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At a news conference on Tuesday, law enforcement officials from Illinois’ Cook County announced that they would be collaborating with Code For America to initiate expungement proceedings for possession charges of up to 30 grams of cannabis.

Here’s a quote from the announcement courtesy Cook County State Attorney Kim Foxx, which we hope is heard ‘round the world:

“It is prosecutors who were part of the war on drugs, we were part of a larger ecosystem that believed that in the interest of public safety, that these were convictions that were necessary to gain. In the benefit of hindsight and looking at the impact of the war on drugs, it is also prosecutors who have to be at the table to ensure that we are righting the wrongs of the past.”

Illinois legalized recreational marijuana two months ago, making it the first state in the US to regulate adult-use cannabis via the legislative process rather than voter referendum. The law will take effect on January 1, and officials are working to make sure that the legal system is in order for that date.

When he signed the bill into effect, Governor J.B. Pritzker said it would automatically expunge and pardon the records of 800,000 state residents. That part was particularly important as police in Illinois and particularly Chicago (which is located in Cook County) have come under fire for their demonstrably racist cannabis policing tactics.

Low level cannabis convictions can prevent individuals from landing employment and qualifying for public housing.

Code For America has also played a role in expediting cannabis expungements in San Francisco, whose DA announced that it would collaborate with the organization in the identification of over 9,000 cases. The group has developed a program that can gather cases relating to cannabis charges that are no longer crimes under recent legalization laws.

The program is a big help to county governments that have struggled over the task of sifting through criminal records. Notably, though, the Code For America program is of little use when it comes to charges that took place before digitization. As the Chicago Tribune notes, in the 1960s, a person found with a single joint on their person could get a felony and mandatory prison sentence. (In the ‘70s, that was reduced to misdemeanor charge, a year in jail, and a $1,000 fine.)

Months after the beginning of the San Francisco project, California’s Los Angeles and San Joaquin counties decided to follow suit with Code For America, saying the collaboration had the potential to reduce or clear more than 54,000 cannabis convictions. To date, 14 California counties have started working with Code For America’s Clear My Record project, which offers online resources for people who wish to get cannabis-related offenses out of their lives.

In Cook County, expungements won’t require any work on the part of the affected individuals, who will get a letter saying their charges have been expunged.

The first challenge will be getting the conviction data into the correct format to be dealt with by the program. After that, “Literally, you will be clearing out hundreds and hundreds of records per minute,” says Foxx.

Mind you, even “automatic” expungements are, sadly, not a quick fix. County officials say Code For America’s work should be done by 2021.

Many cannabis stocks have fallen well below their highs set earlier this year. Volatility in the overall stock market reflects a lot of uncertainty, with worries about the possibility of a recession and an intensifying trade war. The combination of these factors could make some investors afraid to buy any stock, much less a marijuana stock.

But taking a long-term view makes investing a lot less scary. If you think that the pot industry will expand dramatically over the next decade or more, investing in marijuana stocks during times of uncertainty could actually increase your returns over the long run.

Which cannabis stocks look like good picks to buy in September? Here's why I think Charlotte's Web Holdings (OTC:CWBHF), Cresco Labs (OTC:CRLBF), and Trulieve Cannabis (OTC:TCNNF) stand at the top of the list.  

1. Charlotte's Web

Charlotte's Web stock sank earlier this month after the company reported second-quarter results that missed analysts' revenue and earnings estimates. However, shares of the cannabidiol (CBD) leader are still up more than 50% year to date. More importantly, the prospects for Charlotte's Web continue to look very bright.

For years, Charlotte's Web operated in kind of a gray area. Federal laws were on the books that allowed states to sanction the use and sale of hemp-based products for research purposes. Charlotte's Web was permitted to sell its hemp CBD products under these regulations. But a new law went into effect in December 2018 that legalized hemp in the U.S. without the research purposes restriction. Charlotte's Web's business skyrocketed.

The company already ranks as the No. 1 hemp CBD brand in the U.S. by market share. And that market is rapidly expanding. The company has nearly tripled its acreage of hemp this year compared to 2018. Charlotte's Web's products are carried in over 8,000 retail locations, more than double the number at the beginning of this year.

Charlotte's Web continues to be consistently profitable, although it's understandably investing more in building its infrastructure to take advantage of its growth opportunities. The company's new CEO, Deanie Elsner, a former executive at Kraft Heinz and Kellogg, appears to be a great fit for what Charlotte's Web needs at this stage. I view Charlotte's Web as one of the best cannabis stocks to profit from what should be tremendous growth in the U.S. hemp CBD market.

2. Cresco Labs

Cresco Labs ranks as one of the largest vertically integrated marijuana operators in the U.S. It currently has operations in seven states that have legalized medical cannabis, notably including Cresco's home state of Illinois.

The company will soon add four more states. Cresco has binding transactions pending to acquire operations in Florida, Massachusetts, and New York. It also received approval to expand into Michigan.

But the biggest deal for Cresco is its pending acquisition of Origin House, which is the largest cannabis distributor in California. Origin House also markets a line of its own marijuana brands and owns a vape retailer in Canada. 

Cresco's revenue continues to skyrocket and will soar even more with its acquisitions and moves into new states. The company isn't profitable yet, but that's mainly because its spending is increasing as it expands rapidly. Cresco thinks the Origin House acquisition will make it a "North American cannabis powerhouse." I agree.

3. Trulieve Cannabis

Trulieve Cannabis focuses primarily on the medical marijuana market in Florida. The company now operates 31 dispensaries in the Sunshine State. It also offers home delivery for patients who can't get to a physical store.

This focus on Florida makes a lot of sense. The state is projected to be the third-largest legal cannabis market in the U.S. by 2022 with annual sales of more than $1.7 billion, ranking ahead of several states with legal recreational marijuana markets.

Although Florida doesn't allow the legal use and sale of recreational pot at this point, it could be on the way to doing so. An effort is underway to put a constitutional amendment on Florida's ballot in 2020 to legalize recreational marijuana. If the amendment makes it on the ballot, the chances of passage appear to be pretty good, with a recent survey finding that 65% of Floridians support legalization.

Trulieve would have an even greater growth opportunity should these efforts succeed. But the company doesn't need a legal recreational market to grow. Trulieve reported record revenue and earnings in its latest quarterly update. It should be in a solid financial position to fund additional expansion in Florida and other states. 

Common denominator

You might have noticed that all three of these cannabis stocks have a common denominator: They're all based in the U.S. That's not a coincidence. 

I think that U.S. marijuana stocks are undervalued relative to their counterparts in Canada. This doesn't make every U.S. cannabis stock a great choice. However, the growth prospects and solid business models for Charlotte's Web, Cresco Labs, and Trulieve make these three stocks stand out as good picks for long-term investors to consider buying in September.

One of the main roadblocks to the growth of the global cannabis trade is the fear of prosecution hanging over banks, claims a new report.

The Cannabis Legal Report published by London-based Prohibition Partners, finds that medical cannabis now legal in 43 countries with an ever-increasing number of countries also allowing access to CBD products 

It says this  ‘significant’ shift in attitudes to cannabis has been driven by ‘a kaleidoscope of forces including widespread political upheaval, technological innovation and new societal norms’.

The report analyzes the current global status of cannabis legal and regulatory regimes with its major finding being the inability of banks to do business, particularly trade, with cannabis firms, without fear of prosecution. With cannabis federally outlawed multi-nationals are reluctant to enter the U.S. market, as they cannot carry out cross-state trade, it says. 

“Federally insured banks are forbidden from dealing with cannabis businesses, leading to problems all over the world where firms rely on either U.S. capital, allow U.S. dollars as a currency, or use the services of a lender based in the U.S.,” It says. 

The report highlights how a smooth passage into law for the SAFE Banking Act could open the global markets to the larger U.S. players. It says global regulation is failing to keep pace with legalization, and ‘international agreements are needed to give clarity to businesses and patients’. 

Daragh Anglim, Prohibition Partners‘ Managing Director, said: “Regulatory shifts and advances came thick and fast over the last 12 months, such as Thailand’s reform of previously conservative cannabis policies, Canada’s legalisation of adult-use cannabis and the UK’s implementation of a medical cannabis programme. 

“We feel that international regulatory bodies and institutions need to keep pace with global legislative change to offer the clarity that businesses and patients need.” Highlighting how a regulated environment can help business progress it cites Canada as the most active global merger and acquisition player with Canadian firms buying up ‘local’ producers.

It says: “The support and experience gleaned from working in a fully regulated adult market have enabled Canadian firms to penetrate strategically important foreign jurisdictions such as Germany, the largest European Union state.” 

It highlights how Germany’s medicinal market alone promises to be larger than Canada’s medicinal and recreational markets combined, ‘making it an essential outpost for ambitious firms’. 

The report also singles out countries such as the such as the Philippines and Thailand, with strict anti-drug laws, who are launching or advancing medicinal cannabis programmes, while liberal Western jurisdictions are inching toward adult recreational markets. It adds. 

A Michigan legislative committee approved a bill on Tuesday that would require labels on cannabis products to warn consumers about the risks of marijuana use during pregnancy and while breastfeeding. The Michigan House of Representatives’ Judiciary Committee voted 11-2 in favor of the measure, which will head next to the House floor for a vote by the full body.

Under the proposed legislation, all cannabis products would be required to be packaged with a label reading: “Warning: Use by pregnant or breastfeeding women, or by women planning to become pregnant, may result in fetal injury, preterm birth, low birth weight, or developmental problems for the child.”

Republican Rep. Daire Rendon, one of the bill’s sponsors, said that Michigan’s regulations should help inform and protect consumers who may be new to cannabis.

“This is a brand new product that’s going out … and a lot of people automatically think ‘Wow it’s legal, it’s going to be safe,’” said Rendon. “So we felt it was very important that people understand there are health implications for using products like this.”

Citing research that shows that smoke from both cigarettes and marijuana can increase the chance of developmental problems in infants and difficulties with learning and paying attention in older children, Reardon said that legislators decided to address marijuana’s impact on fetal development after hearing testimony from pediatricians.

Too Many Warnings?

But fellow Republican Rep. Beau LaFave said that while he doesn’t condone cannabis use by pregnant women, he voted against the bill to preserve the impact of consumer warning labels.

“Just because something’s unhealthy doesn’t mean the government needs to tell everybody about it or require that label be on it,” LaFave said. “If you warn everyone about everything, the warnings themselves become less helpful.”

Josh Hovey, a spokesman for the Michigan Cannabis Industry Association, said the trade group has decided to not take a position on the bill. Hovey said in an email that the cannabis industry “supports warning labels when they are backed by thorough scientific data and we don’t believe there is enough research available at this point. Since some degree of caution is reasonable, we are neutral on the bill.”

Michigan’s House Judiciary Committee also approved another bill on Tuesday that would require both medical marijuana dispensaries and recreational cannabis retailers to offer pamphlets on safety, including the potential risks of use by minors.

Before becoming law, both bills must be approved by the full House of Representatives as well as the Michigan state Senate, and be signed by Democratic Gov. Gretchen Whitmer. The two pieces of legislation are both supported by the Michigan Marijuana Regulatory Agency.

B.C. sold less legal cannabis than any province other than Prince Edward Island in the first nine months of legalization and officials blame supply shortages and a slow rollout of retail stores.

Statistics Canada data shows B.C. sold $19.5 million worth of legal pot from October 2018 through June 2019. The only province that sold less was P.E.I., which took in $10.7 million with only a fraction of B.C.’s population.

In its annual report, B.C.’s liquor distribution branch said problems with supply and slower than anticipated provincial and municipal approvals resulted in the province’s cannabis industry evolving at a slower rate.

“Managing inventory levels in an environment of product shortages and unknown customer demand is very challenging,” the branch said. ”The LDB is currently building inventory levels in anticipation of future public and private retail stores.”

Alberta has sold the most legal pot, raking in $123.7 million from its dozens of licensed stores. Ontario, which only began opening brick-and-mortar shops in April, sold $121.6 million while Quebec sold $119.2 million.

Saskatchewan and Manitoba sold $38.2 million and $32.2 million respectively. The Atlantic provinces also sold more than B.C., with Nova Scotia raking in $47.9 million and New Brunswick nabbing $25.9 million.

B.C.’s liquor distribution branch said in its report that Statistics Canada estimates $2.2 billion worth of cannabis was sold in the fourth quarter of last year across the country, but 65 per cent of it was purchased illegally.

The branch report said its strategy on pricing is focused on being competitive with the illegal market and there were 212,000 retail transactions through store and online sales, with an average transaction value of $74.38, in the first six months of legalization.

When edibles are introduced, the industry will need to adapt again, it said.

Branch CEO Blain Lawson said it had a $2 million revenue shortfall this year, due mostly to the upfront costs of adding the distribution and retail sale of cannabis to its operations.

The national supply shortage has held back legal sales across the country, but B.C. was slow to open stores and it also has the strongest black and grey market in Canada, said Michael Armstrong, an associate business professor at Brock University in St. Catharines, Ont.

Vancouver and Victoria granted business licences to illegal dispensaries in the years prior to national legalization, and some of those shops have remained open despite not being authorized under the new regime, he noted.

“If there are hardly any stores, yeah, some people will go to the government website, but most people … if they’re already getting good service, they’ll just keep going to their grey market or black market retailer,” he said.

He said price and quality are the two biggest factors in a cannabis consumer’s decision of where to shop. Price isn’t playing a big role yet because the product shortage means legal stores sell out no matter what, he said.

“There are enough consumers who are willing to pay the roughly 40 per cent extra for the legal cannabis,” he said. “As product supply improves … then the price competition will be much more important.”

As for quality, Armstrong said legal cannabis has an advantage when it comes to consistency and safety. But illegal pot users frequently report that legal weed isn’t as potent as the best that’s available on the black market, he said.

Legal edibles are expected to become available toward the end of this year, he added, and the industry has been putting a lot of money into developing products that aren’t really available in the black market, such as cannabis drinks.

Some think these products will boost the legal market, but others aren’t convinced people will switch from drinking a beer to a weed cooler, Armstrong said.

Provincial governments, particularly in B.C. and Ontario, should focus on opening more stores, he said, and Health Canada needs to continue issuing licences to growers so they can scale up production.

Once the market is more competitive next year, governments need to reconsider their tax regimes, particularly the complicated excise tax, which differs by jurisdiction and creates challenges for industry, he added.

“On a more average $10-a-gram product, a $1 excise tax is a big chunk and if you want to compete with black market prices that are $5 or $6 a gram, it’s very difficult for the legal industry.”

On Tuesday, the USDA (United States Department of Agriculture) announced that certain farmers growing hemp for research purposes will be able to get insurance coverage under the WFRP (Whole-Farm Revenue Protection) program for the 2020 planting season.

Hemp farmers get insurance coverage

The USDA’s RMA (Risk Management Agency) clarified that producers authorized under the 2014 Farm Bill are eligible for the insurance coverage. Only farmers growing hemp for fiber, flower, or seeds can access the insurance coverage. The insurance covers up to $8.5 million in revenues generated from farmland.

In a press release, the USDA’s RMA administrator, Martin Barbre, said, “Numerous producers are anxious for a way to protect their hemp crops from natural disasters.” He also said, “The WFRP policy will provide a safety net for them. We expect to be able to offer additional hemp coverage options as USDA continues implementing the 2018 Farm Bill.”

On December 20, 2018, President Trump signed the Farm Bill, which legalized hemp and its derivatives. However, the USDA stated that it’s still in the process of developing regulations under the bill. So, other farmers have to wait for the regulations. The USDA confirmed that cannabis, which contains less than 0.3% of THC, is eligible for the WFRP plan.

Why less than 0.3%?

Hemp is a type of cannabis that contains less psychoactive THC and more of CBD (cannabidiol). Hemp contains less than 0.3% of THC, while cannabis contains between 5% and 20%. THC delivers the psychoactive effects of the drug or the “high.” CBD is mainly used in medical applications like pain relief and mood alteration. Also, CBD acts as a raw material for fabrics and food.

Regulators are treading the waters carefully. Regulators can target cannabis companies quickly if they aren’t careful.

At times, the regulations aren’t defined well. For example, Curaleaf (CURLF) (CURA) received a warning from the FDA about incorrect marketing. Based on Curaleaf’s response, the rules weren’t clear. However, Curaleaf intends to comply with regulators.

Growth in the US hemp business

The development from the USDA couldn’t have come at a better time for cannabis companies. Companies want to expand their hemp business in the US. Canopy Growth (WEED) (CGC) is researching hemp and hemp derivatives at its Batavia facility in Illinois. The company acquired AgriNextUSA, a hemp enterprise, in March.

Earlier this year, Tilray (TLRY) acquired Manitoba Harvest—a hemp food manufacturer. The company introduced a portfolio of hemp-extracted products in the second quarter. Today, Curaleaf was trading over 11.0% due to its bullish outlook, while Canopy Growth and Tilray were trading 0.5% and 3.5% higher as of 11:55 AM ET.

With companies’ research work in full swing, they need hemp in large quantities. The insurance coverage on hemp gives farmers safety and ensures the flow of hemp to these companies.

Marijuana laws have been all over the place in Texas. Many states have passed laws permitting marijuana for medical use. While some states have decriminalized marijuana, others have legalized recreational marijuana. However, Texas has been strict with marijuana laws. So, what’s happening now?

Did Texas accidentally decriminalize marijuana?

In June, Texas passed a bill that legalized the production of hemp and hemp-derived products like CBD oil. However, the state might have accidentally decriminalized marijuana, according to a GQ article on August 20. According to prosecutors, the bill made it difficult for law enforcement to determine if a substance is hemp or marijuana. The new testing is expensive for law enforcement officials.

Difference between marijuana and hemp 

The THC level is the difference between hemp and marijuana. THC or tetrahydrocannabinol is the psychoactive ingredient. If the THC level is 0.3% or more, its marijuana. When the THC level is below 0.3%, it’s hemp. In an update in June, the Texas District and County Attorneys Association stated that the bill’s side effects passed. They said that the sudden execution of the law didn’t give crime labs in Texas the time or resources to differentiate legal hemp from illegal marijuana.

The prosecutor’s association and state crime labs said that they don’t have the resources to detect the TCH level correctly. As a result, hundreds of marijuana cases were dropped. According to the Texas Tribune, Travis County District Attorney Margaret Moore said, “I will also be informing the law enforcement agencies by letter not to file marijuana or THC felony cases without consulting with the DA’s Office first to determine whether the necessary lab testing can be obtained.”

Florida and Ohio accidentally decriminalized marijuana

Besides Texas, Florida and Ohio also unintentionally decriminalized marijuana. In June, Florida passed a bill to administer regulations regarding hemp licensing and cultivation. In July, Ohio passed a similar bill, which accidentally didn’t determine hemp from marijuana. The bill allows farmers to grow hemp. As a result, the bill legalized manufacturing and selling CBD products derived from the cannabis plant. Lawmakers have faced challenges in all three of the states.

Is Texas down for marijuana legalization?

Texas has been a pretty strict state when it comes to cannabis laws. Even possessing a tiny amount of marijuana can land an individual in jail in Texas. The penalties could get more severe. A Cato Institute report this week discussed how strict Texas has been with cannabis laws. In 2017, Texas made 62,057 arrests related to marijuana possession. The report said that arrests related to marijuana violations have increased from 6.8% to 8.2% since 2010. Therefore, passing the bill has been a challenge for law enforcement officials.

However, Republican leadership in Texas explained in a letter to the Texas District and County Attorneys Association that marijuana hasn’t been decriminalized in Texas.

Hemp business expands among cannabis players

The federal Farm Bill passed in 2018. The bill legalized regulated hemp cultivation. Notably, the Farm Bill removed hemp from the Controlled Substances Act. The bill allows the transfer of hemp-derived products to other states for commercial or other purposes. Since then, many states have chosen to legalize hemp. The states want to profit from the growing hemp market. Currently, around 47 states have passed some kind of hemp legislation.

Many cannabis players are also cashing in on the hemp business. Recently, Tilray (TLRY) finalized a deal with the largest hemp foods company. Tilray acquired Manitoba Harvest in February. The company introduced a wide variety of hemp-extracted products in the second quarter. Tilray’s earnings results haven’t been strong this year. The company has reported net losses. Overall, the stock has fallen 35.1% in August and 62.4% YTD (year-to-date).

Canopy Growth (CGC) (WEED) is moving forward with its plan to open a New York hemp-growing facility, which could boost the US CBD market. The company acquired AgriNext USA to advance its hemp business. Canopy Growth had disappointing results for the first quarter of 2020. The company’s top line and bottom line missed the estimates. The stock has fallen 28.0% in August and 12.5% YTD.

Aurora Cannabis (ACB) has been developing hemp-based products. The company acquired Hempco Food and Fiber’s outstanding common shares. Is the hemp business expanding amid trade war tensions? Read Hit by Trade War, Tobacco Farmers Turn to Hemp to learn more. Aurora Cannabis is scheduled to report its results next month. The company increased its revenue guidance for the quarter. Aurora Cannabis stock has fallen 10.8% in August. So far, the stock has risen 12.2% YTD.

Cannabis legalization

Some presidential candidates support cannabis legalization. The 2020 presidential election is heating up. Marijuana legalization is a significant policy issue in the election campaign. Will loopholes in legislation complicate the situation for the cannabis industry? Read Marijuana Legalization: Is the White House Warming Up? to learn more. Stay tuned with us for the latest news.

The governor of Minnesota has ordered state agencies to ready themselves for the advent of cannabis legalization — but many lawmakers think such a marijuana bill is unlikely to pass this year.

“My agencies have been tasked to put all of the building blocks in place, from Revenue to the Department of Public Safety to the Department of Health,” said Governor Tim Walz. “We will have everything ready to go, and we will be able to implement it in Minnesota the minute the Legislature moves this.”

But he faces a Republican-controlled state senate that seems dead-set on keeping recreational marijuana nice and illegal. “It’s my position that it’s not good for Minnesota. It’s dead as far as I’m concerned in the Senate for next year,” Republican Senate Majority Leader Paul Gazelka told Minnesota Public Radio. He cited concerns over dangerous driving, children getting their hands on the drug, and addiction issues.

Two legalization bills were presented at the beginning of the year by Senators Melisa Franzen and Scott Jensen and Representative Mike Freiberg. The similar plans would legalize use for adults 21 years old and up, and set up a licensing to taxing system, as well as one for regulating health and safety within the industry. Those proposals also include plans for social equity programs to address both the biased fall-out of the war on drugs, and services to take on driving under the influence of marijuana.

Last year, a legalization bill received a single hearing in the state senate before it stagnated. But marijuana advocates are already gearing up for 2020 legislative proposals, which many say could be more realistic should the Republicans lose seats in the mid-term elections.

House Majority Leader Ryan Winkler has already announced plans to be the main sponsor on such a bill. “It’s a big issue that needs a lot of attention to be done well,” he said about his decision to leap into the fray. He added that he would embark on a series of “listening sessions” around the state to see what Minnesotans’ primary concerns and hopes were in regards to legalizing cannabis.

“I think most of us who have looked at the issue think that legalization is the path we have to take,” Winkler said. “But I don’t want to prejudge that until we’ve had that conversation with Minnesotans.”

Few states have gone the legislation route when it comes to successfully regulating adult-use marijuana. In fact, Illinois has been the only place in the United States when such a policy change was not accomplished through a voter referendum.

Earlier this summer, a Minnesota Medical Association survey found that the majority of the state’s doctors consider recreational marijuana legalization to be a medically important issue. The same study showed that only 39 percent of Minnesota doctors oppose the legalization of adult-use cannabis. By March, Minnesota had 1,500 health care practitioners signed up to recommend medical marijuana to their patients.

Minnesota’s medicinal marijuana program started in July 2015, and was regarded as one of the country’s strictest. Patients with one of 13 qualifying health conditions lose their gun rights when they enroll in the program, and research suggests that there are more people dropping out of the program than are continuing to be enrolled in it.