September 2022

The long-anticipated New York cannabis market is finally coming into shape. The New York State Office of Cannabis Management (“OCM”) has issued more than 250 Adult Use Conditional Cultivator Licenses and 25 Adult Use Conditional Processor Licenses and began processing retail license applications on August 25. There’s no doubt that New York is the cannabis industry’s next land of milk and honey. As potential investors prepare to inject capital into this promising new market, it’s important they—and their target businesses—be aware of potential regulatory pitfalls particularly as they apply to “True Parties of Interest.” Below, this blog discusses what it means to be a True Party of Interest in New York and how such designation may affect investment in New York’s Adult Use Cultivation and Processing market.

What is a True Party of Interest??

To promote more balanced competition, many states with legalized recreational cannabis have implemented restrictions and limitations on the number of licenses an individual or entity can have a direct or indirect “interest” in. In New York, individuals with such interests are identified by the OCM as “True Parties of Interest.”

The definition of “interest” and the restrictiveness of these provisions vary from state to state. … Keep reading

 

Are supply contracts a thing of the past in the cannabis market? As many cannabis markets continue to develop state to state — whether it be veteran markets adjusting to changes in consolidation or emerging markets expending efforts to establish a foundation — many operators are considering moving away from having a master supply agreement govern the legal terms and conditions of the business relationship between B2B product suppliers and product buyers for one-page purchase orders and invoices as a replacement. This blog identifies the top 5 legal considerations you need know when relying on this latter approach.

Under the traditional approach used in many industries, product fulfillment arrangements to be supplied by a distributor, on the one hand, and received by either a middle-entity operator, like a product manufacturer, or retailer for resale, on the other hand, are papered up as a form of master supply agreement (aka, purchase agreement, distributor agreement or wholesale agreement). These agreements govern the terms of the purchase, payment, delivery, and other legal jargon of the purchase-supply relationship generally and would be later supplemented by the parties through the use of purchase orders or invoices from time to time when the purchaser … Keep reading

The cannabis market in America has expanded and continues to grow with each election cycle. State lawmakers and their respective voters continue to propose and pursue the passage of ballot referendums, constitutional amendments, and new legislation that seek to legalize the recreational use of cannabis and establish a framework for the adult-use commercial market and the regulatory oversight thereof. The November 8th midterm elections are no exception, as five states seek to legalize recreational cannabis.

The following states seek to join the nineteen (19) states that have previously legalized recreational cannabis.

Arkansas

  • Action: Ballot Referendum. Lawmakers in Arkansas passed a constitutional amendment to permit the addition of this initiative to the ballot. The state Supreme Court upheld the constitutional amendment and ordered the initiative to legalize recreational cannabis to be added to the ballot for November 2022.
  • Opposition
    • Faces a legal challenge claiming the title of the ballot initiative is misleading. Many state officials are arguing that this legal challenge should be resolved before adding it to the ballot, which remove it from this year’s ballot.
    • The legal challenges have delayed the secretary of state’s ability to certify the signatures received supporting the ballot referendum. The initiative
Keep reading