Based on a recent article in the Green Market Report (and corresponding public filings), “$1.83 billion of . . . debt is set to come due by 2026” for a number of publicly traded multi-state cannabis operators (“MSO”s). While this public cannabis company debt is not a pretty sight, it might be the tip of
The Minnesota Office of Cannabis Management (“OCM”) has begun issuing final denials to the overwhelming majority of previously qualified social equity applicants (“SEA”s) ahead of its first statewide cannabis lottery on December 2 for 280 available “preapproval” cannabis licenses.
America’s Dairyland does not currently have any form of either medical or adult-use cannabis. The state has tried and failed at least a couple of times on convening medical cannabis legislation (see here on the latest attempt earlier this year). At the same time, Wisconsin is surrounded by three states that have both medical and adult-use cannabis programs (Minnesota, Illinois, and Michigan), with Canada to the north, which legalized cannabis in 2018.
On July 18, 2024, the Englewood and Denver area offices of the Occupational Safety and Health Administration (OSHA) published a Local Emphasis Program (LEP) targeted at identifying and reducing workplace hazards associated with cannabis processing, growing, cultivation, and product manufacturing.
In April, I wrote about the Docklight case in Washington State. That case involved a qui tam action pursuant to the False Claims Act in which Docklight, a cannabis ancillary company, settled with the Department of Justice for having wrongfully received and been forgiven a Payment Protection Program (PPP) loan. While there was little reporting on or analysis of the case by the cannabis industry, it was clear that the federal government was looking at cannabis and cannabis ancillary businesses and, essentially, PPP fraud.
Now, there is growing concern among cannabis PPP loan recipients of potential audits related to the Small Business Administration (SBA) Office of Inspector General’s estimate that up to one-third of PPP loans were fraudulently secured (and forgiven). Notably, as part of the PPP, the SBA issued specific guidance in 2019 that both cannabis and cannabis-related companies were not eligible for PPP loans (though it’s likely that hundreds if not thousands of these companies applied for and received these funds anyway). And while “plant touching” businesses likely have no leg to stand on if they’re audited by the SBA, cannabis ancillary businesses potentially have a shot at surviving these audits.
As the 2024 Minnesota Legislative Session came to a chaotic close on May 20, numerous changes to Minnesota Statutes Chapter 342 were sent to the Governor’s desk to build on the already existing cannabis regulatory structure. On May 24, Governor Tim Walz signed the amendments to Chapter 342, which address social equity provisions, preapproval process for social equity applicants, the larger application and licensing process, and consumer safety.
While the cannabis industry is closely following the recently published notice of proposed rulemaking from the Department of Justice (“DOJ”) and the Drug Enforcement Administration (“DEA”), which will move cannabis from a Schedule 1 controlled substance to a Schedule 3 controlled substance under the Controlled Substance Act (“CSA”), a very important federal cannabis litigation matter is making its way through federal court. That case is Canna Provisions, Inc., Gyasi Sellers, Wisacre Farm, Inc., and Verano Holdings Corp.v. Merrick Garland, case no. 23-cv-30113. Filed in October of last year, the Canna Provisions case is more important than ever in the context of rescheduling (in my opinion) and this post serves as an update on what’s happening in court.
On May 16, the Drug Enforcement Administration (“DEA“) published its 92-page notice of proposed rulemaking (“NPRM“) to move marijuana from schedule 1 on the Controlled Substances Act (“CSA”) to schedule 3 (ironically, the proposed rule itself only takes up a couple of paragraphs on the last two pages of the NPRM). On the same day, the DEA released an opinion from the Office of Legal Counsel (within the Department of Justice (“DOJ”), which prepares legal opinions of the U.S. Attorney General “and provides its own written opinions and other advice in response to requests from the Counsel to the President, the various agencies of the Executive Branch, and other components of the Department of Justice”) in response to questions from the U.S. Attorney General’s office about schedule 3 marijuana (the “Opinion”). While the NPRM represents the proposed DEA rule that moves marijuana from schedule 1 to schedule 3, the Opinion is essentially the OLC’s roadmap for fending off legal and administrative challenges to this historic move.
Dealing with creditors is never a fun experience. However, some creditors are more severe than others, especially in the cannabis industry. One of those is the California Department of Tax and Fee Administration (CDTFA), which administers California’s sales and use, fuel, tobacco, alcohol, and cannabis taxes, as well as a variety of other taxes and fees that fund specific state programs. It’s no secret that CDTFA cannabis taxes are crippling the California cannabis industry. For example, I recently recorded a Cannabis Law Now podcast episode with Anthony Almaz, general counsel for Catalyst. Catalyst is challenging various emergency rules promulgated and adopted by CDTFA that would further expand taxable items in California’s cannabis industry. This post though is about the CDTFA cannabis creditor relationship and the myths and truths around it.
Artificial Intelligence (AI) continues to jump leaps and bounds in 2024. As a lawyer, I’m always curious about how to integrate AI into my practice in order to better serve my clients. And now and then I check in with this seemingly omnipotent technology to ask what it deems top of mind for the cannabis industry. Given that we’re fresh into the new year, I logged into ChatGPT to ask it “What are the most asked questions about cannabis law”, and its answers honestly surprised me. Mainly because, after almost 14 years of practice in this area, it seems that the same questions remain despite all of the legal progress and reform in the area state by state.