Tracy Gallegos, partner and team lead of the Duane Morris Cannabis Industry Group, discussed the cannabis industry’s mergers and acquisitions (M&A) landscape at the Benzinga Cannabis Capital Conference on September 27, 2023.
The discussion also touched upon the rescheduling of cannabis, with differing opinions on its likelihood. Ms. Gallegos said she skeptical due to formal rulemaking processes and international treaty considerations.
Yesterday, the Senate Committee on Banking, Housing, and Urban Affairs reported the Secure and Fair Enforcement Regulation (“SAFER”) Banking Act, formerly known as the SAFE Banking Act, out of committee by a vote tally of 14-9. Although the House of Representatives approved the SAFE Banking Act seven times over the past several years, it never made any traction in the Senate. That changed with yesterday’s vote, marking the first time that any version of the bill was sent to the Senate floor. The Chairman of the committee, U.S. Senator Sherrod Brown (D-OH), expressed his satisfaction with the result, stating that this “bipartisan bill is necessary” to “make it safer for legal cannabis businesses and service providers to operate in their communities and protect their workers.”[1] Continue reading “Milestone For SAFE[R] Banking”
Paul Josephson, partner and team lead of the Duane Morris Cannabis Industry Group, moderated a fireside chat with U.S. Virgin Islands Governor Albert Bryan Jr. at the Benzinga Cannabis Capital Conference on September 27, 2023.
“A governor who really gets economic development,” as Josephson said, Bryan said the region is on the cusp of an unprecedented economic surge. “We have a $4-billion economy right now. And we have $15 billion in sales over the next 10 or so years.”
Duane Morris partner Michael Schwamm has been named to Green Market Report’s 2023 list of Notable Leaders in Cannabis, which recognizes industry professionals who have demonstrated a willingness to effect meaningful change in a dynamic industry.
New York’s much-anticipated adult-use cannabis retail licensing process has recently been stuck in a haze since August 18, 2023, when a New York Supreme Court judge ruled that the state Office of Cannabis Management’s (“OCM”) discretionary licensing procedure violates New York’s Marihuana Regulation and Taxation Act (“MRTA”). As Duane Morris previously reported, the judge’s ruling, resulting in an injunction and stoppage of the OCM’s ability to grant additional license applications, is the latest in a number of delays and legal disputes that has New York’s cannabis authorization program far behind schedule. The case involves a group of military veterans who claim New York’s initial round of issuing conditional licenses only to people with prior marijuana convictions, and not also to a wider group of service-disabled veterans and other social equity applications, violated the MRTA. As a result of the injunction, the OCM has appealed the decision and seeks either a temporary stay of the injunction or an expedited appeals court briefing schedule. Continue reading “New York’s Conditional Recreational Cannabis Licensing Process Goes up in Smoke as State Regulators Ask Court to Stay Injunction Order”
On August 29, 2023, the U.S. Department of Health and Human Services responded to President Biden’s October 2022 call for a federal review of marijuana scheduling: The drug should be reclassified as a Schedule 3 controlled substance. Below, we explore questions on the tax ramifications to the cannabis industry if marijuana is reclassified as such.
Read this Duane Morris Alert for FAQs on cannabis reclassification.
I have been touting the benefits of medical marijuana for nursing home/senior care residents for many years now. As a cannabis attorney, as well, I have been immersed in the research and studies, showing how marijuana can benefit nursing home residents, just like any other drug our residents may take for their well-being.
But the risks of utilizing marijuana in the nursing home, I’ve been stating, have been too great. Marijuana remains a Schedule I federally illegal controlled substance, and, as such, the Controlled Substances Act defines cannabis and its distinct cannabinoids as possessing “a high potential for abuse … no currently accepted medical use … [and] a lack of accepted safety for the use of the drug under medical supervision.”
Read the full column by Duane Morris partner Neville M. Bilimoria in McKnight’s Long-Term Care News.
Just ahead of the Senate Banking Committee’s vote on the Secure and Fair Enforcement (SAFE) Banking Act, the Financial Crimes Enforcement Network (FinCEN) has reported that a total of 812 banks and credit unions filed reports in the 2d quarter 2023 indicating they are actively providing banking services to cannabis industry participants, referred to by FinCEN as Marijuana Related Businesses, which is the highest number since FinCEN began reporting on cannabis banking activity in 2014. However, those 800 or so banks are just a fraction of the thousands of FDIC banks that could be providing banking services to the cannabis industry. Even with the increase in banks providing their services to the cannabis industry since 2014, the industry remains burdened by a dearth of banking. Cannabis companies, employees, and consumers are not able to access traditional financing, payroll services, credit cards, ACH, and debit services, which are the lifeblood of other consumer packaged goods industries. Meanwhile, banks are routinely analyzing entering the cannabis space, but deciding against it because of the cost of compliance, among other reasons. SAFE Banking would provide access to critical banking services.
On September 11, 2023, the California Attorney General’s Office filed a Complaint against a handful of manufacturers of “inhalable hemp products” because they contained hemp-synthesized Delta-9 THC and beta-Myrcene. The Complaint alleges that the sales of such inhalable hemp products violates California’s Proposition 65 and California’s Unfair Competition statutes. Although under California’s AB 45 hemp and cannabinoids, extracts, or derivatives of hemp are permitted to be included in food and beverages , dietary supplements, cosmetics, processed pet food, AB 45 explicitly prohibits the sale of inhalable hemp products in California. Likewise, Prop 65 identifies Delta-9 THC and beta-Myrcene as chemicals known to cause developmental harm, and are thus required to be labeled accordingly; Defendants products were not so labeled. Importantly, none of the Defendants are California residents, and all of the products at-issue appear to have been purchased online and delivered from outside California. Thus, this action should send a strong message to hemp synthesized D-9 manufacturers selling inhalable products into California.
Duane Morris, in partnership with FTI Consulting, will hold its next Cannabis Webinar, Distressed Cannabis M&A, on Thursday, October 5, 2023, from 1:30 p.m. to 2:30 p.m. Eastern.
Learn more and register on the Duane Morris website.
