First introduced in 2013, the SAFE Banking Act just passed the House 321-103. This bill, an exciting and promising development for cannabis advocates, provides safe harbor to banks and financial institutions doing business with state-legal cannabis businesses, and allows cannabis businesses to move away from conducting business exclusively in cash.
Cannabis legalization receives widespread popular support. According to opinion polls, more than two-thirds of Americans support full legalization—a steep rise in support considering that as recently as 2005, almost two-thirds of Americans opposed legalization. The country appears on the path to full cannabis legalization, but until that time, citizens and companies should be aware of the legal risks involved in entering the cannabis space.
Originally published in The New Brewer, July/August 2019.
The Food and Drug Administration (FDA) has increased its efforts to follow through on its commitment to provide guidance to stakeholders on the regulatory landscape for products containing CBD. On May 31, 2019, the FDA held a public hearing to obtain scientific data and information about the safety, manufacturing, product quality, marketing, labeling and sale of products containing cannabis or cannabis-derived compounds. Following the hearing, the FDA established a docket to allow the public to submit additional comments, research and information to the Agency. The docket closed on July 16 and received nearly 5,000 comments. On July 12, FDA Chief Information Officer and Principal Deputy Commissioner Dr. Amy Abernethy confirmed via Twitter that the Agency is “expediting its work to address” questions surrounding CBD and plans “to report on [its] progress around end of summer/early fall.” Due to the significant number of comments to the docket, it remains to be seen whether FDA will provide any material development that impacts the regulation of CBD products beyond a progress report on its review of the docket.
Marijuana, a Schedule 1 drug under the federal Controlled Substances Act (CSA), is the most commonly detected illicit drug in employment drug testing. According to Quest Diagnostics, in 2018, approximately 3% of urine-based workplace drug screenings tested positive for marijuana. Notwithstanding marijuana’s illegality under federal law, 33 states and the District of Columbia have legalized marijuana for recreational or medicinal use. And it is big business. The Colorado Department of Revenue recently revealed that its tax, license and fee revenue from marijuana has reached $1.02 billion. Legal marijuana appears here to stay in the United States. (more…)
“Plaintiffs claim that marijuana has extended their lives, cured seizures and made pain manageable. If true, these are no small things.” So wrote Judge Calabresi on behalf of the United States Court of Appeals for the Second Circuit (Second Circuit) in Washington, et al. v. Barr, et al.
In Washington, a coalition of plaintiffs launched a broad attack on marijuana’s status as a Schedule I drug under the Controlled Substances Act (CSA). The plaintiffs include the parents of infants Alexis Bortell and Jagger Cotte. According to the plaintiffs’ allegations, Alexis Bortell suffers from chronic, intractable seizures, and Jagger Cotte suffers from Leigh’s disease, a progressive neurometabolic disorder characterized by necrotizing (dead or dying tissue) lesions on the brain. After exhausting traditional treatment options, the children found relief with medical marijuana. (more…)
On Friday May 31, 2019, the Food and Drug Administration (FDA) held a public hearing on the topic of cannabis or cannabis-derived compounds. The FDA held the hearing to gather information regarding the safety risks and health benefits associated with cannabis products. More than 110 speakers, including academic researchers, trade associations and cannabis product manufacturers, presented to the FDA panel during the all-day hearing. Below we outline the notable points from the hearing, including statements by FDA officials and interesting speaker comments. (more…)
On May 28, 2019, the United States Department of Agriculture (USDA) issued a legal opinion to address questions raised by several hemp-related provisions of the Agricultural Act of 2018, better known as the 2018 Farm Bill. The USDA opinion clarifies four areas of the 2018 Farm Bill:
The Centers for Disease Control (CDC) and Substance Abuse and Mental Health Services Administration (SAMHSA) announced meetings to be held this summer related to public health and marijuana. The CDC’s Board of Scientific Counselors will convene for a two-day meeting, July 16–17, 2019, to discuss a wide variety of topics, including the role of the CDC’s National Center for Injury Prevention and Control in “addressing public health concerns related to marijuana.” This portion of the meeting will be held on July 17, will be open to the public and will allot 15 minutes for public comments at the end of the session from 3:40–3:55 pm on July 17, 2019. (more…)
On April 25, 2019, TTB published Industry Circular 2019-1. It addresses the hot topic of alcohol beverages (especially beer) infused with hemp-derived ingredients–with cannabidiol (CBD) as the clear focus of industry interest. While hardly surprising, the Industry Circular takes or reiterates the following positions:
Federal statutes create risk for banks that want to operate in the cannabis space. Banks face the threat of civil actions, asset forfeiture, reputational risk, and even criminal penalties if they do business with customers in the cannabis industry. Further, because most banks will not touch cannabis money, the growers, processors, and retailers in the industry must often operate on a cash-only basis. The Internal Revenue Service has even had to build “cash rooms” to accommodate taxes paid by legal cannabis companies.
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