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The Supreme Court may be hitting the cannabis market (with a big ruling)
Going Supreme: Colorado marijuana software and security firm Helix TCS has petitioned the U.S. Supreme Court to review a lower court decision requiring legal cannabis businesses to adhere to federal labor laws. The suit initially arose as former security guards alleged they worked over 40 hours/ week without paid overtime (violating federal law under the Fair Labor Standards Act). Helix has argued that the laws didn’t apply because Colorado’s recreational marijuana industry is in violation of the federal Controlled Substances Act, to which a court in Denver previously disagreed.
Why It Matters: This is just an absolutely bonkers court case. Helix is essentially arguing, “Hey… we’re actually illegal, so we don’t have to treat our employees under the basic rights that apply nationally.” Legally, it might be a semi-defensible approach, but… it’s not only a pretty scummy argument but also somewhat undermines broader goals of, you know, actually becoming a federally legal industry. Then again, it’s maybe not surprising that Helix might not be super concerned with advancing the industry - a legal environment isn’t really bullish for security, and their seed-to-sale software is largely regarded as the worst of the all. When their entire business model benefits from the inefficiencies and technicalities of the complicated environment today, they’re not rushing to promote an uncertain tomorrow, especially if they can save money screwing over employees in the meantime. 
  

Hemp On, Hemp Off: Canadian cannabis company Aurora Cannabis is divesting further hemp assets, selling a large Ontario greenhouse for roughly half and a third of its asking and purchase prices. The greenhouse was originally acquired to “provide optionality for low-cost CBD extraction” but now doesn’t consider “hemp production and foods business to be core to Aurora’s future”. The company also has agreements to divest of certain Canadian and European hemp assets for a nominal amount in May 2020, signalling a big retreat from the space it entered in 2017 with intent to profit off of CBD.
Why It Matters: Another week, another company divesting “non-core” assets. But it’s not just geographies that companies are retreating from (as Acreage did this week), it’s also verticals that have become less attractive as well. In that case, hemp cultivation definitely fits the bill - initial enthusiasm has led to a substantial oversupply, where prices are rock bottom, biomass is degrading in storage or even remains unharvested, and companies are going bankrupt. It’s a reminder that federal legality and booming downstream demand alone do not necessarily promise untold riches… especially in cultivation.

Quick Hits

Research Rips

👍 Marijuana May Not Be Tied To Lower IQ
👍 CBD May Mitigate Risks Of THC-Induced Harms
👍There’s Merit To Setting 19 years as Minimum Age For Recreational Cannabis
👍 Cannabis Is A Potentially Effective and Cost-effective Treatment For Drug-Resistant Epilepsy
👍 Long-Term Cannabis Delivery Systems May Provide New Form Of Cannabis Administration 
👎 Cannabis Use Was Associated With Higher Prevalence Of Certain Fungal Infections

 

State-by-State
State Legalization Watch: 0/5 

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