General – Page 9 – Cannabis Industry

January 16, 2023January 16, 2023 by Brad A. Molotsky

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 .

January 11, 2023January 11, 2023 by Duane Morris

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

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”

January 9, 2023 by Nicholas A. DiMarco

New York Approves Draft Rules regarding Local Time, Place, and Manner Restrictions

On November 21, 2022, the New York State Cannabis Control Board (the “Board”) approved draft regulations under the Marihuana Regulation and Taxation Act (“MRTA”) that address, among other subjects, the scope of “municipal rulemaking,” or the authority retained by cities, counties, towns, and villages to enact “time, place, and manner” restrictions on the operation of adult-use retail dispensaries and on-site consumption sites within their jurisdiction.

Short of opting out from the marijuana retail market altogether, the MRTA permits municipalities to exercise control over the market by passing “local laws and regulations governing the time, place and manner of the operation of licensed adult-use cannabis retail dispensaries and/or on-site consumption site,” so long as the law does not make the operation of such facilities “unreasonably impracticable” as determined by the Board. But while “time, place, and manner” restrictions have a long history in First Amendment jurisprudence, see City of Renton v. Playtime Theatres, 475 U.S. 41, 46 (1986), what do they mean in the context of regulating the marijuana retail market? Continue reading “New York Approves Draft Rules regarding Local Time, Place, and Manner Restrictions”

December 19, 2022December 20, 2022 by Brad A. Molotsky

NJ Cannabis – 3Q 2022 Adult Use Sales Numbers Continue to Blaze

According to recent reporting from the NJ Cannabis Regulatory Commission (“NJCRC”), sales of legalized, recreational adult use cannabis in NJ exceeded $116.5 Million from July to September of 2022. This Q3 revenue figure represents a 46% increase from sales receipts in Q2 of 2022 of $80 Million generated from April to June 2022, when 13 state dispensaries expanded to adult cannabis sales for the first time.

By way of background, New Jersey legalized the sale of recreational marijuana for those 21 and over in April 2021. Sales were initially confined to 12 licensed dispensaries, which had approximately $24 Million in sales through May 2021, or an average of $5 Million per week in a state with 9.3 Million residents. By comparison, adult recreational cannabis generated approximately $80 Million in total sales between April and June 30 per the Cannabis Authority or $6.7M per week. Continue reading “NJ Cannabis – 3Q 2022 Adult Use Sales Numbers Continue to Blaze”

December 15, 2022December 15, 2022 by Duane Morris

Simple Possession Pardons Can Complicate Employment Background Checks

By Danielle Dwyer and Jesse Stavis

On October 6, 2022, President Biden issued a blanket pardon to all citizens and lawful permanent residents convicted of simple possession of marijuana under the federal Controlled Substances Act. Because possession of marijuana 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 District of Columbia Code. However, President Biden has urged governors to follow suit, and some states have begun to explore the idea of pardoning non-violent marijuana crimes. As such, employers need to be aware of the effects such pardons have on their criminal background processes. Continue reading “Simple Possession Pardons Can Complicate Employment Background Checks”

December 12, 2022 by Duane Morris

Too High? THC Test Results Under Fire

Asked how the state verifies test results on THC levels in Arkansas’ legal cannabis system, the Alcoholic Beverage Control Division and Medical Marijuana Commission point to the Arkansas Department of Health.

But the Health Department points back at the commission and the ABC.

The state has no apparent procedure to confirm the test results, which play into the pricing of medical marijuana. That revelation comes as testing faces harsh scrutiny in Arkansas and beyond, as lawsuits question the integrity of testing companies that draw their revenue from marijuana cultivators. The growers know that their products rise in value with higher percentages of tetrahydrocannabinol, the psychoactive ingredient in cannabis. […]

Attorney Seth Goldberg, who works in the Philadelphia office of the law firm Duane Morris, said in an email that each state that has legalized cannabis has set rules on packaging, labeling and testing. “So this is really a state-by-state and case-by-case issue that is highly dependent on the applicable state regulations and regulatory compliance,” he said.

To read the full text of this article, please visit the Arkansas Business website (registration required).

November 23, 2022 by Anna Wills

Medical Cannabis Research Bill Set to Become Law

Last week, the Senate unanimously passed H.R. 8454, or the Medical Marijuana and Cannabidiol Research Expansion Act (the “Act”), sending the bill to President Biden’s desk for signature. The bill passed the House this summer by a vote of 325 – 95, and marks the first time a standalone cannabis bill has been approved by the federal government. Essentially, the Act is intended to simplify and expand research into the medical possibilities of both cannabis and cannabidiol as a treatment for certain serious ailments. However, the Act does not de-schedule cannabis under the Controlled Substances Act, instead keeping cannabis a Schedule 1 drug. This means that cannabis will still be deemed to be a drug with a high likelihood for abuse, with no accepted medical use.

In particular, the Act provides for a streamlined process for the approval of cannabis research applications as follows:

An applicant under the Act must submit a completed application to the U.S. Attorney General, which the Attorney General must approve, deny, or request additional information within 60 days. The application must include: 1) details relating to the applicant’s research protocol, reviewed and approved by the Secretary of the Department of Health and Human Services (the “DHS”), the National Institutes of Health, or another agency, or according to provisions in the Federal Register, and 2) the safety measures to prevent diversion of cannabis substance (including storing it in a locked, constructed cabinet).
If the Attorney General requests additional information and the applicant so provides, the Attorney General must approve or deny the application within 30 days of the applicant providing such additional information. If the Attorney General ultimately denies any application, an explanation of the denial must be provided.
A registrant may update its research protocol without informing the Drug Enforcement Administration, if the quantity and form of cannabis, the source of the cannabis, and the conditions of storage will not change. If any of the foregoing items will change, the registrant must notify the Attorney General via registered mail or an electronic means permitted by the Attorney General.
If the Attorney General does not object to the changed protocol within 30 days, it is considered approved and the registrant may go ahead with the changed protocol.

Moreover, the Act also streamlines the process for applying to manufacture cannabis products for research purposes. The application timeline is similar to the research application process, but will only begin when the Attorney General posts in the Federal Register that the Attorney General’s office will increase the number of entities able to be registered under the Act as manufacturers of cannabis for medical research purposes. Then, entities may submit applications to the Attorney General. The application must show:

The requirements of the Act and the Federal Register have been satisfied.
The applicant will only transfer cannabis to those who are registered under the Act to perform preclinical or clinical research.
The applicant will only transfer or sell cannabis under the Act with the prior written consent of the Attorney General.
The applicant has completed the review process set forth in 21 U.S.C. § 823(a) of the Controlled Substances Act, which discusses general registration requirements for manufacturing Schedule I and II Controlled Substances.
The applicant has established and actually follows a process for storing and handling a Schedule I controlled substance.
A license to operate, if the State in which the applicant operates requires one.

The Act further authorizes registered covered institutions of higher education, like medical schools and research schools, to manufacture, distribute, dispense and possess cannabis for medical research, with guidance from the DHS and the U.S. Food and Drug Administration.

Additionally, the Act allows for doctors to discuss with their patients, and their patients’ parents if the patient is a minor, the potential benefits and risks in using medical cannabis under state medical cannabis laws. Prior to the Act, it was unclear whether such an act was a punishable offense under federal law. Senate Majority Leader Chuck Schumer is hopeful this provision, and the Act in general, will help patients with conditions like Parkinson’s, epilepsy, and severe post-traumatic stress.

Lastly, the Act requires the DHS to report to Congress on particular topics of research, including but not limited to, the effects of cannabis on the human body, effects on the adolescent brain, potential impairment of cognitive ability, and barriers and solutions to studying cannabis from states with legal cannabis.

Importantly, there are a few things the Act does not do. The Act does not allow research using state-legalized products for medical research purposes; the Act only allows for using the products manufactured through the Act’s protocols. Therefore, there will not be research into the products people are currently using to treat their medical ailments under state medical cannabis laws. Furthermore, as mentioned above, the Act does not de-schedule or re-schedule cannabis. President Biden issued an executive order in October asking the Secretary of the DHS and the Attorney General to begin the administrative process of de-scheduling cannabis. Presumably, research performed under this Act may lead to either de-scheduling or re-scheduling cannabis, but it is far too soon to tell.

Additionally, the Act does not implement more widespread reform. President Biden issued a pardon last month for simple cannabis possession offenses under federal law, but further reform will not be enacted unless the Senate passes one of several reform bills on the table. Even so, critics and proponents alike across the political spectrum, are lauding the Act as a necessary step for the federal government to catch up to the state legalization wave.

To read the full text of the Act, see https://www.congress.gov/bill/117th-congress/house-bill/8454/text.

November 17, 2022 by Duane Morris

Could Cannabis Banking Reform Finally Pass In Lame Duck?

In the Nov. 8 midterm elections, voters in both Maryland and Missouri approved legalization of cannabis for adult use, while voters in Arkansas, North Dakota and South Dakota voted no on legalization.

With the passage in Maryland and Missouri, 21 states as well as the District of Columbia have now legalized cannabis for adult use, and another 16 states permit cannabis for medical use.

Despite the fact that nearly half of all states have now legalized cannabis for adult use, it remains illegal under the federal Controlled Substances Act as a Schedule I drug, along with drugs like heroin and LSD. Such a classification means that cannabis has a high potential for abuse and has no acceptable medical use, despite research to the contrary.

To read the full text of this article by Duane Morris attorney Deanna Lucci, originally published in Law360, please visit the firm website.

November 9, 2022November 9, 2022 by Seth A. Goldberg

Pennsylvania Almost Surrounded With Adult-Use Cannabis

Cannabis had a decent day at the polls yesterday, with voters in Maryland and Missouri legalizing adult-use, bringing the number of adult-use states to 21, but voters in Arkansas and the Dakotas voted against adult-use. With Maryland legalizing adult-use, Pennsylvania, which has a medical marijuana program, is getting closer to being surrounded by states where adult-use is legal. Across it’s northern, eastern, and southern borders Pennsylvania is now adjacent to adult-use states – New York, New Jersey, and Maryland. All three states are predicted to generate billions each in cannabis sales.

The election of Josh Shapiro as Pennsylvania Governor would guarantee the passage of adult-use legislation should it pass in the Pennsylvania senate. However, notwithstanding the tax revenues, job growth, and overall economic boost expanding from medical marijuana to adult-use would create in Pennsylvania, most believe state legislators are not there. Perhaps revenues lost from Pennsylvanians crossing the border to buy cannabis in New York, New Jersey, and Maryland will make the difference.

November 7, 2022November 8, 2022 by Deanna J. Lucci

New York Expects 20 Dispensaries to Open by End of Year and Issues Guidance for the State’s First Adult-Use Retail Cannabis Dispensaries

On October 28, 2022, the New York Office of Cannabis Management (OCM) released forward-looking guidance for those seeking to operate within the state’s recreational cannabis market.

The Background

In January, Gov. Kathy Hochul published an extensive State of the State book, laying out New York’s plan for 2022, including $200 million loan fund in support of social equity applicants within the state’s nascent marijuana market.

The state government set a goal of opening dispensaries by the end of the year that will allow New Yorkers to legally purchase cannabis. Hochul told the editorial board of Advance Media, owner of the Syracuse Post-Standard, that the state would open 20 dispensaries by the end of the year, with another 20 opening each month thereafter.

On October 17, Hochul told reporters that New York is “on track” to open some cannabis dispensaries within months.

Under Hochul’s plan, it is up to the state to select and lease locations for the dispensaries, including 70 in New York City. While the state’s OCM has not yet announced any locations for dispensaries anywhere in the state, it recently issued guidance in clear anticipation of this plan unfolding in the near future.

The Regulations

The New York OCM’s “Guidance for Adult-Use Dispensaries” is a series of prospective regulations for Conditional Adult-Use Retail Dispensary (CAURD) licensees and applications and are immediately effective.

The 27-page document includes requirements and operational rules addressing everything from operations and compliance measures to marketing, sales and distribution parameters, while providing insight into the OCM’s plans for issuing licenses when the time comes. This includes topics of record-keeping requirements, required training for staffers, and inventory and tracking requirements, among others.

While these guidelines are not yet formally adopted and enacted as rules, they at least offer both CAURD licensees and regulators a “working” preview of the New York Cannabis Control Board’s (CCB) expectations for the forthcoming dispensaries.

Indeed, the document states that it “serves to provide the framework that will assist CAURD licensees plan for how to operate their dispensary before regulations are formally adopted. . . and provides clarity on what the Office’s expectations are in relation to those regulations and laws currently in place and the regulations that will be promulgated in the future.”

What Does This Mean for CAURD Licensees?

The state and regulators are gearing up for the opening and development of these dispensaries, possibly within the next few weeks, and throughout the next 15 months. CAURD licensees in New York should adhere to OCM’s newest guidance, in addition to existing Cannabis Law and Title 9 of the New York Codes, Rules and Regulations, until a copy of the final regulations is made available on the OCM’s website.

On November 3, a Business of Cannabis: New York panel discussion ensued, where much of the conversations centered on the importance of providing equal opportunities to small business and justice-involved entrepreneurs to participate in the industry. Panel participants included Tremaine Wright, Chair of the CCB, Crystal Peoples, New York State Assembly Majority Leader, and Jeremy Berke, Reporter for Business Insider.

The same day, Wright tweeted, “[New York] is on target to open stores by the end of the year.” Axel Bernabe, Chief of Staff & Senior Policy Director for OCM, who delivered the keynote more specifically assured, “In 15 months, we’ll have a fully established supply chain built on social equity. That supply chain will form the backbone of what we’re going to build on in the future.”

Qualifying New York small business owners and entrepreneurs should keep a close pulse on this evolving regulatory landscape over the coming weeks and months to ensure they remain in legal compliance and best positioned to take full advantage of this next phase of the state’s cannabis initiative.