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.

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