Tag Archives: cannabis

Update: House to Vote on Historic MORE Act in December

As an update to our September 4th blog post, the House of Representatives was scheduled to vote on the historic MORE Act on September 21.  However, days before that vote House Democrats postponed the vote indefinitely.  It was reported that moderate Democrats expressed concern about voting on the MORE Act before voting on a second Coronavirus relief package.  House Judiciary Committee Chairman Jerry Nadler (D-N.Y.), the bill’s sponsor, suggested the vote could be delayed until after the November elections. However, House Majority Leader Steny Hoyer (D-Md.) said in an emailed statement that Democratic leaders were “committed” to scheduling a vote on the bill before the end of the year.

On Monday, November 9, Hoyer wrote in a letter to colleagues that the House would vote on the MORE Act in December.  Hoyer’s letter did not specify which week the vote will take place, but the House is scheduled to be in session Dec. 1-4 and Dec. 7-10.

As discussed previously on this blog, if enacted The MORE Act (Marijuana Opportunity Reinvestment and Expungement Act of 2019 – H.R. 3884) would legalize marijuana and cannabis at the federal level, by removing them from the Controlled Substances Act and eliminate some cannabis criminal records.  As Hoyer wrote in his letter this week, the MORE would “decriminalize cannabis and expunge convictions for non-violent cannabis offenses that have prevented many Americans from getting jobs, applying for credit and loans, and accessing opportunities that make it possible to get ahead in our economy.”

While it is unlikely that this legislation would pass in the Republican-controlled Senate – ensuring it will die this Congress – proponents of cannabis legalization have hailed the House vote as historic, and an important first step toward generating the momentum and support needed to favorably position the measure for future congressional consideration. And whether the measure would be approved by the next Congress likely depends on the outcome of the two Georgia Senate runoff elections set to take place on January 5, 2021.  If both Democratic Senate candidates, Jon Ossoff and Rev. Raphael Warnock, win the runoffs, then the Democrats will control both the House and Senate.

However, it is unclear if President-Elect Joe Biden would sign the bill since he has proposed rescheduling cannabis as a schedule II drug so researchers can study its positive and negative impacts as opposed to removing it entirely from the list of scheduled substances.  While Biden has expressed support for decriminalization of marijuana, expungement of prior cannabis use convictions, and legalizing cannabis use for medical purposes, he has said he wants to leave decisions regarding adult recreational use to the individual states.  Nonetheless, marijuana legalization advocates believe even a symbolic vote on the legislation could send a strong signal to the Biden administration.

 

 

 

 

 

State-Legal Marijuana a Clear Winner in 2020 Voting

Seth Goldberg
Seth A. Goldberg

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

All in a day’s work at the PTAB: Post-grant review denied for psychedelic therapeutics patent-Schedule I status irrelevant

In 2019, the Patent and Trial Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) issued a decision in the first inter partes review of a cannabis related patent (Insys Development Company, Inc. v. GW Pharma Limited and Otsuka Pharmaceutical Co., (IPR 2017-00503)) (“Insys”). That decision was of interest to stakeholders in the cannabis industry particularly for what was not stated in any of the proceedings. Because enforcement of patent rights is governed by federal law, the Schedule I status of cannabis has cast uncertainty over whether cannabis patent rights can actually be challenged or enforced. The Schedule I status of cannabis did not enter into the PTAB’s decision, which was based solely on the obviousness of the claims. The PTAB proceeding showed that just like any other patents, cannabis related patents can be challenged. (See the following link for more information: https://blogs.duanemorris.com/cannabis/2019/01/16/business-as-usual-at-the-patent-and-trial-appeal-board-the-first-cannabis-related-patent-and-trial-appeal-board-decision-at-the-united-states-patent-and-trademark-office/)

Now, in 2020 the PTAB has issued a decision denying a petition for post-grant review of a psychedelic therapeutics patent. (Kohn &  Associates, PLLC v.  Compass Pathways Limited, Pet. for Post-Grant Review, PGR2020-00030, filed February 21, 2020) (“Compass Pathways”). Post-grant review is a trial proceeding at the PTAB that permits a third party to challenge the validity of claims of a granted patent. The first step in the post-grant review process is the filing of a petition by the challenger requesting post-grant review. The challenger must convince the Board that it is “more likely than not” that at least one of the challenged claims is not patentable. If the Board is not persuaded by the challenger’s arguments, the petition is denied and no post-grant review will take place. This is what happened in Compass Pathways.

Similar to its decision in Insys, the PTAB’s decision on the psychedelic therapeutics patent in Compass Pathways had nothing to do with the Schedule I status of psychedelic therapeutics. This recent PTAB proceeding demonstrates that psychedelic therapeutics patents can be challenged and that the PTAB will consider that challenge in the same way that it considers challenges to patents on any other subject matter.

Continue reading All in a day’s work at the PTAB: Post-grant review denied for psychedelic therapeutics patent-Schedule I status irrelevant

House to Vote on Marijuana Legalization Bill This Month

For the first time ever, the U.S. House of Representatives will vote this month on legislation that if enacted would legalize marijuana and cannabis at the federal level, by removing them from the Controlled Substances Act and eliminate some cannabis criminal records.

The MORE Act (Marijuana Opportunity Reinvestment and Expungement Act of 2019 – H.R. 3884) would decriminalize marijuana at the federal level by removing it from the list of scheduled substances under the federal Controlled Substances Act, and would further eliminate criminal penalties for an individual who manufactures, distributes, or possesses marijuana.  While the bill represents a first step toward legalizing cannabis, states would need to adopt similar measures to fully decriminalize its use – currently, 11 states and the District of Columbia have legalized cannabis for adult recreational use, and 33 states and the District of Columbia have legalized medical cannabis.

The bill also makes other changes, including:

  • Replaces statutory references to marijuana and marihuana with cannabis,
  • Requires the Bureau of Labor Statistics to regularly publish demographic data on cannabis business owners and employees,
  • Establishes a trust fund to support various programs and services for individuals and businesses in communities impacted by the war on drugs,
  • Imposes a 5% tax on cannabis products and requires revenues to be deposited into the trust fund,
  • Makes Small Business Administration loans and services available to entities that are cannabis-related legitimate businesses or service providers,
  • Prohibits the denial of federal public benefits to a person on the basis of certain cannabis-related conduct or convictions,
  • Prohibits the denial of benefits and protections under immigration laws on the basis of a cannabis-related event (e.g., conduct or a conviction), and
  • Establishes a process to expunge convictions and conduct sentencing review hearings related to federal cannabis offenses.

The bill, which is expected to be brought to the floor for a vote and pass sometime this month, was originally introduced last year by Rep. Jerrold Nadler, D-N.Y. and approved by the House Judiciary Committee in November. While a counterpart bill (S.2227) has been introduced in the U.S. Senate by Sen. Kamala D. Harris (D-CA) – the Democratic Vice Presidential nominee – its passage in the chamber is unlikely as Senate Majority Leader Mitch McConnell (R-KY) has declined to endorse the bill, making its chances of successfully moving through committee and to the Senate floor for a vote virtually impossible. Without action in the Senate, the bill will die this Congress. However, proponents of cannabis legalization – as well as civil rights and civil liberties organizations, and criminal justice reform advocates – are still hailing the House vote as historic, and an important first step toward generating the momentum and support needed to favorably position the measure for future congressional consideration.

Prospects for the successful consideration and approval of the measure by the next Congress will likely hinge on the outcome of the November election.

Vice President Joe Biden, the Democratic presidential nominee, has proposed rescheduling cannabis as a schedule II drug so researchers can study its positive and negative impacts.  Biden has expressed support for decriminalization of marijuana, expungement of prior cannabis use convictions, and legalizing cannabis use for medical purposes – but wants to leave decisions regarding adult recreational use to the individual states. If elected, Biden and Harris would likely seek to decriminalize cannabis but stop short of advocating for federal adult use legalization, allowing the individual states to decide.

Governor Wolf Calls on PA Legislature to Pass a Recreational Cannabis Bill; $1B of CARES Relief

Earlier today, August 25, 2020, Gov. Tom Wolf called on the Pennsylvania legislature to legalize recreational marijuana and use the tax revenue to help small businesses that have been impacted by the COVID-19 pandemic.

According to the Philadelphia Business Journal, Gov. Wolf’s proposal on recreational marijuana was part of a package unveiled to spend the $1 billion remaining out of $3.6 billion CARES Act funding. The Governor called for a range of spending that would include$225 million in forgivable loans and grants to small businesses and another $100 million for restaurants and bars, hospitality and leisure businesses that have taken a big hit since March with business closures and occupancy restrictions. Tax revenue from the sale of recreational marijuana would add to the state’s small business funding and half would go to historically disadvantaged businesses.

To read the full text of this post by Duane Morris partner Brad Molotsky, please visit the Duane Morris Project Development/Infrastructure/P3 Blog.

Is this a Trend? A Third Court Stays Class Action Given FDA’s Primary Jurisdiction Over CBD

Seth Goldberg
Seth A. Goldberg

Yesterday, the U.S. District Court for the Eastern District of California stayed the matter styled Glass v. Global Widget d/b/a Hemp Bombs, a consumer class action alleging that Hemp Bombs, which manufactures CBD-infused edibles, tinctures and capsules, falsely advertised the amount of CBD in its gummies, and thereby sold products that were misbranded and adulterated under the Food, Drug & Cosmetics Act (FDCA), on the basis that the regulation of CBD is withing the primary jurisdiction of the FDA, which is in the process of developing regulations and guidance over CBD. We have previously written about two other consumer class actions arising out of similar clams of misbranded CBD products that have also been stayed recently under the “primary jurisdiction” doctrine.

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.  

Cannabis: NJ Department of Health issues 2 New Dispensary Permits bringing the total number of Dispensaries in NJ to 11

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.

Patients can refer to the FAQ section of the DOH’s website for additional information. http://www.nj.gov/health/medicalmarijuana/pat_faqs.shtml/  Active physicians enrolled in the program are listed by county and medical specialty on the website.

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.

Be well and stay safe!

Performance Under Cannabis Contracts During a Pandemic: Do the Contracting Parties Stay Best Buds or Does One Party End Up Feeling Burnt?

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.

To read the full text of this article by Duane Morris partner Tracy Gallegos, please visit the Cannabis Business Executive website.

Coping With a Pandemic: Thoughts from Duane Morris’ Seth Goldberg

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. […]

Read the full article.

Duane Morris Cannabis Industry Group Ranked as a National Leader by Chambers and Partners

Duane Morris congratulates our Cannabis Industry Group on being ranked as a National Leader in Cannabis Law by Chambers and Partners.

Seth Goldberg, partner and team lead of the Cannabis Industry Group, is also ranked as a national leading attorney in Cannabis Law.

Chambers writes:

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.”