CannaBeat – Emerge Law Group

CannaBeat – June 7, 2023

June 7, 2023
in CannaBeat, CannaBeat Podcast, Cannabis Industry Group, Delia Rojas
Emerge Law Group
Cannabeat by Emerge Law Group

CannaBeat is a curated biweekly selection of top news stories impacting business, research, and culture in the cannabis industry, crafted by Emerge Law Group.

Emerge’s Hot Take

Finding Essential Oil Dispensers to be Illegal Drug Paraphernalia, Trademark Trial and Appeal Board (“TTAB”) Affirmed Refusal of Two Federal Trademark Applications

Last month, the TTAB published a precedential opinion affirming the United States Patent and Trademark Office’s (“USPTO”) rejection of two applications for the marks “BAKKED” in standard character form and a corresponding logo. The applications sought registration for an “essential oil dispenser, sold empty, for domestic use,” and were originally filed in 2016.

Despite the absence of any reference to cannabis in the applications, the USPTO refused to register the marks due to alleged violations of the Controlled Substances Act (“CSA”). For further details, refer to the opinion in the case of In re National Concessions Group, Inc. available HERE. This decision underscores the USPTO’s and TTAB’s heightened scrutiny of applications associated with cannabis businesses.

In this case, TTAB was unconvinced by applicant’s attempts to draw parallels between its oil dispenser, and razor blades or postage scales. The TTAB found that, unlike with blades and scales, extensive evidence indicated that applicant’s identified products were primarily intended for use with schedule I drugs. Evidence included applicant’s website and marketing of its “Bakked Dabaratus” all-in-one dabbing tool, advertised for “the perfect dose of cannabis extract.”

The TTAB also rejected applicant’s claim that the application qualified for a CSA exemption, citing the legality of cannabis under state law. The USPTO has consistently maintained that a mark must be in “lawful use” under federal law to qualify for registration. In its examination, the USPTO reviewed the company’s website and social media presence, determining the primary purpose of the products was for use with cannabis.

The USPTO further clarified that, although cannabis may be legal in certain states, federal trademark registration rights extend beyond state borders, and the products would be subject to interstate commerce regulations. The authorization of one state to legalize cannabis “cannot override the laws of the other states or federal law[…]”

Emerge’s intellectual property practice group chair, Sean Clancy, had this to say: “Although this decision is precedential, it mostly reiterates the same dated policies that USPTO has been following for years in this arena, similar to the ULTRA TRIMMER case. Brand owners can only get federal registration for federally lawful goods and services. How they do that is heavily fact-dependent, and achievable with the right strategy but not easy. If National Concessions Group’s marketing had not focused on cannabis, perhaps they might have enjoyed a different outcome.” Indeed, in a footnote, TTAB noted that, “nothing in the record supports a finding that Applicant uses its marks on anything other than an apparatus used to dispense cannabis-based oils for vaping […]”

“As with everything else, cannabis businesses must exercise extra diligence and caution in developing and safeguarding their brands,” remarks trademark attorney Delia Rojas. Under the shadow of federal prohibition, brand protection remains challenging for cannabis businesses. Careful trademark strategies should be evaluated on a case-by-case basis for each business.

Other Noteworthy News

Minnesota Governor Signs Bill Legalizing Recreational Marijuana

"Minnesota Gov. Tim Walz (D) signed a bill legalizing recreational marijuana on Tuesday, making the North Star State the 23rd in the nation to fully legalize the substance. “We’ve known for too long that prohibiting the use of cannabis hasn’t worked,” Walz said in a statement. “By legalizing adult-use cannabis, we’re expanding our economy, creating jobs, and regulating the industry to keep Minnesotans safe.” The legislation allows adults 21 and older to carry up to 2 ounces of marijuana in public and possess up to 2 pounds at home, starting Aug. 1. It will also automatically expunge low-level cannabis convictions and create a board to examine expunging or resentencing felony cannabis convictions. “Legalizing adult-use cannabis and expunging or resentencing cannabis convictions will strengthen communities,” Walz added. “This is the right move for Minnesota.” However, the bill’s sponsor, state Rep. Zach Stephenson (D-Coon Rapids), has warned it will likely take time to expunge criminal records and get licensed dispensaries up and running in the state. The Minnesota Bureau of Apprehensions has previously said the earliest it would be able to expunge all records would be by August 2024."

VA Would Study Medical Marijuana Benefits for Military Veteran’s with PTSD Under New GOP-Led Bill

"A Republican congresswoman has reintroduced a bill meant to promote research into the medical potential of marijuana for military veterans. The Veterans Cannabis Analysis, Research, and Effectiveness (CARE) Act, filed last week by Rep. Mariannette Miller-Meeks (R-IA), identical to an earlier measure she sponsored last session. That bill would require the U.S. Department of Veterans Affairs (VA) to “conduct and support research relating to the efficacy and safety of forms of cannabis” for chronic pain, post-traumatic stress disorder (PTSD) and “other conditions the Secretary determines appropriate.” The legislation specifies that the VA studies must involve plants and extracts, at least three varieties of cannabis with different concentrations of THC and CBD and “varying methods of cannabis delivery, including topical application, combustible and non-combustible inhalation, and ingestion.” VA would first have to submit a research plan to House and Senate Veterans’ Affairs Committees and make any requests to support the studies. Over the course of five years after the bill is enacted, VA would need to send annual reports on its progress to the panels."

Louisiana House of Representatives Passes Cannabis Expungement Bill

"The Louisiana House of Representatives recently passed a bill to improve the state’s expungement program for cannabis possession convictions. Rep. Delisha Boyd sponsored the bill, which passed with a 69-30 vote. “House Bill 286 is a request for a reduction in expungement fees in first offense marijuana. I’ve worked closely with the DA association, sheriffs, and the clerks, to put this bill in its proper posture,” Boyd said at the hearing on May 23. The Louisiana House Democratic Caucus recently posted on social media about the bill’s passing as well. “This bill passed the House today and will make it easier for people to get the post-conviction relief and justice they need and deserve. #LaLege #LaGov.” The bill was amended by House representatives, including the adoption of the proposed law that would only apply to 14 grams or less, and also stating that the fee would be set at a maximum of $300 for those convicted of misdemeanor offenses for cannabis possession. According to the bill, these fees will be distributed immediately to the proper channels. “The clerk shall immediately direct the collected processing fees provided…to the sheriff and the district attorney, and the processing fee amount shall be remitted immediately upon receipt in equal proportions to the office of the district attorney and the sheriff’s general fund,” the bill states."

Bill Allowing Amsterdam-Style Cannabis Cafes Passes California Assembly

"A State Assembly bill that would allow Amsterdam-style cannabis cafés where customers would be permitted to consume the tranquilizing herb onsite, received broad partisan support on Wednesday, passing the assembly 64-9. While onsite cannabis consumption is allowed in certain circumstances, AB 374 would permit the sales of non-cannabis-infused products and allow for a more inviting and coffee shop-style experience. Current law bans the sale of non-cannabis related products. […] Haney sees the bill as one that will build on California's deep roots in cannabis culture and set the state on a path to better compete with Amsterdam – a city of 1.4 million people located in the Netherlands that is also known for its cannabis culture. Amsterdam currently has over 700 cafés that permit onsite cannabis use, which rake in an estimated $1 billion annually. Haney hopes the bill will help move the cannabis industry out of a "pharmacy-like business" where customers simply pick up their supplies at a dispensary and leave, into one that is more sociable. He also hopes the bill will allow the currently struggling cannabis industry a greater opportunity to diversify its businesses and to promote tourism in downtown areas and other struggling business districts across the state."

Subscribe to CannaBeat to receive essential weekly articles on news, business, and culture in the cannabis industry, delivered straight to your inbox.

CannaBeat by Emerge Law Group

CannaBeat is a weekly brief on news, business, and culture in the cannabis industry curated by members of Emerge Law Group's distinguished Cannabis Industry Group.

CannaBeat – May 19, 2023

May 19, 2023
in CannaBeat, CannaBeat Podcast, Cannabis Industry Group, Delia Rojas
Brittney Nelson
Cannabeat by Emerge Law Group

CannaBeat is a curated biweekly selection of top news stories impacting business, research, and culture in the cannabis industry, crafted by Emerge Law Group.

Emerge’s Hot Take

Regulators and Advocates Discuss Next Steps for Marijuana Interstate Commerce

It’s been almost 30 years since California legalized medical cannabis, and since then 40 states and the District of Columbia have some form of cannabis legalization (medical, recreational, or both). The Federal government continues to slowly work its way through which approach to take – full decriminalization versus legalization; and then in the meantime work on social equity and providing banking access. Certain states are making moves to prepare for the next step of the industry – interstate commerce. Each of the three West Coast states – California, Oregon, and Washington – have enacted legislation to allow for interstate commerce contingent on the U.S. government legalizing cannabis or allowing for such transactions without federal interference.

The restriction on the cannabis market to stay within state lines has been especially hard on the west coast states that are known for their cannabis and cannabis products. General Counsel for the Department of Cannabis Control in California said “that restricting marijuana markets within state lines is economically unattainable.” He further describes how the situation is analogous to other industries,

“If the Michigan auto industry could only sell cars to people in Michigan, or Florida orange growers could only sell oranges to people in Florida or if the California wine industry could only sell wine to California, I’m not sure that each of those would be a viable legal industry.”

It’s likely that the aforementioned products would not be known as absolute staples in their specific industry if restricted in such a way that most consumers didn’t have access to the specific products from that region. It could be argued that the Emerald Triangle is known as a place for top shelf artisanal cannabis because prior to legalization the product was able to reach a broader consumer market. The Federal government is dragging their feet on this issue but States are not waiting, and rather working to bring the industry in to the next phase, the next era of the legal cannabis market.

Other Noteworthy News

U.S. Senate Committee Holds Marijuana Banking Hearing

"A key U.S. Senate committee convened on Thursday to discuss marijuana banking issues and bipartisan legislation that seeks to resolve the industry’s unique financial challenges. Members of the Senate Banking Committee didn’t take any votes at the hearing, which was titled “Examining Cannabis Banking Challenges of Small Businesses and Workers,” but a focal point was the Secure and Fair Enforcement (SAFE) Banking Act. ens. Jeff Merkley (D-OR) and Steve Daines (R-MT) refiled the measure last month, and they were among those who testified at the committee hearing. Other witnesses included representatives of the Cannabis Regulators of Color Coalition (CRCC), United Food and Commercial Workers International Union (UFCW), Dama Financial and Smart Approaches To Marijuana (SAM). “The cannabis landscape looks far different than it did a few short years ago,” Banking Committee Chairman Sherrod Brown (D-OH) said in opening remarks. “Cannabis has been legalized or decriminalized in almost every state. States and localities have established licensing and social equity programs to ensure that small businesses and communities impacted by the War on Drugs are part of the growing legal cannabis industry.” …

Minnesota Legislature Reaches Deal on Legalized Recreational Cannabis, Vote Likely in Final Days of Session

"Key negotiators working on legislation to legalize recreational cannabis for adults 21 and older in Minnesota reached a final deal Tuesday, teeing up a vote in the House and Senate in the last few days of the session. "This has been a huge team effort through the legislature and the state of Minnesota," said Sen. Lindsey Port, DFL-Burnsville, who is carrying the bill in that chamber. "Hopefully, we have a final conference committee report for you in the next day or two. Representative Stephenson and I remain absolutely committed to getting this bill passed this year." The legislation is the culmination of 30 committees, hours of testimony and several changes to the bill over the course of this legislative session. The final deal will legalize weed for recreational use, but also allow for new state-licensed businesses that will grow, manufacture and sell at retail dispensaries marijuana products. Port said the deal is "locked," after Tuesday's conference committee with no additional changes. When the compromise bill gets to the floor, it's an up-or-down vote. No further amendments can be added."

Up In Smoke: USPTO Leaves Cannabis-Related Trademark Applications in Ashes

"After years of uncertainty, the USPTO has finally provided insight on how it views applications for cannabis-related marks, suggesting that the use of such marks will be heavily scrutinized. In 2016, National Concession Group, Inc. (NCG) filed an application to register the mark “BAKKED” (Serial No. 87168058) and this stylized drop design mark. (Serial No. 87183434) for goods and services related to glass jars and essential oil dispensers. In support, NCG submitted a specimen displaying the respective marks on a device called “The Dabaratus,” which is commonly used for dispersing cannabis oil. The examiner refused registration because the identified goods (The Dabaratus) were prohibited under Section 863 of the Controlled Substance Act (CSA), and thus could not be used in commerce as required by Sections 1 and 45 of the Trademark Act. On appeal to the TTAB, NCG argued that in addition to dispersing cannabis oil, the device could also be used for dispersing essential oils and, therefore, did not constitute paraphernalia under the CSA. Alternatively, NCG argued that even if it is considered paraphernalia under the CSA, the item was lawful under Colorado state law and registration was proper under Sections 863(f)(1) and 863(f)(2) of the CSA…"

Emerald Cup 2023 Makes Jubilant Return to NorCal

"The diverse California cannabis culture is deeply rooted in legacy and tradition. For generations, cultivators, breeders, and product makers throughout the state have worked to continually raise the bar for what the plant can do. Nowhere is this more evident than at the Emerald Cup. A celebration of innovation, community, and of course, great weed, the Emerald Cup honors the best and brightest from across the California industry. From sun-grown flower to edibles, concentrates to pre-rolls, retailers to social justice warriors—and everything in between—the Emerald Cup is often referred to as the “Academy Awards of Cannabis” thanks to its revered status and highly sought-after trophies. Now in its 19th year, the storied cannabis contest held its awards last weekend overlooking the San Francisco Bay at the Craneway Pavilion in Richmond. Emerald Cup 2023 was one for the ages, featuring a red-carpet entry, live music, the always fun Guild Extracts boat offering multiple cruises throughout the all-night soiree, and of course, the awards show itself. Hundreds of contestants, judges, sponsors, press, and other esteemed guests gathered from dusk ‘til dawn for a night of jubilant revelry—and a nonstop sesh."

Subscribe to CannaBeat to receive essential weekly articles on news, business, and culture in the cannabis industry, delivered straight to your inbox.

CannaBeat by Emerge Law Group

CannaBeat is a weekly brief on news, business, and culture in the cannabis industry curated by members of Emerge Law Group's distinguished Cannabis Industry Group.

CannaBeat – May 10, 2023

May 10, 2023
in CannaBeat, CannaBeat Podcast, Cannabis Industry Group, Delia Rojas
Brittney Nelson
Cannabeat by Emerge Law Group

CannaBeat is a curated biweekly selection of top news stories impacting business, research, and culture in the cannabis industry, crafted by Emerge Law Group.

Emerge’s Hot Take

The Complex Legal Landscape of the Cannabis Industry: Lessons from the Cookies Lawsuit

A $38 million lawsuit alleging kickbacks and sabotage at popular cannabis brand Cookies has been abruptly dropped by one of the litigants. In the original lawsuit, Paul Rock, CEO of Cookies Retail Products (CRP), claimed that Cookies executives had taken kickbacks from arrangements with third-party vendors and meddled in purchase orders, leading to significant delays and unsold cannabis products. However, in a recent statement, Rock said that he “voluntarily dismissed all suits” and that the original suit was brought only on the urging of an unidentified third party. He blamed the media for covering the issue and called the mischaracterization of the legal action “shameful and opportunistic.”

Rock’s lawsuit did not name Cookies’ co-founder and CEO, Gilbert Milam Jr., better known as Berner, who commands a significant social media presence and is one of the industry’s most powerful influencers. However, a separate litigation filed against Berner, Cookies President Parker Berling, and other executives by two current investors in the company, who claim to own about 10% of the business, is still pending.

Rich Howell, one of the attorneys at Rutan who filed the second suit on behalf of the investors, called Rock’s backpedaling a “complete reversal” but said that his clients’ legal action would continue. He noted that Rock’s claims were “verified and sworn to under penalty of perjury” and that the reversal had no bearing on their clients’ legal claims involving Cookies and its principals.

The abrupt dropping of the lawsuit is an unusual turn of events in the ongoing legal controversy surrounding Cookies. The case highlights the complex legal and business landscape of the cannabis industry, where disputes and legal actions can arise frequently due to the sector’s lack of federal regulation and compliance standards. It also underscores the need for due diligence and transparency in business dealings, especially in an industry that is still in its early stages of development and grappling with a host of challenges and uncertainties.

Other Noteworthy News

Federal: Transportation Department Finalizes Rule Authorizing Oral Fluid Drug Testing

"Officials with the US Department of Transportation have finalized a new rule authorizing commercially licensed drivers the option to undergo oral fluid testing as an alternative to urinalysis.

“This additional methodology for drug testing will give employers a choice that will help combat employee cheating on urine drug tests and provide a less intrusive means of achieving the safety goals of the program,” the agency stated in an announcement in the Federal Register. The forthcoming rule will set a 4 ng/ml cutoff limit for the presence of THC in saliva. The effective date of the new rule is June 1, 2023. However, use of oral fluid testing cannot begin until the US Department of Health and Human Services certifies at least two laboratories to perform saliva screening. To date, no labs have received HHS certification."

New Jersey Governor Signs Bill Allowing Marijuana Businesses State Tax Deductions

"New Jersey Governor Phil Murphy has signed into law a bill that allows licensed cannabis businesses to deduct certain expenses on their state tax returns. The move follows the federal IRS's 280E code, which restricts companies that sell Schedule I or II drugs from accessing key tax deductions in their federal filings. Under New Jersey's new legislation, licensed cannabis companies can at least see some state-level relief from the financial constraints caused by the implementation of 280E. The decoupling from federal 280E policy is expected to have mixed economic impacts, with a likely annual loss of revenue for the state, but it may help generate more economic activity for cannabis businesses, which could indirectly result in an indeterminate amount of additional annual revenue for the state and local governments that tax cannabis businesses. Other states, including Iowa, New York, Pennsylvania, and Virginia, are similarly pursuing tax relief for their marijuana markets. At the congressional level, lawmakers have been working to pass legislation, including the Secure and Fair Enforcement (SAFE) Banking Act, which would treat the cannabis sector like other legitimate enterprises."

After Two Decades, Maryland Moves from Recognizing Medicinal Cannabis to Recreational Use

"The signing of legislation legalizing cannabis in Maryland marks a mile post in a long, strange trip for one Republican former delegate turned marijuana policy advocate. Don Murphy, a former lawmaker from Baltimore County, once sponsored legislation two decades ago that made it possible for someone arrested for possession of the drug to argue it was for medicinal purposes. “It was Maryland’s first acknowledgement that marijuana had medicinal value,” said Murphy, reflecting on the 2003 law signed by then Gov. Robert L. Ehrlich (R) the year after Murphy left the legislature. “Here we are 20 years later going, ‘It doesn’t matter, have a nice day, have fun. And we’re going to stop arresting people,’ and all that. In perspective, it’s a shame as we think of all the people whose lives have been ruined in the meantime. But better late than never.” At the time, the Republican wasn’t on board with full blown legalization."

Teen Marijuana Use Has Been Declining Since Legal Dispensaries Started Opening, Federal CDC Study Shows

"According to the Centers for Disease Control and Prevention’s Youth Risk Behavior Survey (YRBS), teen use of cannabis has been decreasing since legal dispensaries began opening. In 2021, the percentage of high school students reporting marijuana use in the past 30 days dropped to 15.8 percent, down from 21.7 percent in 2009, and significantly lower than the record high of 23.4 percent in 2013. Even lifetime marijuana consumption among teens has decreased by nearly 10 percentage points since 2019. Studies and surveys, including those conducted or funded by the federal government, have repeatedly shown that legalizing cannabis for adults does not increase teen usage. While COVID likely contributed to the decline in cannabis and other substance use in 2021, the trend has been consistent over the course of the reform movement. The latest CDC study is encouraging news for public health officials, but substance use remains common among U.S. high school students, and continued monitoring is important in the context of the changing marketplaces for alcohol beverage products and other drugs. Therefore, scaling up tailored, evidence-based policies, programs, and practices to reduce factors that contribute to the risk for adolescent substance use and promote factors that protect against risk might help build on recent declines."

NBA Allows Passive Investment and Ends THC Testing, But No Marijuana Brand Promotion for Players

"The National Basketball Association (NBA) has clarified that its players will not be allowed to promote marijuana brands under the new collective bargaining agreement, despite previous reports suggesting otherwise. However, the league will allow passive investments in the marijuana industry and remove the testing requirements for THC. Players can invest in CBD companies without restrictions and hold a passive, non-controlling interest in companies that make marijuana products. The policy change also formally codifies the league's decision to temporarily suspend cannabis testing for the past three seasons. While players are free to consume cannabis legally off the court, they remain barred from using it during games or other team-related events. The move comes as more states legalize cannabis, leading to reforms in other professional sports leagues such as Major League Baseball and the UFC."

Subscribe to CannaBeat to receive essential weekly articles on news, business, and culture in the cannabis industry, delivered straight to your inbox.

CannaBeat by Emerge Law Group

CannaBeat is a weekly brief on news, business, and culture in the cannabis industry curated by members of Emerge Law Group's distinguished Cannabis Industry Group.

CannaBeat – April 24, 2023

April 24, 2023
in CannaBeat, CannaBeat Podcast, Cannabis Industry Group, Delia Rojas
Brittney Nelson
Cannabeat by Emerge Law Group

CannaBeat is a curated biweekly selection of top news stories impacting business, research, and culture in the cannabis industry, crafted by Emerge Law Group.

Emerge’s Hot Take

California State Policy Update

California continues work on the regulatory structure of its cannabis industry. Many of the proposed bills could help the industry grow by increasing opportunities and reducing regulatory burdens. Below are a few bills that California is considering:

AB 374 – Consumption Lounges: This bill would permit local governments to allow the sale of non-cannabis foods and beverages (except alcohol) at consumption lounges. This would also allow lounges to sell tickets to concerts and other events. As discussed in our previous CannaBeat post HERE, this could create exciting opportunities for dispensaries.

SB 508 – CEQA & Licensing Reform: This bill proposes to remove the duplicative CEQA requirements between the state and local governments. This would streamline the application process and lessen the regulatory burden on operators.

AB 1111 – Cannabis Event Sales: This bill allows direct-to-consumer sales from small producers. “Small producer” means less than one acre outdoors. Indoors, “small producer” means 22,000 square feet of mixed-light tier 1 or 5,000 square feet of mixed light tier 2. Under this bill, small producers with the proposed license could sell their products to consumers up to 32 days per year at certain temporary events. This would give small farmers a huge opportunity to work directly with consumers and capture those lifetime buyers.

Other Noteworthy News

New Congressional Bill Would Provide Federal Tax Relief for Marijuana Businesses By Amending IRS’s 280E Code

“A congressman has reintroduced a bill that would amend an Internal Revenue Service (IRS) code known as 280E to allow state-legal marijuana businesses to finally take federal tax deductions that are available to companies in other industries. Rep. Earl Blumenauer, founder of the Congressional Cannabis Caucus, refiled the Small Business Tax Equity Act on Monday. The measure been introduced several times over recent sessions but has never advanced to a hearing or vote. ‘State-legal cannabis businesses are denied equal treatment under 280E,’ Blumenauer said in a press release. ‘They cannot fully deduct the cost of doing business which means they pay two or three times as much as a similar non-cannabis business. […] This grotesquely unfair treatment incentivizes people to cut corners,’ he said. ‘If Congress wants to get serious about supporting small businesses and ending the illicit cannabis market, it is commonsense that we allow legal cannabis operations to deduct business expenses, just like any other industry.’”

Cannabis Culture on 4/20 – A Look at Efforts to Legalize and Tax America’s Most Controversial Crop

“[Last Thursday] was 4/20, a counterculture holiday based on the celebration of cannabis. A few years ago, the day would have confounded some. Now, 4/20 is so mainstream that it trends on social media. Cannabis simply doesn’t have the same taboo as it once did, largely due to legalization efforts. While there are dozens of theories about how the date came to have such significance, [according to one] widely accepted explanation, it can be traced to a group of teenagers from San Rafael, California. The group, nicknamed the Waldos for their favorite hangout spot (a wall outside of school), used to meet after school to smoke pot. The timing of their meeting, 4:20 pm, became a kind of greeting in the hallway, and the rest, as they say, is stoner history.”

Delaware Governor To Let Recreational Cannabis Legalization Bills Become Law

“Delaware Gov. John Carney said Friday he would allow pending legislation that legalizes recreational cannabis in the state to become law. That means Delaware becomes the 22nd state in the U.S. to legalize adult-use marijuana and set up a regulated industry. This year, after both bills passed the state General Assembly with a veto-proof majority, the governor faced the choice of vetoing the bills and risk the Assembly overturning the veto or allowing both bills to become law without his signature. He had until Saturday to act on House Bill 1, which ends criminal penalties for adults 21 and older possessing small amounts of cannabis. The deadline to act on HB 2, which creates regulations for a legal industry, was April 26. He chose to return both unsigned, while voicing serious reservations. ‘As I’ve consistently said, I believe the legalization of recreational marijuana is not a step forward,’ Carney note in a statement released by his office on Friday.”

Subscribe to CannaBeat to receive essential weekly articles on news, business, and culture in the cannabis industry, delivered straight to your inbox.

CannaBeat by Emerge Law Group

CannaBeat is a weekly brief on news, business, and culture in the cannabis industry curated by members of Emerge Law Group's distinguished Cannabis Industry Group.

CannaBeat – April 7, 2023

April 7, 2023
in CannaBeat, CannaBeat Podcast, Cannabis Industry Group, Delia Rojas
Brittney Nelson
Cannabeat by Emerge Law Group

CannaBeat is a curated biweekly selection of top news stories impacting business, research, and culture in the cannabis industry, crafted by Emerge Law Group.

Emerge’s Hot Take

NBA Will Let Players Invest In Marijuana Industry And Promote Cannabis Brands Under New Union Deal, According to Report

In the new draft of the seven-year collective bargaining agreement (“CBA”), the National Basketball Association (NBA) is planning to remove cannabis from its banned substances list, and to let players promote and invest in cannabis companies. The CBA is also expected to officially remove mandatory drug testing requirements for cannabis and only subject players to tests if they show signs of problematic dependency. While the deal must still be ratified, it is expected to be approved. The move to cannabis acceptance has been a long time coming. Mandatory drug testing has been temporarily suspended for a couple years already, which demonstrates the leaders’ commitment to the overall movement. One aspect that separates it from other sports is allowing its players to promote and invest in the cannabis industry. As other sports have lowered the restrictions on use and testing, other leagues do not allow players to actively promote cannabis and related brands. This provides additional opportunities for NBA players and cannabis operators alike. At this point most of the notable sponsors for cannabis have been musicians by partnering with operators to create their own brands.

Other Noteworthy News

Cannabis Companies Aren’t Federally Legal – But Can Still Team Up with National Brands

While cannabis legalization isn’t the law of the land yet, some American cannabis companies are already partnering with national brands. Kiva Confections, a maker of cannabis edibles in six states, is partnering with burger chain, Fatburger this month to sell a limited-edition Kiva x Fatburger THC-infused ketchup. Sackville & Co. is partnering with Playboy to make smoking accessories. Green Thumb, a dispensary and consumer product company, is partnering with Circle K. The aim is to get cannabis into the conversation, and a fun, attention-grabbing product like cannabis ketchup fits the bill, said Kiva's co-Founder Kristi Palmer. The condiment packet will feature 10mg of THC - one dose of cannabis, and cost $5. Kiva’s edibles (infused chocolates, gummies, etc.) are available in California, Arizona, Nevada, Illinois, Hawaii and Michigan, but the ketchup will only be available in two Los Angeles retail chains, Artist Tree and Sweet Flower. Current law prohibits cannabis in any form from crossing state lines, so the company would have to produce and package the ketchup in each state separately to expand the promotion geographically.

Paychex ceasing direct deposits, other services to cannabis firms

U.S. cannabis operators are scrambling to find a new payroll provider after receiving a memo from Paychex advising that the company will no longer process direct deposits or offer other services for marijuana-related businesses. A March 29 memo obtained by MJBizDaily warns that, effective May 1, New York-based Paychex will no longer process direct deposit payments. “Cannabis-related businesses (CRBs) continue to face significant banking obstacles because major banks will not allow electronic fund transfers from CRBs over their networks – typically because of differing state and federal regulations around cannabis,” according to the memo from Paychex, which provides payroll and human resource products and services. “Paychex has worked diligently to provide as many of our services as we can within the parameters established by our banking partners. Unfortunately, we can no longer provide you with some of the services you are currently receiving from Paychex.” ……

“Cannabis in Germany will Be a Success Story:” Europe’s biggest Economy Moves Closer to Weed Legalization

Germany could be weeks away from introducing a bill to legalize cannabis under sweeping reforms that would greenlight the consumption and sale of the drug in Europe’s largest economy. Germany’s Health Minister Karl Lauterbach last week said that the plans had received “very good feedback” from the European Commission, the EU’s executive arm, adding that the bill could be announced by the end of March or in early April. “We will soon present a proposal that works, that is, that conforms to European law,” Lauterbach said, following months of talks with Brussels. The government published draft proposals for the legalization of adult-use cannabis in October, which it said aimed to improve public health. Lauterbach insisted that they would only progress to the Bundestag — Germany’s federal parliament — if the initiatives are compatible with EU law.

The Number of Legal Cannabis Farms in Calif. Is in Freefall

California’s legal pot market has lost hundreds of pot farms a month as farmers opt to quit the legal market. And signs indicate the industry is only continuing to shrink. The state has lost 1,766 cultivation licenses since the beginning of last year, according to data reported by the California Department of Cannabis Control and the Cannabis Business Times. Low wholesale prices and high taxes have made it almost impossible for operators to run a profitable small business, pot industry insiders say. The fleeing farms are reducing the total amount of space licensed to produce cannabis in California. The state has lost 23% of its total legal canopy — the combined size of all legal cannabis grows — since the beginning of 2022, according to Aaron Edelheit, a cannabis investor who analyzes California’s market. That’s over 19 million square feet of cannabis farming that has disappeared over the past year…

Raphael Mechoulam, the “Father of Cannabis Research” who Discovered THC, has Died

Raphael Mechoulam, the Israeli researcher whose work helped to broaden the scientific understanding of cannabis and the compounds that cause the drug's distinctive high, has died. Mechoulam, who was 92, died in Jerusalem early this month, according to American Friends of the Hebrew University. Among Mechoulam's contributions to the field of marijuana studies was the first isolation of the psychoactive compound of the cannabis plant — tetrahydrocannabinol, or THC. His work earned him the nickname "father of cannabis research." He was a "sharp-minded and charismatic pioneer," said Asher Cohen, the president of the Hebrew University of Jerusalem, where Mechoulam had long served on the faculty.

Subscribe to CannaBeat to receive essential weekly articles on news, business, and culture in the cannabis industry, delivered straight to your inbox.

CannaBeat by Emerge Law Group

CannaBeat is a weekly brief on news, business, and culture in the cannabis industry curated by members of Emerge Law Group's distinguished Cannabis Industry Group.

CannaBeat – March 24, 2023

March 24, 2023
in CannaBeat, CannaBeat Podcast, Cannabis Industry Group, Delia Rojas
Brittney Nelson
Cannabeat by Emerge Law Group

CannaBeat is a curated biweekly selection of top news stories impacting business, research, and culture in the cannabis industry, crafted by Emerge Law Group.

Emerge’s Hot Take

With Cannabis Cultivator Cap Lifted, Growers Face New Jersey’s Challenges

After a short and fast 2-year state license cap, there is no longer any limit on the number of cultivation licenses in New Jersey. As the industry continues to expand, New Jersey cannabis operators face the same hurdles as operators in other states. First, and what seems to be a problem across many states, a majority of municipalities have “opted out” of permitting cannabis businesses. This fuels the next issue: real estate. With few jurisdictions permitting operators, there are very limited spaces to set up their operations and sell product. Lastly, one of the original and biggest hurdles: raising capital. Many investors have seen the roller coaster of the cannabis industry in other states and can be hesitant to invest in this new market. Unfortunately, it looks like deja vu. California, for example, faces very similar issues; a majority of jurisdictions have banned commercial activity, the market is limited, and capital is hard to come by. After 27 years since the first legalization of medical cannabis, operators are fighting harder than ever to stay afloat. Emerge shareholder Duncan Delano of New Jersey opines: “Challenges are inevitable. But I continue to be impressed by the tenacity and resourcefulness of our clients in New Jersey and New York, as their options open up. The industry here is developing at light speed.”

Other Noteworthy News

Treasury Secretary Says Regulators Are “Looking For Solutions” to Marijuana Banking Problem As Schumer Recommits To Addressing the Issue

As Senate Majority Leader Chuck Schumer (D-NY) renews his commitment to tackling marijuana banking reform this year, the head of the U.S. Treasury Department says that regulators are also exploring options to address the issue. During a hearing before the Senate Finance Committee on Thursday, Sen. Michael Bennet (D-CO) pressed Treasury Secretary Janet Yellen about the fact that the cannabis industry lacks access to traditional financial services under prohibition. The senator argued that marijuana as a commodity is more “stable” than cryptocurrency, yet banking regulations have allowed for large investments in the latter that ultimately contributed to the collapse of at least one bank this month. Yellen replied by saying that, “as you pointed out, in the case of marijuana, it is against federal law, and that’s a barrier, unfortunately, to appropriate banking services for the industry.” “It’s something the regulators have been looking for solutions to,” she said…….

Coalition Sues NY Marijuana Regulations To Open Licensing Process

A coalition of medical marijuana license holders and recreational market hopefuls have filed a lawsuit in state Supreme Court seeking to force New York’s Office of Cannabis Management to open the retail licensing process “for all applicants immediately.”
The slow rollout of licensing for entrepreneurs beyond those with a documented marijuana conviction in their family has angered small business owners who thought they would have an earlier shot at one of the state’s first retail sales licenses, including those defined under the law as “social equity” applicants. It has also frustrated large companies that entered the market early but are still permitted to sell only to certified medical patients. The challengers argue that equal access to the first recreational licensing process should have been available to them under the state’s 2021 cannabis law, which specifies that “the initial adult-use cannabis retail dispensary license application period shall be opened for all applicants at the same time.” The lawsuit, filed in Albany, claims that by creating limited, “conditional” licensing categories that opened prior to the general process, regulators have “overstepped their rule-making authority” and subverted legislators’ intent. The agency’s “arbitrary and capricious foray into legislative policymaking has harmed those individuals the (cannabis law) was designed to benefit ... and diverted (regulators’) attention from the enforcement tasks” that the law requires, according to the court petition…….

Kentucky Senate Passes Bill to Legalize Medical Marijuana

The Kentucky Senate voted Thursday to legalize medical marijuana in the state, delivering a breakthrough endorsement after years of resisting access to cannabis for people suffering from a series of debilitating illnesses. The measure was passed by the Senate on a 26-11 vote, sending it the House, which has supported medical cannabis measures in the past. Republicans have supermajorities in both chambers. “This is one of those issues where you take out the ledger and you list the pros and cons,” said Republican Sen. Stephen West, the bill's lead sponsor. "And it’s a long list on both sides. But for me personally, the pros outweigh the cons.” Republican Sen. Gary Boswell opposed the bill, referring to cannabis as “a drug, not a medicine.” He said the qualifying medical categories listed in the measure are “too broad.” The dramatic vote came before lawmakers started an extended break to give Gov. Andy Beshear time to consider signing or vetoing the stacks of bills sent to him. The House can take up the medical marijuana proposal in late March, when lawmakers will reconvene for the final two days of this year's legislative session…..

Las Vegas Unveils Unusual First Cannabis Residency

Adult freedom and indulging in multiple pleasures have been Las Vegas themes ever since gambling was legalized again in Nevada on March 19, 1931. Gambling had been outlawed in 1910 after being a legal activity, but Sin City has enjoyed 92 years of living on the edge since gaming became legal again. Las Vegas Convention and Visitors Authority in 2020 adopted a new variation of its former catchphrase "What Happens Here, Stays Here," which Sin City began promoting in one of marketing's most successful advertising campaigns in 2003. The new slogan for tourism adopted in January 2020 is: "What Happens Here, Only Happens Here." The catchphrase might suggest anything goes in Sin City, but among the vices remaining illegal on Las Vegas Strip are prostitution, though sex-for-hire is legal in some parts of Nevada, and smoking pot. You can't legally smoke pot in public in Las Vegas, though you can possess cannabis and legally smoke it in a private residence.

Cannabis Brands Products Steeped In Nostalgia Aim To Attract Generational Consumers

Products Steeped In Nostalgia Aim To Attract Generational Consumers
https://mjbizdaily.com/cannabis-brands-products-steeped-in-nostalgia-aim-to-attract-generational-consumers/
Cannabis companies nationwide are infusing a heavy dose of nostalgia in their products and building brands based on fond memories, good times and the soundtracks of some of our formative years. Resurrecting defunct record labels, rock-band encores and cult-classic throwbacks are all part of the remix. Other forms of entertainment are finding wild success and new audiences with blasts from the past, evident at the box office and streaming services. “Top Gun: Maverick,” a near carbon copy of the original, was nominated for five Academy Awards, including Best Picture after grossing nearly $1.5 billion. Metallica’s 1986 masterpiece, “Master of Puppets,” the title track of the band’s third album, climbed into Spotify’s Top 10 most-played songs last year after playing a key element in the popular Netflix series “Stranger Things,” which introduced throngs of younger listeners to the metal icons. The comedy duo Steve Martin and Martin Short, who first paired up in the 1986 movie “Three Amigos!” have hit streaming gold on Hulu’s “Only Murders in the Building,” joining other contemporaries of that era finding new life in the digital era, including another comeback story for the Karate Kid in Netflix’s “Cobra Kai.” Nostalgia not only evokes positive memories, belonging and coming of age, research has shown it affects consumer behavior and increases purchases……

Subscribe to CannaBeat to receive essential weekly articles on news, business, and culture in the cannabis industry, delivered straight to your inbox.

CannaBeat by Emerge Law Group

CannaBeat is a weekly brief on news, business, and culture in the cannabis industry curated by members of Emerge Law Group's distinguished Cannabis Industry Group.

CannaBeat – March 10, 2023

March 10, 2023
in CannaBeat, CannaBeat Podcast, Cannabis Industry Group, Delia Rojas
Brittney Nelson
Cannabeat by Emerge Law Group

CannaBeat is a curated biweekly selection of top news stories impacting business, research, and culture in the cannabis industry, crafted by Emerge Law Group.

Emerge’s Hot Take

Emerald Triangle Communities Were Built On Cannabis. Legalization Has Pushed Them To the Brink

Legalization in California seemed like a dream come true for the cannabis industry, home of the Emerald Triangle. Abide by the rules and regulations in exchange for the opportunity to have a legal business. Six years later, and the price of cannabis is unbelievably low, businesses are closing, and the illegal market is flourishing. According to coverage by HighTimes and Forbes, cannabis sales declined in 2022, and many believe it wasn’t because people were consuming less.

The Emerald Tringle seems to be hit the hardest as cannabis is a base for much the community’s economy. Farmers in Humboldt reported that even though they sold all their product, they come in at loss for the year. Farm closures reverberate throughout Trinity County. Local businesses that depended on the patronage of the famers and their employees are laying people off and cutting hours. Some have lost so much revenue that they may close. In Mendocino, it is estimated that nearly 70% of operators might not remain in the legal market.

Besides overregulation, two major culprits are said to be the roots of the larger issues within the industry: high taxes and lack of shelf space. In attempt to fix the first problem, the State eliminated the cultivation tax in July of 2022. As for shelf space, 56% (302/539) of California jurisdictions still do not allow any type of commercial cannabis operations. There are only about 1000 licensed dispensaries serving 40 million residents. Delia Rojas of Emerge Law Group says that “the power local jurisdictions hold is frustrating, especially when residents of communities where a majority voted in favor of prop 64 haven’t experienced the product of their vote. Fear still runs rampant in much of the state. Education and advocacy continue to be important to wipe away the stigma surrounding this plant.”

Other Noteworthy News

Mendocino Growers Ask California To Address County’s Cannabis Licensing

A trade association representing cannabis growers in California’s Mendocino County has asked the state government for an “urgent intervention” in the county’s licensing process, citing concerns that many farmers’ license applications won’t be processed by a July 1, 2023, deadline. The Mendocino Cannabis Department and local government have failed to “establish a process capable of moving good-faith cannabis operators towards state annual licensure,” the Mendocino Cannabis Alliance (MCA) claims in a Feb. 8 letter to California Gov. Gavin Newsom and state Department of Cannabis Control Director Nicole Elliott. The letter charges that by the July deadline, the Mendocino Cannabis Department (MCD) will have licensed only 256 “prioritized” marijuana operators in the county, “implying that nearly 70% of Mendocino’s 841 current operators have no path forward to remain in the legal market,” according to an accompanying news release. “Further, among over 500 ‘deprioritized’ operators, MCA has found that a substantial number have been deprioritized incorrectly based on demonstrably false claims of tax delinquency or lack of state licensure.” MCA Executive Director Michael Katz said Mendocino County has “no functional permit program in Mendocino, and no plan to create one.”

Oklahoma Voters Reject Marijuana Legalization Ballot Initiative

Oklahoma voters have rejected a ballot initiative that would have legalized marijuana for adult use in the state on Tuesday. For most counties across the state, the cannabis reform measure—State Question 820—was the only proposal on the ballot, a unique scenario in the history of the legalization movement. Advocates tried to put the reform on the November 2022 ballot, but delays in signature verification by officials and the state Supreme Court’s subsequent decision in litigation meant that it missed the window to qualify for that cycle. In October, Gov. Kevin Stitt (R) called a special election for the cannabis measure that took place on Tuesday.

UConn Launches New Cannabis Cultivation Minor

The University of Connecticut announced a new minor in Cannabis Cultivation for students receiving specialized training in this growing field. “Since we launched the nation’s first cannabis horticulture course, UConn has been a leader in cannabis education and research,” says Indrajeet Chaubey, dean of the College of Agriculture, Health and Natural Resources. “We are thrilled to add another mechanism for students to formalize the skills, knowledge, and expertise in cannabis studies that they gain while at UConn.” Led by professors of plant science Gerald Berkowitz and Matthew DeBacco, the 15-credit minor was formalized in the spring 2023 semester. It provides training in the propagation, cultivation, commercial production, maintenance, processing, and potential markets for and uses of one species of cannabis, Cannabis sativa. As part of the minor, students can receive credit for approved internships with growers and companies to provide students with experiential learning opportunities and exposure to jobs.

Justice Department Website Opens Portal For Those Seeking Presidential Pardon Certificates

After a several month delay, the Justice Department has opened the online application process for those persons eligible to receive certificates indicating that their marijuana-related convictions have been pardoned by the President. The website began accepting applications hours after a notice published in the Federal Register stated that the Office of the Pardon Attorney had “developed the subject form to collect information from potential pardon recipients.” In its notice, the Office estimated that as many as 20,000 people may apply to receive pardon certificates.

Subscribe to CannaBeat to receive essential weekly articles on news, business, and culture in the cannabis industry, delivered straight to your inbox.

CannaBeat by Emerge Law Group

CannaBeat is a weekly brief on news, business, and culture in the cannabis industry curated by members of Emerge Law Group's distinguished Cannabis Industry Group.

CannaBeat – February 24, 2023

February 24, 2023
in CannaBeat, CannaBeat Podcast, Cannabis Industry Group
Brittney Nelson
Cannabeat by Emerge Law Group

CannaBeat is a curated biweekly selection of top news stories impacting business, research, and culture in the cannabis industry, crafted by Emerge Law Group.

Emerge’s Hot Take

Twitter Becomes First Social Media Platform To Allow Cannabis Ads In U.S.

On February 15, 2023, Twitter became the first major social media platform to remove their prohibition on the marketing and advertising of cannabis brands and products. Twitter’s announcement describes how they look to expand the opportunities for one of the most influential markets that utilizes its platform for the exchange of ideas, experiences, and overall business development. Naturally, the new opportunity comes with a list of rules and restrictions which can be found on their updated Cannabis Ad Policy. For example, the cannabis business must have the proper license, prohibit targeting anyone under 21, must not use characters, celebrities, or other icons appealing to minors, and can only target jurisdictions where they are legally allowed to operate. The most restrictive and slightly counter-intuitive rule states “advertisers may not promote or offer for sale of cannabis.” This could prove difficult to navigate but not impossible.

Even with these restrictions, Emerge Attorney Delia Rojas believes that “cannabis businesses will seize this opportunity while most other large social media competitors still flat out ban cannabis advertising and deactivate accounts.” It is unquestionable that social media plays a huge role in any businesses’ advertising plan. Forbes reported that some estimate 20 million tweets about cannabis topics were posted in the past year. With 37 states passing some form of cannabis regulatory structure, and more states looking to join the club in 2023, this is a long overdue and applauded step forward.

Other Noteworthy News

WA Senate Passes Bill to Bar Hiring Discrimination For Cannabis Use

Washington employers would be prohibited from refusing to hire a potential worker solely because of a drug test showing they had used cannabis under a bill that passed the state Senate on Wednesday. Washington voters approved recreational marijuana in 2012 through Initiative 502. More than a decade later, though, as more states have moved to legalize the drug, Washington employers can still screen out applicants who use cannabis. If Senate Bill 5123 becomes law, Washington would join several other states that have enacted laws shielding employees from workplace penalties for off-duty cannabis use. The bill passed the state Senate on a 28-21 vote Wednesday, sending it to the House for further consideration. In 2019, Nevada became the first state to stop employers from rejecting an applicant because of a drug test showing cannabis use. Last year, California Gov. Gavin Newsom signed into law a bill barring discrimination in hiring, firing and other conditions of employment if a worker uses cannabis while off duty.

Legalized Marijuana Proposal Unveiled By Iowa Democrats

Marijuana would be legal for recreational use, previous convictions for non-violent possession charges would be removed from an individual’s criminal record, and the state’s medical cannabis program would be expanded under legislation introduced Tuesday by Democratic state lawmakers. The proposal is not likely to become state law any time soon, since Republican state lawmakers in leadership and Gov. Kim Reynolds have in the past opposed any efforts to legalize marijuana in Iowa. Nationally, 21 states have legalized recreational marijuana, including Iowa neighbors Missouri and Illinois. Minnesota state lawmakers are considering legislation to legalize marijuana there. “It is time,” said Iowa Rep. Jennifer Konfrst, a Windsor Heights resident and leader of the minority-party House Democrats. Konfrst argued that legalizing marijuana would keep sales tax revenue in Iowa instead of sending it to other states, it would preserve state resources that currently go toward enforcing marijuana laws, and it would increase the quality of life for Iowans with chronic illnesses.

North Carolina Senate Panel Approves Medical Marijuana Bill

A North Carolina legislative committee on Tuesday approved a bill that would legalize medical marijuana in the state. The measure, known as the North Carolina Compassionate Care Act (Senate Bill 3), was approved by the Senate Judiciary Committee with little debate among senators, according to media reports. The bipartisan bill was filed on January 25 with sponsorship from Republican Sens. Bill Rabon and Michael Lee and their Democratic colleague Sen. Paul Lowe. If passed, the bill would legalize the medicinal use of cannabis for patients with one or more specified qualifying serious medical conditions such as cancer, ALS, Parkinson’s disease, epilepsy, multiple sclerosis, post-traumatic stress disorder and others. Unlike the more comprehensive medical marijuana programs in many other states, however, the bill does not authorize the use of medical marijuana by patients living with chronic pain.

Delta-8 Brouhaha Creates Marijuana Opportunity In Next Federal Farm Bill

If Congress can’t (or won’t) bundle marijuana reform with the F-35 fighter jet and nuclear submarines, why not food stamps and corn subsidies? Among the pressing items on federal lawmakers’ 2023 to-do lists is renewing the Farm Bill. Every five years, the sprawling, multipart, $428 billion monster that deals with nutrition and rural development as well as what American farmers grow and how they grow it is revamped. And the 2018 Farm Bill that legalized hemp and triggered the boom in delta-8 THC and other intoxicating hemp-derived cannabinoids expires in September. Federal marijuana prohibition means the American cannabis industry still exists separately from federal farm programs and the U.S. Department of Agriculture. Despite this, and despite the many other loud and needy lobbies competing for attention, there’s a growing push in Washington DC for Congress to consider marijuana reform during Farm Bill discussions, according to multiple lobbyists and a federal lawmaker who spoke with MJBizDaily.

The Cannabis Experience Becomes First Marijuana-Licensed Consumption Bus

The Cannabis Experience in Denver has become Colorado's -- and the nation's -- first marijuana-licensed consumption bus. As the cannabis industry continues its blazing trail, local marijuana users can enjoy safe, legal cannabis tours, airport transportation and private cannabis-friendly party buses. The Cannabis Experience will offer transportation services to Denver International Airport along with private party bus rentals with food and art themes such as "Toking and Tacos," and "RiNo Mural Tours." The service also provides tours of the city and tourist attractions. "The Cannabis industry is extremely regulated and not diverse. It took us almost a year to become operational, so we are excited to be the country's first safe, legal, licensed mobile hospitality business," Sarah Woodson said. "We are social equity and African American. We will have amazing tours, and grow our fleet over the next 24 months and work on expanding into other local cities such as Aurora. We are helping move the needle forward in the legalization fight. We are proud to be in the cannabis industry." Visits to cannabis grows and dispensaries are also included in the services as bookings are being accepted now for the grand opening, which is set for March 1.

Subscribe to CannaBeat to receive essential weekly articles on news, business, and culture in the cannabis industry, delivered straight to your inbox.

CannaBeat by Emerge Law Group

CannaBeat is a weekly brief on news, business, and culture in the cannabis industry curated by members of Emerge Law Group's distinguished Cannabis Industry Group.

CannaBeat – February 10, 2023

February 10, 2023
in CannaBeat, CannaBeat Podcast, Cannabis Industry Group
Brittney Nelson
Cannabeat by Emerge Law Group

CannaBeat is a curated biweekly selection of top new stories impacting business, research, and culture in the cannabis industry, crafted by Emerge Law Group.

Emerge’s Hot Take

North Bay Cannabis Operators Back California Bill to Allow Food and Music at Dispensaries

A bill has been introduced in California that would allow a retailer to offer a similar experience as a local venue or cafe (Assembly Bill 374). Retailers with approved consumption lounges could offer the sale of non-cannabis infused foods, non-alcoholic beverages, and tickets to live music. This would be comparable to general venues, providing the cannabis space with equal opportunity for tourism and potentially “nightlife.” Furthermore, allowing for larger or more inclusive events would permit for further educational platforms and work to promote the industry in a positive way. There are other events such as music festivals that have included these types of platforms such as Outside Lands in San Francisco (see “Grass Lands”). This bill would allow smaller and similar events accessible to the local community.

Although the bill looks to expand opportunity, whether or not it will do so is unknown. As written, the proposed bill states that “a local jurisdiction may allow the retailer or microbusiness….” This would leave the decision up to the local governments which has proven difficult in California (56% of jurisdictions do not allow any type of commercial cannabis operations, as shown HERE). California Emerge attorney Delia Rojas commented: “Given the tough market, I could foresee certain jurisdictions being open to these types of consumption lounge models, but the bill will likely receive the same local government pushback as similar past bills.”

Other Noteworthy News

GOP Congressman Files Marijuana Rescheduling Bill Amid Ongoing Biden Administration Review

A GOP congressman has refiled a bill to move marijuana from Schedule I to the less restrictive Schedule III under federal law. Rep. Greg Steube (R-FL) introduced the proposal on Friday. This is the third session in a row that he’s pushed for the modest reform, titled the “Marijuana 1-to-3 Act.” The two-page bill states that “the Attorney General of the United States shall, by order not later than 60 days after the date of enactment of this section, transfer marijuana…from schedule I of such Act to schedule III of such Act.” Advocates are strongly pushing for removing cannabis from the Controlled Substances Act (CSA) altogether, but the congressman has argued that rescheduling could be an interim move to promote research into the plant and its components. “As marijuana is legalized for medical and recreational use across the United States, it is important that we study the effects of the substance and the potential impacts it can have on various populations,” he said in 2019. “By rescheduling marijuana from a schedule I controlled substance to a schedule III controlled substance, the opportunities for research and study are drastically expanded.”

Gun Ban for Marijuana Users Is Unconstitutional, U.S. Judge Rules

The ban on gun ownership for marijuana users in Oklahoma has been declared unconstitutional by a federal judge, as it violates the Second Amendment right to bear arms. U.S. District Judge Patrick Wyrick, on February 3, declared that an indictment against a man charged in August for violating a firearms ban was dismissed as it violated the Second Amendment of the U.S. Constitution. Jared Michael Harrison was taken into custody by Lawton police, Oklahoma, in May 2022 during a routine traffic stop. The search of his car uncovered a loaded revolver and marijuana. Harrison informed the officers that he was heading to his job at a medical marijuana dispensary but lacked the mandatory state-issued medical marijuana card. Harrison's lawyers argued that their client's Second Amendment right to bear arms was violated by a federal law prohibiting "unlawful users or addicts of controlled substances" from possessing firearms. They claimed the law, focused on drug users or addicts, was inconsistent with the historical tradition of firearms regulation, citing the U.S. Supreme Court's ruling in the New York State Rifle & Pistol Association v Bruen case, which set new standards for interpreting the Second Amendment. In contrast, federal prosecutors argued that the law, focused on disarming drug users, is consistent with the longstanding tradition in America of disarming "presumptively risky persons" such as felons, the mentally ill, and the intoxicated.

The Lexi to Become First “Cannabis Friendly” Hotel in Vegas

Coming to the Las Vegas Strip this spring, the Lexi seeks to offer a ‘cannabis-forward’ hospitality experience – and topless sunbathing. Rose Dykins reports. Following a multimillion-dollar renovation, the Artisan Hotel Boutique in Las Vegas is reopening as the Lexi, a fun-loving property that embraces cannabis-friendly hospitality. Owned by Elevations Hotels and Resorts, the Lexis is the first of its kind in Vegas. Situated moments from the Vegas Strip, the property has 64 all-new rooms, with its fourth floor designated as cannabis-friendly. A “cheeky” hotel concept that seeks to normalise cannabis in travel, the Lexi will also offer a high-end experience, an exciting culinary and cocktail offering and a season of spring-summer pool party events. The Lexi’s Cajun-inspired steakhouse will be overseen by executive chef Jordan Savell of Hell’s Kitchen fame.

Mint to Host 3-Day Cannabis Party Near State Farm Stadium for Super Bowl

Mint Cannabis will be holding a “Big Game” party with a three-day festival near State Farm Stadium in Glendale during Super Bowl weekend. The Arizona-based company’s Cannabis Consumption Park will be similar to how a beer garden is run, offering activities, infused foods, cannabis vendors with complimentary samples, live musical performances, comedy skits, celebrity appearances and more for people ages 21 and up, according to a press release. Located off 99th Avenue and Thomas Road, the “Mint Mall” will feature many leading cannabis brands for guests to sample. It will run from Feb. 10-12. “Having a cannabis-friendly celebration at the nation’s biggest sporting event of the year is a big testament to how far our industry has evolved in a relatively short time,” cofounder and CEO Eivan Shahara said in the release. “Our large setup will be a reflection of our five dispensaries in the Valley, where our expert budtenders cater to the needs of medical patients, experienced recreational users, and curious first-timers.” At 4:20 p.m. on Saturday, 10,000 complimentary pre-rolls will be lit in an attempt to break the Guinness Book record for the World’s Largest Smoke Session, followed by a live concert.

Subscribe to CannaBeat by Emerge Law Group

CannaBeat is a curated biweekly selection of top news stories impacting business, research, and culture in the cannabis industry, crafted by Emerge Law Group, delivered straight to your inbox. Click here to subscribe!

CannaBeat – January 27, 2023

January 27, 2023
in CannaBeat, CannaBeat Podcast, Cannabis Industry Group
Brittney Nelson
Cannabeat by Emerge Law Group

CannaBeat is a curated biweekly selection of top new stories impacting business, research, and culture in the cannabis industry, crafted by Emerge Law Group.

Emerge’s Hot Take

FDA Concludes That Existing Regulatory Frameworks for Foods and Supplements Are Not Appropriate for Cannabidiol, Will Work With Congress On a New Way Forward

The US hemp industry has been waiting eight years – since the 2014 Farm Bill opened a window for legal hemp-derived cannabinoid products –to see how the Food and Drug Administration (“FDA”) plans to regulate consumable CBD products. Although the FDA has always insisted that consumable CBD products violate the Food, Drug & Cosmetic Act, they have largely only enforced against CBD manufacturers who make egregious medical claims about their products. In 2019, after the 2018 Farm Bill formally legalized and regulated hemp, the FDA seemed to offer the industry an olive branch when it convened a working group to “explore potential pathways for dietary supplements and/or conventional foods containing CBD to be lawfully marketed.”

Nearly four years later, the FDA has thrown up its hands and punted to Congress. On January 26, 2023, the FDA concluded that it will not pursue a legal pathway for these products, but instead look to Congress to set the initial regulatory structure through new legislation. In the meantime, the FDA has emphasized that it will continue to take action against CBD manufacturers “when appropriate.”

The CBD industry now must depend on a divided and dysfunctional Congress to learn its fate, and will continue to occupy a dubious legal landscape, as it has for eight years, and four years since CBD was “legalized,” unless and until Congress acts.

“This decision is a double-edged sword,” according to Emerge Law Group’s Alex Berger, “on one hand, consumable CBD products remain federally illegal, with no pathway to legality. On the other, FDA has not taken serious enforcement actions against conscientious manufacturers who avoid making unapproved and unfounded medical claims. Nor do they have the resources to do so, given the ubiquity of CBD out there. If FDA had made new regulations requiring everyone go through a complex and expensive approval process, it could have left the industry worse off.”

Other Noteworthy News

Ninth Circuit Affirms Dismissal of RICO Claims Relating to Cannabis

Plaintiff Francine Shulman took advantage when recreational marijuana was legalized in California and started a cannabis cultivation operation. At some point, she needed financial back and guidance, so she partnered with Defendant Todd Kaplan. They and their various business entities entered into agreements, which Shulman ultimately claims were used to defraud her out of her assets and licenses. Shulman filed a lawsuit in the Central District of California, a federal court, because two claims involved violations of RICO and two other claims involved violations of the Lanham Act (both federal statutes). […] n the January 18, 2023 Opinion and Order, the three-judge panel unanimously affirmed Judge Birotte’s ruling. They held Shuman lacked standing to bring RICO claims because in order to establish statutory standing under the statute, a plaintiff must show: “(1) that his alleged harm qualifies as injury to his business or property; and (2) that his harm was by reason of the RICO violation, which requires the plaintiff to establish proximate causation.” However, because Shulman’s “business or property” entails the cultivation, sale, and marketing of cannabis – which is all illegal under federal law – her “harm” wasn’t something that could then be remedied by federal law.

Presidential Pardons for Federal Cannabis Possession Convictions Still Unavailable

It’s time for the Department of Justice to deliver the pardon certificates that President Biden promised last fall. The President announced the issuance of marijuana-specific pardons on October 6, 2022 as part of a widely supported set of actions recognizing the folly of federal cannabis prohibition. Thousands of people with federal criminal records for simple marijuana possession are eligible for a pardon that would help them obtain employment, housing, education, and more. Unfortunately, more than three months later, the Department of Justice pardon website indicates that the applications to obtain a pardon certificate are still unavailable.

How Marijuana Companies Are Building Loyalty by Selling Seeds to Consumers

Several cannabis companies have added marijuana seeds to their line of product offerings – even though the move, at first blush, might seem counterintuitive. Why, for one, would marijuana companies want consumers to grow their own plants? Yet, there’s a logic here: Consider how people who grow their own vegetables also shop for fresh veggies at a grocery store or farmers market. “Everybody who’s got a home garden during the spring and the summer grows tomatoes. But 98% of the tomatoes they buy are at a store,” said Carl Giannone, co-founder of Trade Roots, a cannabis company based in Wareham, Massachusetts, that sells seeds direct to consumers. “If growing tomatoes makes them want to buy tomatoes, then I want to let them grow.” An increasing number of companies are offering seeds thanks to a change in federal policy. The move can be profitable for some, while others are doing it to build brand loyalty and share genetics.

The CannaBeat Podcast

From The Archives: Episode 4 - Commercial Lending to Cannabis Companies

Delia and Jay discuss commercial loans for cannabis companies with North Bay Credit Union's chief lending officer Robert Goebel

Subscribe to CannaBeat by Emerge Law Group

Category Archive for: CannaBeat

Emerge’s Hot Take

Other Noteworthy News

Subscribe

Emerge’s Hot Take

Other Noteworthy News

Subscribe

Emerge’s Hot Take

Other Noteworthy News

Subscribe

Emerge’s Hot Take

Other Noteworthy News

Subscribe

Emerge’s Hot Take

Other Noteworthy News

Subscribe

Emerge’s Hot Take

Other Noteworthy News

Subscribe

Emerge’s Hot Take

Other Noteworthy News

Subscribe

Emerge’s Hot Take

Other Noteworthy News

Subscribe

Emerge’s Hot Take

Other Noteworthy News

Emerge’s Hot Take

Other Noteworthy News

The CannaBeat Podcast

Recent Posts

Categories

FRANCHISE LAW

MERGERS AND ACQUISITIONS

CANNABIS INDUSTRY

PSYCHEDELICS

TAXATION

REAL ESTATE TRANSACTIONS

LAND USE

LITIGATION AND ALTERNATIVE DISPUTE RESOLUTION

INTELLECTUAL PROPERTY

FINANCIAL INSTITUTIONS

EMPLOYMENT LAW

CORPORATE FINANCE AND SECURITIES

COMPLIANCE AND LICENSING

BUSINESS AND CORPORATE