Happy 4/20!

As the nation gets ready to celebrate the unofficial marijuana holiday, 4/20, we thought this was a great time to provide an update on the state of marijuana. 2021 has seen an increase in support for marijuana legalization at the state as well as federal level.  Coming off a year of uncertainty with the COVID-19 pandemic, marijuana legalization is poised to make substantial progress.  In many states, marijuana businesses were deemed essential businesses during the pandemic, highlighting the overall importance of these establishments.
Continue Reading 4/20 Marijuana Legislative Update

On April 19, 2021, the U.S. Postal Service issued a notice regarding the upcoming changes to Publication 52, which is titled “Hazardous, Restricted, and Perishable Mail.”  Postal Service, “Treatment of E-Cigarettes in the Mail,” 86 Fed. Reg. 20,287 (Apr. 19, 2021).  The changes relate to the mailability of electronic nicotine delivery systems (“ENDS”), which were added to the definition of “cigarettes” in the Prevent All Cigarette Trafficking (PACT) Act.  See our previous alert regarding these changes.
Continue Reading Postal Service Provides Guidance on Applications for Exceptions to the PACT Act

In our previous post, we highlighted that the United Stated Department of Agriculture (“USDA”) published its final rule (the “Final Rule”) regulating the production of industrial hemp under the Agriculture Improvement Act of 2018 (the “2018 Farm Bill”). The Final Rule supersedes regulations set forth in the interim final rule published on October 31, 2019 (the “Interim Rule”).

The Final Rule was initially scheduled to take effect on March 22, 2021. However, a White House Memorandum issued by the Biden Administration on January 21, 2021 (the “Biden Memorandum”) effectively “froze” all regulations that had been published in the Federal Register but had not yet taken effect, including the Final Rule. The Biden Memorandum also granted agencies (such as the USDA) the authority to “consider opening a 30-day comment period.”

As part of the transition to the Biden Administrations, the USDA and many other agencies took this opportunity to review new and pending regulatory actions, including the Final Rule.
Continue Reading USDA Final Rule Takes Effect

Delta-8 has been the topic of many conversations over the last year in various cannabis circles. Is it legal?  How will hemp-derived Delta-8 THC impact the state-legal marijuana industry?  How is Delta-8 THC extracted from hemp and in what quantities?  Much of this was already covered in a recent webinar hosted by our firm a

A new California Proposition 65 mandate took effect on January 3, requiring health warning labels for all cannabis products sold in the state.  Failure to comply with the requirements can and will result in enforcement against cannabis producers and sellers, resulting in hefty penalties.  Here’s what you need to know.
Continue Reading California Laws Regarding Health and Safety Warnings for Cannabis Have Changed: Are You In Compliance?

The Federal Trade Commission (“FTC”) has joined the U.S. Food and Drug Administration (“the “FDA”) in enforcing laws related to marketing CBD products. The FDA has historically issued warning letters and pursued companies that illegally market CBD products with claims the products may treat medical conditions.  The FTC has joined the FDA is this pursuit and announced settlements with six different CBD companies involves fines ranging between $20,000-$85,000 in addition to notifications provided to consumers.  Pursuant to these settlement agreements the respondent companies are also prohibited from similar marketing efforts in the future, any health claims must have scientific evidence to support them.

Industry actors making any health or therapeutic claims are vulnerable to action by agencies such as the FDA and FTC, however, they may also be subject to civil suits based on enforcement by those agencies. In April of 2020 Charlotte’s Web Holdings, Inc. (“CWB”) was served with yet another (its second) class action lawsuit due to how their products are labeled. Benson v. Charlotte’s Web Holdings, Inc., No. 1:20-cv-00418 (N.D. Ill.)  The suit based a significant portion of the allegations on FDA guidance:

 “Based on available evidence, FDA has concluded that THC and CBD products are excluded from the dietary supplement definition under section 201(ff)(3)(B) of the FD&C Act [21 U.S.C. § 321(ff)(3)(B)]. Under that provision, if a substance (such as THC or CBD) is an active ingredient in a drug product that has been approved under section 505 of the FD&C Act [21 U.S.C. § 355], or has been authorized for investigation as a new drug for which substantial clinical investigations have been instituted and for which the existence of such investigations has been made public, then products containing that substance are excluded from the definition of a dietary supplement”

Companies facing enforcement actions by the FTC may similarly be subject to civil allegations.

WHAT DOES THIS MEAN FOR YOUR BUSINESS
Continue Reading CBD Companies Now Facing Monetary Penalties For Deceptive Marketing, Will Civil Liability Follow?

On January 15, 2021, the United States Department of Agriculture (“USDA”) published its final rule (the “Final Rule”) regulating the production of industrial hemp under the Agriculture Improvement Act of 2018 (the “2018 Farm Bill”). The Final Rule modifies regulations set forth in the interim final rule published on October 31, 2019 (the “Interim Rule”). The modifications are based on approximately 5,900 public comments submitted to the USDA over three public comment periods.

The Final Rule contains the following key provisions:
Continue Reading USDA Releases Final Rule Regulating Industrial Hemp

In our previous posts,[1] we discussed why state-legal medical and recreational marijuana businesses are likely not eligible to receive federal financial assistance under the Paycheck Protection Program due to the fact that these businesses are inherently engaged in federally illegal activities.

While our view has not necessarily changed, this post is intended to highlight