On January 3rd, according to the owner of a smoke shop in Yuma, Arizona, officials from the Food and Drug Administration (FDA) seized a variety of CBD products from the store’s shelves. The officials took fewer than fifty items and told the owner to anticipate follow-up paperwork within seven to ten business days.
According to the owner’s account, FDA officials had stopped by the shop a few days earlier and asked what products were edible and intended for humans. When those officials returned, they informed the owner that CBD cannot be sold for human consumption.
[I]t’s unlawful under the FD&C Act to introduce food containing added CBD or THC into interstate commerce, or to market CBD or THC products as, or in, dietary supplements, regardless of whether the substances are hemp-derived. This is because both CBD and THC are active ingredients in FDA-approved drugs and were the subject of substantial clinical investigations before they were marketed as foods or dietary supplements. Under the FD&C Act, it’s illegal to introduce drug ingredients like these into the food supply, or to market them as dietary supplements. This is a requirement that we apply across the
The duration of a cannabis crop is around 3 months, with the first month for the plants vegetative growth and at least the next 2 months for flowering. During this time plants require water and fertilisers every few days, so irrigation will become a repetitive task that can end up tiring all but the most dedicated grower, especially when time is at a premium.
Manual or automatic irrigation in cannabis cultivation
Pretty much every grower starting out in cannabis cultivation will usually irrigate by hand, but how can we simplify this task?
Many growers prefer to water by hand and can be a bit reluctant to adopt automatic irrigation systems, but when you use one for the first time there’s no turning back. Automatic irrigation gives us more free time to check the plants or to dedicate to other tasks.
Automatic irrigation can be as simple or as complex as we like, depending on the requirements of each grower and the aspects that they …
A few months ago, I wrote a blog post about the precarious state of industrial-hemp derived CBD in California. Since then, as everyone knows, President Trump signed the Agricultural Improvement Act of 2018 (or “Farm Bill”). A lot of people think that in the wake of the Farm Bill, hemp-derived CBD (“Hemp CBD”) is now completely legal. This is in many cases a wildly inaccurate misconception—especially in California. Now, the legal status of Hemp CBD is arguably even more confounding than it was then. And it was pretty bad.
What did the 2018 Farm Bill Actually Do?
Before getting into California Hemp CBD laws, it’s important to discuss what the new Farm Bill even changes. If you follow us here at the Canna Law Blog, you know we’ve written pretty comprehensively on this topic. For a brief overview, the 2018 Farm Bill modified the Controlled Substances Act (the “CSA”) to exempt hemp from the definition of marijuana. Not only is hemp now clearly excluded from this definition and thus not a scheduled drug, but states and tribes also cannot prohibit the distribution of hemp. However, as I explain below, that doesn’t necessarily mean hemp or Hemp CBD can be sold without state restrictions.
The cannabis industry is volatile and deals are growing more complex as markets evolve. Having worked with clients in the cannabis industry for over eight years, though, and in multiple jurisdictions, there is no deal too complex for Hilary. In 2018 alone, she closed an estimated $100 million in industry transactions.
Because Hilary has been in the industry for so long, she is also uniquely equipped to make observations regarding its changes. As she states in the article, the field is now more diverse, including among service professionals. Among the other attorneys listed were lawyers from large international firms such as Dorsey and Whitney and Fox Rothschild.
With an industry “set to skyrocket to $194 billion,” the diversity and complexity of cannabis transactions will only increase over time. All in all, we are super proud of Hilary and our growing L.A. office, and looking forward to big things in 2019.
We hear from clients on a regular basis who receive fraudulent notices pertaining to their U.S. federal trademark applications, and because we’ve seen an uptick in these scams over the last month, we thought it would be prudent to publish a PSA on the topic, together with what to look out for if you are a trademark applicant or owner.
These trademark scams often come in the form of an official-looking letter or invoice requesting payment related to the trademark application. These letters can come via mail or via email, are formatted to look like an official government document, and list specific details about your trademark application, including an image of your trademark. All of this is public information and readily available, for better or worse, to potential scammers.
A client of ours recently received a letter from a company called Trademark Selection, Inc. that requested a “Registration Fee” of USD 1,360. The letter also provided wire instructions to an account in Florida, and in very fine print at the bottom stated, “By paying the indicated amount you accept this offer that will approve listing this information in the ‘TM SELECTION 2018 / The International Trade Marks and Service Marks’ catalogs.” This letter is a scam.
For clients that utilize our firm for their trademark filings, all correspondence related to …
At the risk of generalising, most cannabis users are all about tetrahydrocannabinol. THC being the psychoactive cannabinoid responsible for delivering that uplifting ‘high’ that’s synonymous with cannabis consumption. As such, it is common for cannabis users to search high and low for the strongest strains they can lay their hands on – ideally packing as […]
I recently wrote about a case in the Tenth Circuit,Kenney v. Helix TCS, Inc., where the Court of Appeals is asked to decide if the Federal Labor Standards act (FLSA) provides wage and hour protection to employees of cannabis businesses. That case hasn’t seen much movement since I wrote about it, but its decision could have a significant impact on a case recently filed in Federal District Court in Oregon.
Michael Garity has filed a state and FLSA wage and hour claim against his former employer, WRD Investments LLC (“WRD Investments”). According to the complaint, Mr. Garity was hired by WRD Investments to provide expertise and labor in support of WRD Investments’ marijuana grow near Junction City, Oregon.
Mr. Garity alleges he was a “non-exempt” employee for WRD Investments. His status as a non-exempt employee would have required WRD Investments to pay Mr. Garity at least minimum wage for all hours worked and overtime rates for all hours worked over 40 hours per week. In the complaint, Mr. Garity alleges that between March 2016 through May 2017 he may have worked approximately 2500 hours without any compensation. He further alleges that he frequently worked over 40 hours per week without overtime pay.
Mr. Garity’s complaints do not stop there. Mr. Garity …
Owning a cannabis business can feel like you’re drowning in various regulation compliances and not actually spending time with your business. The excess of rules and regulations levied by the Washington Liquor and Cannabis Control Board (WSLCB), cannabis-specific regulations, along with an array of state and federal employment laws and regulations can keep any business from blossoming to its fullest. At Harris Bricken we understand your struggles and aim to keep your business thriving.
If you are a WSLCB licensed cannabis business with employees, please join us at noon (PST) on January 29, 2019 for the second of our lunchtime employment law webinar series. Throughout the presentation, Harris Bricken attorney Megan Vaniman will lend her vast knowledge of employment law to ensure that your business is in compliance with Washington regulations. Topics will include:
Washington’s Sick Leave Laws
Washington’s Ban-the-Box Regulation
Washington’s Equal Pay Opportunity Act
The difference between independent contractors and employees
Moderated by fellow Harris Bricken attorney Robert McVay, Megan will also address any relevant audience questions throughout the presentation. Please register by clicking here. For any additional questions regarding the webinar, please contact firstname.lastname@example.org. We hope you can join us!
Once again, Oregon is working on becoming a marijuana maverick. The Beaver State is on the verge of introducing a bill that would allow marijuana exports to other states by 2021.
In an attempt to tackle the oversupply crisis that has plagued Oregon the last few years, the Craft Cannabis Alliance, an Oregon-based membership association of cannabis and allied businesses, has spearheaded a campaign aimed at reintroducing the idea of exporting Oregon cannabis, a plan that was first proposed in 2017 by Senator Floyd Prozanski (D-Eugene).
The idea was memorialized in Senate Bill 1042, which would have permitted interstate transfers of cannabis products with adjacent legal states that complied with Oregon’s testing, packaging and labeling rules as well as any rules imposed by the receiving state. Although the original proposal died in the House last year, a lot has changed since then.
First, the popularity of marijuana among American adults has been on the rise. According to a 2017 Gallup survey, 64 percent of Americans favor the legalization of marijuana for recreational purposes.
Second, Oregon’s supply has far exceeded local demands: the state is currently sitting on approximately 1.4 million pounds of marijuana that state and federal laws prohibit from selling outside state lines. This tremendous oversupply in Oregon has caused prices to crater, putting many licensed growers …
On Thursday and Friday of next week, January 17 & 18, our own Daniel Dersham and Julie Hamill will present at a two-day continuing legal education (CLE) event in San Francisco called The Business of Marijuana in Northern California, to discuss cannabis real estate and land use issues in California. The roster of speakers lined up for this CLE includes an array of lawyers, consultants, and business professionals working with the cannabis industry, and everyone, including non-lawyers, would be well served to attend. For a full event description, including topics, speakers and registration links, click here.
Looking back over the past two years since the passage of Prop 64 legalizing adult-use cannabis in California, it is amazing to see how much things have changed in California cannabis. At this point, the state’s adult-use and medicinal cannabis regulatory regime is fully built out, with thousands of license applications now on file with the state. We are proud to call many of these California producers, processors, wholesalers and retailers our clients, alongside the many investors and ancillary service providers we represent.
Now that the California regulatory groundwork has stabilized, local jurisdictions have continued to open up their markets to the cannabis industry, and the legalization and decriminalization movement has continued to forge ahead, cannabis business activity in California is …
Our California cannabis lawyers are seeing a major spike in mergers and acquisitions (M & A), and it’s time to discuss what’s on the horizon for changes of ownership for some California cannabis businesses. In every cannabis state, M & A is no breeze because the regulators almost always require pre-approval of the transaction or of the new buyer(s). In California, it’s going to be more of the same in the red tape department in the future, as per the proposed permanent rules that will (likely) take effect at the middle of this month.
As you all know, multiple agencies in California run point on licensing. The Bureau of Cannabis Control (“BCC”) is the lead agency though when it comes to the implementation of the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”). Under the BCC’s proposed permanent rules (which are still under review by the Office of Administrative Law), we now have a revised change of ownership process for distributors, labs, and retailers. (The California Department of Public Health the California Department of Food and Agriculture both have new change of ownership rules that significantly differ from the BCC in certain ways.)
First, and most importantly for all licensees, state licenses are not transferable. What this means then is that buyers have to purchase the companies that …
It’s 2019 and Oregon employees can still be terminated for off-work marijuana use. That includes not just recreational use, but off-work medical use by registered cardholders in the Oregon Health Authority system– even patients with debilitating medical conditions like cancer or epilepsy. This means that Oregon, which has been on the forefront of decriminalization and legalization of marijuana, is no better than the most conservative jurisdictions when it comes to off-work use. What gives?
Back in 2017, the Oregon Senator Floyd Prozanski introduced Senate Bill 301. The bill would have protected employee off-work marijuana use—meaning employers could not terminate an employee for using marijuana outside of working hours, so long as it did not lead to on-the-job impairment. The bill faced opposition from industry groups related to worksite safety and federal law. Accordingly, the bill was amended to protect only off-work use by medical marijuana card holders, but this was still not enough to secure passage.
Never one to be stopped by a little failure, Senator Prozanski is back at it and has proposed a new bill, Legislative Concept 2152. The proposed bill is short and sweet. The relevant portion simply states:
It is an unlawful employment practice for any employer to require, as a condition of employment, that an employee or prospective employee refrain from using
Why do most new year’s resolutions fail? Because they suck…period. If you’re serious about your resolutions for 2019 and intend to make them stick, it really isn’t rocket science. You simply need to think of the kinds of things you should be doing but currently aren’t, which will benefit you in the long-run. Of course, […]
Today I’m attending the Washington State Cannabis Summit. This is the 5th Annual summit, but this year is particularly special due to a major announcement by Governor Jay Inslee. During the morning session, Gov. Inslee unveiled the Marijuana Justice Initiative. The Initiative will allow individuals to submit an online petition to Gov. Inslee requesting a pardon for certain marijuana convictions.
To be eligible for clemency under the Initiative, an individual’s conviction must meet the following criteria:
It must be an adult conviction for misdemeanor marijuana possession;
Prosecuted under Washington state law (RCW), not a local ordinance;
The conviction must have occurred between January 1, 1998 and December 5, 2012;
It must be the only conviction on a person’s criminal record.
Gov. Inslee deserves credit here for using his pardon power to address some of the damage done by the war on drugs. The Governor’s office summarized this harm in its press release announcing the Initiative:
For decades, people have faced criminal prosecution for behavior that is no longer considered a crime in Washington. Inslee believes that forgiving these convictions will allow people to move on with their lives
There is no doubt that the enactment of the 2018 Farm Bill, which legalized industrial hemp by removing the crop from the Controlled Substance Act’s definition of “marijuana,” will lead to increased sales and growing opportunities for hemp-derived cannabidiol (“Hemp-CBD”) companies in the new year. In fact, we have already seen an uptick in new and current client inquiries, even in the past few weeks.
As we previously explained, however, there is little information provided by the Food and Drug Administration (“FDA”) about how Hemp-CBD products, including foods, dietary supplements, and cosmetics, should comply with the basic mandatory requirements imposed by the FDA. According to a report released by the Brightfield Group, we will need to wait another 18 to 24 months before the FDA makes a decision regarding the approval of Hemp-CBD products.
Until then, Hemp-CBD companies should handle these uncertainties and the lack of specificity regarding the legal status of Hemp-CBD by being extremely prudent when marketing their CBD products. To that end, we previously discussed the FDA labeling rules and regulations imposed on foods. We now turn to the marketing and labeling requirements imposed on dietary supplements.
For the last three years, the FDA has taken the position that CBD is excluded from the definition of “dietary supplement” …
In early December, California’s cannabis regulators released their proposed final regulations. If the regulations aren’t changed, it’s expected that they will take effect at some point this month, or shortly after. These regulations have some pretty important changes from the current readopted emergency regulations. One of the notable areas of change is the packaging and labeling requirements. In spite of some of the changes, there is almost no grace period for compliance. If the regulations go into effect as is, requirements could change overnight.
For some background, the regulations between the agencies permit manufacturers to package and label manufactured cannabis products such as vape cartridges or edibles, and distributors to package and label cannabis flower. Retailers are not permitted to do any labeling. In large part, this will remain unchanged. But the requirements for different license types will change significantly.
First is child-resistant packaging, which is the only major packaging change that has any kind of transitional period. The proposed final regulations of the California Department of Public Health (“CDPH”), which regulates manufacturers, postpone the child-resistant packaging requirements until January 1, 2020. The Bureau of Cannabis Control (“BCC”), which regulates a number of license types including distributors and retailers, likewise will not require distributors to package cannabis goods in child-resistant packages. …
Even though it is estimated that the cannabis plant has been accompanying humanity for millennia, confusion still exists today regarding the classification of its species or varieties. In fact, the debate on how to classify this plant has been active for more than two centuries: are the different varieties of cannabis typical of a single and very diverse species? Or is it a polytypic genre with several species? In this article we will investigate and explain the main differences between hemp and marijuana.
There are hundreds of cannabis varieties
As we saw in our article on the origins of cannabis cultivation, the plant was first classified by Carl Linnaeus in 1753, and named Cannabis Sativa. However, Linnaeus only knew European hemp, and it was not until 1785 that Jean-Baptiste de Lamarck introduced a second species found in the mountains of India and with very different morphological features from the first, which he called Cannabis Indica. Much later, in the twentieth century, precisely in 1924, D.E. Janichevsky presented a third species found in Russia, Cannabis Ruderalis.
The debate continued until the 1970s, when William Emboden, Loran Anderson and Richard E. Schultes proposed the classification that is still the most popular among botanists and growers today, dividing the genus Cannabis into …
We handle a lot of cannabis M & A in our Los Angeles, San Francisco, Seattle and Portland offices. Over the years, it’s become pretty clear that in robustly regulated cannabis states, the secondary market for buying and selling businesses really peaks (after initial legalization) as local and state governments finally begin to settle their local control entitlement processes, and once the state rules governing cannabis businesses are less volatile. In California specifically, our cannabis business attorneys have worked on a good amount of cannabis M & A deals since the implementation of the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”)– especially in Los Angeles, Long Beach, Santa Ana, Santa Barbara, San Diego, San Francisco, the Emerald Triangle, and Oakland.
Lately though, there’s been a massive uptick in our firm’s M & A practice for cannabis businesses in a multitude of states. Below is an outline as to why this is happening.
Limited number of licensed businesses.
Securing a cannabis license in any state is no picnic. Setting aside the federal illegality of cannabis (which has its own business and legal risks), licensees not only have to deal with the shifting state regulatory landscape, but they must also constantly navigate local control from city to city and county to county. Licensees also have to meet numerous strict …
We had a blast celebrating all of the big wins for cannabis on this blog this past year. Looking back, it was a monumental year for cannabis reform, both in the United States but also internationally. At this point, it feels like there is no realistic scenario in which prohibition carries the day: Federal legalization of marijuana, at least in the United States, feels like a fait accompli. Below are the ten biggest developments in cannabis law and policy over the past twelve months.
California commenced its adult use marketplace.
California is the fifth largest economy in the world. It was the first U.S. state to pass a medical marijuana ballot initiative, back in 1996, and given the interim developments in states like Colorado, Oregon and Washington, adult-use legalization in the Golden State has been a long time coming. There are still a ton of unknowns about California’s cannabis regulations (it also passed a hemp law), but the size, scope and influence of this program on other states—and even other countries—will be staggering. Our Los Angeles and San Francisco cannabis business lawyers will continue to report on these exciting and complex developments every step of the way.
Last week, the 2018 Farm Bill became law. Included in that law is a milestone provision that removes hemp from the Controlled Substances Act (CSA), and another that prohibits states from preventing transportation or shipment of hemp or hemp products across state lines– even if a state has itself outlawed hemp or hemp products. However, following passage of the Farm Bill, the Food and Drug Administration (FDA) issued a statement virtually ensuring that regardless of changes to the CSA, the FDA will effectively maintain the prohibition on most uses of CBD until further notice, because it retains control over the safety of foods and dietary supplements that include cannabis or cannabis products.
A quick review of some relevant terminology for context: The cannabis plant (Cannabis sativa L.) is cultivated in many strains, with varying levels of the psychoactive ingredient tetrahydrocannabinol (THC) and the non-psychoactive ingredient cannabidiol (CBD), along with hundreds of other constituent ingredients. The Farm Bill amends the CSA to define “hemp” (formerly referred to as “industrial hemp”) as the cannabis plant, any parts of the cannabis plant, and all derivatives therefrom, to the extent they contain a THC concentration of not more than 0.3% on a dry weight basis (i.e. not psychoactive). Any cannabis plant or derivative with more than 0.3% THC remains a Schedule …
Everyone has their own unique set of ‘rules’ when it comes to getting higher than high. We’ve all tried all manner of weird and wonderful things to feel a bigger buzz – some of which turn out to be more successful than others. But then there are those standards that are followed instinctively by millions […]
On January 1, 2019, the City of Pasadena in Northeastern Los Angeles County will open up its 30-day window to apply for one of six retail, four cultivation, or four testing facility permits. These 14 licenses will be highly coveted and sought after, and the winners will not be derived from a lottery system, but selected instead on scored applications. For anyone looking to get licensed in Pasadena, it’s going to be a busy month and an uphill battle.
Licensing in Pasadena is based on the June 2018 approval of local ballot measures CC and DD, which allow these limited permits and establish local taxing regimes. These ballot measures set hard caps on the license types as noted above. Unless Pasadena elects to allow more license types or licenses at later dates, this one-month window will be the only time to apply for commercial cannabis licenses in this city. And where the majority of California cities and counties still ban commercial cannabis activity, having Pasadena come online is a big win for overall legalization.
Notably, section 17.50.66 of the Pasadena Municipal Code precludes businesses from being licensed within the same building or even within 500–1,000 feet of one another, depending on the license type. In other words, Pasadena won’t be allowing combined license types in the same building or even …
Pot by post has been a thing for some time now. Even prior to legalisation across much of the United States, it wasn’t exactly difficult to find somebody somewhere selling cannabis online. Today, buying and selling pot via the web is easier than ever before. Whether on the lookout for Star Tonic or a batch […]
It’s the kind of faux-pas every cannabis newcomer makes at some point or another. You refer to one particular consumption method by entirely the wrong name and find yourself the laughing stock of those who know what they’re talking about. As far as some are concerned, it really doesn’t matter how you hit it…just as […]
When getting started with cannabis cultivation, it can be difficult to balance hydration. In fact, even the most experienced home growers occasionally struggle to get things right. Of all the cannabis cultivation challenges you’re likely to encounter, none are more common than overwatering. It’s exactly the same with most house-plants in general. You know they […]
As we’ve stated time and time again, the cannabis industry is rampant with risks and scams, and can be an ethical minefield for attorneys to navigate. Legalized cannabis is a multi-billion dollar industry, however, and legitimate businesses need good and ethical attorneys to provide legal advice.
This is complicated, because due to federal laws, an attorney providing legal advice to a cannabis business in compliance with state and local laws could technically be aiding and abetting violations of the federal Controlled Substances Act.
Earlier this month, I gave a presentation to California attorneys regarding ethical representation of cannabis businesses and how to navigate the complicated tension between state and federal laws. I was joined by municipal lawyer Ruben Duran, partner with Best Best & Krieger, who advises public agencies.
This post will focus on the ongoing tension between state and federal laws, and the application of California’s new Rules of Professional Conduct. My next post will focus on attorney-client privilege concerns and real life ethical scenarios.
On December 20th, U.S. Tax Court issued its opinion in Alternative Health Care Advocates et al. v. Commissioner of Internal Revenue. The long opinion details various issues related to the specific case, but we will concentrate on one relatively small piece of it. How would the Tax Court treat income paid from a marijuana retailer to a management services company for that retailer?
In this case, Alternative Health Care Advocates provided medical marijuana to individuals in California under California law. Another company, Wellness Management Group, Inc., provided management services to Alternative Health Advocates. These services included hiring employees and managing HR for those employees, paying wages for those employees, paying advertising expenses, paying rent, etc. Wellness did not provide services of that nature or any nature to any other business entity. Wellness made money by collecting fees for its services from Alternative Health Care Advocates.
Under Section 280E of the Internal Revenue Code, businesses that are engaged in trafficking controlled substances cannot take regular business deductions, so they end up paying taxes on their gross receipts less their allowed cost of goods sold (COGS). If an expense doesn’t fit into the category of COGS, a company that is considered to be “trafficking” would have to pay taxes as if the expense hadn’t been incurred in the first …
Don’t let your lack of knowledge about how to clean a grinder be a deterrent to maintaining your cannabis equipment. There are plenty of good reasons to keep your grinder clean, and it’s really not that difficult when you get the hang of it.
In this article, the experts at Honest Marijuana will show you how to clean a grinder in five easy steps — with no muss and no fuss.
And if a clean tool isn’t motivation enough for you, we’ll show you how to use the leftover plant matter to take your smoke sesh to the next level.
Why You Should Clean Your Grinder
1) Keeps You From Getting Sick
Those nugs of bud we all love were once live plant matter. And even though they’ve been dried and cured, they will eventually start to decompose.
That means bacteria will start to grow on any leftover kief in your grinder. And in case you were absent that day in middle school, bacteria can make you sick. Clean your grinder and stay healthy longer.
2) Ensures The Smooth Operation Of Your Grinder
Periodic cleaning ensures that your grinder will work smoothly when you need it most.
Grinding cannabis is a sticky job, and some of that sticky icky will get stuck in your grinder. That can gum up …
Trimming weed may seem like a daunting activity. But take it from the professionals at Honest Marijuana — it’s not as hard as all that. In fact, it’s pretty simple, and we’re going to teach you how.
In this article, we’ll show you the best way to trim your weed for maximum potency. We’ll even tell you how you can use all the stuff you trim off your bud to make edibles, creams, and other fun stuff.
Why Trimming Weed Is Essential
Trimming weed is essential during the harvesting process because it reduces the harshness of the finished product.
Leaves contain more chlorophyll than the flowers (buds), so they will always feel more acidic in your throat when burned. Getting rid of those leaves will make the buds smoother and easier to smoke.
Trimming weed also improves THC concentration. Leaves, by nature, have a lower concentration of trichomes.
If you leave the leaves on the bud, gram-for-gram there will be fewer trichomes and, as a result, less THC in the finished product. That can affect potency, flavor, and the overall experience of burning down.
How To Trim Your Marijuana Plant
Supplies For Trimming Weed
Disposable rubber gloves (thin latex medical gloves, not the thick dishwashing gloves)