See Full Interview with Steven Hoffman here.
In the rapidly growing multi-billion dollar cannabis industry, new developments frequently occur in capital markets, investments, M&A, and regulation. Attendees of the Third Annual State of the Cannabis Industry Conference had the opportunity to learn the ins and outs firsthand from many of the industry’s leading experts. In a Spotlight Interview, Frank Segall, Burns & Levinson Chairman, Business Law and Finance, sat down with Steve Hoffman, Chairman of the Cannabis Control Commission of Massachusetts (CCC).
With a background in business and finance, Hoffman admits that this was not a position he had sought after. He had never been in public service before and voted “No” to Question 4 in the original legislature that made marijuana legal in the state. Nevertheless, Hoffman has led a respectable campaign on behalf of the CCC that prioritizes transparency in all aspects.
With a staff of 65 people, the CCC operates with the mission of ensuring that there is room for small players in the big game. Hoffman stressed that there is a responsibility to ensure that the industry meets the expectations of its supporting voter base. To do so, the CCC must tackle problems such … Keep reading
See Keynote Address with Dr. Karen Munkacy and Dan Fireman here.
As previously blogged last week, Burns & Levinson hosted its third annual State of the Cannabis Industry Conference on October 23rd, with over 200 attendees present. The conference featured a keynote address by Dr. Karen Munkacy, Founder and CEO of Garden Remedies, Inc., and Dan Fireman, Founder and Managing Partner of Fireman Capital Partners, a private equity firm that invests in the consumer sector.
Dr. Munkacy is a physician, mother, and breast cancer survivor, who began her public health care advocacy with cannabis legalization in June 2011 when she testified in front of the Massachusetts Legislature’s Public Health Committee in favor of cannabis. Since then, she has built the only physician-and woman-led cannabis company in Massachusetts.
Mr. Fireman founded Fireman Capital Partners in 2008 and currently focuses on all aspects of the Fund’s investment strategy execution and portfolio company management. Over the last ten years, Mr. Fireman has been responsible for raising and investing over $250 million across 29 transactions, the total value of which exceeds $1 billion in aggregate today.
This dynamic duo partnered together in May 2019. At the Conference, they shared … Keep reading
See 2019 Cannabis Conference Introduction Video here.
In both the Commonwealth and New England — and, indeed, the country — these are exciting times for the cannabis industry. As a consensus on the topic of legalization continues to build, technology and banking, specifically, are unlocking doors that have long barred entry to the industry, presenting visionaries and pragmatists alike with opportunities never before possible.
Potential, in many ways, is limited only by imagination. The cannabis market will influence, and be influenced by, countless others, including the biotech, agtech, finance, and manufacturing industries. The synergistic possibilities are endless.
From our first involvement in the cannabis industry in 2012, Burns & Levinson recognized those possibilities. It is in this spirit that we have, once again, convened dozens of national experts and professionals to explore those possibilities and bring the reality of legalization into sharper focus. Their strategic legal and financial perspectives are what separates this conference from other cannabis-focused conferences, workshops, and seminars, and it is our hope that their experience and insight will help industry players chart their own course for future success.
Held on October 23rd, Burns & Levinson’s third annual State of the Cannabis Industry Conference brought … Keep reading
Since the Secure and Fair Enforcement (SAFE) Banking Act (the “Act”) found bipartisan support in the House Financial Services Committee back in March, the industry has been waiting for even the slightest sign of its legislative progress. Fortunately — on September 25, 2019 — the U.S. House of Representatives formally passed the SAFE Banking Act of 2019, which marks the first standalone cannabis reform bill to ever pass the House. The Act, if codified into law, would unshackle the cannabis industry and open access to insurance, traditional banks and other imperative financial service companies.
Even as states have made marked progress on cannabis legalization, the federal government’s regulatory regime continues to burden the industry, including with respect to banking and similar services. Two primary issues plague the cannabis industry’s access to meaningful financial services: (i) any business operating pursuant to a state law, whether it be a financial institution, real estate company, or any other ancillary operation working in connection with cannabis industry, is subject to risk of being construed as aiding or abetting a criminal conspiracy in violation of the Controlled Substance Act since those services do, in fact, facilitate and promote the marijuana industry; and … Keep reading
Over the past seven months, and just as recently as three weeks ago, the Federal Trade Commission (“FTC”) has released several warning letters to businesses selling CBD products. These letters concern the FTC’s review of potential violations of the Federal Trade Commission Act of 1914, §§ 41-58, as amended, (the “FTC Act”) made in websites and marketing materials of CBD-related businesses. Participants throughout the CBD industry may take prudence in reviewing not only these health claims called to question by the FTC, but also by how these other industry participants have responded to the FTC’s warning letters.
The FTC and the CRS Evidence Standard
The FTC is an independent federal agency centered on maintaining marketplace competition that benefits both businesses and consumers. The FTC identifies its purpose as, “seek[ing] to protect consumers by enforcing laws and rules that promote truth in advertising and fair business practices, and by educating consumers and businesses about their rights and responsibilities.” FTC Warning Letter to 4Bush Holdings, LLC, dated September 9, 2019.
In its warning letters, the FTC expressed concerns with companies “making false or unsubstantiated advertising claims about the health benefits of products containing cannabidiol (CBD).” The FTC … Keep reading
On September 24, 2019, the Cannabis Control Commission (“CCC”), the Massachusetts government agency that oversees and regulates the state’s marijuana industry, voted to approve a set of revised marijuana regulations that provides for a number of updates to the existing versions, including several significant changes. Of note, the CCC is contemplating the establishment of a licensing process that would permit marijuana companies to engage in new lines of business, including social consumption and delivery services. While home delivery services are expected to begin within the coming months, the CCC noted that the newly approved “Social Consumption Establishment Pilot Program” may require legislative action before it can be implemented.
Under this Social Consumption Establishment Pilot Program, certain brick and mortar marijuana establishments will be permitted to sell marijuana products to customers who could consume the goods on-site. Similar businesses, often referred to as “cannabis cafés” or “cannabis lounges”, were first made popular in Amsterdam and have recently become a hot topic in the domestic U.S. industry, as more states, such as California, have passed regulations allowing for their proliferation. While many have voiced valid concerns regarding such businesses (including local neighborhood nuisances and the intoxicated operation of motor vehicles), there … Keep reading
In response to the growing crisis around vaping-related illness, Governor Baker has declared a public health crisis and issued a four-month ban on the sale of all vaping products in Massachusetts. The state’s Public Health Council subsequently issued a formal approval of the ban shortly thereafter. The ban – which went into effect immediately on September 24th – is set to last through late January 2020.
Since the media first reported on the issue, doctors have identified more than 530 confirmed or possible cases of vaping-related illnesses across 38 states, according to the Centers for Disease Control (“CDC”). And while the CDC has reiterated that many patients have in fact used THC-based products, some obtained on the street rather than from state-licensed recreational or medical marijuana retailers, the exact cause of such vaping-related illnesses has yet to be determined. Nonetheless, Massachusetts’ officials have reported 61 possible cases of vaping-related illnesses in the state as of this week, including among teenagers — a jump from 38 just last week. In light of this uncertainty, the Governor has halted all sales to allow for investigations by both medical and law enforcement authorities, at both the state and federal level.
Pursuant to … Keep reading
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
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
The Food and Drug Administration (FDA), following up on its public concerns about the science, safety, effectiveness and quality of unapproved products containing cannabidiol (CBD), recently issued a warning letter to Curaleaf Inc., of Wakefield, Massachusetts, for illegally selling unapproved products containing CBD online with unsubstantiated claims that the products treat cancer, Alzheimer’s disease, opioid withdrawal, pain and pet anxiety, among other conditions or diseases.
Acting FDA Commissioner Ned Sharpless, M.D., commenting on the warning letter, indicated that “selling unapproved products with unsubstantiated therapeutic claims — such as claims that CBD products can treat serious diseases and conditions — can put patients and consumers at risk by leading them to put off important medical care.” He further stated that “there are many unanswered questions about the science, safety, effectiveness and quality of unapproved products containing CBD and that the agency stands firm in its commitment to continue monitoring the marketplace and protecting the public health by taking action as needed against companies that deceive consumers and put them at risk by illegally selling products marketed for therapeutic uses for which they are not approved.”
The agency has established an internal working group to explore potential regulatory pathways for various … Keep reading