After having been indefinitely postponed in April 2020 due to the COVID-19 pandemic and nearly four years after Maine residents voted to legalize adult-use recreational cannabis, Maine is set to launch the long-awaited retail sale of adult-use recreational cannabis this coming October. While voters passed a ballot measure in 2016 to legalize adult-use recreational cannabis, state legislators and regulators have spent the time in between battling how to regulate the industry. And, as the state only started accepting applications to its adult-use recreational cannabis program back in December 2019, some had hoped that recreational sales would begin in April prior to the state announcing the indefinite postponement, which was then suggested would last beyond June.
Four months later, on August 14th, 2020, Maine’s Office of Marijuana Policy finally announced its plans for the issuance of the state’s first adult-use marijuana establishment licenses beginning on September 8th, which is anticipated to give stores enough time to harvest, test and package products for sales to begin a month later on October 9th. In light of the ongoing pandemic, the Office of Marijuana Policy is also working with the state’s Department of Economic and Community Development … Keep reading
Since the era of cannabis legalization commenced, stakeholders, regulators, and ordinary citizens alike have been concerned about the lack of social equity and diversity in the cannabis industry. Even prior to the modern era of legalization, the inextricable relationship between race, enforcement, and the origins of prohibition has served as a troubling reminder of our country’s systemic inequity, as we have previously noted. Therefore, in recent years regulators have attempted to address past social and racial disparities by ensuring that those from disproportionately impacted communities would not be blockaded from the legal market. This week we will take a look at various approaches that state regulators have implemented to combat inequity in the industry.
While several states have made social equity provisions a part of their marijuana programs, jurisdictions have taken slightly different approaches and experienced myriad results. Since 2016, at least six (6) states have enacted considerable measures to increase diversity in their respective marijuana programs by either eliminating or mitigating barriers to entry into the market (including, Massachusetts, California, Michigan, Ohio, Illinois, Washington). Moreover, with respect to adult-use marijuana, Massachusetts, California, and Illinois have each made social equity a key aspect of their legalization plans.
Massachusetts … Keep reading
The Cannabis Control Commission (CCC) assembled on July 20, 2020, to approve draft changes to the cannabis adult-use, medical-use, and colocated operator regulations. A Virtual Public Hearing on the draft regulations was held on August 3rd and public comments will be accepted until August 14th.
The new draft regulations encompass various changes across the board – from new CCC approval procedures, operational requirements, licensing updates, and receivership processes. Given the expansiveness of the proposed changes, it is critical for current and future operators as well as investors, lenders, and financial institutions engaging with industry participants to review and understand the additions and modifications.
Colocated Marijuana Operators (CMOs). In regard to the promulgated regulations concerning Colocated Marijuana Operators, the CCC has proposed to combine the regulations previously set forth in 935 CRM 502.000 with the existing 935 CMR 500.000 (Adult-Use Regulations) and 935 CMR 501.000 (Medical-Use Regulations) due to redundancy in the currently effective colocated operator regulations.
Licensure/Certifications. Some key developments in the new regulations regarding licensure include:
- Expansive processes pertaining to patient certification/registration such as:
- permitting patients with certain identified hardships to renew on a 2-year basis instead of annually
- expressly adding telehealth visitation
The staff (the “Staff”) of the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (“OCIE”) recently issued a Risk Alert focused on certain key compliance issues for registered investment advisers that manage private equity funds or hedge funds (collectively, “private fund advisers”). OCIE’s Risk Alert highlights certain common deficiencies the Staff has observed, and its publication demonstrates the Staff’s continued focus on regulating private fund advisers. For purposes of this Cannabis Business Advisory blog, private fund advisers and investors alike in the cannabis space are advised to carefully take note of this Risk Alert, especially given the already enhanced scrutiny of the industry.
The Staff emphasizes three general areas of deficiencies OCIE has identified in examinations of private fund advisers: (1) inadequate disclosure of conflicts of interest, (2) inaccurate allocations and disclosures of fees and expenses, and (3) failure to properly maintain, establish and enforce policies and procedures relating to material non-public information (“MNPI”).
Conflicts of Interest Disclosures
The Staff underscores the antifraud provisions in Section 206 of the Investment Advisers Act of 1940 (the “Advisers Act”). In particular, the Staff cautions advisers who are subject to these antifraud provisions to eliminate or otherwise make “full and … Keep reading