industrial hemp cbdLast week, the U.S. Department of Agriculture (“USDA”) held a public meeting during which hemp stakeholders shared their opinion on the promulgation of rules to regulate the crop.

Pursuant to the 2018 Farm Bill, which legalized hemp by descheduling the crop under the Controlled Substance Act, the USDA is tasked with overseeing and regulating the production of hemp in the United States. Specifically, the federal agency is to review and approve “plans” submitted by states and Indian tribes that choose to hold primary regulatory authority over hemp. However, before the federal agency may begin reviewing these plans, the agency must formalize rules with which states and Indian tribes plans must comply. As of the date of this memo, only a handful of states and Indian tribes have submitted their plans.

Roughly 50 speakers, including state governments, Indian tribe representatives, and stakeholders in the supply chain of hemp, shared their thoughts during the three-hour long webinar. All expressed concerns regarding testing procedures, interstate transportation of the crop, access to banking, and guidance from the Food and Drug Administration (“FDA”). Here is a summary of what each group had to say:

States 

Several state Departments of Agriculture, including Pennsylvania, Kentucky, and Wisconsin, expressed great concerns regarding testing and access to banking. Ryan Quarles, Commissioner of the Kentucky Department of Agriculture, explained that hemp farmers and companies need access to capital “just like any other farmer or agri-business.” Quarles also called for guidance from the FDA regarding its position on CBD derived from industrial hemp:

If the FDA regulates too hard against CBD, it would really harm small Kentucky family farms … We’ve got to develop rules that allow our farmers an opportunity to continue supporting this crop and benefitting economically from it, especially during a period of depressed farm cash receipts.”

Indian Tribes

Although the USDA expects to release these rules by the 2020 growing season, Indian tribes urged the USDA to do so before the end of the 2019 harvest season. Because Indian tribes are not currently allowed to grow hemp pursuant to the 2014 Farm Bill, which strictly limits hemp cultivation within state borders, pushing the release of the rules until fall would further delay tribes’ access to the market and put them at a financial disadvantage.

Supply Chain Stakeholders

The primary concern shared by stakeholders involved in the supply chain pertained to the likely confusion by state enforcement officials in differentiating hemp from marijuana. Indeed, as reflected in recent events, local enforcement groups have struggled to differentiate the plants as they look and smell alike. This issue partially stems from the technologically inadequate field kits currently available, which only detect whether THC is present, regardless of its concentration. Such confusion, industry players held, will continue to lead to unnecessary delays and mistaken arrests.

This public meeting was the first step toward the USDA issuing a proposed regulation in the implementation of the 2018 Farm Bill.  Next month, the FDA will hold a similar public meeting to hear directly from stakeholders regarding the regulation of CBD-infused food and dietary supplements. We will summarize the meeting after it occurs. Stay tuned!

Recently, we wrote about the increasing frequency of litigating cannabis business disputes in the courts, noting several possible causes for this change from the early days when private arbitration was the preferred forum. Meanwhile, the Oregon Liquor Control Commission (OLCC) is beginning to treat violators of the rules governing recreational marijuana much more seriously. One of the keys to prevailing in either (or any) forum, is efficient and thorough discovery. Cannabis businesses should take note the procedures governing discovery in Oregon trial courts (i.e. the Oregon Rules of Civil Procedure or ORCP) differ in several significant ways from those governing an OLCC contested case before an administrative law judge under the Oregon Attorney General’s Rules for the Office of Administrative Hearings.

This post highlights some of the important differences in the forms of discovery that any Oregon cannabis business entangled in a civil or administrative dispute should be aware of. By way of background, there are three forms for conducting written discovery upon an opposing party in the majority of state and federal courts: requests for the production of documents, requests for admission, and interrogatories. These three forms, along with depositions by oral examination (and subpoenas directed to nonparties), typically comprise the better part of preparing for dispositive motion practice, trial, or for an administrative hearing.

cannabis litigation
Legendary discovery artist, Tina Turner.

Document Requests and Requests for Admissions. The ORCP permits requests for the production of documents and requests for admissions. Unlike most jurisdictions, however, ORCP 45 requires filing of requests for admission and of responses. This means parties should take care in crafting requests and in ensuring the veracity of their answers as both will be before the court. The Attorney General’s rules permit request for admissions but contain no specific provision allowing document requests. Instead the agency or party must provide, upon the request by the agency or by a party, documents that that the party or agency “plans” to offer as evidence.

Interrogatories. In stark contrast to the federal rules of civil procedure and those of most state courts, interrogatories are not authorized in Oregon state courts. The inability to conduct discovery through interrogatories may be viewed as a blessing, as obtaining substantive and pertinent information is often difficult or nigh impossible when dealing with obstreperous opposing parties or their counsel. On the other hand, interrogatories may serve as a useful tool to “lock in” an opposing party to a particular set of facts or circumstances, to identify potential witnesses, and to (hopefully) narrow what is actually in dispute.

Although a discussion about the pros and cons of interrogatories may seem purely academic, it is not. That’s because the Attorney General’s rules permit parties to serve up to 20 interrogatories unless otherwise authorized, limited, or prohibited by the administrative law judge. Those rules also allow an agency to opt out of “some or all discovery methods,” but Chapter 845, Division 3, of the Oregon Administrative Rules (the OLCC-specific rules) does not do so. This means that a cannabis business in a dispute with the OLCC has a potentially powerful discovery tool at its disposal, one that is not available in state court.

Depositions. Any person or entity that has experienced litigation knows the fear of a deposition gone wrong and the joy of getting an opposing party to make a crucial admission on the record. The ORCP provides for depositions in the ordinary course, but the Attorney General’s rules prohibit depositions in contested cases without agency authorization. Unlike in state court, where a deposition is usually secured through a telephone call to opposing counsel to negotiate the date and location followed by a formal notice, a party seeking to depose an agency must petition the agency and send a copy of that petition to the administrative law judge. The agency itself then makes the call on whether it will allow itself to be deposed, and on what terms. There are several other caveats, but the takeaway is that a party should consider carefully if deposing an agency is critical to a contested case hearing and act promptly if so.

Recently, the concept of “supervoting shares” in U.S. public companies has surfaced again in the news. Supervoting shares are created where founders wish to dilute themselves in an economic sense (in exchange for transformative capital), but retain outsized control in management and governance. This is different than your typical “class A and B shares” setup, where the former class of stock features robust voting rights, and the latter claims marginal or no voting rights. In a supervoting universe, a select and very small class of individuals can throttle all other decisionmakers.

Over the years, we have structured many cannabis companies where governance rights are out of sync with ownership (both LLCs and corps). Some of these companies have expansive roles for directors and officers, some have strong and weak equities classes, and some have a combination of the two. State laws regulating ownership and control items always must be taken into account, but the bottom line is that voting rights and economic rights are two very different things in cannabis businesses, just like anywhere else. And there are a million ways to dice it up.

supervoting cannabis companyFrom a public markets perspective, the concern with supervoting shares is that owners are inappropriately insulated from market pressures. For example, when Facebook users were outraged to learn about that company’s data malfeasance, Mark Zuckerberg never faced any real danger of ouster: his controlling position forecloses that possibility. From an investor advocacy perspective, the concern with supervoting shares is similar: owners are inappropriately insulated from stakeholder influence. In the case of Uber, Travis Kalanick wielded supervoting shares to hang on to board seats during the company’s 2017 public relations crisis, despite the fact that many investors wanted him gone. Ultimately, Lyft and other competitors benefited.

People who launch companies tend to choose the supervoting structure for the simple reason of job security. This is not necessarily a myopic or self-seeking view: without adequate security, a CEO may be far less likely to invest in crucial long-term planning– especially initiatives that hold great promise at the expense of near- and mid-term losses. Said another way: if a CEO is lurching ahead from quarter to quarter to meet near-term performance metrics, long-term company prospects may suffer and innovative ideas may never see the light of day.

In the next decade, we are going to see a steady stream of U.S. cannabis companies go public. Assuming state-level ownership and control restrictions become immaterial, it will be interesting to see if those company founders try to follow Silicon Valley’s lead, with CEOs retaining outsized voting power and board control through supervoting shares. If and when the capital lines up behind those companies, it seems like a likely outcome.

Our California hemp lawyers regularly get asked about the laws and regulations about growing hemp in California, manufacturing hemp products, and shipping those products around the country. I’ve written about the various hemp laws in California and how confusing they are previously (see here and here). Those posts, however, were more geared towards the manufacture and sale of hemp-derived cannabidiol (“Hemp CBD”) products than the actual cultivation of hemp, which is becoming an increasingly important topic in the hemp industry in the wake of the federal Agricultural Improvement Act of 2018 (or “2018 Farm Bill”).

The reality is that California is far behind many other states when it comes to hemp. There are very few laws or regulations here on hemp and Hemp CBD, and most of them take a very restrictive view towards what kinds of products are allowed to be sold. There is actual law on the books for cultivation, but it mostly sat there for a few years and is only now coming to light.

california hemp

To understand the current state of hemp cultivation in California, we need to look back a few years. In 2013, California passed Senate Bill 566, the California Industrial Hemp Farming Act (or “CIHFA”). The CIHFA amended the Health and Safety Code to redefine “marijuana” to exclude industrial hemp, and to statutorily define industrial hemp. It also added a section to the Food and Agriculture Code that would regulate the production of hemp by established agricultural research institutions and commercial cultivators. This latter section was not immediately effective and was subject to federal law authorizing it.

The next year, the federal Agricultural Act of 2014 (or “2014 Farm Bill”) was passed. As readers of this blog probably know by now, section 7606 of the 2014 Farm Bill allowed the cultivation of hemp for research purposes conducted under an agricultural pilot program or by a research institution, in states where hemp cultivation was legal.

After the 2014 Farm Bill was passed, on June 6, 2014, then-California Attorney General Kamala Harris issued opinion 13-1102, which stated “Federal law authorized, and rendered operative, the relevant portions of the California Industrial Hemp Farming Act on February 7, 2014.” The opinion, however, noted that provisions of the CIHFA were “inoperative to the extent that they apply or pertain to any form of industrial hemp cultivation not authorized by federal law.” In other words, commercial cultivation was still not allowed. In 2016, the Control Regulate and Tax Adult Use Of Marijuana Act (or “Prop. 64”) was passed. Prop. 64 formally amended the above California Food & Agriculture Code sections to make the hemp provisions become effective on January 1, 2017.

In 2018, commercial cultivation began to become a reality with Senate Bill 1409. SB-1409 (which we have written about here, here, and here) allowed for the commercial cultivation of hemp upon registration with the state Department of Food and Agriculture (“CDFA”) and county commissioners, effective January 1, 2019. SB-1409 provides relatively sparse testing and other rules (at least in comparison to the highly regulated cannabis industry). After SB-1409 was passed, the CDFA issued proposed regulations in November 2018 for registering commercial cultivators, which appear to be under review with the California Office of Administrative Law (“OAL”) through April 3, 2019.

Part of the reason for the stalling out of the proposed regulations seems to be the 2018 Farm Bill, which was signed on December 20, 2018. The 2018 Farm Bill completely removed hemp from the Controlled Substances Act and require states to submit “hemp production plans” to the United States Department of Food and Agriculture for its approval. But notably, section 7605(b) of the 2018 Farm Bill extends the 2014 Farm Bill through one year after the USDA’s establishment of certain plans (which will be a while from now).

This is a lot to unpack, but the gist is that hemp cultivated pursuant to state law and provisions of the 2014 Farm Bill (i.e., not purely commercial hemp) will be permitted for now, but purely commercial hemp production may not be permitted until the establishment of USDA-approved plans. It will be interesting to see what happens come April 4 if the OAL approves the regulations that allow for commercial hemp cultivation even in spite of no plan being submitted to the USDA. As of now, it’s pure speculation, and I am not aware of any plan submitted by California to the USDA.

This brings us to today. Currently, California law allows for established research institutions to cultivate hemp if they provide certain information to county agricultural commissioners (subject to any state or local prohibitions, of course). The commercial hemp cultivation regulations haven’t been fully implemented as noted above. There are a few big outstanding questions today.

First, what happens if California allows commercial cultivation before or without submitting a plan to the USDA? We might then be in a world similar to cannabis, where the state has adopted laws and regulations that conflict with federal law. If cannabis is any sign, it may be that the federal government does not prioritize enforcement because California would have its own regulations. But there’s no guarantee as to how the federal government would react and in light of the FDA’s December 20, 2018 statement that hemp-derived CBD isn’t allowed in many commercial products, there may be more aggressive federal enforcement.

Problematically, even if California did allow commercial hemp cultivation, that hemp may get siloed in California or just in the nearby states that don’t block shipments. The 2018 Farm Bill does prevent states from interfering interstate shipment, but its terms seem pretty clear that this only applies to hemp produced pursuant to USDA-approved hemp production plans. Some arguments can be made that 2014 Farm Bill-produced hemp can be transported interstate pursuant to this provision, but the 2014 Farm Bill did not allow commercially grown hemp sales.

Another big question is whether hemp grown by an established agricultural research institute in California could be re-sold commercially. The current hemp law as amended by SB-1409 doesn’t speak to this issue, but these institutions may be concerned about selling hemp and may refuse to do it.

Like I have said many times before, the state of hemp law in California is perplexing. That rule is no different for cultivation than it is for the sale of hemp products. It’s always a good idea to consult with experienced California hemp lawyers when considering hemp cultivation or any other sort of hemp sales. As always, stay tuned to the Canna Law Blog for more California hemp updates.

Three years ago, I did a TedX Talk titled “High Dive: Are We Creating Big Marijuana?” The issues I raised in my talk are still relevant today, especially as more states legalize. Basically the new question around state cannabis legalization is who should get to profit from it–big business or those most negatively affected by the war on drugs or some hybrid of the two that can live in harmony?

By way of example, at SXSW this past week, the Equity First Alliance took exception to John Boehner (former U.S. Speaker of the House of Representatives) touting the benefits of cannabis legalization and its bright economic future. In 2018, Boehner joined the board of Acreage Holdings (a cannabis company that’s publicly traded in Canada and getting cannabis licenses and buying cannabis companies in rapid succession across the U.S.) after having been a drug war advocate during his entire political career. To summarize, some in attendance at SXSW found it troubling how Boehner staunchly opposed federal cannabis legalization while a politician and yet now uses his power and influence for his own financial benefit in building a massive cannabis company–according to its website, Acreage Holdings operates in 19 states, and, according to Leafy, it “deployed $202 million in investment in 2018 and lost $217.6 million in the same period.” Needless to say, Acreage embodies most folks’ idea of “Big Marijuana.” While Boehner is no doubt experiencing the upside of the “green rush,” there’s very little recognition of, or easy entree into the industry for, those who paid (and continue to pay) with their civil liberties for cannabis trafficking over the years as part of the drug war that Boehner helped sustain.

Also according to Leafly, Boehner spoke at SXSW about how the benefits of medical cannabis and exciting investment opportunities in the cannabis industry caused him to change his mind about cannabis. Boehner predicts cannabis revenues will eventually outpace tobacco and the STATES Act will end federal prohibition. Acreage Holding’s CEO, Kevin Murphy, was also present and he told the audience and the protestors that Acreage would invest in cannabis social equity projects if the U.S. Congress would relax its stance on things like 280E, which impede financial growth for cannabis businesses.

From my own boots-on-the-ground perspective in Los Angeles, very little has changed since my TedX Talk three years ago, and that’s because states with legal cannabis still follow the 2013 Cole Memo (even though it is dead though new U.S. Attorney General Bill Barr may revive it) on cannabis licensing and regulations. Because the Cole Memo was so strict regarding federal enforcement priorities, states generally adopt incredibly strict (corresponding) regulations with financial and qualified barriers to entry that do not lend themselves to allowing cannabis businesses good or financially realistic opportunities for righting social harms via social equity programs.

To date, only a handful of U.S. cities, the State of California, and the State of Massachusetts have relaxed licensing standards or provided funding to ensure communities disproportionately impacted by the war on drugs get a good piece of the cannabis market. And though I believe these sorts of programs can work, for them to actually work long term, states need to create incentives to encourage wider and deeper participation from the cannabis business crowd.

When I gave my TedX Talk I believed Big Marijuana to be inevitable and my view on that has not changed. I say this because the cannabis businesses still need a lot of capital and business experience to grow fast while at the same time dealing with comprehensive and ever-changing industry regulations. Unless and until state governments better address this balance between corporatized cannabis and disproportionately impacted populations, the actual relief and easier entry for social equity participants and those wrongly affected by the war on drugs may not really come unless and until the federal laws of repeal ensure a carve out for the more disenfranchised.

The bottom line is this: Relying on established cannabis businesses, including those in the evolving Big Marijuana world, to throw themselves into social equity is not likely to lead to meaningful change, which could ultimately harm the industry as a whole. States, and ultimately the federal government, will have to do better.

Great news: on March 7, 2019, the “Secure and Fair Enforcement Banking Act of 2019” (or, the “SAFE Banking Act”) was officially introduced in the House of Representatives. Even greater news: championed by Representatives Ed Perlmutter (D-CO) and Denny Heck (D-WA), the SAFE Banking Act reached the House with a bipartisan alliance of 106 co-sponsors – meaning a quarter of the House recognizes that state-legal, marijuana-related businesses need to be able to engage with banks and other financial institutions, and vice versa.

As discussed in this earlier blog post, the SAFE Banking Act aims to prohibit federal regulators from punishing banks and other financial institutions that provide banking services to state-legal marijuana businesses, marijuana-related businesses, and their owners and employees. This includes preventing federal banking regulators from limiting a depository institution’s access to the Deposit Insurance Fund and taking action on loans made to marijuana businesses.

At the time of its introduction, Representative Perlmutter re-emphasized that the legislation was primarily aimed at safety – “The SAFE Banking Act is focused solely on taking cash off the streets and making our communities safer. Only Congress can provide the certainty financial institutions need to start banking legitimate marijuana businesses – just like any other legal business – and reduce risks for employees, businesses and communities across the country.”

Representative Heck went on to elaborate: “We know based on the Treasury guidance that the federal government prioritizes keeping this product out of the hands of children and organized crime. The most effective way to do that is to not only allow, but encourage these businesses to use traditional banking methods to track their sales, deposits, expenses, tax payments, and other business transactions. If Congress fails to act, we are discouraging responsible, regulated markets and allowing a serious public safety threat to go unaddressed.”

In case you need a refresher, the SAFE Banking Act needs to pass the House by a simple majority (218 of 435) to reach the Senate. While it’s a long way off from becoming law, the SAFE Banking Act is certainly off to a much better start than all its predecessors. Stay tuned.

california cryptocurrency cannabis tax

We’ve written about the potential benefits of harnessing the power of blockchain technology to track and trace cannabis from seed to sale and provide an effective regulatory tool for governments (see here and here). We’ve also warned of the risks and dangers (and outright scams) associated with many cryptocurrencies and the heightened risks that come when a federally prohibited substance is combined with use of typically anonymous cryptocurrencies.

I have been writing and speaking about the potential benefits of blockchain in a variety of contexts, not limited to cannabis. Last month, I spoke about the benefits of blockchain for local governments on a panel hosted by the International City Managers Association, Government Finance Officers Association, and National League of Cities. The consensus in terms of local government use is that blockchain technology has the potential to provide tremendous benefits to local governments in terms of efficiency and transparency, but that it is still very much in the development stages and great skepticism should be exercised when presented with opportunities to implement it. There are still a great deal of scams and misinformation surrounding blockchain technology, especially in the context of cryptocurrency.

A handful of cities and states are pioneering the way forward in adoption of blockchain technology use. Last month, California Assembly Members Ting and McCarty introduced AB 953, which would allow local governments accept city or county cannabis license tax amounts due by payment using “stablecoins.” The bill would authorize local governments to either accept stablecoins directly into a digital wallet controlled by that jurisdiction or to utilize a third-party digital asset payment processor that allows for the immediate conversion of any payments made by stablecoins into United States dollars and deposit into an account of that jurisdiction. The vulnerability of digital wallets is explained in my white paper.

A stablecoin is defined in the bill as: “a digital asset that has price stable characteristics pegged to United States dollars and United States dollars serve as collateral to that digital asset.”

Digital asset is defined as “a digital representation of value that is used as a medium of exchange, unit of account, or store of value and is not legal tender, whether or not denominated in legal tender.”

We are very interested in watching how this bill plays out in the Assembly, and will keep the blog updated as things progress. We are skeptical that this particular proposal will succeed, but encouraged that the State Legislature continues to search for viable banking solutions for the cannabis industry. Stay tuned: the bill may be heard in committee on March 24.

california cannabis licensingCalifornia’s cannabis licensing process has been a mess for applicants since pretty much day one. Annual license applications have disappeared into a black hole for months, the window for obtaining temporary licenses was very small and many have expired, and many local jurisdictions decided to make up their own phased permitting processes that in many cases ensured that many operators could never be eligible for temporary licenses (e.g., Phase 3 applicants in Los Angeles).

For any applicant who was lucky enough to obtain a state temporary license in 2018, efforts are underway at the state level to relieve some of applicants’ fears surrounding the fact that most of those temporary applications are set to expire in the next few months and that there is no clear understanding of the provisional licensing process. A new California senate bill (SB-67) would reinstate expired temporary licenses and would fill the gaps in the provisional licensing scheme through mid-2020. This would allow operators who received temporary licenses in 2018 to actually become operational rather than sit and wait on annual licenses to be issued.

For some background, I wrote recently the provisional licensing scheme that was intended to act as a band-aid in light of the fact that temporary licenses were going away by the end of 2018 and the fact that annual applications took extreme amounts of time to review. To recap: if an operator who once held a temporary license filed an annual application, submitted evidence of CEQA compliance, and paid the fee, the state agency could issue a year-long provisional license. But the provisional licensing regime is not free from problems.

The first issue with provisional licenses is that they are only allowed to be issued through the end of 2019. This effectively placed about a similar one-year time frame as with temporary licenses. The second problem with provisionals is that there has been virtually no guidance from the state agencies on how to obtain them. The regulations don’t mention provisionals, and only the California Department of Food and Agriculture (or “CDFA”) published guidance on how to get them. That guidance makes it appear like they are issued at the CDFA’s total discretion after an applicant makes the required annual filings. This is problematic because there is no clear time frame or review process. In other words, an operator could file a complete annual application, and the CDFA could sit on it for months before issuing a provisional.

SB-67 might just fix some of these problems. SB-67’s key provision is that when an applicant files its annual license application, its temporary licenses shall remain valid—even if those licenses had previously expired. These extended temporary licenses would only stay effective until an annual license is issued or denied, a provisional license is issued, an application is disqualified or abandoned, or the end of 2019, whichever is earliest.

This is a lot to unpack, but essentially what it means is that if applicants file annuals before the date of  temporary license expiration, those applicants will still have temporary approval until a provisional license is issued. This will help dispel any lack of clarity surrounding the provisional licensing process but will still not change the fact that annuals will need to be submitted as soon as possible.

Another notable part about SB-67 is that if passed, it would first extend the time to issue provisionals through July 1, 2020. This will give the agencies more time in actually issuing provisional licenses past 2019. But problematically, there will be a six-month window where licensees who don’t have provisionals will lose their extended temporary licenses. There may just be another bill on the table later this year to address this very same issue.

SB-67 ultimately will only benefit those few operators and may signal that the state agencies are still so overwhelmed with applications that they won’t be able to process them on time. We’ll be sure to keep our readers up to speed on any updates on SB-67 or the provisional licensing laws.

cannabis law events

February’s webinar “West coast Hemp-CBD After the Farm Bill” was a success! All of those involved at Harris Bricken enjoy hearing your positive words and questions. For those seeking more of the valuable information throughout the webinar, March holds many opportunities for you to attend events where Harris Bricken attorneys will be presenting. Read on to find out more.

The Seminar Group – Owning and Operating a Winery | March 14, 2:30 PM PST | Wineries and vineyards are subject to a mosaic of legal and regulatory hindrances. Businesses should not just be reactive to regulation but help sculpt it from the ground up. This two-day CLE will take place in Napa California covering a broad range of winery related topics, seeking to arm businesses with up-to-date information from industry pioneers. Hilary Bricken provides guidance in exploring marijuana diversification, including everything from land use ordinances, and water laws to co-locations of regulatory bodies and taxation.

Argent Communications Group – 2019 California Land Use Law & Policy Conference | March 18, 4:30 PM PST | The last few months have seen rapid change to land use laws and regulations. Recreational cannabis is the newest industry affected by the strict land use regulations that state and local Californian governments set in place. Hilary Bricken addresses land use concerns and talks strategy for successful retail sales that will keep the cannabis industry thriving.

Philadelphia Bar institute: 2019 Medical Marijuana & Hemp Law Symposium | March 22, 9:00 AM – 4:30 PM | During the Philadelphia Bar Institute’s second annual event, Hilary Bricken will be a part of an expert panel discussing the current state of Pennsylvania’s medical marijuana program.  This symposium will provide an extensive look at the industry and how Pennsylvania’s implementation of its program has and will impact the state.

American Bar Association – Dazed and Confused: Legal Considerations in the Business of Legalized Marijuana | March 28 – 30 | Though cannabis use remains prohibited at a federal level, medicinal cannabis is legal in 32 states and recreationally legal in 10 states, with legalization throughout Canada on October 17. The conflicting laws present unique challenges for business in the cannabis industry to protect and enforce their intellectual property. joined by a panel of experts, Alison Malsbury will provide a in depth view of the varied issues that companies in the cannabis industry should consider when running a marijuana business.

The Seminar Group – The Business of Marijuana | March 28, 9:00 AM – 5:00 PM (PST) & March 29, 9:00 AM – 5:00 PM (PST) | This seminar will canvass topics related to California’s medical and recreational cannabis laws.  On day one, Griffen Thorne offers his expertise on Intellectual property and licensing agreements, including: federal and state trademarks; cross-border licensing agreements; the future of intellectual property, and cannabis and hemp. On day two, Daniel Shortt gives a CBD update, focusing on the legal classifications under federal law.  Program Chair, Hilary Bricken, will discuss product liability and insurance as it relates to the cannabis industry.

State Bar of Michigan – Marijuana Law: Wild, Wild West of Marihuana Law | March 28 12:00 PM – March 30 12:00 PM (ET) | The State Bar of Michigan’s Marijuana law section hosts their first out-of-state event in Breckenridge, Colorado. Hilary Bricken will examine the state of marijuana law including business law updates, criminal defense and various other cannabis-related issues.

Join us at these upcoming events!

oregon hemp

Last week, the Oregon Department of Agriculture (“ODA”) submitted a letter of intent to the U.S. Department of Agriculture (“USDA”) in which the state agency conveyed its decision to submit a state hemp plan, pursuant to the Agriculture Improvement Act of 2018 (“2018 Farm Bill”).

In addition to legalizing the production of hemp by removing the crop from the list of controlled substances, the 2018 Farm Bill delegates to states and Indian tribes the broad authority to regulate and limit the production of hemp and hemp products within their territories. Specifically, Subtitle G of the new Farm Bill sets forth a regulatory scheme by which states and Indian tribes may seek primary regulatory authority over hemp production. To obtain primary regulatory authority, states and Indian tribes must submit a plan to the USDA Secretary for review and approval. However, before the Secretary may review and approve state plans it must promulgate rules and regulations pertaining to these plans.

As such, ODA Director Alexis Taylor expressed to the Secretary her department’s eagerness to receive direction from the USDA regarding requirements for state implementation plans. Specifically, Taylor raised the need for requirements in solving the growing confusion surrounding interstate transportation of hemp. The ODA Director explained that delays in rule making are subjecting Oregon’s hemp industry to “unnecessary transportation and commerce restrictions” and further stated that “having additional guidance to allow the flow of hemp in interstate commerce would be critical to farmers in Oregon.” Indeed, as we previously explained, the interstate transportation of hemp is lawful for hemp grown under a plan approved by the USDA, pursuant to the 2018 Farm Bill.

The ODA’s letter highlights the state’s robust regulation of the crop and the agency’s desire to remain at the forefront of hemp production. The ODA’s strong aspirations for hemp were also reflected domestically this past week. Indeed, a few days before it released its statement to the USDA, the Oregon department filed temporary hemp rules under Oregon Administrative Rules 603-048. The temporary rules, which became effective immediately, bring the ODA testing rules for industrial hemp intended for human consumption and hemp items in compliance with those of the Oregon Health Authority (“OHA”) as required by ORS 571.330. (That statute provides that industrial hemp intended for human consumption and hemp items must be tested similarly to marijuana under OHA’s rules. The OHA recently adopted new testing rules for marijuana, which forced the ODA to amend its rules.)

In addition to revising the ODA testing rules, the proposed rules clarify recordkeeping requirements. The Oregon department announced it would develop a template that registrant growers and handlers will be able to use to ensure their recordkeeping sufficiently meets ODA requirements. The template will be released on the ODA’s website as soon as it will be available. Finally, as we explained recently, the state legislature will likely pass a hemp bill this session.

For more information on Oregon hemp, please contact us.