s arrival in downtown Spokane prompts desire to re-evaluate laws | The Spokesman-Review

Marijuana business owners David and Shilo Morgan set up shop in downtown Spokane last month at the old Commercial Building as city crews worked on sidewalks and removed a chain-link fence that blocked entrance to their store.

Such a welcome is a far cry from what the Morgans had experienced in Pasco, where their store, Lucky Leaf Co., was shuttered by a queasy City Council last year.

“It was completely just night and day from Pasco,” David Morgan said Friday from his shop at 1111 W. First Ave. “Pasco was just, behind the scenes, trying to block us from becoming licensed.”

But the store’s presence in downtown Spokane, near churches and treatment centers for those addicted to drugs and the mentally ill, is poised to reignite the discussion about where marijuana should be sold in Spokane. City and church leaders have been meeting with elected officials in an attempt to revise zoning laws to prohibit pot shops downtown, or at least near houses of worship like the Pilgrim Slavic Baptist Church on Lincoln Street.

“At least we need to have some regulations that protect children,” said Alexander Kaprian, pastor of the church. “We have teenagers here. Youth and young families. We have to protect them.”

Don Olson owns the building next to the church, which Kaprian began more than 25 years ago as a refugee from Ukraine. Olson inherited the building from his father, and it’s been on the market for four years, he said. A buyer interested in locating a retail marijuana store there is the first legitimate offer Olson has received in that time, he said.

“I’m surprised how regulated it is,” Olson said of the marijuana industry. After he was approached about selling his building, Olson visited another marijuana retailer, which he said looked “like a high-end jewelry store.”

The store near Pilgrim Slavic Baptist Church is still seeking final approval from state and local agencies, Olson said.

Kaprian, Olson and others held a neighborhood meeting last week, attended by Spokane City Councilman Mike Fagan, to discuss their concerns about a pot shop on the corner of Monroe Street and Second Avenue. On the west side of the intersection sits a CHAS clinic that offers medical services and counseling for the mentally ill. To the north is Transitions women’s shelter.

Opponents of downtown marijuana stores say the shops will attract crime and serve as a temptation to those seeking treatment at downtown drug clinics. Mark Richard, president of the Downtown Spokane Partnership, said his organization is concerned stores in the heart of the city will add to the existing problem of people smoking marijuana illegally on the streets.

“Our job is to try to create a safe, inviting and vibrant downtown,” Richard said. “These stores are being sited within a stone’s throw of places with really conflicting uses.”

Spokane’s city code permits marijuana businesses to operate in downtown areas, as long as they’re 1,000 feet away from certain locations where children and young adults under 21 congregate. That includes schools, child care centers, libraries and public transportation centers, which rules out shops near the Spokane Transit Authority’s downtown bus plaza. But the setbacks aren’t in place for churches, a revision Our Lady of Lourdes parishioner Michael McGuire wants to see changed.

“We’re looking at four or five years from now,” said McGuire, who joined a small group of concerned citizens that included former state Rep. John Ahern to protest the Lucky Leaf shop shortly after it opened. “What will the downtown area be like with all these marijuana shops?”

McGuire called the influx of legal marijuana into the downtown core “an epidemic.”

Kaprian said even though houses of worship are not written into the law, he believes his church should require a setback because it houses a basement hangout for young people and city code requires a setback from “recreational center(s) or facilities.” Workers on Friday installed a new glass door for the basement’s kitchen, where young church members were practicing brewing coffee drinks.

David Morgan said the first person he reached out to in Spokane was the leader of the Cathedral of Our Lady of Lourdes. The Morgans are practicing Catholics, and their children attend Catholic school in Pasco.

“I saw the church over there. I didn’t think they would really notice us much,” Morgan said. Two parking garages owned by Cowles Co., which publishes The Spokesman-Review, stand between the Lucky Leaf on the south and Our Lady of Lourdes along Riverside Avenue.

David Morgan said the process of moving his business has been stressful on his family. The couple’s children continue to attend school in Pasco, and he commutes several times a week from the Tri-Cities. He’s disappointed there are still people upset he moved into the neighborhood.

“I should have dug into it a little deeper, I guess,” Morgan said. “I didn’t think we were going to get that over here.”

Fagan said discussions to amend local or state laws to prohibit marijuana sales downtown were in “really early” stages. The councilman signed a petition circulated by Kaprian that asks for stricter rules regarding the sale of marijuana downtown. Fagan said the City Council should consider drafting an ordinance that would outlaw the sale of marijuana within areas already identified as alcohol impact areas, or parts of town that prohibit the sale of beverages with high levels of alcohol by volume. That includes downtown.

Fagan said he would not support rules to oust businesses, such as Lucky Leaf, that have been approved through the existing regulatory process.

“I wouldn’t entertain the thought of shuttering that business,” Fagan said, adding the rules would likely grandfather in existing stores. But he said he would appeal to the store to consider moving from an area so near a house of worship.

Blaine Stum, who serves on a small committee at City Hall that reviews applications for marijuana businesses, said the opposition to Lucky Leaf was the first time the city had received “real pushback” since licensing began. The city originally wrote its marijuana ordinances to match state regulations and promote the new industry, Stum said.

“We made it pretty explicit that we didn’t want to make it so difficult for businesses to open up here,” he said.

The focus for Lucky Leaf is to continue to grow its customer base and to be good neighbors in an area of Spokane seeking revitalization, Morgan said.

“If we could contribute or help with that, that would make me feel great,” he said. “That’s what we were hoping to do. If we draw people down here, that would give other people an opportunity to open other types of businesses.”

 

Source: Legal marijuana’s arrival in downtown Spokane prompts desire to re-evaluate laws | The Spokesman-Review

Lucky Leaf opens in Commercial Building Downtown Spokane

SPOKANE, Wash. – 

An unlikely business hopes to bring life back to a rundown street on the west side of downtown Spokane. Lucky Leaf opened their doors on Monday in the Commercial Building on First Avenue.

“It seemed to me like it had a lot of potential. It seemed to me like it was an overlooked part of town,” Owner David Morgan said.

David and Shilo Morgan could have opened their recreational marijuana shop in Seattle, they could have kept it in their hometown of Pasco. Instead, they chose a spot that has been unoccupied in eight years.

“We built it out ourselves,” David Morgan said. “It was pretty challenging and pretty fun.”

With the help of friends, they gutted the inside and painted the exterior. Sample photos from the Northwest Museum of Arts and Culture provided guidance on colors to keep the building’s historic touch.

“Long process, long project,” Shilo Morgan said. “My husband has been up here since the beginning of February.”

The couple said they have had some concerns from churches in the area, however other neighbors in the area are happy to see the spot filled.

“I think new business means new life, anything is great, “ Connie Naccarato said.

Naccarato owns Scratch and the Rain Lounge next door. She has been in the Montvale Building for eight years. There have been tough times, but she is starting to see growth.

“I think this area in itself is very diverse,” Naccarato said. “With us and the Fox here, our clientele might be a little different then what the marijuana shop might bring in.”

The Montvale Building just went under new ownership. She explains that there are plans in the work to fill spaces soon. The Morgan’s hope to see the same happen in the Commercial Building, starting with their pipe dream.

“There’s a bunch of possibilities,” Morgan said.

Source: Lucky Leaf opens in Commercial Building