Cannabis Legal Report - June 2023

Perkins Coie

Perkins Coie

[co-authors: Evan Molineux and Hanna Barker Mullin]

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

Coalition Forms To Influence Scheduling Review Process

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).

As a result of its classification as a Schedule I drug, 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. 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.

FDA Holds Stakeholder Call on CBD Regulation

On May 25, the FDA held a stakeholder call with its senior cannabis policy leads, Cannabis Product Committee Lead Patrick Cournoyer, Ph.D., and Senior Public Health Advisor Norman Birenbaum (who formerly ran the state cannabis programs in New York and Rhode Island). The hour-long call followed FDA’s announcement in January 2023 that the agency had determined that new legislation was needed to properly regulate CBD.

On this call, agency officials outlined the FDA’s continued concerns with CBD as a food additive, both because it is the active ingredient in an FDA-approved drug product (Epidiolex) and because the agency still has concerns about CBD’s overall safety profile, including potential adverse interaction effects with certain medications and caffeine. Nonetheless, the agency confirmed that it was following a risk-based approach to the regulation of hemp and hemp-derived products. Specifically, the agency noted that it was concerned with products that posed the greatest risk to public health, such as (1) those making unsubstantiated health claims and (2) products that inappropriately appeal to children, such as look-alike Delta-8 THC products marketed as candy that carry a risk of accidental ingestion. The FDA highlighted its warning letters and consumer advisories on these points.

Birenbaum noted that the agency understood “the urgency of establishing a regulatory framework for these products and providing regulatory certainty to consumers and industry.” While the FDA did not record this stakeholder call, the agency did make the slides publicly available.

New York Cannabis Regulators Settle Cannabis Licensing Suit

On May 30, New York’s Cannabis Control Board approved a proposed settlement that would resolve a dispute with an out-of-state cannabis license applicant. As we have written previously, the suit challenged New York requirements for social equity dispensary license applicants. A federal judge initially enjoined New York cannabis authorities from granting licenses in five regions of the state as a result of the suit. This injunction was later narrowed to one region, the Finger Lakes. The proposed settlement would resolve the dispute and allow licenses to be issued in that region.

This case is one of several recent federal court decisions involving issues related to the dormant Commerce Clause. Perkins Coie lawyers have written about cannabis and the dormant Commerce Clause in Law360, LexisNexis Practical Guidance, and Yale Law & Policy Review.

Minnesota Legalizes Adult-Use Cannabis

On May 30, Minnesota Governor Tim Walz signed HF 100, legalizing recreational cannabis in the state. The first retail licenses are expected to be issued in about a year. The new law notably allows for the sale of hemp-derived cannabinoid Delta-8 THC in edible products. The law also creates a new Division of Social Equity to administer grants to communities disproportionally affected by cannabis prohibition.

Maryland Releases Adult-Use Cannabis Regulations

On May 25, the Maryland Cannabis Administration (MCA) posted draft regulations to oversee the adult-use cannabis market set to open in the state on July 1. The rules include processes for converting medical licenses to recreational use, information on social equity grant programs, procedures for license applications and approvals, and establishing a single supply chain for all cannabis products grown or produced in the state. Notably, the rules also establish special accommodations for medical patients, such as reserved products, opening hours, and patient lanes for medical-use consumers.

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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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