Cannabis News of Note for the Week:

Politico: Taxes, cannabis banking, drug prices: What Senate Dem incumbents hope to tackle next

Reuters: No one should go to jail for ‘smoking weed,’ VP Harris says at White House

Politico Pro Cannabis: HHS secretary defends scientific rigour of cannabis review on Capitol Hill (paywalled article, full text below)

Cannabis Wire Daily (3/12): ONDCP’s budget is here (paywalled newsletter, text below)

CRB Monitor News: Cannabis ‘cash management’ firm accused of stealing millions, flouting money laundering rules


Cannabis Reports of Note for the Week:

Teen Use Of Delta-8 THC Is Higher In States Without Legal Marijuana, New Study Published By American Medical Association Finds

HHS secretary defends scientific rigour of cannabis review on Capitol Hill
BY NATALIE FERTIG | 03/14/2024 02:32 PM EDT
Health and Human Services Secretary Xavier Becerra defended the FDA’s review of cannabis science and its recommendation to loosen federal marijuana restrictions during a Thursday hearing on Capitol Hill.


“There has been a lot of science that’s been collected over the years on cannabis,” Becerra said during the hearing before the Senate Finance Committee. “We have far more information now.”


Sen. John Cornyn (R-Texas) asked Becerra why the FDA used a two-factor test to determine accepted medical use, instead of its usual five-factor test. Becerra did not directly answer Cornyn’s question, but defended the review by saying that it “is simply reflecting what the science is showing.”


However, Becerra also deflected responsibility for the review to the FDA. Throughout Cornyn’s questioning, Becerra spoke very generally — at one point explaining that he could not “speak for the FDA.”

“What I will tell you is that the rigorous work that was done to come to these conclusions was based on the science and the evidence they had before them,” Becerra said.


Becerra’s agency oversees the FDA — and HHS Assistant Secretary for Health Rachel Levine signed the letter to the Department of Justice sharing the review and recommending that marijuana be moved to a new classification on the Controlled Substances Act.


“I’m sure that FDA would have taken into account all the different circumstances involved,” Becerra said at another point. “I didn’t make the recommendation. It was made by FDA.”


The background: President Joe Biden in October 2022 initiated a review of all available marijuana science and asked HHS to recommend if marijuana should remain where it is on the Controlled Substances Act or be moved to a new category. Marijuana is currently a Schedule I drug — the same category as heroin and LSD. HHS recommended it be moved to Schedule III, concluding that there is evidence that marijuana has some accepted medical uses, including for treating chronic pain.


Marijuana would still be illegal under federal law if it is moved to Schedule III, but it would ease some restrictions. Most notably for the cannabis industry, companies would no longer be subject to Section 280E of the federal tax code, which prevents them from writing off most business expenses.


The Drug Enforcement Administration will have the final say on whether marijuana is reclassified, but there is no deadline for when the agency must make that decision.



Cannabis Wire Daily (3/12): White House
ONDCP’s budget is here. It paints a picture of a persistent unregulated cannabis market.

Pres. Joe Biden released his 2025 budget on Monday. As part of the package from the White House, the Office of National Drug Control Policy (ONDCP) is requesting $469,593,000. Of this, $290,200,000 is for the High Intensity Drug Trafficking Areas (HIDTA) program.

The HIDTA program, as its name suggests, identifies hot spots in the U.S., and facilitates local, state, federal, and tribal cooperation.

Reading through the various HIDTA updates In the ONDCP budget, a clear picture emerges: legal markets continue to struggle to quash illegal cannabis activity, and a lot of the cannabis flowing illegally across the U.S. is coming to and from these legal markets.

To be clear, this isn’t a new trend, but rather one years in the making, as documented in ONDCP budget requests in recent years. Less of the illegal cannabis in the U.S. is coming from Mexico, and more of it is coming from right here in the U.S.

While the DOJ under former Pres. Donald Trump revoked cannabis memos issued by former Pres. Barack Obama’s administration, some advocates have called for renewed guidance under AG Merrick Garland. Last year, Garland told Sen. Cory Booker that any such guidance would be similar to the so-called Cole Memo issued in 2013. This memo essentially laid out eight priorities for the feds that, so long as they were met, would ensure a hands-off approach to state-legal cannabis. One of those eight priorities was the prevention of diversion from legal states.

So, how does the DOJ see these current unregulated cannabis trends playing out across the U.S.? Do they see it as a shortcoming of the legal states? Or do they recognize that as long as there is a patchwork of legality, and not a nationally regulated industry, there will be diversion into non-legal states? Or both? We’ll see.

Meanwhile, here is a sampling of relevant quotes from the ONDCP budget:​

• Arizona HIDTA: “Most illicit tetrahydrocannabinol (THC)/marijuana seizures in Arizona originate from California.”

• Central Valley HIDTA: “The CVC HIDTA focuses its efforts on the DTOs and criminal organizations that produce, transport, and distribute marijuana in violation of federal and state laws. … The practice of cultivating marijuana illicitly on public lands continues to cause significant environmental damage.”

• Northwest HIDTA: “Domestic cannabis availability and use remains stable. As licensed retailers saw the first ever decline in revenue, the market will likely maintain current usage levels for the foreseeable future. Washington was the point of origin for cannabis products driven or mailed to at least 20 other states throughout the United States … Asian organizations dominate the indoor production and distribution of illicit cannabis products in Washington State.”

• Michigan HIDTA: “Michigan legalized adult use of marijuana in 2018, and the first regulated dispensaries opened at the end of 2019. Despite Michigan’s legalization of recreational marijuana, black market marijuana is still being trafficked and remains a threat. … Marijuana produced in Michigan is illegally distributed to other states.”

• Nevada HIDTA: “As adult-use, regulated marijuana has been legal in Nevada since 2017, resources have been prioritized toward illicit drugs causing significant overdose deaths in the state rather than black market marijuana which is produced in illegal clandestine grows in California and more often indoor grows in the Las Vegas. The black-market marijuana continues to thrive virtually uncontrolled due to criminal justice complications with managing the problem.”

• North Central HIDTA: “The demand for higher-potency marijuana and marijuana-related products has remained high over the past several years. Traffickers and DTOs source the majority of marijuana and THC products from Colorado and West Coast states that have legalized the recreational and/or medical use of marijuana and related products.”

• Northern California HIDTA: “Illicit marijuana presents a unique set of threats to the AOR. These threats include: violence and illegal weapons associated with outdoor trespass grows on public land and tribal territories; the trading of high-quality marijuana for more life-threatening drugs like fentanyl or methamphetamine (or fentanyl-laced methamphetamine); robberies and burglaries of marijuana dispensaries; labor and sex trafficking associated with marijuana cultivation; the devastating environmental impact of illicit marijuana; and fraudulent marijuana businesses feigning legitimacy under state law.”

“According to the NC HIDTA survey data, a majority of surveyed commanders believed that marijuana was one of two drugs that most contributed to violent crimes in the AOR. Illicit marijuana cultivation continues to be a defining feature of drug trafficking in the NC HIDTA AOR. California’s legalization of marijuana for recreational use took effect in 2018, but illicit marijuana grows are widespread, and marijuana cultivators and dealers remain steadfastly undeterred by the law. The famed ‘Emerald Triangle’ is considered the marijuana capital of the United States and includes two NC HIDTA counties: Humboldt and Mendocino. These counties are home to thousands of illegal marijuana farms, many of which are trespass grows on public lands.”

• Ohio HIDTA: “The legalization of medical marijuana in Ohio has led to an even greater amount of marijuana usage in the region. … High-grade marijuana from domestic sources of supply across the United States, such as California, Colorado, Arizona, Oklahoma, and Michigan are readily available to users within the Ohio HIDTA AOR. This marijuana has been cultivated to have much higher levels of THC compared to the previously encountered Mexican sourced low-grade marijuana. This marijuana is often diverted from the United States where it is legal and ends up within the Ohio HIDTA AOR for use and abuse.”

• Oregon-Idaho HIDTA: “Oregon remains a source state for high-quality marijuana and extract products for the nation. Despite state efforts to regulate the legalized marijuana market, black and grey market products originating in Oregon continue to be seized in other parts of the country. Marijuana from Oregon continues to negatively affect communities outside of this OI HIDTA region, undermining the legal markets in many states including Oregon. Mexican and Chinese DTOs continue to impact illicit marijuana cultivation in Oregon. Environmental degradation and forced labor trafficking remain a concern to law enforcement and elected leaders throughout the state.”

• Texoma HIDTA: “Independent DTOs within the Texoma HIDTA region also specialize in the distribution of high-grade marijuana, obtained from United States with legalized forms of marijuana.”