Discoveries advance on a regular basis as to how cannabidiol and related therapeutics can heal or at least relieve the pain associated with health conditions. From cancer and opioid addiction to chronic pain and glaucoma, medicinal cannabis shows great promise. As with other efforts to address a patient’s condition, this field will morph toward a more personalized set of therapy regimes. The broader precision medicine field has a significant head start, though, because of the years of both longitudinal and historical data studies. The medicinal cannabis field must leap ahead in this direction.
The proliferation of different, proprietary data sets is seen slowing the growth and penetration of more ‘traditional’ personalized medicine. Each pharmaceutical company, bio bank and research organization has already collected large amounts of data from clinical trials, patients, providers and other sources. But the data an organization owns might not contain the insights it needs to achieve a breakthrough in personalized medicine.
As medicinal cannabis providers collect and combine data sets, the key will be ensuring that those sets are correctly linked and that the data itself provides enough depth to yield real insights. That points to the need to set consistent standards for collecting data … Keep reading
One of the biggest challenges facing the legal cannabis industry today (as we’ve covered extensively on this blog) is access to, or better yet lack of access to, banking services. Because the use and sale of marijuana remains illegal at the federal level, banks and credit unions have been hesitant to provide services to cannabis-related businesses, even in states that have legalized both medical and recreational cannabis. The concern from a banking perspective is that providing banking services to these companies could potentially lead to allegations of money laundering and aiding and abetting federally-illegal operations. While this has not completely prevented cannabis companies from operating in states where it is legal, it has forced a burgeoning industry to operate on a virtually all-cash basis, leading to many financial and safety concerns.
As a potential solution, in May 2017 Senator Jeff Merkely (D-OR) and Ed Perlmutter (D-CO) introduced the “Secure and Fair Enforcement (SAFE) Banking Act”, which proposed certain protections for banks against criminal and civil liabilities for serving legitimate cannabis companies that operate in compliance with applicable state law. The Safe Banking Act was not only intended to legitimize an up-and-coming industry, but also aimed to establish banking … Keep reading
Last week the firm moderated a discussion of banking and lending in the cannabis industry. The event was well attended and most importantly provided practical insights concerning the financing of cannabis businesses (medicinal and recreational) and detailed review of just how regulated and scrutinized operations are when it comes to business financing or daily financial transactions. The bottom line appeared to be that in order to obtain financing or to evolve from a cash business, an organization needs to be squeaky clean.
One question that arises regularly is whether medicinal cannabis firms are subject to HIPAA, the federal Health Insurance Portability and Accountability Act of 1996, which is the primary set of laws and regulations applicable to the privacy and security of patient information. It makes sense intuitively that if a dispensary fulfills a prescription or request for a CBD product then the information associated with the patient, the order, and payment should all be considered “protected health information” or “PHI” under HIPAA.
Does HIPAA Apply to Medicinal Cannabis?
Typically, a medicinal cannabis dispensary or related business would not be subject to HIPAA. However, circling back to the discussion of banking and lending, any organization in the … Keep reading
Tomorrow night, Cannabis Business Advisory Group Co-Chairs Frank Segall and Scott Moskol will speak on a panel hosted by TMA New England. Details about the event and a registration link can be found below.
With the cannabis space projected to grow at a significant pace over the coming years, the panel will explore how banking has evolved to accommodate the needs of a vibrant and energetic industry. Topics will include the technology solutions that have become available to help marijuana-related businesses deal with the lack of traditional commercial banking services, how the Commonwealth accommodates the needs of the local industry, and the legal and regulatory framework surrounding cannabis investing/financing, and how it may change in the weeks, months, or years ahead.
A networking reception will immediately follow.
Jordan Allen, Principal and CEO, Reich Bros Finance
Scott H. Moskol, Partner, Co-Chair Cannabis Business Advisory Practice, Burns & Levinson
Karen Munkacy, M.D., Founder, President and CEO, Garden Remedies
Tina M. Sbrega, President & CEO, GFA Federal Credit Union
Frank A. Segall, Chair Business Law & Finance, Co-Chair Cannabis Business Advisory Practice, Burns & Levinson
January 31, 2019
Boston Marriott Long Wharf
Harborview … Keep reading
It’s a new year, but why not live in the past just long enough to talk briefly about that last couple of Section 280E cases that trickled in at the end of 2018? Today, I’m reviewing the two Harborside cases.
Weighing in at 60-plus pages, and paraphrasing Shakespeare, it’s a wonder that we didn’t learn much more from the first Harborside opinion. Harborside is a medical marijuana dispensary located in California whose 2007 through 2012 tax years were audited, with the IRS issuing deficiency notices covering all six years. The deficiency notices disallowed the company’s Section 162 expense deductions pursuant to Section 280E, and made adjustments to costs of goods sold. Of importance to one of Harborside’s arguments in the case, the business had also been the subject of a civil-forfeiture action filed in 2012, stemming from what the federal law continues to view as its illegal drug-trafficking activities. That action was subsequently dismissed with prejudice in 2016.
In its petition, Harborside asked the Tax Court to decide whether:
- res judicata precludes the Commissioner from applying Section 280E where the prior civil-forfeiture action was dismissed with prejudice;
- Harborside’s business “consists of” trafficking in a controlled substance under
… Keep reading
As described in last week’s post, 2018 proved to be an exceptionally exciting year for the cannabis industry: five states approved legalization initiatives, Canada ended its nearly century-long prohibition, and legalization was a key issue in a number of gubernatorial races. Moreover, Congress helped cap off a robust year by legalizing hemp, and therefore hemp-derived products, through the 2018 Farm Bill. And notwithstanding the current gridlock in Washington, it appears that last year’s pro-cannabis momentum has carried over into 2019.
On January 9, U.S. Rep. Earl Blumenauer (D-OR) introduced H.R. 420, also called the “Regulate Marijuana Like Alcohol Act.” Many readers will remember Blumenauer from the eponymous Rohrabacher–Blumenauer amendment, the appropriations provision that prohibits the Justice Department from spending funds to interfere with the implementation of state medical cannabis laws. (Last fall, he also circulated a legalization agenda for a 2019 Democratic House.) Blumenauer’s proposed legislation provides for a complete overhaul of the federal government’s treatment of marijuana. Among other things, the bill:
- Decriminalizes marijuana by removing it from all schedules of the Controlled Substances Act;
- Amends the Federal Alcohol Administration Act to empower the Secretary of the Treasury to issue permits to those wishing to manufacture,
… Keep reading
As we begin this New Year, we’re taking some time to reflect on all that’s transpired in the cannabis arena over the past 12 months. It’s clear that 2018 was one of the most pivotal and exciting years for the burgeoning marijuana industry. In addition to seeing successful state legalization efforts across the country, we saw signs of support from both political parties (including the President), and witnessed the first legalization of recreational marijuana in an industrialized country with the passage of the Cannabis Act in Canada.
Despite a shaky start to the year, triggered by then-Attorney General Jeff Sessions’ revocation the Cole Memorandum, five states approved legalization initiatives (including Vermont’s vote to approve marijuana in the same week Sessions revoked the Memo). With Vermont and Michigan approving recreational marijuana in 2018, and Oklahoma, Utah and Missouri approving use of medical marijuana, there are now 32 states with some form of legalized marijuana, including 10 which have legalized adult-use marijuana.
This year also saw bi-partisan support for cannabis legalization and its potential social and economic impact. There were a handful gubernatorial races in which candidates made cannabis legalization a key campaign issue. Democrats J.B. Pritzker (IL), Tim … Keep reading
Last week, a House-Senate panel approved the 2018 Farm Bill, thereby ending a months-long stalemate over a piece of legislation that provides critical subsidies to farmers. While much of the bill mirrors current law, the legislation, if passed, will bring an end to five decades of hemp prohibition. Hemp was afforded limited legal protections in 2014, when Congress passed a farm bill that authorized states to develop pilot programs for its research. The 2014 Farm Bill eventually gave rise to a patchwork of state regulations regarding hemp and hemp-derived CBD.
While the hemp industry experienced substantial growth under the 2014 Farm Bill, the new bill is undoubtedly a watershed moment for the entire cannabis industry, as its changes to current law are more far-reaching than its predecessor. If passed, the bill would remove hemp’s low amounts of THC from the Controlled Substances Act, allow the U.S. Department of Agriculture to regulate the crop like any other agricultural commodity, and permit hemp products – like CBD – to be introduced into interstate commerce. Further, it would lift restrictions on advertising, banking, and other financial services.
The bill would also:
- Allow hemp production in all 50 states for any use, including
… Keep reading
On December 23, 2018, the Department of Public Health will transfer oversight of the Massachusetts Medical Marijuana Program to the Cannabis Control Commission, the agencies recently announced, giving the CCC oversight of both recreational and medical marijuana programs. (The Adult-Use Act mandated that the transition occur by the end of the year.)
The DPH has run the Medical Use of Marijuana Program since its inception in 2014. To date, there are 47 registered marijuana dispensaries that have been approved for sales across Massachusetts; those RMDs serve more than 57,000 patients and over 7,000 personal caregivers. DPH and CCC officials have assured the public that patients in the medical program will not see any substantial changes as a result of the transfer.
In a statement issued last week, Public Health Commissioner Monica Bharel stated:
We want to assure medical marijuana patients in the Commonwealth that we have worked closely with the CCC and our constituents over the past several months to support a smooth transition of the program and to ensure that patient access is not impacted by this change.
Echoing Commissioner Bharel’s assurance, CCC Chairman Steven J. Hoffman publicly noted “the considerable collaboration between DPH and the CCC.” … Keep reading
On Monday, the day after Utah’s medical cannabis initiative became law, state legislators supplanted it with a more tightly controlled plan for providing marijuana-based treatment. That plan is called the Utah Medical Cannabis Act, and it is designed as a replacement for voter-approved Proposition 2. The compromise bill is more restrictive than the law established by Proposition 2, which was supported by the Marijuana Policy Project and Utah advocates.
In early October, supporters and opponents of Proposition 2 reached an agreement whereby both sides de-escalated their campaign operations and agreed on a medical-marijuana-law compromise that would be enacted regardless of the outcome of the ballot initiative vote. The legislation has acted as a bridge between Prop 2 opponents, such as the Church of Jesus Christ of Latter-day Saints and the Utah Patients Coalition, the group that spearheaded the initiative effort.
The compromise bill makes a number of changes to Proposition 2, including no home cultivation for patients, a smaller number of dispensaries, and a requirement that dispensaries employ pharmacists who recommend dosages. The replacement legislation crafted by lawmakers and both sides in the Prop 2 debate overhauls the medical cannabis distribution system proposed by the ballot initiative, and … Keep reading