Read about the experience & try a free pack of delta-9 THC + CBC Mood Gummies from Rare Cannabinoid Company.
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We are seeing in an uptick in China-related matters involving cannabis brands. Here are three tips for cannabis brands that are getting their products made in China:
As I recently wrote in our sister blog, “while having a contract provides no guarantee of smooth operations or favorable dispute resolution, a well-drafted agreement can mitigate many risks.” Moreover, it “is almost guaranteed, though, is that if a dispute arises and you do not have a contract, you will have no chance of legal recourse in China.”
We see far too many companies doing business in China without proper contractual protection. In some cases, this is because they mistakenly assume a Chinese court would not enforce a contract anyway. Others assume that an exchange of emails and WhatsApp messages with their supplier would be considered a contract, if push came to shove.
The bottom line is that Chinese courts regularly enforce written contracts. Moreover, the existence of such a contract greatly reduces the likelihood of a dispute, precisely because the Chinese supplier is likely to know that a breach of a written contract is very damning in the eyes of a local court. At the same time, in the absence of a written contract, it is almost certain that a legal dispute against a supplier will go nowhere.
Relying on a single supplier is a very risky proposition, but more so when that supplier is in China. In addition to the inherent risks associated with depending on a single source, a supplier that knows itself to be indispensable could well decide to take advantage of the leverage it has.
Ideally, a Plan B will involve a supplier in a country other than China. This will help guard against China-specific risks, such as possible disruptions to China trade in case of rising tensions between the United States (and its allies) and China. But even a Plan B that involves a different supplier in China is better than not having a Plan B.
Taking the long view, the potentially business-saving upside of channeling 1o% or 20% of production to a different supplier could well offset the associated costs. It could also help canna brands keep their suppliers on their toes, as they know there is always the potential for further production shifts depending on which supplier is offering better terms. If they wanted to, companies like Nike and Adidas could work with a handful of suppliers, yet they work with dozens, spread out over Asia (and beyond). Why do you think that is?
Even if you do not sell in China, there are compelling reasons to register your trademarks and other key intellectual property in China. More than anything, this will prevent others from registering it first, and then using it against you (potentially siccing the authorities on you for infringing on “their” IP). Others might be hitherto unknown parties, looking for a quick buck or actually thinking of using the IP themselves, but it could also be your own supplier, looking to have more leverage over you, or making provisions for possible departure on your part.
Avoid troublesome scenarios by registering your cannabis brand IP in China now. Once you do that, record those IP rights with China Customs to have them be on the lookout for infringing goods leaving China. And of course make sure that your U.S. cannabis brand IP protections are complete and up-to-date, to the extent they are securable.
The post China Manufacturing Tips for Cannabis Brands appeared first on Harris Sliwoski LLP (Formerly Harris Bricken).
Rolling with one of the first legal delivery services on the East Coast.
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For Leafly nation, ghosts say "BOOF!" To get into the Halloween spirit, we curated a list of the hardest-hitting strains that can turn even the most casual smoke sesh into a Jeepers Creepers episode.
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With Army of Darkness, Jason X, and Us.
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If only it was scratch n sniff.
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Including Gush Mints, Grapes and Cream, and Glitterbomb.
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Can a creditor, landlord or other third party take a security interest in an OLCC license? Can an OLCC licensee collateralize or pledge its license– as if that license were personal property, and not just a permission conferred by the state? These are two sides of an academic question we’ve been batting around for years because it has serious, practical implications. The short answer is: “yes, an OLCC license can be collateralized.”
Now, what I just wrote is an unsatisfactory legal answer, for reasons beyond the scope of this article (suffice it to say that it shouldn’t work). But it can and does work regardless. The OLCC agrees. Lawyers in the Oregon cannabis bar also agree. Courts… haven’t disagreed. Thus, some of us cannabis lawyers have been securitizing OLCC licenses, and OLCC licensed businesses, for years.
The rule at issue here is OAR 825-025-1260 (the “Rule”). To paraphrase, the Rule allows OLCC to grant any of the following persons “temporary authority” to operate a licensed business:
Here’s the documentation OLCC requires to confer temporary authority under the Rule, per a recent slide presentation from the Commission itself:
You may have questions at this point. One of the more compelling is: “what kind of proof of default will OLCC accept?” The answer is: “a court order is typically required.” In some cases, OLCC may also accept a licensee’s acknowledgment of its grant of a security interest and subsequent default. My office, working with OLCC, the Oregon Department of Justice and one other law firm, was able to push through the first of these outside of court on that basis, back in 2019.
Does it matter that a court order isn’t a security interest under UCC Article 9? Nope. Does is matter that an OLCC licensee cannot transfer or “sell” its license without OLCC approvals? Nope. None of this matters. All that matters is the fact that OLCC currently treats these licenses like personal property which can be secured, collateralized, transferred and liquidated for value. The fact that OLCC isn’t issuing new licenses, yet allows the “sale” of existing licenses, is consistent with this treatment.
I should emphasize at this point that the Rule contemplates only a “temporary” operational authority by a third party. The purpose of the Rule is to allow a third party to step in and wind up the business, rather than run the business indefinitely. Thus, when OLCC issues an order under the Rule, it gives a standard, 60-day horizon. Extensions are liberally granted, provided the third party can provide a satisfactory explanation of need in each case.
I should also emphasize that the Rule will likely change next year, in conjunction with rulemaking OLCC plans to undertake on related concepts of “licensability” and license transfers. (Here, I am assuming the HB 4016 license issuance moratorium will be extended beyond March 31, 2024.) You can expect to see the Rule built out to address the adjudicated incapacity of a licensee, for starters. But you can also expect serious discussion about the fundamental validity of a rule or practice that allows a party to securitize a “license.” At this point, It’s just a question of whether the OLCC addresses this before a court does.
For now, take good care in drafting your security agreements, pledge agreements, leases, etc. An OLCC license can be a valuable asset. Failing to collateralize that asset in the manner that OLCC would like to see could impair the rights and recovery prospects of anyone owed money by a licensed business.
For related posts, check out the following:
The post Oregon Cannabis: The OLCC License as Security appeared first on Harris Sliwoski LLP (Formerly Harris Bricken).
Connect with a certifying healthcare provider and get approved for your medical card in minutes.
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Connect with a certifying healthcare provider and get approved for your medical card in minutes.
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Leafly’s Dr. Nick Jikomes explains why weed gives some people The Fear—and why it’s sometimes beneficial to face it. Hip surgeries are painful. Patients require potent pain medication afterwards, often for extended periods. Some years ago, a woman named Jo Cameron had hip surgery but responded in a strange way: she reported a lack of […]
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The notion of ornamental trademark use is foreign to many cannabis businesses. This is unfortunate, because it’s an important issue to understand in the cannabis industry, where the only federal trademark protection we can obtain is for ancillary goods and services. (See here for the limitations of federal trademark protection in the cannabis industry.) The issue of ornamental use comes up frequently in the context of trademarks for apparel.
The United States Patent and Trademark Office (USPTO) may reject a trademark application if the specimen indicates that the use of the mark is merely ornamental or a decorative feature on the goods and does not function as a trademark to indicate the source of the goods. Here is an example of ornamental use provided by the USPTO:
“[A] slogan prominently displayed on the front of a t-shirt may be considered merely ornamental use and not trademark use. That is, most purchasers of the t-shirts would not automatically think the slogan identified the source of the goods but would view the slogan only as a decoration on the goods.”
Of course, not everything displayed on the front of a t-shirt would be considered ornamental and be ineligible for trademark protection. There are a number of factors an examining attorney will consider in determining whether a logo is ornamental or functioning as a source-identifier. The USPTO has explained that,
“a small, neat, and discrete wording/design located on the pocket or breast portion of a garment (for example, a small design of an animal) may create the commercial impression of a trademark, whereas a larger depiction of the same wording/design prominently displayed across the front of a garment may be more likely to be seen as a purely decorative or ornamental feature of the goods. The size, location, dominance, and significance of your mark as applied to the goods are factors used to determine whether your mark functions as a trademark to identify the source of your goods or is merely ornamental. Although there is no definitive method or place to affix a mark to the goods, the location and size of a mark on the goods is part of the environment in which the public perceives the mark and may influence how the mark is perceived.”
It is also important to keep in mind that common expressions and symbols (like the peace symbol or the phrase “Have a Nice Day”) are normally not the type of matter perceived as a trademark. There are three ways in which an applicant can overcome a refusal based on ornamentality:
It is possible for an ornamental design to be inherently distinctive if its primary function is to identify the source of the goods, with its ornamental aspect being only incidental.
In building your cannabis brand, it is important to pursue a trademark strategy that does not open any of your marks up to refusal for merely ornamental use. If you intend to pursue trademark protection for ancillary goods like apparel, be certain that your mark is functioning as a source-identifier for that clothing, and isn’t just ornamental in nature. We’ve seen many instances recently of trademark applications that appear ornamental, and those applications will likely be vulnerable to rejection or challenge.
The post Is Your Cannabis “Trademark Use” Merely Ornamental? appeared first on Harris Sliwoski LLP (Formerly Harris Bricken).
Get the heck out of here.
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Hankering for some rich cannabis knowledge? Rapper and NAPALM brand founder Xzibit digs into cannabis and all its layers in a new podcast, co-hosted by educator and entrepreneur Tammy the Cannabis Cutie.
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At the beginning of the summer, I wrote a post entitled “California Gives Up on the Illegal Cannabis Market” in which I went into detail about the state’s failure to meaningfully address the festering illegal market. More recently, I wrote about “Another California Cannabis Enforcement Program That Won’t Work.” As the name suggests, this post was about yet another performative effort by the state to create an enforcement program that won’t be widely used and won’t work.
If you are interested in California’s massive illegal market and some thoughts I have on how to combat it, I suggest you read those posts. I don’t intend to do a full-on deep dive into those issues in this post. Instead, I want to highlight yet another example of how poorly the state is doing here.
Yesterday, October 5, 2023, the California Department of Cannabis Control (DCC) published an announcement with the header: “Unified Cannabis Enforcement Taskforce strategically disrupted illegal market by seizing over $101M worth of unlicensed cannabis products, seized 363% more firearms in Q3 2023”. And the first line of the announcement reads “Focusing on larger targets, the taskforce achieved similar results from previous quarter through serving 35 percent fewer search warrants.” (Italics were in the original, I added the bold.)
Wow, that sounds great right? Well, read the fine print. Specifically this chart:
| UCETF Operations | Q3 2023 | Q2 2023 |
|---|---|---|
| Search Warrants Served | 60 | 92 |
| Pounds of Cannabis Seized | 61,415.75 | 66,315.01 |
| Retail Value of Cannabis Products Seized | $101,349,657 | $109,277,688.94 |
| Cannabis Plants Eradicated | 98,054 | 120,970 |
| Firearms Seized | 69 | 19 |
| Money Seized | $0 | $223,809 |
Let’s break this down. The organization of this chart (left to right) almost makes it look like the numbers went up. However, Q3 comes before Q2. I won’t speculate as to why this was organized this way, but at the end of the day literally all of the numbers got worse from Q2 to Q3 with the exception of firearms seized.
Specifically, Q3 of 2023 say a 1/3 reduction in the amount of search warrants served. Over a 90 day period, 60 warrants were served. That’s 20 per month. For the whole state. During that time, less cannabis was seized, and the retail value went down accordingly. Fewer plants were eradicated. And no money (!) was seized at all.
The only metric that went up was the number of illegal firearms that were seized. Don’t get me wrong, getting illegal guns of out of the hands of alleged criminals is a good thing. But to say that this will make a dent in the illegal market or even that these efforts achieved “similar results” to last quarter is, to put it mildly, a joke.
This most recent confirms what I’ve said for a very long time: the state doesn’t really care about the illegal market. I don’t believe that the best way to end the illegal market is through enforcement but through de-regulation and making it easy to participate legally. But if the state won’t do that and won’t do enforcement, is it any wonder why the illegal market dominates?
The post California Gives Up on the Illegal Cannabis Market: An Update appeared first on Harris Sliwoski LLP (Formerly Harris Bricken).
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When Congress passed the 2018 Farm Bill, did it intend to legalize intoxicating hemp products? If it did, why didn’t it just legalize marijuana? And why didn’t it address the manufacture or sale of intoxicating hemp products?
I think the answer to all of these questions is clearly “no.” Congress did not intend to open Pandora’s Box to any form of legal intoxicating hemp product. But does what I think – or what Congress intended – even matter? Not to some courts, who think that the 2018 Farm Bill is so patently clear that it really doesn’t even matter what Congress intended.
These issues are admittedly very complicated. There are plenty of folks out there who claim that intoxicating hemp products are completely legal with no caveats. That in my view, is wrong. The law is not settled, the text of the 2018 Farm Bill is anything but clear, and whole lot can (and probably will) change with the upcoming Farm Bill. Let’s take a look at some of the issues below.
A few years back, a three-judge panel of the Ninth Circuit held as much in AK Futures v. Boyd Street Distro (we wrote about that case here). That case is widely misquoted as having declared delta-8 THC legal nationwide. It did not. The Ninth Circuit is the appellate court for a group of western states and its rulings have no binding precedential value elsewhere.
What AK Futures actually did was affirm a preliminary ruling in a trademark dispute where legality of delta-8 products was one of a number of issues at play. In order to have a protectible trademark, the good or service must be lawful in commerce. The infringer argued that delta-8 products were not lawful. As part of the preliminary injunction, the Ninth Circuit agreed that the plaintiff was “likely” to succeed in establishing that the products were lawful, if they came from hemp and if they contained under 0.3% delta-9 THC. This was a preliminary ruling, but it’s likely that the court would rule similarly on some sort of final ruling. However, to claim that this case is the be-all-end-all for delta-8 is just, well, wrong. The case is not precedential anywhere outside of the Ninth Circuit.
More recently, hemp attorney Rod Kight posted a blog post entitled “DID A FEDERAL COURT ORDER JUST LEGALIZE THCA AND DELTA-8 THC IN ALL 50 STATES?” Rod referred to Bio Gen LLC v. Sarah Huckabee Sanders, a district (lower) court decision out of the Eastern District of Arkansas that only ruled on a specific Arkansas law. So to answer the titular question, no, the court did not legalize anything in all 50 states. The court did, however, strike down a rather poorly drafted Arkansas law that restricted intoxicating cannabinoids on a number of grounds. (As an aside, I think Rod’s analysis is often right, but in this case we diverge.)
Most relevant to this post was the Bio Gen court’s “conflict preemption” analysis. Conflict preemption is a doctrine that finds a state law invalid if it contradicts federal law – i.e., when it is impossible to comply with both state and federal law. Imagine a state law that said you did not have to comply with a federal law. You get the idea.
Now in Bio Gen, the court took the position that the state and federal definitions of “hemp” were in conflict. The court recognized that “Clearly, under the 2018 Farm Bill, Arkansas can regulate hemp production and even ban it outright if it is so inclined.” But while the state could ban hemp production, the court thought that bans on intoxicating hemp products were legal. I don’t get it either. And for some reason, the court forgot to cite the following 2018 Farm Bill provision in its conflict preemption analysis, even though it cited it elsewhere in the opinion: “No preemption. Nothing in this subsection preempts or limits any law of a State or Indian Tribe that . . . regulates the production of hemp . . . and is more stringent than this subtitle.”
While I think the Bio Gen court still had ample reasons to strike down the Arkansas law on different grounds, I just don’t get the conflict preemption argument, and I don’t think an appellate court would agree that states could not enact more stringent laws or prohibit intoxicating cannabinoids. Taking this case to its logical end point would likely result in massive re-writes of hemp laws in all states.
This is not an easy thing to answer and depends on many factors. What intoxicating hemp cannabinoid are we talking about? How is it produced? Is it “synthetic” (and what does “synthetic” even mean)? And what state are we talking about?
Let’s take delta-8 as an example. Delta-8 is generally not expressed in high quantities naturally and is created by converting CBD via a chemical or similar process. The Controlled Substance Act prohibits synthetic THCs, and DEA’s 2020 interim final rule stated that any quantity of synthetic THC is controlled. So according to DEA, delta-8 is illegal. On the other hand, I’ve long argued that under the text of the 2018 Farm Bill, there’s a good argument that delta-8 is legal – even in spite of what seems like clear Congressional intent to the contrary. That’s because the 2018 Farm Bill defines “hemp” as follows:
The term “hemp” means the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.
In other words, if you take hemp and make something with it, that thing is legal. This is not the position of DEA, but is evidently the opinion of the aforementioned three-judge Ninth Circuit panel. I tend to think that court was right, but at the end of the day, this is by no means a conclusive ruling. Other courts of appeal or the Supreme Court may disagree.
Let’s take another common intoxicating hemp product: THCA flower. I wrote a longer post about that recently here. In a nutshell, people argue that because THCA flower has less than 0.3% delta-9 THC, it is “hemp” even if it has 5% or 20% THCA – even though THCA converts into delta-9 THC. DEA has pretty vocally disagreed with this. In this case, I think the THCA advocates are wrong. I outlined my position in the prior post and we’re well over 1,000 words by now so I won’t recite it again.
Moreover, for any intoxicating cannabinoid or intoxicating hemp product, we also need to look at state law. A number of states outright ban smokable hemp or delta-8 products. Other states (like California) have total THC limits that de facto ban many intoxicating hemp products. No matter what you may think about federal law, those states have their own laws. And unless and until courts in those states start issuing conflict preemption rulings, those laws will be upheld.
[P]ractically speaking, claiming that THCA products are legal is a tough sell to law enforcement or a court that is not familiar with the nuances of federal hemp laws. Imagine a truck driver gets pulled over with a car full of THCA products with 25% THCA. Those products, when tested, will have levels of THC in the double digits. That driver is going to jail, and will have to do their best to persuade a court that a gap in testing requirements under the 2018 Farm Bill makes their product lawful. Even assuming that argument is solid, there are just too many possibilities that law enforcement won’t agree. This is an issue that would likely need to be resolved in the appellate courts, which would be expensive, time consuming, and risky.
Even if someone has what they believe are airtight legal arguments why their intoxicating hemp product is legal, they often fail to consider how costly it would be to get a court to agree. And how long it would take. And how hard it would be to explain to a court or jury. Thinking about the law is not sufficient. You have to consider reality. And reality isn’t cheap or easy.
Indeed, this kind of thing seems to keep happening. Take this example, where a South Carolina man was reportedly arrested for allegedly selling THCA flower that tested over 0.3%. Or this similar example out of Texas. These are just a few reported examples. The point is that being on the right side of the law doesn’t mean you won’t have to pay a boatload of money to be proven right.
When it comes to intoxicating cannabinoids, nothing is easy. Be very skeptical of folks who say that X is legal in all 50 states or that there is no risk with Y. Stay tuned to the Canna Law Blog for more updates on intoxicating hemp products.
The post Intoxicating Hemp Product Laws are More Complicated Than They Seem appeared first on Harris Sliwoski LLP (Formerly Harris Bricken).
Cannabis businesses use non-disclosure agreements (NDAs) constantly. This may be due to a series of factors, or some combination thereof: 1) the relative hardship of acquiring and protecting intellectual property over marijuana-related processes and products, today and historically; 2) a general modus operandi of “close to the vest” dealings in an industry that historically was pushed underground; and 3) the fact that most cannabis businesses are small businesses that have not taken the steps to formally register (registrable) intellectual property.
But none of that is any excuse for having a terrible NDA, or, more specifically, one terrible clause in your otherwise satisfactory cannabis NDA. Here is the problem clause:
Recipient’s obligations under this Agreement with respect to the Confidential Information will survive for a period of two years.
[Or, “three” or “five” or even “ten” years.]
That’s it. That’s the whole problem, which, if drafted by an attorney on behalf of a client attempting to protect a trade secret may rise to the level of malpractice. Why? Because trade secrets derive their protection from proof that the owner has taken reasonable efforts to safeguard the secret information. Once they are out, they are out. You can’t un-ring a bell.
The above clause is probably fine for an NDA where the parties are discussing an investment opportunity in a cannabis business, and the information is limited to financial statements or proposed deal terms. It is never OK, though, in the context of one party trying to protect a trade secret as that that term is defined under the Defend Trade Secrets Act, or the Uniform Trade Secrets Act as adopted in the relevant jurisdiction. Courts have said as much for quite some time.
When a client is thinking about protection of its trade secrets, the advice I usually give is two-fold. First, the best way to protect the secret is never to talk about it (ever). That means not sharing confidential information about methods and processes prior to getting signatures on an investment or licensing or other agreement. It also means safeguarding this information even from the businesses’ own employees, to the extent possible. Second, if you simply must share the information with a third party, the confidentiality obligations can never expire and the typical exemption requests (court order, recipient’s advisors, etc.) need to be narrowed and provisioned (under seal, advisors have to sign a separate NDA and recipient is liable, etc.).
I anticipate crossing out the “will survive for __ years” clause a dozen times in the next year on forms that clients send our law firm for tailoring and review. I anticipate seeing it another dozen times on NDAs sent to our clients by other cannabis businesses—businesses that are trade secret holders—at which point our clients can discuss whether to raise this issue or simply take the favorable term.
We often write on this blog that cannabis agreements are not like other agreements. With trade secrets, though, they sort of are– at least with respect to the consequences of disclosure. So watch out for any survival language if you are trying to safeguard a critical device, method, technique, process, etc. This is a simple precaution but vitally important in many cases.
The post How to Kill Your Cannabis Trade Secrets in One Simple Sentence appeared first on Harris Sliwoski LLP (Formerly Harris Bricken).
It’s 2023 and many cannabis businesses are still missing one critical operating document: a privacy policy. I’ve been writing and talking about this issue for years. And things are not getting better. So let’s talk about it once more.
To start, California has required privacy policies for a very long time (well, “long” at least in terms of the Internet). Under California law, operators of commercial websites that collect “personally identifiable information through the Internet about individual consumers residing in California who use or visit its commercial Web site” need a privacy policy. That’s a lot to digest. In English, website owners must have a privacy policy if California consumers use or visit their website.
Any cannabis business that operates in California and has a website is clearly subject to this requirement. But what about an Iowa-based cannabis company? Well, so long as California residents use or visit it, the requirement applies. And unless the cannabis business can definitively say that its website has no California users/visitors, it’s best practice to just get a privacy policy. If you read the above law, the requirements are relatively manageable and not too intense. But that’s not the end of the story.
In 2018, California passed the California Consumer Privacy Act (CCPA). CCPA is inspired by the European Union’s earlier General Data Protection Regulation (GDPR). Like GDPR, CCPA codified a host of consumer rights with respect to their personal information. And it imposed a host of new legal requirements on applicable businesses (more on that below). In 2020, California voters passed the Prop. 24, a/k/a, the California Privacy Rights Act (CPRA), which amended and supplemented CCPA. And you bet that there are also regulations to deal with.
One of the myriad requirements that CCPA imposed was to have a privacy policy. And unlike prior law, CCPA’s requirement is a whole lot more robust. See here for example. This is also the case for GDPR. For any business that is subject to one of these newer privacy regimes, drafting a compliant privacy policy is a challenge. So the million dollar question is, who do these laws apply to? For CCPA, the California attorney general says:
The CCPA applies to for-profit businesses that do business in California and meet any of the following:
- Have a gross annual revenue of over $25 million;
- Buy, sell, or share the personal information of 100,000 or more California residents, households, or devices; or
- Derive 50% or more of their annual revenue from selling California residents’ personal information.
The second million dollar question here is what it means to do business. Of course, CCPA doesn’t clearly define that. But elsewhere in the law, CCPA says “For purposes of this title, commercial conduct takes place wholly outside of California if the business collected that information while the consumer was outside of California, no part of the sale of the consumer’s personal information occurred in California, and no personal information collected while the consumer was in California is sold. This paragraph shall not prohibit a business from storing, including on a device, personal information about a consumer when the consumer is in California and then collecting that personal information when the consumer and stored personal information is outside of California.”
It’s therefore safe for businesses to assume that even tangential relationships to the Golden State could subject them to CCPA’s requirements so long as one of the above thresholds is met. And this means that the business needs a robust privacy policy.
What about GDPR? GDPR is even more broad in scope:
2. This Regulation applies to the processing of personal data of data subjects who are in the Union by a controller or processor not established in the Union, where the processing activities are related to:
(a) the offering of goods or services, irrespective of whether a payment of the data subject is required, to such data subjects in the Union; or
(b) the monitoring of their behaviour as far as their behaviour takes place within the Union.
A company that simply offers services, even for free, to residents of the EU, may end up subject to GDPR. To be fair, this won’t be the case for your run of the mill cannabis company. It’s more likely to affect hemp/cannabinoid companies that sell in e-commerce. But even cannabis companies can walk themselves into GDPR territory with marketing and sales efforts.
If any of these laws applies – or if a business even thinks the laws could apply – a privacy policy is necessary. There are plenty of plaintiffs’ lawyers out there who will sue, in some cases via class action, if a business fails to employ a privacy policy. Things get even worse if the privacy policy is inaccurate or the company doesn’t adhere to it.
A privacy policy is a key (and often legally required) document for any cannabis company. Without it, there’s not only likely to be a legal violation, but also maybe a lawsuit. It doesn’t need to cost an arm and a leg, and if done right, can save a ton of money and sweat on the back end.
Before ending the post, I should mention that a privacy policy isn’t the only thing cannabis companies need to worry about when it comes to data protection. CCPA, GDPR, and other laws impose numerous requirements beyond simply having a privacy policy. For example, see this post of mine from a while back on CCPA and deletion requests. This stuff can get incredibly complicated. And like with privacy policies, it’s better to invest in privacy law compliance early on, instead of defense counsel down the road.
The post Cannabis Businesses Need Privacy Policies appeared first on Harris Sliwoski LLP (Formerly Harris Bricken).
The OLCC announced several changes to the tax compliance rule this weekend at the Cannabis & Psychedelic Section of the Oregon Bar Association’s annual conference (where I was pleased to moderate a panel on the failures of legalization). This rule has been a hot topic in Oregon cannabis for several months and the OLCC will be enacting permanent rules on this issue soon.
We’ve written about the tax compliance rule on several occasions: e.g. here, here and here. For now, here’s a quick refresher on the subject. On June 15, 2023, the OLCC approved temporary rules requiring marijuana retailers to obtain a Certificate of Tax Compliance (“Certificate”) from the Oregon Department of Revenue (“DOR”) as a condition for acquiring or renewing a marijuana retailer license, as well as for changes of ownership and adding someone to a license. These new rules resulted from a directive by Governor Kotek following the La Mota scandal that led to the resignation of the Oregon Secretary of State, Shemia Fagan.
In short, the temporary rule applied to marijuana retailers, not processors, producers, or wholesalers. The rule mandated that every “applicant” on a license submit a certificate of tax compliance from the Oregon Department of Revenue (“DOR”) at the time of application, or at the time of license renewal, and in connection with certain changes of ownership.
The OLCC is poised to enact permanent rules that will replace the temporary rules. Here are a few key points the OLCC shared with us at the conference in italics, followed by my commentary:
This is not an excuse to not timely seek a certificate! As the OLCC stated this weekend, the goal is not to cull licenses from good faith licensees who find themselves unable to timely procure a certificate. The OLCC desires to work with licensees to resolve issues with obtaining tax compliance certificates. Indeed, the OLCC may grant an additional 60-Day extension to the timeframe if the Commission determines the extension is reasonably necessary to obtain DOR certificates. But this obligates licensees to work with the OLCC and DOR in good faith in doing so. Plan ahead and keep the OLCC apprised of issues with obtaining certificates of tax compliance!
Stay tuned for more on the tax compliance rule and for further reading, see the OLCC’s FAQ and overview on the new rule here and here.
The post Oregon Marijuana: OLCC Announces Changes to Certificate of Tax Compliance Rule appeared first on Harris Sliwoski LLP (Formerly Harris Bricken).
More candy than gas. All power.
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Cannabis may help or hurt G-I issues, depending on several factors.
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During New York’s Cannabis Advisory Board’s meeting on September 26, 2023, the Office of Cannabis Management’s (OCM) Executive Director Christopher Alexander revealed that the OCM anticipated issuing “over a thousand, closer to 1,500 licenses” as part of the initial licensing window that is currently scheduled to open on October 4, 2023. As referenced in this comprehensive summary from John Schoyer of the Green Market Report, the OCM had previously disclosed that the OCM ultimately envisions a market with at least 2,000 retailers and 800 growers.
Executive Director Alexander’s announcement did not provide any insight into how the OCM plans on allocating licenses among the license types that will be available during the initial application window. Nor did it indicate whether there will be any sort of geographic allocations in the same way that the Conditional Adult-Use Retail Dispensary licenses were limited by region.
From an application perspective, it is most interesting (or, more appropriately, alarming), that the OCM’s announcement reiterated the October 4, 2023 application opening date. Although Executive Director Alexander stated that there will be a guidance document published in the coming days, no such guidance document has been published to date. It is difficult to comprehend the doubling down of an application start date with so much in the air and so little time, but, well, here we are.
As we openly begged in our recent plea to the OCM, applicants are still missing necessary application forms and crucial guidance for prospective applicants. We guess we’ll just have to see what happens with New York cannabis licensing as we get ever closer to October 4, 2023. Stay tuned.
The post New York Cannabis: License Number Estimates appeared first on Harris Sliwoski LLP (Formerly Harris Bricken).
