Thursday, September 29, 2022

DEPC releases "Ohio Medical Marijuana Control Program at Four Years: Evaluating Satisfaction and Perception"

2022-OMMCP-Report_for-webI am happy to highligth the release of a terrific new report, titled ""Ohio Medical Marijuana Control Program at Four Years: Evaluating Satisfaction and Perception," authored by Jana Hrdinova of the Drug Enforcement and Policy Center (DEPC) at The Ohio State University Moritz College of Law.  This DEPC webpage provides this overview:

This report, a fourth in the annual series from the Drug Enforcement and Policy Center (DEPC), traces the evolution of the Ohio Medical Marijuana Control Program (OMMCP) over the last four years in terms of its growth and OMMCP patients’ and prospective patients’ satisfaction levels with the functioning and design of the program. For the first time, our survey finds respondents reporting being more satisfied with OMMCP than dissatisfied, an important milestone in OMMCP’s development. Nevertheless, the survey respondents continue to report dissatisfaction with some elements of the program, with the price of marijuana product being the most pressing concern, followed by lack of legal protections for patients and the cost and difficulty of obtaining OMMCP patient card. The final section of this report includes recommendations for policy and regulatory changes that could have a positive impact on patients’ satisfaction with OMMCP.

Here are a few of many notable findings from the report:

  • 56.1% of respondents reported some level of satisfaction with OMMCP, with 15.3 % reporting being “extremely satisfied” and 40.8% being “somewhat satisfied.” Only 35.5% of respondents expressed some degree of dissatisfaction with OMMCP, a significant change from last year when 55.1% of people reported being dissatisfied.
  • If averaged over the 13 months, an Ohio patient paid $4.08 more per gram of plant product in an Ohio dispensary than a Michigan resident in a Michigan dispensary, and $3.57 less per gram than a marijuana medical patient in Pennsylvania.
  • The OMMCP recorded a 44% increase in the number of patients with active recommendation and active registration growing over the past 12 months. But the number of physicians with a certificate to recommend has declined over the same time period to 641 from 651 a year earlier. The patient to doctor ratio in Ohio now represents the lowest among states with a similarly aged program.
  • The top three policy changes that would most positively affect patients’ satisfaction with OMMCP would be the adoption of legal protections for patients, followed by state allowance for self-cultivation, and provision of home delivery under OMMCP.
  • Since January 2019, the state of Ohio collected over $132 million in revenue, with the state tax and local tax accounting for approximately $64 million, medical marijuana businesses application and licensing fees accounting for another $46 million and patient and caregiver fees making up the remaining $22 million.
  • 84% of respondents reported having trust in the safety of products sold in Ohio dispensaries. Only 7.2% reported not trusting the safety of dispensary products.

September 29, 2022 in Business laws and regulatory issues, Medical Marijuana Commentary and Debate, Medical Marijuana Data and Research, Medical Marijuana State Laws and Reforms | Permalink | Comments (0)

Sunday, August 21, 2022

Highlighting all we do not know about marijuana-infused drinks

Cannabis-drinksThis lengthy New York Times article, headlined "Weed Drinks Are a Buzzy Alcohol Substitute. But Are They Safe?", provides a useful overview of "weed drinks" with an emphasis what we do not know about a growing consumer product sector.  I recommend the piece in full, and here are a few excerpts:

According to BDSA, a market research firm in Colorado that specializes in legal cannabis, dollar sales of marijuana beverages are up by around 65 percent from 2020 to 2021 in the 12 states they track. In California, the state with the largest market for weed drinks, the number of cannabis beverages available nearly doubled from 2020 to 2021, growing to 747 distinct products, according to Headset, a company that collects and analyzes data on cannabis....

Cannabis-infused beverages are often branded as a healthier alternative to alcohol — “No painful days after drinking or regrets,” a tagline on Cann’s site reads. These kinds of drinks carry a connotation of health, said Emily Moquin, a food and beverage analyst at Morning Consult. They tout themselves as “hangover-free” and without the high calories of alcohol; they claim to help you feel “focused,” balanced, relaxed. One cannabis beverage company even suggests pairing their drinks with a spa day.

But experts worry that products like weed drinks are becoming more popular than health research can keep up with, leaving big questions about how best to consume them and what impacts they may have on the brain and body....

“It’s really a Wild West of products out there,” Dr. MacKillop said. Some drinks contain just THC, or CBD or both, and drinks on the market vary vastly in how many milligrams of these compounds they contain.

While there is no standard unit for THC product potency, Dr. MacKillop said, most experts in the field consider five milligrams of THC to be a typical single dose, and the National Institute on Drug Abuse sets it as standard unit of research.

According to Headset, over half of cannabis beverage units sold in the U.S. in 2021 contained 100 milligrams of THC, an amount that could significantly intoxicate or impair the average person....

Because weed drinks are so new, they are “an incredibly understudied class of cannabis products,” Dr. MacKillop said. There aren’t yet robust studies on how drinkable cannabis products affect the body long term, Dr. Vandrey added, and it’s unclear how the health effects — positive or negative — of marijuana translate into a drinkable beverage.

“The cannabis industry has evolved much faster than the data,” he said. “This is just another great example of that.”

August 21, 2022 in Business laws and regulatory issues, Food and Drink, Medical community perspectives, Recreational Marijuana Commentary and Debate | Permalink | Comments (4)

Wednesday, August 17, 2022

Split First Circuit panel holds dormant Commerce Clause applies to federally illegal marijuana businesses

In a notable ruling today in Northeast Patients Group v. United Cannabis Patients and Caregivers of Maine, No. 21-1719 (1st Cir. Aug. 17, 2022) (available here), a split First Circuit panel applied the dormant Commerce Clause to a provision of Maine's Medical Marijuana Act. Here is how the majority opinion gets started:

This appeal concerns whether the Maine Medical Use of Marijuana Act, 22 M.R.S. §§ 2421-2430 (2009) ("Maine Medical Marijuana Act"), violates what is known as the dormant Commerce Clause of the United States Constitution by requiring "officers" and "directors" of medical marijuana "dispensar[ies]," id. § 2428(6)(H), operating in Maine to be Maine residents.  The United States District Court for the District of Maine held that Maine Medical Marijuana Act's residency requirement does violate the dormant Commerce Clause, notwithstanding that Congress enacted the Controlled Substances Act ("CSA"), 21 U.S.C. § 801 et seq., to "eradicate the market" in marijuana, see Gonzalez v. Raich, 545 U.S. 1, 19 n.29 (2005).  The District Court concluded that is so, because the residency requirement is a facially protectionist state regulation of an interstate market in medical marijuana that continues to operate even in the face of the CSA.  We affirm.

Here is how the dissent by Judge Gelpi starts:

I respectfully dissent from the affirmation of the district court's opinion. I agree that Maine's residency requirement, that "[a]ll officers or directors of a dispensary must be residents of this State" set forth at 22 M.R.S. § 2428(6)(H), incontestably constitutes protectionist legislation. Indeed, at oral argument, counsel for Defendant-Appellant Kristen Figueroa conceded as much. Moreover, Figueroa does not assert that the measure could meet the strict scrutiny standard to which protectionist legislation is ordinarily subject. Indeed, the Supreme Court and this court have routinely invalidated similar protectionist legislation in markets ranging from liquor store licensing to egg products. See, e.g., Tenn. Wine & Spirits Retailers Ass'n v. Thomas, 139 S. Ct. 2449, 2457 (2019); United Egg Producers v. Dep't of Agric., 77 F.3d 567, 57172 (1st Cir. 1996). Following this caselaw, the majority affirms the district court by concluding that Maine's measure fails under the dormant Commerce Clause, because defendants have not satisfactorily demonstrated Congress's "unmistakably clear intent to allow otherwise discriminatory regulations," United Egg Producers, 77 F.3d at 570 (citing Wyoming v. Oklahoma, 502 U.S. 437, 458 (1992)), or demonstrated that Congress has otherwise consented to such protectionist legislation.  In the ordinary course, in an ordinary market, I would agree that such a measure is unconstitutional under well-trodden dormant Commerce Clause principles and caselaw.

But the national market for marijuana is unlike the markets for liquor licenses or egg products in one crucial regard: it is illegal. Congress in 1971 enacted the Controlled Substance Act (CSA) pursuant to its Commerce Clause powers, designating marijuana a Schedule I controlled substance. See 21 U.S.C. § 841; id. § 812(c)(Schedule I)(c)(10); Gonzales v. Raich, 545 U.S. 1, 22 (2005). Under the CSA, it is a crime "to manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense, a controlled substance." 21 U.S.C. § 841(a)(1). It is here that I part ways with the majority, because I disagree that the test we have developed for the mine-run of dormant Commerce Clause cases apply automatically or with equal vigor when the market in question is illegal as a matter of federal law. As such, I do not believe that the United Egg Producers test -- which, prior to today, we have only ever applied in cases involving legal markets -- extends to national markets that Congress has expressly made illegal.  Instead, I start from the premise that we should vindicate the principles that animate the dormant Commerce Clause -- and I conclude that the same constitutional precepts that led us to articulate the United Egg Producers test counsel against its application here.

August 17, 2022 in Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, Who decides | Permalink | Comments (9)

Monday, July 25, 2022

DEPC event: "Not a SAFE Bet: Equitable Access to Cannabis Banking"

FYhpMJQWAAA1N0AI am pleased to spotlight another great Drug Enforcement and Policy Center (DEPC) event that is part of our summer 2022 Cannabis Regulatory Deep Dive.  (The first event in this series on "Interstate Commerce" can be watched at this YouTube link.).  This event is scheduled for August 17 at 12noon and is titled "Not a SAFE Bet: Equitable Access to Cannabis Banking."  This is how this event is described on this webpage (where you can register):

According to members of the Cannabis Regulators of Color Coalition, the SAFE Banking Act, as written, is not a safe bet to achieve fair and equitable access to financial services for those in the cannabis industry.

Please join us for another Cannabis Regulatory Deep Dive as our panel of experts shares their analysis of the SAFE Banking Act, why it would fall short of its goals, and recommendations to improve fair access to cannabis banking as detailed in their soon-to-be released paper, Not a SAFE Bet: Equitable Access to Cannabis Banking.

Panelists:
Cat Packer, Distinguished Cannabis Policy Practitioner in Residence, Drug Enforcement and Policy Center, The Ohio State University
Rafi Aliya Crockett, Commissioner, Washington, D.C. Alcoholic Beverage Control Board
Dasheeda Dawson, Cannabis Program Manager, City of Portland, Oregon 
Shaleen Title, Distinguished Cannabis Policy Practitioner in Residence, Drug Enforcement and Policy Center, The Ohio State University

July 25, 2022 in Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, Race, Gender and Class Issues, Who decides | Permalink | Comments (0)

Monday, July 11, 2022

DEPC event: "Cannabis Regulatory Deep Dive: Interstate Commerce"

FVYUCIvUsAERDOkI am pleased to spotlight a great Drug Enforcement and Policy Center (DEPC) event taking place tomorrow afternoon titled "Interstate Commerce."  This is how this event is described on this webpage (where you can register):

July 11, 2022 in Business laws and regulatory issues, Federal court rulings, Recreational Marijuana Commentary and Debate, Who decides | Permalink | Comments (0)

"Maximizing social equity as a pillar of public administration: An examination of cannabis dispensary licensing in Pennsylvania"

The title of this post is the title of this notable new paper authored by Alfred Lee Hannah, Daniel J. Mallinson and Lauren Azevedo published in the Public Administration Review. (For the record, this research was supported by funding from the Drug Enforcement and Policy Center.)   Here is the paper's abstract:

Public administration upholds four pillars of an administrative practice: economy, efficiency, effectiveness, and social equity.  The question arises, however, how do administrators balance effectiveness and social equity when implementing policy?  Can the values contributing to administrative decisions be measured?

This study leverages the expansion of medical cannabis programs in the states to interrogate these questions.  The awarding of dispensary licenses in Pennsylvania affords the ability to determine the effect of social equity scoring on license award decisions, relative to criteria that represent the other pillars.  The results show that safety and business acumen were the most important determining factors in the awarding of licenses, both effectiveness concerns.  Social equity does not emerge as a significant determinant until the second round of licensing.  This study then discusses the future of social equity provisions for cannabis policy, as well as what the findings mean for social equity in public administration.

July 11, 2022 in Business laws and regulatory issues, Medical Marijuana Data and Research, Race, Gender and Class Issues, Recreational Marijuana Data and Research, Who decides | Permalink | Comments (0)

Monday, June 13, 2022

"Capital Expenditure and Acquisition in Conventional Agriculture and Cannabis: A Comparative Analysis"

I am pleased to report that I am almost fully caught up on posting a lot of recently produced papers that are part of the on-going series of student papers supported by the Drug Enforcement and Policy Center.  I continue to relish the he chance to highlight great work by OSU law students and recent graduates, and the title of this post is the title of this paper authored by Steve Nosco who recently graduated from The Ohio State University Moritz College of Law.  Here is its abstract: 

Federal laws prohibiting the possession, production, and use of Cannabis create significant operational challenges for state-compliant Cannabis companies.  One of the largest challenges is acquiring the initial capital required for any new business to become self-sustaining and profitable.  Without traditional sources of capital, namely credit from commercial institutions or government lenders, only individuals with access to significant private funds can become entrepreneurs in this burgeoning industry. In the face of Federal inaction to solve this well-documented problem, States can, and should, take on a leading role.  This Paper explores existing federal programs for traditional agricultural lending and suggests how states can emulate these programs for Cannabis businesses within their jurisdictions.

June 13, 2022 in Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, Recreational Marijuana State Laws and Reforms, Who decides | Permalink | Comments (0)

Might some kind of "omnibus" federal marijuana reform bill get through Congress this year?

6a00d8341bfae553ef0223c85155dc200c-320wiThe question in the title of this post is prompted by this interesting Marijuana Moment article headlined "New Details On Congressional Marijuana Omnibus Bill Emerge As Lawmakers Work For 60 Senate Votes."  Here are some of the intriguing particulars from an extended piece worth reading in full:

Two key congressmen made waves in the marijuana community on Thursday by disclosing that there are high-level talks underway about putting together a wide-ranging package of incremental marijuana proposals that House and Senate lawmakers believe could be enacted into law this year.  But multiple sources tell Marijuana Moment that issues under consideration go further than the banking and expungements reforms that were at the center of the public discussion that has emerged.

The dueling pushes for comprehensive legalization and incremental reform — a source of tension among advocates, lawmakers and industry insiders over many months — may actually result in something actionable and bipartisan by the end of the current Congress, those familiar with the bicameral negotiations say.  That said, no deal is set in stone and talks are ongoing.

In addition to the banking and expungements proposals that made waves when discussed publicly at a conference on Thursday by two key House lawmakers, there are also talks about attaching language from other standalone bills dealing with issues such as veterans’ medical cannabis access, research expansion, marijuana industry access to Small Business Administration (SBA) programs and broader drug sentencing reform....

Reps. Ed Perlmutter (D-CO) and Dave Joyce (R-OH) first publicly disclosed that there were discussions about crafting a bipartisan cannabis package at an International Cannabis Bar Association conference on Thursday, with Joyce revealing a recent meeting he had about the idea with Schumer.

Perlmutter, sponsor of the Secure and Fair Enforcement (SAFE) Banking Act, said that his legislation to safeguard financial institutions that work with state-legal marijuana businesses would be part of the package under consideration, but he also said at the time that members are interested in including Joyce’s Harnessing Opportunities by Pursuing Expungement (HOPE) Act to incentive state and local governments to expunge prior marijuana records, as well as proposals to provide veterans with access to medical cannabis and expand marijuana research.

But those four issues — banking, expungements, research and veterans — noted earlier by Law360, are only part of what’s on the table, sources who have been involved in the negotiations but requested anonymity, told Marijuana Moment on Friday.  They stressed, however, that a deal has not yet been reached and talks are tentative at this point.

Another possible component that lawmakers have discussed including in the omnibus legislation would be a proposal to give cannabis businesses access to SBA loans and services that are available to every other industry. It’s a reform that Sen. Jacky Rosen (D-NV) in particular has consistently advocated for, including in a recent letter to the head of SBA.

While it’s not clear what stage the negotiations over the prospective marijuana package is at, a congressional source said that Rosen has spoken with Schumer about her interest in advancing the issue as he’s worked to navigate the congressional cannabis waters.

“These talks are very serious,” a source involved in criminal justice reform said. “I would say this is one of the most serious bipartisan, bicameral conversations that we’ve seen occur in our time in this space.”

To be clear, Senate leadership isn’t giving up the push for the broader CAOA legalization bill at this point.  Nor is Perlmutter fully conceding passing the SAFE Banking Act on a sooner timetable, either as standalone legislation or as part of a large-scale manufacturing bill called the America COMPETES Act that’s currently in a bicameral conference committee....

Other sources told Marijuana Moment that they’ve been involved in conversations about potentially adding to the in-progress cannabis package language that would provide for record sealing of federal misdemeanor convictions, as would be prescribed under the standalone Clean Slate Act from Rep. Lisa Blunt Rochester (D-DE).  It’s the type of reform that presumably would not compromise GOP support given the widespread recognition that offenses like simple possession should not lead to long-term consequences like the loss of access to housing and job opportunities.

June 13, 2022 in Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, History of Marijuana Laws in the United States, Political perspective on reforms, Who decides | Permalink | Comments (0)

Monday, May 23, 2022

"Capitalizing on Missed Opportunities: An Overview of Cannabis Fundraising Disparities"

I am continuing to catch up on posting a lot of recently produced papers that are part of the on-going series of student papers supported by the Drug Enforcement and Policy Center.  The title of this post is the title of this paper authored by Cam Wade, a rising 3L at The Ohio State University Moritz College of Law.  Here is its abstract:

Demanding state regulatory schemes render the operation of cannabis businesses an expensive endeavor and create an urgent need for reliable sources of cash.  Historically, the federal ban on cannabis has hindered the industry’s fundraising efforts, but larger cannabis companies have begun to make inroads toward friendlier deals with manageable interest rates.  This progress has not extended to smaller cannabis businesses, which has prevented many from effectively competing and contributed to a wave of intense industry consolidation around the largest companies in 2021.  This paper explores this fundraising disparity and its policy implications.  Proposed solutions at the state and federal level are also evaluated along with an overview of the limited fundraising options which are currently available to small cannabis businesses.

May 23, 2022 in Business laws and regulatory issues, Federal court rulings, Recreational Marijuana Commentary and Debate | Permalink | Comments (2)

Friday, May 20, 2022

Ninth Circuit panel holds (in trademark dispute) that "delta-8 THC products are lawful under the plain text of the Farm Act"

Images (6)In this post a few month ago, I noted the growth of so-called delta-8 THC products and all the legal uncertainty around them. Yesterday, in an important ruling, a Ninth Circuit panel directly address question about the legality of delta-8 products under federal law. In AK Futures LLC v. Boyd Street Distro, LLC, No. 21-56133 (9th Cir. May 19, 2022) (available here), a trademark dispute prompted the panel to fully engage the arguments surrounding whether the 2018 Farm Bill served to legalize cannabis products without the standard delta-9 THC, and the opinion ultimately embraces the claim that delta-8 THC products derived from hemp CBD are legal products under federal law.  Here are some key passages from the opinion:

[T]he parties dispute whether the possession and sale of delta-8 THC is permitted under federal law and, consequently, whether a brand used in connection with delta-8 THC products may receive trademark protection.  AK Futures argues that delta-8 THC falls under the definition of hemp, which was legalized by the 2018 Farm Act.  Boyd Street argues a contrary interpretation of the Act based on agency documents and congressional intent....

AK Futures argues the Farm Act’s definition of hemp encompasses its delta-8 THC products so long as they contain no more than 0.3 percent delta-9 THC.  Plain meaning supports this interpretation....  Importantly, the only statutory metric for distinguishing controlled marijuana from legal hemp is the delta-9 THC concentration level....

The Farm Act’s definition of hemp does not limit its application according to the manner by which “derivatives, extracts, [and] cannabinoids” are produced.  Rather, it expressly applies to “all” such downstream products so long as they do not cross the 0.3 percent delta-9 THC threshold....

Regardless of the wisdom of legalizing delta-8 THC products, this Court will not substitute its own policy judgment for that of Congress.  If Boyd Street is correct, and Congress inadvertently created a loophole legalizing vaping products containing delta-8 THC, then it is for Congress to fix its mistake.  Boyd Street’s intent-based argument is thus unsuccessful.  With that, neither of Boyd Street’s counterarguments dissuade us from the conclusion that AK Futures is likely to succeed on the merits of its trademark claim.

May 20, 2022 in Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, History of Marijuana Laws in the United States, Who decides | Permalink | Comments (6)

Thursday, May 19, 2022

"Long Overdue, Cannabis Needs to Have a Place in Professional Sports"

I am so happy to be able to continue catching up on posting a lot of recently produced papers that are part of the on-going series of student papers supported by the Drug Enforcement and Policy Center.   To that end, the title of this post is the title of this paper authored by Caroline Rice, a rising 3L at The Ohio State University Moritz College of Law. Here is its abstract:

Although most professional sport leagues amongst the Big Four (National Football League, National Basketball Association, Major League Baseball, and National Hockey League) have restrictions on athletes’ use of cannabis, many professional athletes have spoken out about turning to cannabis as relief for the chronic pain caused by playing professional sports.  This paper explores how as a result of cannabis being wrongly classified as a Schedule I drug on the Controlled Substances Act, professional leagues followed suit restricting cannabis use and leaving athletes with rigid marijuana testing policies and an overuse of prescription painkillers.  This paper then analyzes the medicinal benefits of marijuana use for professional athletes, and subsequently argues for further use of cannabis in professional sports in the United States. 

May 19, 2022 in Business laws and regulatory issues, History of Marijuana Laws in the United States, Sports | Permalink | Comments (2)

Tuesday, May 17, 2022

"Not Easy Being Green: Unique Financial Challenges Faced by State-Legal Cannabis Businesses"

As mentioned in a prior post, the tail end of a busy semester means I can now catch up on posting a lot of recently produced papers that are part of the on-going series of student papers supported by the Drug Enforcement and Policy Center.  So, the title of this post is the title of this paper authored by Jake Avetisian, a rising 3L at The Ohio State University Moritz College of Law. Here is its abstract:

The relationship between cannabis and federal law has never been an amicable one.  However, the recent slew of state legislation legalizing cannabis (whether medical or adult-use) across the country has made things even messier at the federal level.  Although the federal government has attempted over the years (somewhat) to take up a policy of non-enforcement relative to states where cannabis is legalized, it is still a Schedule I drug in the United States under the Federal Comprehensive Drug Abuse Prevention and Control Act of 1970 (the “CSA”).  This has various implications for legal cannabis businesses nationwide, but they aren’t the only ones effected by this classification – although they may be taking the brunt of those effects.  Retaining this classification for a drug that is legal at the state level has caused unintended issues in the context of its intersection with other federal legislation and codes, and the financial services that cannabis businesses need to survive.  Many entities who do business with legal cannabis enterprises are putting the well-being of their own business on the line, creating a chilling effect on financial institutions transacting with state legal cannabis businesses.  This paper will examine cannabis’s continued classification as a Schedule 1 drug, and how this classification adversely affects financial advisory industries that are essential to any successful business – not just a cannabis business.  Specifically, this paper will scrutinize the effects of the liabilities indirectly created by the Schedule 1 classification of cannabis on financial institutions participating in the industry, as well as the secondary consequences of these effects on cannabis businesses themselves and their consumers.  Additionally, this paper will look forward to potential solutions, including one that is already in motion, that could rectify some of these major issues for a quickly growing (no pun intended) industry in the United States.

May 17, 2022 in Business laws and regulatory issues | Permalink | Comments (0)

Monday, April 18, 2022

Student presentation: "Prohibition & the U.S. Economy: How Cannabis Legalization Can Help the United States Economy Recover in a Similar Fashion as the 21st Amendment"

Images (2)The homestretch of students in my Marijuana Law, Policy & Reform seminar presenting on the research topics of their choice includes a focus on economic development issues. Here is how the student describes the topic and some background readings:

Warning lights are now flashing for the U.S. economy as a potential recession appears on the horizon.  At 8.5%, the U.S. is seeing the highest inflation rate since 1981.  It seems that causes for inflation are plentiful.  COVID-19’s impact on the world’s supply chain, surging demand, production costs, relief funds, the Russian war, and an increase in wages to keep up with worker shortages are all reasons economists point to as inflation catalysts.  Recently, it was reported that Americans need to budget an extra $5,200 this year to cover inflation prices.  But the reality is many Americans simply cannot afford to keep up.  Not everyone’s wages have increased, and many Americans are still left without jobs.  Budgeting extra money when so many Americans live paycheck to paycheck or use government assistance to survive is not feasible nor sustainable.

We saw a similar crisis 100 years ago as well.  From 1920 to 1933, Americans suffered through the Prohibition Era, the Stock Market Crash of 1929, and the Great Depression.  During this time, Americans saw a huge downturn in the economy with hundreds of thousands of people out of the job market.  Many businesses shut down. The U.S. government was spending an absurd amount of money to enforce Prohibition all while financially suffering from the loss of alcohol and excise taxes.  Once Prohibition was repealed, Americans saw a boom in economy.  More jobs and legal alcohol sales meant the government was simultaneously reaping the benefits of increased sales tax revenue and newly created income taxes which helped fund the New Deal and, in turn, further helped restore prosperity to the United States.

In this paper, I argue that cannabis can serve a similar purpose to the U.S. economy now as the repeal of alcohol prohibition did in 1933.  Much like the Prohibition Era, the U.S. government spends an obscene amount of money enforcing cannabis prohibition.  There is also a large opportunity cost in delaying federal legalization.  States that have legalized cannabis recreationally have seen a huge boost in economic growth due to job creation, sales tax revenue, and property values.  These dollars are then used to fund social programs, public schools, research, and public safety.  Federal legalization can do the same on a much larger scale.  The economy is becoming more fragile every day, public perception of cannabis has changed, and various proposed reforms have hit Capitol Hill.  I argue that now, more than ever, is the time to federally legalize cannabis because it could be the saving grace that stimulates the economy in the way Americans need.

Background Reading:

Press article from 2020: "Cannabis Legalization Is Key To Economic Recovery, Much Like Ending Alcohol Prohibition Helped Us Out Of The Great Depression"

ACLU blog post from 2012: "Hundreds of Economists: Marijuana Prohibition Costs Billions, Legalization Would Earn Billions"

Blog post by university professor: "How marijuana legalization would benefit the criminal justice system"

Leafly report from 2020: "2020 Cannabis Jobs Report: Legal cannabis now supports 243,700 full-time American jobs"

April 18, 2022 in Business laws and regulatory issues, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Friday, April 15, 2022

Notable federal marijuana reform news with an interesting new bill while we further wait for an old one

6a00d8341bfae553ef0223c85155dc200c-320wiThis past week brought interesting news of federal marijuana reform bill on two fronts.  Marijuana Moment provides the details in these two stories, linked and excerpted here:

"Schumer’s Marijuana Legalization Bill Not Coming This Month, As Senators Work To Finalize Provisions."  Excerpt:

The long-anticipated Senate bill to federally legalize marijuana will not be introduced this month, with Democratic leadership saying on Thursday that the timeline is being extended as they continue to work out various provisions “with the assistance of nearly a dozen Senate committees and input from numerous federal agencies.”

Senate Majority Leader Chuck Schumer (D-NY) has said on several occasions that the bill he’s been working on with Senate Finance Committee Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) for many months would be formally filed by the end of April.  That’s no longer the case, with the leader now saying the “official introduction” will take place sometime “before the August recess.”

A discussion draft of the Cannabis Administration & Opportunity Act (CAOA) was first unveiled last year, and advocates and stakeholders have been hanging on the leader’s words as they continue to push for an end to federal prohibition. Most recently, Schumer said last week that he and colleagues were in the process of reaching out to Republican senators to “see what they want” included in the legislation.

The timeline that Schumer previewed has apparently proved too ambitious — but the hope is that by taking extra time to finalize the measure, it will help the senators overcome what are currently significant odds stacked against them to reach a high vote threshold in the chamber, where Democrats hold just a slim majority and several members of the party have indicated that they’re not supportive of legalization.

"U.S. Attorney General Would Be Required To Create Marijuana Commission To Advise On Legalization Under New Bipartisan Bill." Excerpt:

A bipartisan group of congressional lawmakers filed a bill on Thursday that would direct the attorney general to create a commission charged with making recommendations on a regulatory system for marijuana that models what’s currently in place for alcohol.

Reps. Dave Joyce (R-OH), Hakeem Jeffries (D-NY) and Brian Mast (R-FL) are teaming up on what’s titled the Preparing Regulators Effectively for a Post-Prohibition Adult-Use Regulated Environment Act (PREPARE) Act — an incremental reform meant to inform comprehensive cannabis policy changes in the future.

The measure will “provide lawmakers across the ideological spectrum the opportunity to engage on cannabis reform by creating a fair, honest and publicly transparent process for the federal government to establish effective regulation to be enacted upon the termination of its 85-year prohibition of cannabis,” according to a summary from the sponsors....

Here’s what the new bill would accomplish: 

Require the attorney general to establish a “Commission on the Federal Regulation of Cannabis” within 30 days of the bill’s enactment.  The commission would be responsible for studying federal and state regulatory models for alcohol and make recommendations about how they could inform marijuana regulations.  Among other things, the commission’s report must look at the impact of marijuana criminalization, particularly as it concerns minority, low-income and veteran communities.

The panel would also examine the “lack of consistent regulations for cannabis product safety, use and labeling requirements” as well as the “lack of guidance for cannabis crop production, sale, intrastate, interstate, and international trade.“  It would also need to make recommendations on how to remedy cannabis-related banking and research barriers as well as address measures to ensure the “successful coexistence of individual hemp and cannabis industries, including prevention of cross pollination of cannabis and hemp products.”

Members would further be mandated to study and make recommendations on “efficient cannabis revenue reporting and collecting, including efficient and tenable federal revenue frameworks.”  The panel would be required to issue a report to Congress within 12 months.

I have come to believe that Senator Shumer's CAOA is essentially DOA in a Senate that may not now have even 50 votes in support of full marijuana legalization, let alone the 60 needed to get past a filibuster.  But the new PREPARE Act already has bipartisan support, and it seems to only call upon the federal government to take a serious and sustained look at what kind of federal regulatory rules and structures would be preferable as marijuana reform in the states continues apace.  In a well-functioning Congress, I think some version of the PREPARE Act could and should be a no-brainer and likely should have been enacted a number of years ago.  In the current dysfunctional Congress, I fear that we need not seriously prepare for the passage of the PREPARE Act.  But one can still dream. 

April 15, 2022 in Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, Who decides | Permalink | Comments (0)

Wednesday, April 13, 2022

Student presentation on licensing schemes for marijuana reform in Ohio

6a00d8341bfae553ef0282e11483be200bThe third of this week's presentations put on by my Marijuana Law, Policy & Reform seminar students will be focused on how Ohio might approach how setting up a licensing scheme for the marijuana industry.  Here is how the student describes this topic and some background readings:

Summary

In a regulated industry, licensing is the key that unlocks the door for (legal) opportunity.  The ever-expanding cannabis industry is no exception.  Those who hold licenses in this industry enjoy the benefit of legally-sanctioned conduct, while others assume the risks of operating in the black market. 

Ohio is currently faced with the question of whether an adult-use cannabis market should be established within the state.  As a part of answering this question, policymakers need to consider how to set up a licensing scheme for any potential industry.  There are several different considerations that need to be made in approaching such a scheme.  First, there is the issue of responding to different operators within the market and establishing different licenses for these various operators.  Next, there is the debate over whether to establish a limited license market, and how to respond to concerns over monopolization and social equity.  Lastly, policymakers must decide what qualifications will be necessary in order to obtain a license, and which actors will be excluded from such a privilege.

An Act to Control and Regulate Adult-Use Cannabis is a ballot initiative which seeks to introduce an adult-use market in Ohio, and it proposes a detailed framework for licensing this market.  This project analyzes the licensing scheme that would be established in the state, should this initiative eventually be signed into law, and evaluates how this proposed scheme responds to the policy concerns that are inherent in licensing.

Background

Full Text of Ohio 2020 Marijuana Reform Ballot Initiative

Local press article on law enforcement seizure of assets from black-market cannabis operations 

Primer on “plant-touching” cannabis businesses 

Cato Institute blog post on corruption associated with limited licensing

New Jersey Policy Perspective blog post on social equity issues associate with limited licensing

Reason Foundation report examining issues surrounding criminal conviction restrictions in marijuana licensing

April 13, 2022 in Assembled readings on specific topics, Business laws and regulatory issues, Recreational Marijuana State Laws and Reforms, Who decides | Permalink | Comments (0)

Monday, April 4, 2022

Student presentation exploring patent protection for marijuana plants

My Marijuana Law, Policy & Reform seminar continues with student presentations on the research topics of their choice.   The second of this coming week's presentations is focused on patent protection for marijuana plants.   Here is how the student describes the topic and the provided readings:

Presentation Summary

Intellectual property (IP) refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce. Intellectual properties are one of the most valuable assets for the companies and there are multiples ways one can protects this asset.  And how would businesses in Cannabis go about protecting it’s IP rights under current law, and how much would it effect federal reforms and how would reforms effect IP industries?

Different IP requires different protections, like trademark, copyright, and patent.  And the one I will be focusing on will be patent protection.  Patent protection is most desired of all IP protections as it grants 20 years of monopoly from date of filing.  However, for marijuana related IP to be protected under patent, there are multiple hoops to overcome.  As a plant, it is very difficult to claim a patent.  Furthermore, patents are exclusively governed by federal law, and under federal law marijuana is still illegal, as a Schedule 1 drug under the Controlled Substances Act.   With patent, could provide incentives for researching marijuana and to be able to have enough scientific data to remove it form schedule 1 drug.

This does not mean that getting patent for marijuana is impossible.  There are multiple ways to get over the barriers.  And there are some successful examples of marijuana patent.  This include government owned marijuana patent.  And this patents not only provide economic benefits to patentees but also to the public as it will provide incentive to have more research done on the marijuana.

Background

Background information about marijuana patent law: “Basics of Marijuana Patent law” 

Examples and introduction to obstacles of marijuana patent and examples of marijuana patent: “Twelve Cannabis Plant Patents and Counting

Information about plant patents in general: “General information about 35 U.S.C. 161 plant patents” 

News report of government owned marijuana patent: “Feds patented medical pot…while fighting it” 

April 4, 2022 in Assembled readings on specific topics, Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices | Permalink | Comments (0)

Tuesday, March 22, 2022

Student presentation to explore labor laws and labor rights in the marijuana industry

The second student presentation this week in my Marijuana Law, Policy & Reform seminar is focused on labor issues in the marijuana industry.  Here is how the student describes the topic and provided readings:

On Thursday, February 3, 2022, cannabis workers employed at the Herbology dispensary in Newark voted 8-2 to become the first unionized dispensary in Ohio.  The Sunnyside dispensary in Cincinnati followed soon after, voting to unionize on February 9, 2022.  Not only is there new interest in unionization in the Ohio cannabis industry, but recreational marijuana legalization is gaining momentum and the national cannabis market is growing rapidly.  The legal cannabis industry currently supports 428,059 workers nationally, and it is predicted that a mature cannabis market would support 1.5 million to 1.75 million workers.

The right for workers to unionize is protected by the National Labor Relations Act (“NLRA”).  However, the NLRA does not protect agricultural workers.  In addition, it is unclear whether the National Labor Relations Board will consistently exert jurisdiction over retail workers in a federally prohibited recreational marijuana industry.

To cover this gray area, six states have laws that encourage or require licensed cannabis businesses to adopt labor peace agreements (“LPA’s”) with their employees, and Ohio is considering implementing a similar requirement. However, the effectiveness of LPA’s is contested, as they may impose too many restrictions upon business owners while not providing the full scope of protection that employees would enjoy under the NLRA.  The validity of these LPA’s has not yet been contested in court, but in the interim, they may provide some level of union protection for otherwise unprotected workers.  This paper will evaluate the policy concerns surrounding the use of LPA’s in the cannabis industry, as well as what widespread unionization could mean for a quickly growing sector of the economy.

Background Reading:

Economic Policy Institute, "The Cannabis Industry Could be a Model of Good Jobs — if Policymakers Strengthen Works’ Right to Unionize"

UFCW, "NEW REPORT: Cannabis Workers Unionizing Leads to Higher Quality Jobs and Increases Standards in Fast-Growing Industry"

MJBizDaily, "Marijuana Union Organizing Surging Amid Pandemic, Uptick in Labor Peace Requirements"

Leafly, "Jobs Report 2022"

March 22, 2022 in Assembled readings on specific topics, Business laws and regulatory issues, Employment and labor law issues | Permalink | Comments (0)

Friday, March 4, 2022

Student presentation exploring "marijuana advertising and professional sports"

CBD-Policies-for-Professional-Sports-Leagues-Current-NBA-NFL-MLB-NHL-MLS-and-WNBA-RulesAs long-time readers know, students in my Marijuana Law, Policy & Reform seminar "take over" the second half of my class through presentations on the research topics of their choice. Before their presentations, students are expected to provide in this space some background on their topic and links to some readings or relevant materials. The first of our presentations taking place this week will focus on professional sports and advertising, and here is how my student has described her topic along with background readings she has provided for her classmates (and the rest of us):

For decades, the NFL and other leagues amongst the Big Four professional sport leagues have embraced alcohol, specifically beer, in league and team sponsorships and advertisements. The NFL even has Bud Light as its “Official Beer of the NFL.” Before that, it was tobacco companies who provided the professional sport leagues with millions of dollars in advertising revenue. While tobacco faded out of the sport scene, alcohol emerged and has since held a strong presence despite policymakers’ concerns about promoting and connecting a harmful substance to athletic achievement, on a national stage reaching children.

The professional sport leagues have shied away from letting players use marijuana for any purpose despite its legality in state marketplaces. This has long been a fight for the leagues’ athletes, who want and should be able to have access to cannabis for pain management. But it then comes as no surprise that the leagues have also prevented cannabis advertising from infiltrating the leagues, their teams, and players.

It is with this background, as well as prior research in players’ use of cannabis (stay tuned for its posting to the DEPC Student Paper Series), that I turned to explore another potential connection between marijuana and professional sports — this time through advertising.

This paper and presentation starts out by discussing the long history of alcohol and tobacco advertising in professional sports. It then turns to current federal and state restrictions on marijuana advertising, looking to the legal limitations that leagues must abide by. To make it easier to digest, this section makes connections to existing alcohol and tobacco advertising laws. Subsequently, this paper looks to the current league policies for marijuana advertising, highlighting the NFL’s approach. Finally, this paper looks to the future of marijuana advertising, it’s implications on the sport industry, and makes recommendations for cannabis advertising in professional sports.

For the most part, there are still a lot of unanswered questions that sport industry professionals will have to deal with. While the law provides some guidelines and can help predict league behavior, there are a lot of opportunities available for both leagues, teams, and athletes in this space. Those options are explored in this paper and presentation.

Background Resources:

Tobacco and Alcohol

Cannabis Advertising

Cannabis and Sport Leagues

March 4, 2022 in Assembled readings on specific topics, Business laws and regulatory issues, Sports | Permalink | Comments (0)

Thursday, February 3, 2022

Guest post: "First Circuit Splits with Ninth Circuit Over Meaning of Rohrabacher-Farr Amendment"

6a00d83451574769e20282e1172fad200b-320wiI was very pleased to have received this morning following terrific guest post content from Professor Scott Bloomberg of the University of Maine School of Law about a notable recent federal circuit court ruling:

----------

Since December 2014, Congress has included a rider in its annual appropriations acts that prohibits the Department of Justice (“DOJ”) from expending funds to prevent states from “implementing their own State laws that authorize the use, distribution, possession, or cultivation of medical marijuana.” Consolidated Appropriations Act, 2019, Pub. L. No. 116-6, § 537, 133 Stat. 13, 138 (2019).  The rider — most commonly known as the Rohrabacher-Farr Amendment — is an important source of protection from federal prosecution for medical marijuana businesses and users.

Until recently, the only federal circuit court to interpret the Rohrabacher-Farr Amendment was the Ninth Circuit.  In 2016 in United States v. McIntosh, the court held that the amendment only prohibited the DOJ from prosecuting marijuana businesses that strictly complied with their states medical marijuana rules.  This strict compliance standard meant that if a business stepped out of line — including, in theory, if it only extended a toe over the line — the DOJ could prosecute the business for federal drug crimes.

I have never been a fan of the McIntosh court’s strict compliance standard.  I don’t think it is workable in practice and I find it to be a rather unsound interpretation of the Rohrabacher-Farr Amendment.  So, when the First Circuit had an opportunity to interpret the Amendment in United States v. Bilodeau, I decided to submit an amicus brief arguing as much.

The brief explains that the strict compliance standard offers little real protection for marijuana businesses given the complex state regulatory codes with which they must comply. What’s more, even if the compliance standard were loosened (say, companies only had to remain in “material compliance” rather than “strict compliance” to avoid the risk of prosecution) tethering the DOJ’s ability to prosecute medical marijuana businesses to a business’s non-compliance with state law creates an inherent problem.  Under a standard that bases the DOJ’s authority to prosecute businesses on whether that business has complied with state medical marijuana rules, the best way for a state to shield its medical marijuana businesses from federal prosecution is to not have any medical marijuana rules.  The more carefully a state regulates medical marijuana, the more likely its businesses are to be subject to federal prosecution.  That incentive structure may not only prevent states from “implementing their own State laws that authorize” medical marijuana, it also flies in the face of the DOJ’s Cole Memo, which instructs states to regulate marijuana closely.

The McIntosh court’s strict compliance standard also relies on an artificial distinction between a state’s “laws that authorize” medical marijuana and a state’s enforcement of such laws.  According to the court, when the DOJ prosecutes medical marijuana businesses that fail to comply with a state’s medical marijuana rules, the DOJ does not prevent the state from implementing the “laws that authorize” medical marijuana because the business’s conduct was not authorized by those laws. But laws authorizing states to enforce violations of their “laws that authorize” medical marijuana cannot be so easily divorced from the underlying laws.  Enforcement rules are intertwined with the underlying laws for many reasons. Most significantly, a looming threat of federal prosecution would deter many businesses from ever entering the state’s marketplace.  The threat would also undermine the state’s enforcement authority over those businesses that do—after all, what rational business would admit to even the most menial of regulatory violations if doing so would open a risk of federal prosecution?

In light of these problems with the strict compliance standard, my amicus brief urged the First Circuit to adopt a more expansive interpretation of the Rohrabacher-Farr Amendment. I argued that the Amendment creates a blanket prohibition on the DOJ’s authority to prosecute state-licensed medical marijuana businesses for marijuana-related offenses (with some limited exceptions).

The First Circuit last week handed down its opinion in Bilodeau, which departed from the McIntosh court’s strict compliance standard but did not go quite as far as I urged.  As Judge Kayatta explained, the Ninth Circuit’s strict compliance standard affords the DOJ more power to undermine states’ medical marijuana laws than Congress could have intended.

With federal prosecution hanging as a sword of Damocles, ready to drop on account of any noncompliance with Maine law, many potential participants in Maine's medical marijuana market would fasten fearful attention on that threat.  The predictable result would be fewer market entrants and higher costs flowing from the expansive efforts required to avoid even tiny, unintentional violations.  Maine, in turn, would feel pressure to water down its regulatory requirements to avoid increasing the risk of noncompliance by legitimate market participants.

***

[Moreover, Maine’s medical marijuana] rules were not drafted to mark the line between lawful activity and cause for imprisonment.  Rather, as with most every regulated market, Maine declined to mandate severe punishments (such as, for example, the loss of a license) on participants in the market for each and every infraction, no matter how small or unwitting….  To turn each and every infraction into a basis for federal criminal prosecution would upend that decision in a manner likely to deter the degree of participation in Maine's market that the state seeks to achieve.

After departing from the strict compliance standard, the court declined to clearly demarcate when the DOJ can (and cannot) prosecute medical marijuana businesses.  Instead, the court reasoned that, under the facts of this case, the DOJ could subject the defendants to federal criminal punishment because their alleged conduct also constitute a crime under Maine’s marijuana laws.

The First Circuit’s interpretation of the Rohrabacher-Farr Amendment in Bilodeau should bring some comfort to medical marijuana businesses in the First Circuit.  The interpretation gives the DOJ less discretion to prosecute medical marijuana businesses than does the Ninth Circuit’s strict compliance standard.  This increased protection could become all the more important if a Presidential administration less friendly to marijuana takes power.  (And, for marijuana law professors, Bilodeau and McIntosh present an excellent opportunity for a class exercise on statutory interpretation!)

February 3, 2022 in Business laws and regulatory issues, Criminal justice developments and reforms, Federal court rulings, Federal Marijuana Laws, Policies and Practices, Medical Marijuana State Laws and Reforms, Who decides | Permalink | Comments (0)

Tuesday, February 1, 2022

"Bigger is Not Better: Preventing Monopolies in the National Cannabis Market"

The title of this post is the title of this notable new paper available via SSRN and authored by Shaleen Title.  (Shaleen Title served as one of five inaugural commissioners of the Massachusetts Cannabis Control Commission from 2017 to 2020, and has been serving as the Distinguished Cannabis Policy Practitioner in Residence at the Drug Enforcement and Policy Center.)  Here is the abstract for this paper:

It is a crucial and vulnerable moment for the future of the cannabis market.  While states are making historic progress creating paths for small businesses and disenfranchised groups, larger companies are expanding, consolidating, and lobbying for licensing rules to create or maintain oligopolies.  Federal legalization will only accelerate the power grab already happening with new, larger conglomerates openly expressing interest.  Left unchecked, this scramble for market share threatens to undermine public health and safety and undo bold state-level efforts to build an equitable cannabis marketplace.  This paper argues for intentionally applying well-developed antitrust principles to federal cannabis reform now, before monopolization of the market takes place, and offers eight concrete policy recommendations.

February 1, 2022 in Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)