Welcome back to The Week in Weed, your Friday look at what’s happening in the world of legalized marijuana.

We’ve got an update on the Arizona ballot measure.  Federal appropriation legislation includes some cannabis provisions.  In international news, Bermuda is looking at legalization.  And we close out with Oklahoma, where the state is enforcing testing rules, and slushies are not a thing.

arizona

Smart and Safe Arizona submitted over 400,000 signatures to place a recreational marijuana measure on the November ballot.  If approved, it would allow use by adults 21 and over.  Although a similar initiative lost at the ballot box in 2016, proponents believe support for legalization is stronger now.

appropriations

Cannabis provisions have made their way into several new funding bills.  The National Defense Authorization Act, which we mentioned last week, includes a provision allowing veterans to return to military service even if they’ve used marijuana while separated.  Other measures would allow cannabis banking, marijuana sales in D.C., and cannabis research by universities.  Keep in mind, none of these provisions are final – when it comes to appropriations, there’s many a slip between the cup and the lip.

bermuda

Turning our attention abroad, Bermuda is considering legalization of cannabis for adult-use.  Legislators introduced a previous plan last December, but the pandemic’s economic toll (and need for additional cash) makes it more likely this will pass.

oklahoma

The Oklahoma Medical Marijuana Authority (OMMA) has always required that cannabis be tested, but as of this month, samples must go to an OMMA-licensed lab.  The deadline for enforcement had been delayed due to a lack of testing facilities, but now 21 of them are operational, allowing the state to implement the regulation.

and finally

It’s been a busy time for OMMA.  In addition to the testing regulations, they’ve also release what they’re calling a “slushy-machine guidance memo.”  There’s a phrase I never expected to type!  You would think a product that provides medical marijuana in a way designed to beat the Oklahoma heat would be a no-brainer for approval, but no such luck.

Stay safe and be well everyone – we’ll see you next week!

Welcome back to The Week in Weed, your Friday look at what’s happening in the world of legalized marijuana.

State and local news dominates this week.  Los Angeles will change its cannabis licensing program.  Colorado’s governor signed a law that allows pardons for minor marijuana offenses.  A school funding initiative’s court battles may have implications for marijuana in Idaho.  Medical marijuana patients in New Jersey now have home delivery as an option.  There was federal news as well.  A group of senators has added an amendment to the National Defense Authorization Act that would promote cannabis research.  FinCen released new guidance on hemp banking.  Will Vice President Biden support marijuana legalization?  And finally, we have a look at the dogs of cannabis.

los angeles

The Los Angeles City Council approved changes to its marijuana licensing program, in an effort to expand opportunities for victims of the war on drugs. Opponents of the previous program said that it was riddled with loopholes that allowed wealthy, well-connected people to obtain licenses.

colorado

Governor Jared Polis signed a bill this week allowing the pardon of thousands of citizens convicted of minor cannabis offenses. The bill also establishes a system for social equity licenses; the state is seeking to bring more diverse people into the cannabis industry, which is currently 75% white.

idaho

Supporters of an Idaho school funding ballot initiative have won a victory in federal district court that could have implications for marijuana in the state.  The state’s stay-at-home order stopped signature gathering and was not lifted until after the deadline for submitting signatures passed.  The court mandated that the state either certify the question immediately or allow supporters more time to gather signatures.  The Idaho Cannabis Coalition hopes the decision will apply to them as well.

new jersey

New Jersey medical marijuana dispensaries may now deliver cannabis to their patients’ homes, due to the COVID-19 pandemic.  Dispensaries need to submit a plan to the Department of Health before beginning deliveries.

marijuana research

We don’t discuss defense spending much in this column, but this year’s National Defense Authorization Act is different.  A bipartisan group of Senators introduced an amendment to promote cannabis research.  It would also protect doctors who discuss marijuana with their patients, and encourage FDA-approved cannabinoid drugs

hemp banking

The Financial Crimes Enforcement Network (FinCEN) released guidance on Monday for banks wishing to serve hemp-related businesses.  Banks need not file Suspicious Activity Reports because hemp is federally legal and no longer on the controlled substances list.  Hemp businesses should be treated like any other business.

vice president biden

Vice President Joe Biden has called for the decriminalization of marijuana on the federal level, but has so far stopped short of supporting legalization.  Could his position change as concerns about the disparate impact of the war on drugs on communities of color take center stage?

and finally

June 26 was National Take Your Dog to Work Day, and “Hemp Industry Daily” published a slideshow of the “top dogs” of marijuana.  Of course, this year, everyday is Take Your Dog to Work Day here at the editorial offices of The Week in Weed.  Sherlock takes a keen interest in all things related to cannabis news.

Stay safe and be well everyone – we’ll see you next week!

Welcome back to The Week in Weed, your Friday look at what’s happening in the world of legalized marijuana.

We begin with the claim that the Justice Department brought antitrust actions against cannabis companies due to Attorney General Bill Barr’s antipathy towards the industry.  The state of New Jersey is contemplating decriminalization, and Montana may have cannabis on the ballot.  The city of Denver gets into the R&D business.  Should the FDA issue a CBD rule quickly?  Some consumer groups say no.  Medical marijuana is now permitted to those on parole or probation.  And finally, we have an update on the Oklahoma fake email story!

antitrust and marijuana

DOJ attorney John Elias testified this week that the department was improperly investigating cannabis companies for antitrust violations. Video of the hearing is available here.  Written testimony is available here.  The DOJ’s Office of Professional Responsibility looked into the matter earlier this month and found no evidence of wrongdoing.  The memorandum is available here (subscription required).

new jersey

New Jersey is considering decriminalizing marijuana possession.  The state Assembly recently passed a bill substituting a fine for arrest for possession of up to two ounces of marijuana.  The bill now moves to the state Senate, where opinions against the legislation have recently shifted.

montana

New Approach Montana submitted over 130,000 signatures in support of two ballot initiatives to legalize and regulate adult-use cannabis in the state.  This is far above the number of signatures needed to put the measures before the voters, so it seems likely that they will make the November ballot.

research & development

The city of Denver awarded its first license for medical marijuana R&D.  MedPharm hopes to start work on its first project, studying marijuana’s effect on Alzheimer’s and dementia, by the end of 2020.

cbd rule

For years, the hemp and CBD industries have been waiting impatiently for the Food and Drug Administration to issue regulations on cannabidiol.  Now several consumer groups are suggesting they need to wait a bit longer.  The groups sent a joint letter to members of Congress, urging them not to push the FDA to issue regulations, as their attention has been diverted due to the pandemic.

pennsylvania

The Pennsylvania Supreme Court struck down a county law forbidding the use of medical marijuana by those on probation or parole.  The unanimous decision applies throughout the state.

and finally

Regular readers of this column will doubtless recall that the general counsel of the Oklahoma Department of Health sent herself threatening emails, which she claimed were from cannabis advocates.  She’s now been suspended from practicing law (subscriptoin required) for one year.  You just can’t make this stuff up.

Stay safe and be well everyone – we’ll see you next week!

As we previously reported, the United States Patent and Trademark Office (USPTO) issued a trademark examination guide last year, broadening the class of cannabis-related goods for which cannabis companies could register their trademarks. The examination guide explained that, because certain hemp-based products with less than 0.3% THC–including CBD–are no longer controlled substances under the Controlled Substances Act (CSA), companies could apply to register trademarks in connection with those goods.

The examination guide included a caveat that this expansion only included hemp-based products, and that CBD derived from marijuana was still unlawful under federal law. Furthermore, the USPTO warned that because CBD use as a food additive is still under investigation by the FDA, the use of CBD in foods or dietary supplements is still unlawful and marks seeking registration for such use should be refused.

The USPTO has now issued refusals of several applications for marks that are used in connection with CBD oils. These refusals offer some clarification of the examination guide. The USPTO generally takes the position in these refusals that CBD oils are flavored and in most cases designed to be added to food and drinks, and therefore the goods are unlawful. Because the goods are unlawful, the USPTO will not issue a registration in connection with those goods.

One popular CBD company appealed their refusal to the Trademark Trial and Appeal Board (TTAB) recently, but the TTAB affirmed the refusal in a precedential opinion, finding that, even if the CBD has less than 0.3% THC, it is unlawful to offer CBD as a dietary supplement. The TTAB acknowledges that the hemp-derived product applicant produces may well be lawful, but once CBD is sold as a dietary supplement or added to “food” under the definition of the Food, Drug & Cosmetics Act, it becomes unlawful. Accordingly, whether an applicant’s CBD is derived from hemp or marijuana seems to be irrelevant if the product is designed to be added to “food.” The TTAB also noted that, so long as there are “substantial clinical investigations of CBD” ongoing, the USPTO will consider CBD oils to be unlawful for purposes of federal trademark protection.

One important takeaway here is that the TTAB’s practice is to presume the goods are lawful unless the application record indicates a violation of federal law or when the activities involve a per se violation of federal law. The latter was true in this case, but the TTAB seems to be signaling that there may be a path forward should the FDA ever carve out an exception for certain types of hemp-derived CBD.

Welcome back to the Week in Weed, your Friday look at what’s happening in the world of legalized marijuana.

We’ve got a wide range of news this week.  Members of the Cannabis Caucus asked for consideration of cannabis legalization in the policing reform bill.  Nevada is issuing pardons for marijuana offenses.  Minnesota has introduced a legalization bill, and South Dakota has started the campaign to legalize by ballot initative.  The United Nations will be evaluating its classification of marijuana in the near future.  And sparkling CBD water is now a thing.

policing reform

Reps. Earl Blumenauer (D-OR) and Barbara Lee (D-CA) sent a “Dear Colleague” letter to their fellow House members, asking them to consider marijuana reform as a means towards racial justice.  They support passage of the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act.

nevada

Earlier this week, the Nevada State Board of Pardons Commissioners passed a resolution put forth by Governor Steve Sisolak pardoning those convicted of minor marijuana offenses.  Pardon documents will be free of charge and available online.

minnesota

Senator Ann Rest (DFL-New Hope) introduced a bill to legalize recreational cannabis late last week.  The Senator hopes that legalizing marijuana will allow for greater scientific research.

south dakota

The campaign to bring cannabis to South Dakota has officially started.  Voters will have two options on the November ballot: full legalization or medical marijuana.

united nations

The United Nations will meet next week to discuss the World Health Organization’s  cannabis recommendations.  This is the first in what is scheduled to be a series of meetings ahead of December’s vote to reschedule marijuana.

and finally

You knew it was only a matter of time.  Ocean Spray is testing a line of sparkling CBD water.  One flavor is called Elevate and one is called Descend, so you’re covered no matter which direction you want to go.  No word yet on when the beverages will be available in stores.

Stay safe and be well everyone – we’ll see you next week!

 

THC, CBD, CBN…the Cannabis industry is quite familiar with acronyms. But it’s another nasty little four letters, TCPA, that are – or should be – on the top of mind for every dispensary, delivery service, CRM platform, and private equity holding company. This as the US Supreme Court decides what the byzantine 30-year-old law will look like following a landmark decision expected by the end of June or July. Continue Reading Mass Texts: How the Cannabis Industry Must Deal with the Surge of TCPA Class Actions During Covid-19

Welcome back to The Week in Weed, your Friday look at what’s happening in the world of legalized marijuana.

Our big news this week is that the American Bar Association asked the Small Business Administration to make marijuana-related companies eligible for relief funds.  There’s plenty of state news also. Iowa votes to reform its medical marijuana program.  Maine faces lawsuits over its out-of-state licensing. New Jersey considers decriminalization.  We have a look at which states are most likely to legalize cannabis and there’s more on the Petsmart saga.  Plus, we have the latest on an Oklahoma trademark dispute.

aba/sba correspondence

As regular readers know, marijuana businesses, including what the SBA refers to as “indirect marijuana businesses” (non-plant touching businesses, such as law firms and accounting firms that provide advice and services to plant touching businesses)  are not eligible for Paycheck Protection Program (PPP) relief funds.  The American Bar Association would like to change that, at least for those law firms that advise cannabis companies.  The organization sent a letter this week to the SBA asking them to reconsider their policy barring companies that have any dealings with cannabis firms from receiving money under the PPP.  The National Cannabis Industry Association (NCIA) supports a lawsuit to force the issue with the agency.

iowa

The Iowa Senate passed a bill making changes to the state’s medical marijuana program.  It sets a THC cap of 4.5 grams per patient over a 90-day period, which is more restrictive than the current limit.  Terminally ill patients could get a waiver.  It also broadens the number of conditions eligible for medical cannabis prescriptions.  There’s some question over whether Governor Reynolds will sign the legislation, as she vetoed a similar bill last year.

Maine

Maine recently dropped a residency requirement for ownership of recreational marijuana businesses.  This has been met with a lawsuit filed by the Maine Cannabis Coalition, arguing that the state had no right to eliminate the residency requirement absent action by either a court or the state legislature.

new jersey

Legislators introduced a decriminalization bill this week that would remove criminal penalties for crimes involving possession of less than one pound of marijuana.  It also includes expungement of past crimes and sealing of criminal records.  This move comes ahead of a vote on legalization this November.

where is legalization likeliest?

Speaking of New Jersey, it tops Motley Fool’s list of four states most likely to legalize cannabis in 2020.  Although they emphasize the “wow” factor of Mississippi showing up on the list, South Dakota’s appearance is even more surprising.  They and Idaho are the only states in the country that allow no form of cannabis whatsoever.  It will doubtless be an interesting Election Day.

cbd for pets

PetSmart has appeared more in this blog lately than one might have expected, given that it mostly sells pet food and supplies.  They attempted to branch out into the CBD oil market, but were met with two lawsuits, alleging their products did not work as advertised and were not approved by the FDA.  Both plaintiffs dropped their actions without prejudice (meaning we may not have seen the last of them) and without a reason.  Further bulletins as events warrant.

what’s in a name?

The dispensary formerly known as the Dank of Oklahoma will choose a new moniker.  The Bank of Oklahoma filed a trademark infringement suit against the company, alleging it tarnished the good name of the bank and confused customers.  No word yet on a new name.

On May 29, 2020, the Rhode Island Supreme Court affirmed dismissal of an employee’s lawsuit against his former employer after it terminated him for refusing to submit to a reasonable suspicion drug test, even though his “bizarre” behavior could have been attributed to other causes. As employers are becoming increasingly concerned about marijuana use in states with recreational or medical marijuana laws, the decision serves as a reminder to employers to develop a process for making and defending a reasonable suspicion determination (including manager and supervisor training and objective and clear documentation).

Facts

The plaintiff, who worked as a “supply delivery driver,” suffered an injury to his arm and back while making a delivery. As a result of injuries he sustained while in the military, he previously had applied for and received a medical marijuana card. Although he used marijuana for medicinal purposes, the plaintiff claimed he never used it “on the clock or the job” and was never “under the effects of marijuana” while working. While his managers questioned him about the work-related injury, the plaintiff exhibited “bizarre” behavior, prompting them to request that he submit to a drug test. The plaintiff admittedly got quite angry as a result of their request and had sworn “excessively” during the conversation. Once at the drug testing site, the plaintiff submitted to a breathalyzer, but refused to submit to a urinalysis drug test. The employer terminated him for refusing the test.

The plaintiff claimed in his lawsuit (Colpitts v. W.B. Mason Co., Inc.) that the employer did not have reasonable suspicion to send him for the drug test. Rhode Island’s drug testing statute states that employers may require employees to submit to a drug test if the employer “has reasonable grounds to believe based on specific aspects of the employee’s job performance and specific contemporaneous documented observations, concerning the employee’s appearance, behavior or speech that the employee may be under the influence of a controlled substance, which may be impairing his or her ability to perform his or her job . . .” The plaintiff argued that his behavior was not indicia of drug use, and seemed to suggest on appeal that the behavior on which an employer relies to support a request for a reasonable suspicion drug test “must lead ineluctably to the conclusion that the employee is under the influence of a controlled substance and not to any other conclusion.”

The Trial and Supreme Court Uphold the Termination

The trial court admittedly struggled with the case because some of the plaintiff’s behavior could have been due to substance use but also could have been due to the pain he suffered as a result of the work-related injury. In finding for the employer, however, the trial judge said that “reasonable grounds [do not] have to be the only grounds,” and that while there might have been competing explanations for the plaintiff’s behavior, this does not mean the employer’s request was unreasonable.

The Supreme Court agreed with the trial court based on what it described as contemporaneous observations and other evidence concerning the plaintiff’s appearance, including: (1) testimony at length about the plaintiff’s “odd” behavior; (2) the plaintiff’s failure to call the warehouse to report his injury despite it being his habit to do so; (3) the plaintiff’s inability to clearly articulate what had occurred when he was injured; (4) the plaintiff’s bending over, repeated use of obscenities, staggering and saying that he was going to “puke”; and (5) his superiors’ belief that he was under the influence.

Turning to the issue of whether the behavior could have been the result of pain from the injuries, the Supreme Court wrote:

The employee’s behavior does not need to be such that it could lead to only a conclusion that he or she is under the influence of a controlled substance. The statute at issue clearly and unambiguously does not require actual knowledge that the employee is definitely under the influence, nor that the employee manifest the specific symptoms usually associated with being under the influence; the statute requires only that there be reasonable grounds to believe that the employee is under the influence of a controlled substance.

To hold otherwise, according to the court, would require managers and supervisors to “possess that degree of medical sophistication” that would allow them to distinguish between symptoms of pain and symptoms of drug use.

Employer Takeaways

Given that marijuana legislation is sweeping the nation, many employers are presently updating their policies and procedures as they expect to see increased marijuana usage among their employees. There is a state law trend towards requiring employers to prove impairment to justify adverse action based on marijuana use. This follows from the widely recognized view that a marijuana-positive result by itself says virtually nothing about impairment at work. As a result, a best practice for employers who test current employees for marijuana, or any drug, is to establish a strong record of impairment independent of a positive result. That would include thorough, contemporaneous documentation of the reasons employees are sent for reasonable suspicion testing. It also could include an accident investigation report that rules out non-drug-related causes where circumstances warrant that conclusion.

Employers should consult outside counsel for help in revising policies, addressing new marijuana challenges in the workplace, and ensuring compliance in states (like Iowa, Minnesota, and Rhode Island, among others) with comprehensive and highly technical drug and alcohol testing statutes.

Welcome back to The Week in Weed, your Friday look at what’s happening in the world of legalized marijuana.

Louisiana is expanding medical marijuana, and the United Nations may reschedule cannabis.  Meanwhile, PetSmart faces a lawsuit over pet CBD.  MedMen has campaign finance problems, and the 9th Circuit looks at taxes.

louisiana

The Louisiana legislature passed two cannabis reform bills this week.  One allows doctors to decide whether to prescribe medical marijuana to patients.  The other ensures the state will not prohibit or discourage banks and credit unions from providing financial services to legitimate cannabis businesses.  Supporters expect the governor to sign both bills.

united nations

Marijuana is currently classified as both a Schedule IV drug and a Schedule I drug on the international level.  Schedule IV is analogous to Schedule I in the United States.  Last year, the WHO recommended relisting marijuana as a Schedule I drug only.  Member states pushed back on that recommendation.  The full United Nations is scheduled to vote on revising cannabis policy in December, assuming that COVID-19 doesn’t delay the vote.

cbd for pets

As we reported earlier, PetSmart is now selling CBD oil for pets.  Well, things have not been going well.  Two lawsuits filed in federal court in Florida allege that the products did not perform as advertised.  They also note that the products cannot be sold because they have not been approved by the FDA.

campaign donations

Did MedMen executives give illegal campaign contributions to Nevada Governor Steve Sisolak?  The Secretary of State is trying to find an answer to that question.  The allegations were made in 2019, as part of a lawsuit in California.  The office only recently learned of them, when they were made public in a news article this past weekend.

tax litigation

Cannabis industry groups urged the 9th Circuit Court of Appeals to strike down Section 280E of the tax code as unconstitutional this week.  They filed an amicus brief in support of Harborside Health Center’s appeal of a U.S. Tax Court ruling.

and finally

Did Jesus smoke pot?  Biblical scholars may have a new question to ponder.  A recently published article reports that residue found at the Judahite Shrine of Arad in Israel contains THC, CBD, and CBN.

Stay safe and be well everyone – we’ll see you next week!

On May 11, 2020, a Pennsylvania court upheld the state Unemployment Compensation Board of Review’s order granting a CBD (cannabidiol) user unemployment benefits after being terminated for testing positive for marijuana (Washington Health System v. Unemployment Compensation Board of Review). The decision highlights that employers must tread carefully before taking action against applicants or employees using medical marijuana or CBD products to treat various ailments.

The claimant, a licensed occupational therapist, tested positive for marijuana after submitting to a random drug test under the employer’s drug and alcohol testing policy. That policy prohibited employees from “being under the influence of drugs or having drugs in one’s system while at work,” and defined “drug” to mean “any substance producing effects on the central nervous system, or any controlled substance.” The policy did not prohibit the use of legal drugs, but did require employees to advise the employer if such use would “pose[] a significant risk of substantial harm to the health or safety of the individual or to others” or “render[] the Employee unable to perform the essential functions of the job.” Before the test, the claimant advised her employer that she used over-the-counter CBD for symptoms related to cancer. Regardless, the employer terminated her for testing positive for marijuana.

The Board found, and the court agreed, that the claimant was entitled to benefits because the employer did not prove the claimant violated any company policy. Both pointed to the failure of the employer to present admissible evidence at the hearing that the claimant had tested positive for marijuana. That the claimant testified that she had been advised of the positive test result was not sufficient, and the Board and the court rejected the employer’s efforts at proving the fact of the positive test through hearsay evidence. The claimant maintained all along that she never used marijuana. Instead, she testified to using what she believed to be a legal, over-the-counter product to treat cancer symptoms, although she acknowledged that she had been advised that CBD use could result in a “false positive” test result for marijuana. Thus, because the employer did not present the test result or evidence that the claimant used an illegal drug, the Board concluded the employer failed to prove the claimant violated the drug and alcohol testing policy and awarded the claimant benefits. In upholding the Board’s decision, the court added that the employer also had failed to prove the claimant’s use of CBD would have affected her ability to perform the job.

As previously reported here, CBD is projected to be a $22 billion industry by 2022. However, employers remain hazy about this extremely popular product and the implications it has on their employees and businesses. CBD is now being marketed and sold in a variety of forms, including oil (the most popular), health and beauty products, vapors, beverages, and infused edibles, such as chocolates and gummies.

CBD derived from hemp usually will not report a positive test result for marijuana assuming the THC concentration in the product does not exceed .3%. However, if the CBD product contains a sufficient amount of THC, it is entirely possible the product could cause a positive drug test result for marijuana. In our prior blog, we reported studies showing that some over-the-counter CBD products did in fact have THC in them, which might explain the claimant’s positive test result in the Pennsylvania unemployment case. Regardless, before taking any action against medical marijuana or CBD users, employers should review the laws of the states in which they operate and work with employment counsel to help navigate this complex and rapidly evolving area of the law.

Seyfarth Shaw will continue to monitor legal developments at the federal and state level.