Oregon became the first state to offer controlled use of psilocybin to the public on January 1, 2023. Psilocybin is a Schedule I psychoactive substance that is illegal at the federal level. Notwithstanding this federal illegality, psilocybin’s potential medical uses are being explored in medical research centers, and the substance is currently undergoing clinical trials, being designated by the U.S. Food and Drug Administration (FDA) as a breakthrough therapy. As part of a series of state initiatives aimed at improving access to mental healthcare, Oregon passed the Psilocybin Services Act as a ballot measure in 2020. This law directed the Oregon Health Authority (OHA) to license and regulate the manufacture, transportation, delivery, and purchase of psilocybin products and the provision of psilocybin services within the state. As of January 2, 2023, the OHA has begun accepting applications for licensure, with new psilocybin service centers expected to open later this year.

For more details about OHA’s regulations and compliance considerations, read the Perkins Coie Update.

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The District Court for the Western District of New York denied a motion on January 6, 2023, to dismiss claims alleging that a publicly traded company misled investors regarding an investigation by the U.S. Securities and Exchange Commission (SEC). The company, 22nd Century, engineers cannabis plants to regulate their levels of cannabinoids. The court’s denial of the motion to dismiss is an important reminder to companies, especially those in the cannabis space, about the importance of compliance and disclosure.

Continue Reading New York Cannabis Co. Investor Suit Survives Motion To Dismiss

Cannabis: In Focus

  • New York City Attempts to Crack Down on Illicit Cannabis Market
  • Connecticut Launches Recreational Cannabis Sales, With More States Expected to Follow in 2023
  • Psilocybin State Updates
  • FDA Issues Three New Warning Letters to CBD Product Manufacturers Alleging COVID-19 Benefits
  • Congressional Research Service: Cannabis Banking and the Federal Reserve
Continue Reading Cannabis Legal Report—Week of January 23, 2023

A December 2022 survey from Data for Progress reports that American voters, regardless of political affiliation, support federal cannabis legalization. Specifically, 75% of Democrats, 67% of independents, and 52% of Republicans agreed that cannabis should be legalized at the federal level.

Data for Progress also asked about two equity policies enacted as part of New York’s Marihuana Regulations and Taxation Act (MRTA) that legalized recreational cannabis in the state.

One policy measure reserved 100-200 dispensary licenses for applicants disproportionately affected by cannabis prohibition. In general, voters surveyed supported this measure by a +23-point margin (57% in support, 34% opposed), with the party breakdown as follows: 69% of Democrats, 59% of independents, and 43% of Republicans.

The other policy stipulated that 40% of the taxes collected would go into a community grant fund for community reinvestment programs like job placement and skill services. This policy was supported by a majority of voters from all three parties: 76% of Democrats, 70% of independents, and 51% of Republicans.            

The poll indicates that American voters, regardless of political affiliation, support federal cannabis legalization as well as thoughtful social equity policies.

California Governor Gavin Newsom signed Assembly Bill 2188 (AB 2188) into law on September 18, 2022. AB 2188 will amend the state’s employment anti-discrimination law, the Fair Employment and Housing Act (FEHA), and make it an unlawful practice for an employer to discriminate against an adult applicant or employee based upon the “person’s use of cannabis off the job and away from the workplace.” The new law will take effect on January 1, 2024.

California joins several other states, including New York and New Jersey, that have adopted protections for applicants’ and/or employees’ off-duty cannabis use.

For more details, read the Perkins Coie Update.

To receive updates like this via email, subscribe here (and make sure to check the box for “Cannabis Law”).

This blog series addresses common employment-related issues for cannabis industry professionals.

This post addresses meal and rest break requirements manufacturers and retailers of cannabis products should consider to ensure compliance with applicable state and federal law.

In addition to ensuring accurate timekeeping, employers should be mindful of various state-level meal and rest break laws, if any, that are applicable to their nonexempt employees. For example, California state law generally requires employers to provide nonexempt employees with a paid rest period of 10 consecutive minutes for every four hours of work, or major fraction thereof, and a 30-minute unpaid meal period for every work period of five or more hours in a day. Other states have similar requirements.

Continue Reading Wage and Hour Compliance: Meal and Rest Breaks

As 2022 drew to a close, the Wall Street Journal reported that the FDA is finally considering releasing potential guidance regarding cannabidiol (“CBD”) in the coming year. While the exact timeline and scope of the FDA’s potential action is unclear, the Journal asserts that the agency will decide “within months” regarding the appropriate regulation of CBD and whether that regulation would require Congressional action or new agency rulemaking. Concurrently, the FDA continues to explore potential CBD safety risks.

The agency has generally pursued limited enforcement activity to-date regarding CBD, with a focus on products in foods and beverages that make unsubstantiated health claims, such as claims that CBD could treat or prevent cancer or Covid-19. Stopping short of taking aggressive action, the FDA has only issued warning letters on CBD, despite the widespread availability of largely-unregulated food and beverage products containing the hemp-derived cannabinoid.

Continue Reading Will The New Year Finally Bring FDA Guidance on CBD?

This blog series addresses common employment-related issues for cannabis industry professionals.

This first post addresses timekeeping considerations for manufacturers and retailers of cannabis products to ensure compliance with applicable state and federal law. Future posts will address other employment-related issues, including the administration of meal and rest periods, overtime and regular rate considerations, engaging independent contractors, exempt and nonexempt employment classifications in industry-specific roles, accommodating employee off-duty cannabis use, and similar topics.

Wage and Hour Compliance: Timekeeping

Large-scale class actions and other litigation alleging violations of legal obligations regarding payment of wages and related recordkeeping constitute a large percentage of active employment-related litigation and can expose businesses, including individual founders and owners, to exorbitant financial risk. Ensuring accurate timekeeping and compliance with related requirements is key to avoiding such liability.

Continue Reading New Series: Employment Law and the Cannabis Industry

On November 16, 2022, the Food and Drug Administration (FDA) issued five new warning letters to various companies making edible products containing cannabidiol (CBD) and/or Delta-8-tetrahydrocannabinol (THC). The companies were directed by the FDA to respond within 15 days to defend how their products do not violate the Food, Drug, and Cosmetic Act (FDCA) and how they plan to bring their products into compliance with the FDCA. Failure to address the issue to the agency’s satisfaction could plausibly result in enforcement actions, including seizure and/or an injunction.

The FDA’s most recent set of warning letters builds upon warning letters sent earlier this year targeting CBD and Delta-8 THC products. Previously, FDA has largely focused on CBD products that made health claims. These new warning letters are not, however, limited to those prior concerns. The FDA now appears to be particularly concerned about CBD and Delta-8 THC products that appeal to children.

Continue Reading FDA Issues New Warning Letters to Companies Making CBD and Delta-8 THC Edibles