MJ News for 07/14/2014


Jul 25, 2008
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Marijuana Is at Center of Feud in Capital

WASHINGTON — A law to make marijuana possession in the District of Columbia punishable by only a $25 ticket, one of the laxest drug laws in the nation, has ignited a feud between Washington’s mayor and a Republican House member days before it is to take effect.

Mayor Vincent C. Gray urged district residents to boycott the beaches and resort towns of Maryland’s Eastern Shore, after its congressman moved to block the city’s marijuana-friendly law, claiming more teenagers will take up drug use.

“He is interfering with democracy in this city, and we want people to understand how we feel about it,” the mayor said in an interview. He pointed out that Maryland, like the district, decriminalized marijuana this year, and if the congressman, Representative Andy Harris, had been in the legislature, he would have been outvoted.

Marijuana has potent political symbolism in this city with a large black population because the vast majority of arrests here for possession is of blacks. But at issue is more than marijuana. Infringements on Washington’s home rule hits an ever-sensitive nerve, setting off howls of “hypocrisy” and “tyranny” in a city whose license plates read “Taxation Without Representation.”

A city of liberal voters, the district has long had prickly relations with conservative members of Congress who set up part-time housekeeping here and, thanks to the Constitution, get a big say in local affairs.

“These are things people can’t even do in their own home states, and they use the District of Columbia to make an example out of us,” Mr. Gray said.

City officials accuse federal lawmakers of grandstanding for voters back home or nationally.

“There’s a long tradition of people trying to score points off of us,” said David Catania, a District of Columbia council member.

In recent years, conservative Republicans have stopped the city from implementing a needle exchange program to slow the spread of H.I.V., a registry of gay domestic partners and medical marijuana. All eventually went forward, sometimes after a decade of obstruction.

Mr. Catania accused Mr. Harris of seeking to enhance his bona fides in a campaign for leadership of the Republican Study Committee, a group that seeks to pull the House further right. The chairmanship opened in a House leadership shuffle after the primary defeat of Representative Eric Cantor of Virginia, who resigned as majority leader. Mr. Harris, who is a physician, won his seat in 2010 after a State Senate career in which he was known for opposing late-term abortions, as well as X-rated movies at the University of Maryland.

He denied a political motive in opposing marijuana decriminalization. “If I were looking to advance my position among the broad spectrum of Republicans, this is probably not the way to do it,” he said.

His objection to the district’s law is because it reduces the penalty for possession of up to one ounce of marijuana to a $25 civil fine — a trivial sum, in his view, which he predicted would entice more teenagers to drug use. “One ounce can be almost 100 joints,” he said. “That is not a small amount.”

“Society has some responsibility for protecting minors,” he added. “I think the D.C. law protects them in no way, shape or form.”

The law passed in a 10-1 council vote in March. Supporters cited a study showing a racial disparity in enforcing marijuana laws: 90 percent of Washingtonians arrested on charges of possession were black, in a city where blacks are 50 percent of the population.

Taking Note: Marijuana by the Washington MonumentAPRIL 1, 2014
Mr. Harris’s effort to block the law came in the form of an amendment to a spending bill, which passed the House Appropriations Committee. The rider would stop the district from using its tax revenues to enforce decriminalization. The measure must survive a full House vote and, in an unlikely scenario, a joint conference with the Democrat-controlled Senate.

Attaching budget riders is a backdoor way for lawmakers to block local laws, an authority granted to Congress in Article 1 of the Constitution. The more straightforward, and rarely successful, path is a joint resolution of Congress overturning a district law. Because Congress has not moved to do that within the required window of 60 legislative days, the law is scheduled to take effect this week.

If Mr. Harris’s rider later becomes law, it would make the city’s decriminalization a brief interlude.

District officials, while acknowledging the constitutional authority of Congress, denounced its interference as undemocratic.

“Shouldn’t the people of the District of Columbia in a democracy be permitted to make decisions?” Mr. Gray said. “We have more people in the District of Columbia than in the whole state of Wyoming or in Vermont. I can’t imagine Representative Harris feels he ought to interfere in the business of those two states.”

Michael K. Fauntroy, a political scientist at Howard University who has written extensively on Washington home rule, said Congress has not stepped in as often in recent years as during a volatile period in the city’s management before 2000.

“But it’s still a tinderbox, and it wouldn’t take much to get Congress back involved,” he said.

One possible spark: The city’s move to go beyond marijuana decriminalization to full legalization. This week, activists presented signatures to qualify a referendum for the November ballot that would legalize possession of up to two ounces of pot for personal use and the right to grow three marijuana plants at home.

Passage of the measure, Initiative 71, would put the city in the vanguard of pro-marijuana jurisdictions, including two Western states, Colorado and Washington, where legal retailers selling recreational marijuana opened this year.

The District of Columbia’s referendum would not allow sales. But the prospect of marijuana plants bending to the sun in the windows of Capitol Hill rowhouses might prove too great a provocation to many lawmakers.

“I think Congress would step in to overturn it,” Mr. Fauntroy said. “Especially if Republicans take control of the Senate.”

However, in the face of a sweltering summer, it does not appear that many residents have heeded the mayor’s call to skip their traditional visits to the Eastern Shore beaches and bay towns in Mr. Harris’s district.

“We had huge crowds in town for the Fourth of July,” said Donna Abbott, director of tourism for Ocean City, Md., a popular destination on the Atlantic Ocean.


Jul 25, 2008
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(Illinois) Patients could start using medical marijuana in early 2015

There’s a medical marijuana law on the books in Illinois, but patients can’t yet use the drug here legally.

That’s going to change soon.

On Tuesday, lawmakers who make up the obscure but powerful Joint Committee on Administrative Rules are meeting in Chicago to discuss the rules that would implement the Illinois Medical Cannabis Pilot Program.

If the committee has no objections, the rules can officially be put to use and the process to begin registering patients, dispensers and growers can begin.

Patients who are approved by the state are expected to be able to start using medical marijuana early next year, said Bob Morgan, the state’s medical marijuana program coordinator and a lawyer for the Illinois Department of Public Health.

People with debilitating medical conditions seeking to use medical marijuana will be able to apply for a registry identification card beginning in September, Morgan said, though the application process will be staggered.

Applications for those seeking to sell or grow pot also will be out about the same time, Morgan said.

Then state officials will have to decide who gets the limited business permits for locations throughout the state — 60 for dispensaries and 21 for marijuana growers.

The medical marijuana, which has to be grown in the state, likely will be available for consumption in early 2015, Morgan said.

Though Illinois’ medical marijuana program is highly regulated, there are still many unknowns.

It’s not yet known how many patients will be participating, Morgan said.

“We do know that there are at least 100,00 to 200,000 patients that will be eligible just based on medical conditions,” he said.

The Marijuana Policy Project estimates about 10,000 people will become registered as patients, though that likely will take some time, said Chris Lindsey, a legislative analyst with the Washington-based group.

But in Illinois, the program likely won’t develop as slowly as it has in other states, he said.

”A lot of people now know about medical marijuana,” Lindsey said. “They’ve heard about this in Illinois.”

Morgan said Illinois is anticipating and preparing for “at least tens of thousands [of patients] in the first year.”

That could mean revenue for the state, but the details of that are not yet known either.

So far, based on the number of dispensaries and cultivation centers that can open, the state can collect up to $1.8 million a year from the dispensary’s registration fee of $30,000 and $4.2 million a year from growers who will have to pay $200,000 for the annual permit. People who want to grow or sell marijuana will also have to pay a nonrefundable application fee — $5,000 for dispensaries and $25,000 for cultivation centers — and there are no estimates as to how many potential applicants there will be, though Morgan expects it to exceed the number allotted to open.

Cultivation centers also will pay a 7 percent privilege tax on the sales price per ounce of the marijuana.

Colorado, which started its program more than a decade ago, reported nearly $18 million in medical marijuana revenue so far this year. As of April, more than 116,000 patients were registered to use medical marijuana in Colorado.

Rep. Lou Lang, D-Skokie, a member of the committee that will meet on Tuesday and sponsor of the medical marijuana legislation, said he’s not concerned about the lack of information on revenue.

“To me, this bill is about patients, not revenue,” he said.

Meanwhile, Morgan hopes patients eligible to participate in the marijuana program start preparing for its rollout.

“Right now, we think it’s a good time for patients to be having that conservation with their physicians and their caregivers if they have any interest in participating in the program,” he said.


Jul 25, 2008
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What Oregon can learn from Washington's marijuana legalization

Soaring prices, supply shortages and overwhelmed regulators are three takeaways from Washington's roll out of its retail marijuana system that Oregon advocates hope to improve upon should the state legalize the drug in November.

"You are starting a brand new industry from scratch, so there are definitely hurdles to get over and lessons to be learned," said Anthony Johnson, the chief petitioner for the campaign to legalize marijuana in Oregon.

Washington allowed licensed shops to start selling recreational marijuana to people 21 or older Tuesday, but hiccups in the state-crafted system initially kept the doors closed on all but a handful of locations.

That's one of the most important lessons, Johnson said. "We need to look at regulating and licensing growers and processors first, so there is an adequate supply when regulated sales begin."

Washington's Liquor Control Broad, which oversees the state's marijuana sales, didn't expect the avalanche of applications it received from potential growers.

Overwhelmed investigators have licensed less than 80 growers out of more than 2,600 applicants.

Some of those licensed producers are still growing their first crops, others failed to clear regulatory hurdles and much of the harvested marijuana is still awaiting laboratory testing.

The agency has also issued business licenses to 24 out of a possible 334 stores.

The limited supply pushed prices to $25 per gram — well beyond what marijuana sells for on the black market.

Washington's law includes a 25 percent excise tax on marijuana at each point of sale (i.e. grower, processor and retailer) on top of an 8 percent sales tax.

That means the tax revenue generated from retail pot sales will fluctuate as the price of marijuana rises and falls.

"In Oregon, the excise tax will be according to the amount that's sold," Johnson said. "You'll pay $1.25 per gram (in taxes) whether the price of a gram is $10 or $100 ... We feel we have a more stable tax."

He likes that Washington's Initiative 502 focused heavily on the revenues that would be raised for schools and public safety. The ballot initiative submitted by New Approach Oregon dedicates money for mental health programs, schools, addiction services and law enforcement.

If Oregon legalizes recreational marijuana this November, it will become the third state in the nation behind Washington and Colorado, both of which passed ballot initiatives in 2012.

Johnson said Oregon should have an easier time crafting regulations than Washington because the Oregon Health Authority has already developed a system for regulating medical marijuana dispensaries.

"In Washington, the medical program is not regulated by a state agency," Johnson said. "They had no experience as a state in regulating marijuana sales."

Oregon also has the advantage of seeing what works and what doesn't, Johnson said.

Colorado requires store owners to grow at least 70 percent of their product while Washington prohibits retailers from growing.

"We will provide them the option to grow or not grow," Johnson said. "That's one example where we feel we've taken the best from both measures."

[email protected], (503) 399-6610, or follow on Twitter @AnnaStaver

Business as usual for the Oregon State Police

The legalization of recreational marijuana sales in Washington state hasn't changed how Oregon State Police conducts its day-to-day patrols.

"It's business as usual," said Lieutenant Gregg Hastings, spokesman for OSP. "Obviously there is a high concern for people driving under the influence, whether it's alcohol, drugs or a combination of the two. That's something we will continue to be very vigilant on."


Jul 25, 2008
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Pots of marijuana cash cause security concerns

DENVER — The unmarked armored truck rumbles to a stop in a narrow alley, and former U.S. Marine Matthew Karr slides out, one hand holding a folder, the other hovering near the pistol holstered at his hip.

With efficient motions he retrieves a locked, leather-bound satchel from a safe set into the truck's side and presses a buzzer outside the door. It swings open to reveal a cavernous warehouse filled with marijuana and a safe stuffed with cash.

Welcome to the rear guard of Colorado's rapidly expanding legal marijuana industry, where eager users pour millions of dollars — most of it in small bills — into buying pot, hashish, and marijuana-infused foods and drinks. All that cash adds up, and there are few places to put it: Federal regulations, which still classify pot as an illegal drug, make it difficult for marijuana producers to deposit their profits into traditional bank accounts.

And those cash-heavy small businesses make awfully attractive — and vulnerable — targets for criminals.

That's where Karr and the company he works for come in.

Heading through the warehouse where workers tend young marijuana plants, Karr greets a young woman, and the two empty a safe of tens of thousands of dollars in cash neatly packed in plastic envelopes. Like every room in this combined marijuana store and grow house, the smell of pot hangs heavy in the air. Karr double-checks the ledger, locks his satchel and hustles outside, where former cop Phil Baca waits at the wheel of the armored car.

Karr opens the truck's safe, pitches the satchel inside and climbs back into the passenger seat, an AR-15 rifle stashed behind him. It's a scene that plays out six times in three hours. Their take for the day: somewhere close to $100,000 in cash.

"For the first three months, people were just keeping the money everywhere — in the walls, in mattresses, at home," says Sean Campbell, CEO of Blue Line Protection Group, which provides marijuana security services, including Karr, Baca and the armored car. "And banks don't even want to deal with it. You have a quarter-of-a-million dollars in cash show up all at once. The counting time alone is going to take an hour."

The unusual problem of having too much cash is forcing business owners to hire security firms like Campbell's, especially after Denver police warned in June of a credible threat against marijuana stores and couriers.

Marijuana-store owners have suffered some smash-and-grab robberies over the last several years but surveillance systems and close police attention have solved many of them. Experts say those robberies were largely committed by amateurs, rather than sophisticated crime rings.

Campbell said he believes it will take a serious high-dollar heist to force smaller marijuana stores to take their security more seriously.

State law requires marijuana businesses to have security cameras and systems on the premises, and many have armed guards, but they remain easy targets. The stores and grow operations often are in remote industrial areas, in warehouses that have not been hardened against a determined intruder. Many stores have large amounts of pot sitting around in rooms secured only by flimsy wooden doors.

Options are limited, however. Unlike most other businesses, marijuana-store owners can't easily open bank accounts for fear of running afoul of federal law. Despite Washington state joining Colorado last week in legalizing sales of marijuana for recreational purposes and 23 states plus the District of Columbia permitting medical pot, the federal government still classifies the plant as an illegal drug more dangerous than cocaine or methamphetamine.

By opening a bank account, pot growers and shop owners run the risk of being charged with money laundering, because federal banking laws and regulations are deliberately aimed at tracking large flows of cash like those generated by both legal and illegal drug sales. A single such charge can bring decades in prison, and most banks and pot-shop owners don't want to run that risk.

"When you go into the business, and you know it's federally illegal, you're taking your chances," said Tom Gorman, who runs the federally funded Rocky Mountain High Intensity Drug Trafficking Area task force. "That's the problem when the state legalizes something that remains illegal at the federal level."

While declining to be quoted by name, many marijuana store owners interviewed by USA TODAY shared tales of playing cat-and-mouse with banks, managing to keep accounts open for only a few months at a time before getting shut down.

U.S. Treasury officials require banks to file what are known as "suspicious activity reports" whenever they suspect someone is trying to launder money. Anyone bringing in a pile of cash sets off internal alarms for bank workers, pot-shop workers say. Federal financial-crimes investigators encourage banks to report suspected marijuana transactions because pot remains illegal at the federal level.

"Our goal is to promote financial transparency and make sure law enforcement receives the reporting from financial institutions that it needs to police this activity and to make it less likely that this financial activity will run underground and be much harder to track," said Steve Hudak, a spokesman for the Treasury Department's Financial Crimes Enforcement Network.

Tax-and-marijuana attorney Rachel Gillette said she's seen banks' concerns firsthand — several banks she deals with said they wouldn't let her open an account, even though both the federal and state government are allowed to deposit tax payments from pot sellers. Gillette said federally regulated banks say it's just easier for them not to risk getting their hands tainted by pot.

"They literally told me they would not take my account because I do business with the marijuana industry," Gillette said. "That seems fundamentally unfair — the state is taking that money and putting it in the bank; the IRS is taking that money and putting it in the bank."

Gillette is suing the IRS on behalf of one of her clients who has been paying federal payroll tax bills with cash. The IRS calls for electronic payments and adds a 10% surcharge for cash payments, she said. With some marijuana businesses paying payroll taxes of $100,000 a quarter, those penalties are substantial.

Colorado has tried to solve the problem with a new state law permitting creation of marijuana banking cooperatives, which would have the power to accept deposits, lend money and make electronic payments. But that system likely won't begin operating for at least another year, said Gov. John Hickenlooper, and even then federal officials would need to bless the plan.

The amount of cash already flowing through the fast-growing system has forced state tax officials to change how they accommodate payments. While Colorado allows businesses to pay their taxes in cash, most pay electronically. Marijuana businesses, however, must trek to a central Denver office, cash in hand, where they're met at the curb by armed guards and escorted inside.

"Some people walk in with shoe boxes. Some people have it in locked briefcases. We've had people bring it in buckets," said Natriece Bryant, a spokeswoman for the Colorado Department of Revenue.

Campbell, who runs the armored-car company, said the vast cash flows are a clear come-on for criminals. He said he's working with banks to offer alternatives for marijuana businesses, including vault services. For many in the marijuana industry, the scene from the Emmy-winning television series Breaking Bad of a storage unit filled with drug cash hits uncomfortably close to reality.

Says Campbell, "You're effectively creating a magnet for crime."


Jul 25, 2008
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Cannabis ‘could cut tumour growth’

CANNABIS could be used to reduce tumour growth in cancer patients, scientists have said.

New research reveals the drug’s main psychoactive ingredient - tetrahydrocannabino (THC) - could be responsible for its success in shrinking tumours.

It is hoped that the findings could help develop a synthetic equivalent with anti-cancer properties.

But researchers warned that cancer sufferers should not be tempted to self-medicate.

Dr Peter McCormick, from the University of East Anglia’s (UEA) school of pharmacy, said THC’s anti-cancer properties have been known for some time but the study had identified the receptors responsible for fighting tumours.

“Our findings help explain some of the well-known but still poorly understood effects of THC at low and high doses on tumour growth,” he said.

“There has been a great deal of interest in understanding the molecular mechanisms behind how marijuana, and specifically THC, influence cancer pathology.

“There has also been a drive in the pharmaceutical industry to create synthetic equivalents that might have anti-cancer properties.

“By identifying the receptors involved we have provided an important step towards the future development of therapeutics that can take advantage of the interactions we have discovered to reduce tumour growth.”

The research, carried out with the Universidad Complutense de Madrid in Spain, used samples of human breast cancer cells to induce tumours in mice.

They then targeted the tumours with doses of the cannabis compound and found that two cell receptors in particular were responsible for the drug’s anti-tumour effects.

“Our research uses an isolated chemical compound and using the correct concentration is vital,” Dr McCormick said.

“Cancer patients should not use cannabis to self-medicate, but I hope that our research will lead to a safe synthetic equivalent being available in the future.”


Jul 25, 2008
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Cannabis Stocks Move Higher as Washington State Pot Sales Begin

Jul 14, 2014 (ACCESSWIRE via COMTEX) -- WHITEFISH, MT / July 14, 2014 / The Marijuana Index(TM) moved higher last week in the aggregate, despite a 13% drop in GW Pharmaceuticals plc GWPH -0.36% shares and a roughly 1.5% drop in Medbox Inc. MDBX -2.49% shares, which comprise about half of the weighted index.

Top gainers included Abattis Bioceuticals Corp. ATTBF +0.86% , which jumped 14.75% after announcing an up-listing to the OTCQX, and Nuvilex Inc. NVLX +6.92% , which jumped about 4.63% after announcing that pre-clinical trials would begin in August. Top losers included GW Pharmaceuticals, with its 13% drop caused largely by short-term traders and some investors taking profits off the table.

Cannabis regulatory initiatives continued to progress last week, driving interest in the industry to new highs. Washington State began selling recreational marijuana in a select number of locations, helping boost many public companies operating within the state, including Abattis Bioceuticals Corp. and DigiPath Inc. DIGP 0.00% . The state's market is expected to be larger than Colorado's in gross size.

What's New?

- Cannabis Therapy Moves Closer to Commercialization - Cannabis Therapy Corp. CTCO +22.35% announced that it was starting exploratory laboratory research to develop cannabinoid-based products targeting inflammation and auto-immune diseases.

- Gary Johnson, the Presidency, and Cannabis - CannabisFN takes a look at Cannabis Sativa Inc.'s CBDS -8.21% new CEO and former New Mexico Governor Gary Johnson, including a look at his business and political experience and Presidential aspirations.

- United Cannabis Brings Products to Retailers - United Cannabis Corp. CNAB -7.53% signed two new management, marketing, and distribution agreements with The Melts and Emotek to market their products to its retail contacts, including dispensaries and pharmacies.

- New Study Sheds Light on CO Cannabis Industry - CannabisFN takes a look at a new report indicating that Colorado's legal marijuana industry may be much larger than initially expected, partly due to the large amounts of cannabis consumed by heavy users of the drug.

- Cephas Brings Bitcoin to MMJ Marketplace - Cephas Holding Corp. CEHC 0.00% recently released an application that allows medical related businesses to accept bitcoin, including those companies operating in the legal cannabis industry looking for easier payment handling.

What to Watch This Week

The cannabis sector moved slightly higher last week, despite a drop in bellwethers like GW Pharmaceuticals and MedBox Inc. Over the coming week, traders should watch for some buying interest to reignite, especially if the overall market begins to recovery from its fall last week. Meanwhile, regulatory progress should keep the industry's fundamentals moving forward in a positive direction.

About CannabisFN

CannabisFN.com is a dedicated financial network covering new, emerging and established companies operating in the burgeoning multi-billion dollar medical marijuana ("MMJ") and cannabis industries. CannabisFN's coverage is syndicated on the leading industry specific and mainstream financial websites and social media. To learn more and request a media kit, visit http://www.cannabisfn.com/market-defining-companies-program/ .


Jul 25, 2008
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Free pot for the poor: Berkeley council codifies what many cannabis dispensaries already doing

Berkeley’s medical marijuana dispensaries must provide 2% of their cannabis free of charge to very low-income residents under a law passed unanimously by the City Council earlier this month.

Individual patients who make under $32,000, or families that earn less than $46,000, qualify for the complimentary cannabis. The law further requires that the free marijuana “be the same quality on average as Medical Cannabis that is dispensed to other members.”

“We were happy with that,” said Charley Pappas, a member of the city’s Medical Cannabis Commission. “It gets the council and the mayor focusing on patients. There should be access to the best medicine and the poorest people shouldn’t be excluded.”

Following the decision, national media proclaimed, “Berkeley out-Berkeleys Berkeley” and declared the arrival of “weed welfare.” Many of the articles were long on hyperbole and short of the facts, since the new law may not force dispensaries to radically alter their business models. Many of them already give away free medical cannabis.

“It’s not an uncommon practice” to voluntarily provide free cannabis to needy patients, said Pappas, who used to own a dispensary in San Francisco.

Berkeley Patients Group (BPG) on San Pablo Avenue and Cannabis Buyers Club of Berkeley (CBCB) on Shattuck Avenue, two of the city’s three dispensaries, previously had programs that distributed free marijuana to low-income clients. Furthermore, the law only applies to Berkeley residents, who typically make up only 25% of a dispensary’s clientele.

“We do this on our own, so we certainly welcome the city mandating that all dispensaries create these sorts of programs,” said Sean Luse, chief operating officer of BPG.

Luse estimated that the dispensary, which has hosted a program for low-income patients since it opened in 1999, typically gives away 1% of its cannabis. He questioned whether the 2% requirement was appropriate.

“I do think there could be problems if we’re oversupplying demand and giving away more cannabis than is legitimately needed,” he said. “We’ll see how this plays out.”

The commission’s initial proposal asked dispensaries to give away 1% of their marijuana, but the council decided to double the amount, Pappas said.

The 2%, by weight, is determined by mandatory half-yearly calculations of the amount of marijuana distributed to all members.

In the same July 1 vote, the council approved a fourth dispensary for the city, three and a half years after residents voted on Measure T in support of the additional dispensary.

Pappas applauded the council’s approval of a fourth dispensary.

“They perpetuated the status quo for years when they put a moratorium on additional dispensaries,” he said. “It displays their attention, finally, to medical cannabis distribution in Berkeley. With another dispensary, [medical marijuana] will be cheaper, because there will be more competition.”

The Medical Cannabis Commission had recommended approval of up to six dispensaries in Berkeley, but the council decided to revisit the request next year.

At a previous council meeting on June 17, council members praised the commission’s work on recommending revisions to the cannabis ordinance.

“The work you’ve done here is thorough and honorable — but ongoing,” Councilman Max Anderson said.

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