Posts Tagged:Oregon Measure 91

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Oregon DOJ Clarifies Medical and Homegrow Plants Allowed

ORDOJ

We get this question a lot.  Can I have six mature medical plants and four home grow plants?  The answer is YES, (assuming you are over 21 and a patient growing at home).

The Oregon Department of Justice has published an opinion regarding the intersection of the laws that govern Oregon’s medical and recreational marijuana programs.

In summary, an OMMP grow site located at a patient’s residence may have:

  • 6 mature medical marijuana plants (a per-patient limit), and
  • 4 recreational marijuana plants (a per-household limit).

In addition, a patient may possess up to:

  • 24 ounces of usable medical marijuana (a per-patient limit), and
  • 8 ounces of usable recreational marijuana (a per-household limit).

There are different usable marijuana possession limits for growers, depending on whether the grower is producing marijuana at a patient’s residence.

Members of the public may possess only:

  • 4 recreational marijuana plants at his or her household (a per-household limit),
  • 8 ounces of usable recreational marijuana (a per-household limit), and
  • 1 ounce of usable marijuana in a public place.

The opinion also concludes that the limits in the Oregon Controlled Substances Act apply to possession of marijuana concentrates and extracts. Both patients and members of the public must abide by the following possession limits:

  • 16 solid ounces of marijuana products or concentrates,
  • 72 liquid ounces of marijuana products, and
  • 1 ounce of marijuana extract purchased from a licensed retailer or dispensary.

While members of the public may make their own marijuana concentrates, edibles, or other cannabinoid products for personal consumption, it is still illegal to process marijuana extract without a license issued by the Oregon Liquor Control Commission or Oregon Health Authority. The entire opinion is available here: https://www.doj.state.or.us/agoffice/agopinions/op2016-2.pdf.

The information in this blog post is a summary. These laws and rules are nuanced, and are applied differently based on several factors, such as location of possession. Contact a member of our compliance team with any questions.

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Oregon Marijuana Laws: The Status of Residency Requirements After HB 3400 (Part 4)

In Part 3 of this series, I discussed the residency rules for Ballot Measure 91 businesses that the Oregon Liquor Control Commission (“OLCC”) distributed to members of the Rules Advisory Committee on August 14. The OLCC has not yet made any changes to those rules. However, there is some news to report.

On September 3, Amy Margolis and I met with Steve Marks (Executive Director) and Jesse Sweet from the OLCC to discuss the residency rules. The purpose of the meeting was not to debate the merits of the OLCC’s policy decisions regarding residency. Rather, we were there to: (1) find out what the OLCC’s policy was in the first place; and (2) discuss ways in which: (a) the language in the rules could be clarified; and (b) certain common business organization structures could be specifically addressed. Our firm’s only goal was to attempt to assist the OLCC in making the rules as clear as is reasonably possible, so that license applicants will have some relative certainty (before they file their applications!) that their business organization structures are permissible under the rules. We informed the OLCC that our firm does not support residency requirements and that, in fact, we were reserving the right to assist one or more of our clients in challenging the residency rules.

OLCC’s Current Policy

We were informed that the OLCC’s policy is as follows:

  1. Ownership – 51% of the ownership interests must be owned by two-year Oregon residents.
  2. Management – 100% of the individuals who are directly involved in the operation or management of the business must be two-year Oregon residents.

In Part 3 of this series, I expressed skepticism that the OLCC meant what it was actually saying in the August 14 version of the rules. Either my skepticism was valid or my analysis was partially incorrect, because my interpretation of the OLCC’s August 14 rules concerning management that I stated in Part 3 is not consistent with the OLCC’s management policy stated above. No matter. I now am suggesting that everyone should ignore my management conclusion from Part 3 and consider the above management policy to be the OLCC’s current position, even if the current version of the rules doesn’t exactly say that.

Clarifications / Safe Harbors

At the meeting and in subsequent correspondence, I proposed several clarifications and safe harbors to the OLCC.

On the ownership side of things, I proposed clarifications and safe harbors for: (1) options to purchase ownership interests; (2) convertible promissory notes; (3) preferential distribution rights based on return of capital contributions; and (4) security interests.

On the management side of things, clarifications and safe harbors are particularly important because the numerical threshold (100%) is so high and the substantive threshold (“direct involvement in the operation or management of the business”) is so vague. Of utmost importance, is what exactly does “direct involvement” mean? In Part 2 of this series, I noted that the term “direct involvement “ is not a phrase that is typically used by businesses or business law attorneys. Without clarification, there is simply no understanding what it means. I proposed limiting its definition to participation in the control of day-to-day ordinary course of business matters. There is statutory precedence for such line-drawing. Under the Oregon Business Corporation Act, the Oregon Limited Liability Company Act, and the Oregon Limited Partnership Act, certain major decisions are “kicked up” to the ownership level, while day-to-day ordinary course of business matters are dealt with at the management level. For example, the Oregon Limited Liability Company provides that in a manager-managed LLC, all decisions are made by the managers, except for certain major decisions (which are specified in the statute) that require the consent of the members. See ORS 63.130(2-4). For the OLCC’s residency requirements, it would be beneficial to know that the right to vote on certain decisions that are outside the ordinary course of business does not constitute “direct involvement” in the operation or management of the business.

Legal and Political Pressure

All of our clients should assume that the OLCC’s current policy will, in fact, end up being the policy in the final version of the rules. However, there is always a chance that the OLCC could be affected by certain legal and political pressures.

1. Legislative Counsel Committee Legal Memorandum – At the request of Representative Ann Lininger, Oregon’s Legislative Counsel Committee issued a memorandum that concluded that Oregon House Bill 3400 does not permit the OLCC to impose residency requirements on mere owners of a business. The memorandum was written by Deputy Legislative Counsel Mark Mayer and is dated July 28, 2015 (although it was just recently delivered to us). The memorandum’s legal conclusion is as follows: “For purposes of [Ballot Measure 91 and Oregon House Bill 3400], an “applicant” is a person that participates in the management of the business, owns the business outright or otherwise has the power to control the operations of the business. An “applicant” is not a person that merely has an ownership interest in the business.” The OLCC’s current 51% ownership policy directly conflicts with this legal opinion, and so it will be interesting to see if the OLCC agrees or disagrees with the memorandum.

2. Legislative Days – Members of the Oregon legislature are convening for “Legislative Days” from September 28 through September 30. During Legislative Days, various committees hold informational hearings to hear updates on the implementation of past legislation and to consider potential future legislation. The OLCC’s position on residency requirements could be a topic of discussion, especially in light of the Legislative Counsel Committee’s memorandum.

3. Legal Challenge – A lawsuit could be filed challenging some or all of the residency rules. The ownership requirements could be challenged based on the reasons set forth in the Legislative Counsel Committee’s memorandum. Additionally, all of the residency requirements could be challenged on a constitutional basis. In a subsequent part of this series, I will discuss why the residency requirements probably violate the U.S. Constitution.

4. Oregonian Editorial Board – On September 5, 2015, the Oregonian Editorial Board published an editorial opposing residency requirements for owners.

What to Do

Our overall advice has not changed. If your business is seeking an investment from one or more out-of-state investors, or if your business already has one or more out-of-state owners, and if you haven’t already discussed the issue with us, contact us today to do so. Additionally, if your business is made up entirely of out-of-state owners, and if you haven’t already done so, you should begin searching for one or more Oregon residents who you might be willing to make a co-owner or a manager, director, or officer.

Continue to stay tuned to our blog, as we will post any updated residency information when we receive it.

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Oregon Marijuana Laws: The Status of Residency Requirements After HB 3400 (Part 3)

On August 14, the Oregon Liquor Control Commission (“OLCC”) distributed to members of the Rules Advisory Committee (“RAC”) a revised draft of the rules that will affect the residency requirements for Ballot Measure 91 businesses.

There are several significant changes from the initial draft of the rules (which initial draft was discussed in Part 2 of this series).

Here are the latest versions of the most relevant provisions:

Definitions

() “Applicant” means any person or legal entity having a financial interest in the business for which licensure is sought and who is directly involved in the operation or management of the business
(a) Direct involvement in the operation or management of the business may be indicated by, but is not limited to, the following behaviors, benefits or obligations:
(i) Any person or legal entity that exercises control over, or is entitled to exercise control over, the business;
(ii) Any person or legal entity, that incurs, or is entitled to incur, debt or similar obligations on behalf of the business;
(iii) Any person or legal entity, that enters into, or is entitled to enter into, a contract or similar obligations on behalf of business [sic];
(iv) Any person or legal entity that identified [sic] as the lessee of the premises proposed to be licensed.

() “Financial interest” means having an interest in the business such that the performance of the business causes, or is capable of causing, an individual or a legal entity with which the individual is affiliated, to benefit or suffer financially, and such interests include but are not limited to:
(a) Receiving, as an employee or agent, out-of-the-ordinary compensation, either in the form of over-compensation or under compensation;
(b) Lending money, real property or personal property to an applicant or licensee for use in the business;
(c) Giving money, real property or personal property to an applicant or licensee for use in the business; or
(d) Being the spouse or domestic partner of an applicant or licensee. For purposes of this subsection, “domestic partners” includes adults who qualify for a “domestic partnership” as defined under ORS 106.310.

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Applicant and Licensee Qualifications

(1) An applicant must:
(a) Be at least 21 years of age; and
(b) Be the legitimate owner of the business proposed to be licensed; and
(c) Until January 1, 2020, have been a resident of Oregon for at least two consecutive two years [sic] prior to the date the initial or renewal application was submitted.
(2) Individuals listed as applicants on an initial or renewal application, or identified by the commission as an applicant must maintain Oregon residency while the business is licensed.

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Legitimate Ownership

In determining whether an applicant is the legitimate owner of the business proposed to be licensed or subject to license renewal the Commission:
(1) Must consider whether at least one applicant owns at least 51% of the business proposed to be licensed or whether one or more applicant [sic] in sum owns at least 51% of the business proposed to be licensed; and
(2) May consider whether an individual or legal entity other than an applicant, or an employee acting under the direction of an applicant, is directly involved in the operation or management of the business.

This is my best analysis of what the latest versions of the rules say:

1. Two-year Oregon residents must own at least 51% of the business. The OLCC has provided for this in a rather roundabout way by adding the “legitimate owner” requirement to the Applicant and Licensee Qualifications provision, and then by saying that the OLCC, in determining the identity of the legitimate owner, must consider who (individually or in the aggregate) owns 51% of the business. See clause (1)(b)) of Applicant and Licensee Qualifications and clause (1) of Legitimate Ownership.

2. If any single individual controls the business, or if any single individual has the unilateral authority to take certain actions on behalf of the business (such as incurring debt or entering into contracts), then that individual must be a two-year Oregon resident. The OLCC’s language is not clear here, but this appears to me to be the most likely interpretation. Under the rules, an individual is not an “applicant” unless the individual is “directly involved” in the operation or management of the business. “Direct involvement” means controlling the business or having the right to take certain actions on behalf of the business. If there is a single owner who completely controls the business, then the rule is clear and can be simply applied. However, consider a multiple-owner scenario where a business is owned only by minority investors, some of whom are residents and some of whom are non-residents. For example, assume that a business is owned by four individual shareholders (25% each) and that all four shareholders are also directors. Then assume that the shareholders/directors adopt a common “majority rules” approach, where a majority of the shareholders/directors (three out of four) make all decisions on behalf of business. Finally, assume that two of the shareholder/directors satisfy the two-year Oregon residency requirement and the other two do not. Under this common scenario, no individual person controls the business and no individual person has the unilateral ability to do anything without the majority’s approval. Who then, from the OLCC’s perspective, would be “directly involved” in the operation or management? Because the definition of “direct involvement” in the latest version of the rules does not contain the “individually or in the aggregate” concept that appears in the Legitimate Ownership provision, it stands to reason that each individual person must be analyzed on his or her own to determine whether the individual controls the business or has the right to take certain actions on behalf of the business. Consequently, under the above multiple-owner scenario, I would say that none of the individuals is directly involved in the operation or management of the business.

Some observations:

Observation #1 – If my interpretations are correct, then the revised rules appear to be a complete flip-flop from the initial draft of the rules. As was noted in Part 2 of this series, in the initial draft of the rules, the OLCC seemed much more concerned with non-resident managers than non-resident owners. However, under the revised draft of the rules, the focus seems to be primarily on making sure: (1) that 51% of the owners (individually or in the aggregate) satisfy the residency requirements; and (2) that no single individual non-resident controls the management of the business.

Observation #2 – I’m a bit reluctant to say this, but at this point I believe it has to be said. Both drafts of the OLCC’s rules regarding residency are worded so poorly, and are so vague and ambiguous, that I essentially don’t have much faith in my own analysis of what the rules actually mean. Or to be more accurate, I don’t have much faith that the OLCC’s rules say what the OLCC actually means. Or even worse, it’s entirely possible that the OLCC does not even know what it wants to say in the first place. The rules regarding “direct involvement” in management are not clear even when considering the most basic and simple organizational structures. And there are many other more complicated (but quite common) organizational structures that are not even being contemplated by the OLCC. Additionally, the OLCC’s way of drafting open-ended non-exclusive definitions (“Direct involvement . . . may be indicated by, but is not limited to . . . .”), together with the absence of any safe harbors, will make compliance a virtual guessing game in many scenarios.

Observation #3 (editorial comment) – In my opinion, it is practically unconscionable that the residency requirements have not yet been finalized. The Oregon Medical Marijuana Act never contained any residency requirements for ownership or management. Ballot Measure 91 intentionally did not contain any residency requirements for anyone. The Oregon legislature, in an unfortunate move, imposed a residency requirement on somebody, but then failed to say who. And now the OLCC is struggling with what it wants to do on this issue. From a policy perspective, residency requirements have absolutely nothing to do with public safety, with the ability of the OLCC to conduct criminal records checks, with law enforcement, with the eight Federal enforcement priorities set forth in the “Cole Memo,” with Oregon tax revenues, with local jurisdictions, or with anything else, other than good old-fashioned economic protectionism. And for that very reason, from a legal perspective, residency requirements probably violate the U.S. Constitution (which I will discuss in a subsequent part of this series). In just a bit more than four months, hundreds and hundreds of businesses will be submitting license applications to the OLCC. And a substantial number of those businesses have no idea if their current ownership and management structures will be legal under the OLCC’s rules. Organizing and capitalizing businesses takes a significant amount of time, energy, and money. Reorganizing and recapitalizing businesses so close to the opening day of applications will cause a substantial number of businesses to spend time, energy, and money that is better spent on safety, compliance, higher employee wages, and other matters. For the sake of the entire industry, this issue should be decided and finalized as soon as possible. And just as importantly, the rules must be absolutely clear on the front end. If the rules are vague, ambiguous, or too simplistic, and if the applications of businesses are denied based on some 2016 after-the-fact policy interpretation by the OLCC, there is certain to be litigation and finger-pointing.

Recommendation to the OLCC

At this point, the OLCC should seriously consider taking a more benign and objective approach to residency. The OLCC would be well within its statutory authority to require only that a single individual on the application be a two-year Oregon resident, or that some other relatively minimum threshold be satisfied. This would have the following positive effects: (a) businesses would be better capitalized overall, and would be able to spend more money on “industry best practices” instead of being forced to spend money on corporate legal fees, owner buyouts, and other reorganization matters; (b) the process of reviewing initial applications by the OLCC would be simplified; (c) the process of reviewing change forms for future changes of ownership or business structures would be simplified; (d) the likelihood of one or more lawsuits being filed against the OLCC alleging the unconstitutionality of residency requirements would be practically eliminated; and (e) the likelihood of individual lawsuits being filed against the OLCC alleging the improper denial of an application based on unclear residency requirements would be substantially reduced.

To the extent that the OLCC is dead set on promulgating rules that impose significant residency requirements, the OLCC should promptly consult with one or more experienced business law attorneys to ensure: (a) that there are no ambiguities in the rules; (b) that the rules are sophisticated enough to capture scenarios that are common in organizing and structuring businesses; and (c) that the rules contain safe harbor provisions that make clear that certain organizational and management structures will not violate the rules.

What to Do

If your business is seeking an investment from one or more out-of-state investors, or if your business already has one or more out-of-state owners, and if you haven’t already discussed the issue with us, contact us today to do so. Additionally, if your business is made up entirely of out-of-state owners, and if you haven’t already done so, you should begin searching for one or more Oregon residents who you might be willing to make a co-owner or a manager, director, or officer.

Continue to stay tuned to our blog, as we will post any updated residency information when we receive it.

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Oregon Marijuana Laws: The Status of Residency Requirements After HB 3400 (Part 2)

On July 17, the Oregon Liquor Control Commission (“OLCC”) distributed to members of the Licensing, Compliance, and Enforcement Technical Advisory Subcommittee an initial draft of certain rules that would affect the residency requirements for Ballot Measure 91 businesses.

The most relevant provisions relating to residency are as follows:

Definitions

() “Applicant” means any individual:
(a) Having a financial interest in the business for which licensure is sought and who is directly involved in the management of the business; or
(b) Who owns 51% or greater interest in the business proposed to be licensed; or
(c) Any individual who is a managing member, partner or director or officer of a legal entity if the legal entity owns or operates the business for which licensure is sought.

() “Financial interest” means having an interest in the business such that the performance of the business causes, or is capable of causing, an individual or a legal entity with which the individual is affiliated, to benefit or suffer financially, and such interests include but are not limited to:
(a) Receiving, as an employee or agent, out-of-the-ordinary compensation, either in the form of over-compensation or under compensation;
(b) Renting or leasing real property to an applicant or licensee for use by the business;
(c) Lending money, real property or personal property to an applicant or licensee for use in the business;
(d) Giving money, real property or personal property to an applicant or licensee for use in the business; or
(e) Being the spouse or domestic partner of an applicant or licensee. For purposes of this subsection, “domestic partners” includes adults who share the same regular and permanent address and would be financially effected by the success or failure of the business as well as adults who qualify for a “domestic partnership” as defined under ORS 106.310.

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Applicant and License Qualifications

(1) An applicant must:
(a) Be at least 21 years of age; and
(b) Until January 1, 2020, have been a resident of Oregon for at least two consecutive two years [sic]prior to the date the initial or renewal application was submitted.
(2) Individuals listed as applicants on an initial or renewal application, or identified by the commission as an applicant must maintain Oregon residency while the business is licensed.

Here is my analysis:

Observation #1 – The OLCC seems much more concerned about non-resident managers than non-resident owners. For example, it appears that a non-resident individual could own up to a 50.99% interest in a licensee, so long as the non-resident individual is not a manager, partner, director, officer, or otherwise directly involved in management. In fact, it would appear from the rules that 100% of the ownership interests of a licensee could be owned by non-residents so long as: (1) no individual non-resident owned a 51% or greater ownership interest; and (2) the owners hired an Oregon resident to be the sole manager of the business.

Observation #2 – Certain words and phrases in the rules are either ambiguous, or are not sophisticated enough to capture scenarios that are common in organizing and structuring businesses.

For example, the term “directly involved in the management” is not a phrase that is typically used by businesses or business law attorneys. The phrase may have come from Representative Ann Lininger’s oral legislative history (which was mentioned in Part 1 of this series), where she stated that the definition of applicant was intended only to include a person who “directly manages” the business. However, the line between “direct” and “indirect” involvement in the management of a business is definitely not self-evident. A more commonly-used phrase (and perhaps this is what Representative Lininger and the OLCC are trying to get at) is the term “ordinary course of business”, which is usually used to distinguish between: (1) day-to-day operational decisions that are generally made by managers or officers; and (2) more significant decisions that are generally made by members, shareholders, and directors. However, even that distinction is unclear, and what might be the ordinary course of business for one company may not be the ordinary course of business for another. Another commonly-used phrase is “control,” which usually means that one or more individuals have a majority of the voting power.

As another example, the term “51% or greater interest” could, in some circumstances, be ambiguous. Not every entity has only one class of ownership interests, and some owners may have the right to receive preferential returns for a period of time. In a typical preferential return scenario, a cash investor may have the right to receive 100% of the distributions from the entity until such time as the investor recoups the entire amount invested, and then, after receiving such amount, would have the right to receive a lesser percentage of all future distributions. Depending on the numbers and percentages before and after recoupment, it may be unclear whether an individual would be considered the owner of a “51% or greater interest.”

Observation #3 – The policy behind the rules is difficult to discern. Like most sets of line-drawing rules, there are scenarios that can be articulated that make the rules seem nonsensical. For example, a corporation having only Oregon shareholders and only Oregon directors would nevertheless be disqualified merely because it hired a single non-resident officer as an employee. On the flip side, as was noted above, an entity having no Oregon owners could obtain a license merely because it hired an Oregon resident to be the sole manager.

Observation #4 – The draft rules may be inconsistent with Sections 12, 14, 15, and 16 of HB 3400. As was mentioned in Part 1 of this series, the phrase “an applicant listed on an application” in Sections 12, 14, 15, and 16 of HB 3400 arguably indicates that only one individual listed on the OLCC application needs be an Oregon resident. Also, although the OLCC may have considered Representative Lininger’s oral legislative history when drafting clause (a) of the definition of “Applicant,” the OLCC disregarded the other portion of her legislative history where she stated that the definition of “Applicant” for residency purposes was intended only to include a person who “directly manages” the business. Therefore, clauses (b) and (c) of the definition of “Applicant” in the draft rules are inconsistent with Representative Lininger’s legislative history. (In a subsequent part of this series, I will discuss the possibility that the residency requirements for a marijuana license violate the Commerce Clause of the U.S. Constitution.)

Recommendation to the OLCC

To the extent that the OLCC is going to promulgate rules that impose residency requirements, the OLCC should consult with one or more experienced business law attorneys to ensure: (1) that there are no ambiguities in the rules; and (2) that the rules are sophisticated enough to capture scenarios that are common in organizing and structuring businesses. Additionally, and ideally, the rules should contain “safe harbor” provisions that make clear that certain business organizational structures will not violate the rules.

What to Do

If your business is seeking an investment from one or more out-of-state investors, or if your business already has one or more out-of-state owners, and if you haven’t already discussed the issue with us, contact us today. Additionally, if your business is made up entirely of out-of-state owners, and if you haven’t already done so, you should begin searching for one or more Oregon residents who you might be willing to make a co-owner or a manager, director, or officer.

Stay tuned to our blog, as we will post any updated residency information when we receive it.

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Oregon Marijuana Laws: The Status of Residency Requirements After HB 3400 (Part 1)

Ballot Measure 91 intentionally did not include any residency requirement for anyone who owned or who was otherwise involved with a licensed marijuana business. Since 2014, the Oregon Medical Marijuana Act (“OMMA”) required the person responsible for (“PRF”) a medical marijuana facility (“MMF”) to be an Oregon resident. However, because there was no requirement that the PRF had to be an owner of the MMF, OMMA never contained any residency requirements for anyone who owned an MMF. OMMA did not license growers or processors, and so those businesses were never subject to any residency requirements.

House Bill 3400, which was signed by the Governor on June 30, 2015, has changed all of that.

Ballot Measure 91

For Ballot Measure 91 businesses, HB 3400 imposes a two-year residency requirement. Who exactly needs to be a resident? Unfortunately, we don’t know yet because the legislature has, somewhat surprisingly, delegated that decision to the Oregon Liquor Control Commission (“OLCC”).

For producers, processors, wholesalers, and retailers, HB 3400 requires that “an applicant listed on an application” must have been an Oregon resident for two years. See Sections 12, 14, 15, and 16. Who has to be listed on an application? HB 3400 doesn’t say. And that’s how the legislature has, in a rather subtle way, delegated the decision to the OLCC.

For some context, the OLCC has defined “applicant” under the Oregon Liquor Control Act (the “Liquor Act”) to include all of the individuals and legal entities who own or have an interest in the business. For each corporation or other legal entity, this means: (1) each principal officer; (2) each director; (3) each person or entity who owns or controls 10% or more of the entity’s stock or who holds 10% or more of the total membership interest in the entity or whose investment interest is 10% or more of the total investment interests in the entity; (4) each manager of a limited liability company; and (5) each general partner of a limited partnership. The Liquor Act does not contain any residency requirements however. And so that rather broad definition of “applicant” in the Liquor Act is solely for other purposes, including criminal records checks.

The exact language in HB 3400 for residency purposes is a bit peculiar. The phrase “an applicant listed on an application” is unique and does not appear in the Liquor Act. The phrase seems to contemplate that a Ballot Measure 91 application, like a Liquor Act application, will include a list of one or more individuals and legal entities. And the phrase “an applicant” could indicate that only one of those must be an Oregon resident. (The legislature easily could have said “each applicant listed on an application” must be a resident, but it didn’t.) The “an applicant” phrase can also be compared and contrasted to the criminal records provision in HB 3400, which states that the OLCC may require the fingerprints of “any individual listed on an application.” See Section 10. And finally, there’s some oral legislative history from Representative Ann Lininger, where she states that the definition of “applicant” for residency purposes was not intended to apply to every investor, but rather was intended only to include a person who “directly manages” the business. See Representative Lininger’s testimony at the 1:12 mark.

Still, at this time, the only thing we know for sure is that at least one individual listed on each producer, processor, wholesale, and retail application must have been an Oregon resident for two years. Presumably we will know more when the OLCC publishes the initial draft of its rules under Ballot Measure 91.

Handlers

Individuals who perform work for or on behalf of a Ballot Measure 91 marijuana retailer must obtain a permit from the OLCC. HB 3400 does not impose any residency requirements for such individuals. See Sections 19 and 20.

Laboratories

Laboratories that test marijuana items (under both Ballot Measure 91 and OMMA) must be licensed by the OLCC. HB 3400 does not impose any residency requirements for anyone who owns or who is otherwise involved with a licensed laboratory. See Sections 92(7) and 93.

OMMA

HB 3400 imposes residency requirements for medical marijuana producers, processors, and dispensaries that will be registered by the Oregon Heath Authority (“OHA”).

For medical marijuana producers, the residency requirement applies to: (1) the PRF of the marijuana grow site; and (2) any other person whose name is included in the application. See Sections 81(2)(b) and 173(1). Other than the PRF, HB 3400 does not say who has to be listed on a medical marijuana producer application. Therefore the legislature has, for medical marijuana producers, delegated to the OHA the decision of who exactly needs to be a resident.

For medical marijuana processors, the residency requirement applies to each individual responsible for the marijuana processing site. See Section 85(2)(b). This language is slightly different from the PRF language for medical marijuana producers, although the reasons for the difference are not evident. And for some reason, Section 173, which adds the potentially broad “any person whose name is included in the application” language, does not apply to processors.

The residency requirements for medical marijuana dispensaries are the most stringent. For dispensaries, the residency requirement applies to: (1) each individual responsible for the medical marijuana dispensary; and (2) each individual who has a “financial interest” in the dispensary. See Sections 86(2)(a), (b), and (d) and 173(1). The term “financial interest” is not defined in HB 3400, and so the OHA will presumably define the term in its rules. However, by the plain meaning of the term, the definition would almost certainly include each direct and indirect individual owner of the business, and perhaps even unsecured lenders, third parties whose compensation is based on a percentage of revenues or profits, and others.

The residency requirement for the PRFs and the individuals responsible for the registered sites is two years. For medical marijuana producers and retailers, the residency requirement for all other persons included in the application is two years, unless a person first registered with the OHA on or before January 1, 2015, in which case it is one year. See Section 173(1).

Operative Dates

HB 3400’s residency requirements for Ballot Measure 91 businesses become operative on January 1, 2016. See Section 178(1).

HB 3400’s residency requirements for medical marijuana businesses become operative on March 1, 2016. See Section 179(1).

What to Do

If your business is seeking an investment from one or more out-of-state investors, or if your business already has one or more out-of-state owners, and if you haven’t already discussed the issue with us, contact us today to do so. Additionally, if your business is made up entirely of out-of-state owners, and if you haven’t already done so, you should begin searching for one or more Oregon residents who you might be willing to make a co-owner.

Stay tuned to our blog, as we will post any updated residency information when we receive it.

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Are We There Yet: Ballot Measure 91 next steps

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As we creep towards the finish line of the Oregon legislative session, the issues seem to be winding down. The Committee has finalized a deal on the medical piece of legislation and is working on the final issues around Ballot Measure 91. Here is a brief timeline of what to expect next:

July 1st: Possession limits go into effect. Everyone can possess and cultivate up to 4 plants per household. People may share with each other but can not distribute for consideration.

July 11th: The Legislature absolutely has to be done by this date. It doesn’t matter if nothing gets done, this is the end. That means we will know the statutory guideposts for implementation by this date.

Now- October: Between now and October the various rules committees start to work. Each doing their part to help craft the draft rules that already exist out there. These are important meetings to keep track of mostly because of the snippets of information they may provide about what the final rules will look like. This is a good opportunity for the industry people on those committees to give some solid, practical input.

October- December: In our office we view this as a mad scramble to get licenses (specifically producer licenses) ready for submission. How much scrambling will depend on how in-depth the OLCC wants to go in approving licenses. If the rules mirror HB 3460 (which I think is nearly impossible) then this process will be relatively painless. If OLCC want to do a deep dive into any piece of the applicants history- taxes, finances, requiring certain types of land use work to have been done- then prepare for crazy.

***Some of this you can start now. You can make sure your corporate structure is sound, your building or facility is permitted, that you are caught up on your taxes and that the people who own the entity are likely to pass muster. Because we anticipate that come October everyone is going to kick into high gear getting ready, doing some work ahead of time might make the difference between getting an application done on time and not being ready to submit.

January 2016: The OLCC issues the first licenses which will most certainly be cultivator licenses. This will be it’s own kind of crazy. For outdoor cultivators this means a sense of security and an understanding of how big they can go next year. For indoor we don’t know what it means. Maybe stockpiling for adult use? Continuing to oversupply the medical market until adult use hits? Needing more capitol to make it until retail licenses are issued?

Sometime between January and Fall: Processing licensing are issued. Same issue as above. Does this mean stockpiling product? Sitting on product for a long time? A lot of how this rolls out will depend, I think, on the fundamental understanding of how processing works, how much material it takes and whether or not people are going to be able to continue to supply the medical market.

***As a side note, sitting on product can be dangerous- whether it is flower or concentrate. How each person in this industry deals with that issue will be extremely important. We do not want people hurt. Please make sure you have proper security in place and policies concerning break-ins, locking up and emergency situations.

Sometime between January and Fall: There will be two or more scrambles for licenses. Processing, retail, wholesale, maybe a nursery license and a lab license. Each of these may be completely crazy or relatively painless. I’m veering towards completely crazy.

Fall: Retail licenses will be issued and we hit the go button.

Here are a few more issues to consider:

1. Land use and how that will interface with applications.

2. What will happen with banking before we hit go.

3. What will local governments do with opting out, regulating time place and manner, etc. This is the biggest hurdle, on a state level, that the industry faces.

4. Where will people who are not patients get their cannabis until fall of 2016. That question might be rhetorical.

5. How big will OLCC let people go? We understand that it will be similar canopy size for indoor, outdoor and greenhouse but where that number lands (I predict 10k of flowering canopy) is yet to be announced.

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Ballot Measure 91: Early sales and joint stores?

The questions I get most frequently (other than local government questions) are whether early sales to the adult use market through dispensaries will happen and whether a dispensary will be able to serve both markets. The Oregonian discusses both issues  in an article today.

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Early Sales: It is hard to tell whether this is a real possibility. Common sense and reason would dictate that dispensaries should be able to serve adult use consumers as early as possible. This issue has come up because, on July 1, 2015, the Ballot Measure 91 possession limits go into effect but people have no retail location to get cannabis. One of two things will happen. First, a robust, low level blackmarket will emerge to supply the needs of non-patients. Or, people will create an amazing sharing economy where they give away cannabis to anyone who wants it. You pick which seems most likely.

There are a few issues the Legislature (and/or OHA) will need to tackle to make this viable including production levels, making sure there is enough medicine for medical patients and whether taxes will be immediately imposed or not. These are certainly not insurmountable problems and could be solved by allowing growers to produce more than their cards allow, creating tracking systems through the already existing POS systems to ensure product never gets below a certain level and make a choice on taxes (there is no “right” decision here) placing the burden on the dispensary to collect. The additional benefit for early production and sales is that it will likely bring more producers into the legal market under less threatening and burdensome conditions than the OLCC will impose. Consider it an intermediate ground for transitioning to a recreational license.

You can find the language for early sales here and click on the -3 amendments.

Medical and Recreation Dispensary: That a dispensary licensed by OLCC will be able to serve both markets seems extremely likely. This is not where the question lies. The real question is which producers, OLCC or designated medical growers, will be able to serve OLCC dispensaries and will they have different licensing requirements.

This article makes it sound a little different than it actually is. OLCC has been very clear that you will need to have an OLCC license to grow for an OLCC store. This blended dispensary model does not change that. What OLCC is suggesting might happen is that a person will not be restricted from maintaining their medical cards while holding an OLCC producers license. When I have explained this to clients, each and every one of them, has wondered why they would go through the duplicative process of paying for cards and paying for an OLCC license just to distribute to the same store. Although many people have discussed maintaining a separate medical garden aside from their OLCC licensed one. That, of course, will be a personal and business decision. But, it is important to remember that nothing in the new laws limit a producer’s ability to donate or give cannabis to another person whether you have a medical card or not. That means a grower would still be able to give medicine to patients with or without a medical card. Finally, much of how this blended OLCC store will function is based on whether or not the Legislature moves the tax from the producer level to the retail level.

 

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Ballot Measure 91: Joint Committee stalemate

 

 

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Last night the Joint Committee for the Implementation of Ballot Measure 91 locked down. After working for almost the entire session on just medical marijuana regulations for Oregon, and not even getting to 91, they hit a wall. They did not lock down on plant numbers or tracking or any of the most controversial pieces. Instead, they simply could not reach a compromise on how a local jurisdiction could opt out of the program (this just would have applied to dispensaries and processors both options had grandfathering language).

Watching it play out last night was intense. Just like watching anything else when two parties are so close to each other, and they really, really were, the fact that there was not a middle ground was striking. In a perfect world we could create a system where local governments are compelled to participate in providing access to cannabis. In a perfect world there would be rolling ganja fields outside my door right now with no concern over police involvement or federal preemption. However we are very far away from that and legislators needed to make a decision on this issue for 844 to move.

Where are we now? Is this a good or bad outcome? It depends on who you are. These are the potential permutations of how this plays out:

– Between now and Wednesday they pull it together and come up with a compromise. Bill moves, Committee moves on to 91.

– Committee dissolves or is suspended. Instead of there being a Joint Committee there will be a Senate and House committee. Senate committee likely made up of same legislators, who passed 844 -24s unanimously, votes and the Senate votes in favor on the floor. Bill goes to Ways and Means where Rep. Buckley is the chair (who voted no last night along with other House dems) and 844 dies there.

– Same as above except that 844 does not die in Ways and Means and gets moved in some form or another. This would require serious involvement from Leadership.

– 844 gets tabled for now and the Committee starts working on 91. Seems very unlikely at this point but who knows.

– Nothing happens. Legislature can not agree on anything to do with cannabis. Nothing happens with medical. Nothing happens on 91.

Let’s explore this for a second- here’s what that might look like. OHA and Governor’s office steps in and regulates medical program. OHA has asked for 10.6 million dollars already to do this. OHA is free to do whatever they want with regulation that does not violate existing statutory language. This may mean seed to sale tracking, inspections and local government regulation. Both Governor’s office and Saxton have said they support these types of regulations. Or, OHA does not nothing, Governor’s office does nothing. Medical program stays exactly the same.

For 91, it means that OLCC has ultimate decision making power. There are zero statutory guidelines other than what is in the four corners of the ballot measure. There would be no residency requirement, no adjustment to where tax is collected, none of the technical fixes requested by OLCC, no research license or lab license. We duke it out city by city, county by county on issues of land use, zoning and local ordinances meant to be so prohibitive that they act almost like a ban.

– Nothing happens with OMMP but Legislature addresses 91 through an already drafted omnibus bill. Issues mentioned above get addressed. Legislature comes back in 2016 or 2017 to look at medical program. Or not.

– It seems possible that they could start over with a new medical bill. This is the most remote possibility but, who knows, maybe whatever is the most crazy and unlikely will happen.

We shall stay tuned and see what happens in the next few weeks of the legislative session. There is very little precedent for a committee dissolving like this. Certainly watching this has reminded me over and over again of the quote, “Laws are like sausages, it is better not to see them being made.” Couldn’t be more true than right now.

 

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OLCC and Ballot Measure 91: New revenue projections

​According to the Portland Business Journal, the OLCC has put in their budget for Ballot Measure 91 for 2015- 2016. OLCC is  asking for approximately $10 million over the next two years to implement and run the program. While the Twitterverse is aghast at that number – many wondering if the majority of that request will be dedicated to enhanced law enforcement and the requested police powers, there is a more interesting number for people in the industry, or looking to get into the cannabis industry, to look at. The revenue projection.

The OLCC has released an improved revenue projection. This number is significantly lower than the number projected by ECONorthwest during the campaign.

ECONorthwest projected that the tax revenue number would be $78.7 million while the OLCC is putting the 2016-2017 revenue projections at just over $18 million. Granted, OLCC does explain that retail stores are not likely to open until late 2016 but, even if we double the projected number, we are still at half of the amount projected during campaign season.

If we parse that information apart, along with the statements made by OLCC, we can see that they are reaching a fundamental understanding about the level of cultivation in this state, the access to cannabis both now and when people start growing their four plants at home and sharing what they grow and the general appetite for consumption beyond those who are already involved in the Oregon Medical Marijuana Program.

While these numbers are merely projections this is an interesting conversation to follow as the tax revenue is clearly motivating factor for local governments to participate in this program, citizens to continue to support legalization and may very well impact what happens to the medical program in coming legislative sessions.

As a side note, it is interesting to compare this projection with the actual revenue generated by beer, wine and liquor in 2013-2014. You can find those numbers here: OLCC 2013-2014.

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Ballot Measure 91: Guide to July 2015

Beginning July 1, 2015, Ballot Measure 91 will allow Oregon residents 21 years and older to possess, grow, and transfer cannabis. The rules are as follows:

1. Adults can possess up to eight ounces of marijuana in their homes, but may only possess up to an ounce of marijuana in public areas.

2. Individuals may not consume marijuana in public or while driving. This is true currently as well.

3. Persons over the age of 21 may also gift marijuana based on the following limits: an ounce of marijuana, 16 ounces of solid marijuana products, or 72 ounces of liquid marijuana products.

4. Adults over 21 may also cultivate up to four marijuana plants in their homes. However, these plants may not be visible to the public.

*This plant cultivation limit applies to households, not to individual persons. For example, four adults over the age of 21 may not grow four marijuana plants each for a total of 16 plants, but can only cultivate four total plants per the household.

5. Though adults can lawfully purchase marijuana extracts from licensed facilities, one important caveat of Measure 91 is its prohibition against homemade cannabis extracts. Specifically, no person can produce, process, keep, or store any homemade marijuana extracts. Furthermore, the home extract production using butane, hexane, and alcohol is prohibited.

6. As far as where adults may legally purchase recreational marijuana, Senator Ted Ferrioli is currently working on legislation that would temporarily allow medical marijuana dispensaries to sell retail marijuana beginning July 1, 2015. This concept is attached to Senate Bill 844 otherwise known as the OLCC technical bill.

While the amendments to SB 844 would potentially provide people a place to legally buy recreational marijuana, it is more likely that the state retail licensing system will not be active until sometime in 2016—meaning customers will not have any licensed dispensaries available until that time.

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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: