Unprecedented Opportunities For Lawyers As Marijuana Goes Mainstream

These are uncharted, exciting times for those looking to do business (legally!) in marijuana and hemp products. With laws evolving across the country, clients need expert advice to navigate through a haze of federal and state regulations.

Lawyers interested in practicing in this area have a robust resource in PLI Press’s Legal Guide to the Business of Marijuana: Cannabis, Hemp and CBD Regulation. Co-authors James T. O’Reilly, Professor of Public Health Policy at the College of Medicine of the University of Cincinnati and author of leading references on food and drug law, and Edgar J. Asebey, a founding partner of Keller Asebey Life Science Law and a life sciences attorney with over twenty years of experience, spoke about the treatise.

What makes the Legal Guide to the Business of Marijuana stand out?

Edgar Asebey: While the state regulations that govern marijuana and the federal regulations that govern hemp and its derivatives such as CBD are relatively new, the agencies that have crafted and enforce these regulations are not. Our professional experiences give Professor O’Reilly and I a unique perspective.

Jim has been practicing law for over 40 years and has been quoted as an expert by the U.S. Supreme Court. My work in natural products (i.e., plants, microbes and fungi) -based therapeutics began in 1992 at the National Cancer Institute at the National Institutes of Health, where I worked with the natural products scientists in charge of discovering new therapeutics.

Today, clients are grappling with some of the same issues at the nexus of science, plant-derived therapeutics and regulations that we were thinking about decades ago. This insight allows us to share valuable context with readers.

 Jim O’Reilly: The book also stands out for its structure. We break free of the rigidity of classical law texts, offering practical insights on how regulatory controls can be satisfied with minimal red tape. The appendix lists the segments of state law that readers will actually need.

What are some issues that lawyers starting out in this area might overlook?

Jim O’Reilly: Criminal activity involving marijuana as seen on TV can catch your attention, but these days it is a distraction from the lawful cannabis business. The focus must be on the actual constraints on commercial activity; in fact, lawfully serving the needs of cannabis consumers is a commendable business initiative.

Edgar Asebey: The biggest issue that I see is the ongoing misunderstanding of how hemp and its derivatives are regulated. The framework for regulating these products already exists, as can be seen in the annual Warning Letter sent to hemp and CBD companies by both the Federal Trade Commission and Food and Drug Administration. It is great to advocate for new, better rules specifically tailored to hemp and its derivatives. But if a client places their hemp or CBD product into the stream of commerce, that product will be subject to FDA, FTC and relevant state laws. If you are advising clients, it is essential you understand these regulations.

What do you advise small law firms and individual practitioners who are interested in developing a cannabis practice?

Edgar Asebey: As regulations continue to evolve, practitioners must become familiar with the Food, Drug and Cosmetics Act as well as the Federal Trade Commission Act. Particularly with regard to hemp/CBD, too many inexperienced attorneys believe that regulation of these products will look like cannabis regulation – i.e., at the state level. CBD products are, de facto, regulated like dietary supplements and OTC drugs (albeit, unapproved). Understanding the FDA and FTC regulatory frameworks will allow attorneys to better advise their clients.

Marijuana has been called “the clear winner” of the 2020 election, with voters in several states approving measures related to possession and cultivation. What trends are you watching at the state and federal levels?

Edgar Asebey: With regard to hemp and CBD, the FDA has yet to publish a much-anticipated guidance that will address some gray areas such as THC limits, toxicity testing requirements and claims that can be made for products containing hemp-derived CBD. Some states have filled this void by adopting their own rules regarding hemp and CBD-containing products, including foods. Obviously, these will be superseded by federal legislation when it occurs. Finally, both the states and the federal government will have to grapple with the regulation of newly popularized hemp derivatives.

Jim O’Reilly: The change in attitudes toward marijuana is remarkable, but for one major hurdle, simply follow the money. The 50-year-old Controlled Substances Act of 1970 blocks federally insured banks from handling the legitimate business needs of lawful cannabis dealers. While culturally, Americans have become more accepting, a political fear of being challenged as “pro-drugs” has held lawmakers back from ending the extremist “Schedule 1” view of cannabis. We will continue to monitor these issues and expect to cover big changes in further editions for years to come.

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Practising Law Institute is a nonprofit learning organization dedicated to keeping attorneys and other professionals at the forefront of knowledge and expertise. PLI is chartered by the Regents of the University of the State of New York and was founded in 1933 by Harold P. Seligson. The organization provides the highest quality, accredited, continuing legal and professional education programs in a variety of formats which are delivered by more than 4,000 volunteer faculty including prominent lawyers, judges, investment bankers, accountants, corporate counsel, and U.S. and international government regulators. PLI publishes a comprehensive library of Treatises, Course Handbooks, Answer Books and Journals also available through the PLI PLUS online platform. The essence of PLI’s mission is its commitment to the pro bono community. View PLI’s upcoming live webcasts here.