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Oregon Measure 109 Passes!!!

Emerge Law Group celebrates the passage of Oregon Measure 109, also known as the Oregon Psilocybin Services Act (“M109”).  M109, the first of its kind in the nation, will create a legal, regulated market for psilocybin-assisted therapy under Oregon law.

“Emerge Law Group is both thankful and proud to have contributed to the success of Measure 109,” said Dave Kopilak, Co-Chair of the firm’s Psychedelic Practice Group.  Kopilak, a veteran cannabis industry attorney, was the primary drafter of M109, with support from M109’s chief petitioners Tom and Sheri Eckert and Emerge Law Group attorneys Kaci Hohmann, Kaitlyn Dent, and Sean Clancy.  “This is great news for terminally ill Oregonians,” said Kathryn Tucker, Co-Chair of the firm’s Psychedelic Practice Group, who assisted the M109 campaign by bringing her years of experience in advocacy on behalf of terminally ill patients to educate the end of life care community, encouraging leaders in hospice and palliative care to understand and support M109.  “Opening access to psilocybin therapy will offer relief to dying patients suffering from anxiety and depression, providing an important new tool to the palliative care toolbox.”

The primary purposes of M109 are to:  (i) educate Oregonians about the safety and efficacy of psilocybin in treating a variety of mental health conditions, including addiction, depression, anxiety disorders, and  end-of-life psychological distress, (ii) reduce the prevalence of mental illness in Oregon; and (iii) improve the physical, mental, and social well-being of all Oregonians.  These purposes should be pursued with the utmost vigor, so that psilocybin services can become a safe, accessible, and affordable therapeutic option for individuals 21 years of age and older for whom psilocybin may be appropriate.

There is much work to do during M109’s two-year development period and that work will begin very soon.

Emerge Law Group will be closely following the actions of the Oregon Health Authority, the Oregon Psilocybin Advisory Board created by M109 (the “Advisory Board”), the Governor (who in early 2021 will appoint 15-16 members of the Advisory Board), the Oregon State Legislature, and yes, the United States Attorney for the District of Oregon.

Emerge Law Group is uniquely situated to assist clients who are interested in M109, and to advise advocates seeking to open legal access to psilocybin in other jurisdictions.  Please contact attorneys Dave Kopilak, Kathryn Tucker, Kaitlyn Dent, Kaci Hohmann, or Sean Clancy if you have any questions concerning M109 or any other laws (or ideas for any new laws) involving psilocybin, entheogenic plants, or psychedelics in general.

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Five Key Steps When Selling Your Business: From Preparation to Purchase Agreement

Sales of most small companies involve a fairly standard and predictable process that can be followed when selling your business.  In addition to having a sharp corporate attorney at your side, understanding the process will help you prepare and mitigate surprises.

1. Get Your House in Order. Buyers will investigate all aspects of your business to fully understand its assets and identify all potential liabilities.  You can get ahead of this process by conducting due diligence on your own company before seeking a buyer. Consider setting up your own secure digital data room to organize and store all documents related to your business in an accessible way, making it easy for you, your business lawyer, and the buyer to review them when the time comes.

Are financial statements and tax returns complete and filed? Buyers will often want to see three years of financial and tax records.

• Are corporate records in order? Produce electronic board and shareholder minute books and ensure that capitalization records are current and complete.

• Do you have signed copies of all current contracts with customers, suppliers, landlords, and employees? Distribution agreements?  Intellectual property license agreements?  All material contracts should be identified and kept together.

• Are all government licenses and permits current?

• Do any contracts, licenses, or permits require the consent of any third parties before they may be transferred to a buyer? Look for language about “assignment,” “assignability,” or “change of control.”

• Are all records related to assets and liabilities (titles, bills of sale, financing agreements, loan agreements, leases, etc.) readily available?

Identify red flags, such as missing, lapsed, expired, or incomplete documents, and remedy any issues before a potential buyer raises concerns.  The more prepared and organized you are, the more smoothly the buyer’s diligence investigation will go. This standard form due diligence request list can help you get started: DUE DILIGENCE CHECKLIST

2. Determine Which Transaction Structure You Prefer. Tax and liability considerations often drive the structure of the transaction.  Consequently, buyers generally prefer asset transactions, while sellers tend to prefer stock transactions or mergers. There are different ways to structure sales of businesses (often referred to generally as “M&A,” short for “mergers and acquisitions”).  Here are a few of the most common structures:

• Asset Transactions. In an asset transaction, the buyer determines which assets and liabilities it wants to acquire.  Anything not acquired by the buyer remains an asset or liability of the seller.  Some assets, such as contracts and licenses, may not be transferable to a buyer without obtaining consents from third parties.  Asset transactions are generally taxable to sellers, while buyers get a step-up in the tax basis of the acquired assets.

• Equity Transactions. In an equity transaction, the buyer purchases all of the stock or membership interests of the seller’s company and becomes the new owner, taking on all of the seller’s assets and liabilities.  Stock transactions often have better tax consequences for sellers and generally relieve sellers of liabilities disclosed to the buyer before the transaction.  A potential downside of an equity transaction is that recalcitrant shareholders may cause problems or delay completion of the transaction.

• Mergers. In a merger, the buyer or its subsidiary merges with the seller.  As a result, and similar to an equity transaction, the buyer acquires all of the assets and liabilities of the seller. Mergers have the potential to be structured as reorganizations that are tax free for sellers.  Usually, mergers do not require unanimous shareholder consent and also tend to require fewer third-party consents for the transfer of contracts and licenses.

3. Know the Value of Your Business. There are many methods for determining the value of your company and myriad factors that may be considered.  These are three of the most common methods for determining the value of your company. They are often used in some combination.

• Asset-Based Valuation. An asset-based valuation, also known as book value, is a relatively straightforward valuation method where net value is determined by subtracting the amount of a company’s liabilities from the amount of its assets.  Asset-based valuations are most commonly used by businesses that hold investments, have steady cash flow, or are liquidating.

• Market-Based Valuation. A market-based valuation values a company by comparing it to similar companies in similar industries in similar geographical areas.  Reviewing recent sales of these businesses will help you determine a competitive value for your company.  Market-based valuations are appropriate for any business if the details of sales of comparable companies are available.

• Earnings- or Revenue-Based Valuation. If your company is profitable, an earnings-based valuation may be appropriate.  Earnings-based valuations are based on past performance and forecasts of future earnings.  If your company is not yet profitable, but has high growth potential, a revenue-based valuation may be a good valuation measure. The ultimate value is generally based on a multiple of earnings or revenue, which may be discounted when a company’s future earnings or revenue is uncertain.

4. Letter of Intent. A letter of intent (“LOI”) outlines the structure and the broad terms of the transaction.  Although an LOI is generally not binding and does not guarantee that a transaction will close, it should be taken seriously.  It is wise to talk with your business attorney before the LOI stage.  The LOI will lead and direct the terms of the purchase agreement, so do not agree to anything in the LOI that you can’t live with during the course of the transaction. Negotiating the business terms that are most important to you at this stage makes finalizing the purchase agreement much more efficient.

Buyers will likely want an exclusivity period during which you will not enter into negotiations for the sale of the company with any other potential buyer. Exclusivity provisions are binding.  The LOI should also include confidentiality provisions to protect information you provide to the buyer during the diligence period, and to protect both parties from disclosure of the terms of the transaction.  Confidentiality provisions are also binding.  Finally, consider whether an earnest money deposit is warranted at the LOI stage.

5. Purchase Agreement. The purchase agreement is the legal document that details the terms of the transaction summarized in the LOI: what is being sold, at what price, and on what terms.  The agreement will also include thorough representations, warranties, and covenants by both parties; indemnification provisions to provide protections for both buyer and seller; and conditions that must be satisfied by both parties before the transaction closes. Consider who among the seller parties will be responsible for making representations, warranties, covenants, and ultimately for any related potential liabilities.

Selling a business is a complicated process; however, good preparation, an understanding of the process, and an experienced, competent corporate lawyer as your counsel can lead to a positive result for all parties.

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Oregon Psilocybin Services Act: Measure 109’S Regulatory and Licensing Structure

This blog is the second in a series of substantive explanations of Oregon Measure 109 that we will publish before Election Day.  The complete text of Measure 109 can be found here.

This blog will discuss Measure 109’s regulatory and licensing structure.

The Oregon Health Authority (the “OHA”) is the agency that will implement and carry out Measure 109.  The OHA was an obvious choice to regulate psilocybin services given the purposes of both the OHA and Measure 109.  By statute, the OHA has direct supervision of all matters relating to the preservation of life and health of Oregonians.  The purposes of Measure 109 include:  (i) educating Oregonians about the safety and efficacy of psilocybin in treating mental health conditions; (ii) reducing the prevalence of mental illness in Oregon; and (iii) improving the physical, mental, and social well-being of Oregonians.

The OHA’s powers and duties relating to Measure 109 are broad and will include:

• Publishing and distributing to the public available medical, psychological, and scientific studies and research relating to the safety and efficacy of psilocybin in treating addiction, depression, anxiety disorders, end-of-life psychological distress, and other mental health conditions;
• Regulating the manufacturing, delivery, and sale of psilocybin products and the provision of psilocybin services;
• Issuing, renewing, suspending, and revoking licenses;
• Adopting, amending, and repealing rules to carry out Measure 109; and
• Imposing civil penalties for violations.

During Measure 109’s two-year development period, a newly-created Oregon Psilocybin Advisory Board will be established within the OHA to advise and make recommendations to the OHA.

Measure 109 provides for four different types of licenses:

1. Manufacturer;
2. Service Center Operator;
3. Facilitator; and
4. Laboratory.

A manufacturer license will be required to manufacture psilocybin products.  The term “manufacturing” includes planting, cultivation, growing, harvesting, production, preparation, propagation, compounding, conversion, processing, packaging, and labeling.  Unlike the Adult and Medical Use of Cannabis Act (ORS Chapter 475B), there will be no separate processor license.  Rather, the OHA will designate different types of manufacturing activities, each of which will require a particular endorsement.  A manufacturer may only engage in a type of manufacturing activity if the manufacturer is issued an endorsement for that type of manufacturing.  A single manufacturer license may include multiple endorsements.  A manufacturer license will be valid for only one specific location.

A service center operator license will be required to operate a psilocybin service center.  A service center is the establishment at which a client will purchase, consume, and experience the effects of a psilocybin product under the supervision of a facilitator.  Like manufacturers, a service center operator license will be valid for only one specific location.

A facilitator license will be required to facilitate psilocybin services.  Psilocybin services are the services provided to a client before, during, and after the client’s consumption of psilocybin, including a pre-consumption preparation session, an administration session (which must occur at a service center and at which the client consumes and experiences the effect of a psilocybin product), and a post-consumption integration session.  Unlike manufacturers and service center operators, a facilitator license may only be issued to an individual (as opposed to a legal entity, such as a corporation or limited liability company).  In that sense, a facilitator license will be a personal professional license, not unlike the licenses of many health care and other professionals.  Facilitators will have to complete education and training courses, will have to pass an examination approved and administered by the OHA, and will be subject to a professional code of conduct.  A facilitator license will not be limited to any one location.

A laboratory license will be required to test psilocybin products.  Psilocybin products must be tested at a licensed laboratory before they are transferred by a manufacturer to a service center.  Laboratories must be accredited by the OHA before they are licensed.  Like manufacturers and service center operators, a laboratory license will be valid only for one specific location.  However, it is possible for a person to hold both a manufacturer license and a service center operator license at the same location.

Measure 109 places the following restrictions on the ownership of manufacturer businesses and service center operator businesses:

• An individual may not have a financial interest in more than one manufacturer;
• An individual may not have a financial interest in more than five service center operators;
• If a legal entity holds a manufacturer or a service center operator license, more than 50% of the shares, membership interests, or other ownership interests of the legal entity must be held, directly or indirectly, by one or more individuals who have been Oregon residents for two or more years; and
• If an individual holds a manufacture or a service center operator license as a sole proprietor (which would be inadvisable but possible), the individual must have been an Oregon resident for two or more years.

To be a facilitator, an individual must have been an Oregon resident for two or more years.

The residency requirements for manufacturers, service center operators, and facilitators apply only for the first two years following the two-year development period and expire on January 1, 2025.

Finally, the OHA will have the right to:  (i) require that a licensee or applicant submit to the OHA the name and address of each person that has a financial interest in the business operating or to be operated under the license; and (ii) require that each individual listed on the license or application submit fingerprints to the OHA for a criminal records check.

More blogs about Measure 109 will follow in October as Election Day approaches.

If you have questions concerning Measure 109 or any other laws involving psilocybin, entheogenic plants, or psychedelics in general, please contact attorneys Dave Kopilak, Kathryn Tucker, Sean Clancy, Kaci Hohmann, or Kaitlyn Dent from our Psychedelics Practice Group.

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Oregon Psilocybin Services Act: Measure 109’s Two-Year Development Period

The initiative petition formerly known as Oregon Initiative Petition 2020-034 has been rebranded as Oregon Measure 109.  And with seven weeks to go until Election Day, things are beginning to ramp up.  The Yes on 109 organization released an animated video that provides a general overview of Measure 109, and various campaign ads are on the way.  Yes on 109 also has compiled an impressive number of endorsements.  Additionally, the Oregonian recently published a rather lengthy and interesting article focusing on psilocybin, Measure 109, and Navy SEAL Chad Kuske’s experiences with psilocybin therapy.

An Explanatory Statement Committee (which included me, Yes on 109’s campaign manager Sam Chapman, Deschutes County Sheriff Shane Nelson, Kevin Walruff, and Judy Hall) certified an official Explanatory Statement for Measure 109 that will appear in the Oregon Voters’ Pamphlet, which is scheduled to be posted the week of October 5.

This blog is the first in a series of substantive explanations of Measure 109 that we will publish before Election Day.  As mentioned in a previous blog, Measure 109 is a long measure totaling 71 pages and containing 134 sections.  The complete text can be found here.

This blog will discuss Measure 109’s two-year development period.  The two-year development period is a significant enough feature of Measure 109 that the Oregon Department of Justice included a reference to it in the 15-word limit caption that will appear in the Voters’ Pamphlet.

The two-year development period is tantamount to a significant “delayed effective date.”  The two-year development period technically begins on January 1, 2021 and ends on December 31, 2022.  As a result, Measure 109’s licensing and regulatory program will not be implemented until 2023.  Further, Measure 109 will not change any criminal or other laws regarding the actual manufacture, delivery, or possession of psilocybin until 2023.

There were several purposes behind the two-year development period.  First, as a practical matter, a longer period between passage and implementation will provide the Oregon Health Authority (“OHA”) with more time to adopt rules implementing Measure 109.  Oregon Measure 91, which was passed by Oregon voters in 2014 and which legalized the adult use of marijuana, contained a roughly one-year deadline for its implementation.  This was a relatively short time frame, given that both the Oregon Liquor Control Commission (the “OLCC”) and the Oregon State Legislature (the “Legislature”) had a significant “learning curve” with respect to regulating the adult use of marijuana.  The result was that the implementation of Measure 91 probably did not go as smoothly as it could have.  The idea behind the two-year development period is to better ensure that the OHA is not rushed into rulemaking and that the implementation of the regulatory program under Measure 109 will take place in a more methodical manner.

A second and related purpose is to simply give everyone (the public, the OHA, and the Legislature) more time to become better educated about psilocybin.  Two important educational undertakings will occur during the two-year development period:  (i) the OHA will publish and make available to the public medical, psychological, and scientific studies, research, and other information relating to the safety and efficacy of psilocybin in treating mental health conditions; and (ii) a newly-created Oregon Psilocybin Advisory Board (the “Advisory Board”), which will be comprised of a broad cross-section of health experts, regulatory experts, and other Oregonians, will develop best practices and make recommendations to the OHA.

A third purpose is to give both the Legislature and the federal government the opportunity to take a “wait and see approach” and to do nothing, at least for a while.  As a result of Measure 91’s relatively short deadlines, the 2015 Legislature felt compelled to make a number of changes to Measure 91 before it was even implemented.  Those legislative changes, in turn, caused the OLCC to delay its rulemaking hearings, making for an even more rushed adoption of rules by the OLCC.  Hopefully, the 2021 Legislature will not feel the need to make any substantive changes to Measure 109 before the OHA and the Advisory Bard have a chance to develop best practices.

From the federal government’s standpoint, there is no precedent for a state adopting a licensing and regulatory program for psilocybin services.  Measure 109 will be the first of its kind in the United States.  A subsequent blog will discuss potential reactions by the federal government, but the hope is that the two-year development period will give the federal government some time to learn about psilocybin and Measure 109 before it feels compelled to issue a policy statement or take any other action.

Assuming that the Legislature and the federal government do not intervene, most of the work during the two-year development period will be undertaken by the OHA and the Advisory Board.

The Advisory Board will be established within the OHA.  Measure 109 does not provide for the termination or expiration of the Advisory Board, and it is contemplated that the Advisory Board will exist on a continuing basis.

The Advisory Board will be comprised of 18 or 19 members during the two-year development period.  The Governor will appoint 15 or 16 members as follows:

• Any four of the following: (i) a state employee with expertise in public health; (ii) a local health officer; (iii) a representative of an Indian tribe; (iv) a representative of the Addictions and Mental Health Planning and Advisory Council within the OHA; (v) a representative of the Health Equity Policy Committee within the OHA; (vi) a representative of the Palliative Care and Quality of Life Interdisciplinary Advisory Council within the OHA; and (vii) a representative of individuals who provide public health services to the public;

• A licensed psychologist;

• A licensed naturopathic physician;

• An expert in the field of public health who has a background in academia;

• Any three of the following: (i) a person with experience conducting scientific research regarding the use of psychedelic compounds in clinical therapy; (ii) a mycologist; (iii) an ethnobotanist; and (iv) a person with experience in psychopharmacology; and (v) a person with experience in psilocybin harm reduction;

• A person representing the OLCC who has experience with the OLCC’s Cannabis Tracking System;

• A person representing the Oregon Department of Justice;

• One of Measure 109’s chief petitioners; and

• One or two at-large members.

There will be three additional members that are not appointed by the Governor:  (i) Oregon’s Public Health Director or a designee; (ii) either:  (A) Oregon’s State Health Officer or a designee; or (B) a representative of the OHA; and (iii) a designee of the Oregon Health Policy Board.

Members of the Advisory Board will serve four-year terms.  Only members appointed by the Governor will have voting rights.  Members that are not appointed by the Governor will be nonvoting ex officio members.

The Advisory Board will have the following duties:

• Provide advice to the OHA on all matters related to Measure 109;

• Make recommendations to the OHA on: (i) the medical, psychological, and scientific studies, research, and other information that the OHA should publish and make available to the public; (ii) the requirements, specifications, and guidelines for providing psilocybin services to a client; (iii) public health and safety standards and industry best practices; (iv) a code of professional conduct for psilocybin service facilitators; (v) the education and training that psilocybin service facilitators must complete; and (vi) the examinations that psilocybin service facilitators must pass;

• Develop a long-term strategic plan for ensuring that psilocybin services become and remain a safe, accessible, and affordable therapeutic option in Oregon;

• Monitor federal laws, regulations, and policies regarding psilocybin; and

• Attempt to the meet with the United States Attorney’s Office for the District of Oregon to discuss Measure 109.

The Advisory Board will meet at least once every two calendar months during the two-year development period.

Measure 109’s timelines during the two-year development period are as follows:

• February 28, 2021 – The Governor appoints members of the Advisory Board.

• March 31, 2021 – The Advisory Board holds its first meeting.

• June 30, 2021 – The Advisory Board makes recommendations to the OHA on studies, research, and educational information.

• July 31, 2021 – The OHA first publishes studies, research, and educational information.

• June 30, 2022 – The Advisory Board makes recommendations to the OHA regarding: (i) rules and regulations; (ii) a long-term strategic plan; and (iii) federal laws and policies.

• December 31, 2022 – The OHA adopts rules and regulations and prescribes license application and other forms.

And then, finally, on January 2, 2023, the OHA will begin receiving the first license applications.  Presumably, the first psilocybin licenses will be issued sometime during the first half of 2023.

More blogs about Measure 109 will follow in the coming weeks as Election Day approaches.

If you have questions concerning Measure 109 or any other laws involving psilocybin, entheogenic plants, or psychedelics in general, please contact attorneys Dave Kopilak, Kathryn Tucker, Sean Clancy, Kaci Hohmann, or Kaitlyn Dent from our Psychedelics Practice Group.

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Oregon Psilocybin Services Act (IP 34) Qualifies for the November Ballot

On July 8, 2020, Oregon Initiative Petition 2020-034 (“IP 34”) officially qualified for the November 3, 2020 General Election ballot.

The sponsors of IP 34 submitted over 160,000 signatures, 132,465 of which were determined to be valid by the Elections Division of the Oregon Secretary of State.  The number of signatures required to qualify for the ballot was 112,020, and so the sponsors gathered significantly more signatures than they needed, which is quite an accomplishment given that the COVID-19 pandemic substantially interfered with the signature gathering process.

The Elections Division will soon rebrand IP 34 with a new “Measure XXX” title.  The measure number has not yet been announced, but will be at some point, probably before Labor Day.

The complete text of IP 34 can be found here.  The certified ballot title, which will appear in the Oregon Voters’ Pamphlet, can be found here.  The ballot title includes the following caption and “Yes” and “No” vote result statements:

• Caption: Allows manufacture, delivery, administration of psilocybin at supervised, licensed facilities; imposes two-year development period
• Result of “Yes” Vote: Allows manufacture, delivery, administration of psilocybin (psychoactive mushroom) at supervised, licensed facilities; imposes two-year development period.  Creates enforcement/taxation system, advisory board, administration fund.
• Result of “No” Vote: “No” vote retains current law, which prohibits manufacture, delivery, and possession of psilocybin and imposes misdemeanor or felony criminal penalties.

IP 34 is the brainchild of IP 34’s two chief petitioners, Tom and Sheri Eckert.  The Eckerts envisioned a therapy-based regulatory system that is unlike any cannabis, psilocybin, or entheogenic plant ballot measure, or law that has come before it, at least in the United States.

The most prominent and distinguishing feature of IP 34 is that the administration and consumption of psilocybin will be permitted:  (i) only at a licensed “psilocybin service center;” and (ii) only under the supervision of a licensed “psilocybin service facilitator.”  This means that the consumption of psilocybin, together with the entire hours-long process of experiencing its effects, will take place only in a controlled environment and only under the supervision of licensed and trained personnel.

This method of purchasing and consuming “psilocybin products” is the starkest difference between IP 34 and Ballot Measure 91 (2014), which legalized the adult use of cannabis in Oregon.

IP 34 is also significantly different than several local psilocybin and entheogenic plant ballot measures and laws that have passed in the last year or so.  Those local measures and laws, which have been adopted in Denver, Oakland, and Santa Cruz, do not “legalize” psilocybin or entheogenic plants.  Rather, they generally prohibit or discourage the use of local resources to investigate or prosecute the adult use or possession of such plants.  They also have no effect on State criminal laws or penalties, and as such, are essentially local law enforcement policy statements.

Also, it appears that Oregon will be the only State that will vote on a psilocybin or entheogenic plant ballot measure on Election Day 2020.  Sponsors in California filed a statewide initiative to decriminalize psilocybin, but failed to gather sufficient signatures to qualify for the 2020 ballot.  And so, when it comes to psilocybin, all eyes will be on Oregon in November.

IP 34, also known as the Oregon Psilocybin Services Act (the “OPSA”), is a long ballot measure, totaling 71 pages and containing 134 sections.  Many of the provisions are taken nearly verbatim from the Adult and Medical Use of Cannabis Act (ORS Chapter 475B).  Many other provisions are completely unique and differ significantly from Oregon’s cannabis laws.

In a series of blogs to follow over the next several weeks and months, we will take a deep dive into the OPSA.  Among other topics, we will discuss:  (i) the OPSA’s two-year development period; (ii) the OPSA’s regulatory and licensing structure; (iii) the nature of psilocybin services, and the process of administering and consuming psilocybin under the OPSA; (iv) restrictions on ownership, including residency requirements; (v) confidentiality issues; (vi) tax issues; (vii) “opt out” procedures for local jurisdictions; (viii) potential reactions from the federal government, including the U.S. Attorney for the District of Oregon; (ix) potential business opportunities; and (x) legal issues for attorneys.

If you have any questions concerning the OPSA or psilocybin, entheogenic plants, or psychedelics in general, please contact Dave Kopilak, Sean Clancy, Kaci Hohmann, or Kaitlyn Dent from our psychedelics practice group.

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Follow-up: Guide to Accessing Paycheck Protection Program for Small Businesses Affected by COVID-19

On April 24, 2020, President Trump signed the new “phase 3.5” emergency coronavirus relief package into law (the “Bill”). The Bill includes an additional $310 billion for the Paycheck Protection Program (the “PPP”). The PPP is a federal loan forgiveness program created under the CARES Act to assist small businesses struggling with payroll and operating expenses due to the economic fallout from the global COVID-19 pandemic. Though initially funded with an unprecedented $350 billion, the PPP is a “first come, first served” lending program and quickly ran out of funds within a matter of two weeks.

Banks may begin accepting PPP applications again as early as next week and if you missed out on the initial round of funding, it is crucial that you prepare for the new round of funding before the well runs dry. Notably, the Bill has specifically earmarked $60 billion of the new PPP funds for distribution by small credit unions and community banks. This is good news for the smallest of small businesses that struggled to obtain loan proceeds through big banks during the first round of funding.

For more information about whether your business qualifies for financial assistance under the PPP, see our previous blog on the topic or reach out to one of our business law experts for advice.

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Guide to Accessing Paycheck Protection Program for Small Businesses Affected by COVID-19

The federal Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law on March 27, 2020 to provide assistance to individuals and businesses affected by the global COVID-19 pandemic.  Under Sections 1102 and 1006 of the CARES Act, the Small Business Administration (the “SBA”) is authorized to establish a new loan program known as the “Paycheck Protection Program” (the “PPP”) with $350 billion in funding and a goal to disburse loans as quickly as possible to small businesses to cover payroll and other operating expenses.  Importantly, the principal amount of PPP loans may qualify for forgiveness so long as certain requirements are met.  Because PPP loans are issued on a “first come, first served” basis, it’s crucial that eligible businesses apply now.

The PPP went “live” on April 3 and that same day, the SBA published its interim final rule implementing the program (the “Rule”).  The Rule is subject to a 30-day public comment period and subsequent amendments may follow.  If COVID-19 has affected your business, read our summary below to better understand the SBA PPP loan eligibility requirements and application process.

Is my business eligible for a PPP loan?

“Small business concerns” or certain tax-exempt nonprofit organizations that were in operation on February 15, 2020 and had 500 or fewer employees are eligible for a PPP loan.  A “small business concern” is a business that is independently owned and operated, not dominant in its field of operation, and does not exceed small business size standards listed in the North American Industry Classification System (“NAICS”).  The SBA has a webpage with a table of small business size standards that matches the NAICS codes.

Sole proprietors, individual contractors, or certain self-employed individuals operating as of February 15, 2020 are also eligible for a PPP loan on and after April 10, 2020.

Although these requirements are easy to meet for many small businesses, the SBA has a host of eligibility disqualifiers.  Ineligible types of businesses are listed in the SBA’s Standard Operating Procedure 50 10 5(K) published on April 1, 2019 (the “SOP”) and include, among others, businesses engaged in any illegal activity.

Despite most states with shelter-in-place orders deeming marijuana businesses as “essential” during this pandemic, marijuana is still classified as a Schedule 1 drug under federal law and the SBA specifically identifies “marijuana-related businesses” as engaged in illegal activity.  Both “direct marijuana businesses” (e.g.. businesses that grow, produce, process, distribute, or sell recreational or medical marijuana or marijuana products) and “indirect marijuana businesses” (e.g. businesses that derive any of their gross revenue from sales to direct marijuana businesses of products or services that could reasonably be determined to aid in the use, cultivation, or distribution of marijuana) are considered ineligible to receive a PPP loan.  However, businesses engaged in hemp-related activities consistent with the 2018 Farm Bill are eligible for a PPP loan.  We can advise on the eligibility of your business if you are unsure whether you qualify for the program.

How much can I borrow and what are the loan terms?

The maximum loan amount available to borrowers under the PPP is the lesser of $10 million or an amount determined using the payroll-based formula specified in the CARES Act.  The Rule contains an easy-to-use guideline for the payroll-based formula, but we recommend working with your accountant to aggregate payroll costs and determine the appropriate PPP loan amount.

The interest rate on a PPP loan is 1% and although loan payments are deferred for 6 months, interest accrues on the principal amount borrowed including during the deferment period.  If your business does not qualify for loan forgiveness, the maturity date for the loan is two years.

Do I qualify for forgiveness under the PPP?

The full principal and accrued interest on the PPP loan is forgivable so long as you use the loan proceeds for authorized purposes and maintain employees at their current compensation levels.  You can use the PPP loan proceeds to pay for payroll costs, costs related to group health care benefits and insurance premiums, mortgage interest obligations, rent payments, utility payments, and interest payments on debt obligations.  However, only up to 25% of the loan forgiveness amount can be attributable to non-payroll costs.

To apply for forgiveness, you must document the proceeds used for payroll costs and other non-payroll expenses during the 8-week period following the loan issuance.  If you use PPP loan proceeds for unauthorized purposes, the loan amounts will not be forgiven and must be repaid.  Furthermore, if you knowingly use the loan proceeds for unauthorized purposes, you may be subject to additional liability such as fraud charges.

Can I apply for a PPP loan if I already received an SBA EIDL loan?

You can still apply for a PPP loan if you already received an SBA Economic Injury Disaster Loan (“EIDL”). However, if you used your EIDL loan to cover payroll costs, your PPP loan must be used to refinance your EIDL loan.  Also, the $10,000 grant issued in connection with the EIDL will be deducted from the loan forgiveness amount on the PPP loan.

When and where should I apply for a PPP loan?

You have until June 30, 2020 to apply for a PPP loan.  However, PPP loans are “first come, first served” and lenders have been inundated with PPP loan applications since the program went “live.”  Therefore, we urge you to apply as soon as possible.

The Rule does not require a borrower to apply with the borrower’s current bank.  However, to prioritize applications, many banks are only lending to businesses with a pre-existing business banking relationship.  If your bank is not servicing PPP loans or you do not have a pre-existing business banking relationship at a bank, there are third-party loan marketplaces that route PPP loan applications to SBA lenders.  The SBA also has a helpful webpage listing participating PPP lenders.

If you do not qualify for a PPP loan, there may be state and local options available to you.  At Emerge Law Group, we strive to provide you with the important information you need to safeguard your business during the COVID-19 pandemic.  Please don’t hesitate to reach out for all of your business-related legal needs.

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Contracts During Coronavirus

By Sean Clancy and Kaci Hohmann

As the coronavirus (COVID-19) pandemic rips across the planet, relationships between the environment, governments, businesses, employers, property owners, and individuals are suddenly much more uncertain than usual. Information, guidance, and directives from authorities are changing daily and will continue to change. The total economic and human cost of this virus will not be known for a while, if ever. It is extremely difficult, if not impossible, to accurately predict what will happen next with our most important relationships.

Ordinarily, contracts help establish certainty in relationships, clarifying what’s supposed to happen and what’s expected from the parties. But what happens during a global health crisis when the parties are faced with unprecedented predicaments that hinder their ability to fulfill the commitments they made or intend to make?

The specific facts of each situation affect whether or not contracts are legally enforceable. Although every situation is different, there are a few legal principles that can shape what happens next.

A force majeure clause in a contract might provide a defense to breach or non-performance when “acts of God,” “acts of Nature,” extreme events, or other circumstances occur that are unforeseeable and beyond a party’s control. Force majeure clauses vary in scope depending upon negotiations between parties or, more commonly (until now maybe), whatever boilerplate language the contract drafter happened to include. Some force majeure clauses contain only broad catch-all language, while others are more specific. Such clauses usually identify a laundry list of catastrophic events that may include earthquakes, volcanoes, riots, declared war, acts of terrorism, and, sometimes, pandemics.

A party seeking to excuse its performance under a force majeure clause must demonstrate that its performance is delayed or made impractical or impossible because of the uncontrollable event. Financial burdens or mere difficulties in meeting obligations are insufficient by themselves to excuse performance under a force majeure clause. Courts typically consider whether: (1) the uncontrollable event fits within the definition of a force majeure event under the contract; (2) the risk of nonperformance was unforeseeable and unable to be mitigated; and (3) performance is truly impossible because of the event.

Specific references to an “epidemic” or “pandemic” in a force majeure clause probably cover COVID-19 depending on the circumstances contemplated for performance under the contract. Force majeure clauses that do not specifically mention “epidemic,” “pandemic,” or similar language, may still include COVID-19, depending upon how broad or narrow the language is. By now, COVID-19 almost certainly fits within a broad term like “act of Nature.”

Foreseeability is also crucial in determining what is excusable when an “act of Nature” occurs. Courts and legal experts might disagree about what was foreseeable by parties who formed contracts while the outbreak was in its earlier stages, outside the parties’ jurisdiction. But contracts currently formed during the pandemic that do not specifically address COVID-19 might not allow for excused performance because the parties now have knowledge of the pandemic. Virtually everyone on the planet is affected by COVID-19, so the existence of the virus itself is no longer unforeseeable. That said, it is difficult to know what additional consequences of COVID-19 may still be unforeseeable.

Additionally, if a party wants to be excused, it must prove that performance is an “impossibility.” Even if there isn’t a force majeure clause in a contract, sometimes contractual performance can still be excused based upon common law legal concepts of “impracticability” or “impossibility.” These legal concepts are heavily fact dependent, based upon the circumstances of the deal and the parties’ respective situations. As governments and businesses continue expanding limitations on travel, work, and gatherings of humans, contractual obligations might or might not be deemed legally impracticable or impossible.

There aren’t easy answers regarding what to do next. We recommend reviewing important existing contracts closely to understand rights, obligations, and exit strategies in light of the current COVID-19 pandemic; specifically, take a close look to determine if your contract contains a force majeure clause and ask what that clause does or doesn’t allow. Consider your options and available remedies if a party to the contract wants to excuse or delay their performance.

If you are entering a new deal and forming a new contract, you should consider the existence of COVID-19 during the contract’s formation and its potential effects on the deal later. If you want the counterparty to perform no matter what, consider an “anti-force majeure clause” or negotiating terms that explicitly prevent COVID-19 from being an excuse for nonperformance. If you are apprehensive about either party’s ability to perform, consider the advantages and disadvantages of addressing “pandemic” and COVID-19 specifically as a force majeure event.

Don’t hesitate to contact an attorney if you are concerned about what to do next. Our job is to develop creative solutions for difficult situations to help protect your goals, especially during times of uncertainty.

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Oregon’s New Corporate Activity Tax and Its Impacts on Businesses

In the legal field, the beginning of a new year is often synonymous with new laws and 2020 is no exception. Oregon’s new corporate activity tax, also known as “CAT”, goes into effect beginning January 1, 2020.  The CAT is a gross-receipts tax that affects virtually every industry in the state, including the cannabis and hemp industries. Here’s a quick peek at what you need to know.

Who does CAT affect?

The CAT affects nearly every industry and every business type, including individuals, corporations, LLCs, partnerships, and trusts. The CAT even burdens businesses that do not have a physical presence in Oregon but: (1) have property in Oregon with an original cost of at least $50,000; (2) have payroll in Oregon of at least $50,000; (3) have commercial activity sourced to Oregon of at least $750,000; or (4) at least 25% of the property, payroll, or commercial activity occurs in Oregon.

The CAT is a pyramid tax, meaning the tax is assessed at every level of business activity, including on suppliers, manufacturers, wholesalers, and retailers.  This may have the unwanted effect of increasing prices in the marketplace and ultimately, passing on those increases to consumers.

How much will CAT cost?

Businesses with Oregon gross receipts of $750,000 or more must register for the tax with the Oregon Department of Revenue (“DOR”).  Businesses with Oregon gross receipts in excess of $1 million must file a return and pay a tax of $250 plus 0.57% of the gross taxable commercial activity (“TCA”).

TCA means Oregon gross receipts less 35% of the greater of: (1) cost of goods sold; or (2) labor costs. “Labor costs” means the total compensation of all employees (not including amounts paid to any individual in excess of $500,000); however, it is currently unclear whether the definition means only wages, or also includes benefits and payroll-related taxes.  There are 43 types of receipts that are exempt from the CAT so understanding which receipts fall into which category is crucial in determining the tax owed.

It’s important to note that CAT is a gross-receipts tax, which means some businesses may pay tax on dollars they don’t actually realize in profit.  This could have a serious effect on businesses currently operating at a loss.

When is CAT due?

Although the DOR has not yet built the system for processing CAT, the first estimated quarterly CAT payment is due in April 2020, and then each quarter thereafter.  The first annual return will be due April 15, 2021.

If your business is affected by the CAT, we strongly encourage you to reach out to your CPA or tax counsel.  Emerge Law Group’s tax specialists can also help answer any questions you may have.

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Writing Requirements for Copyright Transfers

By default, the author of an original work of creative authorship owns the copyright to that work upon creation.  And under Section 204 of the Copyright Act a transfer of copyright ownership is not valid unless it’s in writing.

That means, with some specific exceptions, an independent contractor who creates an original work of creative authorship fixed in any tangible medium of expression (e.g. written words, musical works, dramatic works, graphic works, pictures, designs, architectural drawings, sculptures, websites, software or computer code etc.) owns the copyright to that work unless a transfer of ownership has been agreed upon in writing.

If you’re an independent contractor, this can create substantial negotiating leverage during (or after) the course of a project because you own the copyright to the work until you sign it away.

If you’re hiring independent contractors, you probably want to ensure that your contractors have signed off to transfer copyright ownership. Otherwise you might find that you don’t actually own the creative work you thought you paid for.

We have seen both sides of it, even among sophisticated people: both contractors and businesses that hire them sometimes neglect the fundamental issue of copyright ownership when they agree to work together.  Clients have showed us invoices, email correspondence, text messages, detailed scopes of work, and even formal contracts with assertive language about payment timing, recordkeeping, portfolio rights, warranties, indemnification, and limitations of liability.  Yet they sometimes overlook the critical concept of copyright ownership of the work product.  It doesn’t need to be complicated — a simple one page contract (or a single boilerplate phrase) identifying and transferring the work can do the trick.

A few important notes and caveats:

A well-known exception to this writing requirement applies to copyrightable works prepared by an employee “within the scope of his or her employment” (not acting as an independent contractor).  Copyright ownership for such work automatically vests with the employer as “works made for hire.”  Critically, this exception requires (a) employment status and (b) acting within the scope of employment.  Employment status is often (but not always) fairly clear (think W-2, payroll).  But sometimes an employee’s scope of employment is not clear if it isn’t written down in their job description or employment contract.  Software code from a salaried computer programmer or an employee manual from a human resources director are clearly works within the scope of their employment — but what if those employees took photos for their employer’s website while on the clock?  Created logo designs?  It isn’t always clear whether or not creative works fall within an employee’s job description.  Whenever there’s doubt, it is safest to have a signed contract.

And we’re talking about copyright ownership here, which is different from permission to use the copyright (also known as a license).  Oregon sits within the 9th Circuit where courts can find an implied license under the right circumstance, where permission to use the materials is understood although ownership does not transfer.  But relying on such implied licenses is risky and uncertain because the parameters of implied licenses aren’t always clear.  How long does the license last?  Does it cover all types of uses of the work?  Is it transferrable?  Can the license be terminated?  Without a clear written understanding, material disagreements can develop later.  So despite the possibility of implied licenses, it is best to have a written document in place, even a short one, to ensure that everyone understands who owns the copyright.

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FRANCHISE LAW

Franchisors

Franchise law is a heavily regulated area of law.  We help clients expand their businesses through franchising and other distribution methods. We have experience in many industries including, restaurants, health, and beauty, alcohol, and cannabis among others. Our representative services include the following:

Franchisees

We also help potential franchisees interested in buying a franchise. We are able to assist with evaluation of franchise opportunities with respect to:

Alternative Structures

However, not all businesses are suited to franchise. We are also experienced with helping clients structure alternative distribution methods to prevent classification as a franchise.

MERGERS AND ACQUISITIONS

Our M&A attorneys are highly experienced in counseling clients who are considering acquisitions or exit strategies.  We have many years of experience handling deals of various types and sizes, ranging from sales of small closely-held business, private companies, and publicly-traded corporations.  We have represented business owners, private equity firms and investment banks in a wide range of industries. 

We have a deep business bench, and Emerge attorneys have handled transactions of all shapes and sizes.  Whether your deal is valued at $100,000 or $100,000,000, our experienced attorneys will guide you through the deal process.

We understand the intensity, technical skill and judgment needed to get deals done, and we provide our clients with timely, practical and cost-effective legal advice.  We are highly capable in all aspects of M&A, including the following:

CANNABIS INDUSTRY

Emerge Law Group is highly experienced in the cannabis industry.  We have helped many clients obtain state licenses and local permits to operate cannabis businesses throughout California, Oregon, and Washington.

Emerge attorneys were instrumental in the drafting and passage of Oregon Measure 91, legalizing marijuana in the State of Oregon, and have represented cannabis businesses well before many law firms were willing to enter the cannabis industry. As a firm that has provided legal services in the cannabis space for many years, we are familiar with the unique and complex issues businesses and individuals face in an emerging and highly regulated industry.

We regularly help clients with:

Cannabis laws and rules are also regularly changing.  Members of our team are dedicated to attending legislative hearings, state agency and local city and county meetings to stay up-to-date on any new changes and how to adjust to any new changes.

See our Cannabis Industry page for more information.

PSYCHEDELICS

There is tremendous excitement about the potential for psychedelic drugs to benefit a wide variety of populations, including terminally ill patients suffering with anxiety and depression. Until recently, psychedelic substances have been accessible only in the illicit market and are illegal under federal and state to manufacture, distribute, or possess. These substances have, since 1970, been treated as having no legitimate medical use, and no commercial application. As such, no one invested in this area or required legal services, outside of the criminal context.

Today, researchers in a multitude of clinical studies are proving the medical safety and efficacy of these medicines, with the objective of changing the treatment of these substances under the Controlled Substances Act. Companies are now actively raising money to develop intellectual property and seize market opportunities associated with psychedelic drugs.

In addition, advocates at the state and local levels are not waiting for the rescheduling of these substances and are active in undertaking efforts to decriminalize these substances and/or make them affirmatively legal under state and/or municipal law. Decriminalization already has occurred in cities including Denver, Oakland, Santa Cruz, and Ann Arbor. Oregon is poised to be the first state to make psilocybin therapy affirmatively legal. Emerge Law Group is working with a wide array of clients pushing forward in this emerging area.

See our Psychedelics Practice Group page for more information.

TAXATION

CORPORATE AND PARTNERSHIP TAX

Businesses of all kinds benefit from a customized but systematic approach to structuring legal relationships. Emerge Law Group helps businesses and business owners with a variety of tax planning matters.

Representative client services include:

ESTATE PLANNING

Estate planning encompasses everything from a will and power of attorney to combined estate and business succession planning. In almost all cases, the purpose of the plan is to help the client protect those they care about most in the event they can no longer be there for them.

Emerge Law Group has experience with a wide range of tools used in estate planning, including wills, trusts, and family business entity planning.

TAX CONTROVERSIES

Emerge Law Group can assist with the resolution of difficult tax controversies. Our areas of emphasis and experience include:

REAL ESTATE TRANSACTIONS

Emerge Law Group assists clients with a wide range of real estate transactional matters.  We regularly help clients with:

LAND USE

Emerge Law Group also assists clients with all aspects of local government land use and development processes, ranging from preliminary property analyses and building permit issues to complex land use reviews and hearings. Our attorneys are experienced in obtaining land use entitlements and development permits for a wide range of uses.

We regularly help clients with:

Above all, we understand the value of working with cities and counties to enhance communities while developing the land to its potential. We strive to create solutions to land use issues that serve to better our clients and the communities in which they live and work.

LITIGATION AND ALTERNATIVE DISPUTE RESOLUTION

The attorneys in Emerge Law Group’s Litigation and Alternative Dispute Resolution practice group litigate commercial, intellectual property, and public interest matters in state and federal courts, as well as private mediation and arbitration proceedings.  Our lawyers have represented national and regional financial institutions, major media, entertainment and technology companies, and other Fortune 500 companies in a broad array of high-stakes disputes.  Our team of litigators has handled leading cases that have shaped the law in cutting-edge business, technology, free speech, and public interest impact lawsuits in trial and the courts of appeal.

We have particular expertise in handling civil litigation and regulatory enforcement matters in the cannabis and psychedelic industries.  While many firms claim expertise in the these industries, few have our depth of experience successfully litigating contract, trademark, partnership, shareholder, land use, and real estate disputes in court and arbitration.  Even fewer firms have our level of experience handling writ of mandate proceedings against the government regulators.

Our litigators practice in California, Oregon, and Washington, but have appeared in state and federal courts nationwide.  Our knowledge of our clients’ businesses, goals and concerns, and our experience litigating at the highest levels, give us unique insight into possible outcomes and pitfalls as we continuously confront issues of new impression.

No matter what the industry, we pride ourselves in achieving our clients’ objectives through efficient and creative solutions primarily designed to avoid disputes in the first place—which is always the best litigation strategy.  Many times, our clients obtain excellent outcomes before or at the earliest stages of litigation because our adversaries quickly recognize the challenges they will face in litigating against us.  When litigation is unavoidable, however, we work hard to provide our clients with both cost-efficient and “big firm” quality representation.

 

INTELLECTUAL PROPERTY

Your intellectual property (or “IP”) strategy can harness your most valuable information and intangible assets including your name, your brand, your designs, your content, your services, and your products — what makes your business stand apart in a competitive world.  We can help you evaluate and build your IP portfolio, then secure it, monetize it, and protect it.

IP encompasses multiple areas of law and different types of information or material.

Our Intellectual Property practice focuses on:

TRADEMARK

Trademarks include names, signs, logos, designs, phrases, slogans, expressions, and sometimes even colors, sounds, or smells that identify or distinguish one business compared to others.  Trademark protection is fundamental in securing your “brand.”

COPYRIGHT

Copyright covers original works of creative authorship fixed in a tangible medium of expression.  This includes literary, dramatic, musical, and artistic works, such as poetry, novels, designs, movies, songs, computer software, and architecture. Copyright does not protect facts, ideas, systems, or methods of operation, although it may protect the way these things are expressed.  Depending upon the type of work, “moral rights” (such as the right of attribution) may be implicated as well.

TRADE SECRET

Trade secret laws can vary somewhat between states, but generally trade secrets cover information, including drawings, cost data, customer lists, formulas, recipes, patterns, compilations, programs, devices, methods, techniques or processes that derive economic value from not being generally known and are the subject of efforts that are “reasonable under the circumstances” to maintain secrecy.

PRIVACY

Depending upon where you live or operate, there is a special patchwork of laws and regulations that protect and regulate personal information.  If you are handling or giving out personal or potentially sensitive information, you may be implicating privacy laws.

PUBLICITY

Publicity rights address the commercial use of an individual’s face, name, image, or likeness.  These rights vary state-to-state.  Marilyn Monroe, for example, lived in multiple states which created complex questions about her publicity rights.

Our Intellectual Property services include:

FINANCIAL INSTITUTIONS

In states where new cannabis banking opportunities exist, Emerge Law Group has the proven expertise in creating canna-banking programs to efficiently capitalize on those opportunities. Our Banking Practice Group specializes in working with banks and credit unions to develop regulatory compliant programs and operational best practices. We also train banking staff to become experts in canna-banking so they can effective understand and manage the risk affiliated with canna-banking.

We regularly help clients with:

EMPLOYMENT LAW

At Emerge Law Group, we recognize that employees are the heart and soul of any successful business.  Our Employment Law Practice Group works with employers to help them effectively manage their workforce, navigate the complex web of federal, state and local employment laws and, if necessary, defend against claims before administrative agencies and in court.

We regularly help clients with:

CORPORATE FINANCE AND SECURITIES

Our corporate finance and securities lawyers are experienced attorneys who have practiced at large law firms, worked as in-house counsel for public companies and investment banks, and owned and operated start-up companies. We work with clients to help achieve their financing goals while safely navigating the highly technical securities law landscape. 

In addition to representing issuers, we also routinely represent institutional and individual investors, including in connection with fund formation and investments.

Our expertise includes:

We have a deep understanding of the financing options available to businesses, including simple unsecured loans, asset-backed financing, convertible debt, common and preferred equity, crowdfunding and various other structures.  We work closely with our clients to understand their business and financing needs, ensure they are prepared to approach investors and choose the right partners, structure and negotiate terms, navigate the due diligence process and successfully close the deal.

COMPLIANCE AND LICENSING

ALCOHOL AND BEVERAGE INDUSTRY

Emerge attorneys have represented businesses in the alcohol and beverage industry, including wineries, breweries, distilleries, restaurants, bars, movie theaters, golf courses, and gas stations.  We can help you vet new locations, acquire existing locations, and apply for the appropriate liquor license.  We also provide training to comply with applicable rules and regulations, prepare operating procedures, submit renewals, and keep clients protected in the event of any potential violations or administrative hearings.

CANNABIS INDUSTRY

Emerge Law Group is highly experienced in the cannabis industry.  We have helped many clients obtain state licenses and local permits to operate cannabis businesses throughout California, Oregon, and Washington.  We regularly help clients with:

Cannabis laws and rules are also regularly changing.  Members of our team are dedicated to attending legislative hearings, state agency and local city and county meetings to stay up-to-date on any new changes and how to adjust to any new changes.

See our Cannabis Industry page for more information.

PSYCHEDELICS INDUSTRY

Emerge Law Group is a leader in the psychedelics industry.  There is tremendous excitement about the potential for psychedelic drugs to benefit a wide variety of populations, including veterans struggling with PTSD and terminally ill patients suffering with anxiety and depression.  Until recently, psychedelic substances have been accessible only in the underground; they are illegal under state and federal law to manufacture, distribute, or possess.  These substances have, since 1970, been treated as having no legitimate medical use, and no commercial application.  As such, businesses have not invested in this area or required legal services, outside of the criminal context.

Today, psychedelics are proceeding toward legalization on multiple paths.  Researchers in a multitude of clinical studies are proving the medical safety and efficacy of these medicines, with the objective of changing the treatment of these substances under the federal Controlled Substances Act, opening legal access to them.  Private and public companies are now actively raising money to develop intellectual property and capitalize on the market opportunities associated with psychedelic drugs.  Opportunities to be early actors in this new arena are tremendous.

See our Psychedelics Practice Group page for more information.

BUSINESS AND CORPORATE

Our business transactions team is made up of highly experienced transactional attorneys who have practiced at large law and accounting firms, worked as in-house counsel for public companies and investment banks, and owned and operated start-up companies. We understand complex legal matters and provide high quality legal services in a cost-effective manner.  Our clients value our experience, knowledge and judgment.

ENTITY FORMATION

Our team routinely advises clients regarding:

CORPORATE GOVERNANCE

Emerge attorneys also advise on-going concerns with: