Due to federal illegality, the cannabis industry has long been plagued by federal agencies taking a variety of different enforcement approaches to cannabis businesses. From the U.S. Patent and Trademark Office to the National Labor Relations Board to the Bureau of Reclamation, the cannabis industry has not really received consistent treatment across the board. All that to say that a new threat has entered the chat–cannabis qui tam actions. Not many people know what a “qui tam” action is. And with good reason as it’s fairly antiquated and an obscure means through which the federal government (potentially) seeks financial recovery from individuals and businesses that defraud it. In addition to the “gotchas” of IRC 280E and banking, cannabis qui tam actions are now on the table.Continue Reading BOLO: Cannabis Qui Tam Actions

Recently, the Department of Health and Human Services recommended to the Drug Enforcement Administration that cannabis be rescheduled on the Controlled Substances Act (“CSA”) from a I to a III. At the same time, the SAFER Banking Act is winding its way through the Senate. And as of October 26, the cannabis industry will try to end prohibition through the courts. Cannabis litigation at this level has been tried before and failed. This time, however, may be different for a few important reasons (not the least of which is that renowned litigator David Boies is leading the charge). I’ve been practicing in this space for 14 years, and this is really the first time that all three branches of government are seeing the cannabis movement all at once, which is exciting and should give the industry some much needed hope.Continue Reading Cannabis Litigation Alert: Commerce Clause Back on Blast

On June 21, 2021, the U. S. Supreme Court declined to hear Eric D. Speidell, et al., Petitioners v. United States, which sought to overturn the Tenth Circuit Court of Appeals’ 2020 opinion on Speidell v. United States. In that case, the Tenth Circuit rejected the argument of several Colorado medical marijuana dispensaries that the Internal Revenue Service (IRS) does not have authority to investigate whether a taxpayer is dealing in controlled substances. Because the Supreme Court declined to hear the case, the Tenth Circuit ruling stands, and taxpayers can reasonably expect courts across the country to reach similar results as the Tenth Circuit did. Marijuana-related businesses can expect the IRS to continue aggressively enforcing Section 280E of the Internal Revenue Code.
Continue Reading Supreme Court Declines to Hear Challenge to IRS Enforcement of Cannabis Tax Rules

Beginning this summer, the Food and Drug Administration (FDA) through its Office of Criminal Investigations, launched a criminal probe to investigate the vaping-related lung illnesses that have affected over five hundred people across the United States. The Centers for Disease Control and Prevention (CDC) has a parallel investigation tracking the incidences of the illness. Both the FDA and CDC are working with state and local health officials to investigate the increasing number of cases nationwide.
Continue Reading FDA Announces Criminal Investigations of Vaping-Related Illnesses

 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