Tilray gets into the intoxicating hemp business

TILRAY
Tilray gets in the intoxicating hemp business

What happened: Canadian cannabis and alcohol firm Tilray will release a line of hemp-derived Delta-9 THC beverages in the US beginning in October.

The beverages include infused brands like 420 Fizz, with 5mg of THC per serving, Herb & Bloom, a cocktail mixer, and more.

The company didn’t specify which specific markets it will release the beverages in — but intoxicating hemp-derived products are technically legal to sell in 49 states, after California enacted an emergency ban earlier this week.

Tilray’s beverage boom: Tilray has been buying up beer and liquor companies under CEO Irwin Simon. 

So it was only a matter of time before they used that expertise to enter the less restricted hemp-derived beverage market. The company has competitors, though, including Cann, CanTrip, and other brands that sell hemp-derived beverages in multiple states.

But Tilray is perhaps the largest company — and one of the few with a Nasdaq listing — entering the hemp beverage space in the US.

Back up for a second: As readers of this newsletter know, the 2018 Farm Bill legalized hemp, defined as cannabis plants containing less than 0.3% THC.

Since then, intoxicating products derived from hemp have flourished in all 50 states. These products contain various chemical forms of THC extracted from hemp, including Delta-9 THC, which is akin to traditional cannabis and Delta-8 THC, a separate, but similar intoxicant. 

Products containing Delta-8 have come especially under fire from state and federal lawmakers, as these loosely regulated products pop up in gas stations and grocery stores around the country.

The next Farm Bill: Tilray’s new products will get released into an uncertain regulatory environment.

Multiple states, including California, Missouri, and Georgia, either have laws or are debating laws that would clamp down on intoxicating hemp sales. 

And, proposed language in the next Farm Bill, added by Rep. Mary Miller (R-IL) — which will potentially be debated during the upcoming lame duck session this year — excludes intoxicating products with similar effects to THC from the federal definition of hemp. 

CBD products derived from hemp, which generally aren’t intoxicating, likely won’t be subject to this new rule but the jury is still out on that question. 

Our take: In Canada, cannabis is federally legal, so Tilray does not need to take the extra, costly step to source its THC from legal hemp. It’s all just cannabis under Canadian federal law, and THC beverages can be sold anywhere cannabis is sold in the country. 

Over the next few years, we’d bet that both state and federal lawmakers look to close the loophole that allows intoxicating hemp products containing Delta-9 THC to be sold outside of traditional state-led cannabis industry regulations, either through the Farm Bill or via state-level reform. 

It’s all the same desired product: THC. It’s time for the US to treat it all the same, and simplify regulations for all THC products under a coherent federal framework.

And more: “I think it’s really meaningless, because federal law is probably going to change within the next few months,” attorney Griffin Thorne told The Guardian regarding whether intoxicating hemp and cannabis will continue to be treated differently under federal law.

“You know, federal law will change, and then we’re back to square one. There won’t be any ambiguity anymore. They’ll be illegal,” he added of new, intoxicating hemp derivatives like THC-O and Delta-8. 

- JB

“I’ve probably incarcerated more people for misdemeanor amounts of marijuana than anybody else. I’m tough on crime,” Bradford County, Florida Sheriff Gordon Smith said in an interview about why he’s supporting Amendment 3, the ballot measure that would legalize cannabis in the state.

Smith is one of the few conservative sheriffs in Florida to support legalization, and he’s going against the Florida Sheriff’s Association and the majority of the state Republican officials.  He joins Gadsden County Sheriff Morris Young, who filmed an ad with Smart & Safe Florida, the group behind the legalization campaign. 

“I just think we need to refocus our efforts. Regulate it. Take the sin tax. Put it toward the effort of education,” he said. “Sometimes in your heart, you have to do what you think is right and this is one of those situations that I feel that I’m right.”

Watch the full interview.

The IRS will keep your money, thanks 💰
A high-ranking lawyer at the Internal Revenue Service said the agency will continue to seek 280E tax payments from cannabis companies for the years before rescheduling. Some companies, including Trulieve and TerrAscend, have either received refunds or told investors they were expecting to receive refunds on the tax. The 280E rule states that companies selling Schedule I or II substances can’t deduct regular business expenses — but if cannabis is moved to Schedule III, the rule will no longer apply. 

Connecticut’s cannabis regulatory agency had ‘questionable’ practices 👀
Connecticut’s chief cannabis regulator was a “dysfunctional workplace” with little transparency and the lack of a strategic plan, according to the state’s comptroller, Sean Scanlon. Gov. Ned Lamont ordered a four-month investigation into the agency and paused the distribution of millions of dollars of social equity funding until January, reports CT Post. Connecticut joins neighboring Massachusetts and New York as states with embattled cannabis regulatory agencies. 

Pittsburgh protects medical cannabis patients 🌿
Pittsburgh’s city council passed a law that protects medical cannabis patients from being fired if they test positive for the drug. The bill does not, however, include safety-sensitive jobs where employees need to carry a firearm — and does not preclude workplace drug testing after an accident. Pennsylvania lawmakers are trying, yet again, to legalize cannabis in the state. 

Georgia restricts CBD and hemp 🛑
A Georgia law that restricts CBD and intoxicating hemp sales to those over the age of 21 will go into effect on October 1. The law states that all hemp products sold in the state must contain less than 0.3% THC, as outlined in the 2018 Farm Bill. Gov. Brian Kemp signed the bill in May. 

New Yorks’ LOCAL dispensary map 🗽
New York’s cannabis regulatory agency released a cool new map, called LOCAL, that lists all the licensed dispensaries and pending applications near you. The map also has features for prospective license holders, including the ability to generate proximity reports and the ability to export data. Check it out.

Cannabis and psychosis in teens 🧠
Researchers at Dalhousie University in Halifax, Nova Scotia are recruiting 15 and 16-year old teens to study how adolescent cannabis use affects “psychotic-like experiences,” and whether THC is linked to an increase in these experiences.

Cannabis fintech Green Check Verified announced a new feature that would help dispensaries located on sovereign indigenous communities. The company says cannabis-related businesses have increased 25% since last year, but few financial services are available to them. 

Canadian cannabis firm Village Farms International will acquire the remaining 15% of Leli Holland, one of 10 licensed cannabis producers in The Netherlands.

New York City dispensary Gotham will open a new dispensary in Williamsburg, Brooklyn’s historic Domino Sugar Factory on October 11.

Michigan’s cannabis market is suffering from an oversupply problem and the lack of enforcement on illicit growers isn’t helping, reports Crain’s. 

The price per ounce has dropped from over $500 four years ago, before the market opened, to around $80. 

Attendees at the Hall of Flowers, an industry trade show, in Santa Rosa, California set a record for the most joints lit at one time, with 7,000 people sparking up at once.

Local cannabis business leaders provide their take on an industry at the crossroads | North Bay Business Journal

Reclassifying cannabis as a Schedule III drug only exacerbates a bad situation | Los Angeles Times

Let’s open up cannabis consumption to a broader consumer experience in California | Capitol Weekly

Is America turning its back on the great legal weed experiment? | The Times

After cannabis linked to higher stroke risk, Michigan doctor calls for more research | MLive

Stash house stings with Alison Siegler and Erica Zunkel | Drugs on the Docket