Cannabis Legal Report - May 2023 #2

Perkins Coie

Perkins Coie

[co-author: Hanna Barker Mullin]

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

SAFE Banking Updates

The latest iteration of the bipartisan Secure and Fair Enforcement (SAFE) Banking Act was reintroduced in Congress on April 26, 2023, and received a hearing before the Senate Banking Committee on May 11. Prior to the hearing, the American Bankers Association and numerous state banking associations released an open letter calling for the passage of the bill “as soon as possible.”

The hearing, which included witnesses from both parties, addressed possible amendments to the bill, particularly provisions to address expunging cannabis records. Senate Majority Leader Chuck Schumer (D-NY) noted his plan was to amend the bill on the floor and incorporate language from the Harnessing Opportunities by Pursuing Expungement (HOPE) Act, a bill that offers grants to states that expunge cannabis convictions from records.  

New Hampshire Senate Rejects Legalization Bill for Adult-Use Cannabis

On May 11, the New Hampshire Senate rejected a bill that would legalize possession of up to four ounces of cannabis for adult-use. Even with this setback, Governor Chris Sununu (R) said in a statement that he would endorse a legalization bill containing strict regulatory provisions, requiring cannabis products to be sold tax-free in state-owned stores, and allowing local municipalities to ban sales if they choose.

Sixth Circuit Reverses Dismissal of Suit Brought by CBD Shop Owner

On May 16, the U.S. Court of Appeals for the Sixth Circuit overturned a trial court’s grant of summary judgment. In the case, Tennessee law enforcement authorities conducted raids on retailers selling CBD products. Despite the products being legal under state and federal law, stores were padlocked, their inventory was seized, and the owners were arrested and charged with violating the Tennessee Drug Control Act and creating a public nuisance.

The trial court granted summary judgment in favor of state authorities based, in part, on scope of civil conspiracy claims under binding circuit precedent. In reversing the trial court, the Sixth Circuit clarified that timing, illicit purpose, and defined scope of the law enforcement operation created “a genuine dispute about whether it functioned as a single conspiratorial plan to raid the stores and arrest the owners without probable cause.” The case was remanded back to the trial court for further proceedings.

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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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