June – 2018

The legalization of cannabis in Canada is right around the corner with the proposed Cannabis Act, Bill C-45, slated for a final Senate vote. The proposed Act will create an entirely new regulated industry which offers both significant opportunities and significant risks for businesses selling cannabis, cannabis accessories, or related services, and their directors and officers.

British Columbia’s cannabis legalization framework has been revealed, but public debate and discussion around the issue has muddied the waters for anyone wishing to know how they can possess cannabis, and how much.

There exist other forms of trademarks which can be excellent tools for the right type of business, such as for cannabis startups that touch the cannabis plant.

The dual state and local licensing structure that created 540 distinct county and city versions of California cannabis law with bans and partial bans in the majority of the localities was just the beginning.

To say that the DEA is is slow in responding to matters regarding cannabis (other than raids and arrests) is like saying that Rip Van Winkle took a long nap.

Cannabis companies that own and enforce their trademarks, patents, copyrights, and trade secrets are not only protecting their brands, but are also showing their sophistication to potential investors in this fast growing space.

On May 22, 2018, the Commonwealth Court of Pennsylvania issued a temporary injunction that prevents the Pennsylvania Department of Health (DOH) from issuing permits to Clinical Registrants (CRs). The not-yet issued permits would have allowed the CRs to work with Academic Clinical Research Centers (ACRCs) to conduct medical research. Under the temporary regulations issued by the DOH, a licensed CR would be permitted to conduct medical research and at the same time act as a commercial grower/processor and dispensary, all with the added privilege of selling cannabis plants and seed to other CRs and operating twice as many dispensaries as non-CR licensees.

Earlier this year, we outlined a potential argument concerning hemp-derived CBD oil and its status under the Controlled Substances Act (CSA). Our argument focused on the CSA’s definition of the term “marihuana,” which excludes mature stalks, oil or cake made from seeds from the list of controlled substances. Last week, the DEA agreed and issued an internal directive with the following key statement.

The Medical and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA” ), which became effective January 1, 2018, is the governing law for both medical and adult use of cannabis in California. The rules are complex. Cannabis businesses seeking to do business in California should consult with an attorney prior to engaging in any project to ensure full understanding of the most up-to-date rules.

On March 19, 2018 Health Canada published a document entitled “Proposed Approach to the Regulation of Cannabis: Summary of Comments Received During the Public Consultation”. The document briefly reviews the approaches proposed by Health Canada in November 2017, and summarizes the comments received by stakeholder communities most directly affected by the proposed regulations. More importantly, in this publication Health Canada confirms several regulatory approaches and specifies the scope of the regulatory framework in greater detail.

As of March 2018, thirty states and the District of Columbia have enacted laws legalizing medical and/or recreational cannabis. Yet the conflict between state laws and the federal Controlled Substance Act still plays a significant role in acceptance of the changing climate surrounding cannabis. The uneasy coexistence of state legalization and federal prohibition results in uncertainty and fear among elected officials, law enforcement and members of the general public

On February 14, 2014 the Financial Crimes Enforcement Network (“FinCEN”) issued guidance clarifying the Financial Recordkeeping and Reporting of Currency and Foreign Transactions Act of 1970 (31 U.S.C. 5311), commonly referred to as the Bank Secrecy Act (“BSA”), expectations for financial institutions seeking to provide services to cannabis-related businesses (the “FinCEN Guidance”).

In a post District of Columbia v. Heller and McDonald v. City of Chicago world, where it is now
a individual right to bear arms and the growing trend toward the legalization of marijuana, it raises the
question of whether “lawful” users of marijuana should be allowed to own firearms to fulfill the same
needs non-users of marijuana has, for self-defense, home defense, and recreational use.

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