Marijuana

Happy New Year! ICYMI, 2017 Was A Mixed Bag For Marijuana

The top 10 highlights for marijuana in 2017. What will the new year bring for cannabis and the law?

By Hilary Bricken on January 02, 2018 4:20 pm

Happy New Year, everyone!

2017 was an interesting year for the cannabis industry across the U.S., full of ups, downs, near misses, and solid progress. ICYMI, here are my top 10 highlights from 2017:

  1. Jeff Sessions backs off (sorta). 2017 was a somewhat scary time for the state-legal cannabis industry as one of the worst cannabis-haters became the top prosecutor under President Trump.  The industry was pretty paranoid about Sessions, and my firm wrote often (see here, here, and here) about Sessions and his dogged rhetoric about energizing the failed war on drugs. Ultimately though, Sessions took a bit of a U-turn in November when he basically kowtowed to the 2013 Cole Memo, testifying in a House Judiciary Oversight Committee hearing that “our policy is the same, really, fundamentally as the Holder-Lynch policy, which is that the federal law remains in effect and a state can legalize marijuana for its law enforcement purposes but it still remains illegal with regard to federal purposes.”
  2. Constitutionality of Schedule I gets challenged in court. Former NFL player Marvin Washington is one of five plaintiffs that filed suit against Attorney General Jeff Sessions, the DOJ, and the DEA in 2017, alleging that classifying cannabis as a Schedule I controlled substance under the 1970 Controlled Substances Act is so absurd as to be unconstitutional. Currently, 29 states and the District of Columbia have legalized some form of medical cannabis use, and recent studies suggest cannabis actually helps get people off dangerous drugs like meth and opioids (both of which are listed as less dangerous than cannabis). Though we’d love to see this lawsuit undo cannabis prohibition altogether, it’s a long shot at best.
  3. California finally regulated its cannabis marketplace. Though it’s not going to be pretty or smooth, California finally legislated to combine and regulate its cannabis marketplace (it’s also made huge strides in the cannabis trademarks department). If you want to know more about the Medicinal and Adult-Use Cannabis Regulation and Safety Act, see here and here. As of yesterday, at 6 a.m., legal sales began in the Golden State, and my firm’s California attorneys (including me) could not be more excited to witness history being made.
  4. The FDA continued its campaign against CBD and it may start dabbling in state-legal marijuana health claims. It’s no secret the FDA is in relatively hot pursuit of CBD makers who make medical claims about it (see here, here, here, and here), and 2017 was no exception. The FDA has said CBD is not exempt from drug trials under the Food, Drug & Cosmetic Act, and if want to make medical claims about it (regarding either humans or animals), you must first put it through drug testing first. The FDA has also “hinted” that it may explore the validity of health claims made about actual cannabis too.
  5. Blockchain and cannabis may end up making a good marriage. 2017 brought on an onslaught of analysis on whether blockchain and cannabis commercialization will make good bedfellows. My firm wrote extensively about the melding of the two here and here. Blockchain will change the face of the cannabis industry by making state and local reporting and business logistics easier.
  6. Marijuana banking is slowly and steadily keeping on. This summer, FinCEN issued its newest Marijuana Banking Update showing that by March 2017, around 300 banks and 50 credit unions were providing banking services to marijuana related businesses. The states in which my firm has offices — Oregon, Washington and California — all have at least some banks and credit unions providing such services, though virtually all of them do so rather quietly.
  7. Canada dropped its marijuana legalization bills. Making good on Prime Minister Justin Trudeau’s 2015 campaign promises, Canada’s Liberal Party-led government announced a suite of bills to legalize recreational marijuana use throughout Canada.
  8. 2017: The year of cannabis commercial litigation. With maturation of the state-legal cannabis industry comes more litigation, and 2017 saw a significant ramping of RICO lawsuits, counterfeit challenges, and nuisance lawsuits. My firm wrote endlessly about cannabis litigation and how to deal with it (some examples are here and here) and on January 11, we will be giving a free webinar on this topic.
  9. Bankruptcy still isn’t an option for marijuana businesses. Back in 2014, my firm wrote that federal bankruptcy is not an option for marijuana businesses. That issue has been litigated here and there since then, but as of today, it still isn’t. All bankruptcy cases are handled in federal courts under rules outlined in the U.S. Bankruptcy Code, and those courts have held that it would be impossible for a U.S. Trustee to control and administer a debtor’s assets (cannabis) without violating the federal Controlled Substances Act. This was confirmed in 2017 in an article by the Director and Trial attorney for the Executive Office for U.S. Trustees.
  10. Congress continually renewed medical cannabis protections. If you don’t know what the Rohrbacher-Farr/Rohrbacher-Blumaneaur amendment is, see here. In the Ninth Circuit, it’s the single most important protection for medical marijuana businesses because of this case (the amendment does NOT apply to recreational marijuana businesses or legislation). Though AG Sessions has requested Congress repeal this amendment, Congress continued to renew it throughout 2017 and its protections have been extended through January 19, 2018.

Happy 2018, everyone!

Hilary Bricken bio photoHilary Bricken is an attorney at Harris Bricken in Los Angeles, and she chairs the firm’s Canna Law Group. Her practice consists of representing marijuana businesses of all sizes in multiple states on matters relating to licensing, corporate formation and contracts, commercial litigation, and intellectual property. Named one of the 100 most influential people in the cannabis industry in 2014, Hilary is also lead editor of the Canna Law Blog. You can reach her by email at [email protected].