Tag Archives: medical cannabis

Adult-Use Marijuana Bill Introduced in New Jersey

Seth Goldberg
Seth A. Goldberg

With the election of Phil Murphy as New Jersey Governor in 2017, the possibility of New Jersey becoming one of the next states to pass recreational marijuana legislation became very real, as this was among the issues key to Murphy’s campaign.

On Tuesday, January 9, 2018, less than one week after AG Sessions issued guidance to all US Attorneys rescinding Obama-era policies deprioritizing the federal prosecution of state-lawful cannabis-related activities, that possibility became more of a likelihood, as New Jersey Sen. Nicholas Scutari introduced Senate Bill 830, which would allow for the cultivation, sale and use of marijuana for recreational purposes in New Jersey by those 21 and older.

The legislation proposes adults would be permitted to possess up to 1 ounce of marijuana, 16 ounces of marijuana-infused products in solids, 72 ounces in liquid form, 7 grams of concentrate and up to six immature plants, and establishes a sales tax on marijuana that would rise incrementally from 7 percent to 25 percent over five years.

David Feldman

Cannabis Shows Promise in Treating Psychosis

Several weeks ago, scientists at King’s College London announced exciting preliminary study results involving mental illness and CBD derived from cannabis. The trial involved 88 patients diagnosed as psychotic, meaning they experience hallucinations, paranoia and anxiety. The study found that patients administered CBD saw lower levels of psychotic symptoms than those given just a placebo.

CBD, or cannabidiol, is separate from the psychoactive aspect of cannabis known as THC. Thus, the patients were provided a fully non-psychoactive form of cannabis, the same as is used to treat ailments such as chronic pain or seizures, even in children.

The study results were published in the American Journal of Psychiatry. As reported in the VOA News, one of the trial leaders, Philip McGuire, said, “The study indicated that CBD may be effective in psychosis: patients treated with CBD showed a significant reduction in symptoms, and their treating psychiatrists rated them as having improved overall.” McGuire also noted very few side effects to use of CBD.

A slow but steady drumbeat of study results is beginning to prove what many in the medical community have believed for a number of years:  while we still don’t quite know why, CBD and cannabis may indeed provide safe and effective treatment or cure for many illnesses and diseases facing mankind today.

2018 Should Be The Year Cannabis Ends The Opioid Crisis…. Fingers Crossed!

Seth Goldberg
Seth A. Goldberg

Articles appearing this week in the LA Times and the Philadelphia Inquirer, among other recent articles, highlight the horrors of the opioid crisis and the need for research into cannabis as a possible solution.  While the federal government warns about the spiraling toll of the opioid epidemic, it refuses to grant the applications of world-renowned scientists at major universities and research centers seeking to explore the ways in which the well-documented therapeutic properties of cannabis can alleviate the pain and suffering – physical, emotional and financial – being caused by opioid abuse.  There is no shortage of deep pockets willing to fund the research, and US-based scientists are ready, willing and able to get to work, yet the federal government refuses to depart from its antiquated “reefer madness” established in the early 20th Century.  2018 should be the year the federal government stops blocking cannabis research so that scientists can determine if and how cannabis can stem the opioid crisis.  Fingers crossed!

 

 

David Feldman

NY Adds PTSD to Medical Cannabis Conditions

New York Gov. Andrew Cuomo yesterday signed a bill into law permitting those suffering from post-traumatic stress disorder (PTSD) to access legal medical cannabis. It was particularly symbolic that the bill was signed on Veterans’ Day, since many battle-scarred veterans suffer from PTSD. Most states with medical cannabis permit its use to treat PTSD. New York remains one of the most restrictive states in limiting what ailments trigger the right to obtain this treatment.

The PTSD bill was one of five that Cuomo signed yesterday aimed to help veterans. He did not specifically comment on the PTSD bill in his press release. But the release did note that it appears as many as 19,000 New Yorkers with PTSD could benefit from this treatment. The release further acknowledged that PTSD victims include “military veterans, police officers and fire fighters, as well as survivors of domestic violence, rape, violent crime, and accidents.” Here in NY, I know folks who would want to add “survivors of terrorist attacks.”

The irony is that those same veterans cannot access medical cannabis through the free VA hospital system as long as cannabis use remains a federal crime. Therefore, these too often financially struggling vets have to go out of pocket to access this medicine. However, many simply may not be able to afford it. In 2010 the VA did make clear that vets accessing legal medical cannabis in their state outside the VA system are not at risk of losing their VA benefits. But the VA itself still cannot offer cannabis to vets.

Veterans groups like the American Legion have been lobbying for the VA directly to supply cannabis. They argue that the VA provides highly addictive opioids, whereas medical cannabis can help vets avoid these dangerous drugs. Let us hope that it is not too long before those who served our country can access all the help they need from our federal government.

David Feldman

Cannabis Deal Sizes “Growing”

Two big announcements this week on the finance side of the emerging global cannabis industry. First, yesterday’s word that the giant alcohol company, Constellation Brands, the maker of Corona Beer among others, is acquiring a stake in Canada’s Canopy Growth Corporation. Canopy is possibly the biggest medical cannabis producer in Canada and is a public company. The terms? $245 million for a 9.9% ownership interest. Established industries like tobacco, alcohol and pharma have stayed away from investing in US cannabis companies since it is still a federal crime to produce or sell cannabis. But the Constellation investment is into a totally legal enterprise in Canada.

Separately, this week we also learned that a large US operator of cultivation and dispensary facilities in the US announced it is seeking to raise a $250 million investment fund for buying into cannabis companies in several US states. While tremendous capital has flown into the cannabis industry, it has come principally from high net worth individuals and family offices. Established venture and private equity funds generally are prohibited from investing in illegal enterprises. Several funds have been established for cannabis investment, but none known to be as big as this one is planned to be.

One can only imagine the deluge of capital that will descend on US cannabis businesses if/when the US federal criminal restrictions are eliminated. We have already seen it happening in Canada, mostly driven by a group of very active investment banking firms. Once the shackles of the federal restrictions are removed, it appears the growth trajectory of this toddler US industry will expand exponentially.

Insuring Cannabis Businesses

As I note in the linked article, insurers only stand to gain, and in big ways, from underwriting cannabis businesses. Growers, processors, dispensaries and ancillary businesses need a full range of coverage, and are ready to obtain it! Just as in any industry, insurance is a critical component to success in the cannabis space and will hasten the growth of markets already expanding at warp-speed. There are ways for insurers to cover the medical and recreational marijuana markets notwithstanding the regulatory uncertainty. It may require some creativity, but given the financial upsides, it should be well-worth the time and effort it takes to find the optimal pathway.

David Feldman

Kosher Cannabis? Now Available

According to the Marijuana Business Daily, a Quebec-based producer of medical cannabis has joined a New York medical cannabis licensee in obtaining certification of their products as kosher under Jewish dietary laws. This means that more observant Jews, who seek to restrict their diets to kosher foods, will be able to obtain medical cannabis from these companies without concern. To obtain kosher status, according to the article, means they have gone through an audit of their cleaning products, a compliance review and regular onsite inspections.

Without getting too into the mishigas, these products are not certified as glatt kosher, which would be more acceptable for the most observant Orthodox. While there are some historically technical differences, these days it mostly means there is an even more intense and exacting process with rabbis to certify. That said, regular kosher is good for most of those Jews who say they are kosher.

The Canadian company, Hydropothecary, further noted in the article that this designation “addresses the needs of not only those who follow Jewish dietary law but also vegans, vegetarians and anyone interested in the providence of what they consume.” The action was just in time for the Jewish High Holy Days of Rosh Hashonah and Yom Kippur. Mazel tov!

The Federal Antitrust Laws May Not Protect Competition and Consumers In The Cannabis Industry

Seth Goldberg

To assert a federal antitrust claim, a plaintiff must have standing under Article III of the U.S. Constitution and must also have suffered an injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants acts unlawful. Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977).  The Brunswick standard generally benefits consumers who have paid artificially high prices as a result of a defendant’s anticompetitive conduct, or a competitor of a defendant that abused its market power to compete unfairly.

The federal antitrust laws, including the Brunswick standard, are one of the many protections intended to keep competitors on an even playing field and striving to beat one another by offering the optimal combination of quality and price to consumers, and to protect consumers from overreaching and opportunistic manufacturers that use nefarious means to impose a price they would be otherwise unable to charge.  These laws have been critical in shaping industries.

However, it may be that the federal antitrust laws are among the federal laws unavailable to cannabis industry participants, as the federal antitrust laws are limited to commerce “among the states,” i.e., interstate commerce.  Because cannabis is still prohibited under the Controlled Substances Act, its legal manufacture and distribution is generally limited to intrastate activities.  Thus, competition for legal cannabis is, by and large, necessarily intrastate.   Fortunately, most states have antitrust laws that mirror federal antitrust laws, and borrow from the federal judicial precedent they have generated.  However, as a general matter, the federal courts and federal judges are more experienced than the state courts in the complex economics underlying most antirust matters.

For the burgeoning cannabis industry, this may be yet another problem arising out of the federal prohibition of cannabis.  It means that consumers of cannabis products, such as cannabis, vapes, edibles, and possibly ancillary flower-touching products, may not be protected from inflated prices resulting from anticompetitive conduct, such as price-fixing agreements or agreements to allocate markets, and competitors for those products may not be able to ensure a level playing field with the largest companies, allowing the powerful companies to take advantage of their position by inflating prices.

The bottom line is that as the cannabis industry continues its growth at breakneck speed, manufacturers of cannabis, cannabis-infused, and cannabis-related products, may be tempted to engage in the types of anticompetitive conduct the federal antitrust laws are best able to correct, with the help of experienced federal judges, and consumers of those products may unfortunately be exposed to artificially inflated price increases flowing from such conduct left unchecked.  While not all cannabis manufacturers or cannabis-related products are limited to competing in a single state, the bulk are.

To this point, the role the  federal antitrust laws (or state for that matter) can play in shaping the cannabis industry has not been tested.  That day may be on the horizon, however, as some companies continue to grow into industry giants, while others struggle to compete.  Cannabis space participants, especially the larger players, should be aware of the compliance measures taken in other industries to protect themselves from the possibility of antitrust claims brought by their competitors or consumers.

Pennsylvania Medical Marijuana Act: Key Components and Potential Risks

On April 17, 2016, Pennsylvania became the 24th state to legalize the use of marijuana for medicinal purposes when Pennsylvania Governor Tom Wolf signed into law Senate Bill 3, known as the “Medical Marijuana Act” (the “Act”).  While the Act will become effective on May 17, 2016, its implementation will not be fully realized until various reports and regulations contemplated in the Act are developed. The Act will be administered by the Pennsylvania Department of Health (the “Department”).

The Act limits the use of medical marijuana to patients suffering from one of the 17 “Serious Medical Conditions” identified in the Act, which are: cancer; HIV/AIDS; amyotrophic lateral sclerosis; Parkinson’s disease; multiple sclerosis; epilepsy; inflammatory bowel disease; damage to the nervous tissue of the spinal cord with objective neurological indication of intractable spasticity; neuropathies; Huntington’s disease; Crohn’s disease; post-traumatic stress disorder; intractable seizures; glaucoma; sickle cell anemia; severe chronic or intractable pain of neuropathic origin or severe or intractable pain in which conventional therapeutic intervention and opiate therapy is contraindicated or ineffective; and autism.

The Act also restricts the forms in which medical marijuana may be dispensed to patients and caregivers to pill, oil, topical cream/ointment, vaporization, nebulization, tincture or liquid, and it makes smoking and incorporating into edible form unlawful. Continue reading Pennsylvania Medical Marijuana Act: Key Components and Potential Risks

PA Senate Passes Medical Marijuana Legislation Again

Earlier this year, I wrote that 2015 might be the year that medical marijuana legislation is passed in Pennsylvania.  This was because in 2014 the PA Senate approved such legislation, and, although the legislation sat in the PA House through the end of the term, the election of Governor Tom Wolf removed the additional hurdle of a veto by former Governor Tom Corbett were the PA House to pass the legislation.

On May 12, 2015, the PA Senate again passed a medical marijuana bill.  It obviously remains to be seen what the PA House will do, but given Governor Wolf’s indication that he would not veto such legislation should it reach his desk, and reports that up to 88% of PA residents are in favor of legalized medical marijuana, the odds of legalization in 2015 seem to be improving. Continue reading PA Senate Passes Medical Marijuana Legislation Again