Trump Administration Calls Out Recreational Marijuana

Yesterday, Sean Spicer attempted to call out a difference between medical and recreational marijuana at the federal level.  He clearly does not understand that ALL marijuana is federally illegal.  Further, he made a poor and factually incorrect analogy by comparing the current opioid abuse crisis to marijuana use.  Spicer ended his comments on recreational marijuana by stating that the DOJ will step up enforcement actions.

What does this mean?

As we all know, Trump is a wild card, and Spicer’s comments do little to clarify the administration’s position.  Previous statements on the issue indicate some degree of support for the cannabis industry, or at a minimum, support for states to determine their own regulations.  “In terms of marijuana and legalization, I think that should be a state issue, state-by-state,” Trump told The Washington Post. “… Marijuana is such a big thing. I think medical should happen — right? Don’t we agree? I think so. And then I really believe we should leave it up to the states.”

Further, the recent FY2016 omnibus appropriations bill contains the Rohrabacher-Farr Amendment which prohibits the Department of Justice from interfering with state medical cannabis laws was also widely supported by a GOP controlled Congress (passed in the House by a vote of 242-186, and the Senate Appropriations Committee approved it 21-9).  A recent Gallup Poll found nationwide support for legalization at 60%, the highest it likely has ever been.  Florida also passed its medical-cannabis initiative with 71% approval – Florida also voted for President Trump.  It is clear from Trump’s statements and Spicer’s comments that medical marijuana should remain a non-enforcement priority.

So based on Spicer’s comments regarding recreational marijuana – does Attorney General Sessions unwind years of hands-off federal policy towards state-legal recreational marijuana?  We’ll just have to wait and see.  I am hopeful that Spicer’s comments are just that, off-the-cuff comments with little substance or thought.  However, the recreational marijuana industry is now on notice.  I think we are in for a bumpy 2017.

 

Marijuana Legalization – The Bipartisan Congressional Cannabis Caucus

On February 17, 2017 four Congressmen announced a bipartisan “Congressional Cannabis Caucus”. Republican representatives Don Young (AK) and Dana Rohrbacher (CA) joined democrats Earl Blumeanauer (OR) and Jared Polis (CO) as co-chairs of the new caucus.  In a press conference, they each outlined the importance of the caucus to their individual states and to the country.  Representative Rohrbacher started by outlining the changes to the country’s outlook on marijuana, as 44 states now have laws permitting marijuana at varying levels.  He noted the economic benefits and the importance of continuing to make progress on this issue.  Representative Blumeanauer outlined four critical areas that need to be addressed 1. Not allowing the Federal government to prevent marijuana research; 2. Gaining access to marijuana for veterans, (VA hospitals are not allowed to prescribe medical marijuana); 3. Removing IRS code 280E which prohibits marijuana businesses from deducting business expenses on their federal tax returns; and 4. Ending the banking prohibition.

Representative Don Young of Alaska further explained the impact of the banking prohibition. (Marijuana businesses have difficulty getting bank accounts, potentially making it an all cash business.) When there is a great amount of surplus cash, Rep. Young has seen it “cause lots of sideline problems”. He wants to ensure these businesses are able to be run as businesses.  Marijuana businesses should be able to utilize banks for loans and depositing cash.  However, Representative Young’s primary interest in this caucus comes from his belief in state’s rights.  During Q&A Mr. Young pointed out the hypocrisy of a conservative stance against legalization, “you can’t be a conservative and say we can pick and choose, you have to be for state’s rights or against state’s rights…”  Alaska voters “voted to legalize it…pretty large margin” and Mr. Young is a representative of those people. Continue Reading

“When Retirement Comes With a Daily Dose of Cannabis” (nytimes.com)

Cannabis snippetMy esteemed colleague and frequent medical marijuana commentator, Fred Miles, was quoted in the NY Times article “When Retirement Comes With a Daily Dose of Cannabis“.  Check this article out for a great read about the increasing number of older Americans living in assisted living communities and nursing homes using cannabis for relief from aches and pains as an alternative to prescription pain medicine.

Medical Marijuana Challenges Facing Healthcare Providers

Cannabis oil cartridgeMyself, Winn Halverhout and Fred Miles were interviewed by Advisory Board about the main challenges facing providers related to medical marijuana, how the new administration might change the legal landscape, and more.

Check out the article here.  Advisory Board is a best practices firm that uses a combination of research, technology, and consulting to improve the performance of health care organizations around the world.

 

 

Husch Blackwell Partner Steve Levine Named Top Cannabis Lawyer

Husch Blackwell Partner Steve Levine was named a top lawyer in cannabis for 2017 by Denver’s 5280 Magazine. Steve was also elected to the National Cannabis Industry Association’s (NCIA) Policy Council in 2017. The firm congratulates Steve Levine on this honor.

Read here to learn more about the Husch Blackwell Cannabis practice.

 

10th Circuit Took Oral Arguments on Recreational Cannabis Violating RICO

Young cannabis plants, marijuanaFederal appeals court judges on Tuesday reviewed the reach of racketeering laws in a case that potentially could have catastrophic effect on the cannabis industry.  At issue is whether the 10th Circuit Court of Appeals will allow private parties to sue state-licensed cultivations and dispensaries under RICO  for what are, essentially, nuisance issues.   Safe Streets, a Washington, D.C.-based anti-drug and anti-crime organization, filed the lawsuit and claimed that Colorado horse ranch farmers are entitled to property damage under the rarely used private right of action for individuals to sue “racketeers” because of the marijuana smell that allegedly permeates their property.

While it has been widely assumed by the cannabis industry that these were difficult arguments to win, the general scene of the oral arguments, as reported by the Cannabist, was that the judges appeared to be favoring Safe Streets’ arguments.

What does this mean?

The three-judge panel for the 10th Circuit Court of Appeals will not issue an opinion for several months.  Until then, it is a wait and see.  If the 10th Circuit shoots down the appeal, it will be a resounding win for the cannabis industry and the US Supreme Court is unlikely to hear an appeal.  If the plaintiff wins, the floodgate to additional lawsuits against the industry might be status quo.

 

No Federal Trademark Protection for the Growing Marijuana Industry

Cannabis oil cartridgeThe United States Patent and Trademark Office (“USPTO”) is at odds with the ever-growing marijuana industry. While marijuana legalization was a big winner in November’s elections, with seven states legalizing either medical or adult recreational use of the drug, the burgeoning industry may run into some problems obtaining trademarks for marijuana products and related devices. The lack of trademark protection could slow down or inhibit the growth of the industry as the lack of trademark protection limits entrepreneurs’ ability to stop infringement and protect their rights. Continue Reading

Over $1 Billion Raised by the Cannabis Industry

Young cannabis plants, marijuanaAccording to a prominent cannabis advisory firm, the cannabis industry raised over a $1 Billion in investment dollars in 2016.  These investments included public companies on the TSXV (cultivation and extract company), NYSE (REIT) and NASDAQ (pharmaceutical company).

What does this mean?

Majority of large investments are going into real estate and pharmaceutical company – as these investments are not subject to the strict regulatory environment restricting ownership of companies that cultivate and sell cannabis.  Big money will continue to flow to “non-plant touching” business in 2017; however, I expect a fair amount of consolidation in the cultivation and retail sectors.

Establishment of a New Drug Code for “Marihuana Extract”

Young cannabis plants, marijuanaYesterday the DEA published a final rule providing for a new drug code for “Marihuana Extract” .  The DEA states that this will allow them to track quantities of “Marihuana Extract” separately from marijuana to aid in the compliance with relevant drug treaties.  This new rule is set to become effective on January 13, 2017.  The DEA’s new definition for “Marihuana Extract” includes: “an extract containing one or more cannabinoids that has been derived from any plant of the genus Cannabis, other than the separated resin (whether crude or purified) obtained from the plant.”

What does this mean?

Fundamentally this does not represent a change in federal law, as cannabinoids extracted from “marihuana” (as defined in the CSA) are federally illegal.  However, the plain language of the new definition does appear to expand the CSA’s reach to cover cannabinoids extracted from the genus Cannabis not just “marihuana”.  This means that cannabis businesses that have imported permissible parts of the plant Cannabis sativa L., are now also likely prohibited from extracting cannabinoids from such plant material.

NOTE:  Given the varied implications, my firm is further analyzing the implications to the cannabis and pharmaceutical industries.  We will provide an update when appropriate.

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