IOWA PROGRESS
Iowa lawmakers passed a medical cannabis bill last week that would raise the THC cap. The Iowa market is a small, heavily regulated market, but the new law should boost sales. The Marijuana Business Factbook estimates Iowa’s medical market in 2019 at $5-6M. Iowa currently allows medical marijuana products to contain up to 3% THC. The new law would replace that with a per-patient limit of 4.5 grams of THC for 90 days. Last year the governor vetoed a bill that would have capped THC at 25 grams for 90 days. The governor is expected to sign the new law which would indicate some positive momentum for the industry.
KANSAS MEDICAL BILL
Lawmakers in Kansas last Wednesday introduced a comprehensive bill that would legalize the use of marijuana for medicinal purposes and create a medical cannabis advisory board, among a long list of sweeping changes. H.B. 2017, which has eight co-sponsors, is a 69-page bill that provides guidelines for tracking medical marijuana distribution and managing the cultivation of marijuana through licensing. It also details certifications required for health care providers to be able to prescribe medical marijuana. While the bill does not go into detail regarding which ailments medical marijuana can be used to treat, as other states have indicated, it would cap prescriptions at the equivalent of a 30-day supply, or “at least four ounces of dried, unprocessed medical cannabis.”
CALIFORNIA PROBLEMS
California’s legal marijuana industry faces a year of declining sales as a result of the pandemic-induced recession despite an initial spike in consumer demand after dispensaries were deemed essential businesses. Governor Newsom budget projected in January that the state’s cannabis excise tax would bring in $479 million this year and $590 million in the fiscal year starting July 1. Still, his revised budget now forecasts just $443 million this year and a decline to $435 million next year.
The budget says - “While similar products like alcohol and tobacco tend to be recession-resistant, the forecast assumes that the COVID-19 pandemic will more negatively impact cannabis businesses. Cannabis businesses have less access to banking services that could provide liquidity, have a younger consumer base likely to be disproportionately affected by the COVID-19 recession, and still must contend with competition from the black market.”
