cannabis – Page 3 – Cannabis Industry

April 17, 2023 by Michael D. Schwamm

New York City Introduces Several Local Laws Aimed at Helping to Control the Unlicensed Cannabis Industry in NYC

Two pieces of legislation were recently introduced in the New York City Council aimed at controlling the unlicensed cannabis market in New York City.

The first bill bill would prohibit knowingly leasing commercial premises to a tenant who uses the premises for distribution or sale of cannabis or cannabis products without a license. The first time that an unlicensed cannabis seller is found to be operating in leased commercial premises, the Sheriff, Police Department, or any other relevant agency would issue a warning to the owner of the premises. If an unlicensed cannabis seller is later found to be operating in the same commercial premises, the owner would be liable for civil penalties. https://legistar.council.nyc.gov/LegislationDetail.aspx?From=Alert&ID=6165428&GUID=33A0F77B-950A-4A9E-8033-F0316A346404&Options=ID%7CText%7C&Search=cannabis

The second bill would require the Department of Health and Mental Hygiene to collaborate with the Department of Consumer and Worker Protection and any other relevant agency to create and implement a public awareness campaign on the dangers of purchasing cannabis or cannabis products from unlicensed cannabis retailers. The campaign would target minors and young adults and focus on the risks of consuming cannabis products adulterated with synthetic cannabinoids and other harmful substances and the risk of purchasing such products from unlicensed cannabis retailers .https://legistar.council.nyc.gov/LegislationDetail.aspx?ID=6165413&GUID=59A6FC8D-E54A-43D2-B621-906AA1B706A2&Options=&Search=

March 22, 2023 by Michael D. Schwamm

New York State Advertising Rules Effective Today

Effective March 22, 2023, New York’s cannabis advertising rules are now in place. These rules aim to protect public health, particularly minors, and ensure that cannabis advertising is truthful and not misleading.

- Cannabis advertisements cannot be displayed within 1,000 feet of a school or daycare center.
- Ads cannot target individuals under 21 years of age or depict minors, toys, characters, or cartoons.
- Advertising cannot claim cannabis is safe or healthy or that it has curative or therapeutic effects unless supported by substantial evidence.
- Ads cannot contain false, misleading, or deceptive information.
- The warning statement “This product may be intoxicating and may be habit-forming” must be included in all cannabis advertisements.
- Promotions, such as giveaways or coupons, are prohibited except in licensed dispensaries.
- Advertising cannot be displayed on any public transportation or property owned or leased by the state or local government.
- All ads must include the New York State Department of Health’s “Know the Facts” educational campaign website address.

March 22, 2023 by Danielle M. Dwyer

CANNABIS INDUSTRY THE LATEST FRONTIER FOR LABOR ORGANIZING EFFORTS

As legal adult-use cannabis continues to spread across the country, so does a movement to unionize cannabis workers. The need for dispensary and cultivation workers has rapidly increased, along with the demand for higher wages, improved benefits, diversity and inclusion efforts, and more.

To date, 21 states and the District of Columbia have legalized adult use marijuana. Bills to legalize adult use marijuana are pending in several other states. According to Forbes, cannabis sales in the United States are estimated to reach $57 billion by 2030. The industry shows no signs of slowing down. Labor unions have taken notice and have seemingly set their sights on the cannabis workforce.

The efforts of labor unions have been buoyed by labor peace agreement (LPA) laws. While LPA laws vary by state, they generally require cannabis companies to take a hands-off approach to union organizing efforts as a condition of doing business in the state. This means the company cannot interfere with organizing efforts. However, unions typically also agree via the LPAs not to interfere with the operations of the business. Alternatively, some LPA laws offer preferential status in licensing applications for companies that enter into LPAs.

California, New York, New Jersey, and Virginia all have varying degrees of requirements with respect to LPAs in their states. Pennsylvania and Illinois do not require LPAs, but the states offer certain advantages to companies who enter into LPAs. Several other states, such as Massachusetts, Connecticut, and Minnesota, are contemplating enacting their own LPA requirements.

The apparent enthusiasm of organizing efforts largely paid off for unions in 2022. According to Bloomberg Law’s NLRB Election Statistics report, unions prevailed in 76% of overall elections in 2022, one of the highest success rates on record. The United Food and Commercial Workers Union, which has dubbed itself “the Cannabis Workers’ Union” representing more than 10,000 cannabis members, won 70% of representation elections in 2022. They are not the only ones. The International Brotherhood of Teamsters, which has unionized some cultivation workforces, won 66% of representation elections in 2022.

While there has been some litigation surrounding LPAs and organizing efforts, to date, most cannabis companies do not appear to be challenging these requirements. This has the strategic benefit of allowing cannabis businesses to get licenses and begin operations, rather than engage in what could be a prolonged legal battle. However, as unions expand and tighten their grasp on cannabis workforces, industry groups may start to fight back.

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”

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.

October 31, 2022November 1, 2022 by Seth A. Goldberg

Cannabis Industry Sees Rise in Consumer Fraud Class Actions, With More To Come With Interstate Sales

Consumer Protection

Cannabis products – such as vapes, pre-rolled joints, tinctures, gummies, and beverages – are consumer packaged goods that are required under state law to be marketed with packaging and labeling that demonstrates their safety to consumers. Although the U.S. state-licensed cannabis industry has been one of the fastest-growing industries in the U.S. over the past decade, consumer fraud lawsuits arising out of alleged packaging and labeling problems, which are a common risk for CPG manufacturers in other industries, have, until now, not been a major consideration for the cannabis supply chain. However, that is changing. As three recent lawsuits suggest, consumer fraud class actions may be on the rise in the industry. Given the media attention cases like these attract, and the potential for damages for thousands or millions of potential consumers, the cannabis supply chain should take notice. As we discuss in the full text of this post, this is going to be especially true once cannabis products are permitted to be sold interstate.

To read the full text of this post by Duane Morris partners Seth Goldberg, Gerald L. Maatman, Jr., and Jennifer A. Riley, please visit the Duane Morris Class Action Defense Blog.

October 17, 2022 by Deanna J. Lucci

Biden’s Pardon Announcement Gives a Boost to SAFE Banking Prospects

As we previously reported, on October 6, President Biden took executive action and announced that he would issue pardons for all prior Federal offenses of simple possession of marijuana, and urged state governors to do the same. As part of his executive action, Biden also directed the Secretary of Health and Human Services (HHS) and the Attorney General to “initiate the administrative process to review expeditiously how marijuana is scheduled under federal law,” which is currently classified as a Schedule I drug, along with heroin and LSD.

Many observers think that this executive action could usher in cannabis banking reforms. While some have noted that if cannabis is actually de-scheduled, banks and financial institutions will feel more comfortable banking with cannabis and cannabis-related companies, it seems more likely that Biden’s pardon announcement may push Congress to finally pass some version of the SAFE Banking Act.

After Biden’s announcement, Sen. Cory Booker (D, N.J.) said he was hopeful that Congress would pass federal legislation in the lame-duck session after the November election. On that front, Booker alluded to “bipartisan movement” due to “problems in the banking industry” that many think refers to a version of “SAFE Banking Plus” or “SAFE Plus” that we previously reported senators were discussing.

The SAFE Banking Act – which has passed the House of Representatives seven times in recent years but has not been taken up in the Senate – would allow cannabis businesses to access the federal banking system and service providers to the cannabis industry such as attorneys, accountants, bankers and landlords would be permitted to accept payment from cannabis businesses without the risk of violating federal law.

“SAFE Plus” would add equity provisions to the SAFE Banking Act, ensuring equitable access to financial services for minority-owned cannabis businesses, requiring financial institutions to prove compliance with anti-discrimination laws, as well as other reforms like expungements, veterans medical cannabis access and more.

October 6, 2022 by Seth A. Goldberg

President Biden’s Pardon for Simple Marijuana Convictions

Today, President Biden took executive action and pardoned those convicted of simple possession of marijuana under the federal Controlled Substances Act, and encouraged state governors to issue similar pardons to those convicted of simple marijuana possession under their state’s laws. In issuing the pardon, President Biden explained: “Criminal records for marijuana possession have also imposed needless barriers to employment, housing, and educational opportunities. And while white and Black and brown people use marijuana at similar rates, Black and brown people have been arrested, prosecuted, and convicted at disproportionate rates.” He also asks the Secretary of Health “to initiate the administrative process to review expeditiously how marijuana is scheduled under federal law,” noting that marijuana is scheduled higher than fentanyl and methamphetamine. The executive action could mark the real beginning of the ending of the federal prohibition on marijuana. As President Biden stated, “Too many lives have been upended because of our failed approach to marijuana. It’s time that we right these wrongs.”

September 6, 2022 by Michael D. Schwamm

Could the NY conditional adult use retail dispensary program (CAURD) be in jeopardy?

A Maine law requiring all owners of medical marijuana businesses to be residents of the state was recently struck down by the US Court of Appeals for the First Circuit, which ruled that the statute is a violation of the “Dormant Commerce Clause” of the United States Constitution, which prohibits states from passing legislation that restricts interstate trade. In its opinion (Northeast Patients Group et al. v. United Cannabis Patients and Caregivers of Maine, the Appellate Court upheld a lower court ruling that the residency requirement is an unconstitutional restriction on interstate trade.
Under the Maine’s medical marijuana program, all directors or officers of a licensed medical cannabis dispensary are required to be residents of the state. Interestingly, Maine had already dropped its residency requirement for its adult-use market following an earlier legal challenge that was also based on the Dormant Commerce Clause but it sought to keep it in place for its medical cannabis program.
This could be a problem for NY’s new adult use cannabis program, as of the requirements is that the potential licensees must have been arrested (or are related to someone who was arrested) for a marijuana related crime in New York and must also have been a New York resident at the time of the arrest. This could like be deemed a residency requirement and thus lead to challenges not only to any individual licenses grants but the entire CAURD program.
Equally or possibly even more problematic is the fact that this ruling could also open the door to legal challenges to a variety of other State laws banning the exporting or importing of cannabis from other states, as the same rationale invalidating the residency requirements could come, as disallowing cannabis exports and imports between states could be construed as similarly placing unreasonable restrictions on interstate commerce.