Proposed Framework for Adult-Use Legalization Now Slated for Review by the European Commission

Germany’s Federal Cabinet officially approved a plan to legalize marijuana nationwide, however, before the draft law is written, a blueprint will be sent to the European Commission for approval in order to ensure international and European policy allows the country to move ahead, reports The Washington Post.

The Breakdown

• The proposal, which is currently in the form of a 12-page framework outlines key aspects of the legalization plans including removing cannabis and THC from its classification as a narcotic, adults 18 and older could purchase and possess 20-30 grams of cannabis at federally licensed stores and grow up to three plants for personal use.
• Advertising for cannabis products would be prohibited, and strict rules would be imposed on the outer packaging of cannabis products.
• Flower, capsules, sprays, and drops would be allowed, but edibles as well as synthetically produced cannabinoids would not be permitted.

Our Perspective

The key takeaway from this announcement is that the EU remains one of the biggest hurdles in terms of passing cannabis reform in Germany. Luckily, the health minister, Karl Lauterbach suggested that the approval or rejection from the commission would not take long and that a realistic expectation for cannabis to be legalized in Germany is 2024. However, some concerns regarding the proposal have been put forward. Matt Lamers, a reporter at MjBiz Daily noted the relatively short length of the paper that took over a year to draft, compared to Canada’s 100+ pages that helped inform lawmakers. Furthermore, restrictions around advertising as well as edibles are being criticized for being short-sighted and will lead to the unintentional consequence of bolstering the illicit market.

Cronos Settles With SEC After Accusations of Filing Inaccurate Financial Statements

According to the U.S Securities and Exchange Commission (SEC), Cronos Group Inc. a Toronto-based cannabis company and its former executive, William Hilson, settled with the SEC without having to admit or deny guilt by agreeing to cease and desist from future violations of the charged provisions, per the CBC.

The Breakdown

• The settlements ended a pair of investigations, one being carried out by the Ontario Securities Commission (OSC), where Cronos agreed to pay an administrative penalty of 1.3 million, covering costs totalling 40,000 and submitting to a review that will analyze its compliance around financial reporting.
• The other investigation, lead by the SEC, charged Cronos with improperly accounting for millions of dollars of revenue and other accounting misconduct in multiple reporting periods in 2019.
• Cronos agreed to retain an independent compliance consultant to review, assess, and make recommendations along with Hilson agreeing to a three-year officer and director ban and suspension from practicing as an account.
• According to the SEC, the company will not face a financial penalty because of “its timely self-reporting, significant co-operation, and remediation”.
• Cronos has been accused of improperly recognizing 7.7 million in revenue from financial statements in 2019 and that they overstated virtually all its U.S goodwill.

Our Perspective

Putting aside the settlement with the OSC, the lack of repercussions from the SEC for the inaccurate financial statements is certainly a cause for concern and stories like this reinforce the idea that cannabis companies can’t be trusted. This behavior is likely the result of a company that is under immense pressure to become profitable and appease shareholders, but the lack of any significant penalty for this type of misconduct does not send a strong signal that these commissions are taking these investigations seriously.

Pushback on Alberta’s Plans Regulate Psychedelics

Following the announcement in the last days of Jason Kenney’s government that Alberta will implement regulations for psychedelic-assisted therapy, growing concerns related to how the new regulations might limit access to psychedelic medicine have emerged, per the CBC.

The Breakdown

• The new regulations in Alberta would require medical directors to apply for a license before treating patients with psychedelics for mental health disorders and a psychiatrist would have to oversee the treatment and supervise patients while they are in an altered state.
• According to Philippe Lucas, president of clinic group SABI Mind in Calgary, “there’s an over-reliance on psychiatry,” and argues that “giving exclusive control over the field to psychiatrists is a mistake”.
• Under the newly proposed regulations, a physician may prescribe a psychedelic drug, but only in consultation with a psychiatrist.

Our Perspective

Despite the progressive nature of the announcement to regulate psychedelics in Alberta, it’s clear that not everyone is happy with how the plan is moving forward. As the article points out, these treatments are already severely limited, and by putting so much emphasis on psychiatrists having the primary responsibility in terms of overseeing and delivering treatment will likely lead to increased costs and make psychedelic-assisted therapy even more inaccessible, particularly given the long wait times for psychiatry services in Alberta. However, it is still too soon to come to any conclusions as this proposal is so new, and we may still see changes to the regulations before they come into effect.