Duane Morris is pleased to be a sponsor of the 2025 Benzinga Cannabis Capital Conference in Chicago from June 8-10, 2025.
Use code DUANEMORRIS20 for a 20 percent discount on registration. Hope to see you there!
Webinar: Rescheduling vs. Decriminalization – The Movement for Cannabis Legalization and Its Impact on Today’s Market
Duane Morris will hold its next Cannabis Webinar, Rescheduling vs. Decriminalization – The Movement for Cannabis Legalization and Its Impact on Today’s Market, on Thursday, May 8, 2025, from 12:30 p.m. to 1:30 p.m. Eastern.
The panel discussion features journalist filmmaker Michele Mitchell, who will examine the history of the cannabis movement, its impact on the current state of the cannabis market, and whether rescheduling or decriminalization would have the most beneficial impact for cannabis as this nascent industry continues to grow.
Analysis Indicates Pennsylvania State-Run Cannabis Sales Likely Preempted by Controlled Substances Act
As the Pennsylvania legislature considers paths to an adult use cannabis program, the Pennsylvania Cannabis Coalition considered analyses regarding whether the state-run distribution and sales model could be preempted by federal law. In those analyses, the case law distinguishes legalization programs in which the state is not mandated to take action that creates a “positive conflict” with the Controlled Substances Act from those that courts have found to be preempted by the CSA. For example, in People v. Crouse, 388 P.3d 39 (Colo. 2017), the Colorado Supreme Court found that a state constitutional amendment requiring police officers to return seized cannabis to patients prescribed it who were acquitted of state charges was preempted by the CSA. Under the constitutional amendment, officers would be required to “distribute” cannabis, directly violating the CSA and creating a “positive conflict” between federal and state law.
This positive conflict caused by mandated state action is distinct from programs that merely permit regulation of the cannabis industry. For example, in City of Palm Springs v. Luna Crest Inc., 200 Cal.Rptr.3d 128 (Cal. App. 4th 2016), the California Court of Appeals allowed the City to regulate cannabis dispensaries because permitting regulation did not require any state actors to take a positive action prohibited by the CSA.
In contrast, the proposed policy adding recreational cannabis to the Pennsylvania Liquor Control Board’s purview would require a state agency and its employees to “distribute, or dispense, or possess with intent to … distribute or dispense” cannabis, directly and positively violating the CSA (21 U.S.C. § 841). Under the state-run retail model, the Commonwealth and its employees could be exposed to criminal liability and loss of federal grants. Additionally, the Liquor Control Board’s State Stores Fund could be tainted under federal regulations due to comingling of other funds with proceeds from the sale of cannabis. The fund includes Liquor Control Board employees’ retirement and disability accounts.
According to at least one poll, voters prefer a privatized sales program for adult use cannabis over the state-run retail model employed for alcohol sales in the Commonwealth. Initially, 51% of voters surveyed in a Change Research poll favored the privatized retail model, while 25% favored a state-run model. Upon being provided more information, support for a privatized retail model increased to 57% while support for the state-run model remained at 25% of voters surveyed. Voters of varied political backgrounds, including independents, Democrats, and Republicans, favored the privatized retail model, according to a memo published with the poll.
Finally, a memorandum penned by Representatives Rick Krajewski (D., Philadelphia) and Dan Frankel (D., Allegheny) proposing a state-run adult use retail model in Pennsylvania in December 2024 has yet to be submitted for introduction to the legislature.
Those in the industry would be impacted by the implementation of a state-run retail model for adult use cannabis; while the December proposal leaves space for private participation in the industry, businesses in Pennsylvania may be more limited in opportunities for advancement than those in other states were such a model adopted. Further, the legal risk to the Commonwealth under such a model could have negative implications for the industry at large.
We will continue to monitor Pennsylvania lawmakers’ stances and proposals on an adult use cannabis program leading up to the deadline for the legislature to agree on a budget at the end of June.
Pennsylvania House of Representatives Votes to Increase Regulation of Medical Cannabis Prescribers
In a 194-8 vote on March 17, the Pennsylvania House of Representatives has approved a bill that would greatly empower the State Department of Health to regulate medical cannabis prescribers. The State Senate Law and Justice Committee will consider the bill next.
Should the bill pass the Senate, the department would have authority to place specific prescribers on probation, limit the number of medical cannabis certifications prescribers are allowed to issue, require prescribers to be supervised by another physician, and enact reporting requirements. Further, the department could create any other condition it “determines is necessary to protect the health and safety of patients in the program.”
Representative Tim Twardzik (R., Schuylkill) proposed including the additional Department of Health authority in regulation of medical cannabis as an amendment to a cannabis lab testing bill. The House Health Committee unanimously approved the proposal.
State senators on both sides of the aisle have expressed interest in the bill. State Senate Majority Leader Joe Pittman (R., Indiana) said “it is clear Pennsylvania’s medical marijuana program was not implemented well and could benefit from potential changes to make the program more airtight, efficient, and productive.” Similarly, State Senate Minority Leader Jay Costa (D., Allegheny) explained that he supports oversight in the Commonwealth’s medical cannabis program, saying such measures “protect our medical cannabis patients from bad actors, dishonest laboratory practices, and dangerous contaminants.”
Still, lawmakers remain focused on bringing recreational cannabis to Pennsylvania. Senator Costa made that clear, stating “our ultimate goal is the creation of an adult-use recreational cannabis program.” State Senator Dan Laughlin (R., Erie) likewise supports adult-use legalization, commenting “legislation involving cannabis deserves thorough review and I remain committed to using my position as Chairman to achieve this goal.” And Governor Josh Shapiro has urged the legislature to include recreational cannabis in its budget, due by the end of June.
Stakeholders in the cannabis industry in Pennsylvania should pay particular attention to these simultaneous legislative goals, as regulation of the medical cannabis program and the introduction of a recreational cannabis program would both have profound effects on the industry’s landscape in the Commonwealth. We will continue to provide updates on the legislature’s movement with respect to both medical and recreational cannabis.
SB 3 Rolls into the Texas House of Representatives
After an hour and a half of debate on the Senate floor, Senate Bill (SB) 3 is engrossed. The bill received 24 ayes and 7 nos.
Senators who support the bill told stories of children and young adults losing all function after ingesting products containing intoxicating hemp. They emphasized how important it is for law enforcement officers to be able to immediately tell whether a product is illegal during a traffic stop, rather than make an assumption.
Opponents of the bill requested regulation instead of a total ban and raised the issue of veterans and other individuals who rely on these products rather than relying on alcohol and opioids for relief. Senator Charles Perry assured them that physician-prescribed hemp products will be more accessible under the Texas Compassionate-Use Program after a corresponding bill—SB 1505—is introduced and passes this Legislative Session.
Continue reading “SB 3 Rolls into the Texas House of Representatives”Is Delta-8 Going Away in Texas?
The 89th Legislative Session in Texas officially began on January 14, 2025, and one of the hottest topics during this session is Senate Bill (SB) 3, which proposes to ban all forms of consumable THC in Texas. According to Texas Lieutenant Governor Dan Patrick, SB 3, carried by Senator Charles Perry (R – Lubbock), is intended to prevent the sale of products that, on the surface, appear to be compliant with federal law as they are purportedly hemp products, but in reality are oftentimes manufactured in such a way that resulting THC concentrations are higher than cannabis products sold in state-licensed retail dispensaries. Importantly, recreational cannabis use remains illegal in Texas, but is legal for medicinal use with a physician’s prescription through the state’s Compassionate Use Program.
Continue reading “Is Delta-8 Going Away in Texas?”Pennsylvania Legislature Weighs Possibility of Adding Recreational Cannabis to the Purview of the Liquor Control Board
Pennsylvania state representatives Dan Frankel (D-Allegheny) and Rick Krajewski (D-Philadelphia) plan to propose a bill in the House of Representatives that would legalize recreational cannabis. Under their proposal, cannabis would be controlled by the state’s Liquor Control Board, the name of which would be changed to the Liquor and Cannabis Control Board. Cannabis would be sold at existing state liquor stores; meanwhile, private businesses would be permitted in the industry in cultivation and consumption sites, similar to bars.
However, there has been debate about the merits of this state-run system for liquor sales, and Republican members of the state legislature have made efforts to privatize liquor sales in the past.
Proponents of the state-run system argue that this system provides stable jobs, including consistent benefits and reliable pensions, for over 5,000 Pennsylvanians, while also returning millions of dollars in profits to the state. Furthermore, this system gives the state more control to prevent underage liquor sales.
Opponents of this system argue that Pennsylvanians should have more freedom over decisions regarding liquor sales. They also hypothesize that privatizing liquor sales would allow more stores to arise and more sales to occur, which would increase tax revenue for the state. For example, less than three years after Washington State privatized liquor sales, the number of liquor stores increased by approximately 327%, and the industry’s revenue collections increased by approximately 18%.
Despite this debate, Pennsylvania’s state-run system for liquor sales has remained in place. However, a state-run system for cannabis dispensaries may run into a separate issue: the potential conflict with federal law. Cannabis remains a controlled substance under Schedule I of the Controlled Substances Act, and Section 280E of the Internal Revenue Code disallows all tax deductions or credits for amounts paid or incurred in carrying on trade or business that consists of “illegally trafficking” a Schedule I controlled substance. As recently as June 2024, the IRS has issued reminders that this section applies to businesses selling marijuana, even if they operate in states which have legalized the sale of cannabis. It remains to be seen whether state-run dispensaries would be subject to this same provision.
Representatives Frankel and Krajewski’s bill would also provide for the possibility of expungement for people charged with cannabis-related crimes, invest revenue into communities impacted by prohibition policies, implement public health protections, and assist minority business owners in entering the industry.
The legislators have not officially proposed the bill but did release a memorandum to all House members seeking co-sponsors on December 2, 2024.
What New Calif. Law Means For Cannabis Lounges
For years, movies, music and other aspects of popular culture have hailed Amsterdam as the number one destination for openly consuming cannabis purchased from “coffee shops.” […] However, one difference — at least in California where adult use cannabis was legalized in 2016 with the passage of Proposition 64 — is that consumption lounges have been unable to offer prepared noncannabis food and beverages on-site. This changed on Sept. 30, when California Gov. Gavin Newsom signed California A.B. 1775 into law.
Webinar Replay: Legal Challenges and Considerations for Social Consumption Lounges
A replay of Mainstreaming Cannabis: Legal Challenges and Considerations for Social Consumption Lounges is now available for viewing.
Duane Morris Attorneys Recognized by Cannabis Law Report
Tracy Gallegos and Paul Josephson, Duane Morris partners and team leads of the Cannabis Industry Group, are once again recognized in Cannabis Law Report‘s list of Global Top Lawyers.
The list honors cannabis practitioners via the publication’s annual survey of clients and lawyers in the cannabis legal services sector as well as its personal editorial decisions based on its reporting of the industry for nearly 10 years.