ATACH – Cannabis Industry

April 8, 2024April 8, 2024 by Duane Morris

Webinar: Mainstreaming Cannabis: Real Estate and Valuation

The Duane Morris Cannabis Industry Group, the American Trade Association for Cannabis and Hemp and Centri Business Consulting present Mainstreaming Cannabis: Real Estate and Valuation on Thursday, April 25, 2024, from 12:00 p.m. to 1:00 p.m. Eastern.

As with any type of business, the cannabis industry faces real estate concerns ‒ but with particular lease-related issues unique to the field. Facilities for the cultivation, manufacturing and distribution of cannabis and cannabis products are important not only to cannabis operators, but also investors and landlords, all of whom face federal, state and local regulations that can vary by location. Our panel will discuss the interplay between state and federal laws as it relates to cannabis regulations and implications for real estate transactions. REGISTER FOR THE WEBINAR.

March 20, 2024 by Seth A. Goldberg

Attorney Generals Ask Congress to Fix Farm Bill “Loophole”

In a letter to Congress, 20 state Attorney Generals urge steps be taken in the upcoming Farm Bill to correct the loophole in the 2018 Farm Bill’s definition of hemp that has been exploited by those producing and distributing products chemically synthesized from hemp that are just as intoxicating, if not more so, than the cannabis sold under state-regulated cannabis programs. Noting the public health and safety concerns of such hemp-synthesized intoxicants (HSIs), and the fact that their legalization was not intended by way of the 2018 Farm Bill, the AGs suggest the Farm Bill expected this year explicitly reserve for the states the power to regulate HSIs.

Duane Morris client the American Trade Association for Cannabis & Hemp has taken a similar position in amicus briefs filed in the Eighth and Fourth Circuit Court of Appeals in Bio Gen LLC et al. v. Sanders et al. and Northern Virginia Hemp and Agriculture, LLC et al v. Commonwealth of Virginia et al.

February 8, 2024 by Duane Morris

Webinar Replay: Bankruptcy, Receiverships and Reorganization

A webinar replay of Mainstreaming Cannabis: Bankruptcy, Receiverships and Reorganization is now available for viewing.

November 1, 2023November 2, 2023 by Seth A. Goldberg

Virginia’s Restriction of Hemp Synthesized Intoxicants Upheld by Federal Court

On October 30, 2023, in Northern Virginia Hemp and Agriculture LLC, et al., v. The Commonwealth of Virginia, the U.S. District Court for the Eastern District of Virginia refused to enjoin a Virginia statute, SB 903, aimed at curbing the production and distribution of products containing intoxicating chemical compounds derived from federally lawful hemp (“Hemp Synthesized Intoxicants” or “HSIs”). SB 903 imposes upon hemp products, including edibles and smokables, industrial hemp extracts, and any other consumable substance, a limit of no greater than .3% total THC concentration and no more than two milligrams of total THC per package or amount of cannabidiol that is no less than 25 times greater than the amount of total THC per package.

This restriction, referred to as a “Total THC Standard,” is intended to prevent the sale to consumers of ingestible, smokable, and otherwise consumable products that contain intoxicants derived from federally lawful hemp that are the functional equivalent of the delta-9 THC in federally unlawful marijuana. Such products have proliferated since the 2018 Farm Bill because chemical processes can be used to convert the chemicals in hemp into intoxicating compounds like delta-8 THC.

The Court in No. VA Hemp determined that the plaintiffs were unlikely to succeed on the merits of their claims because, among other things, the 2018 Farm Bill did not preempt states from regulating hemp products sold in their states.

October 31, 2023November 2, 2023 by Seth A. Goldberg

AG Consumer Protection Lawsuits Target Delta-8 and Perceived “Loophole” in 2018 Farm Bill

The Nebraska Attorney General and the California Attorney General have filed lawsuits recently under their states’ consumer protection statutes targeting the manufacturers of hemp products containing Delta-8 THC, noting the health and safety risk to consumers of these products. Such products, known as “hemp synthesized intoxicants” or “HSIs” are often just as intoxicating as the Delta-9 THC in state-legal adult-use and medical marijuana, but may not be subject to the same types of licensure, testing, and packaging/labeling requirements imposed under state cannabis programs.

As I have previously written, the manufacture and distribution of HSIs appears to be the result of a perceived loophole in the 2018 Farm Bill’s legalization of hemp and its “derivatives, extracts, cannabinoids, isomers.” Proponents of HSIs assert that, in defining hemp in the 2018 Farm Bill, Congress did not prohibit the chemicals in hemp from being converted into psychoactive compounds.

Opponents of HSIs argue that hemp was legalized as an agricultural commodity, and the 2018 Farm Bill was focused on the production (cultivation) of hemp, not consumer finished products that could be manufactured using its constituents. They posit that Congress did not intend for the chemicals in hemp to be converted into a host of compounds just as intoxicating as Delta-9 THC.

State AG consumer protection lawsuits against manufacturers of products containing HSIs are an attempt to curb their proliferation. Congress may address the perceived loophole that is being exploited to manufacturer HSIs in the forthcoming Farm Bill.

October 30, 2023November 2, 2023 by Seth A. Goldberg

Did Congress Intend to Legalize Intoxicating Hemp Products in the 2018 Farm Bill?

The 2018 Farm Bill legalized “Hemp,” defining it as “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.” The .3% delta-9 THC threshold distinguishes hemp from marijuana, which remains a federally unlawful Schedule I controlled substance, based on the psychoactive effect of delta-9 THC.

Today, consumers can walk into convenience stores, gas stations, and the like, or shop online, and purchase an array of cannabis products that have the same psychoactive effects as delta-9 THC in federally unlawful Marijuana, i.e., delta-9 THC at greater than .3% on a dry weight basis, but, because they were manufactured using “derivatives, extracts, cannabinoids, isomers” found in Hemp, their manufacturers claim they are legal. These products, which contain delta-8 THC, delta-10 THC, and other chemical compounds, are the result of chemical processes that convert the Hemp “derivatives, extracts, cannabinoids, isomers” into compounds that are the functional equivalent of the delta-9 THC in federally unlawful Marijuana.

Manufacturers of delta-8 products believe the 2018 Farm Bill does not prohibit the conversion of the “derivatives, extracts, cannabinoids, isomers” in Hemp into an intoxicating compound, which begs the question: did Congress really intend to legalize intoxicating compounds created from Hemp “derivatives, extracts, cannabinoids, isomers” that are functionally equivalent to the delta-9 THC in federally unlawful Marijuana? It would seem that the .3% delta-9 THC distinction between Hemp and Marijuana is about psychoactive effect, not about a particular chemical.

July 7, 2023July 10, 2023 by Seth A. Goldberg

ATACH Calls for the Regulation of Hemp-Synthesized Intoxicants

Since the legalization of Hemp under the 2018 Farm Bill, a market has grown for products that synthesize Hemp-derived compounds into intoxicants that provide a high for consumers. Manufacturers of such products claim they are legal because they were synthesized from federally legal Hemp. Because FDA and most states do not have regulations specifically addressing such Hemp-synthesized intoxicants, products containing Delta-8, Delta-10 and a synthesized version of Delta-9 are being marketed widely, and with little, if any, federal or state regulation. Consequently, such products propose a health and safety risk to consumers, and undermine state-legal cannabis programs throughout the U.S. Last week, the American Trade Association for Cannabis & Hemp issued a comprehensive policy paper calling for the regulation of Hemp-synthesized intoxicants. ATACH urged federal and state lawmakers, as follows:

- Amend the definition of hemp to account regulation for final product
- Adopt standards for all intoxicating cannabinoids, whether from marijuana or hemp
- TTB should regulate intoxicating products in adult-use settings
- FDA should provide a pathway for non-intoxicating cannabinoids such as CBD
- State labs should be provided with federal technical assistance
- Retail sales should be limited to adults 21 or over anywhere intoxicants are available
- Intoxicating cannabinoid products should be regulated in marijuana programs
- Regulators should adopt uniform testing and labeling standards
- Enforcement efforts should be supported, and regulations should promote public health and safety

March 23, 2022June 13, 2022 by Seth A. Goldberg

Why Cannabis Beverages are a Good Bet

Constellation Brands, Boston Beer, Molson Coors, PepsiCo, Jones are some of the beverage companies betting on drinks with THC or CBD, adding them to their beverage product lines, as are cannabis drink makers like CANN Social Tonics, Keef, and Artet. Here’s why:

Just about everyone enjoys socializing with a drink in their hand. Wherever people are gathering, from couples to small groups to large events, whether at a bar, cocktail party, friends/family get together, a game or other outing, most people have a drink in their hand. Years ago cigarettes were as ubiquitous in social settings, but those days are long gone – smoking, because of its health effects and smell, has become obsolete if not shunned. The same stigmas seem even more pronounced when it comes to smoking or vaping cannabis, plus there is the added stigma of “getting high,” which, for some reason, as a general matter, seems less socially acceptable than “getting drunk.” Cannabis drinks are not burdened by these stigmas.

Moreover, just like alcoholic beverages, cannabis drinks allow the consumer more control over their psychoactive experience. Just as consumers use beer, wine, and spirits for a range of intoxication, cannabis drinks can be consumed in the same way. A few sips of a cannabis beverage with 10 mgs of THC may be enough for some to get a slight euphoric buzz that does not interfere with their socializing like a beer or two might give someone a slight buzz that does not interfere with their socializing. In this way, cannabis beverages stand in contrast to high-THC products like vapes, butter, and shatter, just as shots of tequilla, vodka, and jager stand in contrast to beer and wine.

Cannabis drinks are a good bet because they largely avoid the stigmas of smoking and getting high, and, in so doing, make THC and CBD accessible to consumers who have withheld from using cannabis because of them. Add to that the flexibility and control of micro-dosing, and cannabis drinks become more appealing to more people in more social situations. This is why beverage companies and cannabis companies are betting on cannabis drinks.

November 4, 2020November 4, 2020 by Seth A. Goldberg

State-Legal Marijuana a Clear Winner in 2020 Voting

Voters in the five states where the legalization of marijuana was on the ballot voted in favor.

In the populous states of New Jersey and Arizona, voters legalized marijuana for recreational use by adults over the age of 21. Given New Jersey’s proximity to New York and Pennsylvania, where medical marijuana programs have been popular, legalization in New Jersey could have a domino effect in the northeast, especially considering the tax revenue that will be gained by New Jersey from New York and Pennsylvania residents who travel there every day for work, the Jersey shore and casinos, and other reasons.

Voters in South Dakota and Montana also voted to legalize marijuana for recreational purposes, South Dakota voters also approved medical marijuana, and voters in Mississippi voted to legalize marijuana for medical purposes to treat 22 qualifying health conditions.

Seth Goldberg is a Team Lead of the Cannabis Industry Practice at Duane Morris.

September 4, 2020 by Duane Morris

Duane Morris Partners Seth Goldberg and David Landau Named to ATACH CBD Task Force

Duane Morris partners Seth Goldberg and David Landau have been named to the American Trade Association for Cannabis and Hemp (ATACH) Task Force, which will focus on the harmonization of laws and regulations that contribute to the bifurcated treatment of hemp and marijuana, as well as the evolving regulatory landscape for cannabis industry participants. Mr. Goldberg, a team lead for the Duane Morris Cannabis Industry Group, joined ATACH president Michael Bronstein and Gary Kaminsky of Acreage Holdings in their meeting with the White House’s Office of Management and Budget in August.

For more information, visit the ATACH website.