Massachusetts Secretary of State Bill Galvin and his Securities Division are increasingly turning their attention toward securities offerings in the cannabis industry, as demonstrated by the June 19, 2019 filing of the second enforcement action against a cannabis business in the last two months. The filing was accompanied by a statement from Galvin warning of future sweeps in the industry.
The latest enforcement action, brought against Positronic Farms,… More
Cresco Labs announced this week that United States antitrust regulators are seeking additional information about its anticipated acquisition of Origin House. Pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, Cresco Labs was required to notify the U.S. Department of Justice Antitrust Division (the “Division”) of the transaction and to observe a waiting period while regulators reviewed the transaction. On June 10, the Division requested additional information regarding the proposed transaction.… More
The New Jersey Department of Health’s Medical Marijuana Program announced on Monday that it was seeking applications to license up to 108 additional Alternative Treatment Centers (ATCs). More specifically, the Department intends to license up to 24 cultivators, 30 manufacturers, and 54 dispensaries. The cultivator licenses will be divided into three different size categories: 5,000 square feet, 20,000 square feet, and 30,000 square feet. The purpose of sub-dividing the cultivation licenses by size is to create opportunities for small and medium-sized businesses to participate in the medical marijuana program.… More
Last month, the House Financial Services Committee advanced a federal marijuana banking bill to the full House on a bi-partisan 45 to 15 vote. The “Secure and Fair Enforcement Banking Act” or “SAFE Banking Act” would prevent federal banking regulators from taking adverse actions against financial institutions solely due to an institution’s provision of financial services to state-legal cannabis businesses. The bill would also provide protections for financial institutions that do business with cannabis-industry service providers by declaring that proceeds from such providers do not constitute “proceeds from an unlawful activity.” And,… More
There is no business quite like cannabis, and very few that need constant attention to regulatory compliance in every aspect of operations. Friend of the blog and Director of Legal Compliance at Acreage Holdings, Gary Kaminsky, penned an excellent column recently for Law360 suggesting cannabis companies should implement regulatory Enterprise Risk Management (“ERM”) principles. The column can be found here: A Holistic Approach To Compliance For Cannabis Cos. –… More
On November 29, a U.S. Tax Court judge confirmed that § 280E of the Internal Revenue Code prevents state-legal cannabis businesses from deducting ordinary and necessary business expenses from their federal taxes. The ruling is a blow to businesses in the cannabis industry, who incur significantly higher federal tax burdens than they otherwise would if, like other businesses, they were allowed to deduct their business expenses.
Section 280E declares that “[n]o deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business .… More
With July 1st now fully in the rear-view mirror, we thought it would be a good time to update you on the latest developments at the Cannabis Control Commission. Earlier this month, the Commission approved two final retail licences for businesses in Northampton and Leicester. These represent the very first final adult-use retail licenses awarded in the Commonwealth. With this, Massachusetts residents should expect adult-use retail shops to open to the public within a matter of weeks. … More
Banker & Tradesman interviewed partner Kevin Conroy about the relationship between financial institutions and the marijuana industry. Click here to read on Scribd.
Reprinted with permission from July 23, 2018 More
With the first retail sales of adult use marijuana slated to take place in just over five months, the Massachusetts Cannabis Control Commission (the “Commission”) is working overtime to regulate an industry that some project will exceed $1 billion in revenue by 2020. As the July 1st target date for the opening of retail cannabis shops approaches, one area that will undoubtedly become the focus of much attention is the ability of retailers to market their wares. … More
Despite a less-than-friendly administration, a number of federal cannabis bills have recently been introduced to Congress. Here is a list of bills marijuana business owners should be keeping an eye on:
The Marijuana Justice Act
S.1689, sponsored by Senator Cory Booker (D-New Jersey), introduced August 1, 2017.
About: Booker’s bill would exempt cannabis from the Controlled Substances Act (CSA),… More
The long awaited amendments to the medical marijuana regulations are finally final. The draft amendments to 105 CMR 725.000, Implementation of an Act for the Humanitarian Medical Use of Marijuana, were made available for comment more than a year ago. The amendments accomplish much, such as allowing certified nurse practitioners to certify qualifying patients, certifying institutional caregivers without individual employee certification, streamlining and bifurcating the application/registration process for RMDs,… More
The Department of Public Health this week released guidance that paves the way for RMDs, which prior to the new legislation adopted this summer had to be organized as not-for-profit corporations under Chapter 180, to convert to for-profit corporate entities. The green light from DPH is a blessing for RMDs who, by virtue of the nonprofit requirement, were forced to adopt complex corporate structures. The Guidance can be found here.… More
One Day after being ruled “out of order” by House leadership, Marijuana Business Daily is reporting that the Rohrabacher-Blumenauer Amendment has been extended in the House Budget and temporary hurricane aid package through December 2017.
Since 2015, the Amendment has been consistently attached to federal spending measures passing Congress and signed by the President. The Amendment prohibits the Department of Justice from expending any funds to enforce any law that interferes with a state’s implementation of its own medical marijuana laws.… More
State House News is reporting that Treasurer Deb Goldberg has named former Bain and Company partner Steven Hoffman as Chair of the about-to-be-formed Cannabis Control Commission. When all is said and done, the CCC will regulate all things cannabis in the Commonwealth, including the regulated adult use market and the existing medical marijuana program. Like Gov. Baker’s pick, former Sen. Jennifer Flanagan, Mr. Hoffman voted against Question 4 in November.… More
Governor Charlie Baker signed the legislative overhaul of last November’s referendum legalizing the licensed sale and cultivation of adult use cannabis. We summarized many key details of the bill here.
We have 8 short months until applications are due, although what those applications will require, how far along in the painstaking local zoning process applicants must be, how clear of an advantage licensed medical operators and applicants will have,… More
No sooner said than done, the long-awaited conference committee bill amending Chapter 334 of the Acts of 2016 (the adult use cannabis referendum) has been released. Our complete summary of the new legislation and a comparison to the referendum’s original language can be viewed here:
Summary of Cannabis Legislation
Some big picture highlights:
(1) The referendum’s one year head start for many medical marijuana licensees has been eliminated. … More
We are more than two weeks now since the passage of the House and Senate’s competing legislation overhauling the framework regulation and taxation of adult use cannabis adopted by Massachusetts voters in November. In general, the Senate hewed closer to the language and intent of the referendum, while the House repealed the voter-passed law in its entirety in favor of a total rewrite. Then three legislators from each chamber were swiftly appointed to a conference committee to reconcile the two competing bills into final legislation. … More
The Joint Committee on Marijuana Policy today voted to advance, over objection and disapproval, a bill that repeals the 2012 Medical Marijuana law and 2016 Adult Use laws in Massachusetts — both passed by referendum — in their entirety. Our summary of the major points can be viewed by clicking this link House Bill Summary.
In its place, a House Bill sent out of committee imposes many changes including a 28% tax rate (up from 12%) on adult use licensees;… More
Last month, we noted that a significant number of Massachusetts towns and cities were already enacting bans or temporary moratoria against recreational marijuana sales, even though it will be months before the first adult-use operators are even eligible to apply for licenses. 
Now the legislature may be doing something about that trend. Senate President Stanley Rosenburg (D.) said that lawmakers were considering whether there is a way to incentivize more communities to say ‘yes’… More
Nevada’s adult use referendum passed the same day as Massachusetts voters ushered in the Commonwealth’s adult use law. From there, the states took two very different paths.
Both states contain a “head start” for medical licensees to begin sales, as we’ve discussed here and here.
Well, wanting to keep its boot on the neck of the black and gray markets and begin collecting revenue,… More
Months before the first adult-use cannabis operators are eligible to apply for licenses, a significant number of cities and towns are passing (1) temporary moratoria on local zoning approvals of any such facilities; or (2) permanent outright bans. According to the Massachusetts Municipal Association, 39 municipalities have thus far enacted temporary moratoria, while at least 10 have passed outright prohibitions. “Dozens” more municipalities are expected to vote on such measures soon.… More
Out of nowhere, Sen. Patricia Jehlen, chair of the Joint Committee on Marijuana Policy, tells the Boston Globe that she wants to eliminate the one-year head start that the adult use referendum gives to experienced medical marijuana operators to apply for licenses. She tells the Globe:
But there are areas where Jehlen is keen to see the law changed. One is leveling the playing field, so medical marijuana companies don’t have what Jehlen called “an artificial leg up” in the retail market.… More
The Boston Globe reports that the Legislature is very likely to strip the State Treasurer of Authority to appoint and oversee the Cannabis Control Commission in favor of an “independent” Commission funded by licensing fees and appointed by various state elected officials. The model appears to be the controversial Massachusetts Gaming Commission.
I explained here why the Gaming Commission is not a good model for the regulation of cannabis in the Commonwealth.… More
This week, State Treasurer Deborah Goldberg wrote to U.S. Attorney General Jeff Sessions seeking clarity on the federal government’s “intentions” before the state “commit[s] significant public resources to implementing Massachusetts’ recreational marijuana laws.” She’s not alone on seeking clarity as Attorney General Sessions’ public and reported statements have been anything but consistent and specific (see here and here and here, but also here).… More