Cannabis Law Blog

News & Insights for Cannabis Law and Business

The cannabis industry faced heightened antitrust scrutiny from the Department of Justice (DOJ) in 2019.  There were public reports regarding several “Second Requests” seeking information about potential cannabis transactions.  Second Requests are a part of expensive and time-consuming antitrust investigations typically issued in the approximately 2 percent of transactions that present significant anticompetitive concerns.  To have several Second Requests within a short period of time in the same industry, particularly in an emerging industry such as cannabis, appeared unusual to many observers.  Recent events have shed light on some possible reasons for DOJ’s heightened focus.…
This article originally appeared in Cannabis Business Executive​ on June 10, 2020. Claimed “illegality” of cannabusinesses continues to be a critical issue for them in their ability to enforce their rights in the courts. The ability to seek judicial relief may be especially important to some cannabusinesses that are struggling as a result of the COVID-19 pandemic (e.g., to seek bankruptcy relief, or to obtain compensation from customers or suppliers that breach contracts). In our December 2019 articles[i], we observed that a cannabusiness may find it difficult to pursue its Intellectual Property (IP) rights in certain jurisdictions…
Many Illinois cannabis contracts, including intellectual property licensing agreements, development agreements and supply agreements, contain force majeure clauses.  Depending upon the language of these clauses, the COVID-19 pandemic may be an event that triggers these clauses and provides a defense to nonperformance of the contract. Companies that are experiencing difficulties complying with or enforcing compliance with their contracts should carefully examine their contracts to determine if a force majeure clause may excuse performance. On March 20, 2020, Illinois Governor J.B. Pritzker issued a stay at home order for all Illinois residents.  (Executive Order 2020-10.)  On April 30, 2020,…
On April 6, 2020, the U.S. Drug Enforcement Agency (“DEA”) made history by descheduling  Epidiolex, GW Pharmaceuticals’ anti-epileptic oral solution containing cannabiodiol (“CBD”), thereby removing it from the purview of the Controlled Substances Act (“CSA”) even though it is derived from cannabis and not hemp.  The DEA’s recent descheduling continues the federal government’s trend of keeping the whole cannabis plant illegal as a Schedule I, while  permitting pharmaceutical derivations of cannabis. The DEA’s action on Monday is effective immediately. The FDA’s approval, which was the first approved medication to contain a purified form of CBD derived from cannabis, originally placed…
In an effort to stem the tide of COVID-19 transmission, many state and local governments have enacted “shelter-in-place” or “stay-at-home” orders to protect the health and well-being of citizens, and to establish a consistent approach to slow the spread of COVID-19.  Many of these orders identify certain services as essential, including food, prescriptions and healthcare, that can continue to operate despite the “stay-at-home” order.  In many jurisdictions, cannabis dispensaries have been labeled “essential” businesses, and identified under the headings for healthcare, consumer products or agriculture included in the respective order’s “critical” infrastructure or services. This article addresses cannabis-related exemptions in…
As with essentially all aspects of American life, COVID-19 threatens to be a massive disrupter in the cannabis industry. As most cannabis operators and ancillary services providers are well aware, securing cannabis-related investments in the pre-COVID-19 world presented substantial obstacles. With worldwide markets dropping and investors drawing on their purse strings, the cannabis industry will likely feel a tighter pinch on access to investment dollars. Alternatively put, the already-tight outlook for capital in the cannabis industry will likely be exacerbated by COVID-19, and could result in some companies in the industry failing altogether. However, the Fed’s recent interest rate cut…
On March 5, 2020, the Commissioner of the U.S. Food and Drug Administration (FDA) released a statement describing the agency’s continued evaluation of cannabidiol (CBD) products and signaling issuance of an enforcement policy against sellers and marketers of CBD products. Forthcoming Enforcement Policy. To date, FDA largely has enforced only against companies making egregious health claims, such as treatment for cancer or Alzheimer’s Disease. While FDA will continue to take actions against companies marketing products with aggressive therapeutic claims, FDA Commissioner Hahn reported that the agency will be taking a harder look at products that contain heavy metals, THC (greater…
QR Codes for Retailers, Distributors, and Delivery On February 13, 2020, The Bureau of Cannabis Control’s (BCC) emergency rulemaking for Quick Response Code (QR Code) certificate requirements was approved by the Office of Administrative Law. The new rules are effective immediately. The new rules require licensed commercial cannabis storefront retailers to prominently display their QR Code certificate on their premises. The new rules also requires licensed commercial cannabis distributor and delivery employees to carry a copy of the QR Code certificate while transporting or delivering commercial cannabis goods. The emergency regulations are designed to help consumers identify licensed cannabis retail…
Effective January 1, 2020, Nevada became the first state to ban employers from refusing to hire job applicants for testing positive for cannabis use. Governor Steve Sisolak signed Assembly Bill No. 132 (AB 132) on June 5, 2019, after state lawmakers approved it. AB 132 has two primary effects. First, it makes it unlawful for Nevada employers to refuse to hire a prospective employee because the individual submitted to a drug screening test and the results of the test indicate the presence of cannabis. Second, if an employer requires employees to submit to a drug screening test in the first…
In a case of first impression, the New Jersey Appellate Division determined that employers in the state must reimburse employees for medical cannabis following a workplace accident, despite federal prohibitions against cannabis distribution.  The January 13, 2020 decision in Hager v. M&K Construction, Case No. A-0102-18T3, is the first time a court in the state has required reimbursement for a cannabis prescription in the workers’ compensation context, and may signal a fresh judicial focus on the scope of lawful medical cannabis use in the employment context both in New Jersey and in states with similar laws. The Hager decision…
We previously explored the applicability of trade secret protection to cannabis-related inventions. Here, we provide an overview of patent trends in the cannabis industry and how cannabusinesses can use patents to protect their technological, agricultural, genetic, or other innovations. In short, cannabis-related inventions may be patentable and cannabusinesses should work with counsel to identify which innovations may benefit from patent protection. The cannabis plant (“marijuana”) remains a Schedule I drug under federal law, despite the increasing number of states legalizing cannabis. However, there is no express legality requirement for patent eligibility. So while the actual practice or use of a…
This post originally appeared as an article in Cannabis Business Executive on December 5, 2019. A cannabis product business is no simple venture. Cannabusinesses have to innovate to remain competitive just like any other company, but in an industry plagued by complex and changing federal and state regulations of marijuana (aka cannabis). At the heart of every innovation lies potentially protectible intellectual property (IP) rights and that is no different in the cannabis industry. In our two-part article, we provide cannabis entrepreneurs with an overview of the IP protections available to them for their innovations. In Part I, we discuss…
The California Legislature has passed Assembly Bill 1482 – Tenant Protection Act of 2019 (“AB 1482”), providing for comprehensive statewide residential rent control and eviction protections.  Signed by Governor Newsom in October 2019, and commencing January 1, 2020, AB 1482, among other things, requires a landlord to evict a tenant only for “just cause” if the tenant has occupied the property for more than 12 months.  (See original post here.)  AB 1482 will remain in effect until January 1, 2030. In the cannabis space, AB 1482 has been giving landlords and tenants pause.  Specifically, the question many are…
On November 25, 2019, FDA issued Warning Letters to 15 companies illegally marketing cannabidiol (CBD) products. On the same day, U.S. Food & Drug Administration (FDA) published a revised consumer update, “What You Need to Know (And What We’re Working to Find Out) About Products Containing Cannabis or Cannabis-derived Compounds, Including CBD,” describing the “very limited” scientific information available about CBD and its health effects. The points made in the Warning Letters and update are nothing new to those closely following the FDA working group on cannabis and CBD, but the actions signal the FDA’s continued enforcement against…
On November 20, 2019, the House Judiciary Committee approved a bill that would decriminalize cannabis on a nationwide scale. The Marijuana Opportunity, Reinvestment and Expungement Act of 2019 – or MORE Act – passed with what some are calling a landslide vote of 24-10, with two Republicans – Representatives Matt Gaetz (R-FL) and Tom McClintock (R-CA) – crossing party lines to join in supporting bill. This vote marks the first time in history a congressional committee has affirmatively approved to end federal cannabis prohibition. The committee markup of the MORE Act is historical in and of itself, as it represents…