2019 Cannabis Industry Developments: Tracking Cannabis Bills Part 1

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Welcome to Bill’s first legislative roundup of 2019!

The 2019 legislative session is only a few weeks old, but plenty of cannabis bills are already on our radar. In the first legislative roundup of 2019, we’ll look at the most significant cannabis bills that have been introduced (so far) in Colorado, California, Oregon, Maryland, Pennsylvania, and Massachusetts:

COLORADO

HB19-1090 – Publicly Licensed Marijuana Companies

Summary: The current regulatory structure for the cannabis industry in Colorado creates substantial barriers for out-of-state investment and prohibits publicly traded companies from holding a license. This bill would remove those barriers and restrictions, potentially opening the floodgates for investment in Colorado’s cannabis industry. The bill would repeal provisions that require passive investors to go through an initial background check, would repeal provisions that limit out-of-state owners to 15 natural persons, and would repeal the provision that prohibits publicly traded companies from holding a marijuana license.

Introduced: 01/14/2019

Status: In Committee Process

Upcoming: Hearing in the House Finance Committee on 02/25/2019 @ 1:30p

CALIFORNIA

AB 286 – Reduce Excise Tax Rate, Suspend Cultivation Tax

Summary: To inject some life into the legal cannabis market in California and to combat the black market, lawmakers are considering a bill that would cut taxes on consumers and cultivators for three years. The goal is to reduce the disparity in prices between legal cannabis sources and black market sources to encourage consumers to purchase from the legal market. The bill would reduce the excise tax imposed on retail purchases of cannabis from 15% to 11% and would eliminate the cultivation tax of $9.25 per ounce of flower ($2.75 per ounce of cannabis leaf; $1.29 per ounce of fresh cannabis plant) until June 1, 2022.

Introduced: 01/28/2019

Status: In Committee Process

Upcoming: No hearing scheduled


AB 37 – Deducting Business Expenses (IRC Sec. 280E Relief)

Summary: This bill would allow cannabis businesses to deduct ordinary and necessary business expenses like rent, salaries, employee benefits, utilities, and advertising from income subject to state income tax. These types of expenses are currently disallowed under IRC Section 280E and cannot be deducted from income subject to federal income tax. The bill would take effect immediately on passage and would apply to tax year 2019 and beyond.

Introduced: 12/03/2018

Status: In Committee Process

Upcoming: No hearing scheduled


SB 51 – Cannabis Limited Charter Banks and Credit Unions

Summary: In an effort to reduce the cannabis industry’s reliance on cash, Sen. Hertzberg (D-Los Angeles) introduced a cannabis bill to bring banking services to California’s cannabis industry. The bill provides for the licensure and regulation of cannabis limited charter banks and credit unions. These banks and credit unions would be able to issue special purpose checks to account holders that would be valid for specified purposes like paying state and local taxes, paying rent, and paying contractors.

Introduced: 12/04/2018

Status: In Committee Process

Upcoming: No hearing scheduled

OREGON

SB 582 – Interstate Transfer of Marijuana Products

Summary: To combat the state’s massive oversupply of marijuana, Sen. Proznanski (D-Eugene) and Rep. Helm (D-Beaverton) introduced a bill that would allow Oregon marijuana businesses to export products across state lines to other legal cannabis states around Oregon (Washington, California, and Nevada). The bill would prohibit Oregon marijuana businesses from exporting to another state unless the Governor has entered into an agreement with that other state “for the purpose of cross-jurisdictional coordination and enforcement of marijuana-related businesses”. If this bill is passed, Oregon will become the first state to allow marijuana exports across state lines.

Introduced: 01/14/2019

Status: In the Committee Process. Senate Judiciary Committee held hearing on 02/07/2019.

Upcoming: No hearing scheduled


SB 365 – Local Governance of Marijuana Producers

Summary: This cannabis bill would protect marijuana producers located in cities or counties that adopt bans on marijuana production. It would allow premises used for marijuana production to continue to be used for marijuana production as long as they were licensed prior to the city or county prohibition.

Introduced: 01/14/2019

Status: In Committee Process

Upcoming: No hearing scheduled


SB 585 – Responsible Cannabis Retailer Program

Summary: This bill would direct the Oregon Liquor Control Commission to establish a Responsible Cannabis Retailer Program to assist marijuana retailers in maintaining compliance with cannabis laws and rules. It would prohibit the commission from imposing discipline on marijuana retailers that participate in the program.

Introduced: 01/14/2019

Status: In Committee Process

Upcoming: No hearing scheduled


SB 639 (HB 2233) – Consumption Lounges, Delivery to Hotels, Grow Facility Tours

Summary: This cannabis bill would allow the Oregon Liquor Control Commission to regulate and license marijuana consumption lounges but would allow cities and counties to opt-out. It would allow retailers to deliver marijuana items to hotels- but not to dorms- and would allow marijuana producers and marijuana processors to offer tours of their licensed premises to members of the public who are 21 years of age or older. Producers and processors would be allowed to contract with retailers to sell marijuana items during tours.

Introduced: 01/22/2019

Status: In Committee Process

Upcoming: No hearing scheduled


HB 2909 – Marijuana Deliveries to Adjacent Cities, Counties

Summary: Currently, a marijuana retailer can only deliver to consumers located within the city or unincorporated areas of a county in which the retailer is licensed. This cannabis bill would allow marijuana retailers to deliver to consumers located in adjacent cities and counties, provided those cities or counties have adopted an ordinance allowing for such deliveries.

Introduced: 02/07/2019

Status: Awaiting Referral to Committee

Upcoming: No hearing scheduled

MARYLAND

HB 17 (SB 857) – Repeal Ban on Edibles

Summary: Medical cannabis patients in Maryland who would prefer to medicate with edibles like brownies and chocolate bars might be in luck. HB 17 (cross-filed with SB-857) would repeal Maryland’s ban on “food containing medical cannabis”. Edibles could soon be available to patients in the Old Line State.

Introduced: 11/20/2018

Status: In Committee Process. House Health and Government Operations Committee held hearing on 01/29/2019.

Upcoming: No hearing scheduled


HB 568 (SB 9) – Deducting Business Expenses (IRC Sec. 280E Relief)

Summary: This bill would allow medical cannabis businesses to deduct ordinary and necessary business expenses like rent, salaries, employee benefits, utilities, and advertising from income subject to state income tax. These types of expenses are currently disallowed under IRC Section 280E and cannot be deducted from income subject to federal income tax. The bill would take effect July 1, 2019, and would apply to tax year 2019 and beyond.

Introduced: 02/04/2019

Status: In the Committee Process

Upcoming: House Ways and Means Committee Hearing on 02/20/2019 @ 1pm


HB 0632 – Constitutional Amendment to Legalize and Regulate Recreational Cannabis

Summary: This cannabis bill would amend the Maryland Constitution to legalize recreational cannabis. If it is approved by the legislature, it will be placed on the state ballot and Maryland voters will decide on the issue in November. If voters approve the measure, adults (at least 21 years old) in the Old Line State would be allowed to use cannabis, possess up to an ounce, cultivate up to six plants, and the state would be required to establish a regulation and taxation system for recreational cannabis.

Introduced: 02/06/2019

Status: In the Committee Process

Upcoming: House Judiciary Committee Hearing on 03/05/2019 @ 1pm


HB 0656 (SB 0771) – Legalize and Regulate Recreational Cannabis

Summary: This bill would also legalize recreational cannabis but, unlike HB 0632, would not require voter approval. The cannabis bill would establish a Cannabis Regulation Division that would be responsible for licensing and regulating retail cannabis stores, on-site consumption establishments, cultivation facilities, product manufacturing facilities, testing facilities, and transporters.

Introduced: 02/06/2019

Status: In the Committee Process

Upcoming: House Judiciary Committee Hearing on 03/05/2019 @ 1pm

PENNSYLVANIA

HB 50 – Legalize and Regulate Recreational Cannabis

Summary: This bill would legalize recreational cannabis in Pennsylvania. It would amend the state’s Medical Marijuana Act to require the Department of Health to license and regulate recreational growers/processors and dispensaries. The bill would allow the Department to issue up to 50 grower/processor permits and up to 100 dispensary permits (3 locations allowed per permit) to serve the adult-use market.

Introduced: 02/06/2019

Status: In the Committee Process

Upcoming: No hearing scheduled

MASSACHUSETTS

HD 843 – Increase Legal Age to Purchase Cannabis from 21 to 25

Summary: This bill would require consumers to be at least 25 years old to purchase cannabis for recreational use.

Introduced: 01/15/2019


HD 3351 – Transparency in Approval of Marijuana Facilities in Cities and Towns

Summary: This cannabis bill would establish continuity in the local approval process for marijuana facilities. It would require all cities and towns to adhere to the same process for approving Host Community Agreements with marijuana facilities.

Introduced: 01/18/2019


SD 2142 – Local Approval of Social Consumption

Summary: Currently, the only way a city or town can authorize on-site consumption at a marijuana facility is through a local ballot measure. This bill would authorize a city or town to bypass the ballot measure process and authorize on-site consumption through ordinance or by-law.

Introduced: 01/18/2019


HD 2526 – Deducting Business Expenses (IRC Section 280E Relief)

Summary: This bill would allow cannabis businesses to deduct ordinary and necessary business expenses like rent, salaries, employee benefits, utilities, and advertising from income subject to state income tax. These types of expenses are currently disallowed under IRC Section 280E and cannot be deducted from income subject to federal income tax.

Introduced: 01/17/2019


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