ASA Activist Newsletter - Mar 2014

March 10, 2014 | William Dolphin

IN THIS ISSUE

  • First Dispensaries Earn Patient Focused Certification
  • New DOJ Policy on Cannabis Business Banking
  • Members of Congress Urge Obama to Reclassify Cannabis
  • Epilepsy Foundation Calls for Safe Access, More Research
  • Federal Judge Rules Warrant Needed for Patient Records
  • California Dispensary One of Many Battling IRS
  • Oregon Accepting Dispensary Applications
  • San Diego Passes New Medical Cannabis Regulations
  • Three Medical Cannabis Bills in California
  • ACTION ALERT: Help Fund a Unity Scholarship!

First Dispensaries Earn Patient Focused Certification

Two Approved in California, Certifications Pending in Five States

PFC sealASA’s Patient Focused Certification (PFC) program last month certified the first two dispensaries in the country as meeting the standards issued in 2013 by the American Herbal Products Association (AHPA) and the American Herbal Pharmacopeia (AHP), two established and well-respected organizations that help guide the multi-billion dollar herbal and botanical products industry. The two dispensaries, Berkeley Patients Group and SPARC, are both in the San Francisco Bay Area, but certifications for other medical cannabis businesses are pending in five states.

"In every city I visit across the country, patients say product safety and quality assurance are the issues they care about," said ASA Executive Director Steph Sherer. "ASA’s certification program helps patients, healthcare providers, and regulators identify reliable, high-quality medical cannabis products and services."

PFC is the only nonprofit, third-party certification for the medical cannabis industry and includes distribution, cultivation, analytics and other operations. To earn certification and the right to use the PFC seal, each business or product must demonstrate compliance with AHPA and AHP standards. That includes trainings for all staff, a detailed audit of operations that includes a scheduled site visit and at least one surprise visit annually, and an independent consumer complaint process. Certification is overseen by a review board of scientists, doctors, and industry and regulatory experts.Robert Jacob

"The Patient Focused Certification program is long overdue," said Sebastopol Mayor Robert Jacob, who is also director of Peace in Medicine and SPARC, a San Francisco-based medical cannabis dispensary certified last month. "Patients deserve to know that the products they receive are of the highest standard, and as mayor of Sebastopol, I am relieved to know there are product safety standards established by a trusted national organization to help guide local governments."

More than one million Americans in 20 states and the District of Columbia are legally qualified to use medical cannabis. Many states and localities have regulations to govern businesses and organizations that serve those patients or are adopting new ones that reflect the guidelines issued by the AHPA and AHP.

AHPA standards for the medical cannabis industry cover manufacturing, packaging and labeling of commercial medical cannabis products, as well as dispensary operations and laboratory practices. Late last year, the AHP released a cannabis monograph based on expert scientific consensus that sets standards for the plant's identity, purity, quality, and botanical properties.

ASA has provided trainings to the medical cannabis industry for over a decade and holds a permit from the District of Columbia for mandatory industry trainings. PFC trainings, which are co-produced with the Cannabis Training Institute (CTI),certify adherence to AHPA and AHP standards.

Following a successful beta phase, the PFC program is now available in all medical cannabis states and the District of Columbia. Certifications are pending for businesses in Arizona, California, Maine, New Mexico and Washington State.

More information:
Patient Focused Certification (PFC) program
PFC brochure
AHPA Standards
AHP Cannabis monograph (Abridged version)

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New DOJ Policy on Cannabis Business Banking

Financial Services to be Made Available to State-Licensees

Federal AdvocacyThe Obama Administration last month issued new guidance to financial institutions that allows them to legally do business with cannabis businesses licensed to operate under state laws. Until now, federal money laundering laws have been used to block those businesses from having bank accounts, using credit cards, and other financial services.

The new memorandum issued by the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury (DOT) and the Department of Justice (DOJ)  reverses a policy aimed at forcing cannabis businesses to be cash-only that began under the Bush Administration and was intensified under President Obama. The new policy "clarifies customer due diligence expectations and reporting requirements for financial institutions seeking to provide services to cannabis businesses," according to a press release issued by FinCEN. Institutions covered by the policy include banks, credit unions, and credit card service companies such as VISA and MasterCard.

"We have been pushing the federal government for years to treat licensed cannabis businesses the same as other businesses," said Steph Sherer, Executive Director of ASA, which successfully lobbied members of Congress in 2010 to request a change in the administration's policy. "This is a welcome step, but a piecemeal approach to medical cannabis policy cannot replace a comprehensive public health solution."

To date, the Obama Administration has issued several memoranda providing limited guidance for specific executive departments, such as DOJ, Housing and Urban Development, and Veterans Affairs, but has strenuously resisted efforts to change the classification of cannabis to recognize its use in medical treatments.

"Removing the risks associated with cash-only businesses shows the Administration is accepting that the distribution of medical cannabis is being regulated responsibly by the states," said Sherer. “With more than a million qualified patients accessing those services and more than 40% of the US population living in states that regulate medical cannabis, this policy change should be welcomed by businesses in the financial sector, as well."

More information:
New DOJ guidance on marijuana for financial institutions
FinCEN press release on new guidance
2010 letter to Treasury from 15 Member of Congress

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Members of Congress Urge Obama to Reclassify Cannabis

Letter from 18 Legislators Says Schedule I Status "makes no sense"

Federal AdvocacyEighteen members of Congress last month formally called on President Obama to use his authority to reclassify cannabis to recognize its medical uses and relative safety. The bipartisan request, which came in letter sent by members of the House of Representatives, notes that the current classification of cannabis "makes no sense," and asks President Obama to "instruct Attorney General Holder to delist or classify marijuana in a more appropriate way." The Congressional letter came just days after The New Yorker magazine published an interview with the President in which he acknowledged that cannabis is less dangerous than alcohol.

"Classifying marijuana as Schedule I at the federal level perpetuates an unjust and irrational system," says the Congressional letter. "Schedule I recognizes no medical use, disregarding both medical evidence and the laws of nearly half of the states that have legalized medical marijuana."

Congressman Earl Blumenauer (D-OR), the letter's lead author, said in a statement that reclassifying marijuana "is a step the administration can take to start to rationalize federal marijuana policy to bring it in line with the advances that are happening in the states."

In addition to Rep. Blumenauer, the letter was co-signed by Representatives Steve Cohen (D-TN), Sam Farr (D-CA), Raúl M. Grijalva (D-AZ), Mike Honda (D-CA), Jared Huffman (D-CA), Barbara Lee (D-CA), Zoe Lofgren (D-CA), Alan Lowenthal (D-CA), James McGovern (D-MA), James Moran (D-VA), Beto O'Rourke (D-TX), Jared Polis (D-CO), Mike Quigley (D-IL), Dana Rohrabacher (R-CA), Jan Schakowsky (D-IL), Eric Swalwell (D-CA), and Peter Welch (D-VT).

The Controlled Substances Act establishes several means for changing the classification of drugs, including action by the executive branch under the authority of the U.S. Attorney General or the DEA.

In 2011, the governors of Rhode Island, Vermont and Washington filed a petition to reclassify marijuana for medical use. Colorado Governor John Hickenlooper filed a separate, similar petition. Both are pending before the DEA and could be approved at any time.

More information:
Congressional letter calling on Obama to reclassify cannabis

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National Epilepsy Foundation Calls for Safe Access, More Research

Federal AdvocacyThe Epilepsy Foundation last month endorsed medical cannabis as a treatment option for the 2.3 million Americans who suffer from seizures and called on the federal government to make it available to all Americans. In a statement, foundation said “the end of seizures should not be determined by one’s zip code.”

The Epilepsy Foundation announced it will take action to support improved access and research on medical cannabis, including urging the DEA to reschedule cannabis and supporting changes in state laws to make cannabis available to treat epilepsy for both adults and children.

The foundation also released a statement from one of its board members, Orrin Devinsky, M.D., a professor of neurology and Director of NYU’s Comprehensive Epilepsy Center, who said that if he were a parent of a child with a seizure disorder that did not respond to conventional treatments, he would try cannabis-based treatments.

As a doctor, I would gladly prescribe marijuana products for many of my patients who failed existing therapies if it were legal in my state,” Dr. Devinsky wrote. “Trying marijuana or related compounds should be regarded like any other experimental treatment – a shared decision between patient/parent and doctor.”

An estimated 1 million epilepsy patients in America do not respond to conventional treatment.

More information:
Epilepsy Foundation press release

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Federal Judge Rules Warrant Needed for Patient Records

OregonOn February 11, a federal court in Oregon ruled administrative subpoenas could no longer be used to obtain medical records of patients. U.S. District Court Judge Ancer L. Haggerty concluded medical records should be considered confidential and that "it is more than reasonable for patients to believe that law enforcement agencies will not have unfettered access to their records." The case of Oregon Prescription Drug Monitoring Program v. Drug Enforcement Administration stems from the DEA's routine use of administrative subpoenas to obtain records of prescriptions provided by physicians, but medical cannabis patients have been subjected to similar privacy violations.

Over the past few years, officials in multiple medical cannabis states have been subpoenaed to turn over patients records, including in California, Michigan, and Oregon. In October 2012, the DEA subpoenaed patient records for all medical cannabis patients registered in Mendocino County's cultivation program. In January 2011, the DEA subpoenaed the records of seven Michigan medical cannabis patients, despite strong privacy protections in state law to prevent such subpoenas. In 2007, the federal government tried to obtain via subpoena the medical records of 17 patients registered in the Oregon Medical Marijuana Program (OMMP).

In his ruling, Judge Haggerty cites the long history of protecting patient records, noting, "Medical records, of which prescription records form a not insignificant part, have long been treated with confidentiality. The Hippocratic Oath has contained provisions requiring physicians to maintain patient confidentiality since the Fourth Century B.C.E."

The district court ruling, which finds that the DEA's use of administrative subpoenas "violates the Fourth Amendment," is not yet binding outside of Oregon, but could become a landmark precedent if the case is appealed.

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California Dispensary One of Many Battling IRS

CaliforniaDespite recent guidance from the Obama Administration designed to ease federal interference with licensed, state-sanctioned cannabis businesses, the owners of a California dispensary were in federal Tax Court last month, fighting an IRS claim for $875,000 in unpaid taxes.

Lanette and Bryan Davies, who have operated CannaCare in Sacramento since 2005, are arguing they should be allowed to deduct $2.6 million in business expenses related to their dispensary.

The IRS says they are barred under section 280E of the federal tax code from deducting any costs of obtaining cannabis or distributing it. That comes from a 1982 law aimed at drug dealers that the Davies’ attorney says should not apply to licensed medical cannabis dispensaries.

The IRS has targeted dozens of other licensed dispensaries with this tactic, including some of California’s most prominent and well-respected.  Several have closed as a result.

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 Oregon Accepting Dispensary Applications

OregonUnder the law passed last year by state lawmakers, HB 3460, the Oregon Health Authority will on Mar. 3 begin accepting applications to operate medical cannabis dispensaries. Applicants must be Oregon residents and submit a fee of $4,000, of which $500 is non-refundable.

Dispensaries must be located in areas zoned for commercial, industrial, mixed or agricultural use and be at least 1,000 feet from schools or another dispensary.

Once licensed, dispensaries will be allowed to supply cannabis or immature plants to patients and caregivers registered with the Oregon Medical Marijuana Program. All cannabis products sold in dispensaries will be required to have labels showing the amount of usable cannabis in them as well as potency information, including the amount of THC and CBD.

Qualified patients may not consume cannabis on site, though patient employees of a dispensary may do so out of view of customers. Patients may possess up to 24 ounces of cannabis and caregivers the same amount for each patient under their care.

More information:Oregon Medical Marijuana Program dispensary application

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San Diego Passes New Medical Cannabis Regulations

CaliforniaBy an 8-1 vote, the San Diego City Council last month created new regulations for medical cannabis dispensaries that will allow up to four to operate in each council district, with one notable exception.

Under the new ordinance, dispensaries must be located at least 100 feet from residential zones and 1,000 feet from schools, parks, churches or other dispensaries. Those restrictions mean none can locate in the district represented by Interim Mayor Todd Gloria, which includes downtown San Diego and the neighborhoods of Hillcrest and North Park. The zoning and operating rules replace ones passed in 2011 that were rescinded after advocates collected signatures to force council reconsideration. That left dispensaries within city limits operating without legal status.

San Diego has had a large number of raids and prosecutions of medical cannabis providers due to a district attorney who has maintained that state law does not allow dispensaries.

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Three Medical Cannabis Bills in California

CaliforniaAs the deadline on new bills for this year passed in California, state lawmakers have three bills before them that would affect medical cannabis patients, cultivators, distributors, and other stakeholders.

Just hours before the Feb. 21 cutoff, Senator Lou Correa (D-Santa Ana) introduced SB 1262, a bill sponsored by the League of California Cities and the California Police Chiefs Association that seeks to regulate medical cannabis cultivators, dispensaries, and doctors. The bill would give regulatory control of medical cannabis to the Department of Health and proposes largely reasonable rules for commercial cultivation and distribution, but it would require doctors who recommend medical cannabis to supply documentation on all patients to the state Medical Board and undergo audits if they issue more than 100 per year.


Assembly Member Tom Ammiano (D-San Francisco) has reintroduced AB 604, a bill that would create a new division in the Department of Alcoholic Beverage Control to create and implement regulations for medical cannabis businesses. The bill was unsuccessful last year, but Assembly Member Ammiano has made the measure a priority for his final year in the state legislature.

Assembly Member Connie Conway (R-Visalia) has introduced AB 1588, which would require patient cooperatives and collectives to be at least 1,000 feet from schools, instead of the current 600 feet. Violations would incur fines up to $10,000. The bill would align California law with federal sentencing standards but would force some legally-permitted facilities to move and restrict new facilities looking for locations.

More information:
Text of SB 1262
Text of AB 604
Text of AB 1588

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ACTION ALERT: Help Fund a Unity Scholarship!

Last year, scholarships enabled medical cannabis patients from 34 states to attend our National Medical Cannabis Unity Conference and lobby day. This year, we’re hoping to help even more get to Washington, DC, April 5-7 to learn advocacy skills and lobby Congress. Here are some of the more than 100 committed activists who have applied for scholarships:

Marcia in Arkansas is a disabled veteran who “could not have survived “ without cannabis but lost access to VA medical care because of it and is now “fighting hard in Arkansas” to pass the initiative there.

Zach in Louisiana has been treating himself effectively with cannabis and wants to help create safe access in the South and find out why it helps some with his condition and not others by “coming together” with other patients “to share what they know.”

Marcie in Colorado is a hospice nurse with certification in holistic nursing who wants “as many facts in my tool bag” as she can have to be a better patient advocate because “patients deserve safe options and to know the truth.”

Seth in Tennessee treats his cerebral palsy and Seizures Artistes MS with cannabis on the advice of his doctor to manage the pain and seizures, even though he “hates breaking the law;” he has been lobbying his representatives to make it legal.

Donate today to help patients and advocates like these make a difference for all of us: AmericansForSafeAccess.org/scholarship.

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