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Cannabis SPACs’ Cross-Border Push Threatens Tax Hit on Investors
Special purpose acquisition corporations (SPACs) have been a big deal in cannabis financing as of late, but a recent report reminds us that there are downsides to the financial vehicle. Due to Obama-era anti-inversion tax rules, when a Canadian SPAC acquires more than 80% of a U.S. company, any profits that flow up to the Canadian company will be treated as U.S. income. This triggers different tax consequences for U.S. shareholders and foreign shareholders of the cannabis company.
Texas House committee passes bill to expand medical marijuana program
The Dallas Morning News
Texas, normally a maverick, freedom-loving state, has some of the most restrictive cannabis laws in the United States. The medical cannabis that does exist in the state is basically hemp with a .5% THC cap and only legally available from 3 companies. Fort Worth Republican Rep. Stephanie Klick aims to change that. Her bill would grow the Texas Compassionate Use Program by including patients with any type of cancer, not just terminal, PTSD (only in veterans), and chronic pain that would otherwise be treated with an opioid. The bill would also raise the THC cap 10x to 5%. However, it would take a few more 10x increases after this to allow Texas companies to legally sell even a fairly weak joint.
Group backed by Charles Koch joins in federal marijuana push after Zoom with Snoop
Cannabis legalization has long made strange bedfellows of libertarians and hippy liberals alike, and now the marquee libertarian, Charles Koch, is also joining the fight. It just took the one and only Snoop Dogg to convince him. Americans for Prosperity, the advocacy group co-founded by Koch has joined a coalition of groups that are looking to try and sway the 10-12 necessary Republican votes to pass legalization in the U.S. Senate.
Study: Cannabis Impairment Lasts Between 3 and 10 Hours
A recent meta-study by Australian researchers at the University of Sydney’s Lambert Initiative for Cannabinoid Therapeutics suggests that cannabis impairment can last anywhere between three hours, for inhalable products, to ten hours for edible products based on moderate to high doses.
Uber CEO says company could get into cannabis delivery
This week while on CNBC, Uber CEO Dara Khosrowshahi said that they would be open to delivering cannabis when federal regulations change. As we established in last week’s Bite, Biden isn’t budging and more tellingly, Uber made a recent acquisition, alcohol delivery company drizzly, separate from its cannabis counterpart, lantern. Given the need to monetize their network as much as possible, we would not be surprised to see Uber hauling all manner of additional products if federal regulations were to change - from donor organs to livestock.
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Cannabis as a Consumer Staple
In what should have probably been predictable in hindsight, the U.S. cannabis industry thrived during the COVID pandemic (where it was able to stay open thanks to “essential” designations), recording significant sales growth even in “mature” adult-use markets like Washington and Oregon. Not many people would have predicted that over a year into a pandemic cannabis sales would be up 30-60%. Maybe that’s because people are focused on looking at what’s new and different about cannabis (and there’s a lot) instead of first looking at how much cannabis behaves like products we know well, we budget for, and buy regularly - consumer staples.