New York State Advertising Rules Effective Today

Effective March 22, 2023, New York’s cannabis advertising rules are now in place. These rules aim to protect public health, particularly minors, and ensure that cannabis advertising is truthful and not misleading.

    •  Cannabis advertisements cannot be displayed within 1,000 feet of a school or daycare center.
    • Ads cannot target individuals under 21 years of age or depict minors, toys, characters, or cartoons.
    • Advertising cannot claim cannabis is safe or healthy or that it has curative or therapeutic effects unless supported by substantial evidence.
    • Ads cannot contain false, misleading, or deceptive information.
    • The warning statement “This product may be intoxicating and may be habit-forming” must be included in all cannabis advertisements.
    •  Promotions, such as giveaways or coupons, are prohibited except in licensed dispensaries.
    • Advertising cannot be displayed on any public transportation or property owned or leased by the state or local government.
    • All ads must include the New York State Department of Health’s “Know the Facts” educational campaign website address.

CANNABIS INDUSTRY THE LATEST FRONTIER FOR LABOR ORGANIZING EFFORTS

As legal adult-use cannabis continues to spread across the country, so does a movement to unionize cannabis workers.  The need for dispensary and cultivation workers has rapidly increased, along with the demand for higher wages, improved benefits, diversity and inclusion efforts, and more.

To date, 21 states and the District of Columbia have legalized adult use marijuana.  Bills to legalize adult use marijuana are pending in several other states.  According to Forbes, cannabis sales in the United States are estimated to reach $57 billion by 2030.  The industry shows no signs of slowing down.  Labor unions have taken notice and have seemingly set their sights on the cannabis workforce.

The efforts of labor unions have been buoyed by labor peace agreement (LPA) laws.  While LPA laws vary by state, they generally require cannabis companies to take a hands-off approach to union organizing efforts as a condition of doing business in the state.  This means the company cannot interfere with organizing efforts.  However, unions typically also agree via the LPAs not to interfere with the operations of the business.  Alternatively, some LPA laws offer preferential status in licensing applications for companies that enter into LPAs.

California, New York, New Jersey, and Virginia all have varying degrees of requirements with respect to LPAs in their states.  Pennsylvania and Illinois do not require LPAs, but the states offer certain advantages to companies who enter into LPAs.  Several other states, such as Massachusetts, Connecticut, and Minnesota, are contemplating enacting their own LPA requirements.

The apparent enthusiasm of organizing efforts largely paid off for unions in 2022.  According to Bloomberg Law’s NLRB Election Statistics report, unions prevailed in 76% of overall elections in 2022, one of the highest success rates on record. The United Food and Commercial Workers Union, which has dubbed itself “the Cannabis Workers’ Union” representing more than 10,000 cannabis members, won 70% of representation elections in 2022.  They are not the only ones.  The International Brotherhood of Teamsters, which has unionized some cultivation workforces, won 66% of representation elections in 2022.

While there has been some litigation surrounding LPAs and organizing efforts, to date, most cannabis companies do not appear to be challenging these requirements.  This has the strategic benefit of allowing cannabis businesses to get licenses and begin operations, rather than engage in what could be a prolonged legal battle.  However, as unions expand and tighten their grasp on cannabis workforces, industry groups may start to fight back.

Application for Federal Pardons of Marijuana Possession Now Available

As we previously reported, on October 6, 2022, President Biden announced that he would pardon those convicted of simple marijuana possession offenses under the federal Controlled Substances Act.  As part of his executive action, Biden directed the Attorney General to develop an administrative process to issue Certificates of Pardon to eligible individuals.

On March 3, 2023, the Department of Justice announced the launch of an online application form for individuals seeking proof that they were pardoned under Biden’s proclamation.  The form requires the applicant to provide their full name, contact information, date and place of birth, and citizenship status, followed by information about their charge or conviction with supporting documentation.

In order to be eligible for the Certificate of Pardon, applicants must satisfy the following:

    1. Applicant must have been charged with or convicted of simple marijuana possession by either a federal district court or D.C. Superior Court;
    2. Applicant must have been a U.S. citizen or lawfully present in the U.S. at the time of the offense; and
    3. Applicant must have been a U.S. citizen or lawful permanent resident on October 6, 2022, when Biden announced the pardon.

Note that the pardon neither indicates the innocence of the federal offender nor expunges their conviction.  Nevertheless, it may remove civil restrictions such as the right to vote, hold office, or sit on a jury.  The pardon may also alleviate limitations placed on obtaining certain licenses or employment.

However, Biden’s pardon merely affects several thousand federal offenders.  As we previously reported, 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.  The vast majority of cannabis convictions for simple possession occur at the state level.  Those convicted of state marijuana offenses do not qualify for the pardon.  Biden urged state governors to follow his lead and issue similar pardons.

Since Biden’s proclamation, several states have flirted with the idea of pardoning nonviolent marijuana crimes, some of which took more substantial steps forward.  For example, on November 21, 2022, the governor of Oregon pardoned more than 47,000 people with convictions for simple marijuana possession and forgave more than $14 million in unpaid fines and fees.

As of the present, Connecticut, Missouri, Rhode Island, and Alaska have demonstrated similar relief efforts.  Connecticut expunged the record of about 44,000 residents convicted of cannabis possession, while Missouri expunged the record of about 7,500 residents and ultimately expects 100,000 expungements in the coming months.  The Chief Justice of the Rhode Island Supreme Court issued an executive order directing judges to establish and implement marijuana expungement procedures.  Rhode Island expects 30,000 residents to be able to clear their record.  Justices of the Alaska Supreme Court issued a similar order, permitting residents convicted of possessing less than one ounce of marijuana to seal the records related to such convictions.  Alaska expects 800 residents to benefit from the order, which takes effect May 1, 2023.

To date, 24 states have enacted legislation to expunge marijuana-related criminal convictions.  According to the National Organization for the Reform of Marijuana Laws, state and local officials have issued more than 100,000 pardons and more than 1.7 million marijuana-related expungements since 2018.  More states are likely to follow in the same breadth soon.

Read the full text of the article on Law360.

Probe Shows OSHA Regulating Cannabis Cos. Like All Others

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…

Read the full article.

DEA Finds that Lab-Derived Cannabis Compounds Are a Schedule I Drug, Even if Made from Hemp

On February 13, 2023, the U.S. Drug Enforcement Administration (DEA) published a letter in which it opined that two acetate compounds chemically derived from cannabis, delta-8-THCO and delta-9-THCO, are Schedule I substances under the federal Controlled Substances Act (CSA), even if they are derived from hemp, which is federally legal.  The DEA’s letter came in response to an inquiry from an attorney who represents the Hemp Industries Association.

Dr. Terrence L. Boos, Chief of the DEA’s Drug & Chemical Evaluation Section Diversion Control Division wrote, “Delta-9-THCO and delta-8-THCO do not occur naturally in the cannabis plant and can only be obtained synthetically, and therefore do not fall under the definition of hemp.”  Dr. Boos wrote that the CSA classifies THC under Schedule I, and THC (tetrahydrocannabinols) means those “naturally contained in a plant of the genus Cannabis (cannabis plant), as well as synthetic equivalents of the substances contained in the cannabis plant and/or synthetic substances, derivatives, and their isomers with similar chemical structure and pharmacological activity to those substances contained in the plant.” (emphasis added).

It’s important to note that the compounds addressed in the DEA letter are different from delta-9-THC, the psychoactive chemical found naturally in cannabis that causes a high, and delta-8-THC, a compound that can be synthesized from CBD derived from hemp.

Given the DEA’s position, retailers selling products that contain Delta-9-THCO or delta-8-THCO must hold all requisite licenses to sell cannabis products in jurisdictions where cannabis has been legalized, either for medicinal or recreational purposes.  For retailers who are selling delta-9-THCO or delta-8-THCO products in states where cannabis has not been legalized, such retailers would likely be in violation of the CSA, according to the DEA’s position.

How Marijuana Pardons Affect Employee Background Checks

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.

To read the full text of this article by Duane Morris attorneys Danielle M. Dwyer and Jesse Stavis, originally published in Law360, please visit the firm website.

Adult Use Cannabis – the United States Virgin Islands passes adult use cannabis legislation!

In case you might have missed it with your year end festivities, the U.S. Virgin Islands became the latest U.S. region to legalize adult-use cannabis. Once regulations are finalized, the rules will allow residents and visitors to purchase medical and/or recreational cannabis products from licensed dispensaries. The bill was signed by Governor Bryant and is now effective.

The legislation also includes provisions proposed by Senators Sarauw and Bolques and automatically expunges cannabis possession charges in the territory.

Medical cannabis was previously approved in 2019 but the legislature continues to work on the applicable rules and regulations for the program.

It is estimated by Commissioner Richard Evangelista that it will likely be another 18-24 months before the government can finalize the applicable regulations for medical and adult use.

Sarauw said that even now, with adult-use reforms now heading to the governor’s desk, “we have done absolutely nothing to move cannabis forward.”

At the moment, current rules decriminalize the possession of up to an ounce of cannabis in the U.S. Virgin Islands.

Key Take Away – the USVI has now officially approved adult use cannabis which will likely spark (sorry, could not resist) multiple businesses and business lines to look to establish operations in the Territory. Grow, manufacture, dispensing and businesses supporting these operations are sure to continue their thought processes as to how to engage and become licensed pending final rules to be issued by the Department of Licenses and Consumer Affairs.

Duane Morris has an active Cannabis Team to help organizations and individuals plan, respond to, and execute on your cannabis and hemp initiatives. We would be happy to discuss your proposed project and how these new rules  might apply to you. For more information or if you have any questions about this post, please contact Brad A. Molotsky, or Tracy Gallegos, Seth Goldberg, or Paul Josephson who co-head the Cannabis Group  or the attorney in the firm with whom you in regular contact .


Is Your Business OSHA-Ready? Health and Safety Implications for Cannabis Industry Workplaces

Kathryn Brown
Kathryn Brown

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”

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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