MJ News for 08/01/2014


Jul 25, 2008
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Bankrupt California city eyes marijuana for revenue

The bankrupt California city of San Bernardino has a new idea for raising revenue – legalize medical marijuana, and tax the pot.

Ironically, the plan was spurred by concerns about not having enough resources to crack down on the illegal medical marijuana dealers springing up all over town.

So the city is now looking at legalizing the sellers, and using the proceeds to enforce the regulations.

It’s not quite “if you can’t beat ‘em, join ‘em,” but like many municipalities in California today, San Bernardino is recognizing that it could be bringing millions of dollars into its foundering coffers each year if it opened its doors to regulated medical marijuana dispensaries. And it would be able to have a say in who operates these places, as well as how and where.

“This is a no-brainer,” said Karen O’Keefe, director of state policies at the Marijuana Policy Project in California. “More and more people are realizing that you’d really have to be in the Stone Age to oppose this.”

But San Bernardino is not exactly there, yet. According to City Attorney Gary Saenz, a legislative review panel has been formed by the City Council to study the idea. This panel is collecting data, talking to the city police department and examining laws in other jurisdictions before bringing a proposal to the full committee. It plans on holding at least two more public meetings on the subject through August.

“We are in the exploratory phase,” Saenz told FoxNews.com, insisting that “my primary objective is to close down the seedy shops.”

Police have reported as many as 20 illegal storefronts in town at any given time, he said. Legalizing and regulating this now-unwieldy industry, he feels, is one of the tools available to the city to start taking control.

“We have in this city a proliferation – and a lot of cities in California are experiencing it – of illegal medical marijuana dispensaries. These people are defiant and they are opening up these things right and left.

“We are a city of limited resources,” he added, noting to shut a business down requires civil enforcement, including protracted legal proceedings, and often the police. Even when they do go after the violators aggressively, often they pop up elsewhere and another comes to town in its place.

“We can’t close them down to the satisfaction of our citizens,” said Saenz, so “this city attorney’s office is presenting our council with options. And the idea is essentially, primarily, to close down illegal shops” and using the new money from the legal ones to do it.

City Council member James Mulvihill said he was on board with the idea early on after hearing it cost the city $10,000 every time it went after an illegal dealer. He, as well as the mayor’s chief of staff, Michael McKinney, say any funds gleaned from the regulation and tax of marijuana dispensaries would be used exclusively for enforcement.

“I think we are making the right steps. It’s been a hot issue,” Mulvihill told FoxNews.com, noting that he has not received a lot of negative feedback since the idea was made public in the last two open council meetings. “Prohibiting them is obviously not working. It’s almost easier to regulate it than prohibit it.”

He said he is supporting a plan to permit less than a half a dozen dispensaries. He said they could charge upward of $60,000 a year in fees, plus something in the order of 10 percent a year in taxes, much like nearby Palm Springs, which he says regulates in order to pay for enforcement too.

McKinney said Mayor R. Carey Davis, prefers “not to see any marijuana dispensaries in the city of San Bernardino,” but is listening to all the options on how to combat the current problems.

McKinney said his office has been getting calls advocating both sides of the issue.

Saenz wants to be clear this idea has not sprung out of a newfound desire of town officials or citizenry to embrace marijuana. In fact, San Bernardino is one of 200 California municipalities that have maintained an outright ban on pot shops since medical marijuana was made legal through a ballot referendum in 1996.

This was reaffirmed last year when the state Supreme Court in San Francisco unanimously ruled that local jurisdictions have authority to prohibit medical marijuana despite its legality at the state level.

But San Bernardino, population 209,924, has other problems. In 2012, it declared bankruptcy, at the time becoming the largest city in the U.S. to do so.

Mulvihill insists his own support for the dispensaries is quite narrow.

“I’m doing this because of the trouble we’re in -- we can’t control it,” he said. “I’m not doing this for potheads.”


Jul 25, 2008
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Colorado's marijuana edible manufacturers face tougher rules

Colorado's recreational marijuana edible manufacturers face tougher rules on potency, serving size and packaging of their products under stopgap rules adopted by state regulators Thursday.

The new guidelines, crafted in response to concerns about overconsumption by inexperienced consumers, will do away with bite-sized products that pack in 100 milligrams of the psychoactive chemical THC — the maximum allowed by state law.

Products still may contain up to 100 milligrams of THC, but they must be easily broken off into pieces that have 10 milligrams or fewer — the standardized edible serving size under state law.

In another change, manufacturers will be required to put single-serving edibles in child-resistant packaging before shipping them to stores, instead of relying on stores to provide the packaging as customers leave with their purchases.

Liquid edibles, such as sodas, also must be put in child-resistant containers that clearly mark each serving size.

The rules — which still must be made permanent in a process that will include public comment — would go into effect Nov. 1. They grew out of meetings with health officials, regulators, industry representatives and activists on both sides.

"The Marijuana Enforcement Division's primary concern is to ensure public safety," Natriece Bryant, a spokeswoman for the Department of Revenue, wrote in an e-mail. "...The Marijuana Enforcement Division feels that clear serving size requirements within the industry is a vital part of responsible regulation

Rachel O'Bryan, a founding member of SMART Colorado, which supports tighter restrictions on marijuana, said the rules are a step in the right direction, but time will tell whether they go far enough.

Edibles manufacturers, responding to public demand, already have shifted to lower-potency edibles since recreational sales began Jan. 1, said Mike Elliott, executive director of the Marijuana Industry Group.

"The free market has largely addressed this problem," he said.


Jul 25, 2008
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The White House Tries, Fails to Explain Why Marijuana Should Remain Illegal

No sooner had the Times published its opening editorials advocating legalization of marijuana than the White House fired back with an unconvincing response on its website. It argued that marijuana should remain illegal because of public health problems “associated” (always a slippery word) with increased marijuana use.

Careful readers will immediately see the White House statement for what it is: A pro forma response to a perceived public relations crisis, not a full-fledged review of all the scientific evidence, pro and con. The White House is actually required by law to oppose all efforts to legalize a banned drug.

Besides, it is hypocritical for the White House, whose chefs brew beer for the president, to oppose legalizing marijuana, which poses far less risk to consumers and society than does alcohol. Two recipes for the White House brew are posted on its website under the headline “Ale to the Chief.”

The White House lumped its public health argument under four main headings. Before addressing them individually, we should note that there was an enormous upsurge in marijuana use in the 1970s. So far as we know, no one has claimed that it produced calamitous health or societal harm in subsequent decades. The main metric that soared was arrests for possession of marijuana.

Here are our responses to the four main public health contentions made by the White House.

The first — that marijuana use affects the developing brain — is a concern for all parents of teenagers. That’s why we recommended regulations to keep marijuana out of the hands of young people. The White House cites a study by Australian researchers, published in 2012 in the journal Brain, which found that heavy cannabis use starting while young impairs connections between nerve fibers in the adult brain. It also cites a study which purports to show that heavy use by teenagers can lead to a big decline in intelligence in adult years. That study has been criticized as flawed by a Norwegian researcher who believes that socio-economic factors explain most of the apparent loss of IQ and that the true effect of marijuana could be zero. And remember: no responsible advocate of legalization is urging that marijuana be made available to teenagers.

The second contention — that marijuana use by school age children leads to lower grades — is based on studies where marijuana use is “associated with” lower grades but there is scant evidence that it caused the low grades. In fact the survey cited by the White House cautions that “These associations do not prove causation. Further research is needed to determine whether low grades lead to alcohol and other drug use, alcohol and other drug use leads to low grades, or some other factors lead to both of these problems.”

Parents who deem marijuana responsible for apathy and lack of motivation in their teenagers should be aware that other factors may be in play. The Institute of Medicine, in its 1999 report, noted that when heavy marijuana users drop out of school, work or social activities the drug is often blamed, but it found no convincing data demonstrating a causal relationship between marijuana smoking and those behavioral characteristics.

The third contention — that marijuana is addictive — greatly exaggerates the kind of dependence that marijuana users experience, as we pointed out in Thursday’s editorial on health effects. Some experts believe marijuana is no more addictive, or perhaps even less addictive, than caffeine. The fourth contention — that marijuana is frequently involved in auto accidents — may overstate the importance of that finding. Some studies suggest that drivers under the influence of marijuana actually overestimate their impairment and drive more carefully, while drivers under the influence of alcohol become more reckless. Some studies implicate marijuana as an important cause of motor vehicle accidents and fatalities but others do not. The combination of cannabis and alcohol is clearly more dangerous than either substance on its own.

The White House objections to our editorial campaign seem mostly beside the point. We are not advocating that marijuana be made available to young people, who already seem to get it with relative ease. Rather, we are recommending regulatory steps to keep it away from them and perhaps drive down teenage usage rates. We are not urging that people be allowed to drive under the influence of marijuana: Driving while impaired with any drug, including marijuana, is illegal and will remain so. Nor are we urging adults to take up marijuana smoking. We are simply asking the federal government to get out of the way so that states can decide what marijuana policies would work best for their own people.


Jul 25, 2008
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Congressional Republicans Rail :argue: Against Legalization Of Marijuana

WASHINGTON -- Congressional Republicans on Thursday railed against states that have legalized marijuana, citing its connection to auto accidents.

During a hearing entitled "Planes, Trains and Automobiles: Operating While Stoned," Rep. John Mica (R-Fla.), chairman of the House Subcommittee on Government Operations, said stronger federal regulations on marijuana were needed in light of the wave of states legalizing the drug for medical and recreational uses.

Rep. John Fleming (R-La.) joined in the criticism, attacking Colorado's recent decision to legalize recreational marijuana.

Fleming cited a study by the University of Colorado at Denver showing an increase in marijuana-related traffic fatalities since the state legalized medicinal marijuana in 2009. He implied that a further loosening of restrictions on marijuana is a slippery slope, especially for young people.

"As marijuana is de-stigmatized, use goes up, and it finds its way into the homes and candy and cookies and baked goods, and once it gets there, it finds its way into the brains of teens," he said. "Marijuana will also become more pervasive as states continue to embrace permissible laws on medical marijuana and the recreational use of marijuana, and kids and youth will have easier access to the dangerous, addictive drug."

Committee members also argued for a federal standard for drug-testing drivers.

At one point in the hearing, Mica held up an unidentified device he said was used for roadside drug tests in Europe, and jokingly offered to "swab the panelists." The device is not currently used in the United States, but Jeffrey P. Michael, associate administrator for research and program development for the National Highway Traffic Safety Administration, said that a law enforcement pilot program being developed in California uses a similar device.

Michael also testified that there is insufficient data and scientific research on the connection between drug use and driving, making it difficult to create national standards to drug test drivers.

"We make policy based on science. We cannot make changes without the science," said Patrice Kelly, acting director of the Office of Drug and Alcohol Policy and Compliance for Department of Transportation, who also testified before the committee.

A growing body of research on the topic shows no clear connection between THC levels and impairment, unlike in the case of blood alcohol level. Moreover, some participants in recent studies have tested positive for THC long after the effects of the drug have worn off, which would complicate the enforcement of any imposed standard.

But Fleming, who is opposed to legalizing marijuana, argued that the lack of data and science means that states should exercise caution in deciding whether to legalize marijuana at all.

"Until we have the science, we should be careful and cautious," he said.

Both Mica and Fleming have been outspoken critics of legalizing marijuana. Fleming told a conservative radio show in May that marijuana use will lead to "death and destruction" among military veterans.

On Thursday, Mica defended his decision to bring a fake joint as a prop during a previous hearing in May, in which he protested the District of Columbia's marijuana decriminalization law.

"Some people thought that was entertaining, but it was also designed to illustrate that you can have 28 of those joints now in the District, and that would result in a $25 fine," he said.

A Brookings Institution report released Thursday shows that Colorado's legalization of marijuana has largely been successful and safe so far, particularly in surveillance and enforcement efforts. The state also has seen an increase in tax revenue as a result of the new law and a decrease in crime.


Jul 25, 2008
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This marijuana stock is 900% higher and still smoking :joint4:

A quick look at two of this year’s hottest stocks shows that investors chasing fads could take quite a beating if they aren’t careful.

Bubble, Bubble Bubble. Does that look or sound familiar? At this point in a five-year bull run, it’s no surprise to see a continual stream of articles warning of a coming market “correction.” Isn’t that a strange term for a market decline? A healthy stock market is usually at or near a record level, because it is the nature of market economies to expand and for prices to inflate.

Consider the dire warnings of a 20% correction. That would follow a 6% year-to-date rise for the S&P 1500 Composite index, after a 30% increase in 2013 and a 12% gain in 2012. For investors with very long horizons, including those making regular contributions to 401(k) or other tax-deferred retirement accounts, the correction wouldn’t be such a bad thing, since subsequent contributions would buy in at lower prices.

But you’ve heard that argument before.

Here’s something else to consider: The largest U.S. companies are trading at considerably lower valuations, on average, than smaller ones. The large-cap S&P 500 Index SPX -0.70% trades for 14.8 times aggregate consensus 2015 earnings estimates, according to FactSet. Meanwhile, the S&P Midcap 400 Index MID -1.01% trades for 16 times forward EPS estimates and the S&P Small Cap 600 Index SML -0.83% trades for 16.2 times forward estimates.

There are winners and losers in any market. But among the most speculative of small-cap stocks, everybody’s favorite punching bag is Cynk Technology Corp. CYNK +22.22% , which is headquartered in Las Vegas, and describes itself as a “development stage company which focuses on a social network.” Cynk also says it “intends to serve seekers, who want to meet people; mavens, who know a lot of people; and targets, who are people that other people want to meet.”

Isn’t that nice? Cynk is a wonderful stock. Since the company reports no assets or revenue, there’s very little for investors or analysts to worry about. Then again, there’s nothing at all to support any stock price, save the above word games. The problem is that’s pretty much all Cynk has to say about anything.

Cynk was founded in 2008, but has never commenced operations. The stock this year traded for 10 cents or less through June 16, after which it began a 17-session ride up to a closing price of $13.90 on July 10, for a year-to-date gain of 13,800%. Trading was then halted by the Securities and Exchange Commission, and when it resumed last Friday, the stock sank 85% to $2.10. Then on Monday it dropped another 71% to 60 cents. That was followed by a 33% decline on Tuesday to 40 cents.

There’s a point to all this, which is that you shouldn’t buy stock in any company if you’re unwilling to look at its financial statements. It’s not as difficult as it sounds to pull up quarterly or annual reports, look for trends and read management’s comments.

A ‘real’ hot small-cap stock

Among small-cap U.S. companies valued at between $50 million and $2.5 billion that have been publicly listed at least since the end of last year, the strongest performer has been Cannabis Sativa Inc. CBDS +32.72% of Salt Lake City, which is up 900% year-to-date through Tuesday’s close at $7.50.

And unlike Cynk, Cannabis Sativa is a real company that produces and sells products and regularly files financial statements.

As its name implies, Cannabis Sativa is in the business of “developing, manufacturing, and selling plant-derived lotions, creams, and other formulations for human consumption.” These include herbal compounds. The current line of products, many of which are derived from marijuana, are marketed through Wild Earth Naturals , which Cannabis Sativa acquired last year.

Former New Mexico governor and U.S. presidential candidate Gary Johnson was appointed CEO of the company on July 7, and has long touted the benefits of hemp oil as part of treatments to help with a variety of illnesses and conditions.

On July 1, Cannabis Sativa completed its acquisition of Kush Inc., which is a “development stage” company seeking to obtain a patent on a hybrid medicinal strain of cannabis called “CTA,” described by former Kush CEO and current Cannabis Sativa chairman Steve Kubby as “extremely potent.”

Kubby said in the press release announcing the January agreement that “the more [CTA] you smoke, the higher you get, right up to psychedelic levels.”

So despite Cannabis Sativa’s current focus on products meant to improve health, the company is looking to score big by distributing recreational marijuana products in the only two states where it is currently legal to do so.

So should you consider buying Cannabis Sativa stock after its amazing runup?

The bull case: Johnson has said that Cannabis Sativa is just getting off the ground, and that the company’s goal “is to be a leader in the industry as the market explodes.” If more states quickly follow Washington and Colorado by legalizing marijuana, the stock could pop again, and the company could see a remarkable increase in sales for its current line of products.

The strategy of pursuing one or more patents for hybrid strains of marijuana, which hasn’t been done in the United States before, could also pay off for investors, although Kush’s 2010 patent filing still hasn’t been approved.

According to Johnson, 57% of Americans support the full legalization of marijuana, but no governors or U.S. senators have publicly lent support to legalization.

So should you consider buying Cannabis Sativa stock after its amazing runup?

The bull case: Johnson has said that Cannabis Sativa is just getting off the ground, and that the company’s goal “is to be a leader in the industry as the market explodes.” If more states quickly follow Washington and Colorado by legalizing marijuana, the stock could pop again, and the company could see a remarkable increase in sales for its current line of products.

The strategy of pursuing one or more patents for hybrid strains of marijuana, which hasn’t been done in the United States before, could also pay off for investors, although Kush’s 2010 patent filing still hasn’t been approved.

According to Johnson, 57% of Americans support the full legalization of marijuana, but no governors or U.S. senators have publicly lent support to legalization.

In a phone interview Tuesday, Johnson touted various medical benefits of oil derived from cannabis, known as CBD oil, which is used in some Wild Earth Naturals products. “You can separate the oil from THC, the psychoactive ingredient of cannabis. Right now, kids with epilepsy [use medical products containing CBD oil] to find themselves no longer suffering epileptic seizures.”

“Kids who had been told they wouldn’t live to 21 can now live somewhat normal lives,” he said.

Johnson went on to say that CBD “also has applications to multiple sclerosis and Parkinson’s disease.”

The problem is that CBD contains “microscopic” trace amounts of THC, which means the federal government and all 50 states treat the oil as a controlled substance, similar to non-alcoholic beer.

Johnson is so enthusiastic about the various medical uses for marijuana products and a changing political landscape that he predicts “in 20 years, cannabis-based pharma will amount to 20% of the pharma market.”

“That is just staggering, and is something people just don’t understand and don’t appreciate,” he said.

Johnson confirmed the company’s plans to market marijuana products for recreational use as well. Sublingual products, including lozenges manufactured by Cannabis Sativa, have medical uses and can even replace some prescription pain relievers that Johnson said cause 100,000 deaths per year in the United States.

The lozenges are also “very very pleasant,” he said. “Why would you ever smoke it with this alternative? I have always believed legalizing marijuana will lead to less overall substance abuse because people will find it a safer alternative to alcohol.”

The bear case: Cannabis Sativa in its most recent annual report warned that its operations and prospects “involve a high degree of risk,” adding, “We do not have sufficient cash on hand to pay our current liabilities.” As of March 31, the company’s current assets totaled just $73,671, while its current (and total) liabilities totaled $317,361.

There’s no way of knowing when or if the patent will be approved, and the company’s first-quarter revenue totaled just $1,445. There isn’t much in place to support the market value of $113 million.

Cannabis Sativa has agreed to pay Kubby $1 million in compensation in 2016 and another $1 million, either in cash or stock. The company will need to raise a lot more cash, through dilutive common-equity offerings, or by issuing convertible debt, which can also eventually dilute common shareholders.

“The company has a foundation in place with a good group of individuals to run the company and design its products,” wrote independent chartered financial analyst Fred Rockwell in a research report on July 14. However, he added, “Investing in the company is a bet on growth that may not materialize. The problem is that news and events drive the stock price and anything that could hurt the company’s business will send the stock price down.

“Besides its lozenges and pending patents the company is not much more than an idea. Its lozenges are not the only ones on the market,” Rockwell wrote, while also pointing out that the company only now is putting together a sales force, and adding, “If the company can’t find partners to make products it will not be able to bring products to market.

Johnson said starting up the business is “an ongoing process and we believe we will be able to raise money.”

Here’s where the investor will need to rely on a crystal ball. The big question is whether the industry momentum will be enough to carry the stock so high that the coming dilution won’t be too painful for current shareholders.


Jul 25, 2008
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Medicinal cannabis trial gets green light on Norfolk Island: Tasman Health Cannabinoids gets production licence

The Tasmanian company that applied to trial medicinal cannabis in the state has been given the go-ahead elsewhere.

Like Tasmania, Norfolk Island has an historic past that struggles financially and depends on assistance from the Commonwealth.

But as the island's Health Minister Robin Adams explained, it was keen to pull itself out of that mire.

"We are open for investment, we are open for business on Norfolk Island," he said.

Norfolk Island is an external territory of Australia - it is not part of Australia's taxation or welfare system.

Dependent on tourism, it was hit hard by the global financial crisis.

Mr Adams said the island saw visitor numbers halve from around 40,000 a year to 20,000.

"We see this as a great opportunity both for the economy of Norfolk Island whilst providing a much needed medical product for export," he said.

The island's government has given Tasman Health Cannabinoids (THC) approval to grow medical cannabis.

THC had wanted to conduct its trial in Tasmania, with the view to it becoming a multi-billion-dollar export industry.

"The Health Minister on Norfolk Island Robin Adams has now given us a production licence to go ahead and progress to grow on Norfolk medical cannabinoids," said the chairman of THC, Dr Mal Washer.

Company 'forced' to look outside of Tasmania

THC had been lobbying the Tasmanian Government to grow the product in the state in a trial with the University of Tasmania. The Tasmanian Government knocked them back.

Mr Adams said Norfolk Island leapt at the chance.

"We have our own dangerous drugs legislation and that legislation was amended with the consent of the Commonwealth of Australia back in 1997," he said.

"As a result of that legislative change I may grant a licence to import cannabis into Norfolk Island, export from Norfolk Island, plant, cultivate tend or harvest cannabis and sell cannabis," he said.

Dr Washer said the company would press on with the trial on Norfolk Island rather than THC's home state of Tasmania for two reasons.

"One, obviously shareholders want a profit from this, I personally and a lot of shareholders feel the same as me," he said.

"The main reason though is to really try and get the best quality product we can, [a] medical cannabinboid product for export to the country where it's legal."

Medical cannabis is legal in a number of European countries, Canada and more than 20 states in the United States.

The drug is sold by weight. In a recent article in the Wall Street Journal it was estimated the drug costs about $US1,000 to produce a pound (about 450g), the same weight sells for $US7,500.

THC's chief executive Troy Langman said it would be a profitable industry once it was established.

"In November we're hoping to kick things off and three to four months later we should have our first harvest, and indoors we're looking at around three harvests per year," he said.

Mr Langman has been on Norfolk Island this week working on the licensing arrangements and regulatory regime.

"We're still hoping to fulfil our initial order that we were lucky to obtain from Canada, that was 1,000kg," he said.

Dr Washer said there would be strict growing and security requirements.

"I guess we'd be looking at a 10-acre site and a glasshouse would cover the bulk of that," he said.

THC in the market for cannabis seeds

Mr Langman said he was now in the process of obtaining enough cannabis seeds to get the project started.

"We'll be obtaining our strains through legal channels from both universities in Australia where there's seed banks and also of course the option to obtain seeds from places like Canada and also from Europe," he said.

But Mr Langman said THC was not giving up on Tasmania.

"We'll continue to push ahead, there's different strains that we want to grow in Tassie's climate we feel really committed to Tassie," he said.

Dr Washer believed there was growing momentum for change in Australia.

"There's five jurisdictions currently looking at this," he said

"Federally of course too, my good friend Warren Entsch, when I spoke to him only a couple of weeks ago intends to introduce a bill into the Federal Parliament to legalise medical cannabinoids."

As well as employment there is likely to be hefty returns to Norfolk Island coffers.

Mr Adams said exactly how much was still being decided, with taxes under discussion.

"I'm of the view that this new industry will align perfectly with the vision that I share with many in this community, that Norfolk Island has the potential to be a centre for health and wellbeing in the Pacific," he said.

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