Cannabis Law Prof Blog

Editor: Franklin G. Snyder
Texas A&M University
School of Law

Wednesday, October 31, 2018

Marijuana legalization likely to create market for low-THC products aimed at new users

20140508__MarijuanaBanking1Most people view marijuana legalization as a floodgates moment where long-time black-market marijuana users can finally go to the corner
store to buy ultra-potent strains of the drug in large quantities, and spend their free time testing the hypothesis that it is impossible to overdose on marijuana.

This may be true, but according to a recent report by Deloitte, widespread marijuana legalization may also create a large market of first-time users trying legal marijuana products out of curiosity. According to the report, these consumers are expected to seek out a less potent, more socially acceptable method of ingesting the substance. Forbes.com has the story:

It seems the American CBD craze has invaded Canada. Now, more of those customers, presumably the ones with less experience with hard-hitting pot like GG#4, or these things called dabs are requesting products heavy in the non-intoxicating compound of the cannabis plant. These people are the focus of the latest market report that suggests new, legal users (typically older folks) are more intrigued these days by the stress relieving powers of the plant than they are in getting wrecked.

 

"CBD is becoming kind of an 'it' word in cannabis. We see a real trend there," Andrew Pollock, vice-president of marketing for The Green Organic Dutchman, told CBC News.

 

Due to the forecasted demand for low-THC pot products, dispensaries may want to consider advising customers on the advantages of micro-dosing. Some are already making this part of the plan. After all, this low-key method for consuming cannabis, which is geared toward the person wanting to maintain a functional high without drooling all over themselves and dreaming of tacos all day, is already catching on in parts of the United States.

 

"(They say) two milligrams or three milligrams just has a mild relaxing effect and doesn't interfere with you going about your day," said Tom Adams, managing director of BDS Analytics in Colorado.

 

It's not totally surprising that this new consumer segment seems to be emerging. After all, the purpose of legalization is to make marijuana safer through regulation, and more accessible to the public. The Deloitte report describes current black-market marijuana users as young "risk takers" indicating that their use of marijuana is driven by a desire to "live life to the fullest", and that its illegal status does not curb that desire–if anything it amplifies it.

However, the report goes on to project that the marijuana consumer of the future will be more interested in a less frequent, more relaxing or therapeutic marijuana experience. In other words, once the drug is legalized it will no longer be a ritualistic and taboo exercise in hedonism, but instead will become more akin to the occasional glass of wine or scotch. Further, the report projects that marijuana users in the future will be willing to pay a premium for their products, and will place a high value on knowledgeable staff and diverse product selection. These insights further the parallel between marijuana and alcohol, as recent years have seen a growing demand for high-quality craft beers and locally distilled liquors sold by knowledgeable bartenders and similar connoisseurs.

Government regulators are sure to be happy to hear this information, as there have historically been some concerns that marijuana legalization would result in increased habitual drug use, leading to a host of other societal problems. At least for now, it sounds like cannabis consumers of the future will approach the drug with caution and treat it as an occasional indulgence, rather than instantly succumbing to the "Reefer Madness" that many used to fear.

 –John Robinson

October 31, 2018 in Business, Drug Policy, Edibles, Federal Regulation, International Regulation, Medical Marijuana, News, Recreational Marijuana, State Regulation, Voter Initiatives | Permalink | Comments (0)

Tuesday, October 30, 2018

Q&A: The "Dopest" Lawyer in Town (Part 1 of 2)

Every U.S. state that shares a border with Texas has passed legislation to legalize medical marijuana -- so what does that mean for the Lone Star State?

I recently had a chance to talk to one of the lawyers on the front lines of that issue, Daniel Mehler, of Dallas's Roper & Mehler. Mehler, a former Coloradan, decided to become a lawyer when Colorado began moving towards legalizing medical marijuana. He planned to help companies start up in the industry. At graduation, Mehler found that the Colorado legal market had plenty of big names focusing on marijuana. So, not wanting to work long hours for little pay with one of those law offices, he moved to Texas, a business-friendly state, and here he waits, gaining cannabis expertise, ready for the day that Texas jumps on to the legal marijuana train trudging through the country.

Here, the self-proclaimed "dopest lawyer in town" talks about his front-row seat to what's happening.

Ashley Goldman:  Have the numbers of citations and arrests for possession of marijuana increased as the bordering states have legalized medical marijuana?

Daniel Mehler: I'll tell you, in the Panhandle, there's been an absolute explosion of felonies, penalty group two felonies, involving THC concentrates and edibles. Those have just rapidly multiplied. While down in Austin, and obviously you’ve seen it in Dallas, as well San Antonio and Houston, they've moved in the complete opposite direction with small cannabis offenses–decriminalization.  A Houston district attorney ran on a legalization platform and got elected. They don't even prosecute misdemeanor pot anymore.

AG: So, it is more the state-border cities that are having problems?

DM: You see it in West Texas. I wouldn't say they're having a problem. I think cannabis has always been there, there's just a massive flood of concentrates moving in through all of the [state] border towns. The border counties–those poor, rural districts–and those out in West Texas jump all over it as a profit center. They see an opportunity to arrest people for a felony and get them on several years of probation or to charge them a steep fine for an alternative offer, some $5,000–7000 for a pre-trial diversion program. And people are scared to go into the penitentiary. I'm sure you know from your class, but lots of people don’t realize that 4 to 400 grams is a second-degree felony, so all of a sudden, those gummy bears are really serious crimes.

AG: So, Colorado’s legalization of recreational correlates to additional arrests here in Texas, versus other border states that require a medical card or other identification?

DM: Absolutely. It'd be purely speculative, but I would say that with Oklahoma’s move into the medical marijuana space, the arrests will continue to rise. Oklahoma will have one of the most wide-open medical policies in the country, a very unregulated market. They've granted 1100 business licenses and I would expect that the amount of felonies in the DFW area is about skyrocket. I think that you're going to see massive federal prosecutors in the Metroplex. You know, they’re 45 minutes from the border. People will be able to buy that shit easily. I would expect that you'll see people that have been involved and moving cannabis into Texas relocating just across the border in Oklahoma and Oklahoma become a massive source whenever it's in the game.

AG: You mentioned decriminalization of marijuana in most of the major urban areas in Texas. Do you think that with the other two border states’ [Oklahoma and Louisiana] medical markets opening up in the next few months that the decriminalization might shift a little and they may not be as lenient, especially in the DFW area?

DM: No. I think everyone recognizes that with flower, nobody gives a shit in 2018. It’s become increasingly difficult to seat the jury anywhere in the state and actually convict people on simple pot charges. In December 2016, in a San Antonio, Bexar County court, we got the first low-THC cannabis jury instruction for a Texas case. We got a not guilty in about five minutes, and not because it was about low-THC cannabis, but the jury just didn’t care. We gave them a way to acquit and they did. So, I don't think we're going to see any shift.  Where the problem is, is that people don't realize that a cookie is a second-degree felony; that vape pen is a state jail felony. These aren’t simple possession charges. People don't understand that cannabis products are treated differently than cannabis flower.

AG: Maybe you could explain that a little further, it is because the charge is based on the weight of the product?

DM: When THC is separate from the flower, it’s a charge under a separate code section. It starts as a penalty group two controlled substance. So as a result, adulterant dilutants, that is, the cookie, the entire weight of the cookie, not just the cannabis, get weighed for the charge. The actual gummy bears become the entire weight, not just the amount of the THC. Where it's really bad actually is in the cannabis-infused drinks. That 12-ounce soda only has 30 milligrams of cannabinoids, but the person ends up getting charged for 12 ounces of THC concentrate–that gets you to 400+ grams, so a first-degree felony.

AG: So that's definitely something that people who are wanting to risk it and bring it across the border need to keep in mind.

DM: It's something they need to keep in mind, but let's not kid ourselves, I don’t how attuned you are to the black market in Dallas, but that’s the risk premium. That makes that $8 gram of shatter (aka wax, dabs) in Denver worth $50.00 on the street in Dallas.

AG: So, there is a large black market for some of the other products, besides the flower?

DM: There’s a massive black market. It would it be purely speculative, but I would say hundreds of millions of dollars just in DFW alone in the concentrate market. I mean you can get an ounce in Colorado recreationally for about $300, take it to Dallas, and sell it for $1,400 if you sell it as 28 individual grams. With that profit gradient, you’re never going to stop people from doing that. And the reality of it is, an ounce of concentrate is small and relatively easy to conceal.

AG: Is Texas fighting a losing battle in trying to keep “legal” marijuana out?

DM: Absolutely. The reality of it is, the cannabis is already here but the Texas money is going out of state. Unfortunately, it's going out of state for black market channels. Texas consumers statistically consume more weed than anybody else and that's not going to change. What we see is quality continues to increase. South Texas used to be dominated by imported Mexican brick schwag weed [i.e., low-quality marijuana usually dry and brown]; it effectively doesn't even exist anymore. As prices have plummeted in Colorado, you see commensurate price declines in Texas on the flower side. With the concentrates, because of the risk premium with the felony prosecution, those prices have really stayed pretty steady. But as prices of flower have plummeted to where you can buy it at $90.00 an ounce in Denver, where it used to be $350.00 an ounce for good flower in Dallas, you can now pay for airfare and go buy your own for that price. Now prices have plummeted and Texas is awash with California, Colorado, and Oregon grown cannabis.

AG: What about DWI or DUI Charges? Are you seeing increased prosecution for individuals accused of driving high? Is there any difference based on region? 

DM: There are pockets in the state with increased prosecutions, like up in Wise County. They seem to ask everybody that they arrest with marijuana coming down [Highway] 287 when the last time they smoked was. We're seeing a spike in prosecutions for DWI for marijuana.  The problem with DWI on marijuana is there's no science to back any of it up, whereas, there's actually validated science that alcohol impacts everybody the same way. Everybody will exhibit the same physical manifestations of intoxication at a given level of alcohol in their system. Marijuana doesn't work the same. A casual smoker, consuming the same amount of THC, will get a lot more intoxicated than an everyday smoker, smoking the exact same product. Also, when you get into measuring intoxication there is a problem in that physical manifestations are different based level of metabolites. The only thing we can test in the blood to get an actual [measurement of cannabinoids in someone’s system] are metabolites that are pharmacologically inactive. The science of THC shows that peak intoxication happens literally just minutes after your last hit if you're smoking it.

AG: So, before it does get metabolized and stored in fat cells or whatever else?

DM: Yeah. In Colorado, they have started studying the link between metabolites and impairment, for instance, a five nanogram per liter of blood per se limit. Well, the vast majority of your medical cannabis users in Colorado are already above that when they wake up in the morning before they even spark their first flame.

AG: That seems like one of the major downfalls of trying to have any enforcement, but a really good opportunity for scientists to get in there and figure out a way to measure it.

DM: The National Highway Transportation Safety Administration has already funded studies. You're seeing a move in that direction. They want to validate [the science] so they can prosecute. But then, there's actually a study that said marijuana smokers are less of a threat than alcohol users because marijuana smokers are actually cognizant of their impairment and take compensatory measures. As a result. Generally, stoners don't get emboldened by being stoned.

 Continued at [link to part 2]

October 30, 2018 in Business, Edibles, Law Enforcement, Medical Marijuana, Recreational Marijuana, State Regulation | Permalink | Comments (0)

OPINION: State-legalized marijuana businesses probably need not fear federal prosecution, but that "probably" should be more clear

Legalpic

States with legal marijuana cannot have complete confidence in the legitimacy of their businesses because marijuana remains federally illegal. Cannabis in the U.S. is a Schedule 1 drug, which has a very specific meaning according to the DEA website

Schedule I drugs, substances, or chemicals are defined as drugs with no currently accepted medical use and a high potential for abuse. Some examples of Schedule I drugs are:

heroin, lysergic acid diethylamide (LSD), marijuana (cannabis), 3,4-methylenedioxymethamphetamine (ecstasy), methaqualone, and peyote

Cannabis is explicitly illegal on the federal level to this day, despite state efforts to legalize marijuana locally. Adding further confusion to the mix, Attorney General Jeff Sessions has not made it clear whether legal marijuana business owners will be prosecuted. 

Dispensaries can take small solace in the apparent lack of Congressional or presidential support for Sessions. In a Wall Street Journal article, authors Sadie Gurman and Natalie Andrews noted that Sessions did not seem to have the backing of the president or Congress behind his desires to crack down on states with legal marijuana: 

Attorney General Jeff Sessions vowed to use federal law to get tough on marijuana, announcing in January he was ending Obama-era protections for the nascent pot industry in states where it is legal. Six months into his mission, he is largely going it alone.

Mr. Sessions’ own prosecutors have yet to bring federal charges against pot businesses that are abiding by state law. And fellow Republicans in Congress, with support from President Donald Trump, are promoting several bills that would protect or even expand the legal pot trade.

The article went on to explain that Sessions told members of Congress that the Justice Department is now emphasizing the pursuit of more dangerous drugs.

And well they should -- by many measures, cannabis is a far less dangerous drug than even legal alternatives like alcohol and tobacco. Smoking tobacco has been linked to lung cancer, and drinking too much alcohol can cause alcohol poisoning and even death.

Yet it is functionally impossible to overdose on the psychoactive ingredient in marijuana, THC, and medicines with CBD oil have been successfully used to treat patients suffering from seizures. Perhaps due to the fact that alcohol and tobacco have been accepted and abundant for so long, they remain legal and well regulated, as opposed to cannabis. 

Although unlikely, at any point, federal agents could bring suit against a state's legal marijuana businesses and arrest the people running it. This should not be the case because it leaves marijuana businesses in an uncertain place. If federal agents are not going to enforce federal marijuana law, perhaps the law should at least be altered, or abolished. 

Keeping marijuana illegal does not benefit society overall. It results in unnecessary prison sentences for nonviolent offenders charged merely with small scale possession. It inhibits research into medical applications.

Some argue that legal marijuana might lead to lower productivity and differences in brain development for young children, but such detriments are far outweighed by other factors at play. Those factors include huge potential for tax revenue generation; potential medical treatments for nausea, loss of appetite, seizures, and pain medication; and focusing of resources toward other larger problems like the opioid epidemic.

Marijuana legalization is an incredibly complex process, in which countless factors are at play and there is no simple solution for everyone. Things would be much simpler, though, if the federal government stepped up in favor of legalization, whether for medical or recreational marijuana. Even if the government actually did start cracking down on legal marijuana businesses, that might be preferable to this Sword of Damocles hanging over the head of every pot business owner, held up by just a single thread. 

 -- Alex Bennett

October 30, 2018 in Decriminalization, Drug Policy, Federal Regulation, Legislation, Local Regulation, State Regulation, Voter Initiatives | Permalink | Comments (0)

Sunday, October 21, 2018

ANALYSIS: Marijuana Justice Act (S. 1689, H.R. 4815)

AnalysisSpearheaded by Senator Cory Booker (D-NJ) and California Rep. Barbara Lee, the Marijuana Justice Act is attempting to set the foundation, on a congressional level, for what equitable and progressive marijuana legalization should look like. 

The Senate Bill, S. 1689, was introduced by New Jersey Senator Cory Booker on August 1, 2017, during the 1st Session of the 115th United States Congress. In January of this year, an identical bill was presented to the House of Representatives during the 2d Session, titled H.R. 4815, by California Representative Barbara Lee. Although the proposals have not yet garnered traction within Congress, the bills mark a progressive attitude towards legalization.

Senate Bill 1689 and House Bill 4815, both named the "Marijuana Justice Act", are a pair of identical Congressional bills that center marijuana legalization around criminal justice reform, accountability, and community reinvestment, and they represent the first time that companion legislation has been introduced in both chambers of Congress to remove marijuana from the Controlled Substances Act (CSA).

Objectives

The Marijuana Justice Act, if enacted, would:

  • Remove marijuana from the US Controlled Substances Act, thereby ending the federal criminalization of cannabis;
  • Incentivize states to mitigate existing and ongoing racial disparities in state-level marijuana arrests by:
  1.  Cutting federal funding for state law enforcement and prison construction if a state disproportionately arrests and/or incarcerates low-income individuals and/or people of color for marijuana offenses and;
  2. Allowing entities to sue states that disproportionately arrest and/or incarcerate low-income individuals and/or people of color for marijuana offenses;
  • Provide a process for expungement of federal convictions specific to marijuana possession;
  • Allow individuals currently serving time in federal prison for marijuana-related violations the right to petition the court for resentencing;
  • Create a community reinvestment fund to invest in communities most impacted by the failed War on Drugs.

The Text

A Bill to amend the Controlled Substances Act to provide for a new rule regarding the application of the Act to marihuana, and for other purposes.

The stated purpose of the Act is to de-schedule marijuana, apportion funds, and create a “Community Reinvestment Fund”.

Section 1. Short Title

Both bills began with their titles, with the Senate bill stating: This Act may be cited as the “Marijuana Justice Act of 2017”. The House bill has identical language, with the only amendment being the change of the date from 2017 to 2018 when the House bill was introduced.  

Section 2. De-Scheduling Marihuana

This section serves as the cornerstone for the legalization aspect of the Act.

For context, the Controlled Substances Act is the federal drug policy that places all regulated substances into one of five schedules based on the potential for abuse, current accepted medical use, and degree of physical or psychological dependence resulting from abuse of the drug. 

As quoted in the CSA, the finding for Schedule I drugs include that:

(A) The drug or other substance has a high potential for abuse.

(B) The drug or other substance has no currently accepted medical use in treatment in the United States.

(C) There is a lack of accepted safety for use of the drug or other substance under medical supervision.

Section 2 (a) of the Marijuana Justice Act is titled "Marijuana Removed from Schedule of Controlled Substances." The purpose of this section is to de-schedule marijuana from the Controlled Substances Act (CSA) by striking the terms "marihuana" and "tetrahydrocannabinols", and re-designating subparagraphs within §202(c) of the Controlled Substances Act (21 U.S.C. 812). 21 U.S.C. 812 (c) (10) and 21 U.S.C. 812 (c) (17) force cannabis-related substances "marihuana" and "tetrahydrocannabinols," respectively, into schedule 1 regulated substances; therefore, by striking the terms as mentioned above, they would no longer be listed as schedule 1 substances under federal law.

Section 2 (b) of the Act, captioned “Removal of Prohibition on Import and Export”—§1010 (b) of the Controlled Substances Import and Export Act (21 U.S.C 960) strikes the language that penalizes:

Any person who -

  • (1) …  knowingly or intentionally imports or exports a controlled substance,
  • (2) …  knowingly or intentionally brings or possesses on board a vessel, aircraft, or vehicle a controlled substance, or
  • (3) …  manufactures, possesses with intent to distribute, or distributes … a mixture or substance containing a detectable amount of marihuana. 

Additionally, the Act would conform the following amendments to the Controlled Substances Act by striking variations of the term "marihuana" and restructuring the designations of paragraphs and subparagraphs within:

21 U.S.C. 802 (44) – Definitions

21 U.S.C. 841 (b) – Prohibited Acts, penalties

21 U.S.C. 842 (c) (2) (B) – Prohibited Acts, penalties with prior convictions

21 U.S.C. 843 (d) (1) – Prohibited Acts, penalties and terms of imprisonment

21 U.S.C. 859 (a) – Distribution to persons under age twenty-one, first offense

21 U.S.C. 860 (a) – Distribution or manufacturing in or near schools and colleges, penalties

21 U.S.C. 863 (d) – “Drug Paraphernalia” defined

21 U.S.C. 886 (d) – Payments and advances, Drug Pollution Fund

The last measure of de-scheduling marijuana would amend the National Forest System Drug Control Act of 1986 by striking the terms "marijuana and other" and "marihuana" from the act.

Section 3. Ineligibility for Certain Funds

Although this section is titled, “Ineligibility for Certain Funds” the section also provides guidelines for expungement and sentencing review.

Section 3 (a) provides definitions for terms such as “covered state,” “disproportionate arrest rate,” “low-income individual,” and several other terms cited throughout the section.

Section 3 (b) details the considerations for distributing Federal funding to states. Under the Act, if a state is determined to have a disproportionate arrest or incarceration rate for marijuana offenses, they will be deemed ineligible to receive federal funds to staff or construct a prison or jail. However, covered states will not be subject to more than a 10% reduction of funds that would otherwise go to law enforcement assistance programs, block grants, and justice assistance grant programs. Additionally, any funds not awarded to covered states will be deposited into the Community Reinvestment Fund.

Section 3 (c) requires that each Federal court issue an expunction for marijuana use or possession offenses that resulted in a conviction. Subsection (d) provides for sentencing review and states that individuals who have been sentenced and imprisoned have the right to motion the court to conduct a sentencing hearing. Lastly, subsection (e) allows individuals who have been aggrieved by the disproportionate arrest or incarcerations rate the right to bring a civil action in appropriate district courts.

Section 4. Community Reinvestment Fund

The final section of the Marijuana Justice Act establishes a "Community Reinvestment Fund" within the United States Treasury. According to the bill, deposits to the Fund will consist of funds not awarded to covered states, states that have not enacted a statute legalizing marijuana, because they have disproportionate arrest and/or incarceration rates for marijuana offenses in addition to amounts otherwise appropriated to the Fund.

Section 4 (c) outlines the uses for the funds; making them available to the Secretary of Housing and Urban Development to reinvest in communities most affected by the war on drugs by funding job training, re-entry services, community centers, and other programs and opportunities. The Act concludes by authorizing $500,000,000 to be appropriated to the Fund for each fiscal year from 2018 – 2040.

Implications

The Marijuana Justice Act is rooted in social justice and community development. While the objectives of the Act are noble and progressive, perhaps the Act is attempting to tackle too many issues at once. There has been vocalized support for federal legalization, making Section 2 of the Act the most accessible.

Additionally, expunction efforts for marijuana-related crimes have been a topic of discussion on both the West and East coasts. However, there is a likelihood that courts will get overloaded by individuals who desire to bring civil suits. In regards to the Community Reinvestment Fund, the introduction of the fund would be groundbreaking; however, it is important to realistically consider the logistics and operations of the fund, as there would need to be continuous data-collections and attention to the appropriations on a federal level. If the Act were to be passed in its entirety, it would be a victory for communities impacted by the war on drugs and individuals who have been negatively affected by the implicitly discriminatory enforcement of current marijuana laws. 

--Gianna Redeemer

October 21, 2018 in Decriminalization, Drug Policy, Federal Regulation, Law Enforcement, Legislation, Politics, State Regulation | Permalink | Comments (0)

OPINION: Medical Benefits vs. Economic Gain for Legalizing Cannabis.

AaaThere are typically two camps that exist when people argue for legalization. You have those who would want to set up a store and begin selling cannabis like the cash crop that it is, and those who couldn't care less what the strain is called as long as it stops their seizures, anxiety, opioid addiction, or whatever illness they have that is being treated by medical marijuana.

Does it matter what camp you're in? Is one more persuasive than the other? Medical marijuana seems to be the stronger camp when it comes to the act of actual legislation and implementation. That doesn't mean legislators aren't thinking about the profits, but it is easier to argue economics once you have a template thanks to medical marijuana. 

Medical marijuana began its path to legalization in the 1990's when five states, Washington, Oregon, California, Alaska, and Maine put into place their own versions of laws that legalized the use of marijuana for medical purposes. Since then, medical marijuana has appeared to be the baby step before recreational legalization. It wasn't until 2012 that recreational marijuana became legal, and even then it was only Colorado and Washington. 

Now, in 2018, we have 9 states and the District of Columbia with fully legal recreational marijuana and we seem to be on the path of increasing that number, but how? 

One obvious argument for recreational legalization is the economic boom that comes with it. Colorado boasts a $506 million dollar profit from sales since recreational stores opened in 2014, according to CNN. In this current economic climate, that number should surely convince the public that marijuana is an incredibly profitable market and states should be running to legalize it. But why aren't they? 

Fear. Marijuana is still a drug and drugs can be scary. Drugs lead to addiction, addiction leads to a downward spiral, and nobody wants their family or friends to go down that path. This argument comes in the form of driving while high. a recent Gallup pole shows that about 47% of the participants believe that driving will be less safe if there is legal marijuana. There hasn't been a scientifically proven way to determine if the driver themselves is high. We can test if there is THC present in the body but how long has it been there, is it enough to intoxicate this specific driver, and many more questions come in to play when assessing impaired driving.

Law enforcement in states with legalization have been trying to find a system that works together to maintain safety without assuming guilt. Certain states, like Colorado have implemented a legal limit of THC allowed to be present in the driver's system. Their officers have received special training, according to the state's website, that allow them to detect if a person is impaired due to drug use. This limit applies to MMJ and recreational users. The Washington Post compared two studies on the increase of auto accidents in states with legalization. The first was by the Insurance Institute for Highway Safety, the second by The American Journal of Public Health. The American Journal found no increase in fatal car crashed but the Highway Safety found a 3% increase in auto accidents. 

This is the part where people against legalization say that public safety and wellbeing is more important than money and the argument gets shut down. There is one thing that the states with recreational marijuana all have in common; they all had medical marijuana legalized before legalizing recreational use. This is how the state can test the waters for marijuana, the public reaction, the drawbacks, what the overhead costs really are, different methods that could be used in terms of patients picking up the marijuana. And when the fear of impaired driving comes out then advocates bring out a study done by the American Journal of Public Health that claimed there was a decrease in traffic fatality rates. 

Another issue that comes up when advocating to jump right into recreational use is defining the terms. Legislation is not easy to write or pass, it can be less difficult when the governing body can at least agree on definitions and terms of use, sale, and consumption. When advocates try to begin with recreational, the first issue will probably be, how can we keep this out of the hands of children. This is a very important issue, one that alcohol businesses are well aware of. The trick is that their product, while dangerous, is not on the Controlled Substances Act.  Legislators go down a never ending path when trying to legalize recreational marijuana because their audience for the bill is too large. When there is a medical marijuana bill, the same terms need to be defined, but the size of affected users is not nearly as large. This allows for the creation of what could be the template for recreational marijuana. 

With what seems to be a movement towards legalization of marijuana across the United States, the best options for states that have not created medical marijuana laws, to do so before attempting to legalize recreational marijuana. It can placate certain fears of the general public, give the legislators a template, and it opens doors to those who really need it sooner rather than later. 

--Loren D. Elkins

October 21, 2018 in Drug Policy, Federal Regulation, Legislation, Local Regulation, Medical Marijuana, Recreational Marijuana, State Regulation, Taxation, Voter Initiatives | Permalink | Comments (0)

Friday, October 19, 2018

OPINION: Oklahoma Hospitals Should Reconsider Their Decision to Not Recommend Medical Marijuana

AaaTwo prominent Oklahoma hospitals have instructed their physicians to not make recommendations for medical cannabis under the state's new MMJ law, according to a recent article in Tulsa World.  The private Tulsa-based Saint Francis Health System and the public Oklahoma State University Medical Center are turning away requests for cannabis recommendations from their primary care providers.

These hospitals are doing a disservice to their patients and should reconsider their decisions.  Patients should not be blocked from using these treatments because of antiquated laws and outdated perceptions of the substance. 

Cannabis Illegal and of No Therapeutic Value, Health Systems Say

A Saint Francis spokeswoman has said that hospital rules require physicians to follow federal law, which considers marijuana a prohibited Schedule 1 drug. She explained in a statement:

Warren Clinic’s provider contracts and our hospitals’ bylaws require that physicians follow both state and federal laws governing the practice of medicine … To this end, Warren Clinic physicians and providers are not able to endorse or promote the use of cannabis with their patients.

For its part, OSU Medical Center pointed out that its decision was based on the lack of evidence that any of the Schedule 1 drugs on the federal list have therapeutic value.

“Schedule I drugs lack clinical evidence for therapeutic purposes,” a statement from OSU Medical Center reads. “To this end, OSUMC physicians and providers are not able to endorse or promote the use of cannabis with their patients.”

True, marijuana is still illegal under federal law as a Schedule I drug. However, there is a move in many states to approve recreational marijuana (California, Maine, Massachusetts, and Nevada), as well as and medical marijuana use (Florida, North Dakota, and Arkansas). There are now eight states where individuals can purchase marijuana for recreational use and 28 states and Washington, D.C. where medical marijuana is legal under state law.

Further, laws enacted in Connecticut and Maine permit the use of medicinal marijuana formulations by hospitalized patients.

Hospitals are exposed to a significant risk for allowing cannabis use by patients as cannabis continues to be illegal under federal law. This is because hospitals receive their accreditation from the Center for Medicare & Medicaid Services. These facilities also receive federal funds which may be vital to their ability to operate and provide services.

This threat may be perceived as real—especially since U.S. Attorney General Jeff Sessions said that he will enforce federal law as it pertains to marijuana. Sessions rescinded a 2013 memo by the Obama administration that instructed federal attorneys not to hinder states’ ability to legalize marijuana, provided state officials prevented the drug from migrating to places where it remained outlawed, such as federal property, and kept it away from criminal gangs and children. This will allow U.S. attorneys throughout the country to decide whether to devote federal resources to marijuana enforcement based on their district’s priorities. Hospitals are reticent to risk penalties and the loss of federal funding by prescribing or providing the drug in their facilities.

But with more states approving the use of marijuana, hospitals are frequently being asked to allow patients to bring in their own supply for their own use. These hospitals have created their own inpatient medical marijuana policies. To help standardize this, the Minnesota Hospital Association has created a set of policy templates. These policies may help to insulate the hospital and its staff from the threat of federal prosecution, and permit patients to use a drug that has proven to be effective in their treatment.

Healthcare providers such as Saint Francis should implement similar policies that help to reduce liability without sacrificing patient care. Yes, there are potential legal implications for such an approach -- but the likelihood they will be targeted for prosecution is low, while the likely improved patient outcomes are high. 

The benefits of medical marijuana have been proven.  Patients report many benefits of CBD or cannabidiol—the chemical found in marijuana plants. This includes relieving insomnia, anxiety, spasticity, and pain, as well as epilepsy, multiple sclerosis, and the side effects of chemotherapy. In fact, one form of childhood epilepsy, Dravet syndrome, is nearly impossible to control; however, it has been found to respond dramatically to a CBD-dominant strain of marijuana called Charlotte’s Web.

Those suffering from debilitating illnesses should not be denied access to treatments that can help them, whether it is to ease their pain or to find a cure. Medical research in the past 20 years has uncovered substantial data about the benefits of medical marijuana and the chemicals found in cannabis. Further, hospitals are warranted in putting their federal funding at risk in order to prescribe marijuana in the interest of improved patient care and outcomes.

The Oklahoma Medical Marijuana Authority has released a list of close to 40 physicians across the state who have registered as providers willing to recommend medical marijuana for patients. The agency said it released the list “as a courtesy” to potential applicants whose own physicians may be unwilling to sign a recommendation.  But patients of St. Francis and OSU deserve to get this badly needed medicine from their own providers.

--Jason Carr

October 19, 2018 in Federal Regulation, Legal Ethics, Local Regulation, Medical Marijuana, Research, State Regulation | Permalink | Comments (2)

Sunday, September 30, 2018

New Jersey's Latest Marijuana Act Could Mean Weed Delivery and Public Consumption

State lawmakers in New Jersey have just sent the latest bill that would legalize marijuana and lay the foundation for a commercial weed industry in New Jersey to the state's Governor Phil Murphy.

A recent article by NJ.com covers some of the highlights from the latest bill.

Businesses with a marijuana retail license would be able to apply to have a consumption space on the same premises as, but separated from, their dispensary. Retailers would have to get local approval for the consumption space in addition to getting permission from the state, the bill says. Maxresdefault

If passed, this aspect of the bill would set New Jersey apart from most states which have legalized marijuana but have yet to legalize public consumption. 

The article also discuss the bill's allowance for weed delivery services by licensed retailers.

Businesses with a marijuana retail license would be able to get permission from the state to deliver cannabis products to customers. Not all states allow marijuana to be delivered, but California, Nevada and Oregon do.

The bill could pass as early as October and licensing approval would begin shortly after--with cultivation to follow closely behind. Accordingly, New Jersey may have a marijuana market in place by next September. 

--Gabrielle Rennie

September 30, 2018 in Business, News, State Regulation | Permalink | Comments (0)

Saturday, September 29, 2018

The Latest US Territory to Legalize Marijuana Use Makes History

AaaOn Friday, a small US territory made a big splash in the country’s marijuana legalization history. According to Forbes.com, the Governor of the Commonwealth of the Northern Mariana Islands signed a bill into law that provides

adults over 21 years of age will be able to legally possess up to one ounce of marijuana, as well as infused products and extracts. Regulators will issue licenses for cannabis producers, testing facilities, processors, retailers, wholesalers and lounges. Home cultivation of a small number of plants will be allowed.

The article further points out that this is the first US jurisdiction “to go from having cannabis totally illegal to allowing recreational use without first having a medical marijuana program.” It was “unclear if the governor was going to sign or veto the legislation, as he had previously expressed concerns about the public safety implications of legalizing marijuana.”


Though the governor signed the recreational scheme into law, he also used his “line-item veto powers to cancel some provisions of the proposal, including one to allow a government entity to be licensed to grow cannabis, as well as a provision requiring recreational marijuana consumers to obtain $5 permits.”

Legalization advocates are hopeful about the effect this may have on other US Jurisdictions.

"This is the first legislatively enacted law in the U.S. that taxes and regulates marijuana for adults’ use, but it will be far from the last," Karen O'Keefe, state policies director for the Marijuana Policy Project, said in an interview. "New Jersey could follow suit within weeks, and as many as five more state legislatures could do so within the next year. Public support for legalizing marijuana is strong and growing, and elected officials are increasingly getting the message."

Other advocates are hopeful that the “building momentum will add pressure on the federal government to modernize its approach to cannabis.”

 --Ashleigh Morgan Williams



September 29, 2018 in Decriminalization, Drug Policy, Legislation, Local Regulation, Politics, Recreational Marijuana, State Regulation, Taxation | Permalink | Comments (0)

Nevada cannabis industry shatters revenue projections; state expects more growth to come

Nevada is the latest state to feel the economic boom of legalized cannabis, and so far it is smooth sailing for state regulators. The state fully legalized the drug beginning in January 2017 and total industry sales soared over $500 million, $425 million of which came from recreational sales alone. These numbers drastically outperformed both state projections, and first year sales of other states. The Las Vegas Review-Journal has the story

Vegas-weedIncluding recreational and medical marijuana as well as marijuana-related goods and accessories, Nevada stores
eclipsed a half-billion dollars in sales, just under $530 million, according to figures released Tuesday by the Nevada Department of Taxation.

 

Bill Anderson, executive director of the Tax Department, said that the industry “has not only exceeded revenue expectations, but proven to be a largely successful one from a regulatory standpoint.”

 

“We have not experienced any major hiccups or compliance issues,” he added. “As we move into fiscal year 2019, we expect to see continued growth in the industry by way of additional businesses opening up, and we expect revenues to continue to be strong.”

This stunning performance translated into $70 million in tax revenue for the state. To give some context to these metrics, state regulators projected $265 million in sales and $50 million in tax revenue, according to the Review-Journal. Furthermore, the states of Colorado, Washington, and Oregon–largely considered to be trailblazing states in the cannabis industry, and all with larger populations than Nevada by at least 1 million citizens–recorded first-year cannabis sales of $303 million, $259 million, and $241 million, respectively, putting them far behind Nevada's first year numbers. Perhaps most surprisingly, despite being home to Las Vegas, Nevada only collected $49 million in intoxicating beverage taxes from 2016-2017, signaling that marijuana may be a greater source of revenue for the state than alcohol moving forward.

Nevada's "sinful" tourist economy can likely be thanked for such astounding numbers, although the state's casinos have come out against marijuana use in their facilities, out of fear of losing their gaming licenses. Additionally, the state's marijuana law prohibits consumption anywhere but in private residences. State Senator Tick Segerblom told the Las Vegas Sun: “The numbers are kind of leveling off, and we need to reach the tourist market a little more. We need a venue where people can come and enjoy marijuana properly."

These results suggest a few things: first, that tourism economies can drive marijuana sales even in states with lower populations and where marijuana use is not widely supported by dominant businesses. Second, that as more states legalize cannabis they may take cues from states that have previously approved legalization in order to more efficiently bring the drug to market. Finally, that there is still much progress to be made with respect to laws surrounding marijuana consumption in states where it has been made legal. Perhaps as more states begin venturing into legalization, they will use Nevada as a model of how best to regulate, tax, and sell cannabis.

--John Robinson

September 29, 2018 in Business, Commercial Law, Decriminalization, Drug Policy, Legislation, Medical Marijuana, News, Politics, Recreational Marijuana, State Regulation, Taxation, Travel | Permalink | Comments (0)

Friday, September 28, 2018

Restaurant Wants to Use Marijuana to Ease Lobsters’ Pain. Slow Your Roll, Maine Says.

2018-09-22 14_51_03-The New York Times - Breaking News  World News & MultimediaYour death is imminent.  It will be painful. Minutes beforehand, your executioner hands you . . . a joint.

Charlotte Gill, the owner Charlotte’s Legendary Lobster Pound in Southwest Harbor, contemplated that very idea when thinking about how lobsters are cooked. It is fair to say that no reasonable person would want to be thrown into boiling water while still alive (or dead for that matter) so Charlotte, a self-proclaimed animal lover, decided to use the recently legalized recreational marijuana use for more than her own satisfaction.

She decided to get the lobsters high before cooking them in order to ease their pain and suffering. While, scientifically, questions still remain as to whether lobsters can even feel pain or get high, Charlotte contends that,

it is undeniable that the marijuana is having the intended effect. In a series of tests, restaurant employees put a lobster in a small container and added a few inches of water. They channeled marijuana smoke through a tube until the container was filled with it, and kept the lobster there for about three minutes.

Before the lobster went into the container, it would flap its tail and click and wave its claws. After being exposed to the smoke, the lobster was docile and serene.

It’s still a very alert lobster, but there’s no sign of agitation, no flailing of legs, no trying to pinch you. So calm, in fact, that you’re able to freely touch the lobster all over without them trying to strike at you or to be aggressive in any way.

This method is preferable, she said, to dropping a live crustacean into boiling water without the marijuana.

A more important question, to the Maine government at least, is whether getting lobsters high before cooking them leads to the consumer getting high; essentially, whether a high lobster turns into an edible post-cooking. Charlotte and her employees conducted their own experiments to find out those results,

staff members have tested their urine after eating the marijuana-treated lobsters, she said, and no trace of the drug has been found. In the latest experiment, Ms. Gill’s 82-year-old father has been eating copious amounts of marijuana-sedated lobster every day; he will soon take a blood test.

She said she hoped her tests could prove to the state that the lobsters were not absorbing the marijuana.

It is a unique and creative way of utilizing the legalization of marijuana, undoubtedly. While questions to remain as the effects on humans; whether lobsters feel pain; and whether lobsters can even get high; this use has garnered plenty of publicity for the restaurant -- yet another way marijuana legalization has helped boost business.

For now the Maine government is still skeptical as to whether this use should be allowed.

 

-Fernando Lira Gomez

September 28, 2018 in Business, Drug Policy, Edibles, Medical Marijuana, Recreational Marijuana, State Regulation | Permalink | Comments (0)

Cannabis cafe coming soon to Oklahoma

With Oklahoma's changing view towards cannabis, Cannafe, a cafe in Norman, Oklahoma, plans to open soon with a line of food and beverages containing CBD. OU Daily has the story: Cannabis cafe

A new cafe will open on Campus Corner selling coffee, tea, brownies, cheesecake and other snacks  — all containing cannabis compounds.

Co-founders of Cannafe, Jim Castor and Joel Jacobs, envision the cafe as a place for students to study and relax. This will be aided by cannabidiol, known as CBD, and other molecules from the cannabis plant that can help reduce anxiety and improve focus, said Jacobs.

CBD is a cannabinoid, or a compound found in cannabis plants. However, unlike the mind-altering compound THC, also found in cannabis, CBD does not get people high and is non-psychoactive, according to Medical News Today.

...

“It doesn’t alter how you can function,” said Castor. “You can still do your job and go to work and go to school and study and relax, and it just kind of takes the edge off.”

...

The owners also want to provide a non-alcoholic space where students too young to go to bars can hang out during the daytime or between parties.

You may now be curious as to if the sale of products containing CBD is even legal in Oklahoma. Oklahoma established the Oklahoma Medical Marijuana Authority (OMMA) to regulate medical marijuana (MMJ) in response to its legalization in June. However, the OMMA only regulates MMJ and does not speak to CBD products. Thus, without specific regulation against CBD products, Oklahoma tolerates the sale of these products, according to MarijuanaBreak.

--Wyatt Hinson

September 28, 2018 in Business, Edibles, Law Enforcement, Legal Education, News, State Regulation | Permalink | Comments (0)

Thursday, September 27, 2018

A Federal Court Win for Connecticut Employees Who Use Medical Marijuana

Connecticut MarijuanaMedical marijuana users in Connecticut now receive extended employment-related protections under the state’s medical marijuana law as a federal court rejects an argument that the state laws conflict with federal laws and are therefore preempted. Dale L. Deitchler and Elizabeth R. McKenna, employment lawyers with national firm Littler Mendelson, report:

A Connecticut federal court has issued another decision in the case of Noffsinger v. SSC Niantic Operating Company LLC, further expanding protections to individuals who are qualified under Connecticut's Palliative Use of Marijuana Act (PUMA) to use marijuana. . . . [T]he parties filed cross-motions for summary judgment. These motions presented the court with another opportunity to address the extent to which PUMA protects qualified medicinal marijuana users—even though marijuana remains illegal as a matter of federal law. On September 5, 2018, the court granted partial summary judgment in the plaintiff's favor and concluded that she had successfully asserted a PUMA discrimination claim, and discussed the damages available. Significantly, the court considered and rejected additional arguments that federal/state law conflicts preempted enforcement of the Connecticut law, concluding that state law can co-exist with federal laws criminalizing marijuana use.

In an earlier decision, known as Noffsinger I, the Connecticut federal court held, “that various federal laws prohibiting use and sale of marijuana do not prohibit employers from hiring individuals who use marijuana in compliance with state law.” According to Deitchler and McKenna,

The case involves claims brought by an applicant who accepted a job offer contingent on passing a drug test. Before taking the test, the plaintiff informed her potential employer she was qualified under PUMA to use marijuana to treat post-traumatic stress disorder (PTSD). The plaintiff reportedly used marijuana "in the evenings" and provided current dosage information.

The employer rescinded the job offer after the plaintiff tested positive for cannabis. The plaintiff sued, alleging that the employer violated PUMA's anti-discrimination provision, claiming her rejection was discriminatory because she was qualified to use marijuana under PUMA.

The Noffsinger II court concluded the employer violated PUMA by rescinding the plaintiff's job offer on the basis of a positive pre-employment drug test when it knew she was using marijuana as permitted under Connecticut law.

The employer bases its position on, among other authority, the federal Drug Free Workplace Act and the federal False Claims Act.

Reading the DFWA narrowly to prohibit only the possession and use of illegal drugs at work, the court concluded that the DFWA did not require the defendant to rescind the plaintiff's job offer because she reportedly used marijuana for medicinal use after work during off-hours.

The court reached the same conclusion in response to the employer's argument that the federal False Claims Act barred it from hiring the plaintiff. . . .[T]he court concluded that "there is no federal law that bars defendant from hiring plaintiff on account of her medicinal use of marijuana outside work hours.

The court also found the employer’s argument that the employment decision was based on the positive drug test result, not on the employee’s status of a PUMA-qualified medical marijuana user unpersuasive. The authors explain:

The court disagreed, in effect finding action based on a positive workplace drug test for marijuana constitutes status-based discrimination when an employer knows the result was caused by marijuana use lawful under Connecticut law. The court explained, "[there] would be no reason for a patient to seek PUMA status if not to use medical marijuana as permitted under PUMA.

According to Deitchler and McKenna, “[t]he takeaway is that the DFWA is not a "free pass" to justify or defend the application of a "zero tolerance" policy in jurisdictions that have adopted protections for medical marijuana users.”

As 30 states in the US have legalized medical marijuana use, it is likely worthwhile to follow the development of this case as it could have a lasting effect on the relationship between state and federal laws in the labor and employment arena.

--Ashley Goldman

September 27, 2018 in Business, Drug Policy, Federal Regulation, Medical Marijuana, News, State Regulation, Workplace | Permalink | Comments (0)

Saturday, September 22, 2018

Massachusetts Cannabis Cash Finds a Home at Federal Credit Union

It's no secret that recreational marijuana is a cash cow, but until recently, retailers have had no piggy bank in which to deposit all their earnings. However, thanks to the efforts of Gardner Federal Credit Union, marijuana dispensaries in Massachusetts may have found a home for their earnings. The Boston Business Journal has the story:

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The bank said Friday afternoon that it would begin banking for the industry, working with Safe Harbor Services, a
wholly-owned affiliate of Partner Colorado Credit Union that is the leader in compliance-based cannabis banking services.

 

“As a credit union committed to helping people and serving the underserved, we found in Safe Harbor a partner who offered a viable and proven compliant-based cannabis banking option and a way to keep our communities safe. Our board of directors recognizes the need to provide banking services for the safety of our citizens in reducing the ‘cash on the streets’ and I applaud them for their vision and commitment to providing public safety," said GFA Federal Credit Union’s CEO, Tina Sbrega.

Banking has long been a thorn in the side of recreational marijuana retailers. Because marijuana is still illegal at the federal level, if a bank were to accept funds derived from marijuana sales, that would constitute money laundering. The resulting friction between state legalization and federal drug policy has created an business ecosystem where cash is king. Colorado marijuana entrepreneur Babak Behzadzadeh told The New York Times: "If we had bank accounts, it'd be much easier."

Safe Harbor Services began helping local banks and credit unions in Colorado accept marijuana money in 2014, serving a vital–and very profitable–role in the cannabis industry. The company has expanded its reach outside of Colorado, now offering its services to credit unions like Gardner Credit Union in Massachusetts. The company is able to help its customers deposit their cannabis profits "legally" by ensuring that none of the money is derived from activities specifically prohibited by the Cole memorandum, and that the banks who accepted cannabis cash were careful about what they did with it–specifically ensuring that it did not migrate outside of states in which marijuana was legal. However, with the recent rescission of the Cole memorandum by Attorney General Jeff Sessions, it is not clear that Safe Harbor will be able to continue offering their services to financial institutions. 

Polls show that the majority of Americans favor legalization of marijuana, and 30 states have legalized the drug in some form. With this increasing momentum in favor of legalization, states have expressed an interest in allowing banks to accept money derived from marijuana sales in order to quell threats of violence and robbery to marijuana businesses, who generally carry large amounts of cash on hand. Whether the current administration will crack down on organizations like Safe Harbor and their partners like Gardner Credit Union in Massachusetts remains to be seen, but something will have to be done with all of the cash currently being generated by the marijuana industry.

 -John Robinson

September 22, 2018 in Banking, Business, Commercial Law, Decriminalization, Drug Policy, Federal Regulation, Finance, Law Enforcement, Local Regulation, Medical Marijuana, News, Recreational Marijuana, State Regulation | Permalink | Comments (0)

Utah may soon legalize medical marijuana

Utah FlagA public event supporting legal medical marijuana organized by the Utah Patient Coalition has attracted hundreds of supporters. The bill being considered, Proposition 2, would allow patients with doctor recommendations to legally obtain medical marijuana from privately owned dispensaries. 

According to an article by Kathy Stephenson of the Salt Lake Tribune, the event included music, food trucks, bounce houses, T-shirts and lawn signs. 

Not all Utahns are in favor of the bill in its current form, though. The article explains that despite empathy for suffering children, some groups don't support Proposition 2 due to a perceived lack of sufficient procedural safeguards. 

A Dan Jones and Associates poll, conducted for UtahPolicy.com, found 64 percent of likely voters to be “somewhat” or “strongly” in support of the measure.

However, several groups, including the The Church of Jesus Christ of Latter-day Saints and the Drug Safe Utah Coalition — made up of medical experts, clergy, law enforcement, educators and business leaders — are opposed and say the initiative as written lacks procedural safeguards.

“We are aware of many in our neighborhoods who seek relief from pain and suffering and are moved with empathy by stories of children who endure debilitating seizures and other medical conditions," said Marty Stephens, the church’s director of community and government relations. “The church supports medicinal use of marijuana, so long as proper controls and safeguards are in place.

“In the spirit of compromise,” he added, "we urge a timely, safe and compassionate approach to providing medical marijuana for those in need without the harmful effects that will come if Proposition 2 becomes law.”

The upcoming elections in November will show whether events like this are enough to sway the voters of Utah to become the 32nd state to legalize medical marijuana. 

--Alex Bennett

September 22, 2018 in Decriminalization, Law Enforcement, Medical Marijuana, News, Politics, State Regulation | Permalink | Comments (0)

Sixth Circuit Defers to State Cannabis Law in Insurance Dispute

Federalism might bolster insurance coverage for commercial landlords who choose to rent to legal marijuana grow operations if the landlord ensures their insurance policy does not contain a broad exclusion for “criminal acts.” An insurance claim for damage to a rental unit may not bring a commercial landlord any relief, especially when the tenant was growing cannabis illegally under both state and federal law. K.V.G. Properties, Inc. v. Westfield Ins. Co. (hereinafter KVG), a recent case out of the Sixth Circuit, begs the question: Would an exclusion in a first-party insurance contract for criminal acts apply if the tenant had complied with state law when growing marijuana?

Michael S. Levine and Geoffrey B. Fehling of Hunton Andrews Kurth recently weighed in on the K.V.G. decision, which was handed down in late August and, according to Levine and Fehling, “previews ‘federalism’ arguments that are likely to reappear in future cannabis coverage disputes where state law permitting all or limited use of cannabis conflicts with federal law.”

5838164This dispute began when the DEA raided KVG’s commercial tenants for growing marijuana in rental units, but not before the tenants had already done substantial damage, like wall removal, holes in the roof, altered ductwork, and severe damage to HVAC systems. KVG evicted the tenants and sought coverage for nearly $500,000 in related losses from its insurers. KVG sued after the insurer denied its claim because the damages resulted from acts contained in the “Dishonest or Criminal Acts Exclusion” in the policy. The exclusion states that the insurer “will not pay for loss or damage caused by or resulting from any dishonest or criminal act by you, any of your partners . . . employees (including leased employees) . . . authorized representatives or anyone to whom you entrust the property for any purpose.”

Cultivating marijuana is a crime under federal law, but it is protected by Michigan law under the Michigan Medical Marihuana Act (the “MMMA”). The Court noted that “under different circumstances, KVG might have a strong federalism argument in favor of coverage.” However, KVG’s tenants did not comply with Michigan law, which KVG admitted in eviction pleadings. KVG claimed that the “tenant illegally grew marijuana” and it was a “continuous health hazard.”

Moreover, when raiding the premises, the DEA operated under guidance from the Deputy Attorney General James Cole stating that they should not prioritize “individuals whose actions are in clear and unambiguous compliance with existing state laws providing for the medical use of marijuana.” The Court reasoned that “the fact of the raid itself has some tendency to show that the tenants were not in ‘clear and unambiguous compliance’ with Michigan law.” Since pleadings are binding legal documents, KVG admitted its tenants engaged in a criminal act and never argued legality under the MMMA. Instead, KVG argued that the Dishonest or Criminal Acts Exclusion only applied if the tenants had been convicted. The Court rejected this argument because the policy says “criminal act,” not “crime” or “criminal conviction.”

Levine and Fehling concluded that two of the biggest takeaways from KVG are that:

"Policyholders should look for narrow criminal acts exclusions—that are, for example, triggered only by a 'crime' or 'conviction'—that do not apply broadly to alleged 'criminal acts.'" If KVG had not admitted the acts were 'illegal,' a court would be required to interpret exclusions narrowly and in favor of coverage, which may have led to a different outcome in KVG. Also, as the Sixth Circuit recognized, federal courts "act as faithful agents of the state courts and the state legislature," meaning that federal courts sitting in diversity emulate state courts that will enforce applicable state law.”

This deference to state law, including legalized cannabis use through ballot initiatives, may result in different outcomes on “criminal acts” arising from different facts.

--Kindal Wetuski

September 22, 2018 in Business, Commercial Law, Contracts, State Regulation | Permalink | Comments (0)

Saturday, September 15, 2018

Sorry, Merle, they're smoking pot in Muskogee these days . . .

Only 49 years after Merle Haggard & the Strangers sang that Okies don't smoke marijuana there, Muskogee, Oklahoma is getting is first medical cannabis dispensary.  

Still great music, even if times have changed. Enjoy.

 

--Frank Snyder 

September 15, 2018 in Medical Marijuana, News, State Regulation | Permalink | Comments (0)

Friday, September 14, 2018

Crackdowns of black market operations in legalized territory are amping up

AaaOperating a dispensary without a license? Beware! Los Angeles and several other California cities are increasing efforts to stop cannabis operations that continue to operate without a license.

Officials initially issued warnings to the many perpetrators, but after many months of noncompliance, LA is now filing criminal charges against various retailers, growers, and delivery services. 

The Los Angeles Daily News reports that earlier this month, prosecutors there have charged 515 people for helping to run 105 illegal marijuana operations: 

“Our message is clear: If you are operating an illegal cannabis business you will be held accountable,” Los Angeles City Attorney Mike Feuer said.

It’s widely believed that Los Angeles has the world’s biggest marijuana market, and businesses have thrived for years under the state’s loose medical marijuana laws. But since the start of the year, new California laws have required all cannabis businesses to have both a state and city license to operate — licenses that can add costs to operations in the form of fees, testing requirements and hefty taxes.

The new laws also let cities regulate the marijuana industry, and many cities so far have opted against allowing such operations. Los Angeles, however, began licensing retail outlets in late January and most other types of marijuana businesses on Aug. 1. As of Friday, the city said 163 businesses have been given temporary licenses to operate.

But that represents just a fraction of the overall marijuana market, and for the past eight months, the City Attorney’s office coordinated with the Los Angeles Police Department to identify and investigate businesses that were operating without licenses. Most are retail shops, the City Attorney’s office said, but action also was also taken against marijuana growers, extraction labs and delivery services.

California and other legalized states, like Washington, and Colorado, continue to struggle with black market operations well after legalization has taken effect. In an effort to level the playing field, Los Angeles and other cannabis officials say they will take all measures necessary to crackdown on illegal operations. The 120 criminal cases recently filed in LA are intended as a loud and clear signal to all cannabis operators that they must follow the licensing regulations, or face the consequences. 

--Manda Mosley Maier

 

September 14, 2018 in Business, Commercial Law, Drug Policy, Law Enforcement, Local Regulation, News, State Regulation | Permalink | Comments (0)

Thursday, September 13, 2018

Is "High Grade" Marijuana Actually Getting Recreational Users Higher?

AaaRequired package labeling on recreational marijuana may not be as helpful and accurate as it appears.  Looking at the scene in Alaska, Lauren Andrews of the Anchorage Daily News reports that recreational consumers' love for "Top Shelf" marijuana (strains that boast a higher THC content than cheaper strains) spurred questions about the legitimacy of the package labeling Alaskan marijuana.

There is relatively little regulation of labels in the state.  Andrews explains that although the Alcohol and Marijuana Control Board director concluded in January that the only two testing labs in the state were coming up with different results on the same strains, "the public's interest in marijuana with 20 percent THC shows no sign of slowing down."

This is especially shocking, says Andrews, considering that the price difference between proposed "high" and "low" grade marijuana can be as much as $8 per gram, according to executive vice president of Great Northern Cannabis, Jordan Huss. 

The article goes on to explains the ramifications of this "Top Shelf" phenomenon may include bankruptcy for suppliers that cannot afford to keep up with the large companies that create these purportedly extra-potent strains. "It's real nonsense, but it's driving the cost, and it's going to drive people out of business" according to Jessica Alexander, lab director at The New Frontier Research. 

 --Kylee Debler

 

September 13, 2018 in Drug Policy, Recreational Marijuana, State Regulation | Permalink | Comments (0)

Wednesday, September 12, 2018

Commercial Sale of Marijuana is Officially on the Vermont Democratic Party Agenda

Legalization celebrationLate last month the Vermont Democratic Party officially declared support for the statewide commercial sale, regulation, and taxation of marijuana.  At an August 26 meeting, party leadership unanimously voted to change the platform’s language to include the party’s belief that marijuana “should be legal, taxed and regulated in the interests of consumer and public safety, as well as economic opportunity.”

Vermont is the most recent state to legalize the recreational use of marijuana among adults who are 21 years of age and older, and as a Washington Post article reports, the first to do so by legislative enactment (all other initiatives were by ballots). However, the commercial sale is still illegal within the state.  As Professor Robert Mikos notes in his casebook, Marijuana Law, Policy, and Authority, of the 9 states in the US that have legalized recreational marijuana, Vermont is the only state in which any form of commercial sale is still criminalized.

Despite the failure of a taxation and regulation bill last year, members of the Democratic Party in Vermont are still hopeful that “momentum from recreational legalization will translate into swift passage of tax and regulate policy in the upcoming legislative session.”  

 

--Ashleigh Williams (Morgan)



September 12, 2018 in Politics, State Regulation | Permalink | Comments (0)

Monday, September 10, 2018

Possible Safe Harbor for U.S. Military Veterans Who Need Medical Cannabis

AaaA bill filed in Congress would allow veterans to get medical marijuana from the U.S. Department of Veterans Affairs.  While a growing number of military veterans use medical marijuana for the treatment of PTSD, chronic pain, and other mental and physical war wounds, however, federal law prohibits VA doctors from prescribing it.  That might change.

Senators Bill Nelson (D-FL) and Brian Schatz (D-HI) recently filed the Medical Marijuana for Veterans Safe Harbor Act that would legalize medical marijuana for veterans and empower physicians in the VA to issue medical marijuana recommendations in accordance with the laws of "the State in which the use, possession, or transport occurs." Despite the fact that state laws that legalize the use of medical marijuana are preempted by federal laws which prohibit such use, this bill effectively harmonizes federal law governing the VA with state law in states where medical marijuana is legal.

According to Tom Angell of Forbes, who reports on the story, Senators Nelson and Schatz are addressing long-term goals such as cannabis research and reduction of opioid use among veterans. The bill allocates $15 million for research on "the effects of medical marijuana on veterans in pain" and "the relationship between treatment programs involving medical marijuana that are approved by States, the access of veterans to such programs, and a reduction in opioid abuse."

Some form of medical marijuana is permitted in 31 states and this legislation would grant veterans the same access to legitimately prescribed medication as other patients in those 31 states would have. Justin Strekal, political director for NORML, says that "Historically, veteran and military communities have long been at the forefront of American social change, catalyzing widespread acceptance of evolving cultural norms and perceptions surrounding racial, gender, and sexual equality. The therapeutic use of cannabis by veterans follows this trend and members of Congress should follow their lead and pass the Veterans Medical Marijuana Safe Harbor Act."

--Kindal Wetuski

September 10, 2018 in Drug Policy, Federal Regulation, Legislation, Medical Marijuana, Politics, Research, State Regulation | Permalink | Comments (0)