All posts by DuaneMorris3

Smart Labeling Practices

It has been more than one year since the Agricultural Improvement Act of 2018 (better known as the 2018 Farm Bill) was enacted removing hemp and hemp-derivatives like CBD from the Controlled Substances Act. And while the U.S. Food and Drug Administration (FDA) has held a public hearing on the use of cannabis, including hemp-derived CBD, in products like food and beverage, the industry anxiously awaits guidance or rules on advertising and labeling (which includes the label and packaging, as well as anything that you say about the product, including any claim that you make on your label, package, website, social media, etc.) for CBD-containing products.

Add to this lack of guidance, FDA currently takes the position that CBD may not be incorporated into and sold as food or a dietary supplement. A number of states have also specifically prohibited the use of CBD in foods, such as Massachusetts, Washington and North Carolina. Therefore, any company wishing to include CBD in food or beverages should proceed with caution. On the other hand, a broad spectrum of statutes and regulations exist from other states on the advertising and labeling of CBD-containing foods and beverages, including some states that require any product containing CBD to be packaged in be child-resistant, tamper-evident, and light-resistant containers. Even if you are not selling in a state that requires this type of packaging, it can still be beneficial from a products liability perspective to follow the more stringent packaging regulations.

To read the full article by Duane Morris attorney Jennifer Briggs Fisher, visit the firm website.

Kelly Bonner Reviews How to Legally Implement CBD Products and Services into the Spa Industry

Duane Morris associate Kelly Bonner shares legal insight on CBD products and services in the January issue of DaySpa magazine.

From the publication:

  1. Consider the source. CBD can be derived from both hemp and marijuana, which have different definitions in U.S. law and are subject to different statutory and regulatory requirements. Hemp-derived CBD products are not illegal to sell and possess under federal law, as long as they contain no more than 0.3 percent tetrahydrocannabinol (THC). Marijuana has more than 0.3 percent THC, and is a Schedule I controlled substance under the federal Controlled Substances Act.
  2. Get proof. Given the current lack of federal testing requirements for CBD products, it can be difficult to ensure that those purchased from third-party vendors contain no more than the permitted level of THC. So it’s extremely important that spas get anything containing CBD from a trustworthy supplier who can verify ingredients, confirm THC levels with third-party labs and/or provide certifi cates of analysis.
  3. Act locally. While the 2018 Farm Bill lifted the federal ban on the commercial cultivation of hemp and derivatives that contain no more than 0.3 percent THC, the ability to manufacture, market and sell CBD products is still heavily regulated at the state level, and changing rapidly.
  4. Make no promises. The U.S. Food and Drug Administration (FDA) has issued warning letters to a number of CBD companies that have touted their products as having certain health benefi ts in their promotional materials and on packaging or websites. Spas should ensure that any products or services offered don’t come with false or misleading claims.
  5. Handle with care. Although research into the risks of CBD use is ongoing, the FDA has noted potential adverse health effects linked to the use of cannabis products containing THC by pregnant or lactating women. Even though CBD topicals typically contain very low levels of THC, spas should be up front with clients about potential risks.

To read the full text, read the January issue of DaySpa magazine.

Seth Goldberg Predicts What 2020 Will Bring to the World of Weed

Seth Goldberg, Duane Morris partner and Cannabis Industry Group team lead, is quoted in The Philadelphia Inquirer article, “Reading the tea leaves: What 10 cannabis bigwigs predict 2020 will bring to the world of weed.”

Mr. Goldberg says:

We’ll see adult-use in Illinois. While vaping bans are likely to be removed, additional restrictions around THC vaping could be imposed by states.

The hemp space seems situated to expand as the regulations become more clear, and the federal banking regulators have recently announced that hemp can be banked like any other legal product.

A lot is contingent on the federal government. If the STATES Rights Act or SAFE Banking Act were to pass, the latter of which seems to have the best chance in 2020, there will be a boost. Conversely, tightening of enforcement by the federal government could have the opposite effect. FDA regulations around vaping and CBD as a drug, dietary supplement, food/beverage may also be issued in 2020, which would shape the market for those products.

Bottom line, businesses and individuals in 2020 must remain mindful of the differences between the federal and state regulatory framework and the state-by-state regulatory patchwork, and be nimble in responding to changes.

To read the full article, visit The Philadelphia Inquirer website.

Duane Morris Honored in Cannabis 50 Impact Report

Duane Morris is recognized in the inaugural Cannabis 50 Impact Report, presented by MGO | ELLO.

The report honors a wide range of people, organizations and entities making an impact across the cannabis, hemp and CBD culture. Duane Morris is featured in the Knowledge and Health category as a business “pushing the boundaries of our understanding and sharing the complexities of cannabis, hemp, and CBD with the world” and for “providing legal education and guidance to cannabis.”

From the report:

Duane Morris was the first Am Law 100 firm to engage cannabis on a national platform. Their legal teams support clients across the cannabis supply chain, assisting with regulations, financial transactions, and general litigation. The practice is led by Partners and Cannabis Team Leaders, Jennifer Briggs Fisher and Seth Goldberg. They extend support to the entire cannabis community with their regular series of informational webinars exploring regulatory, business and financial complexities.

For more information, visit the Cannabis 50 website.

Spate of FDA and FTC Warning Letters Sets Stage for Wave of False Advertising Consumer Class Action Lawsuits

Since the 2018 Farm Bill passed in December 2018, removing hemp from the Controlled Substances Act and thus legalizing it under federal law, consumer goods containing the hemp-derivative cannabidiol (CBD) have become exceptionally popular. With that growing popularity among consumers has come increased scrutiny by federal regulators whose mission is consumer safety and protection, such as the Food and Drug Administration and Federal Trade Commission, and now by the plaintiffs’ bar, which files consumer class actions based on advertising. As the recent spate of warning letters and consumer class actions demonstrate, hemp-derived CBD product manufacturers and others in the supply chain for those products have to be mindful of the claims they make to consumers about their products.

View the full Alert on the Duane Morris LLP website.

Cannabis Patent Review: Extraction and Purification

In this first article of his Cannabis Patent Review series, Duane Morris partner Vince Capuano reports on the patenting of technology related to cannabis extraction and cannabinoid purifications.

He writes:

One of the more active areas in the patenting of cannabis technology in 2019 is the related fields of cannabis extraction and cannabinoid purification.  Cannabis operators now must educate themselves and navigate an emerging landscape of U.S. cannabis extraction and purification patents for freedom to operate, while also looking for opportunities to patent their own innovations. So far in 2019, the U.S. Patent and Trademark Office (USPTO) has granted over 30 patents with claims directed to cannabis extraction technologies and many others related to distillation of cannabinoid components and techniques for obtaining active compounds from marijuana and hemp. Dozens more are pending.

Read Mr. Capuano’s full analysis on this topic.

Duane Morris Partner Tracy Gallegos Named a Top Woman of Influence by MyVegas Magazine

Duane Morris partner Tracy Gallegos is featured in MyVegas magazine as one of the Top 100 Women of Influence. The list recognizes women who have made a “huge positive impact … and continue to change the shape of Las Vegas on a daily basis[.]”

Ms. Gallegos has a multifaceted practice that touches upon corporate, real estate, cannabis, sports and entertainment law for clients ranging from startup companies to established businesses. Her clients include cannabis companies involved in retail, manufacturing and cultivation, as well as companies providing ancillary services to the cannabis industry in both California and Nevada.

Read Ms. Gallegos’ profile in the publication. For more information, visit the MyVegas magazine website.

Federal Banking Regulators Take Steps to Allow Financial Services for Hemp-Related Businesses

Banking has been an impediment for the cannabis industry because the Bank Secrecy Act of 1970 (BSA) and related regulations―which seek to prevent money laundering and other financial crimes―place onerous requirements on banks when a transaction is suspected to involve illegal activity. 12 C.F.R. Section 21.11. Notwithstanding billions of state-legal cannabis dollars exchanging hands, the commercial banking industry, which is largely federally regulated, is virtually nonexistent in the cannabis space. In 2014, the Treasury’s Financial Crimes Enforcement Network (FinCEN) provided guidance intended to enhance the banking of cannabis-related monies by establishing a category of suspicious activity reporting for “marijuana related businesses.” But, according to FinCEN, as of June 30, 2019, just 553 commercial banks and 162 credit unions had filed an SAR for a “marijuana-related business.”

View the full Alert on the Duane Morris LLP website.

U.S. Senators Urge Changes to Testing Requirements Under USDA Interim Final Rule for Hemp Program

When the United States Department of Agriculture released the interim final rule for the hemp program in October 2019, many stakeholders—including businesses and state agencies—were caught off guard by certain testing-related requirements contained in the rule. Because hemp is now legal under the 2018 Farm Bill if it contains no more than 0.3 percent THC concentration, testing for THC levels is critical. However, significant questions and issues with the testing requirements must be clarified.

On November 20, 2019, Senators Ron Wyden and Jeff Merkley, both from the state of Oregon, submitted a letter to the secretary of the USDA, in which they flagged—“in no particular order”—five controversial testing-related requirements and requested modifications to those requirements. Below, we have summarized the senators’ concerns and proposed solutions to three particularly controversial testing-related requirements in the interim final rule.

View the full Alert on the Duane Morris LLP website.