Cannabis: In Focus

  • Coalition Forms To Influence Scheduling Review Process
  • FDA Holds Stakeholder Call on CBD Regulation
  • New York Cannabis Regulators Settle Cannabis Licensing Suit
  • Minnesota Legalizes Adult-Use Cannabis
  • Maryland Releases Adult-Use Cannabis Regulations
Continue Reading Cannabis Legal Report—Week of June 5, 2023

As the Biden administration actively reviews the classification of cannabis under the Controlled Substances Act (CSA), a diverse group of cannabis companies and organizations is partnering with scientific and legal authorities, including Perkins Coie LLP, to launch the Coalition for Cannabis Scheduling Reform (CCSR).

The current classification of cannabis as a Schedule I drug puts it in the same category as heroin and cocaine (and more strictly controlled than even fentanyl). This is despite widely accepted medical use, a low potential for abuse, and per the DEA, no overdose deaths attributable to cannabis. As a result of its classification, cannabis continues to be harshly criminalized, Americans continue to be incarcerated for possession and use of cannabis, and state-licensed cannabis businesses operate under extreme regulatory burdens.

Last October, President Biden took the historic step of directing his administration to “expeditiously” review the status of cannabis under the CSA. Rescheduling cannabis to Schedule III, IV, or V would mark historic progress toward ending federal prohibition and present a wide range of advantages over the status quo. Descheduling would demonstrate cannabis’ low potential for abuse and represent a dramatic step toward achieving President Biden’s criminal justice and racial equity goals.

CCSR aims to engage with stakeholders to provide critical information and analysis concerning the urgent need for cannabis scheduling reform by, among other things, releasing a forthcoming comprehensive report on the classification of cannabis. Senior Counsel Andrew Kline, co-chair of the firm’s Cannabis Law industry group, is one of the white paper’s authors, with support from Associate Tommy Tobin and Paralegal Hanna Barker Mullin.

Read the official press release or visit to learn more.

Cannabis: In Focus

  • SAFE Banking Updates
  • New Hampshire Senate Rejects Legalization Bill for Adult-Use Cannabis
  • Sixth Circuit Reverses Dismissal of Suit Brought by CBD Shop Owner
Continue Reading Cannabis Legal Report—Week of May 22, 2023

Cannabis: In Focus

  • SAFE Banking Gets a Senate Hearing
  • Representative Nancy Mace Is Promised a Hearing on her Descheduling Bill
  • CLAIM Act Reintroduced in Congress
  • Hawaii Federal Judge Says 11th Amendment Protects State’s Choice to Define Hemp
  • Maryland Governor Signs Cannabis Regulation Bill
Continue Reading Cannabis Legal Report—Week of May 8, 2023

Cannabis: In Focus

  • Tenth Circuit Upholds Licensing Agency’s Discretion When Awarding Cannabis-Related Licenses
  • Delaware Becomes Latest State To Legalize Recreational Cannabis
  • Cannabis Legislative Updates
Continue Reading Cannabis Legal Report—Week of April 24, 2023

Rep. Earl Blumenauer (D-OR) introduced the Small Business Tax Equity Act (H.R. 2643) on April 17, 2023, a bill that will allow cannabis businesses to obtain tax write-offs for ordinary business expenses.

Currently, cannabis businesses are not able to deduct business expenses under a provision of the tax code known as Section 280E, which prohibits such deductions for Schedule I or Schedule II controlled substances. The bill would amend Section 280E to allow ordinary business expenses to be deducted when the company’s business consists of sales of cannabis conducted in compliance with state law.

The proposed bill has bipartisan cosponsors including Reps. David Joyce (R-OH), Brian Mast (R-FL), Nancy Mace (R-SC), Barbara Lee (D-CA), and Danny Davis (D-IL). The bill has been referred to the House Committee on Ways and Means for further consideration.

Of course, the congressman’s bill would be moot if the President Biden’s administrative rescheduling process moves cannabis to Schedule III, IV, or V. Rescheduling to Schedule III, IV, or V would solve the 280E tax issue without the need for an additional legislative fix. Congressman Blumenauer has asked for more transparency around the president’s process.

Cannabis: In Focus

  • US Sentencing Commission Seeks Amendment To Allow for More Lenient Treatment for People With Prior Cannabis Convictions
  • Second Circuit Narrows TRO Affecting New York State Cannabis Retail Licensing
Continue Reading Cannabis Legal Report—Week of April 17, 2023

As a consequence of cannabis’ federal illegality, cannabis companies are generally locked out of the nation’s federal bankruptcy courts. Perkins Coie’s Cannabis industry group’s Tommy Tobin recently sat down with Billy Organek, a program fellow at the Harvard Law School Bankruptcy Project, to discuss the effects of current bankruptcy laws on cannabis companies in the United States.

Cannabis companies can run out of money, but they are generally unable to declare bankruptcy. While company leaders and investors still have options, these opportunities remain largely untested. Harvard’s Organek discussed several options, including:

  • State-level receiverships running a distressed cannabis company while winding down its affairs.
  • Out-of-court restructuring negotiations between the debtor and its creditors to attempt to reach resolution regarding amounts owed.
  • Foreclosures to allow those with security interests in property to enforce their rights to that property.

As with so many aspects of cannabis law, there are countervailing pressures and untested solutions to novel problems. Of course, having smart, appropriate contracting on the front end is vital when working with cannabis companies, including provisions that will help mitigate risk in the absence of federal bankruptcy protections.

Listen to “Distressed Cannabis Companies: Considering Options Amid Bankruptcy Limitations – Episode 20” on Spreaker.

Note that all episodes are available on AppleGoogle, and Spotify.

Cannabis: In Focus

  • Two Bipartisan Bills Introduced to Regulate CBD
  • Congressional Letter Circulated Regarding Biden Administration’s Cannabis Scheduling Review
  • Alcohol Industry Group Issues Open Letter Supporting Cannabis Legalization
  • SEC Charges Cannabis Company With Securities Fraud
Continue Reading Cannabis Legal Report—Week of March 27, 2023

Cannabis: In Focus

  • Attorney General Garland Testifies Before Senate Judiciary Committee
  • Ninth Circuit Affirms Ruling that California County May Deny Licenses to Cultivate Cannabis
  • Oklahoma Recreational Cannabis Measure Fails
  • Medical Cannabis Patient Sues Arkansas Company for Inflating THC Levels
Continue Reading Cannabis Legal Report—Week of March 20, 2023