Marijuana legalization is a beginning, not an end. When residents of Colorado and Washington voted to legalize the adult use of cannabis, it felt like a momentary rush of sobriety in a country dazed by decades of anti-marijuana hysteria. But what comes next?
Most of us do not intend to break the law, but occasionally we may be caught on the wrong side of law enforcement. Both felony and misdemeanor crimes can derail an individual’s or company’s initial marijuana license application or renewal process. The Washington Liquor and Cannabis Board (the “WSLCB”) utilizes a point system, and if a true party of interest (“TPOI”) in a cannabis business accumulates too many points based on criminal activity, that can jeopardize the company’s ability to obtain, retain, or renew its license. The severity of the crime dictates the number of points counted against the TPOI. If a TPOI accumulates eight points, they will jeopardize the license application or renewal.
Let’s briefly review the definition of a TPOI. Only Washington residents may own a licensed marijuana business, and a marijuana license must be issued and maintained in the names of all TPOI. The WSLCB defines TPOIs broadly. A legal owner of any shares or membership interest in a marijuana business and that person’s spouse are considered TPOIs. WAC 314-55-035 lists who must qualify as a TPOI for various marijuana business entity structures:
| True party of interest (TPOI) | Persons to be qualified |
| Sole proprietorship | Sole proprietor and spouse |
| General partnership | All partners and spouses |
| Limited partnership, limited liability partnership, or limited liability limited partnership |
All general partners and their spouses All limited partners and spouses |
| Limited liability company |
All members and their spouses All managers and their spouses |
| Privately held corporation |
All corporate officers (or persons with equivalent title) and their spouses All stockholders and their spouses |
| Publicly held corporation |
All corporate officers (or persons with equivalent title) and their spouses All stockholders and their spouses |
| Multilevel ownership structures | All persons and entities that make up the ownership structure (and their spouses) |
| Nonprofit corporations | All individuals and spouses, and entities having membership rights in accordance with the provisions of the articles of incorporation or the bylaws |
The WSLCB also considers as a TPOI any entity or individual who has the right to receive any percentage of the gross or net profits from a marijuana business, which could include key employees and financiers. Licensees must apply to the LCB to add or change any TPOI for any reason. The WSLCB has discretion to inquire into all matters with the sale or issuance of a TPOI’s ownership interest or proposed change to the marijuana business’ officers or owners. Because a marijuana license is issued in the name of all TPOIs, each TPOI must be a Washington resident at least six months prior to applying to the WSLCB.
As mentioned above, in the license application and renewal processes, the WSLCB reviews each TPOI’s criminal history and assigns a score to each TPOI based on a point accumulation system. All criminal history must be reported on the application, and each successful applicant is responsible to report any criminal convictions to the WSLCB within 14 days of such conviction for as long as they remain a licensee. As a general rule, subject to some mitigating circumstances below, any individual who accumulates eight or more points will be disqualified from the license or the application. This means that all TPOIs must be aware of what is going on in other TPOIs lives, and that business partners need to engage in the practice of full ongoing disclosure with each other and the WSLCB. Failure to disclose any relevant circumstances to the WSLCB results in a significant penalty in itself.
| Description | Time period during which points will be assigned | Points assigned |
| Felony conviction | Ten years | 12 points |
| Currently under federal or state supervision for a felony conviction | n/a | 8 points |
| Gross misdemeanor conviction | Three years | 5 points |
| Misdemeanor conviction | Three years | 4 points |
| Nondisclosure of any of the above | n/a | 4 points each |
If a person is disqualified due to point accumulation, their spouse is also disqualified. For license applications at the entity level, the entity’s license will not be granted or renewed if any individual TPOI is disqualified. If an individual has a criminal case pending that would result in the accumulation of eight or more points, the WSLCB will hold the application until the case is final. However, if no final result is reached within 90 days on that criminal case, the WSLCB will administratively close the application.
The criminal points do not stay relevant forever. After three years or ten years, depending on the severity of the crime, certain crimes are no longer calculated. This is consistent with Washington’s pardoning certain marijuana-related convictions, as we discussed in a prior blog post. Also, the above point accumulations can be reduced in the WSLCB’s discretion. Up to two federal or state misdemeanor convictions in the prior three years that occurred before the initial license application, and that involved only the possession of marijuana, may not be assigned points. However, state misdemeanor possession convictions that accrued after December 6, 2013 (the commencement of Washington’s recreational cannabis program) that exceeded the allowable amounts will count toward point accumulation. In addition, the WSLCB will consider for mitigation, on an individual basis, any one state or federal conviction for the growing, possession, or sale of marijuana that arose prior to the initial license application, taking all circumstances into account.
Bottom line, the commission of a crime by a TPOI could result in a license revocation or an initial or renewal application denial by the WSLCB, and it is better to disclose rather than try to conceal it from the WSLCB.
(This is an abridged version of a column that appears in the July issue of Marijuana Business Magazine.) Hemp is worth 10 times as much as soybeans. No, 20 times. No, 100 times. Sound too good to be true? Farmers I know and trust insist that gold-rush dreams about hemp’s profitability are no fantasy. This plant […]
Editor’s Notebook: Why the hemp industry should heed cotton’s lessons and resist overproduction is a post from: Marijuana Business Daily: Financial, Legal & Cannabusiness news for cannabis entrepreneurs
Ohio Gov. Mike DeWine has signed into law a measure authorizing CBD sales and the commercial production of industrial hemp in the state. The law takes effect immediately and allows CBD to be sold outside dispensaries. Before, CBD was legal in Ohio but only in medical marijuana dispensaries.Highlights of the Ohio hemp law include: CBD food, […]
Ohio governor enacts hemp law opening CBD sales beyond dispensaries is a post from: Marijuana Business Daily: Financial, Legal & Cannabusiness news for cannabis entrepreneurs
Commercial cannabis licensing in California kicked off on January 1, 2018. A few days later, former U.S. Attorney General, Jeff Sessions, rescinded all former Department of Justice guidance on federal enforcement of the Controlled Substances Act in states with legal cannabis. The industry reaction in California that day was all over the place, and chaos and uncertainty was in the air.
Interestingly enough, it’s safe to say that the chaos that commenced with initial licensing under the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”) has never really abated. In a given day, I get a good amount of client and would-be client feedback opining that California is still “a mess” or dysfunctional when it comes to cannabis licensing. All state commercial cannabis markets take time to establish and settle out, though. California is no different, it’s just bigger. The imminent maturation (and consolidation) of businesses and more concrete and consistent enforcement from regulators is taking longer.
In any event, certain bad and/or bizarre behavior persists. If you’ve seen any of this activity out in the marketplace, you’re not alone. And hopefully most if not all of these seven deadly cannabis sins will abate as the market goes on.
1. Straight up unlicensed actors.
It’s no secret that California has a large illegal market problem. And maybe it always will given its size. However, we have multiple cities and counties in California that will not get on board with legalization, and these places are hotbeds for real drug dealers and criminal operators. In addition, in a place like the City of Los Angeles, you have a culture of persistence still that is more than happy to set up fly-by-night shops and delivery services only to be shut down and then re-open again and again. Luckily, the state has upped the ante on illegal operators with steep fines, penalties, and even potential jail time, but it’s going to be a hot minute before we eliminate even a small portion of the black market (if ever).
2. The “collective hangover”.
Shockingly enough, our cannabis business attorneys in California still get calls from people who want to set up non-profit “collectives” under the Compassionate Use Act of 1996. Unless you’ve been living under a rock, you know that the “collective model” died on January 9 of this year, and it’s not coming back. Of course there are those folks who would still set up collectives anyway knowing that they’re violating the law, but this is one cannabis sin that should burn away pretty quickly for obvious financial and organizational reasons. And if you’re an investor and someone is still pitching you on investing in their non-profit collective in California or an attorney is telling you to set up a non-profit collective, you can safely flee from that proposition.
3. Screwy M&A.
We have written a lot about California M&A on the blog. It’s not a straightforward situation because of state and local licensing laws and resulting changes of ownership protocol, but a ton of people are breaking state and local laws left and right through M&A in California. It’s only a matter of time before regulators catch on to people’s recklessness here, which will lead to license cancellations and a good amount of lost investment, but until then (because of inconsistent enforcement combined with buyer momentum), many cannabis businesses that have sold ownership interests are likely sitting on significant rule violations.
4. Crappy legal advice.
Cannabis is still an emerging marketplace. And the fact that it’s federal illegal has still mostly kept the large, white-shoe law firms out of the scene (unless they form small practice groups to advise on things like employment and financing, which we see on occasion). This has led to a significant amount of legal hacks and newbies joining the industry holding themselves out as “legal experts” in the field. And don’t get me started on the volume of criminal defense attorneys that now claim to do legitimate business, corporate, and securities work. I’m constantly in receipt and reviewing legal work being produced in California relative to intellectual property licensing, M&A, inventory purchase agreements, distribution contracts, and a number of other transactions between licensees, and some of it is still terrifying coming from attorneys who are not competent in the area (in that they completely ignore applicable regulations) or unethical in their dealings altogether. Again, as the industry matures, the hope is that bad and unqualified actors fall by the wayside.
5. Regulators shuffling the deck (at your expense).
It’s a common annoyance in the state legal cannabis industry where state regulators constantly change the rules or, more accurately, their interpretation of certain rules as time goes on (and you better learn “regulatory language” now to better deal with this issue). California, again, is no different. Our firm has had conversations with each state agency regarding change of ownership laws, distribution rules, testing requirements, the ability to return products, and other lucrative day-to-day licensee tasks where we literally get different answers almost every time we touch base. As industry issue arise and fall and the political powers change, so too will the state’s interpretation of its own rules. It’s not easy being a regulator, but I can promise you that the state agencies will eventually even out and remain fairly consistent with their rule interpretations (eventually).
6. Local authorization headaches.
California is a local control state. This means that before you can get a state license, you have to secure local approval for your cannabis operation from your city or county. And each of the 482 cities and 58 counties in California is doing regulation or prohibition differently. Local authorization is no picnic. It seems that certain cities have really dragged out the process to no end, either flipping their position from allowance to prohibition (see El Monte) or significantly changing the entitlement process at the expense of applicants. The City of Los Angeles is a prime example in that it has navigated complex issues relative to three phases of local licensing and implementing a social equity program that it’s had to refine for months and months (as opposed to L.A. County, which commissioned a group to study the impacts of legalization and regulation and even has an Office of Cannabis Management, but still has a ban in place).
7. No real banking options.
California’s regulations for its licensees are not super tough. There’s a lot of red tape, but the state as a whole isn’t as strict as it could be (when compared to other states) relative to owner and financier reporting requirements and just general day-to-day compliance issues (for example, we have no residency requirement and you can vertically integrate your licenses). This means that our rules probably aren’t the strongest to satisfy the 2014 FinCEN guidelines that enable cannabis banking, and this is why we don’t have really robust banking options in California. Thus, many cannabis companies still open management companies that secure phantom banking for the actual cannabis operations (which is a terrible idea because of 280E reporting to the IRS and for a number of other reasons). And if folks aren’t using these convoluted structures, they’re dealing in all cash, which is a major pain and public safety hazard.
A few of these hazards cannot be avoided right now in California, but most will go away with time as the market stabilizes. In the interim, compliance is king and that, alone, will help you avoid getting into most of the foregoing trouble.
The case of Hempen, the United Kingdom’s not-for-profit farming cooperative, illustrates the extra hurdles British hemp farmers face in not being able to use the flower, the most valuable part of their crop. Based in Oxfordshire, Hempen had been growing hemp since 2015. And, until last year, the harvest was used to manufacture and sell […]
One of UK’s largest hemp farms forced to destroy crop amid policy changes is a post from: Marijuana Business Daily: Financial, Legal & Cannabusiness news for cannabis entrepreneurs
One of the largest cannabis companies in the world made a significant move into the U.S. hemp industry Monday by breaking ground on a new industrial park for hemp processing in New York. Canadian cannabis pioneer Canopy Growth Corp., based in Smith Falls, Ontario, unveiled plans for its new $150 million Hemp Industrial Park in […]
Canopy breaks ground on NY hemp industrial park is a post from: Marijuana Business Daily: Financial, Legal & Cannabusiness news for cannabis entrepreneurs
Cannabis investment company SOL Global Investments purchased additional common shares to raise its ownership in its CBD-focused wellness subsidiary HeavenlyRx to 44.53%. As part of a larger private offering, the Toronto-based international investment company announced Monday it spent an additional $18.1 million (23.9 million Canadian dollars) on HeavenlyRx. The announcement comes just weeks after Sol […]
SOL Global increases ownership stake in HeavenlyRx is a post from: Marijuana Business Daily: Financial, Legal & Cannabusiness news for cannabis entrepreneurs
After federal regulators sent a letter to cannabis giant Curaleaf last week warning the company against making unsubstantiated medical claims for its CBD products, the company has taken action. The Massachusetts cannabis company has removed its blog and deleted social media posts and articles on its website saying its products can be used to treat medical […]
Curaleaf scrubs website for medical claims following FDA warning is a post from: Marijuana Business Daily: Financial, Legal & Cannabusiness news for cannabis entrepreneurs
Some in Michigan’s fledgling hemp industry are concerned that a state privacy law preventing agriculture officials from disclosing hemp farmers’ identities and locations could negatively affect their businesses. As a stipulation under the 2018 Farm Bill, applicants who seek to produce and process hemp must give their GPS coordinates. But the Michigan attorney general’s office […]
Michigan hemp farmers worry privacy law could hurt business is a post from: Marijuana Business Daily: Financial, Legal & Cannabusiness news for cannabis entrepreneurs
As we reported last week, a Senate Banking Committee hearing occurred this past Tuesday to consider the SAFE Banking Act. In short, the hearing didn’t display as much GOP sway or support as we were hoping for.
For one, none of the Republican committee members attended the hearing aside from Committee Chairman Mike Crapo (R-ID) (which he attributed to conflicting hearings). For another, while Chairman Crapo did conclude that “a case has been made pretty strongly here,” he cautioned that it’s still a “very important and complex issue that we need to get right.”
Despite Chairman Crapo’s long faces at times, various witnesses made their cases to the Committee during the 1.5-hour hearing. Those witnesses included SAFE Banking Act sponsors Senators Cory Gardner (R-CO) and Jeff Merkley (D-OR); MAPS Credit Union Chief Risk Officer, Rachel Pross (representing CUNA), Citywide Banks’ President and CEO, Joanne Sherwood (representing ABA); Smart Approaches to Marijuana (SAM) Vice President of Government Affairs, Garth Van Meter; and LivWell Enlightened Health CEO, John Lord.
Senator Gardner called the hearing “an important step toward the federal government waking up to the reality that the cannabis issue is not going away and needs action.” He cited that polling now shows about 65% of Americans support legalization of marijuana and 93% support medical marijuana. Senator Gardner emphasized that the states are leading on this issue, “and the federal government has failed to respond.”
It has closed its eyes and plugged its ears and pretended the issue will go away. It won’t.”
Ms. Pross testified: “There are there are certainly valid concerns being brought to this committee hearing today. But the SAFE Banking Act is narrowly targeted,” she said. “It’s a narrowly targeted protection for financial institutions to serve an $8.3 billion industry that is already in place today.”
Mr. Lord provided perspective on the significant compliance costs associated with serving cannabis customers under the present regime, citing that those financial institutions who service cannabis businesses charge them substantial monthly fees.
Our company pays in excess of $3,000 per month for the mere privilege of having an account. … The current situation is especially challenging for small businesses. While we, due to our size, are able to absorb the additional costs associated with cash management and exorbitant bank fees, many small businesses are not.”
On the opposite end of the spectrum, Mr. Van Meter testified that prioritizing marijuana banking “over science” that verifies the risks of marijuana consumption would be irresponsible.
By skipping ahead to a technicality over banking rules, the marijuana industry is hoping to gain many of the benefits of federal legalization without a debate over the public health effects. But make no mistake, a policy change around banking would have massive public policy and public health ramifications, so we are shirking our duties if we do not consider the full question. The SAFE Banking Act will allow the expansion of an industry pushing new, exponentially more powerful forms of marijuana before any of its health or other societal impacts are fully understood. Today’s marijuana is produced in concentrations that have damaging effects on the brain, are promoted by the industry, and sold in forms attractive to children.”
In response to questions following the hearing, Chairman Crapo commented that the Committee is “trying right now to see if we can find a way to address the various issues” ahead of a potential markup on the cannabis banking legislation. He also indicated he doesn’t intend to hold additional hearings on the issue.
This hearing marks the sixth congressional hearing on marijuana policy this term, following a hearing held by the House Judiciary Subcommittee on Crime, Terrorism and Homeland Security on pathways to ending the federal prohibition of cannabis. It also comes just hours after House Judiciary Committee Chairman Jerry Nadler (D-NY) and Democratic presidential hopeful Senator Kamala Harris (D-CA) announced plans to introduce a bill to decriminalize marijuana at the federal level. These certainly are all positive steps for the industry, but it remains to be seen whether anything will come to fruition.
How CBD Oil is Made: Introduction CBD (Cannabidiol) is becoming ever more popular today, now being incorporated into many products such as topicals, drinks, and even as massage oils. Many swear by CBD’s amazing effects, helping them treat anxiety, depression, and other ailments. CBD can be extracted through many different methods. We’ll discuss them below, …
How Is CBD Made? (Find Out About the Intriguing Process) Read More »
The post How Is CBD Made? (Find Out About the Intriguing Process) appeared first on Honest CBD Reviews.
The Agriculture Improvement Act of 2018 (“2018 Farm Bill”) legalized hemp by removing the crop and its derivatives from the definition of marijuana under the Controlled Substances Act (“CSA”) and by providing a detailed framework for the cultivation of hemp. The 2018 Farm Bill gives the US Department of Agriculture (“USDA”) regulatory authority over hemp cultivation at the federal level. In turn, states have the option to maintain primary regulatory authority over the crop cultivated within their borders by submitting a plan to the USDA. This federal and state interplay has resulted in many legislative and regulatory changes at the state level. Indeed, most states have introduced (and adopted) bills that would authorize the commercial production of hemp within their borders. A smaller but growing number of states also regulate the sale of products derived from hemp.
In light of these legislative changes, we are presenting a 50-state series analyzing how each jurisdiction treats hemp-derived cannabidiol (“Hemp-CBD”). Each Sunday we will summarize a new state in alphabetical order. So far, we have covered Alabama, Alaska, Arizona, Arkansas, California and Colorado. This week we turn to Connecticut.
Connecticut very recently passed Public Act No. 19-3 (“S.S.B. No. 893”), which directs the state Department of Agriculture (“DOAG”) to implement an agricultural pilot program under the 2014 Farm Bill to enable the cultivation and processing of hemp until the state plan is approved by the U.S. Department of Agriculture (“USDA”). Once the state plan is approved by the USDA, the research program will expire and DOAG will begin regulating the commercial production of hemp and hemp products, pursuant to the 2018 Farm Bill.
Section 1 of S.S.B. No. 893 provides that hemp has the same meaning as that found in the 2018 Farm Bill and defines “hemp products” as “products with a delta-a tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis derived from, or made by, the processing of hemp plants or hemp plant parts.”
Only growers and processors of hemp and hemp products that are not consumable (i.e., hemp products containing no more than 0.3 percent THC not intended for human ingestion, inhalation, absorption or other internal consumption) are required to obtain a license from the DOAG. In addition, DOAG licensed growers and processors must acquire certified seeds and are strictly prohibited from transporting hemp containing more than 0.3% THC to any location not listed on the licensee’s application.
In order to “manufacture, handle, store and market hemp” for human consumption, one is required to obtain a license from the Department of Consumer Protection (“DCP”) and must (1) satisfy specific testing procedures; (2) comply with the Federal Food, Drug and Cosmetic Act; and (3) not make any health claims promoting the therapeutic value of their products.
Note that hemp products that have been deemed Generally Recognized As Safe (“GRAS”) by the Food and Drug Administration (“FDA”) that are (1) marketed for the uses described in the FDA GRAS notices, (2) manufactured in a way that is consistent with the notices, and (3) meet the listed specifications in the notices, may be manufactured in the state without a DCP manufacturers or hemp consumable license.
As of the date of this post, the DCP has yet to release rules on the manufacturing, processing, storing and marketing of hemp for human consumption, but it is clear from its FAQs that the CDP is deferring to the FDA guidelines when dealing with CBD-infused foods and dietary supplements.
So while Connecticut has shown a friendly attitude towards hemp and hemp products (the state was already differentiating hemp from marijuana, even before the enactment of S.S.B. No. 893), the state is also putting restrictions on the manufacture, sale and distribution of CBD-infused foods and dietary supplements. This means that enforcement actions may soon ensue.
Each Saturday, we have been running a series of blog posts that take a close look at each of the Democratic Party candidates for President in 2020. We examine each candidate’s historic approach to marijuana law and policy, and we also canvas their current respective stances on marijuana.
Over the past four weeks, we covered Joe Biden, Bernie Sanders, Kamala Harris and Elizabeth Warren. Today, we turn to Pete Buttigieg, the Mayor of South Bend, Indiana.
Grade: B+
Stance on marijuana: Pete Buttigieg supports legalizing marijuana and expunging criminal records of marijuana-related drug convictions. On his website, Buttigieg’s criminal justice reform platform focuses on mass incarceration and racial disparities in the justice system. To this end, he expresses his intention to “legalize marijuana and address the harmful effects of its criminalization.”
History: Buttigieg’s record on marijuana legislation is limited. As mayor of South Bend, Indiana, Buttigieg has not signed any legislation related to marijuana. This is not surprising considering Indiana has yet to legalize marijuana, even for medical use. See also, State of Cannabis: Indiana.
In addition to his lack of any legislative history on cannabis, the issue seems to be only a peripheral part of his platform. This past June, Buttigieg did criticize Iowa Governor Kim Reynolds for vetoing a medical marijuana expansion bill on Twitter, but this is one of his only posts on social media about marijuana.
However, when asked about his views on marijuana in interviews, Buttigieg has clearly expressed his support for cannabis legalization. He correctly asserts that legalization is what the majority of Americans want, including those in his home state of Indiana.
Buttigieg has also asserted the importance of not only ending the War on Drugs, but supporting those released from prison. As stated on his website, this support would include community-based reentry programs. Buttigieg also plans to, “on the federal level, eliminate incarceration for drug possession, reduce sentences for other drug offenses and apply these reductions retroactively, legalize marijuana and expunge past convictions.”
Conclusion: Buttigieg receives a “B+” grade. Over the course of his short and mostly innocuous political career, Buttigieg has not accumulated enough of a record on marijuana to determine the depth of his convictions regarding cannabis, but he has consistently stood for legalization since announcing his presidential candidacy. We do downgrade him though for not actively addressing legalization on social media, which seems to indicate that this issue is not a high priority for him. In his favor, Buttigieg has openly supported legalization and his plan to address the War on Drugs and its aftermath is quite comprehensive.
GW Pharmaceuticals announced that the Committee for Medicinal Products for Human Use (CHMP) recommended approval of the British company’s cannabis-based medicine Epidiolex. The CHMP is responsible for preparing the European Medicines Agency (EMA)’s opinions on questions related to the marketing of human medicines. The CHMP opinion was adopted July 25, and the final decision now rests […]
European Medicines Agency panel OKs GW Pharma’s cannabis drug is a post from: Marijuana Business Daily: Financial, Legal & Cannabusiness news for cannabis entrepreneurs
AndHemp CBD bringing you natural CBD products for wellness.
The post AndHemp tincture, muscle gel and lip balm review appeared first on Sweet Honeybee Health CBD.
In the latest blow dealt to the burgeoning smokable hemp flower market in the Southeast United States, South Carolina law enforcement officials are requiring retailers across the state to pull raw, unprocessed hemp products from their store shelves. The action comes after an opinion handed down from the State Attorney General’s office on July 10 […]
South Carolina law enforcement cracks down on smokable hemp is a post from: Marijuana Business Daily: Financial, Legal & Cannabusiness news for cannabis entrepreneurs
Another set of policymakers in North Carolina has signed off on banning smokable hemp until December 2020 in hopes that tests will be developed by then to distinguish the plant from marijuana. The state House Judiciary Committee voted to approve the original measure passed by the Senate, which would make smokable hemp legal until December […]
North Carolina lawmakers vote to delay smokable hemp ban is a post from: Marijuana Business Daily: Financial, Legal & Cannabusiness news for cannabis entrepreneurs
Although selling products that violate federal law is understandably prohibited on the Amazon platform, we have many clients that do sell their legal ancillary goods, as well as their hemp goods, on Amazon. And what many of them are unaware of is that Amazon’s Brand Registry is an excellent tool for protecting and maintaining control over your brand.
The Amazon Brand Registry gives sellers “access to tools that enable [them] to more accurately represent [their] brand, find and report violations, and share information that can help [Amazon] proactively prevent violations.” Utilizing the Brand Registry is a great way to efficiently (and cheaply) stop infringers in their tracks without having to resort to litigation. Some of the benefits of the program include:
In order to enroll in the program, your company must have:
The first step to all of this, of course, is securing your trademark rights. If your company, whether cannabis, hemp, or otherwise, is considering selling anything on Amazon, obtaining trademark protection such that you will have access to Amazon’s brand protection tools will be crucial. We’ve written extensively about trademark protection for ancillary goods and services and for hemp, which you can read more about at the links below:
As hemp and CBD companies increasingly lure executive-level talent away from mainstream corporations, many are coming from large food companies. The Kellogg Co. is one of them. The $13 billion food giant recently saw three of its executives leave for positions in the cannabis space, including Paul Norman, a former president of Kellogg North America, […]
‘Imperative to have mainstream experience’ in the growing CBD sector: Q&A with HeavenlyRx CEO Paul Norman is a post from: Marijuana Business Daily: Financial, Legal & Cannabusiness news for cannabis entrepreneurs
Canadian marijuana giant Aurora Cannabis is sponsoring CBD research with the UFC to determine if the cannabinoid treatments are effective in treating pain and inflammation. The partnership marks a milestone for the cannabis industry, where individual athletes commonly strike sponsorship deals but few prominent leagues agree to research for CBD or other cannabis products. Athletes’ […]
Canadian CBD maker sponsors athlete research with UFC is a post from: Marijuana Business Daily: Financial, Legal & Cannabusiness news for cannabis entrepreneurs
The Food and Drug Administration (“FDA”) seems to be listening.
For the past six months, the federal agency has been bombarded with messages, urging the FDA to promptly develop a regulatory pathway for the lawful use of hemp-derived CBD (“Hemp-CBD”) in foods and dietary supplements.
Some of these messages came from Oregon’s hemp champion, Senator Ron Wyden (D), who in two occasions has publicly pressured the FDA to act on this issue.
Back in January, Wyden issued a joint letter with Jeff Merkley (OR-D), in which the Oregon senators demanded that the agency update federal regulations governing the use of certain hemp-derived ingredients in food, beverages and dietary supplements.
At the end of June, Wyden issued a second letter to the agency in which he criticized Former Commissioner Scott Gottlieb’s suggestion that it may take the agency three to five years to issue a final regulation authorizing the lawful use of Hemp-CBD in foods and dietary supplements. Specifically, Wyden explained that the regulatory confusion and uncertainties surrounding CBD could not continue much longer. To that end, Wyden recommended that the FDA adopt certain steps to streamline the regulatory process and directed the agency to issue “enforcement discretion guidance” by August 1 of this year and to follow up by issuing final rules as quickly as possible while the agency develops permanent final regulations.
In response to Senator Wyden and other stakeholders’ demands, FDA Acting Chief Information Officer, Amy Abernethy, recently announced on Twitter that:
[FDA] is expediting its work to address the many questions about cannabidiol (CBD). This is an important national issue with public health impact, & an important topic for American hemp farmers and many other shareholders.”
Abernethy went on to explain that while the agency is enthusiastic about research into the therapeutic values of CBD-infused products, it is also concerned with the need for safety.
To understand the breadth of issues and gather data on safety we have conducted a public hearing, reviewed the medical literature, and have an open public docket.”
If you recall, the public hearing to which Abernethy refers was held on May 31 and offered stakeholders a platform to share their thoughts and experience with the FDA and to stress the importance of developing a regulatory framework that would legalize the marketing and sale of CBD-infused foods and dietary supplements.
The public had an opportunity to weigh in with the FDA through July 16. Four days before the deadline, over three thousand comments had been published on the public docket. Now that the public comment period is over, the FDA will review the submitted data and anticipates reporting on its progress “around end of summer/early fall.”
Expediting the rulemaking process of CBD products will not only help clarify the legality of these products and render the cultivation and processing of hemp economically viable, it will also settle the position of many federal agencies on this issue. As we previously explained, numerous federal agencies, including the U.S. Patent and Trademark Office and the U.S. Alcohol and Tobacco and Trade Bureau, defer to the FDA in dealing with CBD-related issues.
Whether or not the FDA meets its proposed timeline, we will continue to monitor and report on its progress.
Hemp farmers and federal health regulators are headed to the U.S. Senate Thursday to try to clear up confusion about the newly legal plant and its extracts.
Nagging hemp uncertainty takes center stage in Congress is a post from: Marijuana Business Daily: Financial, Legal & Cannabusiness news for cannabis entrepreneurs
Athletes for CARE is a nonprofit created by current and former professional athletes dedicated to using their influence for social change. They aim to protect the health and wellbeing of current and former athletes around the world.
Rugby is a physically demanding sport that requires both mental focus and a high tolerance for pain. It’s a full-contact tackle sport with no pads and no helmets, and the game flows freely with few stoppages – meaning continuous sprinting and collisions throughout the full 80 minutes of the match.
A week or so ago, I wrote a post outlining the current state of California hemp laws, and noted that there are two pending pieces of legislation that could change the state of hemp law in California: AB-228 which deals more with adding hemp-derived cannabidiol to foods and other consumer products, and SB-153, which would re-write a significant portion of California’s Food and Agriculture Code that relates to hemp cultivators. Today, I’m going to talk about SB-153, which could have a massive impact on California’s hemp cultivation industry. Below are some of the highlights of the bill.
A New Definition of “Industrial Hemp”
Currently, the California Health and Safety Code defines “industrial hemp” as follows:
“Industrial hemp” means a crop that is limited to types of the plant Cannabis sativa L. having no more than three-tenths of 1 percent tetrahydrocannabinol (THC) contained in the dried flowering tops, whether growing or not; the seeds of the plant; the resin extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds or resin produced therefrom.
Current provisions of the Food and Ag. code relative to hemp use this definition. But if SB-153 is passed, it’ll add a brand new definition of “industrial hemp” to the Food & Agriculture Code, as follows:
“Industrial hemp” means an agricultural product, whether growing or not, that is limited to types of the plant Cannabis sativa L. and any part of that plant, including the seeds of the plant and all derivatives, extracts, the resin extracted from any part of the plant, cannabinoids, isomers, acids, salts, and salts of isomers, with a delta-9 tetrahydrocannabinol concentration of no more than 0.3 percent on a dry weight basis.
To be clear, this new definition would be in addition to—and not a replacement of—the current state definition. And significantly, the two definitions are different. For example, the general H&S Code definition appears to place caps on the total amount of THC, whereas the Food and Ag code’s definition would place limits on delta-9 THC. This could create confusion or different standards among state agencies. We’ve written about how “total THC” limits have caused a headache in Oregon, and it’s possible that these different definitions could lead to similar issues.
Additionally, the Food and Ag code’s definition only applies to agricultural products, and may not apply to many other derivatives, for example, hemp products imported from other states.
A California Hemp Production Plan
SB-153 would force the state to create and submit to the U.S. Department of Agriculture a hemp production plan. If you haven’t read about the 2018 Farm Bill yet, in short, it allows states to set up their own hemp production programs after approval by the USDA. States aren’t forced to submit plans and have to affirmatively take steps to do it, and SB-153 would put CA on track to do just that.
New Definitions of “Established Agricultural Research Institutions”
Current California law creates a scheme for commercial cultivators to register to cultivate hemp, and then exempts established agricultural research institutions (“EARIs”) from needing to register. EARIs currently can include:
(1) A public or private institution or organization that maintains land or facilities for agricultural research, including colleges, universities, agricultural research centers, and conservation research centers; or
(2) An institution of higher education (as defined in Section 1001 of the Higher Education Act of 1965 (20 U.S.C. 1001)) that grows, cultivates or manufactures industrial hemp for purposes of research conducted under an agricultural pilot program or other agricultural or academic research.
Part (2) of the EARI definition is pretty consistent with the 2014 Farm Bill, which is still in effect, but part (1) is much broader. In the wake of this law, many institutions that may not necessarily qualify for cultivation under federal law would be able to cultivate in CA.
SB-153 would close that gap. The bill would re-define EARIs to only include:
an institution of higher education, as defined in Section 101 of the federal Higher Education Act of 1965 (20 U.S.C. Sec. 1001), that grows, cultivates, or manufactures industrial hemp for purposes of research conducted under an agricultural pilot program or other agricultural or academic research in accordance with Section 7606 of the federal Agricultural Act of 2014 (7 U.S.C. Sec. 5940) or otherwise approved by the secretary.
This new definition of EARIs would be much more in line with the 2014 Farm Bill, and would not allow many different kinds of parties to claim EARI exemptions. But note, this definition change won’t take effect until after the state’s hemp production plan is approved. So it could take a long time.
Expansion of Hemp Registrations
What will all of those companies who used to qualify as EARIs and don’t want to cultivate commercial do if the definition changes? Well, the answer is that SB-153 would expand required registrations from only commercial cultivators to include all cultivators except EARIs. So purely private companies who wanted to do hemp research and could not qualify as EARIs or work with EARIs would probably need to get registered with their county commissioner and follow the Department of Food and Agriculture (and localities’) requirements for registered cultivators.
Penalties for Misbehavior
SB-153 would add some pretty key penalty provisions that are not currently in the Food and Ag code.
First, SB-153 says that “[a]ny person convicted of a felony relating to a controlled substance under state or federal law before, on, or after January 1, 2020, shall be ineligible, during the 10-year period following the date of the conviction, to participate in the industrial hemp program.”
This is exceptionally broad. Anyone who has been convicted, ever, in any state, for any drug, would be barred from participating in the program for 10-years post conviction. We don’t have hemp regs yet or even know what the production plan will look like. But the extent of this could be far-reaching. If “ownership” is anything like in the cannabis rules, this may exclude a wide class of persons from even owning relatively minor stakes in hemp companies.
Second, “A person that materially falsifies any information contained in an application [for commercial or non-commercial registration], or other application to participate in the industrial hemp program, shall be ineligible to participate in the industrial hemp program.”
This is also significant. Companies who are seeking registrations will need to be 100% sure that everything they put into their application is accurate. Even minor slip-ups could lead to ineligibility to participate in the hemp industry.
These are just a few examples of the significant changes that SB-153 might bring about. The bill isn’t guaranteed to pass, and it’s possible that it gets amended again. It’ll be a while before it’s fully implemented, but it’s clear now that the state wants to get up to speed and in compliance with the federal farm bills as fast as possible. We’ll continue to report on SB-153 and its aftermath in the coming months.
