Legalization of marijuana continues at the state level including in several new states this November, but it remains illegal at the federal level. Given this illegal status, businesses and individuals directly involved in the marijuana industry have often been unable to obtain relief in federal bankruptcy courts—with bankruptcy courts dismissing marijuana cases because the purported debtor’s conduct is unlawful under federal law. Three cases decided in 2020 highlight potential barriers to bankruptcy protection faced by debtors even when they are only indirectly involved in the marijuana industry.
Continue Reading Marijuana Industry Takes a Big Hit in Federal Bankruptcy Court in 2020

Legalized recreational marijuana was on the ballot in four states last night, and it won in all four. Arizona, New Jersey, Montana, and South Dakota now bring the total number of U.S. states that have legalized recreational marijuana to 15, along with the District of Columbia. Notably, these changes were primarily the result of ballot initiatives, which is typical of the “grassroots” (pun intended) way in which marijuana has been legalized in most states, suggesting a rare point of democratic consensus in otherwise divided times. A fifth state, Mississippi, legalized medical marijuana, as well.
Continue Reading Marijuana on the Ballot: Four More States Legalize Recreational Pot

A former part owner of a failed venture sued the venture’s former CEO, Paul Smith, alleging he misappropriated trade-secret hemp strains, selling them to a Canadian cannabis company for nearly $4 million.

In its September 21, 2020 complaint, Big Wuf Enterprises, LLC and its principal, W. John Short, allege their former venture, YCG Holdings LLC,

The Sixth District Court of Appeal held that a medical marijuana dispensary could recover its marijuana plants seized by law enforcement, finding that violation of the ordinance did not render medical marijuana plants “contraband” per se and subject to seizure. Granny Purps, Inc. v County of Santa Cruz, 54 Cal.App.5th 1 (2020). Read the full

The possession, distribution, and use of cannabis remains illegal under federal law. Consequently, in isolation, employers may believe that enforcing their zero-tolerance policies for drug use (as referenced here, zero-tolerance refers to policies that prohibit any on-duty or off-duty use of unlawful cannabis products) remains a defensible position, including in response to employee complaints that such policies restrict employees’ otherwise permissible use of cannabis products. But how does state legalization of recreational and medical cannabis use fit into the mix? As states become increasingly tolerant of cannabis use, employers may need to reconsider whether their anti-drug and drug-testing policies are compliant with applicable law in order to minimize the risk of discrimination or failure-to-accommodate claims resulting from the employer’s restrictions on the purportedly lawful use of cannabis products.
Continue Reading Zero Tolerance for Zero-Tolerance Policies? The Impact of Cannabis Legalization on Workplace Drug Policies

Kern County’s ordinance banning marijuana dispensaries was validly reenacted because a “material change in circumstances” had occurred since the County previously repealed a similar ordinance in response to a referendum petition.  County of Kern v. Alta Sierra Holistic Exchange Service, No. F077887 (5th Dist., March 6, 2020).

In 2011, the County adopted an ordinance