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Cannabis Law

Navigating the Legal Complexities of an Evolving Industry

Launching a cannabis business, whether related to medical- or adult-use in states where it has been authorized, requires tenacity. It also demands an appreciation for the complexities of the evolving and conflicting federal, state and local laws governing the operation. While an increasing number of states and foreign countries have authorized cannabis for medical- and/or adult-use, hurdles remain, such as securing capital, obtaining real estate, accessing credit and banking, addressing regulatory scrutiny, and navigating complicated tax treatment. These challenges necessitate a clear understanding of the applicable laws and regulations, and a holistic approach to business formation and operation.

Saul Ewing Arnstein & Lehr attorneys advise state cannabis license applicants and awardees, ancillary service and product providers, investors, management companies, and various other entities that are affected by federal and state marijuana laws, such as food and beverage and cosmetics companies, colleges and universities, and long-term care facilities, on a variety of cannabis law matters in the following areas:

  • Regulatory
    • State agency licensure, including with regard to applicable requirements, as well as application content and strategies
    • Post-licensing compliance (e.g., standard operating procedures and employee training)
    • FDA compliance for food and dietary supplement manufacturers
    • Relevant federal law
    • Surveys of state medical- and adult-use regulations
    • Regulatory counseling for non-cannabis companies
  • Corporate
    • Business formation, management agreements, contract drafting/negotiation and tax matters (including IRC 280E)
    • Mergers, acquisitions and dispositions of cannabis businesses
    • Joint ventures
    • Investments and financing
    • Public market advisory and execution services in the United States and Canada
  • Real Estate
    • Acquisition of growing, processing and dispensing properties
    • Land use and zoning matters for cannabis-industry properties
  • Intellectual Property
    • Patent applications and prosecution
    • Trademark selection, registration, and infringement and unfair competition litigation
    • Licensing and merchandising agreements
  • Labor and Employment
    • Medical marijuana cardholder accommodations
    • Employee handbook revisions
    • Employee applications and agreements
    • Non-compete agreements
    • Non-disclosure agreements
    • Labor peace agreements as part of licensing applications
    • Labor compliance plans as part of licensing applications
    • Labor-management relations, including union organizing campaigns, collective bargaining negotiations, and NLRB proceedings
  • Disputes and Litigation
    • Employee medical marijuana cardholder accommodation disputes
    • Court challenges to state licensing programs
    • Partnership and investor disputes
    • Pre-litigation advice and guidance

Hemp & Hemp-Derived Products

The passage of the 2018 Farm Bill has significantly impacted the hemp industry, raising myriad questions for industry stakeholders, such as: what role United States Department of Agriculture (USDA), Food and Drug Administration (FDA), and Drug Enforcement Administration (DEA) will play; how rigorously state hemp programs will be reviewed by USDA; what actions FDA has taken and may potentially take on cannabidiol (CBD)-containing products; and industry standards regarding DEA’s expectations to prove products are hemp-derived rather than marijuana-derived. Our attorneys are well-positioned to provide guidance on these and other related questions so that businesses operating in this nascent industry may appropriately mitigate risk, plan for growth, and remain in compliance with the ever-evolving laws and regulations they face. We routinely advise hemp cultivators, processors, food manufacturers and marketers regarding applicable requirements throughout the hemp lifecycle, from soil to oil. For food companies developing hemp-derived CBD products, we leverage our FDA experience in the food and beverage industry with our CBD knowledge to help guide them through the evolving compliance landscape as they work to get products to market.

Our attorneys closely follow the existing and prospective cannabis regulations throughout the country and the world, helping our clients understand the legal implications regarding licensing as well as navigate various compliance issues. In addition, our lawyers regularly research, provide legal advice, and speak and write about industry developments, challenges and best practices.

DISCLAIMER: Per federal law, marijuana is a Schedule I controlled substance. This means that it is a federal crime to sell, distribute, possess, and/or use marijuana or marijuana-derived products, regardless of any state law that may authorize certain marijuana activity. Although federal policy may, at times, recommend enforcement discretion when a business or individual is in compliance with state marijuana law that is deemed to comply with federal enforcement priorities, it is important to understand that compliance with state law does not equal compliance with federal law, and that federal marijuana policy may change at any time. No legal advice we give regarding marijuana law or policy is ever intended to guide or assist clients in violating federal law.

Related Industries

Experience

Saul Ewing Arnstein & Lehr attorneys advised on these select cannabis representations:

  • Regulatory
    A Canadian investment banking firm in conducting regulatory and corporate due diligence of a vertically integrated infrastructure and technology cannabis company, including three of its portfolio entities. The investment firm was lead agent in respect of a syndicate of agents that raised money for the cannabis company ahead of its listing on the Canadian Securities Exchange.
    A New York state applicant for hemp cultivation in successfully securing a license and in advising on ongoing regulatory and strategic business matters.
    Applicants in Arizona, Florida, Illinois, Maryland, Massachusetts, Nevada, Ohio and Pennsylvania in various aspects related to their cannabis licensure endeavors.
    A Canadian investment firm in performing regulatory and corporate due diligence of a vertically integrated, multistate owner of cannabis licenses and assets in a number of U.S. states where either medical- and/or adult-use of cannabis is authorized ahead of its listing on the Canadian Securities Exchange.
    A joint venture applying for medical cannabis grower, processor, and dispensary licenses in Maryland on application requirements, content and strategies.
    A large U.S. provider of property and casualty reinsurance on regulatory advice regarding insurance of state-authorized marijuana businesses.
    A Canadian investment bank as the lead agent in support of a $100 million funding round for a multistate cannabis operator based in the U.S. in performing regulatory and corporate due diligence of the cannabis business ahead of its listing on the Canadian Securities Exchange.
    A cannabis-based medicine company in providing regulatory counsel regarding its applications for medical marijuana permits in Pennsylvania.
    An ancillary services and products provider in conducting a state and federal law survey regarding potential liabilities related to providing such services and products to the cannabis industry.
  • Corporate
    A multistate cannabis operator in its merger agreement with another multistate cannabis operator. We also advised on various matters in connection with the deal closing, including complicated license transfers, license divestiture, and management agreement drafting and execution.
    Multistate operators in the acquisitions of dispensaries and cultivation facilities in Arizona, Arkansas, California, Florida, Illinois, Massachusetts, Missouri, Pennsylvania, New Jersey, Ohio and Washington.
    A medical marijuana dispensary in Maryland in its agreement with a cannabis consulting firm.
    An estate on its investment in a company that will lease manufacturing facilities and license technology to medical marijuana growers and processors.
    Maryland medical cannabis license applicants in the preparation of LLC operating agreements.
    A national cannabis company in the acquisition of a cultivation and dispensary facility, navigating complex regulatory hurdles and working with the client from inception through the closing of the deal.
    A cannabis-based medicine company on organizational, tax and investment structuring matters.
    A hemp producer in Oregon regarding strategic business advice, regulatory counseling, securities and privacy guidance, as well as a transformative funding round resulting in more than $30 million in capital.
    Several national cannabis companies as outside general counsel on corporate and employment matters, ongoing litigation, fund raising and regulatory compliance.
  • Real Estate
    A multistate cannabis operator in closing a real estate transaction and securing a working capital loan in excess of $50 million from a private lender.
    A medical marijuana grower in Maryland on securing land use approvals for its grow facility.
    A medical marijuana grower in Maryland on environmental due diligence for land purchased for a grow facility.
    A medical marijuana grower and retailer in securing real estate in Illinois, Massachusetts, Michigan and Pennsylvania.
    A medical marijuana operator in securing dispensary real estate sites in Florida, which included advising on land use, acquisition and leasing.
 

Recognition

The group includes attorneys who have received the following recognition:

Trade Groups & Associations

Contacts

Jonathan A. Havens
Adam Fayne