Week’s In Review: California Permits Lounges; Los Angeles County Targets Unlicensed Cannabis Dispensaries with “Deplatforming” Motion; California Bans Hemp-Derived THC Products Amid Regulatory Concerns; California’s New Hemp Regulations Raise Concerns for Industry and Consumers

LOS ANGELES–Welcome to the far too-exciting world of cannabis and psychedelics, where it’s a tale of two markets with some states doing amazingly well. And some, well…they’re not doing so well (hello New York). Let’s get to it! 

Cannabis Industry Highlights

1#In a landmark decision for California’s cannabis industry, Governor Gavin Newsom has officially signed AB 1775 into law, allowing the creation of cannabis consumption lounges throughout the state. This move is set to revolutionize how Californians experience cannabis, providing new opportunities for businesses and establishing regulated environments where cannabis can be enjoyed alongside food, beverages, and live entertainment. Read more here.

2# Los Angeles County Targets Unlicensed Cannabis Dispensaries with “Deplatforming” Motion: Los Angeles County has approved a new initiative aimed at reducing the visibility of unlicensed cannabis dispensaries on major online platforms such as Google and Yelp. The motion, introduced by Supervisor Lindsey Horvath and passed by the Board of Supervisors, seeks to address the ongoing issues posed by illegal cannabis operations in the region.

3#California Bans Hemp-Derived THC Products Amid Regulatory Concerns: California has implemented a ban on hemp-derived THC products following the approval of emergency regulations proposed by Governor Gavin Newsom. Effective September 23, 2024, the new rules prohibit any hemp-based products containing detectable amounts of THC from being sold in the state, marking a significant shift in the hemp industry.

4#California’s New Hemp Regulations Raise Concerns for Industry and Consumers: Governor Gavin Newsom has enacted emergency regulations in California, significantly impacting the hemp industry by banning hemp-derived THC products. This move, approved by the Office of Administrative Law and effective as of September 23, 2023, has sparked controversy among businesses and consumers alike. The regulation sets stricter rules, such as prohibiting any detectable THC in hemp products, limiting the servings to five per package, and raising the minimum purchase age to 21.

5#Allegations of Predatory Contracts Surface in Missouri’s Social Equity Cannabis Program: Missouri’s social equity cannabis licensing program faces scrutiny amid allegations of predatory investor contracts. Designed to benefit disadvantaged individuals, the program has seen reports of investors using deceptive agreements to gain control of licenses meant for marginalized groups.

6# Colorado’s Cannabis Market Faces Decline Amid National Expansion: Colorado, once a leader in the legal cannabis market, is now grappling with declining sales and tax revenues. A report from the state’s Legislative Council Staff attributes this downturn to market saturation, oversupply, and the expansion of cannabis legalization in other states. The state’s cannabis market has contracted by 17% among licensed growers, with tax revenue continuing to decline, though at a slower rate.

Psychedelic Sector Update

Psyence Biomed to Acquire Stake in PsyLabs for $1.1 Million: Psyence Biomedical Ltd. announced its agreement to acquire an 11.13% stake in PsyLabs, a company specializing in psychedelic active pharmaceutical ingredients (APIs) and extracts, in exchange for $1.1 million worth of common stock. This transaction strengthens Psyence Biomed’s partnership with PsyLabs, providing access to PsyLabs’ production capabilities as the company advances its clinical pipeline.

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