For years, movies, music and other aspects of popular culture have hailed Amsterdam as the number one destination for openly consuming cannabis purchased from “coffee shops.” […] However, one difference — at least in California where adult use cannabis was legalized in 2016 with the passage of Proposition 64 — is that consumption lounges have been unable to offer prepared noncannabis food and beverages on-site. This changed on Sept. 30, when California Gov. Gavin Newsom signed California A.B. 1775 into law.
Webinar Replay: Legal Challenges and Considerations for Social Consumption Lounges
A replay of Mainstreaming Cannabis: Legal Challenges and Considerations for Social Consumption Lounges is now available for viewing.
Duane Morris Attorneys Recognized by Cannabis Law Report
Seth Goldberg, Tracy Gallegos and Paul Josephson, Duane Morris partners and team leads of the Cannabis Industry Group, are once again recognized in Cannabis Law Report‘s list of Global Top Lawyers.
The list honors cannabis practitioners via the publication’s annual survey of clients and lawyers in the cannabis legal services sector as well as its personal editorial decisions based on its reporting of the industry for nearly 10 years.
Webinar: Legal Challenges and Considerations for Social Consumption Lounges
The Duane Morris Cannabis Industry Group will present a webinar, Mainstreaming Cannabis: Legal Challenges and Considerations for Social Consumption Lounges, on Thursday, September 26, 2024, from 12:30 p.m. to 1:30 p.m. Eastern time.
Continue reading “Webinar: Legal Challenges and Considerations for Social Consumption Lounges”
Filling Credit Risk Gaps for Cannabis Businesses
Tracy Gallegos, partner and team lead of the Duane Morris Cannabis Industry Group, is quoted in American Banker about CTrust’s recently launched Cannabis Trust Score and its impact on the industry. […]
“Until there’s a rescheduling, obtaining traditional banking loans is going to be a significant hardship for plant touching operators,” said Gallegos, referring to cannabis’ classification as a Schedule 1 controlled substance, which exposes banks to potential money laundering investigations, which prevents most banks from lending to cannabis businesses. […]
“Having a company like CTrust provide a credit score is an indicator of credit worthiness, but it won’t do anything to solve any of the issues that the banks are facing in terms of the banks being penalized for engaging in business with what the federal laws still consider an illegal activity.”
Duane Morris’ Cannabis Industry Group Receives Top Honors from Chambers USA and The Legal 500
Duane Morris was nationally recognized by Chambers & Partners USA 2024 for Cannabis, and partners Tracy Gallegos, Seth Goldberg, Paul Josephson and Michael Schwamm were individually honored.
“Duane Morris helps clients across all sectors of the multi-faceted legal cannabis industry. The group has extensive experience with the wide array of issues attendant to legal cannabis business activities, including licensing for cultivation, processing and dispensing; litigation; banking and finance; raising and deploying capital; protecting intellectual property; real estate development and leasing; public company representation and SEC filings; land use and zoning; healthcare and research; taxation; and cross-border transactions.”
The Legal 500 2024 has also placed the Cannabis Industry Group in Tier 1 nationally, with clients noting that “Duane Morris’ cannabis practice is simply the best in the country. They have the most thorough knowledge of our ever-changing industry and its regulatory landscape.”
“What makes Duane Morris unique among peer firms is the entrepreneurial spirit of the cannabis practice, backed up by extensive institutional knowledge and experience of business. They created laws, regulations and precedents that govern and protect the cannabis industry today and advised businesses how to operate within them.”
Clients also acknowledged “the passion and commitment of Duane Morris’ lawyers to serve businesses and entrepreneurs.” The Legal 500 named partners Seth Goldberg and Michael Schwamm “Leading Lawyers” in the Cannabis Industry – as well as recognizing Tracy Gallegos, Paul Josephson and Justin Santarosa for their work.
“The firm has acted as a pathfinder through a constellation of state laws and regulation – many of which the firm’s cannabis practice has helped shape.”
Webinar Replay: Distressed Cannabis M&A
Webinar: Distressed Cannabis M&A
Duane Morris, in partnership with FTI Consulting, will hold its next Cannabis Webinar, Distressed Cannabis M&A, on Thursday, October 5, 2023, from 1:30 p.m. to 2:30 p.m. Eastern.
Learn more and register on the Duane Morris website.
Changes to the Controlled Substances Act for Cannabis to make it a Schedule III Drug – The Winds May Be Blowing this Way
Earlier today, on August 30, 2023, the U.S. Department of Health and Human Services (HHS) officially recommended that cannabis be moved from Schedule I to Schedule III under the Controlled Substances Act (CSA) – a landmark recommendation from HHS which indicates that HHS no longer considers cannabis to be a drug with high abuse potential and no medical value.
After completing a scientific review into cannabis per a requested review from the Biden Administration, HHS advised the Drug Enforcement Administration (DEA) that it believes marijuana should be placed in Schedule III of the Controlled Substances Act.
Note, HHS’s recommendation is NOT binding on the DEA but given the report’s findings and growing public sentiment is likely that the DEA agrees with the recommendation and shifts its policy.
Historically, cannabis has been federally prohibited as a Schedule I controlled substance. As noted by many pundits, the rescheduling to Schedule III would have major implications for researchers who have long criticized the Schedule I classification that creates significant barriers to access for studies.
For researchers, this change would likely mean that they would no longer need to go through the onerous registration process with the DEA in order to access cannabis for studies as a Schedule III drug. The shift to Schedule III would also enable various federal tax deductions to become applicable to the cannabis industry and unlock value for them that is currently stuck in an onerous tax structure under the Internal Revenue Code. Schedule III drugs are not subject to the same onerous structure under federal rules.
The cannabis ball is now firmly in the DEA’s court as the DEA has the final authority to schedule a drug as Schedule III rather than Schedule I under the CSA (or transfer a controlled substance between schedules or remove such a drug from scheduling altogether).
Parting Hits – With Congress due to reconvene after Labor Day, and the Biden Administration looking for a win on moving this issue along, look for pressure to continue to mount for some type of Congressional action in the Banking arena under a SAFE legislation bill and for the DEA to move through their rule making process in a swift and firm manner.
Duane Morris has a full service cannabis group that helps clients and investors in a wide array of cannabis-related issues including, but not limited to, licensing, fundraising, intellectual property protection and real estate. If you have any questions, please do not hesitate to contact Brad Molotsky or the attorney with whom you regularly communicate at Duane Morris.
Adult Use Cannabis – the United States Virgin Islands passes adult use cannabis legislation!
In case you might have missed it with your year end festivities, the U.S. Virgin Islands became the latest U.S. region to legalize adult-use cannabis. Once regulations are finalized, the rules will allow residents and visitors to purchase medical and/or recreational cannabis products from licensed dispensaries. The bill was signed by Governor Bryant and is now effective.
The legislation also includes provisions proposed by Senators Sarauw and Bolques and automatically expunges cannabis possession charges in the territory.
Medical cannabis was previously approved in 2019 but the legislature continues to work on the applicable rules and regulations for the program.
It is estimated by Commissioner Richard Evangelista that it will likely be another 18-24 months before the government can finalize the applicable regulations for medical and adult use.
Sarauw said that even now, with adult-use reforms now heading to the governor’s desk, “we have done absolutely nothing to move cannabis forward.”
At the moment, current rules decriminalize the possession of up to an ounce of cannabis in the U.S. Virgin Islands.
Key Take Away – the USVI has now officially approved adult use cannabis which will likely spark (sorry, could not resist) multiple businesses and business lines to look to establish operations in the Territory. Grow, manufacture, dispensing and businesses supporting these operations are sure to continue their thought processes as to how to engage and become licensed pending final rules to be issued by the Department of Licenses and Consumer Affairs.
Duane Morris has an active Cannabis Team to help organizations and individuals plan, respond to, and execute on your cannabis and hemp initiatives. We would be happy to discuss your proposed project and how these new rules might apply to you. For more information or if you have any questions about this post, please contact Brad A. Molotsky, or Tracy Gallegos, Seth Goldberg, or Paul Josephson who co-head the Cannabis Group or the attorney in the firm with whom you in regular contact .