Original Source: www.cannabiz-africa.com
South African President Cyril Ramaphosa has instructed his staff to engage with the cannabis stakeholders to address their concerns about the bottlenecks in the fledgling legal marijuana economy. But, he’s concerned that the industry is too fragmented to speak with one voice and that government is faced with too many competing interests.
Ramaphosa Open to Engaging with Cannabis Industry
Two Cannabiz Africa sources have confirmed this, saying the lack of progress in cannabis reform was drawn to the President’s attention by a letter sent by the Cannabis Trade Association Africa and other major players in April 2021, requesting an urgent meeting to address their concerns. The letter addresses the same issues raised by the Cannabis Development Council of South Africa had in calling for a cannabis desk to be sent up in the presidency. Ramaphosa’s office has not issued any public statement on the matter.
Finance Minister Tito Mboweni has long been urging his cabinet colleagues to support legalization of cannabis as a job-creating “taxable product” and the legalization of hemp has the full support of the Premier of the Eastern Cape. Gauteng Premier David Makhuru has also endorsed cannabis legalization.
NCMP: ‘the wrong guys are in charge’ and the industry is hurting
Calls for the presidency to become involved in cannabis reform are consistent with advice from the United Nations, which is that countries embracing reform should have a strong institution in charge of policy and licensing – either within the presidency or as a constitutionally independent authority. The body should have the authority to co-ordinate the work of different government departments.
“One of the problems with cannabis reform is that they’ve put the wrong guys in charge of the Master Plan” another source told CA. “DALRRD (Department of Agriculture, Land Reform and Rural Development) does not have the capacity or the mandate to develop an economic model for cannabis, and, with respect they’ve put a plant pathologist in charge of reform whereas what we really need is the DTI (Department of Trade and Industry) to get the investment ball rolling”.
“The problem is that we don’t have a willing champion in government who understands the full potential of the plant” said the source, who wanted to remain anonymous for obvious reasons, “and until this happens the debate is going to be stuck at a technical level.”
Calls for government to speed up cannabis reform are becoming increasingly louder from the private sector which has invested well over R100 million in cultivation and processing facilities in South Africa. Many hemp farmers are at financial risk because their permits have expired and have to be renewed by a different department, while Cannabiz Africa understands that almost R2 million of SAHPRA-approved, imported CBD products have been held up at Durban Port for several months because of a lack of procedural clarity.
Nedlac seeks outside expert advice in cannabis discussions
Meanwhile, negotiators at the Trade and Industry Chamber of Nedlac have decided that they need expert input into their deliberations around the National Cannabis Master Plan (NCMP) hand have apparently approached Business Unity South Africa for assistance. Officially Nedlac is declining to comment on the cannabis discussions until a final report is drawn up for the Minister of Trade and Industry.
However, DTI, which has been absent from the legalization debate so far, appears to be finally stirring. Hemporium founder Tony Budden says he’s been in contact with the DTI, which is “bringing some important players to the party to get investment in the sector rolling”.
DALRRD says Justice Dept holds the key to cannabis reform going forward
DALRRD says it has a cannabis framework in place and is waiting on the Minister of Justice to move on the enabling legislation. DALRRD’s Thabo Ramashola, who’s driving the NCMP, says the main technical problem to getting the cannabis economy off the ground is the wording of the Drugs and Drug Trafficking Act of 1995, which prohibits the commercial use of any part of the cannabis plant unless licensed by the South African Health Products Regulatory Authority (SAHPRA) for export.
Cannabiz Africa Legal Desk partners’ Schindlers Attorneys say the Drugs Act is at odds with the constitution, in light of recent court rulings, notably the Gauteng High Court ruling on the relationship between minors and cannabis.
The other government department that is at odds with cannabis reform is Social Development, which views cannabis as a narcotic that breaks down the social fabric and contributes to criminal behaviour.
For the current status of the legalization debate in South Africa, read the Cannabiz Africa legal desk report here.
Original Source: www.cannabiz-africa.com
Rhode Island Rakes In $1.6 Million in First Week of Recreational Pot Sales
Rhode Island’s new adult-use cannabis market opened for business earlier this month, and so far, business is good.
Local news station WPRI, citing the state’s Department of Business Regulation, reported this week that “Rhode Island’s six marijuana dispensaries — five of which are currently authorized to sell to recreational customers — collectively sold just over $1.63 million worth of marijuana from Dec. 1 to Dec. 7.”
“Less than half of those sales were for recreational marijuana, at about $786,000. The rest, about $845,400, were sales to medical marijuana patients,” the station reported. “For comparison, during the last week of October — the most recent full week available prior to recreational sales — the dispensaries collectively sold $1 million worth of medical marijuana.”
Rhode Island legalized recreational cannabis use in May, when Gov. Dan McKee signed a bill that was passed by lawmakers in the state General Assembly.
The law made it legal for adults aged 21 and older to cultivate and possess marijuana, while also establishing the regulatory framework for cannabis sales.
“This bill successfully incorporates our priorities of making sure cannabis legalization is equitable, controlled, and safe,” McKee, a Democrat, said in a statement at the time. “In addition, it creates a process for the automatic expungement of past cannabis convictions. My Administration’s original legalization plan also included such a provision and I am thrilled that the Assembly recognized the importance of this particular issue. The end result is a win for our state both socially and economically.”
Additionally, the law “will give courts until July 1, 2024, to automatically expunge past convictions, and those who want their expungement sooner may request it,” the governor’s office explained in a press release at the time.
Late last month, McKee and the state’s Department of Business Regulation’s Office of Cannabis Regulation announced that “five licensed medical marijuana compassion centers have received state approval to begin selling adult use marijuana on or after December 1.”
The five “compassion centers” that were given approval to begin adult-use sales are: Aura of Rhode Island (Central Falls); Thomas C. Slater Center (Providence); Mother Earth Wellness (Pawtucket); Greenleaf Compassionate Care Center (Portsmouth); and RISE Warwick (Warwick).
“This milestone is the result of a carefully executed process to ensure that our state’s entry into this emerging market was done in a safe, controlled and equitable manner,” McKee said last month. “It is also a win for our statewide economy and our strong, locally based cannabis supply chain, which consists of nearly 70 licensed cultivators, processors and manufacturers in addition to our licensed compassion centers. Finally, I thank the leadership of the General Assembly for passing this practical implementation framework in the Rhode Island Cannabis Act and I look forward to continuing our work together on this issue.”
Matt Santacroce, who is serving as interim deputy director of the Rhode Island Department of Business Regulation, said last month that the state was “pleased with the quality and comprehensiveness of the applications we received from the state’s compassion centers, and we are proud to launch adult use sales in Rhode Island just six months after the Cannabis Act was signed into law, marking the Northeast’s fastest implementation period.”
“We look forward to continuing to work with the state’s cannabis business community to ensure this critical economic sector scales in compliance with the rules and regulations put forward by state regulators,” Santacroce said.
The launch of recreational sales on December 1 was only one change to Rhode Island’s existing marijuana policy to arrive this month.
WPRI reported that, on the same day, “the state also stopped charging medical patients to obtain or renew their medical marijuana cards,” adding that “there is an expected revenue loss from the pending plan to expunge marijuana possession charges, which will eliminate court fees from those crimes.”
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D.C. Council Approves Cannabis Bill To Promote Equity, Provide Tax Relief And Eliminate Medical Marijuana License Caps
On Tuesday, lawmakers in Washington, D.C., approved a bill that would significantly alter the city’s medical marijuana program. The bill would, among other things, remove licensing caps on cannabis businesses, reduce taxes for operators, increase efforts to promote social equity, and establish new categories of regulated businesses, such as on-site consumption facilities and cannabis cooking classes.
Additionally, it would allow current “gifting” operators, who sell non-cannabis items in exchange for “free” marijuana products, to transition into the permitted market while granting authorities the ability to crack down on those who continue to operate unlawfully.
The measure, which had been revised by the Committee of the Whole earlier in the day, was passed by the full D.C. Council by a vote of 7 to 4.
A second reading vote by the Council is still required before it can be sent to the mayor’s office.
Pro-reform lawmakers have voiced concerns that the bill’s most recent iteration may have unintended consequences for social fairness by granting preferential treatment to already established medical cannabis outlets.
Legally, adults would be able to selfcertify their medical marijuana use according to the Medical Cannabis Amendment Act.
Council Chairman Phil Mendelson (D) introduced the legislation on behalf of Mayor Muriel Bowser (D).
A note prepared for the hearing by the Committee of the Whole states that the most recent print “retains a majority of the adjustments and additions made by” the Committee on Business and Economic Development (CBED), which passed the measure last week.
It had progressed out of a different panel before.
Dispensaries’ Cashless ATM Transactions Get The Ax
Cannabis dispensaries in several states were left scrambling to find ways to process transactions without cash when a popular workaround to federal banking regulations known as cashless ATMs stopped working for many retailers beginning last week. Cashless ATMs, also known as “point of banking” systems, allow customers to use bank cards instead of cash at cannabis dispensaries, giving retailers and their patrons alike more flexibility when processing transactions for marijuana purchases.
But beginning last week, some of the biggest ATM transaction processors including NCR Corp.’s Columbus Data Services have shut down the ability of cashless ATM transaction processors to use their service, according to unidentified sources cited by Bloomberg. NCR declined to comment on the situation, according to the report.
“This is a pivotal point in cannabis banking,” Ryan Hamlin, chief executive officer of payment technology provider Posabit Systems Corp., told Bloomberg about the cashless ATM shutdowns.
Notice Given Last Year
Late last year, international payment processing giant Visa announced in a memo to retailers that it “was aware of a scheme where POS devices marketed as ‘Cashless ATMs’ are being deployed at merchant outlets.”
The system worked by rounding up purchases, often to multiples of $20, to make the transaction appear to be cash disbursements. Instead, only the change from the transaction would be returned to the customer, and the dispensary would keep the rest to cover the payment for the purchase.
“Cashless ATMs are POS devices driven by payment applications that mimic standalone ATMs. However, no cash disbursements are made to cardholders,” the December 2021 memo continues. “Instead, the devices are used for purchase transactions, which are miscoded as ATM cash disbursements. Purchase amounts are often rounded up to create the appearance of a cash disbursement.
In April, Bloomberg reported that cashless ATM transactions were able to be processed because they were disguised by listing an address of a nearby business such as a fast food restaurant instead of the actual dispensary address. An estimate put the portion of cannabis sales processed through cashless ATM transactions at 25% of the $25 billion in projected annual dispensary sales.
“Those sales could generate more than $500 million in fees for payment processors, based on average purchase sizes,” Bloomberg reported.
Banking Laws Hinder Legitimate Cannabis Businesses
The popularity of cashless ATM transactions is indicative of the difficulty federal regulations pose for cannabis businesses, even those operating legally under state law. Federal banking and money laundering laws put restrictions on the banking industry, making it difficult for financial institutions to provide traditional services such as credit card processing, loans, and deposit and payroll accounts. But cashless ATMs fail to pass muster with the federal regulations.
“The cashless ATM trend is damaging to investors, dispensaries, and consumers, as when it comes down to it, it’s blatant money laundering,” CannaTrac CEO Tom Gavin told High Times. “Instead of creating loopholes and using a cashless ATM, dispensaries should take advantage of other solutions currently on the market that are safe, legal, and transparent. A proper financial solution should be registered with FinCEN and have a money transmitter license, or be the agent of a sponsor or bank with a money transmitter license in their state.”
Hamlin of Posabit said that signs of the cashless ATM shutdown began to appear in November and increased last week. He estimated that by the end of the weekend, only about 20% of the cannabis industry was still able to use cashless ATM payments.
Cannabis dispensaries in Arizona, California, and Massachusetts have reportedly been affected by the shutdown of cashless ATM transactions, with employees at those shops recommending that they pay for their purchases with cash instead. Curaleaf Holdings, one of the largest cannabis retailers in the United States, reported in April that approximately one-third of the company’s dispensary transactions were processed through cashless ATMs.
“It’s left merchants in the lurch because it happened overnight, but the writing has been on the wall for a while now,” said Peter Su, a senior vice president at Green Check Verified, a consulting and software company that specializes in cannabis and banking.
Sahar Ayinehsazian, a partner at Vicente Sederberg LLP and co-chair of the law firm’s Banking and Financial Services Access Group, said that the shutdown of the cashless ATM system illustrates the need for the passage of legislation now pending before Congress that would allow legal cannabis businesses access to banking services.
“This shutdown further underscores the ongoing need for banking and financial reform for cannabis businesses and the passage of the SAFE Act,” Ayinehsazian wrote in an email to High Times. “While there can be no guarantee that the Act will open up payment processing for cannabis operators, the industry is very optimistic that its passage will facilitate access to legal and legitimate cashless payment options for cannabis operators.”
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