New Mexico’s big step toward legalization • Cronos Australia IPO • & more…

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FDA warns against CBD use while pregnant.

The U.S. Food and Drug Administration tweeted yesterday, “FDA is continuing to collect and study the data on the possible harmful effects of using CBD during pregnancy and while breastfeeding. However, based on what we do know, there is significant cause for concern.”

New Mexico Governor’s Legalization Work Group releases recommendations.

After reviewing hundreds of pages of public comment, researching 279 policy questions, holding 30 hours of public meetings, and studying 12 state cannabis programs, New Mexico Governor Michelle Lujan Grisham’s cannabis legalization work group has published a report. This group’s recommendations will determine how the adult use cannabis industry takes shape in the state post-legalization.

On the revenue and job creation front, the report notes: “Combined, a joint medical-adult use program is anticipated to include more than 13,000 jobs at all skill and income levels and mature to generate at least $850,000,000 in annual sales which would generate almost $100,000,000 in new revenue for state and local governments annually.”

Many of the recommendations are expected, such as clear labeling for products and allowing employers to maintain drug-free workplace policies.

Other recommendations were noteworthy, as not all adult use states are uniform in their approach to these regulations. For example:

• Home grow looks unlikely, as law enforcement flagged this as a “huge” challenge.

• Localities will likely not be able to opt out of allowing cannabis businesses, as they “become illicit markets overnight” (in California, for example, the majority of localities have opted out, creating a regulatory and enforcement headache for the state).

• There is an emphasis on equity in the industry, with plans to create programs to include those disproportionately harmed by cannabis prohibition and to include sovereign governments (pueblos, nations, and tribes).

• Large cannabis businesses will likely need to have labor peace agreements.

• License fees will likely be below $6,000 a year, and will be available for growers (and “micro-cultivators”), product manufacturers, retailers, labs, and couriers. The plan is also to allow for a microbusiness license, similar to a “brew pub” or a “farm store.”

• The tax rate will likely be around 17% total (including local and state taxes).

You can read the full report here.

Cronos Australia will IPO next month.

Canadian cannabis company CronosGroup plans to list its joint venture with NewSouthern Capital, Cronos Australia, on the Australian Securities Exchange in November, and to list 40 million shares at $.50 (AUD) each, for a total of $20 million. 

Tobacco giant Altria put $1.8 billion into Cronos late last year, the most significant tobacco investment in the cannabis industry to-date. 


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