Three decisions staying CBD class actions in two months may signal a trend, especially considering that the Courts in these cases refer to the other’s decisions. Such a trend may keep the plaintiffs’ bar at bay, as it would cast doubt on the viability of consumer class actions asserting CBD violations, or at least it could make the cases less appealing to the plaintiffs’ bar because a stay makes the timing of a settlement or resolution even more uncertain.
Duane Morris has been named a top law firm for cannabis law by Business Insider. The publication reached out to 29 players in the cannabis industry, from VCs to startups to multistate operators, to get their take on the best law firms in the industry.
Firm Profile from the Publication
Involved in cannabis: 2015
Recommended by: Panther Opportunity Fund, Salveo Capital
Their clients range from those directly cultivating and selling cannabis products to investors in the industry. A spokesperson for the firm said that the group advises clients in a variety of areas, including regulatory, intellectual property, and litigation law.
For more information, please visit the Business Insider website (subscription required).
Consumer class actions regarding CBD marketing are on the rise. In recent months, a number of federal judges have placed lawsuits concerning the marketing of CBD-infused products on hold because the U.S. Food & Drug Administration—tasked with regulating those products under the 2018 Farm Bill—still has not issued regulations governing how they can be marketed. This further complicates the already confusing federal-state regulatory structure concerning the treatment of CBD products.
Earlier this week, the New Jersey Department of Health (DOH) issued permits allowing Zen Leaf Elizabeth (Verano NJ) in Elizabeth and Columbia Care in Vineland to begin dispensing medical marijuana.
These 2 new operations bring the total number of operating dispensaries in the state to 11. Zen Leaf Elizabeth is scheduled to open Friday, May 29 and Columbia Care will likely open in early June.
The 9 other ATCs currently dispensing medical marijuana include Greenleaf Compassion Center of Montclair, The Botanist (Compassionate Care Foundation) of Egg Harbor and Atlantic City, Garden State Dispensary of Woodbridge and Union Township, Breakwater Alternative Treatment Center of Cranbury, Curaleaf NJ, Inc. in Bellmawr, Harmony Dispensary in Secaucus and Rise in Paterson.
In March, the DOH issued several waivers to improve ATC operations during the COVID-19 pandemic. These included waivers that allowed for curbside pick-up, telephonic consultations (instead of in-person), volume-based discounts and reduced caregiver fees.
Participation in the medical program continues to grow. According to the DOH, there are currently over 77,000 patients, 3,000 caregivers and 1,100 physicians enrolled. Patients and caregivers can visit the Division of Medicinal Marijuana’s website if they choose to change their preferred ATC. http://www.nj.gov/health/medicalmarijuana/
The change can also be made by calling the Customer Service Unit of the Division at 844-419-9712 and does not require changing ID cards.
Duane Morris has a robust Cannabis Practice Group to assist clients in all facets of the cannabis arena including formation, licensing, fund raising, regulatory, real estate, and intellectual property. Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team’s webpage.
For Further Information:
If you have any questions about this post, please contact Brad A. Molotsky, Paul Josephson or the attorney in the firm with whom you are regularly in contact.
The COVID-19 pandemic has wreaked havoc on nearly every industry in the global economy. The nascent and volatile cannabis industry was not exempt and, in some jurisdictions, has been impacted significantly due to local or state shelter or stay-at home orders. In most states where adult-use cannabis is legal, local and state governments have deemed cannabis businesses as essential and, thus, are permitted to continue operating notwithstanding local or state shelter orders. However, despite their characterization as essential businesses, many limitations imposed by local or state shelter orders have greatly affected the way cannabis businesses operate. As a result, cannabis businesses have experienced steep declines in their revenues and, in some instances, have left cannabis businesses unable to perform contractual obligations that they entered into pre-pandemic.
Seth Goldberg, partner and team lead of Duane Morris’ Cannabis Industry Group, discusses with Law360 how the COVID-19 pandemic has affected the industry and shares how he and his family have been adapting.
Below are highlights from the article:
What challenges has the pandemic created in your specific area of work?
From a pure business standpoint, the pandemic has been bittersweet for the cannabis industry. Many of our clients have fared well because state-licensed medical marijuana businesses have been deemed “essential” in all states that have legalized medical marijuana. However, as in every industry, the pandemic has created workforce issues and has also impacted performance. […]
How are you and your family adapting at home?
It’s fun, especially if you like practicing law while teaching fourth-grade math, negotiating screen time for two 13-year-olds, and keeping a college-bound senior interested in completing high school remotely. A breakthrough was convincing the four kids that the internet on their laptops would be faster if they turned the wifi on their cellphones off!
What is the most creative or productive response to the crisis you’ve witnessed so far?
My daughters insisting that buying three “fancy mice” would be a good substitute for friends and classmates.
Duane Morris has developed a tremendously responsive and informative COVID-19 task force that is, on a daily basis, providing incredibly insightful information about all aspects of the legal issues and implications of the pandemic, including contractual, employment, insurance and health care issues. […]
Seth Goldberg, partner and team lead of the Cannabis Industry Group, is also ranked as a national leading attorney in Cannabis Law.
What the team is known for Utilizes cannabis expertise on a nationwide basis and across a broad spectrum of practice areas, with practitioners specializing in IP, corporate transactions and regulatory advice within the sector. Offers expanded capabilities in the wake of the 2018 Farm Bill for clients trading in hemp and hemp-derived CBD products. Also boasts litigators able to handle contentious issues for producers and distributors across the industry.
Strengths“Outstanding is the first word I’d choose to describe their service,” says one client, who notes that the team is “creative and always very informative in an industry changing on an almost daily basis.“
Another client says: “The group is very polished, professional and experienced.”
Work highlights Represented iAnthus Capital Holdings as US counsel in connection with its all-stock merger with MPX Bioceutical.
Notable practitioners Seth Goldberg boasts high-level experience advising cannabis businesses throughout their life-cycle. Clients say: “Seth is a great businessman – not only does he understand the law, but also the business realities of things, which makes him a great adviser from that perspective.”
Duane Morris is sponsoring an Advance 360 Cannabis Insider Live Online webinar, “Cannabis and COVID-19: Where Does America Go From Here?” to be held on Wednesday, May 13, 2020, at 1:00 p.m. Eastern time and 10:00 a.m. Pacific time.
Advance 360 Cannabis Insider Live Online presented by Duane Morris LLP and hosted by NJ Cannabis Insider editor Justin Zaremba, is a highly focused, information-driven talk designed to engage audiences about the most pressing concerns and challenges communities face as the state and federal government navigate the Covid-19 crisis.
News remains fluid day by day in these uncertain times. That said, there has been some progress in the cannabis space out of sheer necessity: curbside pickup and home delivery in some markets to aid medical marijuana patients. A renewed call to allow patients to grow their own weed and telemedicine are also at the forefront of possible changes, especially as the country remains in lockdown. Research for medical cannabis applications, lab testing for reliable and quality medicine and CBD and a resurgent hemp industry are also making strides, despite a stalled economy.
Can a federally legal cannabis industry help rescue the economy as we enter into what might be one of the worst recessions since the Great Depression? Some analysts believe it will be similar to the way the end of alcohol prohibition boosted the country’s economy at the end of the Great Depression.
Earl Blumenauer, United States Congressman
Karen O’Keefe, Director of State Policies for Marijuana Policy Project
Chris Melillo, Senior Vice President of Retail Operations for Curaleaf
Katie Neer, Director of Government Affairs for Acreage Holdings and an Associate at Greenberg Traurig
In an April 28th letter authored by the American Trade Association for Cannabis and Hemp (ATACH) and the Policy Center for Public Health and Safety, 24 state-level cannabis trade associations from across the country called on Congress to end the Small Business Administration’s exclusion of cannabis businesses from COVID-19 federal funding relief.
Although a number of states have deemed medical marijuana companies- and in some cases adult use marijuana companies- “essential” businesses, the SBA has excluded them from the Economic Injury Disaster Loans because marijuana is still a prohibited Schedule 1 Controlled Substance. Even worse for the industry, SBA has included ancillary cannabis companies in its prohibition. The cannabis industry is also ineligible for the Paycheck Protection Program and the Employee Retention Credit.
This issue was first flagged by industry groups in early April when they wrote to governors asking them to fill the gap. The industry’s allies in Congress then took up the cause. Almost three dozen members of the U.S. House of Representatives signed a letter to congressional leaders urging that cannabis companies be included in future federal relief packages aimed at stimulating the economy during the COVID-19 outbreak. A group of 10 U.S. senators followed on April 22nd with their own letter urging congressional leaders to include small, state-legal marijuana businesses and ancillary companies in any future coronavirus relief packages. On April 23rd, Reps. Earl Blumenauer and Ed Perlmutter introduced the Emergency Small Business Health and Safety Act which would make cannabis businesses eligible for the SBA programs.
The ATACH letter urges Congress to amend the CARES Act to make cannabis businesses eligible for all available loans tax credits and other pandemic-related assistance. The letter also suggests Congress authorize fixed block grants to each state for non-specific pandemic relief. This would leave it up to the stated to tailor relief efforts and a individual state could make funds available to cannabis businesses.
As a commercial litigator who has handled a broad range of claims in highly regulated industries over the past 20 years — particularly in complex matters such as class actions involving claims brought by consumers and shareholders — and given my experience spearheading the development of Duane Morris’ cannabis industry group, which has included providing regulatory and business advice to a number of businesses and individuals with cannabis-related interests, I have been expecting the maturing cannabis industry to eventually mirror other industries when it comes to using commercial litigation to resolve disputes between businesses and to address claims of injury allegedly experienced by aggreived consumers and shareholders. It appears the time has come. Now, as opposed to even just a few months ago, not a day goes by when the daily legal news outlets that report on litigation matters filed in federal and state courts around the country do not include matters pertaining to adult use marijuana, medical marijuana, and/or hemp.
Today alone, legal news outlets are reporting about a shareholder deriviative action being filed against the manufacturer of cannabinoid-containing transdermal patches, a maker of mobile hemp dryers suing a distributor for alledgedly stealing trade secrets, a publicly-traded company that owns cannabis brands being sued for breach of contract by an MSO arising out of a failed merger agreement. Claims like these are among the many product liability, stock-drop and securities fraud, tradmark infringement, FLSA, and employment litigation matters to be filed in 2020 relating to cannabis; not to mention the federal and state regulatory cannabis-related enforcement actions also commenced. Just as in other industries, COVID-19 is likely to spur litigation in the space because of strains on resources and performance caused by business disruptions and the slower economy. To be sure, the plaintiffs’ bar has cannabis on its radar.
Thus, now more than ever, it is critically important for cannabis businesses to implement the necessary compliance measures, including making sure appropriate insurance coverage, e.g. premises, products, and D&O, has been obtained, that could protect their businesses from the cost and disruption of commercial litigation. Likewise, cannabis-specific nuances, such as the enforceability of contracts and jurisdictional questions, require careful evaluation by experienced counsel advising plaintiffs and defendants who are considering filing, or who have been brought into, a commercial litigation.