Welcome to Senior Cannabis Digest. This week we look at Mastercard’s refusal to serve cannabis businesses, veterans and cannabis use, investment in the cannabis sector and more. Enjoy.
Dollars and Sense
In a move likely to have a significant impact on both cannabis retailers and consumers, Reuters reports that Mastercard has told financial institutions to stop allowing marijuana transactions on its debit cards.
According to Niket Nishant and Tanay Dhumal, reporting for Reuters, a spokesperson for Mastercard said, “The federal government considers cannabis sales illegal, so these purchases are not allowed on our systems.”
Chris Casacchia and Kate Robertson, reporting for MJBizDaily, noted that Mastercard’s decision is reminiscent of a decision made earlier in 2023 by payroll provider Paychex which advised cannabis companies it would no longer process direct deposits or offer other services for marijuana-related businesses.
Commenting on Mastercard’s announcement, Dawne Morris, co-founder of California-based Proteus 420, which makes point-of-sale (POS) and inventory software for cannabis companies said, “What this means is moving into heavier cash processes again, which increases theft, and potential for more (illicit) market operators to move back into a space prior to legalization.”
Casacchia and Robertson also note in their article that technology platform Dutchie, which provides POS hardware and e-commerce solutions for marijuana retailers across the country, alerted customers on Monday via email it’s rolling out a new payment processing service. The service will use Bitcoin and a digital wallet to “deposit, transact and receive funds.” That’s according to an updated user agreement sent to customers.
Here’s how the Dutchie service will work. Customers will purchase Bitcoins from Dutchie partner Mobile Currency LLC equal to the amount of the corresponding dispensary transaction. Those Bitcoins, according to the user agreement, will then be used to purchase cannabis products. Essentially, this process would take the place of a debit-card transaction.
More news as more news develops.
Mastercard’s decision was first reported by Bloomberg News. Thanks to Dave Ruth for sending the story our way.
To learn more, you can read the article by Niket Nishant and Tanay Dhumal that appeared in the July 26, 2023 issue of Reuters.com.
You can also read the reporting by Chris Casacchia and Kate Robertson that appeared in the July 27, 2023 issue of MJBizDaily.com.
mjbizdaily.com/mastercard-ban-on-cannabis-debit-card-purchases-rocks-industry/
Stats of the Week: Cannabis and Veterans
This week’s magic number is 90 percent. According to a recent survey of U.S. military veterans who use medical marijuana, 90 percent of those queried said using cannabis significantly improved their quality of life. In many cases, these veterans have turned to cannabis as a substitute for over-the-counter and prescription medications.
That’s the word from Joseph Billions who reported on the study for the online publication Cannabis.net. The study, which was conducted by researchers from the Cannabis Center of Excellence in Boston, Massachusetts, the University of Utah, the University of Massachusetts, and other cannabis research institutions, originally appeared in the journal Clinical Therapeutics.
According to Billions, a group of 510 veterans who use marijuana participated in the study, which was designed to gain deeper insights into their usage patterns and experiences.
The participants reported experiencing a variety of mental and physical health conditions, such as chronic pain (38 percent), PTSD (26 percent), anxiety ( 9 percent), and depression (5 percent).
Highlights of the research findings included the following:
• 67 percent of respondents acknowledged using cannabis daily.
• Over 30 percent of the individuals said they had reduced their usage of other substances by using marijuana.
• 25 percent of participants said they sought relief from depression with antidepressants.
• 17 percent said they wanted to reduce their intake of non-steroidal anti-inflammatories.
• 21 percent of veterans in the study said they had reduced their need for opioid-based medications by smoking cannabis.
• 91 percent of the respondents claimed that they experienced significant improvement in their quality of life due to cannabis use.
In his article, Billions noted that the research participants included African-American veterans, female veterans, soldiers who served in active combat and veterans experiencing severe pain. In addition, he also points out that the study revealed that women and daily cannabis users were more likely to rely on cannabis use to reduce their dependence on prescription drugs.
Billions does acknowledge that there are two possible “drawbacks” to the results that he believes should be considered. One is that the data relied on self-reported information. The other is that some pro-cannabis media outlets and companies were involved in the recruitment process and funded the survey. He suggests that, intentionally or not, some biases could be introduced into the study.
However, he argues that even with that possible bias, the findings are consistent with the results of previous research on cannabis’s potential as an alternative to prescription drugs.
Writes Billions, “Other studies have also suggested that cannabis could be a viable option for some individuals seeking alternatives to traditional medications.”
In its findings, the research team wrote, “The present findings indicate that medicinal cannabis can potentially play a harm-reduction role, helping veterans to use fewer pharmaceutical medications and other substances.”
To learn more, we suggest reading the article by Joseph Billion in the July 26, 2023 issue of Cannabis.net.
To read the study, which appeared in the June 2023 issue of Clinical Therapeutics, simply click on the link that follows.
www.clinicaltherapeutics.com/article/S0149-2918(23)00133-9/fulltext
Spotlight on Legislation
Critics say a bill intended to enlist social media in an effort to combat the illegal sale and distribution of fentanyl and other controlled substances would cast a wide net that could ensnare cannabis consumers and others.
That’s the word from Kyle Jaeger, reporting on the bill—called the Cooper Davis Act—for Marijuana Moment. According Jaeger, the bill would amend the Controlled Substances Act (CSA) in a way that would require social media companies and other communications service providers to report instances where there’s suspected sales, manufacturing or possession with intent to distribute of fentanyl, methamphetamine, prescription opioids and counterfeit drugs taking place in their networks.
Also, the proposed legislation would impose a maximum fine of $190,000 if the business “knowingly and willfully fails to make a report” to DEA about relevant drug-related content that they become aware of. A second offense would be punishable by a maximum $380,000 fine.
Jaeger noted that Sen. Ron Wyden (D-OR) is opposing the bill that he says would perpetuate the discriminatory consequences of the war on drugs by forcing social media and other technology companies to broadly surveil people in an effort to combat illicit drug sales and lead to “meritless” referrals to the Drug Enforcement Administration (DEA).
Sen. Wyden said the bill “would mandate that platforms scan their users’ communications for anything that could be interpreted as being about selling or using drugs.”
Added Wyden, “Forcing a platform to decide what represents a drug transaction means that lots of innocent people will be referred for investigation and prosecution. Finally, the reporting structure of this legislation is likely to produce large numbers of meritless referrals to the Drug Enforcement Administration and do little to address the real causes of the fentanyl epidemic or protect vulnerable communities.”
In his article, Jaeger acknowledges that the “bill itself doesn’t seem designed to target people who merely use drugs.” However, he also makes the point that the wide latitude that companies would be given to interpret suspected instances of possession with intent to distribute could ultimately lead to social media companies alerting DEA about people who only discussed simple possession.
Said a Wyden spokesperson to Marijuana Moment, “Given the penalties in the bill and the ambiguity about intent, there are concerns that it is very likely that use/possession will be swept up in reports by companies to the DEA.”
The Cooper Davis Act was originally introduced by U.S. Senator Roger Marshall, M.D. (R, Kansas) in December of 2022. At that time it did not receive any votes. The bill is named for Cooper Davis, a 17-year-old who died of a fentanyl overdose after buying pills online.
Those who want to express an opinion about this or other legislation may want to contact their elected officials.
To learn more, we urge you to read the article by Kyle Jaeger that appeared in the July 21, 2023 issue of Marijuana Moment.net. As always, his reporting is clear and on point.
A Viewing Tip For Mature Consumers
This Sunday the CNN series “The Whole Story with Anderson Cooper” will feature Dr. Sanjay Gupta’s award-winning cannabis series: “Weed 7: A Senior Moment.” The series will explore the risks and benefits of cannabis in treating chronic issues such as pain, anxiety and Alzheimer’s disease in patients over 50.
According to Maureen Meehan, reporting for Benzinga, in this episode Dr. Gupta visits cannabis research facilities in Tel Aviv, Israel, a senior living community in West Palm Beach that’s running an experimental cannabis treatment pilot program and will discuss how baby boomers are “using marijuana for pain relief, better sleep, reducing anxiety, keeping their weight up and more.”
He will also explore how the stigma around marijuana use is disappearing in the U.S.
While not a cannabis advocate, per se, Dr. Gupta’s reporting on cannabis is always balanced and led by the facts.
The program airs at 8 PM, Sunday evening on CNN.
For a more detailed preview of the program we suggest reading Maureen Mehan’s excellent article in the August 2, 2023 issue of Benzinga.com.
Investor News and Notes
As too many investors know from experience, the cannabis sector remains a volatile environment that is not for the faint hearted.
For example, Alan Brochstein, CFA, notes in an article for New Cannabis Ventures, a weekly newsletter that focuses on the cannabis sector, the publication’s Global Cannabis Stock Index, is down 16.5 percent so far in 2023.
To be fair, he acknowledges that the index did post a gain of 8.1 percent in July. However, writes Brochstein, “the performance is very mixed among the 21 companies in the index. 4 stocks have gained more than 20 percent, while one has fallen by more than 20 percent. 6 names have actually declined so far.”
He does, however, identify a subsector of cannabis stocks that he believes shows some promise—ancillary stocks. Typically, these are companies that neither grow, handle or sell cannabis. What they do is support companies in the sector with goods or services. Think grow lights or fertilizer for producers or ventilators for retail operations.
He notes that New Cannabis Ventures does maintain an Ancillary Cannabis Index which is down just 0.6 percent in the year and has rallied 8.1 percent in July, in line with the company’s Global Cannabis Stock Index.
Said Brochstein, “We think that ancillary companies should be considered by those who want to invest in the sector. Unlike the American cannabis operators, there is no 280E tax for them. Additionally, there are no limitations by higher exchanges, which continue to refuse to list American cannabis growers, processors and sellers. Finally, there are no limitations on their operations geographically.”
He believes many investors make the mistake of focusing on just one sub-sector and would benefit from having a wider perspective.
While we aren’t in the business of recommending stocks, we agree that investors may benefit from exploring ancillary stocks. Similarly, that’s one of the reasons we have discussed the benefits of investing in cannabis REITS—which allow investors to “bet on the barn instead of a particular horse”—in previous issues.
To learn more, we urge you to read the detailed and insightful article by Alan Brochstein, CFA that appeared in the July 30, 2023 issue of New Cannabis Ventures.
www.newcannabisventures.com/this-part-of-the-cannabis-market-is-relatively-strong/
Senior Cannabis Digest is compiled and edited by Joe Kohut and John Kohut. You can reach them at joe.kohut@gmail.com and at 347-528-8753.
