by Taylor Swick
Sue Sisley, a well-known physician in Scottsdale has finally been approved to begin her treatment of 76 military veterans who suffer from chronic of PTSD. This approval comes nearly two years after her group, which is named the Multidisciplinary Association for Psychedelic Studies (MAPS), was awarded a Cannabis study grant. The funding for this program has come from a more than $2 million grant from the Colorado Department of Public Health and Environment (CDPHE). With this money, MAPS is working to evaluate the safety and efficacy of Cannabis for specific FDA regulated medical uses, and specifically for PTSD.
This January, Dr. Sisley and her group were able to finally enroll their first round of participants in the program and as of March, five participants had received Cannabis as a part of Phase 2 of the MAPS clinical trial.
In this program, MAPS is testing four potency levels of smoked Cannabis as a way for patients to control their symptoms of chronic, treatment-resistant PTSD. The reason for using a variety of Cannabis potencies is to provide vital information on the various compounds contained within Cannabis that work in concert with one-another, as well as to determine information on dosing and the potential side effects and benefits of Cannabis as used as a potential treatment for PTSD.
All Cannabis that is used for any clinical trial or study in the United States comes from one Cannabis grow facility. This location is a 12-acre grow at the University of Mississippi, run by the National Institute on Drug Abuse (NIDA). Currently this facility is the only DEA licensed site that can grow Cannabis for clinical research since growing large quantities of Cannabis, even for research, is still prohibited under federal law. For this reason, the demand for Cannabis from this grow facility has spiked in the past year.
Sadly, at the end of 2016 and through the beginning of this year, Dr. Sisley and her group have experienced what they characterized as product that did not look or smell like Cannabis and also that tested at different levels of potency than the product that MAPS had originally asked for. These quality issues and the associated need for multiple rounds of testing this Cannabis for safety brought the MAPS program to a halt for months. Even though no participants in the MAPS program have compromised immune systems, the MAPS team worried about the safety of using the Cannabis that MAPS had received since it was unknown what adverse potential this Cannabis could have on any of the participants when smoked. Upon much testing and consideration, the MAPS team concluded that it was safe to proceed with the study.
Luckily, with MAPS suffering these setbacks, the DEA recently announced some positive information about the future of Cannabis grow facilities in the United States. This summer the DEA stated that it would begin to accept applications for additional Cannabis grow facility licenses and therefore NIDA will no longer be the only facility licensed to grow Cannabis for clinical trials if any of these applications are accepted. Since this time, multiple organizations have submitted the application paperwork. To date, none of the applications had been approved, and the DEA reported that no timeline has been established for the agency to make any determinations or decisions. Dr. Sisley is a part of the Scottsdale Research Institute (SRI), which is one of the organizations that has submitted an application to grow Cannabis. She hopes that SRI will soon be able to grow Cannabis for her own program from tissue cultures of plants rather than seedlings so that a more sterile method of producing Cannabis is used for these clinical trials in the future.
Source: MAPS press release
The voters of Arizona passed the Arizona Medical Marijuana Act in 2010, yet to this day politicians continue to attack the industry and use medical marijuana as a pawn in their political games.
Perhaps, nowhere is this more evident than in the current legislative attacks against the Voter Protection Act (VPA) and the citizen initiative process. The VPA was passed by Arizona voters in 1998 and was intended to prevent legislators from overturning or tampering with voter-passed initiatives. However, every year many legislators attempt to pass legislation which would undermine, overturn, or simply ignore VPA provisions altogether by trying to weaken voter approved initiatives. And, this year the legislature has gone a step further by passing bills which will create significant barriers for citizens to get initiatives on the ballot in the first place. It’s an attack on the constitutional rights of every citizen.
It’s bad enough that these attacks are happening, but even worse is that many legislators have used the Medical Marijuana Act as the basis for their attacks on voter rights. They’ve made wildly inaccurate claims about the impacts of marijuana, vilified many of the tax-paying people of the industry, and attempted to make it harder for certified patients to get access to medical marijuana. These legislators have declared war on medical marijuana and voters’ rights, and it won’t stop without deliberate, professional representation focused on mainstreaming medical marijuana in Arizona’s culture and economy.
That’s why a coalition of patients, providers, dispensaries, growers, and other stakeholders have come together to form the Arizona Medical Marijuana Action PAC. Known as AMMA-PAC, the organization has been working to protect the medical marijuana industry from legislative meddling, while also promoting smart and responsible legislation intended to strengthen the industry, expand public education about marijuana, and foster constructive dialogue to dispel the myths propagated by the opponents of medical marijuana.
Unfortunately, the future of marijuana will always be caught up in political games. Our opponents will use rhetoric, inaccurate information, and outright lies to try and take away our rights and stop any legal use of marijuana in Arizona - either under current law or any future efforts towards expanded legalization of marijuana. AMMA-PAC will continue working to stop these efforts, protect the industry and its patients, and work to support positive public policies that will support the legal and responsible use of marijuana.
The writers of the Article are AMMA PAC Chairman, John Hartsell, Treasurer Taylor Swick, and Former Representative Chad Campbell of Strategies 360. For more on AMMA PAC or to learn more about our work, visit www.ammapac.com.
Toward the end of each legislative session in Arizona there is a flurry of activity to get certain controversial or previously unheard bills heard. This happens through the use of “strike everything” amendments or “strikers”. A striker is used to delete all of the text of a previously existing bill, regardless of topic, and to substitute new, generally totally unrelated, language.
Since this leads to the introduction of a brand new bill, legislators often use strikers to introduce bills after the deadlines for the introduction of new bills in committees, or, in many cases, to reintroduce a controversial bill that had already been killed in committee or one that had never even been heard in committee. Strikers create less transparency in the legislative process and breed distrust by the public when controversial bills “pop up” at the last second, hidden by a completely unrelated bill name in most cases.
During the 2017 legislative session, more than 100 strikers have been proposed. At this point in the 2017 legislative session, the Legislature is voting on two strikers that would undermine the initiative process in Arizona and therefore, the right of every voter in Arizona to be able to pass laws at the ballot. The Arizona Chamber of Commerce is pushing these two bills with one striker moving through the House and one through the Senate.
In the House, Representative Michelle Ugenti-Rita’s striker to SB 1236 is a catch-all from multiple bills that were previously killed in committee, that would have harmed voter’s rights at the ballot. This striker requires the inclusion of a warning on all advertising and fundraising materials for ballot measures that says “NOTICE: PURSUANT TO PROPOSITION 105 (1998), THIS MEASURE CANNOT BE CHANGED IN THE FUTURE IF APPROVED ON THE BALLOT EXCEPT BY A THREE-FOURTHS VOTE OF THE LEGISLATURE AND IF THE CHANGE FURTHERS THE PURPOSE OF THE ORIGINAL BALLOT MEASURE, OR BY REFERRING THE CHANGE TO THE BALLOT" and disqualifies any petitions gathered without a paid circulator’s registration number, even if all signatures on the sheet are valid.
In the Senate, HB 2244 had a striker attached to it by Senator Debbie Lesko which will apply a strict compliance standard to all signatures gathered for voter initiatives. This striker would therefore allow for minor technicalities like the petition being printed with slightly different margins or the collected signature having the zip code written in the wrong box to be reasons to throw the entire petition out and not counted, even when it is clear who the voter is who signed the form. Again the Chamber of Commerce is pushing this bill so that any future ballot measures will have basically no chance of getting the required number of signatures to reach the ballot.
These two strikers are clearly a way for the Arizona Chamber of Commerce and the Republican controlled Legislature to stop future ballot measures that lessen their power. What this signals is a grave problem for Arizona’s Cannabis industry because any future Cannabis initiatives will become much more costly and difficult to get on the ballot.
Section 280E of the Internal Revenue Code forbids businesses from deducting ordinary business expenses from gross income associated with the sale of Schedule I or II substances, as defined by the Controlled Substances Act.
"Because cannabis is federally classified as a Schedule I substance the IRS has applied 280E tax rules to businesses in states where the sale of cannabis is legal. It’s hard to get excited about our best sales days when we know profits will be cut deeply as a result of 280E."
~ John Lord, CEO LivWell Enlightened Health
Weedia®Buzz recently had a conversation with John Lord, Owner and CEO of LivWell Enlightened Health in Colorado where he said, “This inequity is a huge burden on our industry and must be addressed if our business is going to succeed. Not fixing this problem challenges the very ingenuity and creativeness American commerce is built on.”
Section 280E states: No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted. Click here for more.
While cannabis companies are forced to file taxes under §280E rules, they are also bound to comply with additional federal employment regulations. LivWell, for example, is required to pay payroll taxes, and provide health coverage for employees as required by the Affordable Care Act, yet, they are unable to deduct ordinary costs and other expenses related to their employees. LivWell employs 550 people.
Section 280E is creating an impossible position for cannabis company owners each year when they file their taxes. Ken Boiarsky, a tax attorney with the nation’s leading cannabis law firm Hoban & Feola, said, “This is just another example of paradoxical application of tax law by our federal government.” For instance, Boiarsky explains, “If the company doesn’t file taxes using 280E, they’re breaking the law and if they do file their taxes using 280E, they’re admitting to having broken the law,” this, in reference to “trafficking” cannabis material – a Schedule I Controlled Substance.
According to John Lord and his team at LivWell Enlightened Health, the sustainability of the cannabis industry depends on a change to IRS imposed policies. Other businesses are able to deduct normal costs to do business such as rent, utilities and employee related expenses. Since cannabis businesses are required to file its taxes using Code 280E, these deductions are disallowed.
While the IRS continues to trudge along, charging cannabis retailers differently than other retail businesses the cannabis industry continues to pour millions in tax revenue into local and state coffers.
For example, wholesale cannabis distributed to retail stores in Colorado is taxed at a rate of 15% before it ever hits retail shelves. Customers then pay a 12.9% state sales tax, plus an additional 7.15% city tax if located in Denver. The retailer is also required to pay income tax to the state each year.
Assuming a pound of cannabis sold for an average of $1,900 wholesale, which 2015 Colorado data indicates, at a 15% tax rate on wholesale material – before the product is ever sold remember – the state collects $285.
If the average gram sold for $7.00, (there are 454 grams in a pound) the retail value of that pound of cannabis would be $3,178 – $410 of it going to the State and the City receives $227.
Dispensaries in colorado sold nearly 150,000 pounds of cannabis to medical and recreational consumers in 2014 which provided nearly $140 million in tax revenue. This represents nearly $1,000 in taxes for every pound of cannabis sold.
As an American retailer can you imagine paying 53% of your revenues to state and local governments before you’ve even started paying all of the other expenses associated with running a business – and not being able to claim most of these expenses on your tax return?
This past 4/20 (April 20th) – the cannabis community’s annual holiday – LivWell Enlightened Health experienced the highest single-day sales in its history. But because LivWell is compliant with §280E rules, the majority of the profits from these record-breaking sales will be paid in federal and state income taxes.
LivWell’s John Lord said, “It’s hard to get excited about our best sales days when we know profits will be cut deeply as a result of 280E.”
So, with an overview of the problems facing cannabis retailers, what is the solution?
The solution to this inequity, according to both Lord and Boiarsky, is to remove cannabis from the Controlled Substances Act’s list of scheduled substances entirely.
Ken Boiarsky said, “There are legal remedies to this problem and there are several court cases at the federal level addressing this issue,” The first line of one of these pending complaints reads, “This case owes its genesis to the mixed messages the federal government is sending these days about the distribution of marijuana.” (Feinberg vs. the Commissioner of the IRS)
Cases such as the Feinberg’s are being heard in local tax courts and in federal courts across the country, but until the issue is addressed at the IRS and in Congress retail cannabis operations will continue to pay up to 90% of their profits in taxes.
John Lord does not have much confidence that the federal government is working towards a solution, “The government isn’t exactly losing the longer this [lingers] on. There is a vast disincentive for the government to fix this problem. I don’t hold a lot of faith that we’re going to fix this in a short time. Our best option is for cannabis to be descheduled from Schedule I” said Lord.
The tax payment issue is just the tip of the iceberg, as federal laws making the trafficking of cannabis material a crime cause a litany of other problems, business banking being just one.
Most financial institutions are unable to justify the risk in taking on cannabis industry clients making the industry a largely cash business. The industry, now exceeding $8 billion in annual commerce, is likely to double in size over the next few years and is in dire need of viable banking options. But this is another story for another day…
by John Hartsell
Today, Donald J. Trump becomes the President of the United States and thus, his team will begin the work of our federal government. In reference to Medical Marijuana programs across the country, our new POTUS has been less than forthcoming on his intended approach wavering from a state’s rights position to cabinet appointments which indicate potential programmatic interruptions at the state level.
In their own words:
In reference to medical and adult-use cannabis, President Donald Trump told Bill O’Reilly that, “In Colorado, the book isn’t written on it yet, but there is a lot of difficulty in terms of illness and what’s going on with the brain and the mind and what it’s doing. So, you know, it’s coming out probably over the next year or so. It’s going to come out.”
U.S. Attorney General Nominee Jeff Sessions said, “Good people don’t smoke marijuana.” And he said, “We need grown-ups in charge in Washington to say marijuana is not the kind of thing that ought to be legalized…that it is, in fact, a very real danger.”
Vice President Mike Pence, in response to reducing criminal penalties for marijuana possession, said, “I think we need to focus on reducing crime, not reducing penalties.”
Though a quote was not readily available for Secretary of Health and Human Services nominee Tom Price, his actions speak louder than words:
CALL TO ACTION
Last week, members of Arizona’s House of Representatives were set to hear HCRs 2002 and 2007 and HB 2320, all with the intention of repealing or weakening the Voter Protection Act (VPA). As you know, the VPA, and its ¾ House and Senate approval requirement, is the first line of defense in keeping AMMA safe from legislative attacks.
Without VPA, AMMA would have already been changed significantly including amendments to certification processes, growing methods, and other very limiting laws which did not pass due to the ¾ vote requirement. This is an explicit attempt by some members of the legislature to manipulate the system to take power from the voters and give it to themselves as legislators.
AMMA PAC, along with several other groups, registered in opposition to the bill with hundreds of citizens stating their opposition to the three bills. AMMA PAC alone was responsible for registering well over 100 cannabis activists and leaders in opposition. And, the bills were held from consideration during last week’s hearing in House Government.
In a hail-Mary hope for fatigue among our opposing activists, HCRs 2002 and 2007 and HB 2320 have been scheduled for another hearing this week in the same committee. To have us register you in opposition to these three bills, go here: http://www.ammapac.com/registration.html. If you already asked us to register you in last week, we will automatically do so again unless you ask us not to.
Below, find each of the committee members and their contact information. Please call them and tell them that the Voter Protection Act ensures that voter initiated laws require a higher threshold for changes. Ask them to oppose HCRs 2002 and 2007 and HB 2320.
Rep. Michelle B. Ugenti-Rita (Republican) Sponsor of all three bills- (602) 926-4480
Rep. Todd A. Clodfelter (Republican)- (602) 926-4850
Rep. Drew John (Republican)- (602) 926-5154
Rep. Douglas Coleman (Republican) Chairman- (602) 926-3160
Rep. Bob Thorpe (Republican) Vice-Chairman- (602) 926-5219
Rep. Ray D. Martinez (Democrat)- (602) 926-5158
Rep. Athena Salman (Democrat)- (602) 926-4858
Rep. Ken Clark (Democrat)- (602) 926-3108
Please click here http://www.ammapac.com/meeting.html to schedule an appointment with
John Hartsell to discuss what else is upcoming at the Legislature that you should be aware of.
We hope to get as many people as possible to call and email each of the above listed Representatives to show them that the marijuana industry is paying attention and does not want changes to the AMMA or Proposition 105.
Finally, look for our next email which will tell you more information about our AMMA PAC lunch and learn with legislators on March 6, 2017 at the Capital where we will introduce multiple legislators to industry leaders as a first part of our goal to show the business aspects of the medical marijuana industry to our elected officials.
Over the past two and a half years the Arizona Cannabis Nurses Association has organized legal action to require that patients diagnosed with PTSD gain access to medicinal cannabis – among them are 500,000 Arizona war veterans, women who suffer from sexual abuse and domestic violence, and others. The action will be heard in an Arizona Court of Appeals next Wednesday, January 25.
In 2014, the Nurses group won a landmark decision to compel the Dept. of Health Services to accept an Arizona Administrative Law Judge’s Decision to add PTSD as the first new qualifying condition to the Arizona Medical Marijuana Act. Read the former Director Will Humble’s article acquiescing to the decision here.
Since then, 11 additional states have added PTSD to their list of MMJ qualifying conditions. Now, 20 of the 28 states that have a medical marijuana program include PTSD as a qualifying condition. None, however, require the additional burden of proving concurrent “conventional treatment” on PTSD victims.
Heather Manus, RN, the President of the Arizona Cannabis Nurses Association, said, “Unlike the conventional medications used for PTSD, medical cannabis is a gentle plant therapy which helps in all aspects of the disorder – fear extinction, memory retrieval and stress mediation. Given the fact that there has never been a reported adverse outcome from the use of cannabis for PTSD, AZDHS’ imposition of this additional requirement is unjustified, dangerous and discriminatory. On the other hand, we know that ‘conventional treatment’ with dangerous pharmaceuticals have accounted for thousands of deaths by overdose and suicide.”
Nurse Heather, as she is affectionately referred to, has been a medical director of a Santa Fe, New Mexico cannabis dispensary since 2010. As an in-home psych nurse she frequently helped vets with PTSD recover from years of using harmful pharmaceutical medications that dealt serious side effects, replacing opiate-based medications with medicinal cannabis.
Lawyer Ken Sobel, who serves as the Vice President and General Counsel for the national non-profit, Grow For Vets, provides representation for the Nurses. According to Sobel, Judge McClennen got it wrong. “There are many cases where an administrative agency like AZDHS exceed their authority or mistakenly interpret the law. It is precisely for that reason that an independent judiciary must step in and rein in such agency. In this case, just like the New Mexico case, we are asking the Court of Appeals to reverse this unlawful and discriminatory ‘conventional treatment’ requirement.”
According to Mr. Sobel, Judge McClennen’s ruling has broader implications. “For example, if the state can impose a ‘conventional treatment’ requirement on PTSD, the state could require cancer patients – another qualifying condition like PTSD – to undergo chemotherapy – a conventional treatment – before being able to get an Arizona MMJ patient card, even though recent studies show that cancer patients who undergo chemotherapy die sooner than those who don’t. Moreover, the evidence shows that 1 out of every 13 Arizonans – 500,000 residents – suffer from PTSD, and the majority are women, many of whom are the victims of sexual assault and domestic violence.”
Further, “the ADHS has rejected every single petition brought to add new debilitating conditions to the voter-approved MMJ list over the past 6 years – approximately 36 in all. Only when it was forced to do so did it add PTSD on the second attempt. Most of these conditions have already been approved by many other states. The actions of the AZDHS in denying all of the petitions submitted, and now seeking to impose this unnecessary and burdensome restriction on PTSD patients, are more political than scientific.”
The President of Grow For Vets, Roger Martin, said: “We appreciate the tireless work of Mr. Sobel, Nurse Heather and the AZCNA. With 55 veterans committing suicide each day, many of whom because of their war-inflicted PTSD, this unnecessary and expensive burden on our returning war heroes is totally unjustified.
This is especially so in Arizona, the poster child for VA healthcare neglect. We should make it easier, not more burdensome, on them to safely access medical marijuana for PTSD.”
The Arizona Court of Appeals, Division One (Maricopa), will hear the appeal on Wednesday, January 25th at 3:00 pm at the Court of Appeals courthouse, Department “E”, courtroom “2”, 2d Floor, 1501 W. Washington, Phoenix, Arizona. The hearing is open to the public.