Texas Archives - Green Market Report

StaffJuly 26, 2022
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The Daily Hit is a recap of the top cannabis business stories for July 26, 2022.

ON THE SITE

Texas Leader Wants Hemp Expansion Amid License Shakedown Scandal

Texas Agriculture Commissioner Sid Miller is calling for an expansion of the state’s current cannabis laws while a license shakedown scandal swirls around him. Last week, Miller posted an editorial on the Texas Department of Agriculture website calling for a loosening of the state’s cannabis laws. Texas has only legalized medical marijuana for a very restrictive list of conditions, but the state is also a big proponent of industrial hemp. While Miller is calling for “expanded access to the compassionate use of cannabis products in Texas,” a scandal is swirling within his orbit. Read more here.

Red Light Holland Pushes To Expand In Netherlands

Red Light Holland Corp. (CSE: TRIP) (FSE: 4YX) (OTC Pink: TRUFF) will acquire two retail stores based in the Netherlands in a bid to expand their psychedelic truffles and wellness products. The company also said the acquisition makes Red Light Holland fully vertical – marrying their production, packaging and distribution operations with the retail shops and online sales. Read more here.

The Still-wary NIH Cozies Up To Psychedelics Research

The National Institutes of Health (NIH), the world’s largest funder of medical research, has been taking a keen interest in psychedelics over the last few years. The NIH invests about $41.7 billion annually in medical research mostly in the U.S., with Texas getting the most ($6.7 billion). More than 80 percent of NIH’s funding is awarded for extramural research, largely through almost 50,000 competitive grants to more than 300,000 researchers at more than 2,500 universities, medical schools, and other research institutions in every state. Read more here.

IN OTHER NEWS

Stable Road Acquisition Corp., Momentus Inc.

Shareholder rights law firm Robbins LLP is investigating the officers and directors of Stable Road Acquisition Corp. (NASDAQ: SRAC, SRACW, SRACU) to determine whether they breached fiduciary duties or violated securities laws in connection with the company’s acquisition of Momentus Inc. Stable Road Acquisition Corp. is a special purpose acquisition company that went public in November 2019. Its purpose, according to a filing with the SEC, was to merge with a company in the cannabis industry. Read more here.

Sugarbud Craft Growers Corp.

Sugarbud Craft Growers Corp. (TSXV: SUGR, SUGR.DB, SUGR.WR, SUGR.WS, SUGR.WT) (OTCQB: SBUDD) announced that it has received the initial purchase order from Alberta Gaming, Liquor and Cannabis for the company’s first Dry Sift Hash Infused 3 x 0.5g multi-pack Pre-Roll format. Read more here.

Salus Bioceutical

Salus Bioceutical (Thailand) Co., Ltd., a leading cannabis company in Thailand, has added the ENTEXS Corporation RMD-T Series for THC-free production in their Thai GMP-compliant hemp research, cultivation, and processing facility in Thailand’s Chiang Mai province, which makes Salus Bioceutical the first and only company in Thailand to provide premium medical grade distillate with THC less than 0.2%. Read more here.

Small Pharma Inc.

Small Pharma Inc. (TSXV: DMT) (OTCQB: DMTTF), a biotechnology company focused on short-acting psychedelic-assisted therapies for mental health conditions, today announces that it has received Issue Notification from the United States Patent and Trademark Office that its patent application no. 17/459,284 will be granted on August 9, 2022, in the United States under patent no. 11,406,619 for novel injectable formulations of N,N-dimethyltryptamine (DMT) based compounds. Read more here.

2022 AACC Annual Scientific Meeting & Clinical Lab Expo

As the cannabis derivative delta-8-THC grows in popularity, it’s important for drug tests to be able to detect and differentiate it from delta-9-THC—the primary psychoactive ingredient in cannabis. Breaking research showcased at the 2022 AACC Annual Scientific Meeting & Clinical Lab Expo demonstrates that common drug testing methods can do just that. Read more here.

The AURORA Institute

The AURORA Institute launched with its inaugural event honoring the first four AURORA Institute Prize winners. They were recognized for their significant contributions to ending the mental health crisis. Evening of Discovery was a one-of-a-kind celebration, focusing on the new science of mental health, mindful meditation, understanding the science behind psychedelics, and exploring the integration of the metaverse and virtual reality in mental health interventions. Over USD 8m was committed during the evening, which will be both directed to the charities represented by winners of the AURORA Institute Prize on stage and the ideas brought forward during the “call to action.” Read more here.


Adam JacksonJuly 26, 2022
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Texas Agriculture Commissioner Sid Miller is calling for an expansion of the state’s current cannabis laws as a license shakedown scandal swirls within his orbit.

Last week, Miller posted an editorial on the Texas Department of Agriculture website calling for a loosening of the state’s cannabis laws. Texas has only legalized medical marijuana for a very restrictive list of conditions, but the state is also a big proponent of industrial hemp.

While Miller is calling for “expanded access to the compassionate use of cannabis products in Texas,” a political consultant and former top aide for Miller, Todd Smith, is fighting accusations – among many others – that he profited off a hemp licensing scheme.

Hemp Scandal

Smith was first arrested by state authorities in May 2021, on charges of third-degree felony theft, alleging that he leveraged his relationship with Miller and the Texas Department of Agriculture (TDA) to solicit money and campaign contributions for licenses as the state was figuring out how to regulate hemp cultivation.

In a 9-page affidavit, investigators detailed how Smith used a middle man to recruit prospective clients willing to dole out thousands of dollars in exchange for a “guarantee” that they would be first in line for the state-issued licenses.

The first known instance according to the document occurred at a social event on Aug. 18, 2019, shortly after Texas Gov. Greg Abbot signed into law House Bill 1325, which legalized hemp production.

Smith’s associate, a Texas man named Keenan Williams, approached Andre Vinson – who was operating in the CBD industry before finding interest in hemp amid state implementation – and told him that he was working directly with senior leadership at the TDA, adding that there would only be 15 exclusive state hemp licenses issued in the entire state. The going rate for just one license according to Williams at the time? $150,000.

However, there is no such cap on hemp production licenses in Texas. Each license costs $100.

“What Will Be The Cost Of A License?” on Page 5 of TDA’s Hemp FAQ Guide.

The criminal warrant chronicles at least six detailed accounts of cash handoffs and quid pro quos for exclusive access into Texas’ nascent hemp market. In another instance, Smith gave one prospect-turned-whistleblower a $25,000 invoice to conduct a survey “to help obtain and solidify the Republican votes on hemp issues.”

“Todd Smith created by words and his conduct, a false impression of fact that affected the judgment of others in the transactions to obtain a hemp license and/or conduct a survey that was never attempted by Todd Smith,” the affidavit said.

Miller Denials

Green Market Report previously reported that this apparently isn’t Smith’s first rodeo when it comes to influence peddling. In 2018, the Austin American-Statesman reported that Smith promised a San Antonio businessperson an appointment with the Department of Agriculture in exchange for a $29,000 loan. Miller and Smith’s relationship has been mutually beneficial. In 2016, Miller gave Smith’s wife a newly created assistant commissioner position, one of the highest-paying roles in the department.

Miller denied knowing anything about the allegations against Smith and Williams – even suggesting that the accusations were political fodder amid an upcoming election season – though the pending criminal case called into question by political opponents the commissioner’s own proximity to the scheme.

“That was Todd, between him and his clients,” Miller told the Texas Tribune.

Texas criminal defense attorneys Sam Bassett and Perry Minton – whom Smith hired following his arrest – said in a statement that he was “paid and performed these very duties for a number of clients interested in obtaining hemp licenses” and that Smith “never guaranteed anyone a particular outcome of any kind.”

“Todd never violated any laws and did not steal anything from anyone,” the lawyers said at the time, adding that their client “looks forward to continuing his cooperation with law enforcement and the district attorney to clear his name.”

Grand Jury Indictment

At the same time, Williams continued to cooperate with authorities following his arrest. By January 2022, a grand jury indicted Smith on felony theft charges – along with Williams – as well as commercial bribery. Miller officially cut ties with Smith the next day.

“Todd Smith and I have mutually agreed to terminate his association with my campaign effective immediately,” Miller told the Texas Tribune. “My campaign and the (TDA) will cooperate fully with any agency involved in this matter so it can be resolved openly, fairly, and judiciously.”

In the end, the scheme earned $55,000 for Smith. Williams collected $77,500.

Market Size

In 2021, Texas has issued 760 hemp licenses and permitted 3,405 outdoor acres and 10,871,664 greenhouse square feet. Texas is third in the nation for the amount of greenhouse hemp grown. According to Texas A&M Today, industrial hemp is the target for a plan from Texas A&M University researchers to 3D print new buildings using hempcrete. The project will be funded by a $3.74 million grant from the U.S. Department of Energy Advanced Research Projects Agency-Energy (ARPA-E) Harnessing Emissions into Structures Taking Inputs from the Atmosphere (HESTIA) program.

While some in Texas are working towards increasing legal hemp and medical marijuana, the conservative state also has those fighting against it. The Jurist wrote in June that the Texas Supreme Court decided to uphold a ban on the production and processing of smokable hemp, saying that it was constitutional under state law.


Dave HodesFebruary 7, 2022
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On December 16, 2021, researchers at Dell Medical School at The University of Texas at Austin launched the Center for Psychedelic Research and Therapy

The Texas center joins other similar centers in the U.S. in California (established in 2015) and Baltimore (established in 2019), and a growing list of over 100 colleges and universities in the U.S. alone who have partnered with for-profit companies, non-profit organizations, and government agencies to study psychedelic medicine.

The new center secured funding to launch its initial work and will leverage the research infrastructure and expertise at Dell Med and University of Texas-Austin to advance its goals.

The launch of the center was a direct reaction to the passing of Texas House Bill 1802 on June 18, 2021, which specified actions for Baylor College of Medicine but also opened the door to more help for veterans using alternative treatments at any medical institution across the state. 

The bill stipulated that the Texas Health and Human Services Commission (HHSC) conduct a study on the use of alternative therapies to treat veterans suffering from PTSD with Baylor College of Medicine. The bill writers chose Baylor for this study presumably because it ranked with U.S. News and World Report as one of the best medical research schools in the country (Dell Medical School, by comparison, is unranked). 

Baylor is to perform a clinical trial on the therapeutic efficacy of using psilocybin in the treatment of treatment-resistant post-traumatic stress disorder in veterans, review current literature regarding the safety and efficacy of 3,4-methylenedioxymethamphetamine (MDMA), psilocybin, and ketamine in the treatment of post-traumatic stress disorder, and the access veterans have to these psychedelic substances. 

The HHSC is required to prepare and submit to the governor, the lieutenant governor, the speaker of the house of representatives, and each member of the legislature quarterly reports on the progress of the study, and, by December 1, 2024, a written report containing the results of the study conducted under this section and “any recommendations for legislative or other action.” The costs of the study are expected to be approximately $2.7 million between now and December 2024, according to the HHSC.

The new Texas center at the University of Texas-Austin will conduct its own clinical research to better understand the potential for drugs such as psilocybin, MDMA, ibogaine and ayahuasca to treat severe depression, anxiety and PTSD when used as part of treatment with a trained provider. 

The center’s initial focus will be on military veterans living with post-traumatic stress disorder (PTSD), adults experiencing prolonged grief disorder or depression, and those who have experienced childhood trauma. 

The focus on veterans comes in part because of the center’s relationship with the Central Texas Veterans Health Care System (CTVHCS). The system features a large stand-alone clinic in Austin, and has one of the largest inpatient psychiatric facilities in the U.S. in Waco, which is the location of one of its two medical centers. The system serves a veteran population of more than 252,000 in the area.

The first program partners of the Center for Psychedelic Research and Therapy will be The Mission Within, a clinical psychedelic retreat provider in Rosarito, Mexico focusing on specialized treatments for PTSD, depression, anxiety, and personal growth; and the Heroic Hearts Project, a nonprofit that connects military veterans struggling with trauma to psychedelic therapy options including ayahuasca, psilocybin, ibogaine, and ketamine treatments in combination with professional coaching.

By the middle of next year, Greg Fonzo, the co-director of the center, hopes to begin the first research study, according to an article in the Austin American Statesman, the major daily newspaper for Austin. He wants the center to run more larger scale studies with more than 100 participants. Each study will have different criteria for who can enroll, but all of the studies will focus on adults.

The research team at the center will also explore treatments that combine psychedelic drugs with brain modulation techniques such as transcranial focused ultrasound and transcranial magnetic stimulation which have been used to measure the effects of psychedelic drugs on neural integration. That technique has also be used as a neuromodulation technique to treat substance abuse disorders, and to study anticonvulsant drugs.

Fonzo’s prior work was in functional magnetic resonance imaging to assess brain function, which is increasingly focused on integrating computational modeling approaches to understand information processing dysfunction in psychiatric disorders.

“This research will bring further scientific rigor and expertise to study psychedelic therapy,” said center co-lead Charles B. Nemeroff, professor and chair of Dell Med’s Department of Psychiatry and Behavioral Sciences and holder of the Matthew P. Nemeroff Endowed Chair in a press release. “Engaging in this kind of work at a place like UT Austin opens up a world of possibilities.”

More work is being done at a few other Texas medical institutions, including the McGovern Medical School at the University of Texas-Houston Center of Excellence on Mood Disorders, which is taking part in a worldwide multi-center study investigating the effects of psilocybin in treatment-resistant depression. The study is sponsored by COMPASS Pathways (NASDAQ: CMPS).


Julie AitchesonMay 3, 2021
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Up until now, the cannabis market in Texas has been limited, to say the least. Its medical cannabis Compassionate Use Program has fewer enrolled patients and businesses than most other states, and their restrictions put them in the bottom 11 (out of 47 programs) for accessibility nationwide. But between a recent $25 million investment by one of the largest privately-held multi-state cannabis operators in the U.S. (Parallel) in a cannabis cultivation, production and retail facility in San Marco Texas, and breaking legislative gains including over a dozen pieces of cannabis-related legislation submitted for consideration in 2021, that is about to change.  

Parallel’s investment reflects the growing demand for medical cannabis products in Texas. This financial commitment expands Parallel’s ability to meet the growing demand for medical cannabis products in Texas. The company has planned a 63,000 square-foot facility that is expected to create hundreds of new jobs in the San Marcos region. The company also recently introduced its goodblend retail brand a retail brand of Parallel that just launched the first cannabis capsules for patients registered in the Texas Compassionate Use Program. These capsules are the fifth medical cannabis format option offered through the company’s Surterra Wellness branded product line, and the fourth first-to-market product innovation that it has launched in Texas in the last eight months. 

and the lower House chamber’s passing of H.B. 1535 on Thursday would help expand Texas’ marijuana program for those suffering from chronic conditions. Currently, the state’s cannabis program serves those suffering from grave diseases such as terminal cancer, intractable epilepsy, seizure disorders, and multiple sclerosis, but if the bill gets passed into law, those with chronic pain, non-terminal cancer, and PTSD would gain access as well.  The bill would also raise the THC cap from 0.5% to 5% and make it possible for those in the medical cannabis program to have access to higher doses. 

This followed the passage of H.B. 2539 in the legislature by just a day, which would lessen the penalty for possession of up to two ounces of marijuana concentrate to a misdemeanor. On Friday, the Texas legislature passed H.B. 441 which, if signed into law, would make possession of less than four ounces of marijuana a misdemeanor as well.

According to a recent University of Texas poll done in collaboration with The Texas Tribune, a large majority (60%) of Texans support the possession of cannabis for medical and recreational use, while only 13% of respondents believe it shouldn’t be legal for use of any kind. For the record, the latter describes the stance of Texas governor Greg Abbot when Texas legislators legalized the use of medical cannabis in 2015. Though he appears to have had a change of heart since then, the original laws were among the most restrictive in the country, resulting in a low number of business licenses awarded and a similarly low percentage of Texans to whom cannabis would be available. This is the original climate that Parallel’s watershed investment and proposed legislative measures are seeking to proactively improve, which many Texans hope will lead to greater access for those in need, criminal justice reform, and economic growth for the U.S.’s second-largest state. 


StaffApril 30, 2019
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The Texas Tribune reported on Monday that the House of Representatives approved a bill that would decriminalize possession of cannabis. Rep. Joseph Moody (D), the chief sponsor of the bill, still had to amend it in order to get the bill approved. His original version had a lower fine of $250 and it would have dropped down low-level possession to a civil infraction instead of a class C misdemeanor.

Still, the paper reported that the chances of the bill turning into law would be slim. “After the House grants final approval for the bill — usually just a formality — it will head to the Senate, where presiding officer Lt. Gov. Dan Patrick has expressed opposition to the idea of loosening marijuana possession penalties.” The resistance is attributed to the fear that each move to loosen cannabis laws is another step towards full legalization.

If Texas manages to pass the law, it would become the 25th state to decriminalize cannabis. “Texans have suffered under failing marijuana policies for far too long,” Heather Fazio, director of Texans for Responsible Marijuana Policy, said. “Rep. Moody’s bill will help preserve valuable public safety resources and keep a marijuana charge from derailing someone’s life. Like a majority of Texas voters, Democratic and Republican lawmakers agree that marijuana laws need to change.”

Medical marijuana is legal in the state but on a very restrictive level. There is only one approved condition, which is intractable epilepsy. Several pieces of legislation have been filed in order to expand the condition list.

Hemp Farming Legalized

Just last week, The Texas House approved a bill that would allow farmers in the state to legally grow industrial hemp. House Bill 1325 from state Rep. Tracy King, D-Batesville, would also legalize hemp and hemp-derived extracts like CBD oil as long as they contain no more than 0.3% THC. “HB 1325 is right-to-farm legislation that will allow Texas farmers the opportunity to cultivate a drought-resistant cash crop — that being hemp,” King told other House members.

The bill has now headed to the Senate for approval. Texas Agriculture Commissioner Sid Miller is a strong supporter of industrial hemp production as a new market opportunity for Texas farmers to expand their operations and grow alternative crops.  Once authorized by the Legislature, TDA said it will create rules regarding licensing, production, testing, seed certification and other oversight as necessary.

“There’s no good reason for Texas farmers and ranchers not to have hemp as a crop option,” said Gene Hall, a spokesman for the Texas Farm Bureau. “I suspect a lot of farmers will choose this option once it’s available. It’s a drought-tolerant crop and can be grown anywhere where cropping is prevalent right now.”

 


Emerson BrownNovember 21, 2017
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History is being made in the Lone Star State as Texas prepares to open its first medical marijuana dispensaries. The state of Texas saw Compassionate Cultivation as one of two companies to set the tone for the state when it comes to the current market for cannabis and the treatment of epilepsy. The dispensary is located in the liberal bastion of Austin Texas with plans to open its doors in January.

Dr. Karen Keough, a board-certified child neurologist, who specializes in the treating of intractable epilepsy at child Neurology Consultants of Austin is a key team member. ““I know many of my patients are incredibly excited about this. For them, it’s a new and promising opportunity to manage this devastating neurological disorder when more traditional options just aren’t working,” said Dr. Keough. Like every new state that decides to intertwine into the culture and business of cannabis, don’t expect a line of epilepsy patients at Compassionate Cultivates front door January of 2018 ready to walk in and to buy some high-quality CBD oil.

Estimated Size Of Texas Cannabis Market

Matt Karnes of Green Wave Advisors estimates that the addressable market in the state is 1.9 million patients. Texas will only allow for patients with epilepsy to be treated at this time, reducing that patient count to approximately 185,000. Karnes believes the market could see $9 million for 2018 and then if the program restrictions are eased, it could grow to $162 million in 2020. He also thinks that as the state grapples with hurricane expenses from this past year, it may begin to quickly consider legalizing adult-use marijuana in order to reap the tax revenues.

Austin is a state of structure and proper percentages, so when it comes to growth there must be a few guidelines to follow in order for a patient receive this miracle medicine. First, they must be a current resident of Texas and have a written prescription from a licensed doctor that treats epilepsy and that prescription must be entered into the computer system of Compassionate Cultivations as active. Lastly, the patient must be resistance to two of the current drugs on the market that are already expected and recommended to treat epilepsy.

The Limitations Of Texas’ Program

So, there are some limitations and restrictions that come with current patients being treated for epilepsy, but under this new Texas Compassionate Act, Austin is providing for the state a great start. At least some families will be able to stay in state to receive treatment instead of traveling to a nearby state to receive treatment. And situations like the one of 12-year-old Alexis Bortell whose family filed a lawsuit against the federal government this month will stay out the headlines.

Medical marijuana plants being grown by MJardin. (Courtesy photo)

Compassionate Cultivation teamed up with well-known cannabis management consultant group MJardin to operate its grow. The company manages 30 licensed facilities in 13 states and two countries. MJardin has produced over 150,000 pounds of cannabis product since its inception in 2014, making it the largest cultivator of legal cannabis in the world. “MJardin and the Compassionate Cultivation team have worked seamlessly throughout the process thus far,” says MJardin Chairman and CEO Rishi Gautam. “And the fact that we are about to achieve an unprecedented five-month stand up from provisional license to final license is a testament to the level of expertise this team will bring to the medical cannabis community of Texas.”

In addition to Compassionate Cultivation, Knox Medical is slated to open its doors in small hill country town of Schulenberg, Texas. It is owned by Jose Hidalgo, who also has licensed operations in Florida and Peurto Rico. Knox will not operate a storefront and instead will deliver by courier to registered patients. The Florida stores have been described as looking like Apple stores with its clean, sleek minimal style. While the group is hoping for a December opening, it’s possible that it won’t be able to begin filling prescriptions until January.

Limited Amount Of Texas Doctors For The Program

It seemed like Texas’ tightly restricted medical marijuana wasn’t going to get off the ground. According to Texans for Responsible Marijuana Policy, “only 411 doctors in the state have the necessary qualifications to register for the program. This amounts to approximately 0.54% of the licensed physicians in Texas. Far fewer may decide to register in light of the personal and professional risk involved.”

With that being said and the facts too bold to ignore, watch out for the state of Texas and the city of Austin when it comes to using some of the world’s most high-quality cannabis as a medicine to treat and prevent epilepsy. The state of Texas will now be responsible for every patient that the standards and the business ethics of this calibration will always be held to the highest.

My Personal Thoughts

You know in today’s day and age.We need examples. We need people that dream. We need people that plan and we need people that execute. And I must say, Austin Texas has officially stamped itself as one of those examples within the culture of cannabis with the partnership of Compassionate Cultivation and MJardin. This tandem has now produced a strong platform, but uniquely this tandem isn’t all about getting patients elevated. It’s all about producing some of the world’s most high-quality CBD. You know that beautiful extract of oil that is known to prevent the sudden shock of epilepsy. And now with the state’s approval, these two companies are set and ready to produce some of the world’s most high-quality cannabis in order to do so.

Think about this for a minute, Compassionate Cultivation’s CEO Morris Denton is a homegrown businessman of 30 years and a few of his partners have now teamed up with one of the world’s largest cultivators and processors of cannabis. And with a full license and local laws on their side, these two companies are able to start planting hundreds of seeds in their own backyard, with no duplication unless you have their approval.

I would let you know how much to expect from each quarterly harvest and what strains to expect to hit the market first and most often, but all this information is still under wraps. And personally I don’t blame them, because small roots will always rise to be respected in the culture of cannabis, because believe it or not this direction towards the production of CBD oil wasn’t a choice for Morris and his partners, yes it was pondered on by them for years, but truthfully it was the best direction for the state according to its planners.


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