News of widespread layoffs at cannabis companies across the United States has dominated headlines, but an analysis of employee counts at America’s largest multistate operators shows several actually grew their payrolls last year.
The fact that employee payrolls were up for some marijuana MSOs at the end of 2022 but down for others underscores how several factors can play a role in determining a company’s health.
Those factors include geographic footprint, taxes, operating costs and capital availability, experts said.
“The present moment is the Great Rationalization for the industry,” Paul Josephson, a New Jersey-based partner and leader of the cannabis industry group at the Duane Morris law firm, told MJBizDaily via email.
“Price compression and profitability varies tremendously by state and even within a state. So smart operators are taking a hard look at where they are investing their human capital.”
That means winding down operations in some areas and investing in others with more opportunity for revenue growth.
As continued legalization of cannabis across jurisdictions in the U.S. and foreign countries causes the industry to become increasingly lucrative, determining proper avenues for dispute resolution controlling underlying agreements and investments has become a critical consideration for business-owners and foreign investors alike. Foreign investment in businesses involving cannabis is subject to a complex web of oversight that could include any combination of local and foreign laws, agreements, regulations, and practices. Many foreign investors in the cannabis industry have turned to international arbitration as a method for navigating these complexities and resolving disputes that may arise from such investments and business relationships. This post explores high-level considerations for foreign investors in the cannabis industry when assessing the viability of arbitration as a means for dispute resolution.
For years, legal commentary about cannabis and the workplace has focused on employees’ off-duty cannabis use, as well as employers’ rights to test and discipline employees for off-duty cannabis use.
But with the Occupational Safety and Health Administration’s investigation of Trulieve, one of the largest multistate cannabis companies, the spotlight now shines on the safety of the licensed cannabis workplace itself and whether on-duty contact with cannabis may pose health hazards…
On Oct. 6, 2022, President Joe Biden issued a blanket pardon to all citizens and lawful permanent residents convicted of simple possession of marijuana under the federal Controlled Substances Act. The move reflects a shift in attitudes towards low-level drug offenses, and should serve as an impetus to employers to review their policies on criminal record checks.
Because marijuana possession offenses predominantly fall under the jurisdictions of the states, not the federal government, the immediate impact of these pardons is limited. Only about 6,500 people have been convicted for simple possession under federal law and a few thousand more have been convicted under the Code of the District of Columbia.
In a field rife with rapid regulatory changes and legal uncertainty, Duane Morris LLP’s experience advising multimillion-dollar acquisition and tax settlement deals has placed it in the forefront of major industry developments, earning it a spot on Law360’s 2022 Cannabis Groups of the Year.
If you employ workers in the cannabis industry, consider including workplace health and safety among your top priorities as you set goals for the new year.
With the rapid growth of the cannabis industry comes increased scrutiny from government regulators, including those charged with enforcing workplace health and safety laws. For example, in December 2022, cannabis producer and retailer Trulieve announced that it reached a settlement with the Occupational Safety and Health Administration (“OSHA”) of a citation issued in June 2022 for alleged violations of the Occupational Safety and Health Act. The citation followed OSHA’s investigation of the death of a Trulieve production worker from asthma-related complications allegedly related to her occupational inhalation of cannabis dust. As part of the resolution of the citation, Trulieve agreed to study the hazards of exposure to ground cannabis dust for purposes of determining whether cannabis dust should be classified as a “hazardous chemical” for OSHA purposes. Expected to be complete in May 2023, the study is likely to have nationwide implications for employers in the cannabis industry. Continue reading “Is Your Business OSHA-Ready? Health and Safety Implications for Cannabis Industry Workplaces”
On October 6, 2022, President Biden issued a blanket pardon to all citizens and lawful permanent residents convicted of simple possession of marijuana under the federal Controlled Substances Act. Because possession of marijuana offenses predominantly fall under the jurisdictions of the states, not the federal government, the immediate impact of these pardons is limited– only about 6,500 people have been convicted for simple possession under federal law and a few thousand more have been convicted under the District of Columbia Code. However, President Biden has urged governors to follow suit, and some states have begun to explore the idea of pardoning non-violent marijuana crimes. As such, employers need to be aware of the effects such pardons have on their criminal background processes. Continue reading “Simple Possession Pardons Can Complicate Employment Background Checks”
Asked how the state verifies test results on THC levels in Arkansas’ legal cannabis system, the Alcoholic Beverage Control Division and Medical Marijuana Commission point to the Arkansas Department of Health.
But the Health Department points back at the commission and the ABC.
The state has no apparent procedure to confirm the test results, which play into the pricing of medical marijuana. That revelation comes as testing faces harsh scrutiny in Arkansas and beyond, as lawsuits question the integrity of testing companies that draw their revenue from marijuana cultivators. The growers know that their products rise in value with higher percentages of tetrahydrocannabinol, the psychoactive ingredient in cannabis. […]
Attorney Seth Goldberg, who works in the Philadelphia office of the law firm Duane Morris, said in an email that each state that has legalized cannabis has set rules on packaging, labeling and testing. “So this is really a state-by-state and case-by-case issue that is highly dependent on the applicable state regulations and regulatory compliance,” he said.
In the Nov. 8 midterm elections, voters in both Maryland and Missouri approved legalization of cannabis for adult use, while voters in Arkansas, North Dakota and South Dakota voted no on legalization.
With the passage in Maryland and Missouri, 21 states as well as the District of Columbia have now legalized cannabis for adult use, and another 16 states permit cannabis for medical use.
Despite the fact that nearly half of all states have now legalized cannabis for adult use, it remains illegal under the federal Controlled Substances Act as a Schedule I drug, along with drugs like heroin and LSD. Such a classification means that cannabis has a high potential for abuse and has no acceptable medical use, despite research to the contrary.