FDA LAUNCHES CRIMINAL PROBE AS VAPE CRISIS SPREADS

The FDA launched a criminal probe into the vaping supply chain, a move likely to affect licensed cannabis businesses, as the total reported cases of vape-related lung disease climbed above 500.
MJBiz

  • “We’re very alarmed about products containing THC,” Mitch Zeller, director of the FDA’s Center for Tobacco Products, said. He said the investigation will focus on the supply chain, not users of illegal vape products. Many medical groups have called on people to avoid vaping until the cause is determined.
  • “The industry should be worried,” D.C. cannabis lawyer Emily Leongini said.
  • As far as I’m aware, no licensed cannabis manufacturer has been publicly tied to the crisis.
  • On Tuesday, a congressional sub-committee will hold a hearing on vaping.
  • David Downs reports an overall 15% drop in legal cannabis vape sales.

The death toll reached eight. While some cases have been tied to vitamin E acetate oil, a diluent sometimes found in street vapes, the cause of the disease continues to stump doctors. Further complicating the situation, patients often present different symptoms.
Vox

Crack downs on vaping gained momentum:

The vape panic came up on the panels at WeedWeek Recharge, our event Friday at the London Hotel in West Hollywood:

  • Avis Bulbulyan, CEO of consultancy Siva Enterprises, called on responsible manufacturers to come out and tell their stories publicly. Bulbulyan said similar crises are likely in store for edibles and other product categories.
  • Despite the unfortunate circumstances, Julia Jacobson, CEO of Aster Farms, said the crisis was an opportunity and validation for her sungrown flower company.
  • ????We’ll have video soon!

WEED AT CRUX OF VICE CULTURE CLASH

Vice fired two senior employees after a Vice Weed Week promotion to roll the world’s heaviest joint with rapper Lil Yachty involved ordering enough weed to Vice’s office qualify the media company as a distributor. The incident highlighted internal tensions about whether it wants to be taken seriously as a news outlet.

Vice has an annual Weed Week promotion. At the WeedWeek started (first) by yours truly, every week is WeedWeek. Thank you for your support.????????

CAN POT SECURE PATENTS?

An interesting piece in Bloomberg looks at the struggle to lock in cannabis intellectual property:

“Where many companies tout their intellectual property but few have successfully obtained exclusive rights to their inventions. For young companies, it will be difficult to prove they were first with an invention in a sector that’s existed illegally for decades. Those companies that are granted patents could face years of lawsuits.”

As with so much else in this industry, the resolution of these questions is worth billions of dollars.

CANADIAN COS. HAVE FORMULAS TO PREDICT U.S. REC LEGALIZATION

Leading Canadian pot companies Canopy Growth and Aurora have developed secret internal formulas to predict when the U.S. will legalize cannabis or at least make it “permissable” in legal states.
MarketWatch

  • The companies use the formulas to appropriately value their assets. Canopy has agreed to acquire U.S. Multi-State Operator (MSO) Acreage Holdings once it can legally do so.
  • Neither company disclosed its formula or its predictions.

Quick Hits

  1. A lawsuit filed by a rival accuses MSO Harvest of giving inaccurate information on a Pasadena, Calif. dispensary license application which was eventually approved. Harvest said it would contest the suit. ????WW California has more.
    Pasadena No
    w
  2. Canna Law Blog discusses the tough questions investors ask companies.

NEVADA PUTS REGULATOR ON LEAVE AMID CORRUPTION SUIT

Nevada has put a top cannabis regulator at the state taxation department on leave.
Las Vegas Review Journal

  • A lawsuit filed by many cannabis companies who didn’t receive licenses says applicants who met with Pupo “received favorable treatment in exchange.”
  • In court testimony cited in the suit, Pupo suggested companies expressed interest in hiring him though he denied interpreting the comments as formal job offers. Dangling a job offer as an attempt to influence a regulator is illegal in Nevada.
  • The lawsuit accuses the state of “rampant illegality and corruption” in its licensing process.
    Nevada Independent
  • The state has not commented on the lawsuit or Pupo’s leave.

Quick Hit

  1. Massachusetts suspended all six licenses held by company Nova Farms after one of its owners was arrested on a drug charge.
    Boston Globe

BANKING LEGISLATION GAINS MO’ IN D.C.

Senate Banking Committee chairman Mike Crapo (R-Id.) says he wants to hold a vote on cannabis banking legislation by the end of the year. And Marijuana Moment reports cannabis banking legislation will get a full House floor vote this month.
Politico

  • The bills’ specifics have not been finalized.

In California, a bill which would have given cannabis businesses access to some financial services unexpectedly died until the next legislative session. ????WW California has more.
Sacramento Business Journa
l

Quick Hits

  1. In the Democratic primary debate, frontrunner Joe Biden reiterated his position that marijuana should remain illegal with offenses treated as misdemeanors. The other leading candidates favor legalization.
    Marijuana Moment
  2. Canna Law Blog gives Trump a D+ on cannabis policy.

INTO THE VAPE UNDERGROUND

The New York Times explores what a bust in small town Wisconsin tells us about the vape underground. Police found 98,000 empty vape cartridges and 57 mason jars of THC oil. Two brothers, 20 and 23, are in custody. They have not been connected to any patients with the disease.

  • N.Y.T.: “The operation employed at least 10 people, the police said, who were paid $20 an hour to use syringes to fill cartridges with oil. The [brothers] kept meticulous records, using timecards to note when employees worked. The cartridges were sold in packs of 100, through channels that authorities, who also seized 18 pounds of marijuana and three money-counting machines, said they did not yet fully understand.”
  • “These types of operations are integral to the distribution of contaminated THC-based vape carts in the United States,” Leafly reporter David Downs told the Times.
  • While good quality THC oil can cost $8,000/kg, potentially dangerous additives cost a tiny fraction of that.
  • Some underground products are counterfeits of products legally available in Colorado and California.
  • Amazon has taken down several products which can be used to make counterfeit vapes.
    Minnesota Public Radio

New York State subpoenaed Mass Terpenes, a Massachusetts company, and two competitors saying they sell vitamin E acetate onlineRolling Stone has more.
MassLive