Arizona law may protect Medical Marijuana users from feds’ new stance

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U.S. Attorney General Jeff Sessions may be looking to crack down on pot sales in states where they are legal, but Arizona medical-marijuana users likely don’t need to worry.

A provision buried in the federal budget, plus a safety valve in what Arizona voters enacted in 2010, are expected protect individual medical-marijuana users in the State unless the Drug Enforcement Administration starts targeting individual users, which is considered highly unlikely.

Leading cannabis companies have seen positive feedback from support such as Arizona’s and other lawmakers across the country. The companies are experiencing positive momentum as a result including Supreme Pharmaceuticals Inc. (TSX: FIRE) (OTC: SPRWF), MedReleaf Corp. (OTC: MEDFF), GW Pharmaceuticals (NASDAQ: GWPH), and MYM Nutraceuticals Inc.(CSE: MYM) (OTC: MYMMF).

In what is equivalent to an about face, Attorney General Sessions announced that he is rescinding a memo that directed the federal prosecutors under his jurisdiction not to target businesses or individuals who are in compliance with state marijuana laws despite the fact the drug remains illegal under federal law.

It’s evident that the tide has turned with regard to public perception of marijuana use, but Sessions is apparently determined to follow the contentious ruling.

Still, markets are rebounding on actions by the states and the positive news out of Canada where medical marijuana is already legal. Several prominent companies are continuing their initiatives to expand capacity including Supreme Pharmaceuticals Inc. (TSXV: FIRE) (OTC: SPRWF), and others focusing on medicinal applications and therapies using cannabis, such as MedReleaf Corp. (OTC: MEDFF), and GW Pharmaceuticals (NASDAQ: GWPH).

There are also a few specialized companies looking to support their efforts in developing formulations, extracts and supplying marijuana based on their Licensed Producer status. Among these, MYM Nutraceuticals Inc. (CSE: MYM) (OTC: MYMMF) is leading the charge. The company has announced it is developing some of the world’s largest cannabis greenhouses, as well as diversified interests in cannabis derivatives, formulations and most recently, producing cannabis in Australia for that growing market.

What are the Feds to do?

For the moment, AG Sessions and his prosecutors really can’t do anything about Arizona.

A provision in the federal budget adopted in 2014 prevents his agency from using any resources to target patients. It also prevents actions against providers in states where medical marijuana is legal. That provision has been continuously renewed every year since, and shows no signs of being rescinded.

It’s important to note though that this protection expires Jan. 19th unless Congress includes it in the new spending bill. Then again, they could adopt another “continuing resolution” to keep the government operating while a budget deal is being negotiated.

“If it is not included, or if there is a government shutdown, the Department of Justice will no longer be prevented from targeting state-legal medical marijuana,” said Morgan Fox, spokesman for the Marijuana Policy.

Again, that’s not likely under the current climate.

Demand Continues

Despite the Federal Government’s actions, the demand for quality cannabis continues.

According to a recently released report from Marijuana Business Daily titled "Marijuana Business Factbook 2017," the U.S. legal cannabis industry is expected to grow by about 30% in 2017, 45% the following year, and an aggregate of 300% between 2016 and 2021.

The numbers look even better in neighbouring Canada: the annual retail marijuana market there could be at least $4.9 billion, but possibly as high as $8.7 billion considering ancillary markets.

This has given rise to a race to create more product right away.

Companies like MYM Nutraceuticals are aggressively pursuing the next stage without regard for the enforcement issues by the US Government. Their strategy is based on superior growing technology, well-crafted branding and innovative distribution opportunities.

Last year MYM signed an exclusive deal with the Quebec municipality of Weedon to build a 1.5 million square foot facility. At completion, Weedon will be one of the largest greenhouse facilities dedicated to marijuana growth in the world, expected to produce over 150,000 kg of cannabis per year.

MYM has also announced two more production facilities; a smaller facility in Laval, Quebec which is due to come online shortly, and the other in Australia that’s a co-venture with local government. That facility in New South Wales will house a 1 million square foot growing space slated to start in 2018.

The 'What If?' Scenario

Even if the DOJ takes an enforcement stance, there are some protections built into the Arizona law.

The first is designed to protect medical-marijuana users against any state administration that decides to use the illegality of marijuana under federal law to shut down Arizona’s program.

The 2010 law approved by voters allows people with certain specified medical conditions to be certified by the state to obtain up to 2ƒ ounces of marijuana every two weeks. They make purchases through state-licensed dispensaries.

Accordingly, if the Arizona Department of Health Services fails to issue a medical-marijuana-user identification card within 45 days of getting a valid application or renewal, the card is considered to be deemed “issued” and the applicants copy then qualifies as a valid ID card.

A separate section says if the health department is not accepting applications, people can effectively self-certify by providing the same required information in a notarized statement along with the written certification of a physician that the patient needs the drug.

These possibilities are not out of the question, even with the voter approval of the 2010 law.

Arizona’s Governor Doug Ducey supports the Session sentiment saying, “I’ve always thought we should enforce federal law, just like we should enforce state law,”.

So while the Feds and States wrestle over the reality of the laws, the prospect of added demand coupled with solid news of governmental support has fortified the positions of cannabis producers and medical companies.

Several states and Canada appear to be willing to take the initiative to legalize marijuana. And legal cannabis companies are moving to meet future demand.

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