Cannabis Law Blog

News & Insights for Cannabis Law and Business

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Recreational cannabis is now legal in 19 states and Washington D.C., driving the growth of legal cannabis sales estimated at $33 billion this year—up 32% from 2021—and expected to reach $52 billion by 2026.[1] This movement signals that financial investment in cannabis is not abating but accelerating notwithstanding the impact of the lingering COVID-19 pandemic. This growth in the cannabis industry, of course, also means that operators and their investment partners face commercial risk, including insolvency.
Continue Reading The Cannabis Conundrum: Can Cannabis Companies File Chapter 15?

Residents of California often complain about high taxes, but no one pays higher taxes than the cannabis industry.  In addition to the Federal 280E penalties, the cannabis industry in California is subject to a 15% state-wide excise tax, sales and use taxes that can reach up to 10.75%, and local business licenses taxes which are as high as 15% in some jurisdictions.  On top of these excise taxes, which combined can approach 40%, there is a state cultivation tax currently imposed on cannabis flowers at a rate of $161.28/dry-weight pound (and some local jurisdictions impose additional cultivation taxes).
Continue Reading California Cannabis Farmers May Finally Get Some Relief

On May 4, 2022, the Food and Drug Administration (FDA) issued warning letters to five companies it asserts are illegally marketing products labeled as containing delta-8 tetrahydrocannabinol (Delta-8 THC) in ways that violate the Federal Food, Drug, and Cosmetic Act (FDCA). Simultaneously, FDA issued a new consumer update “5 Things to Know about Delta-8 Tetrahydrocannabinol – Delta-8 THC.”  The consumer update and warning letters are a continuation and expansion of FDA’s efforts to warn the public about products that are not approved under the FDCA and to rein in the rapidly expanding market of products containing hemp-derived cannabinoids. 
Continue Reading Warning! FDA Issues Warning Letters for Products Containing Delta-8 THC

For many in the cannabis industry, April 1, 2022 is seen as a day of reckoning following the July 2021 passage of Assembly Bill 141 and Senate Bill 160 (collectively, the Cannabis Trailer Bill).  In an attempt to transition to an annual licensure program, April 1st marked the beginning of the end for provisional cannabis licensure.  It also ushered in significant changes to renewal process for previously granted provisional licenses.  These modifications now require applicants to comply with the California Environmental Quality Act (Pub. Res. Code §§ 21000 et seq.) (CEQA), a complex statewide policy of environmental protection fraught with
Continue Reading No April Fools: Starting April 1st, Cannabis Operators Face CEQA Compliance Requirements for State Licenses

Federal cannabis reform is once again on the move in Congress. On Friday, April 1, 2022, the U.S. House of Representative passed the latest iteration of the Marijuana Opportunity Reinvestment and Expungement (MORE) Act. This is Congress’s oldest comprehensive measure, and it aims to decriminalize cannabis on the federal level by removing it from the list of controlled substances while providing certain social reforms to address the detrimental repercussions of the War on Drugs.[1]
Continue Reading The House Does It Again: MORE Act Ready for Senate Action

On March 10, 2022, New York Governor Kathy Hochul, the Cannabis Control Board and Office of Cannabis Management (“OCM”) introduced the Seeding Opportunity Initiative (“SOI”).[1] This regulation would provide key opportunities for farmers, entrepreneurs and individuals that have been disproportionately impacted by the War on Drugs. Notably, the proposed regulation would give individuals with previous cannabis convictions and their family members, subject to certain limitations, the first opportunity to apply for a conditional adult-use cannabis licenses.
Continue Reading New York Regulators to Jumpstart NY’s Cannabis Industry by Giving Priority to Small Businesses and Individuals with Prior Cannabis Convictions

Canada legalized recreational cannabis in 2018, but the legal cannabis market continues to struggle even three years later. Observers blame overregulation by both federal and provincial regimes, high taxation, and a thriving black market that continues to sell cannabis at much lower prices. What has this meant for cannabis bankruptcies in Canada, and what lessons can the U.S. learn?  For an in-depth discussion, listen to Episode 3 of Sheppard Mullin’s Restructure This! podcast. We speak with Kathryn Esaw, partner in the Insolvency and Restructuring group at Osler, Hoskin & Harcourt LLP, and Susan Newell, partner in Osler’s Health Industry
Continue Reading Restructure This! Episode 3: Canada: Cannabis Boom or Bust?

Hope soared with the possibility of federal cannabis reform in 2021.  And for good reason – the induction of a new, more liberal administration, rapid state-level legalization, broad support by Americans,[1] and growing bipartisan backing led many to believe that 2021 was going to be the year where federal decriminalization of cannabis would become a reality.  But, as 2021 continued on, optimism dwindled as any advancement in federal cannabis reform was hobbled by the inability of Congress to agree on the appropriate level of reform and the proper mechanics for passage.  Specifically, tension rose amongst the elected Democrats on
Continue Reading Federal Cannabis Reform – Is 2022 the Year?

Although Congress failed to pass federal legislation legalizing cannabis in 2021, the push to end the federal prohibition of the ever-growing industry continues to gain steam.  While Republican lawmakers have traditionally opposed decriminalization, more are beginning to support or even introduce new cannabis legislation.[1]  On top of that, recent polls indicate that an estimated 68% of Americans now support legalization[2] with many consumers now viewing cannabis as less dangerous than alcohol.[3]  In addition, the industry’s total addressable market has been forecasted to grow to $84B by 2026.[4]
Continue Reading Cannabis Legislation Year-in-Review

In a win for much of the booming hemp products industry, on October 6, 2021, California Governor Gavin Newsom signed AB-45 into law.  AB-45 is comprehensive legislation that regulates and legitimizes many industrial hemp products. The law excludes from the list of permissible products inhalable hemp products. The law takes effect immediately and supersedes the California Department of Public Health’s (CDPH) 2018 “FAQ” guidance on hemp-derived CBD in food, beverages, dietary supplements, and pet food. The new law allows for the inclusion of hemp and cannabinoids (e.g., CBD), extracts, or derivatives of hemp in food and beverages, dietary supplements, cosmetics,
Continue Reading AB-45: California Finally Welcomes Hemp Products To The Marketplace

It is undeniable that, not only is the cannabis industry here to stay, but it is growing exponentially.  To date, 47 states, 4 U.S. territories, and the District of Columbia have legalized cannabis in some form – whether they decriminalize production, allow uses limited to cannabidiol (“CBD”) or hemp, or is as expansive as permitting THC-containing cannabis for medical use, adult-use or both.  Yet, in comparison to other industries, legitimate licensed cannabis-related businesses remain hobbled by the difficulties they face in accessing traditional banking and financial services – largely due to the fact that “marijuana” is still considered illegal on
Continue Reading SAFE Banking Act of 2021: Where Are We on Cannabis Banking Change?

California’s comparable-to-organic “OCal” certification program for cannabis and nonmanufactured cannabis products officially went into effect on July 14, 2021.  The OCal program represents a new branch of state cannabis regulation, but remains firmly rooted in existing state and federal organics standards and procedures.  Its goal is to “assure consumers” that certified OCal products “meet a consistent standard comparable to standards met by products sold, labeled, or represented as organic.”
Continue Reading California Breaks New Ground With OCal: Answers to Key Questions About “Comparable-to-Organic” Cannabis

In January 2020, Illinois legalized the use of recreational marijuana through the Cannabis Regulation and Tax Act (“the Act”).  Two months later, many employees began working remotely because of the pandemic.  Today, work-from-home continues to blur the lines between “work” and “home” in countless ways, and employee drug policies are no exception.  The new world of remote work has left many employers wondering what to do with their drug policies now that cannabis is legal and their employees are remote or hybrid.  Can an employer lawfully prevent their employees from using cannabis while working from home?
Continue Reading What Do I Do With My Workplace Drug Policy Now That Cannabis Is Legal in Illinois and My Employees Are Remote?

This article originally appeared on Law360 on June 25, 2021.

On Wednesday, June 23, 2021, the U.S. Supreme Court issued its decision in Cedar Point Nursery v. Hassid.  The ruling invalidated a California labor regulation that requires growers to grant union organizers seeking to represent their workers property access, and declared it an unconstitutional taking of the grower’s property in violation of the 5th and 14th Amendments.  Several other California laws and decisions sanction similar union trespass onto private property.  For example, numerous state court decisions have granted unions access to private property of employers with whom they have a
Continue Reading SCOTUS Decision May Force Reversal of California Laws Sanctioning Union Trespass