Category Archives: General

Paul Josephson Named to Insider 100: Policymakers by Insider NJ

Paul Josephson
Paul Josephson

Duane Morris partner Paul Josephson was named to the 2019 “Insider 100: Policymakers” list by Insider NJ, which described him as “an expert on transportation and casino issues – and cannabis.” Mr. Josephson was also named to the 2017 and 2018 lists.

“The list assembles names listed … because of the rigorous quality of their public policy minds,” according to the publication.

To read the 2019 “Insider 100: Policymakers” publication, please visit the Insider NJ website.

New Illinois Cannabis Law Sets Licensing, Regulation Trends

Neville BilimoriaOn June 25, Illinois Gov. J.B. Pritzker (D) signed into law the Cannabis Regulation and Tax Act, making Illinois the 11th state in the country to legalize cannabis and the first to have a legislature approve commercial sales without a voter referendum.

Legalizing marijuana in Illinois is expected to generate revenue to help restore poverty-and crime-ridden communities and fund substance abuse, mental health, and law enforcement services. Adult-use cannabis sales could net Illinois about $500 million in tax revenue annually, according to some experts. The act takes effect Jan. 1, 2020.

The Illinois law will end cannabis prohibition and replace it with a comprehensive and highly regulated system to tax and regulate cannabis for adults 21 and over.

To view the full text of this article written by Duane Morris attorney Neville Bilimoria, please visit the Duane Morris website.

Effort to Legalize Adult Use of Marijuana Fails in New York State

By Jerome T. Levy and Lauren G. Perry

Lauren G. Perry
Lauren G. Perry
Jerome T. Levy

On June 17, 2019, the New York Legislative session adjourned without passing a bill that would have legalized adult use cannabis in the state.  The sponsor of the leading bill in the assembly and Manhattan Democratic Senator, Liz Krueger, announced that there was not sufficient time to gain the support necessary for passage of a bill.  Although there appears to be broad popular support for legalization of marijuana in New York, a number of “safety” issues arose, particularly among suburban constituencies relating to concerns such as operation of motor vehicles under the influence of marijuana.  Sentiment in suburban areas caused lawmakers from those districts to withhold the support needed, particularly in the state senate.  In addition, many blamed the failure on Governor’s Cuomo’s reluctance to give the measure full support.  Although the governor had endorsed adult use legalization earlier in the session, and had attempted to include it within the budget bill passed at the end of March, at the critical time before adjournment he appeared to take a hands‑off approach, becoming oddly passive, a pose this activist governor rarely adopts. Continue reading Effort to Legalize Adult Use of Marijuana Fails in New York State

Florida’s Budding Cannabis Industry Expands With New Hemp Law

According to a research report published by Cowen & Co. earlier this year, the investment bank believes that the U.S. market for cannabidiol (CBD) consumer goods could reach $16 billion—a “conservative” forecast—by 2025, up from between $600 million and $2 billion in 2018 retail sales. As the third-most populous state in the country, this is a very big deal for Florida.

Florida’s state hemp program law, Section 581.217, Fla. Stat., created by the enactment of Senate Bill 1020, has the potential to transform Florida’s agricultural landscape while also capitalizing on a fertile market of enthusiastic cultivators and eager consumers.

With a population of more than 21 million, Florida has long been viewed as ripe for potential commercialization by the cannabis industry. Gov. Ron DeSantis made headlines in March when he signed legislation that effectively repealed the ban on smoking and “vaping” medical cannabis. Yet outside of Florida’s medical marijuana program (and the hemp pilot project discussed below), cannabis—which includes hemp and hemp-derived products—has remained a controlled substance, making the manufacture, processing, sale and possession of hemp or hemp-derived products (including cannabidiol, i.e., CBD-infused items) a criminal endeavor. Even within the state’s medical use program, the cultivation of cannabis, even for medicinal purposes, remains tightly regulated.

To read the full text of this article by Justin M. L. Stern, Robert A. Zinn, Jay Steinman and Jennifer A. Migliori, please visit the Duane Morris website.

On Your Mark, Get Set, Go: Revised New Jersey Medical MJ RFA Details Announced

It’s official: if you’re seeking a medical cannabis license in New Jersey, cancel your summer vacation plans. July and August promise to be very busy months. Today, the NJ Department of Health materially revised its current Request for Applications. Details below.

Although the number of permits to be issued this round has shrunken considerably, tomorrow, July 2, Governor Phil Murphy will be signing a major medical cannabis bill that substantially increases patient access, establishes a new regulatory overseer for the cannabis sector, and promises a much larger round of licensing (integrated and stand alone) this fall.

Key takeaways for the pending RFA round revised today:

  • Book It: Application forms will be released on July 15, 2019, and are due on August 21, 2019 at 3pm for dispensaries and August 22, 2019 at 3 pm for cultivation and integrated applications.
  • How Many? In total, the Department will seek up to 4 vertically integrated permits, up to 5 cultivation endorsements, and up to 15 dispensary endorsements.
  • In each of the three regions (North, Central, South) the Department will seek to issue up to 2 cultivation endorsements, 5 dispensary endorsements and 1 vertically integrated (cultivation, processing and dispensing) permits.
  • A fourth vertically integrated permit will be issued, with the region to be determined based on quality of application and patient need. “Because the patient population is expanding so quickly and is expected to accelerate, the Department anticipates that this flexible approach for up to 1 vertically integrated permit will allow for 1) the most qualified applicant to be chosen and 2) that the award can most adequately respond to real time changes in enrollment.”
  • No processing permits will be issued this round.
  • Initial Cultivation Canopy Limits: To provide opportunities for different sized businesses to participate in the RFA, the Department will seek to issue cultivation endorsements in the following tiers of canopy size:
    – Up to 5,000 Square Feet: up to 1 cultivation endorsement.
    – 5,001 square feet to 20,000 Square Feet: up to 2 cultivation endorsements.
    – 20,001 square feet to 30,000 Square Feet: up to 2 cultivation endorsements.
  • According to NJDOH, these cultivation tiers “represent the ranges of starting cultivation canopy at the ATCs awarded as part of this RFA. The maximum initial canopy for any of the awardees is 30,000 square feet. Vertically integrated applicants may choose any of the canopy tiers.”
  • Limits on Number and Combination of Applications:
    Entities and individuals may seek up to three total permit endorsements as part of this RFA. Applicants may only apply for one cultivation endorsement and may only submit one application per region. A separate application is required for each endorsement. An applicant for a vertically integrated permit may submit one application because all endorsements will be located within the same region. Therefore, the only applicants eligible to submit an application for more than one endorsement per region in this RFA are applicants for vertically integrated permits.
  • Applicants cannot submit for both vertically integrated permits and individual endorsements.
  • Applicants submitting for individual endorsements can submit applications for up to three endorsements, but they can’t be in the same region(s).
  • No applicant shall be awarded more than one permit pursuant to this RFA, and no applicant shall hold more than 1 cultivation endorsement, 1 manufacturing endorsement, and 1 dispensary endorsements as a result of the awards made pursuant to this RFA.
  • Except for the vertically integrated permits, no other entity shall be awarded both a cultivation endorsement and a dispensary endorsement pursuant to this RFA.
  • Current ATC permit holders (including awardees from December 2018) are not eligible to participate in this RFA.
  • Get Your Legal Documents Ready: NJDOH has substantially increased the disclosure requirements (of interested parties and documentation of virtually all business deals underlying an application) this round to ensure all parties interested in an application are known to the NJDOH at the time of application.
  • Questions, Comments and Further Information: NJDOH will accept questions on the RFA until July 26, and will conduct a preapplication webinar on August 2. Potential applicants are strongly encouraged to present any concerns, objections or suggestions relating to the substance of the RFA by July 26, if not sooner.
  • No Deadline for Award: NJDOH has not announced a deadline for making awards.
  • No License Squatting: Applicants awarded the right to complete the ATC permitting process must complete facility build out and be ready to commence operations within 18 months (cultivation endorsements and vertically integrated permits) or 12 months (dispensary endorsements). If an awardee is not permitted at the end of the above timeline, or the materials submitted with the application are found to be not accurate or truthful, as applicable, the award may be rescinded.
  • Criteria, Weighting and Page Limits:
    Applicants must observe a strict 100 page limit per endorsement sought. Criteria weighting is as follows:
    Criterion 1. Ability to meet the overall health needs of qualified patients and safety of the public. 30 pts
    • Measure 1, Security plan: 10 pts
    • Measure 2. Environmental impact plan: 10 pts
    • Measure 3, Quality control and quality assurance plan: 10 pts
    Criterion 2. History of compliance with regulations and policies governing government-regulated marijuana programs. 20 pts
    • Measure 1, Experience of principals, officers, and owners, in operating a regulated cannabis business, or operating a business in another highly regulated industry, such as healthcare, insurance, financial services, pharmaceuticals, or energy. 20 pts
    Criterion 3. Ability and experience of applicant in ensuring an adequate supply of marijuana. 20 pts.
    • Measure 1, Financing plan: 20 pts.
    Criterion 4. Community Support and Participation. 20 pts.
    • Measure 1, Ties to the local community: Applicants shall provide a list of all owners, officers, board members, and principals that have resided in NJ for at least 2 years, and supply proof of their residency. 20 pts.
    Criterion 5. Ability to provide appropriate research data. 10 pts
    • Measure 1, Research contributions: Evidence of past contributions – in the form of cited original and published work – to expanding clinical and scientific research related to medical cannabis or the debilitating medical conditions that can be treated with medical cannabis. 10 pts
    Criterion 6. Experience in cultivating, manufacturing, or dispensing marijuana in compliance with government-regulated marijuana programs. 100 pts.
    • Measure 1, Cultivation plan.
    • Measure 2, Manufacturing plan.
    • Measure 3, Dispensary plan.
    Criterion 7. Workforce and job creation plan, including plans to involve women, minorities and military veterans in ATC ownership, management and experience with collective bargaining in cannabis industries. 100 pts
    • Measure 1, Labor Peace Agreement: Applicants shall provide a signed labor peace agreement that includes provisions to ensure the cultivation, manufacturing and dispensing of medical cannabis will not be disrupted by labor-related disputes. Failure to provide a signed agreement will result in a score of 0 for this measure. 30 pts.
    • Measure 2, Labor compliance plan: Applicants shall provide a plan to comply with labor laws and an overview of their experience related to collective bargaining and/or accommodating the rights of workers. 20 pts
    • Measure 3, Minority-owned, women-owned or veteran owned business certification: Applicants shall provide a copy of certification(s) issued by the Department of the Treasury, Division of Revenue which verifies MBE/WBE certification or VOB certification, or evidence that the applicant would otherwise meet the MBE/WBE certification or VOB certification requirements once generating revenue. Applicants with a certification will receive the full 30 pts. Applicants that provide evidence of meeting the criteria in the future shall receive partial credit, based on the strength of the evidence. The selection committee shall take into account related entities for this measure. 30 pts.
    • Measure 4, Workforce and job-creation plan: Applicants will be scored on the extent to which they will involve individuals from socio-economically disadvantaged communities, individuals disproportionately impacted by enforcement of drug laws, and people with disabilities in the ownership, management and staffing of the proposed ATC. 20 pts
  • Scoring criteria reflect strong union (50 out of 300 total points), MBE/WBE (30 of 300 points) and social justice (20 of 300 points) preferences.

This post summarizes key terms of interest.  Potential applicants should review the complete terms of the RFA at https://www.nj.gov/health/medicalmarijuana/alt-treatment-centers/applications.shtml, and regularly consult the NJDOH website for ongoing updates.

“Sort of a Land Grab”: Intellectual Property in the Cannabis Space

Cannabis Wire discussed the Duane Morris webinar, Cannabis 202: IP Issues Facing the Cannabis Industry: Hot Topics in Patent, Trademark and Branding Protection and Enforcement.

The publication writes:

The 2018 Farm Bill, which legalized hemp in the U.S., has triggered an avalanche of applications for cannabis patents and trademarks.

Last Tuesday, Duane Morris, an international law firm headquartered in Philadelphia, hosted a webinar on intellectual property concerns as they relate to the cannabis industry. Early on, the presenters made two things clear: one, there is an unprecedented rush for cannabis patents, and two, how property rights in the industry will be divvied up remains up in the air. The lawyers presented a patent and trademark landscape that the industry needs to understand, but one in which the rules are very much in formation.

For more information, visit the Cannabis Wire website or view a replay of the webinar.

New York Fails to Legalize Adult Use Cannabis, Expands Decriminalization

Some bad news for those waiting for New York to legalize adult-use cannabis. Legislation aimed at legalizing adult-use cannabis failed on Wednesday (June 19), as state leaders in New York could not agree on certain key components of the  proposed Marijuana Regulation and Taxation Act (the “MRTA”).

One of the biggest points of contention in the MRTA was how the state would allocate the projected $300 million in annual tax revenue. In particular, some legislators argued that the funds should be allocated towards communities negatively impacted by the war on drugs, while New York Governor Andrew Cuomo argued that the executive branch – which he leads – should have more control over how that money is spent.

In addition, lawmakers also struggled to reach consensus on whether past cannabis convictions should be expunged and whether cities and counties would be expected to opt in to cannabis sales or, alternately, be able to opt out.

While adult-use maybe be off the table for now, on June 21, 2019, the New York Assembly and Senate approved a bill (A08420) to further decriminalize possession of cannabis and automatically expunge many low-level cannabis convictions.

Under A08420:

  • The penalty for possessing an ounce of cannabis (possession in the second degree) will be reduced to a $50 fine. Current law imposes a $100 fine, provided that the individual does not have a prior cannabis-related offense within the past three years.
  • The limit for cannabis possession in the first degree will be increased from 25 grams to one ounce, and the penalty will be reduced from a misdemeanor to a $200 fine. Currently, first-degree cannabis possession  can result in up to 90 days in jail and/or a fine of up to $500.
  • Cannabis in “public view” will no longer be a misdemeanor offense.
  • Cannabis possession arrests and convictions for amounts decriminalized under the bill will be automatically expunged, and will apply to convictions prior to decriminalization.

A08420 will take effect and become law pending signature by Governor Cuomo.

 

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.