Hong Kong Dealmakers Poised to Strike in Year of the Snake
Hi, it's Dong Cao and Manuel Baigorri in Hong Kong, where we've been chatting with Alex Bidlake, a partner at Clifford Chance (and a champion rower), about the outlook for M&A in the financial hub. Also today, Italy seeks an alternative Telecom Italia deal.
Today's top stories
The strong dealmaking momentum in Hong Kong toward the end of 2024 should swing through 2025, the year of the snake—regarded in Chinese tradition as a symbol of intelligence and intuition, which are good traits to have in making deals.
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Yahoo
23 minutes ago
- Yahoo
Hegseth defends $961.6B Defense Department budget request
June 11 (UPI) -- The proposed Department of Defense budget puts "America first" while addressing Ukraine, the Indo-Pacific and the Middle East, Defense Secretary Pete Hegseth told the Senate Appropriations Committee on Wednesday. Hegseth and Joint Chiefs of Staff Chairman Gen. Dan Caine fielded questions during a more than 2-hour hearing regarding the proposed $961.6 billion DOD budget for the 2026 fiscal year. The Defense Department is improving pay, housing, healthcare and other services to improve the quality of life for military members and their families, Hegseth told committee members. "This budget puts America first and gives our warriors what they need," he said during his opening statement. The proposed budget request also would "end four years of chronic underinvestment in our military by the Biden administration," Hegseth added. Russia and the Ukraine war Sen. Mitch McConnell, R-Ky., opened the hearing with questions about the Ukraine War, including who is the aggressor and preferred outcomes. Hegseth said Russia is the aggressor and China would prefer to keep the conflict going as long as possible to distract from its moves in the Indo-Pacific region. Europe needs to do more to defend its territory against Russian aggression, Hegseth said, and the United States must remain strategic in its handling of the war while addressing matters in the Indo-Pacific region. Sen. Chris Coons, D-Del., cited ongoing Russian aggression against civilian targets in Ukraine as evidence that Russia has no intention of ending the war there. The 2026 budget request eliminates aid to Ukraine, while senators are working to impose more sanctions on Russia, Coons said. "What message do you think it sends" when Russia "attacks civilian centers in Ukraine and the United States does not send additional air defense and interceptors to Ukraine?" Coons asked. Hegseth said arms are still flowing to Ukraine, but other NATO allies are not doing enough to end the war. "You're not a real coalition, you're not a real defense alliance, unless you have real defense capability and real armies that can bring those to bear," Hegseth said. "That's a reality that Europe is waking up to quickly," he added, "and we're glad." Coons said the United States should not negotiate a cease-fire in Ukraine "at any cost" and instead should continue supporting Ukraine to achieve an enduring peace. "Putin will only stop when we stop him," Coons said. "The best way to stop him is through a stronger NATO." Chinese military threats and Hegseth's DOD leadership Sen. Susan Collins, R-Maine, said China has more than 400 warships and is rapidly expanding its fleet versus 293 ships for the United States. She asked why the Defense Department only seeks funding to build two submarines and an ocean surveillance ship, plus some destroyers. Hegseth said the 2026 budget request reflects a 13% increase for investing in national defense over the current fiscal year. Sen. Patty Murray, D-Wash., then questioned Hegseth's leadership. "I am repeatedly hearing that your policy and personnel changes at the Pentagon are only undermining [and] not strengthening our military's preparedness to protect our country," Murray said. She accused Hegseth of using the military to police areas in the United States, including sending the National Guard and Marines to California to use against "peaceful protesters." Murray then asked Hegseth if the Defense Department would continue to fire shipbuilders, which he denied it has done. "We are investing historically in our shipbuilding defense industrial base and workforce and ships in this budget," Hegseth said. Murray said the Navy is firing shipbuilder staff in the state of Washington and accused it of asking welders if they ever donated to the Democratic Party. Hegseth said no welders are subject to litmus tests to work on naval projects and denied that political questions are asked. Iranian, Russian, Chinese and North Korean coalition Sen. Lindsey Graham, R-S.C., asked Hegseth and Caine if the world is underestimating Iran's intent to "kill all the Jews," including using a nuclear weapon against Israel if Iran had one. Caine said Iran would use one to pressure Israel but doesn't know if Iran would use it to "wipe out Israel." Hegseth said a radical cleric in Iran would use one to wipe out Israel. "They're going to use a nuclear weapon if they get it," Graham said. He also asked if China intends to "take Taiwan by force if necessary." Hegseth said the DOD doesn't know that China has made the decision to do so. Caine suggested China might use military force against Taiwan, and the United States needs to prepare for it. Coons said China, Russia, North Korea and Iran are aligned and pose the greatest threat to world peace since the Cold War. He cited Ukraine as an example of the future of warfare, but said the Department of Defense is "internally divided" and operating on a continuing resolution for the first time. The current state within the Defense Department "cannot continue," Coons added. Next-generation fighter and collaborative drones are planned The Defense Department also wants to spend $4 billion during the 2026 fiscal year to develop the F-47 fighter and "collaborative combat" drone aircraft, according to DefenseScoop. The $4 billion request is just part of the 2026 budget request, but the amount of the entire proposed budget has not been released. The Air Force wants to spend $3.5 billion on the F-47 fighter project, which would give it a fighter capable of exceeding Mach 2 with a range of more than 1,000 nautical miles. The current F-22 and F-35A fighter jets have top speeds of greater than Mach 2 and Mach 1.6 and ranges of 590 and 670 nautical miles, respectively. The Air Force wants to buy up to 185 F-47 fighters during the program's duration. The Air Force's Collaborative Combat Aircraft program would promote the development of next-generation drone aircraft that are capable of flying with the manned F-47 and other next-generation fighters.
Yahoo
25 minutes ago
- Yahoo
Trump tariffs live updates: Trump says he will set unilateral tariff rates within weeks
President Donald Trump told reporters on Wednesday that he would send letters to trading partners in the next week or two setting unilateral tariff rates. 'At a certain point, we're just going to send letters out. And I think you understand that, saying this is the deal, you can take it or leave it,' the president said at the Kennedy Center in Washington. Soon after introducing steep new tariffs that roiled markets, Trump instituted a pause on his most punishing duties that expires July 9. His latest comment, however, only muddies the waters about what could happen next as the deadline approaches. Earlier on Wednesday, Treasury Secretary Scott Bessent told Congress that it is "highly likely" that the tariff pause would be extended for countries that are negotiating with the administration "in good faith." "There are 18 important trading partners — we are working toward deals on those — and it is highly likely that those countries that are ... negotiating in good faith, we will roll the date forward," Bessent said during testimony before the House Ways and Means Committee. On Tuesday, the US and China agreed to a framework and implementation plan to ease tariff and trade tensions. Trump signaled his approval, saying the deal was "done" pending sign-off from him and Chinese President Xi Jinping. Trump and other US officials indicated the deal should resolve issues between the two countries on rare earths and magnets, though reports later indicated China would only loosen restrictions on rare earth mineral exports for a six-month period. Trump also said the US will allow Chinese students in US colleges, a sticking point that had emerged in the weeks following the countries' mid-May deal in Geneva. Trump said the US would impose a total of 55% tariffs on Chinese goods. Yahoo Finance's Ben Werschkul reports, citing a White House official, that Trump arrived at that figure by adding together an array of preexisting duties and not any new tariffs. Meanwhile, though Trump's most sweeping tariffs continue to face legal uncertainty, on Tuesday, the president received a favorable update. A federal appeals court held a decision saying his tariffs can temporarily stay in effect. The US Court of International Trade had blocked their implementation last month, deeming the method used to enact them "unlawful." Read more: What Trump's tariffs mean for the economy and your wallet Here are the latest updates as the policy reverberates around the world. Treasury Secretary Scott Bessent told House lawmakers on Wednesday that the Trump administration may extend the 90-day tariff pause on some countries in order to continue trade negotiations. When asked if Americans should prepare for another "Liberation Day" on July 9, when the tariff pause ends for most countries, Bessent said that the administration may choose to move the deadline on 18 of the most important trading partners, so long as they make an effort to come to the negotiating table. "We are working toward deals on those, and it is highly likely that [for] those countries — or trading blocs, in the case of the EU — who are negotiating in good faith, we will roll the day forward to continue good faith negotiations," Bessent said (see video below). "If someone is not negotiating, then we will not." A recent report on the drastic decline of US ocean imports serves as an example of how President Trump's increased tariffs on China affected supply chains and several industries as ttalks continue. Reuters reports: Read more here. The Treasury Department says that the US government is successfully using tariffs to decrease the budget deficit by more than $30 billion, largely due to increased customs receipts. Reuters reports: Read more here. China will ease curbs on exports of rare earth minerals for six months as part of a new trade understanding with the US, according to The Wall Street Journal. The move could add more uncertainty for American manufacturers, particularly the auto industry, which has been pushing for easier access. The Journal notes that the move gives China leverage down the line if tensions ratchet back up. From the report: In celebrating the agreement early Wednesday, President Trump noted "any necessary rare earths will be supplied, up front, by China." He did not mention any time limit on loosening those restrictions. Treasury Secretary Scott Bessent, in testimony before Congress on Wednesday, painted Wednesday's agreement as an incremental step on the longer road to a more comprehensive trade deal. "A trade deal today or last night was for a specific goal, and it will be a much longer process," he told a House committee. When asked if current US tariff levels on Chinese imports would not change again, Commerce Secretary Howard Lutnick told CNBC, "You can definitely say that." "We're in a great place with China," Lutnick said Wednesday. While the US-China truce framework is awaiting final word from US President Trump and Chinese President Xi Jinping, Lutnick added, "Both sides are really positive." The agreement is largely viewed as reestablishing the "handshake" that US and Chinese officials reached in Geneva last month, as details on a larger trade pact remain scant. Trump posted on social media this morning that the US has imposed 55% tariffs on China, a number that does not include any new tariffs but instead comprises some preexisting tariffs, Trump's fentanyl tariffs, and 10% "Liberation Day" tariffs. Lutnick touted that, as a result of the two-day talks, the US will gain access to rare earths and magnets, while the Chinese delegation sought to remove the US's export controls. He added that the trade deficit remains an ongoing issue, stating, "We're going to examine how China can do more business with us." May's Consumer Price Index (CPI) report showed inflation pressures eased on a monthly basis despite investor concerns that President Trump's tariffs would accelerate the pace of price increases. The Consumer Price Index (CPI) increased 0.1% on a monthly basis in May and 2.4% on an annual basis, a slight uptick from April's 2.3% gain. Yahoo Finance's Allie Canal reports: Read more here. I would keep an eye on consumer names off the news of a trade deal with China floated by President Trump this morning (see our prior post below). Seeing upticks premarket in heavily China-exposed retailers such as Nike (NKE), Walmart (WMT), Target (TGT), and Abercrombie & Fitch (ANF). The premarket gains here aren't mind-blowing in part because tariffs appear to still be in place. Trump posted on Truth Social: OUR DEAL WITH CHINA IS DONE, SUBJECT TO FINAL APPROVAL WITH PRESIDENT XI AND ME. FULL MAGNETS, AND ANY NECESSARY RARE EARTHS, WILL BE SUPPLIED, UP FRONT, BY CHINA. LIKEWISE, WE WILL PROVIDE TO CHINA WHAT WAS AGREED TO, INCLUDING CHINESE STUDENTS USING OUR COLLEGES AND UNIVERSITIES (WHICH HAS ALWAYS BEEN GOOD WITH ME!). WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%. RELATIONSHIP IS EXCELLENT! THANK YOU FOR YOUR ATTENTION TO THIS MATTER!" A variety of market observers quickly weighed in hours after Tuesday evening's unveiling to suggest that the deal may not have a lot of meat on the bones — but at least relations are no longer moving in the wrong direction. The talks perhaps underscored how unlikely a comprehensive trade deal is anytime soon, noted AGF Investments Greg Valliere, "but at least relations may not worsen as talks continue throughout the summer." Both sides promised additional talks in the weeks or months ahead, but none have yet been scheduled. Veronique de Rugy, a professor at the Mercatus Center at George Mason University, suggested the talks continued to show China's leverage. "China is hurting, yes—but they still hold the upper hand on critical resources, and they know how to use them." Any lessening of tensions — and freer flow — of these mineral resources in China would be a significant boost to the global economy with China holding outsized leverage in both the reserves and processing capacity of these key building blocks for everything from computers to electric vehicle batteries to medical devices. Likewise, the US offering concessions on export controls would be a significant move after years where successive US administrations have wielded these controls — especially around the design and manufacture of semiconductors — by saying they need to be tight on China for national security reasons. Read more here. May's Consumer Price Index (CPI) report will be released on Wednesday and its expected to show that prices rose a bit faster than in April. Yahoo Finance's Allie Canal breaks down what to look out for and how President Trump's tariffs are impacting what consumers are now paying for goods and services. Read more here. Now that the US-China trade truce is back on track, both sides are keen to ensure it stays that way. China's Vice Premier He Lifeng said both sides need to now 'show the spirit of good faith in abiding by their commitments and jointly safeguard the hard-won results of the dialogue.' Bloomberg News reports: Read more here. Reuters reports: Read more here. Despite the US-China trade truce resuming the pain from President Trump's tariffs remains in China, especially among small exporters. Reuters reports: Read more here. Japan warned Wednesday that tariffs threaten its economic growth, the government said in a monthly report. Reuters reports: Read more here. Reuters reports: Read more here. Reuters reports: Read more here. A federal appeals could said on Tuesday that President Trump's sweeping tariffs can continue for now. This is a significant win for Trump, who introduced tariffs back in March and declared "Liberation Day," as he saw them as a way to free the US from what he called unfair trade practices. Bloomberg News reports: Read more here. Early summer sales for Inditex, the owner of fashion retailer Zara, came in weaker, as the company missed expectations for first quarter sales on Wednesday. President Trump's tariffs have impacted consumer demand in the US and other major markets. Reuters reports: Read more here. After weeks of back and forth, the US and China have agreed on a framework to implement the Geneva consensus that helped ease tariffs. The breakthrough came after two days of talks in London, including a marathon session on Tuesday. US Commerce Secretary Howard Lutnick said both sides had to "get the negativity out" before making progress. 'Now we can go forward to try to do positive trade, growing trade,' he said. As part of the deal, Beijing has promised to speed up shipments of rare earth metals, a crucial component for global auto and defense industries. Washington will ease export controls. This marks the first sign of movement on key issues. The proposal will now be presented to President Trump and China's Xi. Still, the discussions also did little to resolve a long-standing issue: China's trade surplus with the US. 'Markets will likely welcome the shift from confrontation to coordination,' said Charu Chanana, chief investment strategist at Saxo Markets. 'We're not out of the woods yet — it's up to Trump and Xi to approve and enforce the deal.' The meeting was set up after a phone call between the two leaders, following weeks of each side accusing the other of breaking the Geneva commitments. Both countries had used chips, rare earths, student visas and ethane as bargaining tools. Josef Gregory Mahoney, a professor at East China Normal University, said trust, not money, has been the biggest casualty of the trade war. 'We've heard a lot about frameworks,' he said. 'But the fundamental issue remains: Chips versus rare earths. Everything else is a peacock dance.' Bloomberg reports: Read more here. Treasury Secretary Scott Bessent told House lawmakers on Wednesday that the Trump administration may extend the 90-day tariff pause on some countries in order to continue trade negotiations. When asked if Americans should prepare for another "Liberation Day" on July 9, when the tariff pause ends for most countries, Bessent said that the administration may choose to move the deadline on 18 of the most important trading partners, so long as they make an effort to come to the negotiating table. "We are working toward deals on those, and it is highly likely that [for] those countries — or trading blocs, in the case of the EU — who are negotiating in good faith, we will roll the day forward to continue good faith negotiations," Bessent said (see video below). "If someone is not negotiating, then we will not." A recent report on the drastic decline of US ocean imports serves as an example of how President Trump's increased tariffs on China affected supply chains and several industries as ttalks continue. Reuters reports: Read more here. The Treasury Department says that the US government is successfully using tariffs to decrease the budget deficit by more than $30 billion, largely due to increased customs receipts. Reuters reports: Read more here. China will ease curbs on exports of rare earth minerals for six months as part of a new trade understanding with the US, according to The Wall Street Journal. The move could add more uncertainty for American manufacturers, particularly the auto industry, which has been pushing for easier access. The Journal notes that the move gives China leverage down the line if tensions ratchet back up. From the report: In celebrating the agreement early Wednesday, President Trump noted "any necessary rare earths will be supplied, up front, by China." He did not mention any time limit on loosening those restrictions. Treasury Secretary Scott Bessent, in testimony before Congress on Wednesday, painted Wednesday's agreement as an incremental step on the longer road to a more comprehensive trade deal. "A trade deal today or last night was for a specific goal, and it will be a much longer process," he told a House committee. When asked if current US tariff levels on Chinese imports would not change again, Commerce Secretary Howard Lutnick told CNBC, "You can definitely say that." "We're in a great place with China," Lutnick said Wednesday. While the US-China truce framework is awaiting final word from US President Trump and Chinese President Xi Jinping, Lutnick added, "Both sides are really positive." The agreement is largely viewed as reestablishing the "handshake" that US and Chinese officials reached in Geneva last month, as details on a larger trade pact remain scant. Trump posted on social media this morning that the US has imposed 55% tariffs on China, a number that does not include any new tariffs but instead comprises some preexisting tariffs, Trump's fentanyl tariffs, and 10% "Liberation Day" tariffs. Lutnick touted that, as a result of the two-day talks, the US will gain access to rare earths and magnets, while the Chinese delegation sought to remove the US's export controls. He added that the trade deficit remains an ongoing issue, stating, "We're going to examine how China can do more business with us." May's Consumer Price Index (CPI) report showed inflation pressures eased on a monthly basis despite investor concerns that President Trump's tariffs would accelerate the pace of price increases. The Consumer Price Index (CPI) increased 0.1% on a monthly basis in May and 2.4% on an annual basis, a slight uptick from April's 2.3% gain. Yahoo Finance's Allie Canal reports: Read more here. I would keep an eye on consumer names off the news of a trade deal with China floated by President Trump this morning (see our prior post below). Seeing upticks premarket in heavily China-exposed retailers such as Nike (NKE), Walmart (WMT), Target (TGT), and Abercrombie & Fitch (ANF). The premarket gains here aren't mind-blowing in part because tariffs appear to still be in place. Trump posted on Truth Social: OUR DEAL WITH CHINA IS DONE, SUBJECT TO FINAL APPROVAL WITH PRESIDENT XI AND ME. FULL MAGNETS, AND ANY NECESSARY RARE EARTHS, WILL BE SUPPLIED, UP FRONT, BY CHINA. LIKEWISE, WE WILL PROVIDE TO CHINA WHAT WAS AGREED TO, INCLUDING CHINESE STUDENTS USING OUR COLLEGES AND UNIVERSITIES (WHICH HAS ALWAYS BEEN GOOD WITH ME!). WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%. RELATIONSHIP IS EXCELLENT! THANK YOU FOR YOUR ATTENTION TO THIS MATTER!" A variety of market observers quickly weighed in hours after Tuesday evening's unveiling to suggest that the deal may not have a lot of meat on the bones — but at least relations are no longer moving in the wrong direction. The talks perhaps underscored how unlikely a comprehensive trade deal is anytime soon, noted AGF Investments Greg Valliere, "but at least relations may not worsen as talks continue throughout the summer." Both sides promised additional talks in the weeks or months ahead, but none have yet been scheduled. Veronique de Rugy, a professor at the Mercatus Center at George Mason University, suggested the talks continued to show China's leverage. "China is hurting, yes—but they still hold the upper hand on critical resources, and they know how to use them." Any lessening of tensions — and freer flow — of these mineral resources in China would be a significant boost to the global economy with China holding outsized leverage in both the reserves and processing capacity of these key building blocks for everything from computers to electric vehicle batteries to medical devices. Likewise, the US offering concessions on export controls would be a significant move after years where successive US administrations have wielded these controls — especially around the design and manufacture of semiconductors — by saying they need to be tight on China for national security reasons. Read more here. May's Consumer Price Index (CPI) report will be released on Wednesday and its expected to show that prices rose a bit faster than in April. Yahoo Finance's Allie Canal breaks down what to look out for and how President Trump's tariffs are impacting what consumers are now paying for goods and services. Read more here. Now that the US-China trade truce is back on track, both sides are keen to ensure it stays that way. China's Vice Premier He Lifeng said both sides need to now 'show the spirit of good faith in abiding by their commitments and jointly safeguard the hard-won results of the dialogue.' Bloomberg News reports: Read more here. Reuters reports: Read more here. Despite the US-China trade truce resuming the pain from President Trump's tariffs remains in China, especially among small exporters. Reuters reports: Read more here. Japan warned Wednesday that tariffs threaten its economic growth, the government said in a monthly report. Reuters reports: Read more here. Reuters reports: Read more here. Reuters reports: Read more here. A federal appeals could said on Tuesday that President Trump's sweeping tariffs can continue for now. This is a significant win for Trump, who introduced tariffs back in March and declared "Liberation Day," as he saw them as a way to free the US from what he called unfair trade practices. Bloomberg News reports: Read more here. Early summer sales for Inditex, the owner of fashion retailer Zara, came in weaker, as the company missed expectations for first quarter sales on Wednesday. President Trump's tariffs have impacted consumer demand in the US and other major markets. Reuters reports: Read more here. After weeks of back and forth, the US and China have agreed on a framework to implement the Geneva consensus that helped ease tariffs. The breakthrough came after two days of talks in London, including a marathon session on Tuesday. US Commerce Secretary Howard Lutnick said both sides had to "get the negativity out" before making progress. 'Now we can go forward to try to do positive trade, growing trade,' he said. As part of the deal, Beijing has promised to speed up shipments of rare earth metals, a crucial component for global auto and defense industries. Washington will ease export controls. This marks the first sign of movement on key issues. The proposal will now be presented to President Trump and China's Xi. Still, the discussions also did little to resolve a long-standing issue: China's trade surplus with the US. 'Markets will likely welcome the shift from confrontation to coordination,' said Charu Chanana, chief investment strategist at Saxo Markets. 'We're not out of the woods yet — it's up to Trump and Xi to approve and enforce the deal.' The meeting was set up after a phone call between the two leaders, following weeks of each side accusing the other of breaking the Geneva commitments. Both countries had used chips, rare earths, student visas and ethane as bargaining tools. Josef Gregory Mahoney, a professor at East China Normal University, said trust, not money, has been the biggest casualty of the trade war. 'We've heard a lot about frameworks,' he said. 'But the fundamental issue remains: Chips versus rare earths. Everything else is a peacock dance.' Bloomberg reports: Read more here. Sign in to access your portfolio
Yahoo
33 minutes ago
- Yahoo
Maine won't require medical cannabis to be tested for contaminants -- this year
Jun. 11—Maine's medical cannabis providers have once again fought off a controversial requirement to start testing their products — at least for now. A legislative committee killed one bill and carried over another that would have instituted testing and tracking requirements that industry members have said for years would put them out of business or force price increases. While Maine's recreational cannabis market requires testing for contaminants and potency and includes potency limits, the medical market requires neither. Maine is the only state that doesn't mandate medical cannabis to be tested. LD 104, proposed by the state's Office of Cannabis Policy and sponsored by Rep. Marc Malon, D-Biddeford, would have required seed-to-sale plant tracking and standardized chemical, mold and heavy metal testing between recreational and medical cannabis. LD 1847, sponsored by Rep. Anne Graham, D-North Yarmouth, sought to do the same while also adding potency caps on edibles. The latter will be taken up again next year. "I have listened and I've read testimony and I've worked with public health advocates to make sure that the medical cannabis industry survives, thrives and (can) be regulated so that when patients buy cannabis, they know that they have a safe product and they know what the potency is," Graham said. " ... Clearly our regulations and how we look at (testing), it needs work, a lot of work." But it's also "hugely complicated," she said, and needs more time. Jennifer Belcher, president of the Maine Cannabis Union, said there's a "sense of relief now that we know that nothing is going through this year. If either bill passed as written, she said "the medical program would be done." Belcher was encouraged by how receptive the committee was to the industry's concerns, and while "it is nerve-racking that we are going to face this next session," there's also an exciting opportunity for collaboration. "(LD) 1847 gives us an opportunity to focus on the facts, the research, the science," she said. AN ONGOING FIGHT John Hudak, director of the office, has been clear that implementing a testing program is a top priority, but this session was the first time since he was appointed to the office in late 2022 that an official proposal has been before the committee. Following a 2022 law, any major substantive rule-making from the department must be approved by the Legislature. "If a business model is one in which producing clean cannabis is too costly, there's something wrong with the business model," he said previously. "We're not going to focus on profits at the expense of patients' health." Supporters of the bill have referenced a 2023 report by the Office of Cannabis Policy that found about 45% of the cannabis in Maine's medical market would fail the standards set for the recreational market. They also pointed to the influx of suspected illegal growers allegedly tied to Chinese organized crime who have been selling bulk cannabis at "rock bottom" prices to legal dispensaries. However, in a public hearing last month, dozens of medical cannabis caregivers and consumers testified in opposition to the bills and the committee received roughly 1,000 pieces of written testimony. They criticized the state's testing program, citing several recalls in the recreational program last year that have brought the science behind the tests and the state's standards into question. The recent recalls, they argue, prove the testing doesn't work and shouldn't be forced on the medical program. The fight is just the latest in a series of uphill battles for Maine's medical cannabis providers. Oversaturation, competition with recreational cannabis and high costs have caused revenue to plummet and people to leave the industry in droves. Unlike many other states, Maine's medical cannabis market has always outperformed its recreational counterpart. But the gap between the two is narrowing, and last year the medical market brought in about $280 million (down from $371 in 2021), while the recreational market brought in $217 million. The number of providers, known in the industry as caregivers, has been cleaved in half from its 2016 peak of 3,257 to 1,627 in May, according to state data. "We are literally fighting for our lives at this point," Belcher said. OTHER BILLS The committee carried over several other bills, including one that would require the director of the Office of Cannabis Policy be confirmed by the Legislature rather than appointed by the commissioner of the Department of Administrative and Financial Services, which oversees the office. Sen. Craig Hickman, D-Winthrop, who drafted the bill, said the committee needed time to investigate whether there are other directors, like the heads of the state's alcohol and gambling control agencies, that should also be subject to legislative approval. Lawmakers also carried over a proposal to allow cannabis "social clubs" or public consumption, based off recommendations in a task force report this winter. Earlier this session, the committee killed two bills that would have implemented revenue sharing across Maine's cannabis industry, meaning towns and cities that allow recreational businesses could receive a portion of the tax revenue they generate. Legislators hoped the bills would encourage more towns and cities to allow cannabis shops and help them recoup the costs of overseeing the recreational program. Copy the Story Link We believe it's important to offer commenting on certain stories as a benefit to our readers. At its best, our comments sections can be a productive platform for readers to engage with our journalism, offer thoughts on coverage and issues, and drive conversation in a respectful, solutions-based way. It's a form of open discourse that can be useful to our community, public officials, journalists and others. We do not enable comments on everything — exceptions include most crime stories, and coverage involving personal tragedy or sensitive issues that invite personal attacks instead of thoughtful discussion. You can read more here about our commenting policy and terms of use. More information is also found on our FAQs. Show less
