Weed Legalization in Florida Gains Ground: This Week in Cannabis Investing

2024 will be here before we know it, and another big election cycle is on the horizon. Primary election years are usually strong for state-level cannabis legalization initiatives, given the higher voter turnout. We are closely watching a few key states, with potential weed legalization in Florida being of particular note. 

Late last week, we learned a key hurdle for recreational cannabis legalization in the state was cleared when Smart & Safe Florida gathered over 294,037 valid signatures for its petition. The committee is seeking weed legalization in Florida, and acquired the number of signatures needed for the Florida Supreme Court to review the proposal and confirm its validity. 

From there, the initiative will get the green light to continue gaining more signatures. It will require at least 891,589 for recreational cannabis use to make the ballot next year. Momentum is building, with key stakeholders like Trulieve (TCNNF) providing further funding, and Smart & Safe Florida is already around 33% of the way to gathering enough valid signatures to take recreational weed legalization efforts in Florida to the next step.

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New York's recreational cannabis market flooded with counterfeit products 

The litany of issues regarding New York's emerging recreational cannabis market is well documented. Most recently, a report in Bloomberg detailed rampant illicit importing of cannabis from California and the nonchalant counterfeiting of these brands. This isn't new news per se, as NYC has had a regular flow of this type of activity for years. But it seems to be getting more attention as the state struggles to get legal recreational cannabis doors open. 

The market is facing a significant imbalance which is leading to consumer confusion and could introduce additional risks. 

"Consumer perception and industry standards don't always meld," said Maddie Scanlon of cannabis industry data firm Brightfield Group. "And you're like, 'Oh my god, they all are thinking they're shopping recreationally?' They just don't know." 

It's also fairly clear where the ball has been dropped. 

If state regulators cannot see the damage of bad governance and taxation, we expect the industry to step up to force a proper course correction. Each passing week of ongoing issues with escalating magnitude is harmful for the legal industry. We want to see the legal cannabis industry thrive, and we need the states like New York to recognize when they have done wrong and make fast, necessary changes. 

FDA delays decision on CBD regulations 

It's no surprise that the U.S. Food and Drug Administration (FDA) punted on cannabidiol (CBD), delaying its decision-making until forced by Congress. The FDA doesn't shoot from the hip regarding consumer safety. With the administration setting its own bar on science, it doesn't matter much what evidence outside researchers or the general public find compelling. 

Despite anecdotal and observational evidence, there is a need for more safety and efficacy data for the FDA to move forward on CBD. As a primary concern, the FDA has cited a lack of data on CBD's impacts on fertility, but one has to wonder if there was a problem would they not have acted already?  

Advocates and some industry insiders believe the next Farm Bill could be an upcoming moment for CBD. Unfortunately, considering the recent history of inclusion in must-pass legislation coming up short (SAFE Banking Act, anyone?), the cannabis and hemp/CBD industry must wonder if any material deviation from language already in the 2018 Farm Bill will make the cut. 

"The lack of traction that's gone over in the intervening years since the first farm bill, it's led us all to conclude that [CBD] isn't something [the FDA are] trying to work towards finding a pathway to regulate," said Michelle Bodian, partner at the cannabis-focused law firm Vicente Sederberg.

There is a large dietary supplement industry that wants CBD to be regulated as part of 1994's Dietary Supplement Health and Education Act, but GW Pharma's approved CBD drug complicates this. In addition, the FDA may be wise in avoiding a debate about the intoxicating derivatives of CBD rising in popularity.  

With the legislative and executive branches of the federal government letting the industry down, it may be time to pursue legal challenges en route to the Supreme Court. The upshot is that higher priorities may act to maintain the status quo for CBD on the federal level. This opens up an opportunity for states to work together and harmonize regulations that create a quasi-national legalization framework.  

One thing about cannabis and hemp is that every day the federal government fails to regulate these categories, the states deepen their ties to the industry and further shape the future for these products and consumers.

Little to no hangover effects from cannabis 

Wouldn't it be nice if you could come home after a day of work, relax with a legal wellness-like product, get a good night's sleep, and go to work the next day without a nagging hangover? Most cannabis users are very familiar with this dynamic. It's nothing new to us. We have experienced the ability to have a work-life balance without the hangover, but have been told that our experiences are just anecdotal. 

Thankfully, research continues to grow for the legal recreational cannabis industry, and a new study from the University of Sydney has emerged regarding marijuana and its "next-day" effects. The data shows little support for next-day effects and limited evidence of impairment the next day. 

The industry badly needs testing that can determine active versus inactive THC without the need to draw blood. For example, a saliva-based test would be far less intrusive and costly. We would like to see if a solution is underway, as that could boost continued legalization progress, especially among more conservative groups.