General – Page 12 – Cannabis Industry

April 14, 2022 by Michael D. Schwamm

NY State Department of Taxation Creates New Webpage with Information on the Adult-use Cannabis Excise Tax.

New York State Department of Taxation and Finance has created a new webpage with information on the Adult-use cannabis products excise tax.

This cannabis excise tax will apply to both:

- Distributors of adult-use cannabis products on sales of retailers, and
- Adult-use retailers on sales to retail customers.

If you plan to sell adult use cannabis you must register with the Department of Taxation (which is in the process of developing an online registration process and other guidance. More information is available on the NYS Department of Taxation website (https://www.tax.ny.gov/bus/auc/)

NY Adult

April 6, 2022February 25, 2025 by Duane Morris

Duane Morris Helps Steer Harborside’s Purchase Of Calif. Co. Loudpack

California cannabis retailer Harborside Inc. announced Tuesday that it had closed a deal to purchase cannabis manufacturer and distributor Loudpack in a cash-and-stock deal steered by law firms Duane Morris LLP, Aird & Berlis LLP, Cassels Brock & Blackwell LLP and Feuerstein Kulick LLP.

[…]

Under the terms of the deal, Harborside acquired all equity in Loudpack through the issuance of approximately 91 million subordinate voting shares and 2 million warrants, which can be used to purchase subordinate voting shares at $2.50 each within the next five years. Harborside also assumed $50 million in Loudpack’s debt and paid approximately $5 million in cash.

The deal adds 15 new California retail locations, manufacturing facilities and 230,000 square feet of cultivation space to Harborside’s portfolio.

Harborside, which currently trades on the Canadian Securities Exchange and the OTCQX, a U.S. over-the-counter exchange, is expected to change its name to StateHouse Holdings by the end of the month, the company said.

Harborside received legal counsel from Aird & Berlis LLP and Cassels Brock & Blackwell LLP in Canada and Duane Morris LLP in the U.S., led by partner Nanette Heide.

To read the full text of this article, please visit the Law360 website (subscription required).

March 23, 2022 by Michael D. Schwamm

Key Cannabis Industry Projections and Trends from the New Frontier Data’s Recently Released 2022 U.S. Cannabis Report

- With a combined 148 million Americans living across those 19 adult-use states, and 248 million living across the 39 medical-use states, 44% of American adults now have access to legal adult use cannabis, and nearly three-quarters (74%) of the country now have access to legal medical cannabis in some form. Conversely, 89 million Americans (26% of the U.S. population) live in states where possession and use of cannabis remain illegal.

- The US legal marijuana industry could surpass $72 billion by 2030 (assuming that an additional 18 states will legalize adult-use marijuana or comprehensive medical marijuana programs by then (with the current legal states reaching $57 billion by 2030), up from $32 billion this year.

- Self-reported usage rates have risen sharply since 2012, and if this is sustained, the number of U.S. consumers will grow from 47 million in 2020 to 71 million by 2030.
- U.S. medical markets continue to expand, with the number of registered patients forecast to increase to 5.7 million in 2030 (1.6% of the adult population).

- Assuming legalization in all 18 potential markets by 2030, 47% of total demand would be met by the legal cannabis purchases, up from 27% in 2021, indicating continued disruption of illicit markets.

- Despite strong state-level momentum, the near-term prospects for federal reform are dim, but a limited measure, like cannabis banking reform, is possible following the 2022 mid-term elections.

March 15, 2022 by Duane Morris

Tunnel Vision: How Cannabis Lawyer Paul Josephson Scored a Front-row Seat to a $13B Piece of Infrastructure

Duane Morris partner Paul Josephson was featured in this article published in New Jersey Super Lawyers magazine.

Josephson came to cannabis law after learning state contracts and licensing skills from mentor Clive Cummis, who died in 2010.

Thanks to Cummis’ deep infrastructure work, Josephson spent the ’90s as outside counsel for the New Jersey Turnpike. Then like Cummis, Josephson got into political law, and has spent the last two decades representing gubernatorial campaigns. And when Gov. Phil Murphy pushed legalizing weed, Josephson says he was already in the right place at the right time.

To read the full text of this article, please visit the New Jersey Super Lawyers website.

March 11, 2022 by Deanna J. Lucci

New York’s “Seeding Opportunity Initiative” Opens up Adult-Use Cultivator License Applications to Hemp Farmers on March 15 and Introduces Proposed Regulations that Will Favor Those With Past Marijuana Convictions for Retail Dispensary Licenses

On March 10, New York State’s cannabis regulators filed proposed regulations for conditional adult-use retail dispensary regulations. The public will have 60 days to provide comment on the proposed regulations before the Cannabis Control Board votes on them.

The proposed regulations place “justice-involved” individuals – those who have been convicted for a marijuana-related offense and their family members – at the front of the line for retail dispensary applications. To assist those applicants, Gov. Kathy Hochul has proposed a $200 million budget that, if approved by the Legislature next month, would be used to help find, secure and renovate storefronts for the dispensaries. The state’s goal is for the dispensaries operated by “justice-involved” individuals to open by the end of 2022, with other dispensaries to follow in early 2023. New York’s approach differs from other states that have legalized cannabis in that it is attempting to address head-on the struggles that social equity license applicants often face in raising capital and starting a business in a highly-regulated industry. Chris Alexander, the executive director of the state’s Office of Cannabis Management, said he expects 100-200 licenses to go to “justice-involved” individuals.

Under the “Farmers First Program,” the application period for adult-use cultivator licenses will also open up on Tuesday, March 15 and end on June 30, 2022. Gov. Hochul signed legislation last month that created a new Adult-Use Conditional Cultivator License, authorizing eligible hemp growers to apply for a license to grow cannabis containing over 0.3% THC for the upcoming adult-use market. To be eligible to apply, the hemp grower must have been authorized to grow hemp under the Department of Agriculture and Markets Industrial Hemp Research Pilot Program and meet certain other requirements. These conditional licenses make it possible for farmers to grow cannabis in the 2022 growing season.

With these moves, the Seeding Opportunity Initiative seeks to establish a supply chain from New York State farmers to social equity retailers.

The general regulation package for cannabis licenses is expected to be released in May.

February 28, 2022 by Michael D. Schwamm

New York Conditional Cultivation License – Advanced Preparation (What You Can Do Now To Be Ready)

As we noted is our blog post earlier this week, New York recently adopted legislation to allow licensed hemp farmers to grow and process cannabis for the adult use market with the aim to have product available once retail sales are permitted.

While the New York Office of Cannabis Management has yet to release the form of application (and any implementing regulations), that doesn’t mean that potential applicants should sit idly by and wait. In reviewing the legislation, its clear that there is plenty of work that can be done now. Continue reading “New York Conditional Cultivation License – Advanced Preparation (What You Can Do Now To Be Ready)”

February 23, 2022 by Michael D. Schwamm

NY Gov. Hochul signs conditional cannabis cultivation bill to speed-up recreational cultivation

New York Gov. Kathy Hochul signed new legislation on Tuesday that will allow hemp farmers in the state to apply for a conditional license to grow cannabis.

With this legislation, New York is creating a new Conditional Adult-use Cannabis Cultivator license, allowing hemp farmers to grow cannabis in the 2022 growing season to “position New York’s farmers to be the first to grow cannabis and jumpstart the safe, equitable and inclusive new industry we are building”. Conditionally licensed cannabis farmers must hit certain requirements under this law. Continue reading “NY Gov. Hochul signs conditional cannabis cultivation bill to speed-up recreational cultivation”

January 28, 2022 by Duane Morris

More Investors Eying Ways to Tap the Higher Returns of Cannabis Real Estate

Duane Morris partner Michael Schwamm was quoted in an article on WealthManagement.com.

The past few years have brought cannabis legalization to multiple states, giving real estate investors a new alternative asset class to put their money into. It looks like this trend is only going to intensify in the months ahead.

As we get further into 2022, all U.S. states without current medical cannabis legalization are now considering legislation or ballot initiatives to legalize it. In addition, some states where medical cannabis is already legal may take the next step this year to allow adult recreational use. […]

Twenty-one additional states may legalize cannabis use in some form this year, according to Michael Schwamm, a partner in the New York office of the law firm Duane Morris. […]

“Real estate investing (along with ancillary services) is often the entry point for many investors,” Schwamm adds. “As the industry continues to gain acceptance, I am seeing more and more traditional real estate investors taking a look at this market as they are able to get higher returns in the cannabis sector vs. other [real estate] markets.”

To read the full text of this article, please visit the WealthManagement.com website.

January 26, 2022 by Duane Morris

New York State Cannabis Update

By Michael Schwamm

More than 520 cities, towns and villages (1/3 of all municipalities in New York state) have opted out of allowing cannabis retailers and consumption lounges in their municipalities as of the December 31 deadline, according to new data released by the OCM. Of that number, 75 municipalities opted out of consumption lounges, but will still allow cannabis retailers. On the other hand, three towns are banning retailers, but will allow consumption lounges. Continue reading “New York State Cannabis Update”

December 6, 2021February 25, 2025 by Duane Morris

Harborside to Combine with Urbn Leaf and Loudpack to Create StateHouse Holdings

Harborside Inc. (CSE: HBOR), (OTCQX: HBORF) a California-focused, vertically integrated cannabis enterprise, is pleased to announce that it has entered into definitive agreements to acquire UL Holdings Inc. (“Urbn Leaf”), a top California cannabis retailer with a dominant position in Southern California and LPF JV Corporation (“Loudpack”), a leading manufacturer, cultivator and distributor of award-winning cannabis brands in California . Following completion of the Transactions, Harborside is expected to be renamed StateHouse Holdings (“StateHouse”), subject to shareholder and regulatory approval.

Duane Morris partner Nanette Heide, who led the team that acted as United States legal counsel to Harborside, commented, “We are super proud of Harborside for taking on the challenge of pursuing two opportunities almost simultaneously and delighted to be the legal team that led them through this intense process.”

To learn more about the transaction, please visit the New Cannabis Ventures website.