Wednesday, March 31, 2021

Is your CBD what it says it is? Study finds high-THC weed sold as hemp

Over 70% of CBD samples tested failed for either excessive levels of contamination or contained too much THC to qualify as hemp or both.

The post Is your CBD what it says it is? Study finds high-THC weed sold as hemp appeared first on Leafly.



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Does white ash equal quality cannabis? Leafly asked the experts

This bit of cannabis bro science is thin on facts.

The post Does white ash equal quality cannabis? Leafly asked the experts appeared first on Leafly.



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Meet PAX® Era Life™, the newest addition to the Era™ vape family

We got to know the fun, new addition to the PAX Era fam, decked out in four new colors, to tell you what’s up with Era Life.

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What is delta-8?

Delta-8 is a cannabis compound similar to THC, although less potent. It's become popular lately because it's legal in states where THC is illegal—sometimes. Learn all about delta-8.

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New York Officially Legalizes Adult-Use Cannabis

After years of hoping, false starts, and attempts, New York has finally legalized recreational marijuana!

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New York becomes 17th state to legalize marijuana: Weed is legal in NY starting today

Cannabis is legal in New York today. Yes, today. The law takes effect immediately.

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New York’s Cannabis Control Board – The New Sheriff in Town

Now that the Marijuana Regulation and Taxation Act (the MRTA) is (just about) law, the most frequent question (really, the only) we get at the Canna Law Blog is: what do I need to do to get a license? The answer is in the hands of the Cannabis Control Board (the CCB), a newly established governing body that will oversee the equally new Office of Cannabis Management (the OCM). Since the CCB will be responsible for implementing and regulating New York’s cannabis industry, our series on the specific components of the MRTA begins with a deep dive into the CCB and its powers and responsibilities.

What is the CCB?

The CCB is the government body tasked with creating and regulating New York’s cannabis industry. The CCB will consist of 5 board members, 3 appointed by the Governor and 2 appointed by the Senate and Assembly (1 each). The chairman of the CCB will be nominated by the Governor with the advice and consent of the Senate. CCB members will be appointed for a term of three years and must be citizens and residents of New York.

A key point: the composition of the CCB will be geographically and demographically representative of the State and the communities historically affected by criminal prosecution of marijuana offenses, with its principal office in Albany and branch offices in New York City and Buffalo (to start). It is clear that the CCB will be focused on the impact of the cannabis industry from a statewide perspective, and not just New York City.

What are the CCB’s responsibilities and powers?

Basically, the CCB is tasked with creating New York’s cannabis industry from scratch. Among its enumerated powers:

  • Limiting (or not limiting) the number of registrations, licenses, and permits for each class to be issued within New York or in any political subdivision (i.e. municipalities) in New York. In plain English, the CCB will determine both the number of licenses issued and whether there will be any limits on licenses issued for any geographic area.
  • Creating the standards and requirements for the following categories of licenses for medical cannabis, adult-use cannabis and cannabis products, and cannabinoid hemp and hemp extract:
    • Cultivation;
    • Processing;
    • Packaging;
    • Marketing and Sale; and
    • For cannabinoid hemp and hemp extract, the ability to regulate excipients, and the type, forms, and concentration of products which may be manufactured and/or processed.
  • Prescribing the form of applications for registrations (medical cannabis organization), licenses, and permits and any reports deemed necessary by the CCB.
  • Issuing or refusing to issue any registration, license, or permit.
  • Establishing the minimum criteria for certifying employees to work in the cannabis industry in positions requiring advanced training.
  • Approving any price quotas or price controls set by the executive director of the OCM.
  • Approving the OCM’s social equity plan.
  • Reviewing the impact of licenses two years after the first retail sale to determine if any licensees have substantial market share that impairs social equity goals and to prevent dominant marketplace participation.

What do we know about the registration, licensing, and permitting process based on the CCB’s powers?

As of now, we do not know about the specifics beyond the types of licenses that will be issued.  With that said, based on requirements for the social and economic equity program, the required composition of the CCB, and the CCB’s enumerated mandates, we can make an educated guess about the following:

  • New York is serious about implementing a successful social and economic equity program. 50% of licenses will go to social and economic equity applications and the OCM and New York’s Urban Development Corporation will provide low-interest or zero-interest loans to qualified social and economic equity applicants. The CCB will also appoint a chief equity officer, who will be responsible for establishing public education programing dedicated to providing communities adversely impacted by cannabis prohibition with information about the licensing process and the resources the OCM can provide to social and economic equity applicants.
  • Geographic variety will be a consideration in determining the number of and conditions for licenses. Between the requirement that the CCB’s membership be geographically representative and the express power to limit the number of licenses by region, it is apparent that the CCB will be encouraged to spread licenses around, literally.
  • An applicant’s ability to demonstrate security and product tracking capabilities will be a significant component of evaluating applicants. The MRTA directs the CCB to implement rules and regulations designed to: (i) prevent the sale of adult-use cannabis to underage persons, including modification of tobacco vaping products for use with cannabis; (ii) prevent diversions of cannabis from New York into other states and vice versa; and (iii) prevent cannabis products that are legal under the MRTA from being used as cover for trafficking illegal drugs or other illegal activities.

When will the CCB begin creating and implementing the rules and regulations for New York Cannabis Industry?

So far, no specific time frame has been announced for appointing members to the CCB, the other advisory boards authorized by the MRTA, or filling positions within the OCM. Here is what we do know: the MRTA requires the CCB to issue an annual report on the effectiveness of the MRTA, with the first such report due by January 1, 2023. By definition, the deadline for the CCB’s first annual report implies that registrations, licenses, and permits will be issued early enough for sales to begin in 2022. Accordingly, it would be surprising if details on the registration, licensing, and permitting processes are not released this calendar year.

What is the OCM and how is it different from the CCB?

The OCM is effectively responsible for the administration of New York’s cannabis industry. For example, the OCM will be responsible for prescribing the actual application forms for licenses and permits and will submit completed applications (and recommendations) to the CCB for a final determination on the respective application.

Anything else you should know about the CCB?

The overarching point is that the CCB will be creating and regulating New York’s cannabis industry. As we all wait for details, the MRTA gives us a good sense of what the CCB will prioritize when creating and implementing a framework for the legal marijuana industry in New York.

Stay tuned to the Canna Law Blog for our next MRTA summary, coming live from our New York office. Please feel free to contact us with any questions.

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Tuesday, March 30, 2021

Looking for delta-8-THC? Rare Cannabinoid Company offers delta-8-THC alongside THCV, CBN, CBG, CBC, CBDA, and more

Delta-8-THC provides a different kind of high. Clear-headed yet still intoxicating and said to have less risk of anxiety than delta-9-THC, delta-8 is available from Rare Cannabinoid Company.

The post Looking for delta-8-THC? Rare Cannabinoid Company offers delta-8-THC alongside THCV, CBN, CBG, CBC, CBDA, and more appeared first on Leafly.



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Amid legalization, teen hospitalizations for pot down 50%, CDC finds

The bulk of legalization research indicates kids are alright.

The post Amid legalization, teen hospitalizations for pot down 50%, CDC finds appeared first on Leafly.



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Chemometrics will change how you buy weed

Don't get caught in the potency race trap. Chemometric reporting from SC Labs shows you the full picture of what you're buying.

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Cannabis Beverage Sales Keep Flowing With Particular Leaning Towards Macrodosed Drinks

A growing number of consumers are choosing cannabis-infused beverages. Cheers!

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Chicago Cannabis Company Allegedly Involved in Pay-to-Play Scandal

Green Thumb Industries is reportedly under federal investigation...however they maintain that they are not aware of any supposed investigation.

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This plumber was sentenced to 12 years for growing marijuana in a legal state. How is that possible?

Outdated drug war laws and a secondary offense led to Thomas Laverty's outrageous sentence.

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Governor of Virginia Signs Bill Protecting Employees Who Use Medical Cannabis

Although the bill has caveats, it's a significant step in the state's journey in marijuana reform.

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State Agriculture Commissioner Nikki Fried Pushes Florida On Further Cannabis Reform

A longtime proponent of cannabis legalization, Nikki Fried is a rising star in Florida's political sphere.

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Should You Join the Board of Directors of a Cannabis Company?

We lawyers get asked to sit on boards pretty frequently. At this law firm, those requests are sometimes made by clients and I believe we have always declined– but not for the reasons you may be thinking.

In many cases, a lawyer who sits on the board of a company he or she represents risks exposure to conflicts of interest. That is especially true where equity compensation is involved. In other cases, founders of a new company will not fully appreciate the role of a board and what it really means for oversight and governance. Or, expectations simply be mismatched. Overall, I’ve found there are more reasons to say “no” than “yes” to requests to join boards. And I say that as someone who has chaired a couple of them.

This post covers some high-level considerations for someone considering joining a cannabis company board. It’s written with lawyers in mind, but most of these thoughts apply to just about anyone.

Insurance

I may be starting out of order, but only slightly. One of the first questions I typically ask when invited to join a board is what insurance is in place. What I’m looking for is a broadly written directors and officers (D&O) policy with decent policy limits. (Yes, you can get one of these as a cannabis company). Ultimately, I would not sit on a board without insurance.

D&O insurance covers individuals from personal losses if they are sued in relation to their role as a director or officer of an organization. Generally speaking, U.S. corporate law exists at the state level; and generally speaking, it grants directors and officers broad discretion in their business activities. Still, that doesn’t mean a director cannot be sued in the first place. And cannabis companies tend to be pretty good at giving people reasons to sue— even the big ones.

Bylaws, Articles of Incorporation, etc.

Big question: how much control does the board actually have under the bylaws? I’ve seen bylaws drafted to afford directors insufficient say in company governance— sometimes carelessly and sometimes by design. A director candidate should ensure that the board is not a token body with no real ability to govern; that the board is not forced to bless whatever nonsense because officers or shareholders hold all the keys. It can be tempting for a founder to charter a weak or “blank check” board. As a director, you are just wasting your time while giving someone cover. More than that, you may also feel that your time is very valuable, and you want to add value wherever you go.

Compensation

Corporate documentation also comes into play on the pay side. Many companies will incentivize people to join their boards with stock (often restricted stock). Bigger companies may also offer cash, or maybe cash plus stock. Whatever it is, you will want to make sure that everything is properly structured and papered— in addition to assessing whether the stock has real value (if applicable), and what the tax implications may be. In my view, if the company is for-profit, some form of compensation is appropriate. If the company is a nonprofit, it’s a different story.

What are the board dynamics?

Assuming you like the cannabis company and its goals enough to join, you will want to understand the dynamics within the board itself. Most boards are set up with a “chair” or other director who gets to run meetings and monopolize governance to some extent. That can be good or bad, depending on who sits in that seat. (This is often a rotating position.) But if the board is dysfunctional, or if the board regularly clashes with the executive team, or if the board is permanently out to lunch, of if the board keeps poor records, or if the board has record of dismal performance, or if the board is irrevocably stacked with founders and founder appointees… don’t join the board!

How much time are we talking?

Some boards are basically full-time jobs. Others may be just a few hours a week. Still other times, a board member will have almost no duties, and be recruited just for their name. When I served on the board of a prominent arts organization, for example, a famous Hollywood director agreed to join our board. Because he had won many awards and accolades and because we wanted to trade on his name, we agreed to relax participation requirements. The point here is there may be room for negotiation and flexibility. In fact, you may even come across boards where certain members are treated exceptionally (bylaws permitting).

Sometimes, joining a standing or ad hoc committee is also a good place to start. Larger boards will have these structures; these can be a good entrée to full board service, or just a one-off tour.

Why do they want you? (Truly)

Many companies will recruit a lawyers as board members for free or cost-effective legal advice. This can put the lawyer in an awkward spot. Lawyer-directors must ensure that any legal advice they provide remains privileged. If the lawyer-director is being asked for legal advice, she should also clarify that the meeting at issue has been called solely for that purpose (and that no business advice will be given). The lawyer must also constantly watch for pitfalls where her law firm’s interests could be favored over the corporate client. Sometimes, that dynamic becomes very hard to control.

For other professionals, the analysis may be similar if a company pursues them for trade services. An accountant may be identified as a potential, de facto CFO from her director’s chair, for example; or an H.R. professional may be sought to help manage staff. If your goal is to give general business advice rather than perform a specific “job” for the company, it’s important to communicate that up front.

Finally, as a board member you should understand and appreciate that if a company is not using your professional expertise directly, it will still want to leverage your rolodex. This means that, in addition to the cannabis company being interested in you, you should believe in the cannabis company. In my view, this means not merely supporting the company enough to make a few introductions: you should feel comfortable and even convicted in that role. At that point, it’s fun being on the board.

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Monday, March 29, 2021

New Mexico Lawmakers To Have Special Legislative Session On Marijuana Law Reform

A previous effort to legalize cannabis fell short, but Governor Grisham isn't done fighting.

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Gov. Cuomo And NY Lawmakers Reach Agreement On Cannabis Legalization Bill

With an upcoming vote, legal adult-use cannabis in New York is closer than ever.

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Study Shows Alcohol Impacts Cortical Thickness in Young Adults, Cannabis Does Not

A recently published study argues against a theory that says cannabis use causes brain damage.

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Virginia gets real on legalization, aims to move up start date to 2021

There's no reason to wait three years, and Gov. Northam is ready to move ahead.

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Exclusive: Russ Debut’s New ‘CHOMP’ Cannabis Collaboration with Wonderbrett

The multi-platinum recording artist Russ has teamed up with California legend Wonderbrett to create CHOMP.

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California Cannabis Label Alert: New Prop. 65 Requirements Coming

For better or worse, the Safe Drinking Water and Toxic Enforcement Act of 1986 (a/k/a Prop. 65) has long plagued California businesses. And cannabis businesses are no exception (see here and here). Prop. 65 requires businesses to provide “a clear and reasonable warning before they cause an exposure to
a chemical listed as known to the state to cause cancer or reproductive toxicity.” The Office of Environmental Health Hazard Assessment (OEHHA), the agency in charge of implementing and overseeing Prop. 65, publishes and updates the list of chemicals known to cause cancer, birth defects or other types of reproductive harm. That list now includes hundreds of chemicals.

Effective June 19, 2009, marijuana smoke was added to the Prop. 65 list of chemicals known to cause cancer. OEHHA’s Carcinogen Identification Committee “determined that marijuana smoke was clearly shown, through scientifically valid testing according to generally accepted principles, to cause cancer.” Technically then, all cannabis flower is subject to Prop. 65 warnings, because all flower contains/produces “marijuana smoke” and because there is no safe harbor level per OEHHA. In addition, oils, wax, vapes, etc. usually contain at least one chemical on OEHHA’s list.

Given these facts, there is hardly a cannabis business in California that won’t find itself subject to Prop. 65 warning requirements at some point. And none of the state agencies in charge of overseeing the implementation of the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) directly assist licensees in figuring out what they need to do to protect themselves under Prop. 65 (other than the handy fact sheet recently published by the California Department of Public Health that gives a slim nod to Prop. 65 compliance).

In January 2020, OEHHA added “THC” to the list of chemicals known to cause reproductive harm. At the same time, OEHHA also determined that “marijuana smoke”, in addition to being listed as a cancer-causing carcinogen, also causes reproductive harm (which will definitely change the content of the safe harbor language on flower products across the industry). There was a one year grace period for cannabis businesses to comply with the Prop. 65 safe harbor warning label provisions, and that grace period ended in January of this year.

Now, OEHHA is proposing to amend Prop. 65 regulations again, but this time it’s to establish “tailored safe harbor warnings for cannabis (marijuana) smoke and delta-9-tetrahydrocannabinol (delta-9-THC) exposures would assist affected businesses and consumers of those products.” Specifically, the “proposed amendments will adopt new safe harbor warning regulations to address the methods of transmission and content of warnings for exposure to cannabis (marijuana) smoke and delta-9-tetrahydrocannabinol (delta-9-THC).” Here is a copy of the proposed rules, and here are some of the highlights:

  1. The proposed safe harbor warnings are optional, but it would be foolish not to adopt them since they’re your best chance of complying with Prop. 65;
  2. The safe harbor warnings (and methods of transmission) will apply to smokeable and ingestible cannabis products (i.e., edibles) as well as THC-based or containing vapes, dabs (which is an undefined term), and dermally transmitted products (like skin patches); and
  3. There will be a safe harbor warning for “environmental exposures” to cannabis and/or THC for establishments “where such exposures can occur on the premises of the business” (i.e., consumption lounges as permitted under MAUCRSA).

The safe harbor warnings themselves are definitely different from the current warnings used by cannabis businesses (see here). Here are a couple of the proposed warnings with the updated, “tailored” safe harbor language:

  1. The Prop. 65 symbol; The word “WARNING:” in all capital letters and bold print, and the words, “Smoking cannabis increases your cancer risk and during pregnancy exposes your child to delta-9-THC and other chemicals that can affect your child’s birthweight, behavior, and learning ability. For more information go to www.P65Warnings.ca.gov/cannabis.”
  2. The Prop. 65 symbol; The word “WARNING:” in all capital letters and bold print, and the words: (i) “Consuming this product during pregnancy exposes your child to delta-9-THC, which can affect your child’s behavior and learning ability. For more information go to www.P65Warnings.ca.gov/cannabis”, or (ii) if the product also exposes consumers to one or more listed carcinogens, “Consuming this product exposes you to carcinogens including [name one or more listed carcinogens], and during pregnancy exposes your child to delta-9-THC, which can
    affect your child’s behavior and learning ability. For more information go to www.P65Warnings.ca.gov/cannabis.”

The public has until May 18, 2021 to get comments into OEHHA on the proposed tailored safe harbors for cannabis and THC products. Nonetheless, I anticipate that OEHHA will adopt the regulations as a written, which means hundreds of cannabis companies will need to re-work their current product labels to comply with the new safe harbor language to remain as safe and as compliant as possible. Otherwise, as usual, the notorious Prop. 65 bounty hunters will abound.

Cannabis businesses should start examining their inventory now and taking stock of the time and expense it will take to protect themselves as these new safe harbor warnings undoubtedly roll out.

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Sunday, March 28, 2021

New York’s Comprehensive Cannabis Legislation Released

The revised version of New York’s comprehensive cannabis legislation that legalizes recreational cannabis and expands New York medical cannabis program has (finally) been released. Still titled the Marijuana Regulation and Taxation Act (the MRTA), the revised legislation more closely resembles the original version of the MRTA than Governor Andrew Cuomo’s legalization plan, as was expected. The MRTA is expected to be voted on in the next week.

Before getting into the MRTA itself, two important caveats:

  1. The MRTA is not yet law. While it is widely expected that the MRTA will be passed in short order, our summary is based on the proposed final bill. However unlikely, additional revisions could be made before passage.
  2. The actual application process for prospective licensees has not yet been released. With that said, the MRTA provides a good indication of what will be considered as part of evaluating license applications. As detailed below, the Cannabis Control Board (CCB) and Office of Cannabis Management will be established after the MRTA is passed and will be responsible for creating and implementing a license application process in accordance with the MRTA.

Let’s get to the actual terms of the MRTA, which covers everything from the legalizing adult-use cannabis to the allocation of cannabis driven tax revenue toward social equity programs. A few highlights:

Establishing the Cannabis Control Board:  The CCB will be responsible for all aspects of cannabis regulation, including the allocation of licenses, licensing regulations and requirements, and general oversight of the industry. The CCB will be comprised of a 5-member board, with the governor appointing three members and the Assembly and Senate each appointing one member.

Legalizing Adult-Use Cannabis:  Recreational cannabis sales and consumption will be legal for adults 21 and older. The MRTA eliminates penalties for possession of less than three ounces of cannabis and allows for expunging records for anyone with convictions for illegal activities that are no longer criminalized.

The MRTA also permits delivery of cannabis and “consumption sites” where marijuana can be consumed. Cities, towns, and villages will be given until the end of the year to opt out of having retail dispensaries or consumption sites within their respective jurisdictions.

Identifying the Types of Licenses for Adult-Use Cannabis:  The CCB will issue separate licenses for growers, wholesalers, retailers, and on-sit consumption. Vertical integration will generally be prohibited, with licensees limited to a single license.  The exception here is microbusinesses, which will be able to utilize a vertically integrated model.

Creating a Social Equity Program:  The MRTA sets a goal of issuing 50% of licenses for distribution and retail to social equity applicants. The definition of “social equity applicant” includes people with past marijuana convictions or who have relatives with such records, people who live in economically distressed areas or places where cannabis criminalization has been enforced in a discriminatory manner, individuals with income lower than eighty percent (80%) of the median income of the county in which the individual resides, minority- and women-owned business, disabled veterans, and financially distressed farmers.

General Criteria for Applicants:  Although the CCB will be responsible for creating the specific criteria for prospective applicants, the MRTA includes the following criteria that “may” be considered by the CCB:

  • Whether the applicant is a social and economic equity applicant.
  • The applicant’s ability to demonstrate effective controls against the illegal diversion of cannabis.
  • The applicant’s ability to comply with applicable state laws and regulations.
  • The applicant’s and its officers’ ability to properly carry on the activities for which a license is sought, including with assistance from the social and economic equity and incubator program, if applicable.
  • Whether the applicant possesses or has leased sufficient land, buildings, and equipment to carry on the activities described in the application or has a plan to do so if qualifying as a social and economic equity applicant.
  • If a non-social and economic equity applicant, whether such applicant sets out a plan for benefiting communities and people disproportionately impacted by the enforcement of cannabis laws.
  • Whether it is in the public interest that the applicant be granted a license.
  • Whether the applicant and its managing officers are of good moral character and do not have ownership or controlling interests in more licenses or permits than allowed by the MRTA.
  • Whether the applicant has entered into a collective bargaining agreement.
  • The applicant’s contribution to communities and people disproportionately harmed by enforcement of cannabis laws.
  • For adult-use cultivator or processor applicants, the environmental and energy impact of the facility to be licensed.

Expanding New York’s Medical Cannabis Program:  The eligibility for patient certification is expanded to require only that the patient’s physician determine, “in the practitioner’s professional opinion and review of past treatments, [that] the patient is likely to receive therapeutic or palliative benefits from the primary or adjunctive treatment with medical use of cannabis for the condition.” Qualified patients will also now be allowed to obtain a 60-day supply.

With all of that said, the above is only a high-level overview of the MRTA and several (but certainly not all) noteworthy provisions.  Over the next few weeks, we will provide in-depth summaries of each component of the MRTA, as well as the license application process as information becomes available.

We will be doing all of that from right here in New York. Please feel free to contact us with any questions.

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Saturday, March 27, 2021

The SAFE Banking Act’s Reintroduction in 2021

This week, the SAFE Banking Act’s long-awaited reintroduction finally happened, and by a bipartisan group of over 100 members of the House and 30 members of the Senate (and counting!). The legislation was first introduced in March 2019, and we’ve followed along ever since. This Act has now been passed by the House THREE times, most recently in the fall of 2019. At that time, it showed some promise but ultimately remained pending before the Senate Banking Committee indefinitely. Now that there appears to more bipartisan support than ever, and with renewed calls for change by the American Bankers Association, the Credit Union National Association and other prominent voices in the industry, 2021 may finally be the year we see the SAFE Banking Act turn into law.

In case you need a refresher, the SAFE Banking Act aims to create a safe harbor for banks and credit unions so they cannot be held liable or subject to federal forfeiture action for providing financial services to a cannabis-related business. Under the Act, federal banking regulators cannot:

  • Terminate or limit the deposit insurance or share insurance of a depository institution solely because the institution provides financial services to a cannabis-related business;
  • Prohibit or discourage an institution from offering financial services to a cannabis-related business;
  • Recommend or otherwise encourage an institution not to offer financial services to an account holder solely because the account holder is affiliated with a cannabis-related business; and
  • Take any adverse or corrective action on a loan made to a person solely because the person either owns a cannabis-related business or owns real estate or equipment leased to a cannabis-related business.

As we’ve discussed in previous posts, many see this legislation as insufficient reform, but at least bridging a critical gap that has been created by the conflict between federal and state law. Then Treasury Secretary Steven Mnuchin’s voiced concerns come to mind, especially his noting that the IRS had had to build enormous “cash rooms” for the taxes paid by state-legal businesses. Perhaps more importantly, it would alleviate intense safety and security concerns, which Senator Jeff Merkley puts well in his press release:

“No one working in a store or behind a register should have to worry about experiencing a traumatic robbery at any moment,” said Merkley. “That means we can’t keep forcing legal cannabis businesses to operate entirely in cash—a nonsensical rule that is an open invitation to robbery and money laundering. Let’s make 2021 the year that we get this bill signed into law so we can ensure that all legal cannabis businesses have access to the financial services they need to help keep their employees safe.”

To drive the point home, the press release contains a link to a news article describing the fatal shooting of a budtender in December. OLCC data similarly indicates Portland dispensaries were robbed, burglarized, or looted over 100 times in 2020.

We’ll continue to monitor the status of the SAFE Banking Act and other cannabis-related legislation on the federal and state level throughout this year. Here’s hoping it’s a good one for much needed reform.

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Friday, March 26, 2021

Virginia Governor Wants An Earlier Start Date For Marijuana Legalization

Governor Ralph Northam is pushing for an earlier start for legal cannabis in his state.

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How weed activists are taking action in the Mexican legalization movement

#PlanTÓN420 is occupying space in front of the Mexican Senate building as a means to fight for their rights to consume cannabis.

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Changing Tides: Lobbying on Cannabis Issues in the Biden Administration – The Webinar Video Replay

For anyone who was not able to join our March 24th webinar, Changing Tides: Lobbying on Cannabis Issues in the Biden Administration, we’ve got you covered! Below, please find the full presentation for your viewing pleasure.

You can download the PowerPoint presentation HERE.

Stay up to date on everything cannabis via the Canna Law Blog.

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Thursday, March 25, 2021

What is a ‘weed salad?’ Tips on cannabis cultivar blending

Blending can create novel, preternatural cannabis effects

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Delaware Advances Cannabis Legalization Bill for Full House Vote

Delaware lawmakers are making moves towards legalizing cannabis.

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Democrats Blast Biden Administration’s Employment Policy On Cannabis

Thirty Democratic lawmakers have signed a letter urging President Biden to clarify the White House' policy on past cannabis use.

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Gelato is the best strain ever. Try and change my mind

Once and for all, it’s time to crown the greatest weed strain of all time—Gelato. Let me tell you why.

The post Gelato is the best strain ever. Try and change my mind appeared first on Leafly.



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New York lawmakers reach historic deal on a marijuana legalization bill

With homegrow, social equity, delivery, and lounges, the legalization bill could pass next week.

The post New York lawmakers reach historic deal on a marijuana legalization bill appeared first on Leafly.



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Study Finds No Evidence Legal Medical Cannabis Increases Youth Marijuana Use

This latest research is consistent with other studies that found no increase in youth cannabis use caused by medical cannabis availability.

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Cannabis Leases: Six Important Landlord Considerations

Last year, I wrote a post entitled “Cannabis Leases: Eight Important Tenant Considerations“. The post outlined eight of the more important considerations for tenants entering into cannabis leases. Today, I want to focus on some of the top considerations for landlords in leasing to cannabis tenants.

1. Compliance with Mortgages

Landlords that do not outright own property will probably have a much harder time leasing property to cannabis tenants. If landlords have mortgages on their property and the lender is a bank, that can generally be a huge roadblock to these leases. Mortgages generally allow lenders to call a loan if the property is being used for illegal activity, which necessary includes cannabis activity given the fact that cannabis is still illegal under federal law. This could lead to dramatic consequences from the landlord and its mortgaged property.

2. Who is the Tenant?

We’ve received a lot of calls over the years from landlords excited to lease to cannabis tenants, only to find out quickly into the call that the property at issue is in a city that completely bans cannabis activities with no exception. In these cases, the would-be tenant would openly violate local law (and thereby state law) if it opened a cannabis business, which could lead to exposure for the landlord. Even if a tenant opens up shop in a “legal” city but does not follow the rules or get all required permits or licenses, that could lead to exposure for the landlord. For these reasons, cannabis leases often look a lot different from run of the mill leases. They include things like express requirements to get fully licensed before commencing operations, and allowing for immediate termination if the landlord discovers foul play.

3. Profit-Sharing Rent Structures Can Lead to Regulatory Issues

Landlords may be tempted to ask for a percentage of a cannabis business’ profits or revenues in addition to fixed rent. This raises two key issues. First, landlords who share in rent increase their exposure for federal criminal violations. If there is ever a change in federal enforcement priorities (though there may not be), landlords who share in the profits of a cannabis business could theoretically face more exposure as they are more intimately connected with the cannabis business than landlords who just passively get fixed rent each month.

Additionally, landlords sharing in the profits will probably need to be disclosed to state, and in some cases, local authorities. In California, any form of profit-sharing renders a landlord a “financial interest holder” requiring disclosure to the state. If profit-sharing hits certain thresholds, a landlord can be considered an “owner”, and much more significant disclosures would be required. It is critical to understand this second point at the outset. It’s much easier for a landlord who doesn’t want to be disclosed to know how to handle this from the outset rather than trying to reform a lease later.

4. Tenant Improvements

I don’t think I’ve ever seen a situation where a cannabis tenant applies for a license and is not required to make at least some modifications to the premises. This is key for landlords because almost all leases dictate how alterations and tenant improvements are made and what kind of consent and oversight landlords have. Understanding that tenants are basically guaranteed to need to make improvements can dictate just what those provisions say.

5. Guarantees

In many (if not most) cases, would-be cannabis tenants are newly formed entities with no operating history and no bank accounts at first. Even a larger cannabis company that negotiates a commercial lease will often form a new entity for the leased premises, in order to avoid liabilities and for other legal and practical reasons. Landlords often therefore want guarantees either by corporate affiliates of the tenant (e.g., the parent company with an actual operating history) or personal guarantees from owners of the tenant. In some cases landlords insist on both. Without this, landlords might end up with very limited options in the event a tenant defaults.

6. Addressing Unknowns

Landlords may not understand the complexities of obtaining a cannabis license for a tenant. The process is never guaranteed and can take a significant time. Many tenants may get some form of conditional use permit or other land-use entitlement, then spent months or even years completing buildouts, getting local regulatory licenses or permits, and then getting state licenses. This means many months may pass between lease commencement and operations. And in some cases, operations may never commence. This is good to know for landlords who don’t want their property sitting vacant for a protracted period of time, and is a good starting point for talks about early termination provisions in the event a tenant can’t get a license.

Conclusion

These are a number of issues that may impact potential cannabis landlords. The actual factors will likely change significantly from lease to lease and jurisdiction to jurisdiction. It’s a good idea to work with a seasoned cannabis real estate lawyer to determine what lease provisions are best in for a specific tenant and jurisdiction.

The big takeaway here should be that drafting and negotiating cannabis leases is tough and that left unchecked, cannabis tenants can end up making life difficult for their landlords. Please stay tuned to the Canna Law Blog for more developments on cannabis leasing law, and in the meantime check out the posts linked below.

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Wednesday, March 24, 2021

Study Shows Cannabinoids May Help With Pathological Tremors

A newly published study offers hope to those suffering from pathological tremors.

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New York Lawmakers Reportedly Reach Deal On Legalizing Adult-Use Cannabis

Is the long journey to cannabis legalization in New York finally reaching a conclusion?

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South Dakota Governor’s Office Introduces Decriminalization Bill

While the considered proposal is a step, activists maintain that it's not a significant enough step.

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Cannabis in Morocco: Once Again the Kingdom Makes History

On March 11, Morocco’s cabinet approved a bill to legalize medical cannabis. The bill will now pass to Morocco’s parliament for consideration. If the bill ultimately succeeds, Morocco will become a true pioneer, as only the second country in the Arab world to legalize any form of cannabis.

Under the terms of the bill, cannabis cultivation will be permitted only in certain sectors in the Rif mountains. This reflects the government’s concerns with boosting farmers’ incomes in a region that has “seen protests over economic inequality.”

What will happen in parliament is anyone’s guess. The largest party in the governing coalition, the Justice and Development Party (PJD), is split on the issue. As demonstrated by cabinet’s approval, the PJD leadership is supportive of the bill. However, there is dissent amongst the rank-and-file, which some fear could lead to division within the party. A former PJD secretary general, Abdelilah Benkirane, has “frozen” his party membership over the bill, declaring cannabis to be “evil” and inconsistent with Islam.

In addition to disagreements over cannabis, the acrimony also reflects dissatisfaction from PJD hardliners over the government’s warm relationship with Israel. Moreover, Algeria has expressed concern about the potential impact of legalization across the border in Morocco. The prospect of heightening existing tensions with its neighbor—including over Israel—may further cool attitudes toward the bill.

Ultimately, the fact that there is at least some support for cannabis legalization within the PJD is remarkable. It was not that long ago that the party voiced its “categorical refusal” to consider legalization initiatives.

While the strife within the PJD could complicate the bill’s approval, the main opposition parties, the Authenticity and Modernity Party (PAM) and Independence Party (Istiqlal), have long supported the legalization of medical cannabis. Between them, the PAM and Istiqlal hold 148 of the 395 seats in the House of Representatives. This means that the bill could clear the lower chamber even if more than half of the PJD delegation votes against it. In the House of Councillors, the two parties control 48 out of 120 seats. Assuming the bill has the support of at least some PJD councillors, its passage could be secured with handful of votes from the myriad other parties represented in the upper chamber.

Morocco’s landmark normalization agreement with Israel last December rightly earned praise. Now the kingdom has another chance to make history.

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KushKart delivery service makes Massachusetts debut after raising $3.5 million

KushKart cannabis delivery service is using a state social equity program to show Massachusetts' what it's got.

The post KushKart delivery service makes Massachusetts debut after raising $3.5 million appeared first on Leafly.



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Tuesday, March 23, 2021

Kansas Lawmakers Consider Strictly Regulated Medical Marijuana Program

Patients in Kansas have been urging state lawmakers to create a medical cannabis program.

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Evanston, Illinois To Fund Reparations To Black Community With Cannabis Tax Revenue

Officials of the Chicago suburb approved the plans this week.

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How to choose the right community for your cannabis business

Where can you open a dispensary? Good Tree Capital answers this and more in this article about the right place to open a cannabis business.

The post How to choose the right community for your cannabis business appeared first on Leafly.



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Cannabis Litigation: Selecting the Right Mediator for Your Marijuana or Hemp Lawsuit is Critical

Although Americans, and citizens of certain states in particular, have a reputation as a litigious bunch, the reality is that very few civil lawsuits actually go to trial. The vast majority of cases—perhaps more than 90%—end in settlement. This is certainly true in my practice and for most attorneys I know who specialize in business litigation.

Although litigants may resolve disputes informally, i.e. without the aid of a third party, disputes are often resolved via private mediation. See What’s the Point of Mediation? for a detailed primer on what mediation is (and is not) and how it works. For now just recall that mediation is different than arbitration because the mediator does not decide who is right and wrong. For this reason, mediation does not result in a binding decision unless the parties come to an agreement on terms to resolve the dispute (i.e. a settlement agreement). This post is about factors to consider in selecting a mediator for your marijuana or hemp dispute.

The primary reason cases settle is economic. Litigation in the 21st century is an expensive proposition. This is especially true in any document-intensive case. Our ability to create, share, and store vast amounts of electronic communications and documents (emails, texts, tweets, direct messages, etc.) across numerous platforms (Outlook, Facebook, Twitter, Signal, WhatsApp, LinkedIn, etc.) can give rise to the need to review and produce hundreds of thousands of documents. The cost of doing so is enormous. So when litigation is approached from a business perspective, it usually makes sense to attempt to settle a case rather than go through the risk and expense of trial.

Ordinarily the parties must jointly select a mediator, who can have a significant impact on whether the mediation will be successful. The term “successful” in this context means reaching a settlement agreement, not winning, or losing, or even liking the terms of settlement.

With that, let’s take a look at three criteria to consider when choosing a mediator:

Cost. This is straightforward enough. But don’t make the mistake of assuming that a $300/hour mediator is not as competent as a $900/hour mediator. If you are cost-sensitive, consider negotiating the length of the mediation statement and its exhibits (the more voluminous, the more time the mediator must spend reading, and time is money). You may also consider limiting the amount of preparation time you are willing to pay the mediator. On the other hand, consider the value in having a mediator that takes the time to understand the issues in your case and consider the significant litigation costs that you will incur if the mediation is not successful. So while there is merit to being judicious with mediation costs, there also is merit to spending to try to settle the case instead of incurring the additional costs of litigation if the mediation is not successful.

Experience. More and more, business disputes that involve cannabis are not much different than other commercial litigation. Although finding a mediator with knowledge about the cannabis industry may be helpful, it is not a requirement in any sense. Oftentimes, the parties can provide the mediator with sufficient cannabis-specific information that would be helpful. Look beyond just cannabis and for a mediator with knowledge or experience in the underlying legal issues – e.g. product liability, partnership, business valuations, employment, securities transactions, commercial leasing etc.

Mediators with judicial experience are often an excellent option. Former judges may have decided countless cases similar to yours,  may have insight into the court or judge in which your dispute is pending, and can probably provide a realistic perspective on the realities of going to trial.

Demeanor. Mediators have reputations among lawyers as to how they conduct a mediation. Some mediators take a in-depth approach to directing the parties to a settlement. Others are known as hard-nosed individuals who will be brutally honest with the parties. Some mediators take a less active approach and put the onus on the parties to do the hard work of resolving a dispute. Different cases and parties call for different approaches; the point here is not to neglect what approach is best for you.

The answer to what mediator is right for your case, like many lawyer answers, is “it depends.” But if you are serious about trying to resolve your dispute in mediation, you should carefully consider what characteristics of the mediator have the greatest chance of resulting in a settlement.

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Monday, March 22, 2021

U.S. Senator Introduces Bipartisan Insurance Bill, CLAIM Act, for Cannabis Businesses

Senator Bob Menendez has introduced a bill that would give cannabis businesses access to insurance coverage.

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Survey Data Reveals Most Common Reasons People Use CBD

These days, more and more people are turning to CBD to cope with various ailments and troubles.

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Poland Pushes On: Cannabis Reform Is A Game of Inches

The country just to the east of Germany is moving forward on cannabis reform, but everything is still a massive struggle.

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Ninth Circuit Finds “The Herbal Chef” Is Generic and Denies Trademark Protection

On Tuesday, the Ninth Circuit Court of Appeals settled an appeal by The Herbal Chef, LLC (“THC”) and held the words “The Herbal Chef” do not qualify for trademark protection. The short memorandum opinion affirmed summary judgment granted by Central District Court Judge, Andre Birotte Jr., in favor of defendant AFG Distribution, Inc. (“AFG”) in March 2020.

Some background: THC is a California company that has been providing private dining and catering services incorporating cannabis and other herbs since 2014. THC has also been promoting cannabis education awareness within the food and beverage industry. AFG is a North Carolina corporation that sells cooking products, some under the branding of “Herbal Chef.” It goes without saying that THC and AFG are two very different types of companies.

Interestingly, AFG was issued a trademark for “Herbal Chef” by the USPTO in September 2016 for specific classes of products like baking dishes, pot holders, trivets (Class 21), and electric food processors (Class 7). One year later, THC filed its own trademark application for the mark “THE HERBAL CHEF” for meal preparation, catering services, and private dining (Class 43), alleging it had begun using THE HERBAL CHEF mark in commerce in August 2015. The USPTO denied Plaintiff’s application. In its denial, the USPTO wrote, “Registration is refused because the applied-for-mark merely describes a feature, characteristic, function, quality, ingredient, purpose or use of applicant’s services.”

THC filed a lawsuit against AFG, claiming that its line of Herbal Chef products infringed its the HERBAL CHEF trademark. AGF pretty quickly filed a motion for summary judgment and asked Judge Birotte to dismiss THC’s case, arguing the THE HERBAL CHEF mark is “generic” and, thus, not entitled to trademark protection. THC filed an opposition arguing the mark is “persuasive/suggestive,” and accordingly automatically entitled to trademark protection. Because THC doesn’t have a registered trademark, its burden to prove this is higher.

Here’s the rundown: trademarks are classified in one of five categories of increasing “distinctiveness”: (1) generic, (2) descriptive, (3) suggestive, (4) arbitrary, or (5) fanciful. For purposes of this case, what the first three categories break down as follows:

  • “Generic” marks lack any distinctive quality, and therefore are not entitled to trademark protection.
  • “Descriptive” marks, which describe the qualities or characteristics of a product, may be registered “only if the holder of the mark shows that the mark has acquired distinctiveness through secondary meaning.” An example of a “secondary meaning” is Apple – people obviously recognize that this refers to something other than an apple, and it’s specific to a brand of computers.
  • “Suggestive” marks identify a product’s source and are entitled to automatic protection.

Judge Birotte found that THC failed to show the THE HERBAL CHEF mark was not descriptive and that a secondary meaning had not been established (or at least proven to be established). He also deferred to the USPTO’s findings in denying THC’s trademark application:

“As permitted by the Ninth Circuit and in the absence of any countervailing evidence set forth by Plaintiff, this Court finds the USPTO’s classification decision persuasive and likewise concludes that the mark THE HERBAL CHEF ‘merely describes a feature, characteristic, function, quality, ingredient, purpose or use of applicant’s services.’ Namely, the mark THE HERBAL CHEF denotes that Plaintiff primarily provides customers with a chef “who specializes in cooking with infused marijuana.”

The Ninth Circuit agreed, adding that THC’s alleged mark does not become suggestive just because it also offers goods and services in addition to cooking with cannabis. At the end of the day, the Appellate Judges found the dictionary definitions of “herbal” (which include a slang term for marijuana) and “chef” directly describe THC’s services (cooking with marijuana).

The lesson for our readers is this: use these decisions to inform your business and marketing strategies, and specifically on the scope of goods or services that can be protected under a trademark. Here’s a great post on that, which also includes relevant links to other posts and cases we’ve covered in the past.

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Sunday, March 21, 2021

2021 Mexico Cannabis Summit

Cannabis Mexico Summit

Register HERE!

Mexico will soon be the largest country in the world with legalized cannabis and now is the time to start preparing for that.

Harris Bricken and Harris Bricken Mexico will be teaming up with Mexico-based law firm, Lawgic, for this upcoming four-day virtual event, taking place Thursday, March 25 through Sunday, March 28th. This event will be bringing together Mexico cannabis experts and key players to discuss and teach about Mexico’s burgeoning cannabis industry. These experts include Chris Nazarenus, CEO and Co-Founder of Medical Marijuana 411, Nick Jikomes, Director of Science & Innovation at Leafly, Dr. Karyemaitre Aliffe, biomedical executive, and many more!

The summit will focus on the following four topics:

  • Medical Advances and Research
  • Pharmaceutical Business
  • Agribusiness
  • Commercial & VC opportunities

Harris Bricken attorneys, Hilary Bricken, Fred Rocafort, Jonathan Bench, and Adrián Cisneros Aguilar, will be talking about how businesses and investors can enter Mexico’s soon-to-be booming cannabis market. The Harris Bricken panelists will, among other things, cover the following:

  1. What you CURRENTLY can and cannot do in Mexico with cannabis, hemp and CBD.
  2. Mexico legalization perspectives and the pluses and minuses of the Mexican cannabis/hemp/CBD markets.
  3. How Mexican legalization benefits American cannabis companies.
  4. How American companies can expand into Mexico.

Panelists will answer attendee questions throughout the webinar, but please feel free to submit any questions prior to the webinar that you would like the panelists to address, either as comments below or when you register.

Register HERE!

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Saturday, March 20, 2021

Cannabis in Mexico Part 2: The Q&A: The Webinar Video Replay

For anyone who was not able to join our March 4th webinar on Cannabis in Mexico Part 2: The Q&A, we’ve got you covered! Below, please find the full presentation for your viewing pleasure.

You can watch part 1 of this two-part series HERE.

Stay up to date on cannabis in Mexico via the Canna Law Blog.

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Friday, March 19, 2021

Colorado Senate Passes School Medical Cannabis Bill

A bill that would give children access to their medical cannabis in school is getting closer to becoming a law.

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White House Staffers Fired or Pushed to Resign over Past Cannabis Use

The news comes a month after an initial statement that indicated past cannabis use would not disqualify candidates from jobs at the White House.

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California’s Overly Restrictive Cannabis Laws Incentivize Illegal Activity

It’s no secret that California has a massive cannabis illicit market, despite the fact that it is perfectly legal (under state law) to sell cannabis if a business goes through the licensing process and complies with state and local laws. However, since the passage of the Medicinal and Adult-Use Cannabis Regulation Act (MAUCRSA), and the opening of licensing in 2018, the state’s illicit-market problems seem to have only gotten worse, not better. There were reportedly 3,000 illicit cannabis businesses in late 2019; that number is probably much higher today.

It seems counterintuitive that a state that allows licensed medicinal and recreational cannabis activity would have such a robust illicit market. However, the reasons that the illicit market is alive and well are baked into state and local laws themselves. For starters, the fact that MAUCRSA allows cities to ban commercial cannabis activities altogether has led to many cities doing just that. This is a lose-lose for everyone involved: illicit businesses continue in those cities (why wouldn’t they when prohibition never worked in the first place), cities lose out on tax and licensing revenue, and customers lose out on access to tested and safe cannabis.

It doesn’t just end with local prohibition. The California Bureau of Cannabis Control (BCC) essentially gave up in a fight over whether retailers licensed in one jurisdiction could deliver into those jurisdictions that prevent cannabis activities. Had that litigation turned out differently, it’s possible that delivery companies would have been able to deliver statewide, and effectively eliminated the “deserts” where people cannot legally purchase cannabis. In turn, this likely would have forced more cities’ hands with respect to allowing physical cannabis establishments, as they would have realized they were missing out on tax revenues. But things will stand for the foreseeable future and only a few cities here and there will change course each year.

Even in those cities in which licensing is fully legal, there are so many challenges on getting and maintaining licenses that many would-be licensees decide it’s not worth it and take the risk of running an unlicensed business. Above-market rent, costly buildouts that are effectively mandated by intense regulations, high application and license fees (at the state and local level), and high taxes mean serious dollar signs for people that may not have the money and may not be able to or want to try to raise capital and cede control of their enterprise.

Another regulation that does no favors for the licensed industry is the prohibition on selling cannabis between 10 PM and 6 AM, which is often narrowed even further at the local level. It makes little sense that people can go to bars or purchase alcohol, but can’t go to a store or even have cannabis delivered. If someone wants cannabis “after hours”, they will probably end up getting it, just not from a licensed company.

What is the fix? It’s clear that the fix is not enforcement. Enforcement to date has been lackluster at best (and that’s a generous description), but even if the state became super aggressive with enforcement, would that really change anything? When the state and federal government were actively prosecuting cannabis activity prior to legalization, people still bought and sold cannabis. Enforcement in a regulated market is likely to have even less of an effect than it did previously and will be much harder for the state to carry out since in some cases, the line between legal and illegal is blurred whereas before, all cannabis activity was illegal.

The answer almost certainly lies in relaxing restrictions. In order to make a real change, the state legislature or voters (by initiative) need to either restrict local control or at least ensure that deliveries can be conducted statewide. Taxes need to be reduced. Licensing costs need to be reduced. Regulations that make little sense need to be amended or scrapped. These are all common-sense ways that the state can fight the illicit market without wasting too much time on enforcement. The ball is in the state’s court. Stay tuned to the Canna Law Blog for more California cannabis developments.

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Thursday, March 18, 2021

Pennsylvania Police Make More Than 20,000 Pot Arrests During The Pandemic

There is a jarring racial disparity in the arrests.

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New Mexico Senate To Vote On Cannabis Legalization Bill

Despite some recent uncertainty, New Mexico seems to be gearing up for a vote on cannabis legalization.

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Seth Rogen’s new Houseplant cannabis unboxed and reviewed

My house smells terrific. I’ve spent several days sampling Seth Rogen’s new line of Houseplant cannabis, and the air in my place is spicy and fragrant. This weed is loud. The beloved comedic actor and stoner icon, along with his creative partner Evan Goldberg, launched Houseplant in California last week. They promptly broke the weed […]

The post Seth Rogen’s new Houseplant cannabis unboxed and reviewed appeared first on Leafly.



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House Reintroduces SAFE Banking Act to Protect and Advance Legal Cannabis

House representatives have reintroduced the SAFE Banking Act in a push to allow cannabis businesses to have access to banking services.

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Gummies, tinctures, and a whole lot more for the people

Leafly takes a look at some stand-out products from the quality freaks at Koi CBD to show how they're setting the bar high in quality and consistency

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New PTSD study finds cannabis safe, but not as effective as assumed

Many factors could be at play: the placebo effect, poor quality weed, subject pool, or maybe it just doesn't work as well as some assume.

The post New PTSD study finds cannabis safe, but not as effective as assumed appeared first on Leafly.



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Michigan Cracks Down on Cannabis Banking Through Credit Unions

In the U.S., banks and credit unions are reluctant to work with cannabis businesses because of the federal illegality of cannabis.

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Largest Human Trial to Date Reviews Safety of Full Spectrum Hemp Products

In January 2019, the European Union (EU) reclassified extracts of Cannabis sativa L. and derived products containing cannabinoids, including CBD, as “Novel Food” under the EU Novel Food Catalogue. The reclassification was based on the lack of demonstrated history of human consumption of these extracts and of any product to which they might be added.

As one would naturally suspect, the Novel Food Application process is time consuming and expensive. Every successful Novel Food Application goes through three phases (the “Application Assessment,” the “Safety Assessment” and the “Marketing Authorization”), which lasts 3 to 4 years and require a hefty budget of €350,000 to €500,000.

To alleviate to burdensome cost of an individual Novel Food Application, the European Industrial Hemp Association (EIHA), which represents and advocate for the interest of European hemp producers and processors, launched a Novel Food Consortium (the Consortium). The Consortium was established to submit joint Novel Food applications and share the costs between its members, the majority of which are small and medium-sized enterprises (SMEs) that could not bear the cost of an individual application.

To date EIHA has submit three categories of Novel Food applications, including one for CBD-isolate-based products, another for synthetic-CBD-based products and a third one for products infused with full spectrum hemp extract. For each of these applications, EIHA will need to submit toxicological studies showing the substances are safe for human consumption, yet the organization seems particularly concerned with that of full spectrum hemp extract-based products.

In a recent interview with Cannabis Health, EIHA’s Managing Director, Lorenza Romanese explained that the challenge lays in the presence of tetrahydrocannabinol (THC) in the full spectrum hemp extract.

As is the case in the United States, Europe lacks sufficiently reliable scientific data to support the safety of products infused with full spectrum hemp extract, including the safety of THC, one of the 100+ cannabinoids naturally found in the extract. Therefore, through its collective effort, EIHA is taking the lead on investing in the type of comprehensive research the industry so desperately needs to freely operate by spearheading the largest human trial to date on the safety of consuming trace amounts of THC.

EIHA hopes that this toxicological study, which will assess 200 participants during a 30-day period, will make regulators more comfortable with the concept of full spectrum hemp extract and will enable EIHA members to continue producing and selling these products on the European market and overseas.

Nevertheless, there remains a possibility that European regulators will reject the validity of the study during the Assessment Phase of the Novel Food Application process, in which case EIHA is prepared to appeal.

Once submitted, the European Food Safety Authority (EFSA), the Food and Drug Administration’s European counterpart, will have 9 months to carry out the safety assessment of EIHA’s toxicological study, at which point the EFSA will issue an opinion to the EU Commission. If favorable, the EU Commission will submit a draft of an implementing regulation approving products infused with full spectrum hemp extract to the Standing Committee on Plants, Animals, Food and Feed, which would then add these products to the EU Novel Food Catalogue.

Needless to say, such approval would be a game changer for the industry. We’ll continue to monitor and report on the development of this ground-breaking study so stay tuned!

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Wednesday, March 17, 2021

Montana’s legalization plan: Homegrow bans, THC caps, 20% taxes. Yay?

The red-state vision for legal cannabis faces criticism.

The post Montana’s legalization plan: Homegrow bans, THC caps, 20% taxes. Yay? appeared first on Leafly.



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Arizona Dispensaries Rewarding Covid-19 Vaccinations With Free Edibles

Another dispensary is offering free cannabis products to those who have gotten vaccinated against the coronavirus.

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Half-Ton of Cannabis Worth $8 Million Found at Routine Traffic Stop

The discovery of cannabis happened in Indiana, about 50 miles from Chicago, Illinois.

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Leafly Buzz: 12 fire cannabis strains of March 2021

12 new, hot, and best-selling strains for March including Lemonatti, Layer Cake, and Oreoz.

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Oklahoma Bill Would Welcome Medical Marijuana Patients From All 50 States

A bill in Oklahoma would help people across the country access medical cannabis.

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23 things I miss about pre-pandemic weed life

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Cannabis Litigation Common Counts: Alternatives to a Breach of Contract Claim

In almost every litigation webinar we’ve done, and in many of our past posts discussing breach of contract (the general breakdown of this claim is here), we’ve stressed the importance of memorializing agreements in writing to save yourself from potential or protracted litigation down the line. Unfortunately though, we still get quite a few prospective clients who just don’t have this principle down (whether because of prior industry norms or otherwise) and find themselves in a bind. In California, that’s where “common counts” might help. The common count is a general pleading which seeks recovery of money without specifying the nature of the claim. In today’s post, we’re going to discuss the four common counts that might save your breach of contract claim.

  1. Money Had and Received

The common count of “money had and received” may be brought “wherever one person has received money which belongs to another, and which … in justice and right, should be returned. … The plaintiff’s right to recover is governed by principles of equity, although the action is one at law.” Mains v. City Title Ins. Co. (1949) 34 Cal.2d 580, 586. As provided by CACI Jury Instruction No. 370, the plaintiff must prove that the defendant received money ‘intended to be used for the benefit of the plaintiff,’ that the money was not used for the plaintiff’s benefit, and that the defendant has not given the money to the plaintiff.”

  1. Goods and Services Rendered

The common count of “goods and services rendered” encapsulates the concept of quantum meruit. To recover in quantum meruit, instead of proving the existence of a contract, the plaintiff must show the circumstances were such that services were rendered under some mutual understanding or expectation that compensation for the same was to be made. “The underlying idea behind quantum meruit is the law’s distaste for unjust enrichment. If one has received a benefit which one may not justly retain, one should ‘restore the aggrieved party to his [or her] former position by return of the thing or its equivalent in money.’” E. J. Franks Construction, Inc. v. Sahota (2014) 226 Cal.App.4th1123, 1127-1128. The plaintiff’s recovery in quantum meruit is the reasonable value of the services rendered. “To recover on a claim for the reasonable value of services under a quantum meruit theory, a plaintiff must establish both that he or she was acting pursuant to either an express or implied request for services from the defendant and that the services rendered were intended to and did benefit the defendant.” Ochs v. PacifiCare of California (2004) 115 Cal.App.4th 782, 794; CACI Jury Instruction No. 371.

  1. Open Book Account

“A book account may furnish the basis for an action on a common count ‘… when it contains a statement of the debits and credits of the transactions involved completely enough to supply evidence from which it can be reasonably determined what amount is due to the claimant.’” Interstate Group Administrators, Inc. v. Cravens, Dargan & Co. (1985) 174 Cal.App.3d 700, 708. CACI Jury Instruction 372 provides the plaintiff must establish plaintiff and defendant had financial transactions with each other, that plaintiff kept an account of the debits and credits involved in these transactions, that defendant owes plaintiff money on the account, and the amount of money.

Specifically, “a book account is defined … as ‘a detailed statement, kept in a book [written or electronic], in the nature of debit and credit, arising out of contract or some fiduciary relation.’ It is, of course, necessary for the book to show against whom the charges are made. It must also be made to appear in whose favor the charges run. This may be shown by the production of the book from the possession of the plaintiff and his identification of it as the book in which he kept the account between him and the debtor. An open book account may consist of a single entry reflecting the establishment of an account between the parties, and may contain charges alone if there are no credits to enter. Money loaned is the proper subject of an open book account.” Joslin v. Gertz (1957) 155Cal.App.2d 62, 65-66.

  1. Account Stated

“The essential elements of an account stated are: (1) previous transactions between the parties establishing the relationship of debtor and creditor; (2) an agreement between the parties, express or implied, on the amount due from the debtor to the creditor; (3) a promise by the debtor, express or implied, to pay the amount due.” Zinn v. Fred R. Bright Co. (1969) 271 Cal.App.2d 597, 600; CACI Jury Instruction 373. The account stated common counted is a little special in that it can be established passively: the creditor may render a statement of the account to the debtor, and if the debtor fails to object to the statement within a reasonable time, the law implies his agreement that the account is correct as rendered.” When the account is impliedly agreed to, it becomes a new contract for the balance agreed to by the parties.

While these are helpful when you’re backed into a corner, these common counts still aren’t ideal claims to make for several reasons (but mostly because you may be limiting your remedies). So our number one recommendation to memorialize everything and keep your records in order still stands. And if you’re interested in learning more about how to protect yourself from potential litigation, these past webinars should may also help:

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