On January 10, 2017, Alabama GOP Sen. Jeff Sessions began confirmation hearings with the Senate Judiciary Committee for his potential role as Attorney General in the upcoming Trump administration.   During these hearings he was asked questions that shed light on possible differences between the Trump administration Department of Justice’s stance on marijuana as compared to the Obama administration.

In response to a question about federalism as it relates to marijuana laws from Sen. Mike Lee, a Utah Republican, Sessions stated:

“One obvious concern is that Congress has made the possession of marijuana in every state an illegal act. If that is not desired any longer, Congress should pass a law to change it. It’s not the attorney general’s job to decide which laws to enforce. We should enforce the laws as effectively as we are able.”

Continue Reading Jeff Sessions Senate Confirmation Hearing Hints at Enforcement Attitudes Towards Marijuana

In April, we wrote about Med-X, Inc. (“Med-X”).  Med-X was the first cannabis company to launch an equity crowdfunding campaign, and as of September 16, 2016, the company has found itself in regulatory hot water for failing to adhere to securities law requirements.

Continue Reading Crowdfunding in the Cannabis Industry – Update – SEC Temporarily Suspends Med-Ex Crowdfunding Offering

First Canadian Marijuana Crowdfunding Platform Launched

On March 2, Ascenta Finance Corp., a licensed exempt market dealer, and KoreConX Corp., a company that specializes in crowdfunding, launched Bay Street Cannabis (“Bay Street”), Canada’s first online equity crowdfunding portal dedicated  to the cannabis sector.  Bay Street provides public and private legal cannabis and cannabis-related businesses with access to investors.  Like the U.S., Canada’s laws have recently made it possible for Canadians to purchase securities of cannabis companies.  The Canadian cannabis sector is clearly moving into the future financing, but what about the U.S.?
Continue Reading The State of Crowdfunding in the Cannabis Industry

Infestation by mildew, parasites, fungus, mites, bacteria, powdery mildew and other biological agents can spell disaster for a cannabis crop. Unchecked, an infestation can destroy an entire grow room worth of crops. With each crop representing thousands of dollars of investment, it is understandable that many marijuana entrepreneurs will use any means available to save an at-risk crop, including dousing it with gratuitous amounts of chemicals to kill invading organisms. Although using pesticides in such cases might seem like a sound business decision, it could actually open the doors for lawsuits and unwanted regulatory attention.  Oregon politicians Andy Olson and Jeff Barker, state in their opinion piece, “Marijuana Regulations Must Cover Pesticide Use”, that people who use medicinal marijuana may already have compromised immune systems and are those least able to bear exposure to a tainted product.  Additionally, as with any other product, anyone in the product’s chain of distribution (including marijuana growers, processors and retailers) can be held liable for a defective product under products liability law, as described in Alison Malsbury’s article, “Inaccurate Marijuana Testing Will Lead to Lawsuits.”  Given that marijuana is consumed through edibles, by smoking and even through topical application to the skin, there are a number of ways that unregulated pesticide use may put consumers at risk.

As further proof that these concerns are more than merely hypothetical, on April 24, 2015, officials from the City of Denver’s Department of Environmental Health quarantined 60,000 plants produced by LivWell, Inc., a Colorado-based grower with 2015 revenues projected to exceed $80 million (“LivWell”). The plants were tested by a state-licensed lab and found to be acceptable within the limits for vegetation and officials eventually released them to LivWell to sell. Nonetheless, on October 6, 2015, two Colorado marijuana users (one of whom has a brain tumor) recently sued LivWell for unspecified damages, claiming, that Eagle 20, a fungicide that the LivWell used, was “patently dangerous” when used on a product that is likely to be consumed through heating and combustion.  In the complaint (full text here) the plaintiffs reference the fact that Eagle 20 has not been approved for use with tobacco products.  The plaintiffs, neither of whom allege that they were sickened by ingesting the marijuana, seek class action status and relief based on LivWell’s use of Eagle 20 and failure to disclose its use to consumers as violations of common law.  This case is the first marijuana product liability claim in the U.S. since marijuana has been legalized.
Continue Reading EPA Offers Guidance to States for Use of Pesticide on Marijuana