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. […]
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.
About the Program
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
- Paul P. Josephson, Partner, Duane Morris
- Joy Beckerman, Hemp Ace International
- Imani Dawson, Minorities for Medical Marijuana
- Steve Hoffman, Massachusetts Cannabis Control Commission
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.
On Tuesday, April 21, 2020, Seth A. Goldberg, partner and team lead of the Duane Morris Cannabis Industry Group, and Justin M. L. Stern, Duane Morris associate, will present at the webinar, “Cannabis 303: Civil Litigation and COVID-19 Implications for the Cannabis Industry: An Unavoidable Consequence of a Maturing U.S. Cannabis Market.”
Please join the attorneys to review the recent landscape of cannabis-related commercial litigation, discuss the potential impact of COVID-19 on marijuana- and hemp-related civil litigation, and learn best practices for businesses with respect to preparing for, and possibly preventing, potentially resource-draining and almost always disruptive civil litigation matters.
On Friday, April 10, 2020, from 12:30 p.m. to 1:00 p.m. (Pacific time), Duane Morris will be hosting the webinar, “Cannabis 302: The Impact of COVID-19 on the California Cannabis Market.”
Join Tracy Gallegos and Justin A. Santarosa from our Cannabis Industry Group for a discussion on how California cannabis companies are adjusting to the COVID-19 pandemic by way of operational changes, such as increasing curbside and home delivery and seeking alternative sources of revenue, while responding to lease issues in relation to various eviction moratoriums and other matters.
Cannabis operators, like all other businesses, are searching for new ways to reach their customers during the COVID-19 pandemic. Cannabis businesses have been generally treated as “essential” under the various state orders that have otherwise closed businesses and ordered people to stay at home. Even though they have been permitted to operate, it is not business-as-usual for these operators as they grapple with CDC workplace restrictions and guidelines for reducing the spread of COVID-19.
As a result of these restrictions, state regulators and cannabis business have begun implementing new policies and procedures such as curbside pick-up, expanded delivery zones and increased use of contactless payment methods. While these changes are viewed as temporary, if properly implemented, cannabis businesses may be able to show regulators that these expanded policies should continue after the crisis has passed. This difficult time presents an opportunity for cannabis retailers to expand their reach and help bolster support for more online ordering, home delivery and other delivery methods.
Below is a summary of how several states have handled the COVID-19 pandemic in relation to the operations of cannabis businesses during the stay at home orders. Continue reading COVID-19 Forces Cannabis Industry and State Regulators to Evaluate and Improve Methods of Cannabis Delivery and Access
Although the cannabis reform movement has made incredible strides over the past 25 years, our industry and the medicinal potential of the plant are still not recognized at the federal level. The COVID-19 pandemic is drastically altering our lives but difficult times are able to expose many truths, including the understanding that legalization and safe access to cannabis is critical, especially during a crisis.
Thankfully, many states already have come to the realization that cannabis, especially medicinal use, is not a luxury but a necessity. Although states are restricting access to public places and prohibiting gatherings, many governors have designated cannabis dispensaries as an “essential service.” […]
“Opponents of federal legalization are likely to argue the categorization was merely a natural extension of the law in states that have already legalized medical marijuana to treat certain conditions, and that the uniqueness of the COVID-19 situation limits the ‘essential’ designation to that very urgent and unprecedented fact pattern,” Seth Goldberg, attorney and partner at Duane Morris LLP told mg.
To read the full text of this article, please visit the mg website.
[…] With so many out of work and many more likely joining them in the coming weeks, Americans are looking to Washington D.C. to provide a lifeline. One bill, the Families First Coronavirus Response Act (FFCRA), has already been signed into law by President Trump. This provides $1 billion in additional funds for states to direct toward bolstering their unemployment insurance programs.
Lawmakers on Capitol Hill have been working to pass additional relief legislation—but when it comes to the federal government and the cannabis industry, the relationship is not usually cozy. Will those relief funds find their way to cannabis workers who are out of work due to the coronavirus pandemic?
“Given that marijuana remains an unlawful substance under Schedule I of the Controlled Substances Act, there has been concern that the relief under the FFCRA would not be available to cannabis businesses and, therefore, would not be available to support cannabis workers,” Linda Hollinshead, an attorney and Partner at Duane Morris LLP told mg.
“The law provides that any administrative grants transferred to the account of a state may be used ‘by such State only for the administration of its unemployment compensation law,’ suggesting that the money is being provided to support a state’s program, and that the federal government will not dictate how it is spent or what industries will be recipients of those grants,” Hollinshead said. “As a result, it does not appear that the additional availability of these federal funds under the FFCRA jeopardizes an individual’s ability to have access to state unemployment benefits.”
To read the full article, visit the mg Magazine website.