Cannabis Client Alert - Week of October 12, 2020

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In this week’s edition:

  • Mounting challenges to US and global drug scheduling classifications of cannabis
  • US cannabis stocks surge after statements by Kamala Harris (D) at VP-nominee debates
  • Vermont enacts legislation establishing a taxed and regulated recreational cannabis market
  • New Mexico House Speaker hopeful for major cannabis reform in 2021 legislative session
  • And more…

Federal

Supreme Court Declines To Hear Cannabis Security Co.'s Wage Dispute - The Supreme Court rejected a petition from Helix TCS, a cannabis security company, declining to hear a suit addressing whether federal labor laws could protect workers at a business illegal under federal laws.  In the case, former Helix employee Robert Kenney alleged the company failed to pay him and other employees overtime owed. Helix asserted that Kenney could not rely on protections provided by the Fair Labor Standards Act because his work providing armed security for cannabis businesses is illegal, a position rejected by the lower federal district court and later the Tenth Circuit Court of Appeals.

Scientists Demand DEA Reconsider Marijuana’s Federal Status in New Court Briefing - Counsel for a group of scientists and veterans filed a brief in federal court in support of their legal challenge to the Drug Enforcement Administration’s (DEA’s) classification of cannabis.  This comes after the plaintiffs initially filed suit against the DEA in May 2020 asserting, among other things, that the agency’s Schedule I classification of cannabis is unconstitutional.

Military Veterans Group Asks Federal Court To Hear Marijuana Case Challenging DEA Classification - Iraq and Afghanistan Veterans of America (IAVA), a major military veterans group and advocate for expanding cannabis research, is asking the U.S. Court of Appeals for the Ninth Circuit to hear its case challenging the Drug Enforcement Administration’s (DEA’s) classification of cannabis under federal drug schedules.  In its amicus brief filed with the court, IAVA asserts that the existing scheduling status of cannabis inhibits research and studies that may have therapeutic potential in the treatment of post-traumatic stress disorder (PTSD).

U.S. Government Supports Removing Marijuana From Strictest Global Drug Schedule - The US government maintains support for the World Health Organization (WHO) to remove cannabis from Schedule IV, the most restrictive global drug scheduling category, but continues to oppose separate cannabis reform proposals. At a United Nations Commission on Narcotic Drugs meeting in Vienna, Patt Prugh, attorney advisor at the US State Department, acknowledged that “[t]he status or stigma of being in Schedule IV did not prevent the dramatic escalation of cannabis use . . . . And it is unlikely that removing it will lead to any increase. On the contrary, to those who are skeptical of warnings that cannabis abuse can be harmful—and here we know that youth are particularly at risk—keeping cannabis and cannabis resin in Schedule IV despite scientific evidence will signal that the commission is tone deaf and out of touch.”

States

AZ - Arizona is moving to relax limits on past cannabis use for police officer applicants. Under new rules proposed by the Arizona Peace Officer Standards and Training Board (AZPOST) and approved unanimously by the Governor’s Regulatory Review Council, applicants will only be disqualified from consideration if they have consumed cannabis within the past two years.

CA - California Attorney General Xavier Becerra (D) announced the eradication of more than one million illegal cannabis plants as part of the California Department of Justice’s annual Campaign Against Marijuana Planting (CAMP) program.

GA - The Georgia Access to Medical Cannabis Commission preliminarily approved a medical cannabis license application design draft for review by the state’s procurement agency.

LA - The Louisiana House Education Committee approved a bill that would authorize the administration of medical cannabis to a student by a parent, guardian or authorized school employee at public schools. The bill is set to move next to the House floor for debate.

MA - The Massachusetts Supreme Judicial Court will hear an appeal by Mederi Inc. LLC against the city of Salem, in which the company is seeking a state recreational cannabis retail license. Mederi alleges that by refusing to enter into a host community agreement with Mederi as part of the city’s local review process, Salem exceeded its statutory authority to evaluate the qualifications of state license applicants, thus wrongfully precluding Mederi from bidding for a state-issued license.

MI - The Michigan Marijuana Regulatory Agency (MRA) announced that as of March 2021, certain newly licensed recreational cannabis businesses will no longer be required to first hold a medical cannabis business license. At that time, the agency will begin accepting applications from any applicant for licensure “as a marijuana retailer, marijuana processor, class B marijuana grower, class C marijuana grower, or marijuana secure transporter if the MRA determines that additional state licenses are necessary to: minimize the illegal market for marijuana in this state, or efficiently meet the demand for marijuana, or provide for reasonable access to marijuana in rural areas.”

MT - A new study from the University of Montana’s Bureau of Business and Economic Research has found that, notwithstanding the state’s small population, a recreational cannabis market could boom, generating sales of more than $200 million in its first year of operation in 2022

NM - In a livestream event, New Mexico House Speaker Brian Egolf (D) said he's hopeful the state can move forward cannabis reform in the 2021 legislative session, stressing that legislators “can gain from the knowledge and experience that other states provide based on their first experiences with legalization.” Egolf also spoke of “decriminalizing the possession of narcotics and what that would do to help people across the board, especially people of color in New Mexico, avoid the prison cycle or the jail cycle and all that does to force someone to lose a job, to lose an apartment.”

IL - For the fifth month in a row, Illinois achieved record-breaking cannabis sales, with consumers purchasing more than 1.4 million products valued at almost $67 million, as reported by the state’s Department of Financial and Professional Regulation. Nearly $18 million of those sales came from out-of-state visitors.

VT - Legislation establishing a taxed and regulated marketplace for recreational cannabis progressed across the desk of Vermont Governor Phil Scott (R) without signature, becoming law. This makes Vermont the 11th state to tax and regulate retail cannabis.

WV - West Virginia regulators awarded 10 medical cannabis cultivation permits, with the winners including at least three multistate operators—New York-based Columbia Care, Illinois-headquartered Verano Holdings and Massachusetts-based Holistic Industries—and several West Virginia and out-of-state investors.

Hemp/CBD

U.S. - The US Environmental Protection Agency (EPA) announced an award of $594,424 in funding for eight undergraduate and graduate student teams from colleges and universities across the US, through the agency’s People, Prosperity and the Planet, or P3, grant program. This included an award of $74,882 to the University of California Riverside to develop “hempcrete,” a more sustainable concrete made from high quality, cellulose-rich hemp pulp that would emit zero gaseous emissions and zero toxic waste.

International

Germany - Medical cannabis grown in Uruguay is now available in the German market for the first time.  Beginning in late September, a German subsidiary of Canada-headquartered cannabis producer Tilray began offering its product, Tilray Cheese Quake (Indica Strong), with a THC content of 22 percent, to German pharmacies.

France - A group of 80 MPs in France openly challenged the legalization of cannabis, asserting that there is no such thing as a “soft drug.” In an open letter published in newspaper Le Journal du Dimanche, the MPs wrote: “There is no ‘soft drug.’ Drugs are a poison, a plague that we must fight.” The letter continues: “In recent weeks, some mayors have restarted the debate by saying they are ‘for’ the legalisation of cannabis. We, MPs and Républicains senators, would like to remind them that we are strongly against this.”

Italy - Italy’s Agriculture Ministry included hemp flower for “extraction uses” on an official list of agricultural products for medicinal purposes. The listing was part of a decree approved by Agriculture Minister Teresa Bellanova and published in the Italian Official Gazette in August. Hemp flower—“canapa infiorescenza”—was listed under “medicinal plants” in a table of agricultural products.

Business

US - US-listed shares of major cannabis producers surged on Thursday following Democratic vice president nominee Kamala Harris’s statement that cannabis would be decriminalized in the US at the federal level under a Biden administration. MJ ETF MJ.P rose 5.5 percent, its best result since early June, while Tilray Inc TLRY.O soared 19.2 percent on the Nasdaq. US-listed shares of Canopy Growth Corp WEED.TO, Aphria Inc APHA.TO and Aurora Cannabis Inc ACB.TO each closed 10‒13 percent higher.

Pabst Blue Ribbon - American lager beer company Pabst Blue Ribbon announced its newest non-alcoholic beverage, Cannabis-Infused Seltzer. Pabst Labs entered into an exclusive partnership with Oakland, CA-based Nabis to distribute the product, which will contain 5 mg of THC per can, across California.

Medical/Health

Chronic Treatment with Cannabidiolic Acid Reduces Thermal Pain Sensitivity in Male Mice and Rescues the Hyperalgesia in a Mouse Model of Rett Syndrome - A study by Italy’s Center for Behavioral Sciences and Mental Health highlighted a number of findings relating to chronic treatment with cannabidiolic acids (CBDA), including that chronic treatment with CBDA reduces pain sensitivity in wild type mice, that low doses of CBDA rescue the thermal hyperalgesia of a Rett syndrome mouse model, that CBDA does not improve the motor, anxiety-like and cognitive deficits of Rett mice, and that CBDA has no effect on the aberrant neurobiological profile of Rett mouse brains.

Study Finds Older Adults Using Cannabis to Treat Common Health Conditions - A study by the University of California San Diego School of Medicine found that older adults use cannabis primarily for medical purposes to treat a variety of common health conditions, including pain, sleep disturbances and psychiatric conditions, such as anxiety and depression. The study, published in the Journal of the American Geriatrics Society, found that of 568 patients surveyed, 15 percent had used cannabis within the past 3 years, with half of those users reporting using it regularly and primarily for medical purposes.

Nurses association: Pregnant and breastfeeding mothers should abstain from using cannabis - The National Association of Neonatal Nurses (NANN) published a statement that “data on the associated risks to infants are insufficient to address the safety of marijuana consumption by women who are breastfeeding.” The statement continues: “Because of the lack of safety data regarding maternal marijuana consumption, transmission to the breast milk, and potential impact on infants, women who are providing human milk for consumption should be advised to avoid marijuana consumption . . .”

Dentons speaks

Presentation On Litigation Involving Cannabis - On October 9, 2020, Dentons’ Cliff Levine and Cezanne Harrer, based in our Pittsburgh office, spoke on various issues surrounding the state’s cannabis law at a statewide Pennsylvania Bar Institute Conference. Cliff and Cezanne discussed litigation that has taken place under the law, including several cases in which Dentons has served as counsel, among them Pennsylvania Supreme and Commonwealth Court cases involving challenges to the Medical Marijuana statute, Right-to-Know Law issues and the general interplay between the Department of Health as a regulatory entity and the holders of grower/processor and dispensary permits.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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