Cannabis Law


See Hot Smoking Topics in Operations Panel here.

The growth and legitimacy of the cannabis industry is at an all-time high with nearly two-thirds of the country in support of the federal legalization of cannabis. With such legitimacy and potential for further growth, it’s no surprise ancillary businesses are coming to the forefront to provide services to the cannabis industry. However, with so many new and ever-changing developments in the rapidly growing cannabis industry, ancillary businesses need to be positioned to understand and adapt to the complex landscape of the cannabis industry in order to provide sound advice and guidance to cannabis operators.

The Hot Smoking Topics in Operations Panel, presented by Burns & Levinson, examined the landscape of ancillary services provided to the cannabis industry and the Governor’s ban on vaping products.

Tina Sbrega, President and CEO of GFA Federal Credit Union, a well-capitalized, $540 million member-focused credit union, is at the forefront of providing services to the cannabis industry. Under Ms. Sbrega’s leadership, GFA Federal Credit Union created a subsidiary company in 2018 to provide banking services to cannabis operators, employees of cannabis operators and other companies willing to service the cannabis industry.

According to Ms. … Keep reading

Hemp Insurance is Cropping Up as the Industry Awaits USDA Regulations


In early August, hemp farmers in central Oregon confronted a dilemma that every crop farmer fears. Severe thunderstorms – showering golf ball-sized hail – rolled through nearly five hundred acres of farmland, severely damaging the hemp crops in its path. Early estimates tallied the storm’s damage at nearly $25 million (~ $50,000 an acre), though losses now appear to be less than initially believed. Nonetheless, the destruction witnessed in central Oregon, one of the United States’ most densely planted hemp regions, elucidates a key challenge to the industry’s continued growth and profitability; namely, a lack of access to affordable crop insurance.

Put simply, the status quo for many hemp farmers, especially small-scale operations, is simply too burdensome. Most farmers engaging in hemp production do so at their own risk since the private insurance that is on the market is often too expensive. And even if hemp farmers too are willing to purchase an expensive policy, many cannot overcome the private insurance industry’s self-imposed barriers to coverage. For example, many private insurers require that operations have at least 25 acres of hemp crop.

Fortunately, the United States Department of Agriculture (USDA) is beginning to take steps to protect some hemp … Keep reading

In Case You Missed It: Recent Federal Developments Signal Forthcoming Hemp-Industry Guidance


On Thursday, July 25, 2019, the Senate Agriculture Committee held a hearing before federal regulatory agencies in the agriculture, public health and pesticides space concerning efforts to implement the legalization of hemp. Representatives from the U.S. Department of Agriculture (USDA), the Environmental Protection Agency (EPA) and the Food and Drug Administration (FDA), among others, were invited to attend. The hearing was an effort to provide “certainty and predictability for farmers,” stated Pat Roberts, Chairman of the Agriculture Committee.

Why was this hearing needed?

The passage of the Federal Agriculture Improvement Act of 2018 (the “2018 Farm Bill”), which was signed into law by President Donald Trump on December 22, 2018, took monumental steps to remove several federal prohibitions on the U.S. hemp industry. For instance, the 2018 Farm Bill legalized the cultivation and distribution of hemp, defined as any part or derivate of the cannabis plant with 0.3 percent or less of tetrahydrocannbinol (THC).

However, while the Farm Bill provided some regulatory framework at the federal level for the cultivation of hemp, it did not resolve all uncertainty as to the FDA’s regulatory authority. In addition, there is still unrest as a result of ongoing concerns and … Keep reading

Supplementing the Pink Slip for a Green Stamp of Approval – Rising Trends of New Employment Protections for Registered Cannabis Users


 

 

Early this month, New Jersey enacted new workplace protections for authorized medical cannabis users

Under the new regulations, employers are prohibited from taking an adverse employment action against an existing or prospective employee on the basis of the person’s status as a registered qualified user of medical cannabis.  Under the recent amendment to the New Jersey Compassionate Use Medical Marijuana Act (“CUMMA”), “adverse employment action” is defined as “refusing to hire or employ an individual, barring or discharging an individual from employment, requiring an individual to retire from employment, or discriminating against an individual in compensation or in any terms, conditions, or privileges of employment.” Any employee or applicant, who is registered and qualified under New Jersey’s medical marijuana program and tests positive for cannabis, is required to receive a written notice by its employer offering the employee or applicant the right to (i) state a “legitimate medical explanation” for the positive test result, which may include authorized use issued by a health care practitioner, or (ii) request a retest of the sample within three days of receiving such notice. Further, the amendment’s notable silence on an employer’s obligation to accommodate an employee’s use of medical marijuana … Keep reading

When Alcohol Leads, Cannabis Follows


The nascent cannabis industry is much like a younger sibling, riding the wake of its forerunner, alcohol.  In joining the vice industry’s consumer products market segment, the cannabis industry has had the benefit of being able to follow in the footsteps of the alcohol industry and anticipate potential upcoming obstacles.  This use of the alcohol industry as a guinea pig can be readily observed in connection with the evolving legal and regulatory frameworks currently being formulated for cannabis.  It is in this light that the June 26, 2019 U.S. Supreme Court decision in Tennessee Wine & Spirits Retailers Association v. Thomas, a case concerning certain Tennessee alcohol regulations, can offer some guidance and foreshadow the future of cannabis laws and regulations.

In Thomas, the Tennessee Wine and Spirits Retailers Association (a trade association of in-state Tennessee liquor stores), sought relief from the Supreme Court in their endeavor to have certain Tennessee state regulations -which required state residency for holders of alcohol licenses- upheld.  Justice Alito and the Court ruled against the Association in their holding that such regulations were unconstitutional.

Although a number of other regulations requiring that alcohol license holders and applicants in Tennessee be residents … Keep reading

Looking Beyond the Green – Garden Remedies’ Commitment to Mentoring New Cannabis Entrants


Retail sales of medical and recreational marijuana in the U.S. have been projected to reach $12 billion by the end of 2019. In Massachusetts, the total sale of recreational marijuana have topped $100 million last month according to data released by the Cannabis Control Commission (“CCC”). This is a significant rise from the CCC’s January report of nearly $24 million in recreational sales. However, statistics also show that at the beginning of this year only 4 marijuana licenses were held by Economic Empowerment Applicants (“EEA”) out of a total of 247 license applications – amounting to a mere 3 percent of all recreational license applicants qualifying as minority-owned.

At the foundation of Massachusetts’ cannabis legislation is a commitment to ameliorating the disproportionate harm done to minority communities as a result of the War on Drugs, specifically in the context of the prohibition on marijuana. Pursuant to St. 2017, c. 55, the CCC is required to ensure that members from communities that have been disproportionately harmed by the enforcement of marijuana laws are not excluded from the cannabis industry. As a result, the CCC established a system of priority review for EEAs who meet three out of the six criteria, … Keep reading

Blumenauer Introduces the "Regulate Marijuana Like Alcohol Act"


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
Utah Medical Marijuana Compromise Passes and Is Signed into Law


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

Riding the Legalization Wave: The After-Effects of the Midterm Elections


It’s no surprise that marijuana reform resulting from the recent midterm elections made headlines last week, as three states voted in favor of legalization. As discussed in last week’s blog post, voters in Missouri and Utah green-lit measures to legalize state medical marijuana programs, while voters in Michigan moved to adopt a measure legalizing adult-use (medical marijuana has been legal in Michigan since 2008). With these major ballot initiatives being passed, almost two-thirds of states have now legalized cannabis in some capacity, and 20% of states allow recreational consumption. However, this is only the tip of the iceberg when it comes to the growing wave of momentum in favor of federal cannabis reform.

In addition to the legalization efforts in Missouri, Utah and Michigan, Democrats regained control of the House of Representatives last week, including the House Rules Committee, which over the last few years has acted as a gatekeeper blocking votes on cannabis amendment and reform. Republican Pete Sessions (TX), the chairman of the House Rules Committee, lost to Democratic opponent Colin Allred, who has previously been critical of Sessions. As recently as September, Congress blocked an amendment that would have permitted doctors affiliated with the Department … Keep reading

A Conversation with Massachusetts Cannabis Control Commissioner, Steven Hoffman – Part II


Below is the conclusion of the conversation that Burns partner and Cannabis Business Advisory Group co-chair Frank A. Segall had recently with Steven Hoffman, Chairman of the Massachusetts Cannabis Control Commission, regarding the state of the industry in the Commonwealth.
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FRANK SEGALL: Let’s talk about [the 3% sales tax incentive]. Host-community agreements have received some attention – for those in the audience, the regulations are pretty clear: Towns can charge up to 3% of gross revenue, with respect to costs that are associated – we’ll say directly, but it’s not clear – with operating an establishment. What we’re seeing is, it’s pretty much 3% flat, with no analysis as to the costs. And there are additional requests that towns have been making – we’d like that new fire truck, we’d like that new park – that have created some consternation and raised questions about whether the rules are being followed and the playing field is level. What are your thoughts on that?

COMMISSIONER HOFFMAN: This is a complicated issue – there’s been a lot of comment and feedback on this. We’ve looked at 15+ host-community agreements that we’ve signed thus far, and there are three things that we … Keep reading