General – Page 28 – Cannabis Industry

July 2, 2019 by Duane Morris

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 Ron DeSantis made headlines in March when he signed legislation that effectively repealed the ban on smoking and “vaping” medical cannabis.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.

July 1, 2019 by Duane Morris

Vincent Capuano Featured in July Issue of Marijuana Business Magazine

Duane Morris partner Vincent Capuano was featured in “Making Your Mark & Protecting It” in the July issue of Marijuana Business Magazine. Vince discussed when it makes sense to seek a patent for your product.

July 1, 2019July 2, 2019 by Paul P. Josephson

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.

June 25, 2019 by Duane Morris

“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.

June 19, 2019 by Duane Morris

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.

June 19, 2019June 19, 2019 by Duane Morris

“Cannabis 202” Webinar Replay Available

A video replay of the webinar “Cannabis 202: IP Issues Facing the Cannabis Industry: Hot Topics in Patent, Trademark and Branding Protection and Enforcement” is available to view.

June 11, 2019October 17, 2019 by Duane Morris

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.

June 10, 2019 by Brad A. Molotsky

NJ Assembly Delay Vote on Medical Cannabis Expansion – likely due to concern over potential Governor’s veto

NJ Assembly leaders announced they would not be voting on the proposed expansion of medical cannabis licenses earlier today – 6-10-19.

Instead, per NJ.com, legislators are going to attempt to work with Gov. Phil Murphy’s office on a plan that’s more amenable to him and the state Legislature, said Kevin McCardle, a spokesman for Assembly Democrats.

The Governor’s team has previously raised objections to a few provisions in the medical expansion bill, including the creation of the Cannabis Regulatory Commission, which would assume oversight of the industry. Currently, the state Department of Health regulates the medical marijuana program.

We will keep an eye out for any collaborative resolution of the medical licensure issue and report back.

#Duane Morris – Brad A. Molotsky, Esq.

May 31, 2019 by Brad A. Molotsky

NJ Senate and Assembly close in on expansion of medical use Cannabis – Brad A. Molotsky, Esq. – Duane Morris

The New Jersey Senate voted 33-4 yesterday (Thursday) to advance a bill that is intended to increase medical marijuana sales and likely create new business opportunities in the state.

Per Marijuana Business Daily, before the vote, the Senate amended Assembly Bill 10 to allow marijuana workers to become union members.

The Bill will now return to the NJ Assembly for a vote to approve the Senate’s modification.

If the Bill is ultimately signed, the measure will:

– Create a new regulatory commission for medical marijuana.
– Pave the way for the state to issue additional business licenses.
– Allow cannabis home delivery.
– Ease restrictions on the process for recommending medical marijuana.

Currently there are 12 vertically integrated medical cannabis licenses that have been granted in NJ.

We will continue to track this development and report back as it get’s closer to passage in the Assembly. -Brad

May 30, 2019 by Duane Morris

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.