January 2021

Delta-8-THC: Legal THC?

Delta-9-tetrahydrocannabinol (popularly referred to as THC) is widely considered the rock star of cannabinoids. However, Delta-9-THC isn’t the only cannabinoid with psychoactive effects that is emerging on the scene. In fact, it was forced to share the spotlight with its lesser-known cousin, Delta-8-THC, in a recent Rolling Stone article. Does this mean we should expect to see a new cannabinoid rising star on the horizon?

As Rolling Stone highlighted in its article, there is good reason to buy into the hype surrounding Delta-8.

In some ways, Delta-8 sounds too good to be true. But it isn’t. For people who want to feel the psychoactive effects of Delta-9 yet find it gives them paranoia or anxiety, Delta-8 is a quasi-legal option available online. And unlike Delta-9, Delta-8 is significantly cheaper, making it a viable option for some people looking for a short uplifting feeling without being intoxicated. But judging by how much attention Delta-8 has been getting by law enforcement, the trend might be short-lived. Despite the burgeoning success of Delta-8 over the past year, any day can be the cannabinoid’s last.

In fact, the two analog cannabinoids share a lot in common. They are nearly identical from … Keep reading

High on Cannabis: Outlook of the Industry Continues to Shine After Record-Setting 2020

Despite the ongoing COVID-19 pandemic, 2020 was a record-setting year for the cannabis industry, and indications suggest 2021 will continue the trend. Years of steady growth in the cannabis industry shined in 2020 with record levels of sales growth, significant legalization reforms, and re-emerging optimism in the cannabis capital markets.

Sales Growth:

Sales of medical and recreational cannabis set all-time records in both mature cannabis markets, such as Colorado (sales figures for medical and recreational cannabis exceeded $2 billion, up from $1.7 billion in 2019 and $1.5 billion in 2018) and Oregon (annual sales surpassed $1 billion for the first time in 2020), and emerging markets, such as Illinois (sales surpassed $1 billion for the first time). One factor that contributed to these all-time highs resulted from dozens of states – and the District of Columbia and Puerto Rico – declaring their cannabis industries “essential,” allowing cannabis operators to remain open and operational throughout the pandemic. Notably, one exception was the Commonwealth Massachusetts, where the governor closed adult-use cannabis businesses for two months but declared medical cannabis companies as “essential.” Despite the governor’s actions, Massachusetts sales still set records – hitting $700 million in sales, up approximately 56% from … Keep reading

Key Considerations for Issuers and Potential Finders Under the SEC’s Proposed “Finder” Exemption from Broker Registration

In our first installment of this two-part “mini-series” on finders, we outlined the Securities and Exchange Commission’s proposed conditional exemption (“Proposed Exemption”) to permit unregistered brokers – or “finders” – to engage in limited activities on behalf of private issuers without being subject to federal broker-dealer registration requirements.

We expect the Commission’s Proposed Exemption would help facilitate private companies’ capital raising efforts by permitting unregistered exempt finders to connect issuers with accredited investors in private markets in exchange for transaction-based compensation. Private investment funds, prospective finders, issuers, and investors should all take notice of this proposed “finders” exemption. Cannabis businesses, in particular, may find that the Proposed Exemption would open doors to previously untapped networks of potential investors through exempted intermediary “finders” that are not explicitly available under current regulations.

However, there are also certain traps for the unwary.

This installment highlights key considerations and concerns that issuers, private funds, potential investors, and prospective finders should be aware of – particularly any cannabis constituents seeking to navigate the proposed safe harbors in light of the federal illegality their industry operates under.

The Proposed Exemption Would Expand Available Capital Sources:  Exempt Finders Would be Free to Connect Private Companies with Keep reading

Big Benefits: HR Resources for Cannabis Companies

There are significant differences between professional employment organizations (PEOs), administrative services only (ASO) providers, and payroll providers. Why are these services critical for cannabis companies and their financial institutions? Which one do you need – and when? Katrina Skinner of Burns & Levinson joins Brian Wall of AdaptiveHR and Stacie McLauchlan of Paragon Payroll to discuss why cannabis companies should outsource HR and payroll, the implications of 280E, 401(k) options, how banking is affected, and of course – the cost of obtaining and providing these services.

Click here to watch the full webinar.… Keep reading

Weed Wrapped Up: Massachusetts Updates Labeling, Packaging, and Advertising Regulations

The Massachusetts Cannabis Control Commission (CCC)’s new regulations for adult-use and medical-use are to be effective on January 8, 2021.

The new final regulations’ simplified language in the Advertising, Labeling, and Packaging sections clarified the permitted and prohibited practices under these categories and implemented a pre-approval process.

We encourage marijuana businesses to seek guidance from a trusted attorney regarding these final regulations and the potential impacts on your business or operations.

Pre-Approval Process for Packaging & Labeling

In addition to complying with the Advertising, Labeling, and Packaging regulatory requirements set forth 935 CMR 500.104 (4)-(6), the CCC must pre-approve a package or label.  An application for pre-approval may be submitted at any time but should be submitted prior to sales or before implementing a substantive change to an already approved package or label. The pre-approval application fee is $50 per product.

The CCC may determine the form and manner for a pre-approval application, but, in addition to such application, applicants will also need to submit images of the proposed package or label to the CCC as an electronic file. Packaging applicants should submit front and back photographs of the packaging and labeling applicants should submit one photograph of each … Keep reading