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Nevada Becomes First State to Ban Pre-Employment Marijuana Testing

By Eric Ruden, Duane Morris LLP

On June 5, 2019, Nevada’s Governor, Steve Sisolak, signed a bill into law banning pre-employment testing from marijuana. Nevada becomes the first state to pass such a ban and follows New York City’s similar ban passed in April 2019, beginning a trend that surely will expand to other jurisdictions.

Under the new law, Nevada employers are prohibited from failing or refusing to hire a prospective employee because the prospective employee submitted to a drug test and the results of the screening indicate the presence of marijuana. The law provides exceptions for firefighters, emergency medical technicians, employees operating a motor vehicle for which federal or state law requires drug testing, or if the position could adversely affect the safety of others. Notably, the law does not prohibit an employer from testing current employees for marijuana.

The law additionally provides that employees who are required to submit to a screening test within the first 30 days of employment have a right to submit to an additional screening test, at the employee’s own expense, to rebut the results of the initial screening. Employers are required to accept and give appropriate consideration to the results of the second screening test.

The law becomes effective on January 1, 2020. Nevada employers should review their drug testing policies prior to the law’s effective date and employers nationwide should be prepared for similar bans to follow this growing trend.

How Will FDA Bring Order to the Wild West of Cannabis Regulations?

By Frederick R. Ball and Carolyn A. Alenci, Duane Morris LLP

The cannabis industry is the next frontier, growing rapidly and becoming one of the highest grossing industries in the country. The problem is, through no fault of its own, it is also the “wild west” of industries in many ways operating without guidance or regulation from the federal agencies that have jurisdiction of its products.

On May 31, 2019, the U.S. Food and Drug Administration (FDA) held a public hearing to allow stakeholders to share their experiences and challenges with cannabis or products containing cannabis-derived compounds. For this hearing, FDA requested information, scientific data, and stakeholders’ views on the safety of CBD-containing and cannabis-derived products. FDA hoped to obtain input on possible strategies that will allow for lawful marketing of CBD-containing and cannabis-derived products in a predictable and efficient manner, while still providing incentives for drug development with CBD and cannabis-derived compounds. Over 100 academic, industry, medical, and consumer stakeholders spoke or gave presentations at the hearing to a packed audience of about 500 attendees. In addition, over 1300 written comments have been posted to the FDA’s public docket FDA-2019-N-1482 for this hearing.

The hearing opened with remarks from Acting Commissioner Dr. Norman Sharpless. As expected, he made no new announcements about FDA’s current thinking about regulating products containing cannabis or cannabis-derived compounds. He did restate the FDA’s current position that CBD and THC cannot lawfully be added to a food or dietary supplement and that FDA does not have a policy of enforcement discretion with respect to these products.

To read the full text of this article written by Duane Morris attorneys Rick Ball and Carolyn Alenci, please visit the Food and Drug Law Institute website

Why the Trend of Going Public in Canada May be Ending

Greenlane Holdings, Inc., a U.S. vape distributor, went public on the Nasdaq in April. Greenlane is the first U.S. cannabis company to obtain a Nasdaq listing and may well bode the beginning of the end of the prior trend of U.S. companies going public in Canada, where cannabis is federally legal. The New York Stock Exchange also recently reversed its prior ban on listing U.S. pot companies by allowing the name and symbol change for Kathy Ireland’s company, formerly known as Level Brands, Inc. The company changed its name to cbdMD with the new symbol YCBD, reflecting its change to primarily a CBD company. The NYSE also reversed its own initial delisting decision on India Globalization, now a CBD company as well, back in February. (As we know, cannabidiol, or CBD, derived from the cannabis plant, is believed to contain much of the plant’s medical benefit without the psychoactive “getting high” features of THC).

A number of U.S. cannabis companies decided to go public in Canada in the last few years, mainly under the belief that fundraising would be easier there and the company’s valuation in trading would fare better than if they traded only in the U.S. over the counter markets. Canada’s senior exchange, the Toronto Stock Exchange, had declined to list U.S. companies, so they trade on its lower exchange known as the Canadian Securities Exchange or CSE.

To read the full text of this article written by Duane Morris attorney David Feldman, please visit the Green Entrepreneur website.

USDA Memo Clarifies Key Provisions Regarding Hemp in the 2018 Farm Bill

The Agriculture Improvement Act of 2018 (the “2018 Farm Bill”), signed into law on December 20, 2018, altered the federal government’s treatment of hemp in a number of ways. The 2018 Farm Bill expanded the definition of “hemp” to include, explicitly, derivatives, extracts and cannabinoids, and removed hemp from the definition of federally unlawful marijuana under the Controlled Substances Act (CSA). See 2018 Farm Bill, Pub. L. No. 115-334 §§ 10113, 12619, 132 Stat. 4490. Notably, the 2018 Farm Bill also explicitly permitted the interstate transportation of hemp: “No State or Indian Tribe shall prohibit the transportation or shipment of hemp or hemp products produced in accordance with subtitle G of the Agricultural Marketing Act of 1946 (as added by section 10113).” Id. at § 10114.

Subtitle G, for its part, provides that “[n]othing in this section prohibits the production of hemp in a State or the territory of an Indian tribe—(1) for which a State or Tribal plan is not approved under this section, if the production of hemp is in accordance with section 297C or other Federal laws (including regulations).” Id. at § 10113 (emphasis added). This final clause, “or other Federal laws,” is significant because the Agriculture Act of 2014 (the “2014 Farm Bill”) is also a “federal law,” and to date approximately 40 states have instituted industrial hemp programs pursuant to the 2014 Farm Bill. Under the language of the 2018 Farm Bill, then, states may not interfere with the interstate transportation of hemp produced in accordance with either the 2014 Farm Bill or—once regulations are implemented and state hemp programs are approved—the 2018 Farm Bill.

Notwithstanding the language of the 2018 Farm Bill, the absence of federal regulations implementing the new law and sanctioning state hemp programs revised pursuant to the 2018 Farm Bill has caused significant confusion regarding the true impact of the act.

View the full Alert on the Duane Morris LLP website.

“How to Free CBD from the FDA’s Grasp: Call It GRAS,” The Cannabis Reporter Radio Show with Rick Ball

Duane Morris partner Rick Ball was a guest speaker on The Cannabis Reporter Radio Show, hosted by Snowden Bishop, on May 20, 2019. The episode is titled “How to Free CBD from the FDA’s Grasp: Tell Congress to Call It GRAS,” and can be found on The Cannabis Reporter website.

About the Episode

When Congress legalized agricultural hemp with the passage of the 2018 Farm Bill, it seemed like the hemp industry would finally be out of the woods from a regulatory standpoint. So, it defies logic that the FDA is creating obstacles for hemp CBD producers and that every-day people are still being arrested for possession of hemp biomass and extracts.

Just last week, a 67-year-old great grandmother was arrested at the happiest place on earth when a Disney World employee discovered a bottle of CBD in her purse after a routine inspection at the park entrance. You may recall the truck driver who was arrested in Idaho with a load of freshly harvested hemp on its way from Oregon to a processing plant in Colorado just weeks after the hemp measure was signed into law.

Incidents like that leave most of us scratching our heads, considering that hemp is now legal at the federal level and hemp-derived CBD is a harmless molecule that is naturally produced in our own bodies when we’re young.

Let’s face it, legal hemp seems to be an oxymoron. Minutes after the hemp measure was signed into law, the FDA blindsided the elated industry with its stern warning that only one CBD product has ever been approved for sale in the U.S. and that all other hemp CBD products would remain illegal to sell until they can be approved by the FDA. The only exceptions would apply to the manufacturing and sale of CBD limited to states that had included CBD provisions in their state marijuana policy measures.

To read more about this episode and listen to the interview with Duane Morris attorney Rick Ball, please visit The Cannabis Reporter Radio Show page here.

Case Sets Stage for Cannabis Patent Infringements Actions

Getting a patent for a cannabis product is no more difficult than getting a patent for any other kind of product. However, with a high number of cannabis patent applications being approved, it is likely that many will be challenged for invalidation in the coming years.

Already one of these patents has gone to court in the U.S. District Court for the District of Colorado. In United Cannabis v. Pure Hemp Collective, United Cannabis Corp. claims that Pure Hemp Collective Inc. used a cannabis extract that United Cannabis had a patent on. Pure Hemp filed a motion for partial summary judgment, arguing United Cannabis should not have had a patent on the extract because it was something that occurred naturally. In April, U.S. District Judge William Martinez found the strain was altered and would not have occurred naturally and denied the motion for partial summary judgment. The case is still pending..

To read the full text of this article including Duane Morris Attorney Vince Capuano,  please visit the Duane Morris website.

Reprinted with permission from law.com, © ALM Media Properties LLC. All rights reserved.

Green Light for the Sunshine State: Florida Legislature Approves Sweeping Changes to Hemp, CBD Regulation

On May 3, 2019, the Florida legislature passed SB 1020, creating the state hemp program and authorizing the Florida Department of Agriculture and Consumer Services (FDACS) to enact regulations to govern the program. The bill, first filed in the Florida Senate on February 13, 2019, passed with overwhelming support; the final version passed by a margin of 39-0 in the Senate after passing 112-1 in the House. Governor Ron DeSantis has until May 18, 2019, to veto the bill or it will automatically become law.

“The historic vote,” according to FDACS Commissioner Nicole Fried, is in response to the federal 2018 Farm Bill, which “removed the prohibitions on industrial hemp in place since 1937 and authorized states to create hemp programs.” Id. If SB 1020 becomes law, it will fundamentally alter the treatment of hemp and hemp extracts, including cannabidiol (CBD) products, under Florida law.

View the full Alert on the Duane Morris LLP website.