What is the Legislative State of Cannabis Affairs?

In light of increased national momentum involving the cannabis industry, we provide below an update of the current legislative state of affairs for cannabis including the highly anticipated public hearing hosted by the U.S. Food and Drug Administration (FDA) on May 31, 2019. The summary highlights hindrances faced by states in attempting to legalize marijuana and touches upon federal implications stemming from the Farm Bill .

Over 30 states have legalized marijuana and 10 permit its recreational use. Despite this, however, some state legislatures continue to face challenges in dealing with expungement provisions and black market tactics. New Jersey, vying to lock in recreational legalization over New York announced today that it was dropping its efforts to pass the bill. New York appears to be following suit as well. Governor Cuomo expressed concern over the implications of legalizing marijuana on law enforcement and declared that“negotiations were too complicated.”  Similarly, Illinois is engaged in revising language implicating constitutional concerns related to criminal record expungement and “black market” tactics stemming from consumers being able to grow their own cannabis plants.

At the federal level, two main issues surfaced during the webinar: (1) the activity surrounding the Secure and Fair Enforcement (SAFE) Banking Act and (2) the upcomingpublic hearing hosted by the U.S. Food and Drug Administration (FDA) to discuss the legality of cannabis. As we previously mentioned here, the SAFE Act if enacted, would create a safe harbor for banks to engage in business with companies who serve cannabis in states where it is legal. On May 9, 2019, 38 Attorney Generals from various states wrote to congressional leaders urging them to pass the bill in order to protect banks against legal liability from engaging in related transactions. With this activity, it is likely the Act may pass before the August congressional recess.

With respect to FDA oversight of cannabis (CBD), the Farm Bill effectively removed hemp from the Controlled Substances Act, which means it is no longer a controlled substance under federal law. The upcoming CBD public hearing scheduled for May 31, 2019 will in part, shed light on the health and safety risks of CBD-derived products including how researchers may access “high quality” uncontaminated CBD used by consumers at the state level. Notably, because the CBD that is legally available in some states is not yet federally regulated, the safety, purity, and quality are questionable.

We look forward to participating in the public hearing and will post further developments related to FDA regulatory oversight and enforcement of CBD-containing products.

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