Can We Use Commercial Cannabis to Address Historical Inequities?

Here in Portland, a number of City Councilors have been adamant that Portland’s adult use program should benefit minority communities. There is a current proposal to give historically disadvantaged groups some level of preference when applying for licenses. This mirrors a common sentiment nationwide that the adult use industry should benefit those communities historically disproportionately affected by marijuana-related prosecutions. 

Chicago has one interesting idea for how this could happen. Chicago’s Mayor Lightfoot has proposed a “social equity program” that would essentially create a co-op for growing adult use marijuana and allow minorities to invest through small cash investments or sweat equity. The Mayor has proposed using $15 million in municipal funds for this project. It would be interesting to see this play out, if it gets off the ground.

Bills to Watch in 2020 NH Legislative Session

While the text of bills slowly make their way out of the Office of Legislative Services for the 2020 legislative session in New Hampshire, there are at least a couple cannabis-related bills of interest to keep tabs on. 

The first bill is HB 1386, sponsored by Rep. Wendy Thomas (D – Hillsborough), which would prohibit employers from retaliating against an employee solely because the employee is a qualified patient of the New Hampshire therapeutic cannabis program and has a positive drug test for cannabis. The potential reach of this bill is unclear as it provides that “[e]mployment where no cannabis is allowed shall be excluded from this section.” This suggests that at least some undefined class of employers (Hospitals? Police departments? Schools?) can retaliate against employees who test positive for cannabis. The bill also clarifies that an employer is not required “to allow being impaired by cannabis products while at work.” Given Governor Sununu's veto of several cannabis-related bills last session, I do not anticipate this bill becoming law this session (at least in its current form).

The second bill to watch is HB 1150, sponsored by Rep. Renny Cushing (D – Rockingham), which would permit qualifying patients visiting from out-of-state to access New Hampshire’s therapeutic cannabis dispensaries. Anybody who has visited New Hampshire knows that the state prides itself on obtaining revenue from visiting out-of-staters whether by tolls, state-run liquor stores on the highway, or room and meals taxes. Nevertheless, the elimination of the current ban on such transactions may run into some practical obstacles, such as how to determine whether an out-of-state consumer is a “qualifying patient.” This determination will likely become even more difficult as our neighboring states move away from a medical cannabis market and toward a legalized recreational cannabis market.

Feds Take Steps to Increase Hemp Producers’ Access to Capital

The Department of Treasury released new guidance yesterday that makes it much easier for banks to serve hemp producers. This comes on the heels of the USDA interim rules governing hemp nationwide. 

Basically, the new guidance says that banks no longer need to file ‘suspicious activity reports’ with Treasury for hemp producers since the crop is now largely legal under federal law. Suspicious Activity Reports (or SARs) are a fairly burdensome regulatory requirement for banks that require a great deal of diligence. This new guidance not only reduces the regulatory burden; it also reduces legal exposure banks may face by working with clients in the hemp industry. This should mean a greater willingness on the part of federally chartered banks to work with hemp producers, which, in turn, will result in greater access to capital.

This is also important because of likely trickle down effects. Insurers, for example, will likely become more eager to work with the hemp industry as access to capital increases.

Of course, banks will still need to ensure that their clients are complying with state and federal laws governing hemp, and will need to conduct necessary diligence to avoid banking illegal marijuana operations with products containing THC in excess of 0.3%. In addition, banks will need to remain cautious about clients who work with CBD in food products given the FDA’s hostility to that practice.

All in all, I see this as another positive step in the long game toward broader legalization.

Class Action Lawsuit Brought Against CBD Company for Deceptive Advertising

Just a week after the U.S. Food and Drug Administration (FDA) stated that it could not give CBD a “generally recognized as safe” designation, a proposed class action has been filed against a CBD company in California. The complaint alleges that Infinite Product Co.’s CBD products are misleadingly labeled and illegal to sell because they use CBD as an additive to food and topical cream products in violation of federal law. The “generally recognized as safe” designation allows a substance to be used as a food additive without going through the FDA’s approval process. Currently, there is no federal regulation that allows the use of CBD as a food additive. This proposed class action could be the first of many against CBD companies offering consumer products and food containing CBD as an additive, and may provide further impetus to the FDA to provide more guidance related to CBD products.