Oklahoma voters rejected SQ 820, the statewide adult-use legalization measure, by more than 60%.
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Tuesday, March 7, 2023
How to maximize your magic mushroom yields
Check out these magic mushroom growing standards and hacks that can significantly boost boomer bounties for the hobby grower.
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9 ways to have a weedy International Women’s Day
International Women's Day is here and we have all the ways you can celebrate the holiday with weed on March 8.
The post 9 ways to have a weedy International Women’s Day appeared first on Leafly.
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Publicly Traded Cannabis Company Plans $500M (!) EB-5 Raise (!!)
Cannabis and business immigration don’t mix. Or at least that’s the conservative guidance we often give clients that come to us with that question. That’s not because a particular investment may not be sound, rather because federal law creates inherent conflicts between immigration eligibility and participating in a cannabis venture.
Kate Robertson at MJBizDaily reported on March 1, on a first of its kind development in the space. Bright Green Corp., a publicly traded company on the Nasdaq exchange is planning to raise half a billion dollars in foreign capital through the U.S. EB-5 program. At first blush, that seems patently insane. But, there are a few important aspects of Bright Green’s proposal and 2022 EB-5 regulations that, at least in principal, make it more of a wildly risky gambit.
Cannabis and immigration
U.S. Immigration law is contained in the Immigration and Nationality Act (“INA”). The INA is federal law and administered by the U.S. Citizenship and Immigration Services (“USCIS”). Similarly, in spite of dozens of states enacting legislation that allows for recreational or medicinal use of cannabis, it remains federally illegal to possess, produce, and sell under the Controlled Substances Act (“CSA”) as a schedule I substance. The INA contains many penalties and bars to U.S. admissibility for violating federal law, including the CSA. Among them are bars to admissibility to the U.S. in the first instance and bars to being able to naturalize as a citizen down the road. For analysis of cannabis and naturalization, see Canna Law Blog posts here and here.
The INA provides that a person who is or has been a knowing aider, abettor, etc. in the illicit trafficking of any controlled substance under the CSA is inadmissible to the U.S. This begs the question: is it the case that an investment in a cannabis business makes a person an “aider, abettor, conspirator” of trafficking in an illicit substance? Not necessarily. Most lawyers would likely say that an active investment, meaning also having a role in running the cannabis business would violate the INA. On the other hand, some may say that a passive investment (not having an active role in running the business) would not. In either case, we rarely get to this analysis because lawful residence in the U.S. is the goal for most immigrant investors. Rolling the dice on an investment with questionable approvability is often an untenable risk.
This might make one wonder, why would Bright Green try to raise capital through investment immigration in the U.S., if there is substantial risk the investment may not be approved in the first place?
EB-5 and cannabis immigration
The answer requires a brief discussion of EB-5. The INA contains an immigrant investor program at 8 USC § 1153(b)(5) that allows foreign nationals to apply for permanent residence by making a minimum investment in a new commercial enterprise in the U.S. that creates or preserves 10 full time jobs as a result. The program, known as “EB-5”, is much more complex but for or purposes here that will do. The EB-5 program has since its creation yielded tens of billions in foreign investment to the U.S. and likewise created or preserved hundreds of thousands of jobs for U.S. workers.
In March of 2022, the EB-5 Reform and Integrity Act (“RIA”) was passed. The RIA contains much needed investor protection provisions and creates a stricter compliance and reporting regime for EB-5 project offerors and regional centers. Regional centers are USCIS approved economic entities that are now required to sponsor any EB-5 project with multiple investors (like Bright Green’s proposed project).
Regional centers now must submit applications called I-956F forms (formerly a voluntary “exemplar” filing) to USCIS before individual investors may file visa petitions. This filing must contain among other things extensive information and certifications about the offeror of the securities, the investment project manager, and all of the offering and investment documentation provided to investors. The filing contains every piece of information USCIS will scrutinize to determine project eligibility for purposes of EB-5 law. If USCIS approves an I-956F filing, that approval “shall be binding for purposes of the adjudication of subsequent petitions [filed by] immigrants investing in the same offering.” Before the RIA this was called an “exemplar” filing.
For many investment offerors with non-traditional projects, getting investors to subscribe to the offering will likely require such pre-approval before offering it to prospective investors. As Kate Robertson pointed out in her article, this appears to be what Bright Green has done. Given that an EB-5 investment in a cannabis business is potentially disqualifying under the INA, the I-956F filing affords the Bright Green the opportunity to have USCIS review the filing and make a binding determination about its eligibility for purposes of EB-5 law before the offering. There is no chance any cannabis company, publicly traded or otherwise, could raise $500 million of foreign investor capital in the absence of pre-approval by USICS. But the question remains, is it approvable?
The Bright Green project
Bright Green states in its press release about the project that it has built a one million square foot greenhouse for an “agricultural complex to be the largest in the world for fully-integrated and federally compliant research and drug manufacturing”. EB-5 investor funds will be used for “for working capital requirements to operate its current greenhouse facilities in Grants, New Mexico”.
While “not yet fully complaint”, Bright Green already has a memorandum of agreement “approving” its operations to supply bulk cannabis to cannabis researchers from the U.S. Drug Enforcement Administration (“DEA”), the agency tasked with enforcing the CSA. In principal at least, if the EB-5 cannabis investment is solely supplying cannabis to approved, licensed researchers pursuant to preexisting DEA approval then that is not “trafficking in an illicit substance” under the INA. This is because it is not a violation of the CSA to produce and sell cannabis to federally approved researchers. The CSA does provide for this kind of production to researchers who have gone through its highly rigorous process of approval.
It should be noted, however, that the company would need more than just a DEA letter approving this proposal in order to actually implement its plan. Further, it’s not at all clear that federally approved researchers need the amount of cannabis that the company’s 1 million square foot facility could generate. For an excellent discussion of Bright Green’s “plan” and its attendant issues, see this Substack post from Shane Pennington and Matt Zorn. Now, it’s certainly possible that only some of the enormous facility will be used for DEA approved cannabis production and other parts of the facility for non-cannabis production of other agricultural products.
With that being said, political winds shape agency action and it’s possible that a conservative administration is victorious following the 2024 presidential election. If federal agency policy like the Stephen Miller crafted, Trump Era USCIS were to reemerge, the consequences for the investors in Bright Green’s project could be nightmarish. Consider if the head of the DEA were to revoke Bright Green’s approval to produce federally legal research cannabis. That would throw the project and therefore the investors’ immigration eligibility into question under any interpretation of the INA. That is to say nothing of the attitude towards legal immigration at USCIS, which has yet to recover from the damage done by the previous administration. It is certainly possible that whatever favorable treatment this project is receiving now from the U.S. government changes course in 2025. Adjudication of EB-5 visa petitions at USCIS is currently taking between 5-7 years, so whatever happens following 2024, it will impact investors in this project.
What’s next?
Bright Green’s raise is ambitious to say the least and its federal cannabis allowance seems dubious. But, if approved by USCIS it would be the first raise of its kind pairing immigration and cannabis. Still, the project’s approvability relies on the DEA’s allowance of the company’s operations under the CSA. If the project is approved by USCIS, that will not mean that immigrant investments in cannabis business writ large are likewise approvable. Our conservative advice on this issue will remain the same until federal cannabis reform takes place, irrespective of Bright Green’s project approval.
We will monitor developments on this prospective raise and all things cannabis and immigration here at the Canna Law Blog.
The post Publicly Traded Cannabis Company Plans $500M (!) EB-5 Raise (!!) appeared first on Harris Bricken Sliwoski LLP.
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Justice Department Launches Expungement Application
The time is now to expedite the process and get proof of pardon for low-level federal cannabis convictions that no longer stand today yet still haunt individuals, sometimes decades later. According to a March 3 announcement, the U.S. Department of Justice is launching the application to make the expungement process easier for people with low-level federal cannabis convictions.
For people who are interested, you’ll need to gather personal details like name, mailing address, email address, and citizenship status. You’ll also need to know the docket or case number and the code section that was charged, and provide copies of documentation, such as charging documents (indictment, complaint, or criminal information) or conviction documents. It’s also important to know the exact date the sentence was imposed.
Pardons for low-level cannabis convictions were promised by President Joe Biden last October.
“Today, the Justice Department is launching an application for eligible individuals to receive certificate of proof that they were pardoned under the Oct. 6, 2022, proclamation by President Biden,” the department wrote on March 3.
“On Oct. 6, 2022, the President announced a full, unconditional and categorical pardon for prior federal and D.C. offenses of simple possession of marijuana. The President’s pardon lifts barriers to housing, employment and educational opportunities for thousands of people with those prior convictions. President Biden directed the Justice Department to develop a process for individuals to receive their certificate of pardon.”
The Application for Certificate of Pardon will be available on the Office of the Pardon Attorney’s website. People with eligible cases may submit documentation to the Office of the Pardon Attorney and receive a certificate indicating the person was pardoned on Oct. 6, 2022, for simple possession of cannabis.
The President’s pardon can assist pardoned cases by removing civil or legal penalties such as restrictions on the right to vote, to hold office, or to sit on a jury.
The process makes getting proof of pardon quite a bit easier for people seeking to obtain licenses, bonds, or employment. President Biden said last October that the point of pardoning low-level cannabis convictions is to “help relieve the consequences arising from these convictions.”
In order to be eligible for a certificate, an applicant must have been charged or convicted of simple possession of cannabis in either a federal court or D.C. Superior Court, and the applicant must have legally resided the United States at the time of the offense. In addition, an individual must have been a U.S. citizen or lawful permanent resident on Oct. 6, 2022.
Those who were convicted of state-level cannabis offenses do not qualify for the pardon.
In a historic move on October 6, 2022, Biden announced that he will pardon people with federal convictions for simple possession of cannabis, and announced that he will direct the U.S. Attorney General Merrick B. Garland and Secretary of the Department of Health and Human Services Xavier Becerra to begin the process of reviewing the classification of cannabis at the federal level.
The White House statement noted that under current federal law, cannabis falls under Schedule I alongside deadly drugs like fentanyl. The White House will “review expeditiously” the plant’s current classification.
“As I’ve said before, no one should be in jail just for using or possessing marijuana,” Biden tweeted. “Today, I’m taking steps to end our failed approach. Allow me to lay them out.”
For more information about determining eligibility and to find answers to frequently asked questions, visit Presidential Proclamation on Marijuana Possession.
The post Justice Department Launches Expungement Application appeared first on High Times.
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Monday, March 6, 2023
California makes a historic move toward legal interstate cannabis commerce
Listen to our expert break it down on NPR.
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Peru: New Medical Cannabis Regs
Peru has new regulations for the use of medical cannabis, following the issuance of Supreme Decree (Decreto Supremo) No. 004-2023-SA on February 28 of this year. The decree approves the Regulation that Regulates the Medicinal and Therapeutic Use of Cannabis and Its Derivatives (Reglamento que regula el uso medicinal y terapéutico del cannabis y sus derivados). The Regulation implements the provisions of Law No. 30681 and Law No. 31312.
The Regulation details the requirements to obtain the different types of cannabis licenses available. Licenses to import cannabis and/or market cannabis derivatives may be granted to pharmaceutical laboratories and droguerías, duly authorized to operate by the Peruvian government. While in some Spanish-speaking countries the term droguería could mean a drugstore, in Peru it is legally defined as a “pharmaceutical establishment, which is dedicated to the import, export, marketing, quality control, storage and/or distribution of pharmaceutical products, medical devices and medical devices.”
As part of the application process, applicants must certify that they will only sell cannabis or its derivates to other licensed entities, such as pharmacies and similar businesses, again duly authorized to operate by the Peruvian government. These businesses are not able to legally import cannabis into Peruvian businesses, but they may apply for a license to market cannabis derivatives.
In line with the framework in some other Latin American countries, such as Colombia and Ecuador, cannabis is classified as “psychoactive” (Cannabis psicoactivo) or “non-psychoactive” (Cannabis no psicoactivo), depending on the THC content. Psychoactive cannabis is that whose THC content is equal to or exceeds 1%. The Regulation contemplates the use of both psychoactive and non-psychoactive cannabis for medical and therapeutic purposes. As such, both types of cannabis may be imported into Peru under the Regulation. Importers of psychoactive cannabis, however, must obtain an import certificate from the General Directorate of Drugs, Supplies and Drugs (DIGEMID).
The Regulation also provides for other types of licenses that, while perhaps of limited interest to foreign cannabis businesses, are significant to stakeholders in Peru. These include licenses for the production of cannabis derivatives, which may include authorization to grow cannabis. In addition, licenses are available for accredited patient associations. The Regulation also establishes requirements for cannabis prescriptions for patients.
Considering the fraught political environment in Peru, that there was bandwidth in the Palacio de Gobierno to tend to the Regulation is by itself remarkable. Is embattled President Dina Boluarte seeking to shore up support for her government, by appealing to medical cannabis patients? We see no indication of such a ploy, which is just as well, since at least some patients are unhappy with the new rules. Perhaps, though, the businesses set to take advantage of the opportunities presented by the medical cannabis market will be more pleased.
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