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.
In a field rife with rapid regulatory changes and legal uncertainty, Duane Morris LLP’s experience advising multimillion-dollar acquisition and tax settlement deals has placed it in the forefront of major industry developments, earning it a spot on Law360’s 2022 Cannabis Groups of the Year.
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 .
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”
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, seeCity 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”
Not long ago, the Honorable Gary Sharpe, of the United States District Court for the Northern District of NY, granted Variscite NY One, Inc.’s (Variscite) request for an injunction prohibiting the NY State Office of Cannabis Management (NYOCM) from providing the initial batch of conditional retail operating licenses stemming from an application program held between August 25, 2022 and September 26, 2022. This month-long application period resulted in New York planning to issue 150 retail dispensary licenses, for which the injunction affects 63.
Variscite and Gay filed a complaint on September 26, 2022 against the NYOCM, and moved for an injunction soon after, arguing that the application process approved by the NYOCM is unconstitutional because it unlawfully restricts interstate commerce in violation of the dormant Commerce Clause. Plaintiffs sought an injunction prohibiting the NYOCM from issuing any licenses in certain New York geographic areas. Continue reading “Will SCOTUS Remain Dormant?”
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”
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”
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.
The New York Cannabis Control Board (the “Board”) held a public meeting on November 21, 2022, during which it approved a number of conditional license applications and voted to publish new and revised regulations for public comment. These approvals represent important steps forward in New York’s rollout of its adult-use legalization plans. In approving both the license applications and proposed regulations, the Board highlighted New York’s commitment to social and economic equity as principles underlying its regulatory scheme.
The state aims to begin adult-use cannabis sales by the end of this year. To this end, the Board has accepted applications for three different components of the supply chain: growing, processing, and cultivating. During last week’s meeting, the Board approved of measures granting eight applications for conditional cultivator licenses, and eight for conditional processor licenses. The application period for the third sector of the supply chain, Conditional Adult-Use Retail Distributors (“CAURD”), closed in September, and the Board received more than 900 applications. The Board voted to issue the first of New York’s CAURD licenses, to 29 business applicants and eight nonprofits, subject to the applicants’ submission of final application materials. Once these entities receive final licensure, they will be permitted to sell cannabis products grown and processed in New York State. The Board will continue to review applications and issue licenses on a rolling basis, to qualifying businesses owned by justice-involved individuals.
The Board also voted to publish revised regulations for product packaging and laboratory testing, and to publish a comprehensive package of proposed regulations. The Proposed Adult-Use Cannabis Regulation Package addresses, among other items, the application process and ownership and licensing requirements; protections for cannabis businesses from discrimination by municipalities; environment and sustainability regulations, including requirements for sustainable packaging and energy use tracking and water use conservation measures by growers and processors; and social and economic equity. The Board noted during this meeting that enforcement for cannabis-related offenses has affected minorities in New York even more disproportionally than in other states, and New York is now prioritizing these affected groups in its licensing and funding. The state will also prioritize other licensing applicants, including disabled veterans, minorities, women, and distressed farmers. New York’s cannabis laws create a “two-tier” market, which discourages vertical integration by prohibiting common ownership of retailers and suppliers and imposing certain disclosure requirements. The Board approved publication of this set of regulations for a 60-day public comment period.
The Board noted that this meeting included several milestones – particularly the approval of the first set of CAURD licenses and publication of the proposed regulation package. The Board’s focus moving forward will be to get current licensees up and running and continue to review and approve new applications.