Tag: cannabis legalization

Warning Sign? A New Round of FDA Warning Letters Over CBD Consumer Confusion May Signal a Shift in Government Enforcement

FDA warning letters are nothing new in the cannabis industry. In fact, we here at Budding Trends have covered this topic a number of times (here, here, and here). Not resigned to playing the hits, however, the FDA issued a new set of warning letters on November 21 that may signal a shift in enforcement posture away from solely targeting companies that market CBD as a potential medical treatment and towards including companies that market their products in ways that could cause consumer confusion. This is a “Warning Sign” that might cause the cannabis industry “A Rush of Blood to the Head,” much like Coldplay’s multi-platinum album that recently celebrated its 20-year anniversary. So, turn back the “Clocks,” book your flight to “Amsterdam,” and indulge us if you will — just not too much.

Congress legalized the production of hemp and hemp-derived products under the 2018 Farm Bill. But federal legalization did not exempt the hemp industry from federal regulation. Indeed, the FDA and FTC retain overlapping enforcement authority over CBD marketing, with the FDA having primary authority over labeling. Far more than “A Whisper,” the FDA and FTC have not been shy about issuing warning letters to hemp companies that fail to follow the FDA’s labeling requirements and guidance.

Since its first set of warning letters to CBD companies in April 2019, the FDA has focused its enforcement activity on companies that market their CBD products as treatment and cures for a variety of diseases and illnesses. But the FDA’s most recent warning letters took a different tack, focusing on potential health risks from long-term CBD use, consumer confusion leading to unintentional or overconsumption of CBD, and CBD products that could be seen as marketed to children.

The basis of the FDA’s five new warning letters was that CBD is neither an authorized food additive nor generally recognized as safe. The FDA noted it had “not found adequate information showing how much CBD can be consumed, and for how long, before causing harm,” and claimed that “scientific studies show” potential harm to the “male reproductive system” and “liver” from long-term CBD use. In the FDA’s words, “[p]eople should be aware of the potential risks associated with the use of CBD products.”

The products highlighted in the warning letters included gummies, fruit snacks, lollipops, cookies, teas, and other beverages. The FDA said these products were targeted because consumers may confuse them for traditional foods or beverages, “which may result in unintentional consumption of overconsumption of CBD.” Further, the FDA noted that gummies, candies, and cookies are especially concerning because they may appeal to children. Likewise, the FDA cited tea, coffee, sparkling water, beverage “shots,” and honey as products similar to traditional food that may confuse consumers into over-consuming CBD.

Keeping its focus on unintended consumption or unintended overconsumption, the FDA also chastised one company for failing to specifically list CBD as an ingredient on the label of its hemp-infused tea. This is particularly important to note for hemp companies, many of which have sought to avoid listing “CBD” on the product labels for full spectrum hemp extracts in an effort to avoid the FDA and FTC’s seemingly CBD-focused enforcement actions.

Given this new enforcement posture, CBD companies may consider avoiding marketing attempts that seek to link CBD products too closely with traditional foods and beverages. This may include limiting references to the similarity of CBD products to traditional ones. And CBD companies should continue to avoid product labels and marketing campaigns that would be enticing to children, especially for CBD products that are in a form children might be likely to consume (such as gummies and candies).

It remains to be seen where the FDA will draw the line between appropriate marketing and marketing that goes too far towards confusing consumers, but, aside from a falsetto Chris Martin, “nobody said it was easy.” Until then, watch this space and remember to follow the marketing dos and don’ts we provided in one of our previous blog posts.

Article By J. Hunter Robinson and Josh Kleppin of Bradley Arant Boult Cummings LLP

© 2022 Bradley Arant Boult Cummings LLP

Cannabis Legalization and Racial Justice

Earlier this year, New York passed legislation legalizing the adult use of cannabis. New Yorkers can now legally possess three ounces for any use, and can smoke marijuana in any publically-designed area where tobacco smoking is allowed, although home cultivation is still not permitted. Importantly, certain convictions – possessing up to 16 ounces or selling up to 25 grams of marijuana – will be automatically expunged from criminal records.

Not only does this law expand existing medical marijuana programs and create a licensing system for producers and distributors, but it also acts as an important step toward addressing the racial disparities in drug-related arrests. During the 1970s and 1980s, the so-called “War on Drugs” stigmatized drug use as a criminal and moral issue rather than as a public health issue.

The criminalization of drug use led to disproportionate arrest rates of low-income people of color. Higher arrest and incarceration rates do not reflect increased drug use in these communities, but rather the increased presence of law enforcement in urban areas, low-income communities, and communities of color. In every state, Black people are more likely to be arrested for marijuana possession, and in some states, Black people are nearly ten times more likely to be arrested than White people. In states where marijuana has been legalized or decriminalized, arrests of racial minorities have declined markedly.

The criminalization of drug use has had lasting ramifications for many lives and communities. As noted by the Drug Policy Alliance, many people have been denied food stamps and public assistance, evicted from public housing, and lost custody of children. With the new legislation, once a marijuana conviction is expunged, it will not show up on a background check and cannot be used against an applicant in seeking employment, housing, or student loans.

The legalization of marijuana is an important step forward but much more needs to done such as providing greater resources to integrate the formerly incarcerated into society and expanding the definition of public safety beyond just the criminal law to include equal access to health care, education, employment, and housing.

© 2021 Proskauer Rose LLP.

Marijuana Legalization Update: Early 2021 Legislative Developments

In November 2020, voters in five states (Arizona, Mississippi, Montana, New Jersey, and South Dakota) voted in favor of legalizing medical and/or recreational marijuana. Since then, there have been several developments within the marijuana legalization world that employers may want to keep an eye on as they move forward in 2021.

While the COVID-19 pandemic brought a halt to many state legislative efforts to legalize marijuana in 2020, many of those efforts have been renewed in 2021, and some states have begun to consider marijuana legalization for the first time. Also, while Mississippi and South Dakota voters approved marijuana legalization measures in November 2020, subsequent developments have emerged that may impact those approvals.

Employers new to marijuana legalization laws may want to be aware of the two broad categories of medical marijuana laws: (1) laws with express protections within the language of the statutes for medical marijuana cardholders (i.e., “antidiscrimination” provisions) and (2) laws without express protections for medical marijuana cardholders. Employers should also be aware that irrespective of whether a medical marijuana law contains an antidiscrimination provision, they should be mindful of the potential disability and accommodation issues inherently at play when dealing with medical marijuana cardholders.

Importantly, while recreational marijuana laws are becoming more common, they typically do not contain employment protections for recreational marijuana users—although New Jersey recently deviated from this approach.

Employers may also want to keep in mind that legislation tends to evolve as bills work their way through the legislative process, and many of the bills discussed in this article are still in committee or other preliminary stages.

Medical Marijuana Legislation

Alabama

Senate Bill 46 would legalize marijuana for medicinal purposes in Alabama. The bill, which is the same as prior legislation introduced in 2020, does not contain any employment protections for medical marijuana cardholders.

Florida

Senate Bill 692 and House Bill 335 would amend the existing Florida Compassionate Medical Cannabis Act to include a provision prohibiting public employers from taking adverse employment action against medical marijuana cardholders. The proposed legislation would permit a public employer to discipline an employee if the employer is able to show that the “lawful use of medical marijuana use is impairing the employee’s ability to perform his or her job responsibilities.” Importantly, this prohibition would not extend to private employers. This development follows failed efforts in 2020 to amend the Florida Compassionate Medical Cannabis Act to prohibit private employers from discriminating against medical marijuana cardholders.

Hawaii

Senate Bill 64 would amend the existing Hawaii Medical Marijuana Act to include protections for medical marijuana cardholders.

Idaho

The Idaho Senate recently voted in favor of an anti-drug constitutional amendment, Senate Joint Resolution 101. The proposed amendment to the Idaho Constitution would make the use of all psychoactive drugs, including marijuana, illegal. In response, the Idaho House Health & Welfare Committee voted to introduce the Sergeant Kitzhaber Medical Cannabis Act, a medical marijuana legalization bill. The proposed act does not contain any employment protections for medical marijuana cardholders.

Kansas

Kansas Governor Laura Kelly recently announced a proposal to legalize marijuana for medicinal purposes. Relatedly, both the Kansas Senate Commerce Committee and House Federal and State Affairs Committee have introduced medical marijuana legalization bills. The proposed bills, Senate Bill 92 and House Bill 2184, do not contain any employment protections for medical marijuana cardholders.

Kentucky

House Bill 136 and Senate Bill 92 would legalize marijuana for medicinal purposes in Kentucky. House Bill 136 is a renewed bill that is the same as prior legislation introduced in 2020. Neither bill contains any employment protections for medical marijuana cardholders. Recent news reports, however, have indicated that there is a strong likelihood that these bills will not pass this legislative session.

Maryland

Senate Bill 504 would amend the existing Maryland medical marijuana law to include protections for medical marijuana cardholders. House Bill 683 would add medical marijuana to the list of medical treatments that can be provided to injured employees under the state’s workers’ compensation laws.

Mississippi

Since voters approved Initiative Measure 65 during the November 2020 election legal challenges have arisen related to the constitutionality of the initiative. The Supreme Court of Mississippi will hear oral arguments on this issue in April 2021. Perhaps in response to these challenges, Senate Bill 2765 would serve as an alternative or parallel to the medical marijuana program authorized by Initiative Measure 65. Senate Bill 2765, which passed the Mississippi State Senate on February 12, 2021, does not contain any employment protections for medical marijuana cardholders.

Nebraska

Legislative Bill 474 would legalize marijuana for medicinal purposes in Nebraska. The bill does not contain any employment protections for medical marijuana cardholders.

South Carolina

House Bill 3361 and Senate Bill 150 represent alternative bills that would each serve to legalize marijuana for medicinal purposes in South Carolina. Neither bill contains any employment protections for medical marijuana cardholders.

South Dakota

In November 2020, South Dakota voters approved Initiated Measure 26, which would establish a medical marijuana program in South Dakota. Governor Kristi Noem recently announced a plan to delay the implementation of Initiative Measure 26, which was originally scheduled to take effect in July 2021, until July 1, 2022. The South Dakota legislature subsequently introduced House Bill 1100, which reflected Governor Noem’s efforts to delay implementation of South Dakota’s medical marijuana program.

Virginia

House Bill 1862 would prohibit an employer from taking adverse employment action against a medical marijuana cardholder based on the individual’s lawful use of medical cannabis. Notably, Virginia does not have a typical medical marijuana law or program in place but instead has a limited medical marijuana program allowing individuals to use cannabis oils and products with less than 10 mg of tetrahydrocannabinol (THC).

Recreational Marijuana Legislation

Connecticut

Senate Bill 5853 and Senate Bill 888 would legalize marijuana for recreational use in Connecticut. Governor Ned Lamont has also been a vocal proponent for legalization of marijuana for recreational use.

Florida

House Bill 343 and Senate Bill 710 would legalize marijuana for recreational use in Florida.

Hawaii

Hawaii lawmakers are currently considering several alternative bills (such as Senate Bill 767) to legalize marijuana for recreational use in Hawaii.

Maryland

House Bill 32 would legalize marijuana for recreational use in Maryland.

Minnesota

House Bill 600 and Senate Bill 757 would legalize marijuana for recreational use in Minnesota.

Nebraska

Legislative Bill 546 would legalize marijuana for recreational use in Nebraska.

New Jersey

On February 22, 2021, New Jersey Governor Phil Murphy signed into law the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA), legalizing marijuana for adult recreational use in New Jersey and prohibiting employers from taking adverse action against employees solely because they use marijuana.

New Mexico

New Mexico lawmakers are currently considering several alternative bills (such as House Bill 12) to legalize marijuana for recreational use in New Mexico.

New York

Senate Bill 854 would legalize marijuana for recreational use in New York. Governor Andrew Cuomo has also been a vocal proponent of the legalization of marijuana for recreational use.

North Dakota

House Bill 1420 would legalize marijuana for recreational use in North Dakota.

Oklahoma

House Bill 1961 would place the issue of marijuana legalization for recreational use on the 2022 Oklahoma election ballot.

Virginia

On February 27, 2021, the Virginia General Assembly approved legislation that would legalize the sale and possession of recreational marijuana for adult recreational use beginning on January 1, 2024. Governor Ralph Northam has not yet signed the legislation and may propose amendments that would speed up the effective date of the proposed law.

Other States

Legislation to decriminalize the possession of small amounts of marijuana is also pending in several states. These laws should be viewed differently than typical recreational marijuana legalization laws.

Key Takeaways

Employers across the country may want to closely monitor state marijuana legalization efforts. Marijuana legalization continues to be a quickly moving area of the law, and employers following these developments should expect marijuana legalization efforts to continue in the years to come.

© 2020, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.
ARTICLE BY M. Tae Phillips of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
For more articles on marijuana legalization, visit the NLR Biotech, Food, Drug section.

Virginia is for… Cannabis Lovers… in 2024?

While adult-use cannabis legalization has been gaining popular support across the country, many state legislatures have been slow to translate that support into legislative action.  That is changing in Virginia.  In 2020, Virginia decriminalized the simple possession (up to an ounce) of cannabis while providing a civil penalty up to $25.  On February 5, 2021, the Virginia House and Senate took another significant step further when both passed bills approving adult-use cannabis legalization in Virginia.  Senate Bill 1406 passed on a 23-15 vote.  House Bill 2312 passed on a 55-42 vote.

There are differences in the bills that must be resolved in a conference committee.  However, an adult-use legalization bill is likely to pass through conference and be sent for Governor Ralph Northam’s signature.  Governor Northam has already stated his support for legalizing adult-use cannabis.  With passage, Virginia would become the 16th state to legalize recreational cannabis, but only the 3rd state to do so solely through the legislative process.

Key Rules and Penalties Found in Both Bills:

  • Adults who are 21 or older can possess up to one ounce of cannabis or an equivalent amount of cannabis product.
  • A household can cultivate up to two mature and two immature cannabis plants at their primary residence.
  • Possessing more than an ounce of cannabis remains punishable by a civil fine up to $25.
  • Possessing more than five pounds could result in up to 10 years in prison.
  • Possession on school grounds could result in up to 6 months in jail.
  • Bringing any cannabis into Virginia would be punishable by up to 1 year in jail.

Regulatory and Licensing Framework Found in Both Bills:

  • A Cannabis Control Authority, governed by a five-member board of directors, will be created to regulate the adult-use cannabis market.
  • Licensing priority will be given to social equity applicants.
  • A Cannabis Business Equity and Diversity Support Team will be created.
  • A Cannabis Public Health Advisory Council will be created to make public health recommendations.
  • Requirements for seed-to-sale tracking, packaging, and labeling, including state-created risk information and warning labels, are included.
  • A state tax of 21% would be levied at the point of sale.  Localities could impose their own tax up to 3%.
  • Portions of the tax revenue would be earmarked for pre-K education for at-risk children and substance abuse treatment and prevention, among other things.

Both bills also provide automatic expungement of misdemeanor marijuana–related offenses and allow for petitions for expungement of marijuana-related felonies under certain circumstances.

The House and Senate bills differ in the role and scope of local government involvement.  The Senate bill allows localities to ban cannabis stores by voter referenda.

Both bills set January 1, 2024 as the earliest date for beginning the retail sale of cannabis.  As Virginia moves forward toward 2024, the regulatory framework will continue to grow in size and complexity at both the state and local levels.

Copyright © 2020 Womble Bond Dickinson (US) LLP All Rights Reserved.
ARTICLE BY Morgan E. Persinger of Womble Bond Dickinson (US) LLP
For more, visit the NLR Biotech, Food, Drug section.

Voters in Five States Approve Marijuana Ballot Initiatives on Election Day

Voters in Arizona, Mississippi, Montana, New Jersey, and South Dakota approved laws to legalize marijuana on Election Day 2020. Recreational marijuana was approved in Arizona, Montana, and New Jersey, while Mississippi voters approved medical marijuana. South Dakota voters approved both medical and recreational marijuana ballot initiatives.

Medical Marijuana

  1. Mississippi – Mississippi Ballot Measure 1 passed, with 68% voting “yes” and 32% voting “no.” Ballot Measure 1 asked voters to generally cast a vote for “either measure” Initiative 65 or Alternative 65A, or against both measures. Voters who cast a vote for “either measure” were then required to cast an additional vote for their preferred measure. Mississippi voters passed Initiative 65 with 74% voting for it and 23% voting for Alternative 65A.*

Initiative 65 allows the medical use of marijuana by patients who suffer from qualifying medical conditions. Qualified medical marijuana patients may possess up to 2.5 ounces of medical marijuana. The new law does not permit a qualifying patient to be “subject to criminal or civil sanctions for the use of medical marijuana.” However, it does not require “accommodation for the use of medical marijuana or require any on-site use of medical marijuana” in any place of employment. It also does not affect any “existing drug testing laws, regulations, or rules.”

The Mississippi State Department of Health has the authority to implement, administer, and enforce the law. It is required to issue final rules and regulations regarding medical marijuana by July 1, 2021. The Department must begin issuing medical marijuana identification cards and treatment center licenses no later than August 15, 2021.

  1. South Dakota – South Dakota’s Initiated Measure 26 passed, with 69% voting “yes” and 31% voting “no.” The new law allows the medical use of marijuana by patients who suffer from a debilitating medical condition. Medical marijuana card holders may possess up to three ounces of marijuana and cultivate marijuana plants. The law goes into effect July 1, 2021, but it may take up to a year before medical marijuana is available in the state.

Under the new law, medical marijuana cardholders are entitled to “all the same rights under state and local laws” as the person would be afforded if they were prescribed a pharmaceutical medication as it pertains to: (1) any interaction with a person’s employer; (2) drug testing by a person’s employer; and (3) drug testing required by any state or local law, agency, or government official.

The new law requires the South Dakota Department of Health to issue regulations regarding medical marijuana within 120 days after the law goes into effect (October 29, 2021) and to begin issuing registry identification cards to qualifying patients within 140 days after the law goes into effect (November 18, 2021).

The new law does not apply to employers to the extent it would conflict with the employer’s obligations under federal law or regulation or if it would disqualify an employer from a monetary or licensing-related benefit under federal law or regulation.

Although employers may discipline employees for ingesting marijuana in the workplace or for working while under the influence of marijuana, employers may not consider a qualifying patient to be under the influence of marijuana solely because of the presence of metabolites or components of marijuana that appear in “insufficient concentration to cause impairment.” Employers in South Dakota should take note of this language because there is no universally accepted concentration of marijuana that proves “impairment.”

Recreational Marijuana

  1. Arizona – The Smart and Safe Arizona Act passed with nearly 60% voting “yes” and 40% voting “no.” Under the Smart and Safe Arizona Act, individuals 21 years of age or older may lawfully use and purchase less than one ounce of marijuana (except, not more than five grams may be in the form of marijuana concentrate) and may cultivate up to six marijuana plants for personal use at the individuals’ primary residence (subject to certain restrictions). The new law does not include a delayed effective date, but it will likely be several months before Arizonans can purchase recreational marijuana.

The new law requires the Arizona Department of Health Services to begin accepting applications for marijuana establishment licenses from “early applicants” beginning January 19, 2021 through March 9, 2021. Licenses will be issued to qualified applicants within 60 days of receiving an application.

The new law does not restrict the rights of employers to “maintain a drug-and-alcohol free workplace” or prevent employers from having workplace policies “restricting the use of marijuana by employees or prospective employees.” It also does not require employers to “allow or accommodate the use, consumption, possession, transfer, display, transportation sale or cultivation of marijuana in a place of employment,” nor does it restrict employers from prohibiting or regulating marijuana use that occurs on or in their properties.

Arizona passed the Arizona Medical Marijuana Act in 2010, prohibiting employers from discriminating against medical marijuana patients. The recreational marijuana law expressly states that is it not intended to limit any privilege or right of a qualifying patient under the Arizona Medical Marijuana Act.

  1. Montana – Montana’s Initiative 90 and Constitutional Initiative 118 both passed with approximately 57% voting “yes” and 43% voting “no” for Initiative 90.  Effective January 1, 2021, individuals age 21 or older may possess, use, or transport one ounce or less of marijuana, and grow up to four mature marijuana plans and four seedlings on the grounds of a private residence. The Montana Constitution provides that a person 18 years of age or older is an adult for all purposes, except that a different legal age may be established for purchasing, consuming, or possessing alcoholic beverages. Effective October 1, 2021, the Montana Constitution will similarly permit a different legal age (i.e., 21 years of age or older) to be established for the purchase, consumption, or possession of marijuana.

Certain provisions of the new law go into effect on October 1, 2021, which is the deadline for the Department of Revenue to issue rules and regulations related to licensure of adult-use marijuana providers and dispensaries. The Department must begin accepting applications from dispensaries, providers, and manufacturers on or before January 1, 2022. However, for the first 12 months, the Department will only accept such applications from providers and dispensaries licensed under Montana’s medical marijuana statute.

The new law does not impose restrictions on employers. It states that is may not be construed to: (1) require an employer to permit or accommodate recreational marijuana use (or any other conduct permitted by the law) in any workplace or on the employer’s property; (2) prohibit an employer from disciplining an employee for violation of a workplace drug policy or for working while intoxicated by marijuana; (3) prevent an employer from declining to hire, discharging, or otherwise taking adverse action against an individual with respect to hire, tenure, terms, conditions, or privileges of employment because of the individual’s violation of a workplace drug policy or intoxication by marijuana while working.

Montana has had a medical marijuana law since 2004.

  1. New Jersey – New Jersey’s Question 1 passed with 67% voting “yes” and only 33% voting “no.” Effective January 1, 2021, the New Jersey Constitution will be amended to legalize recreational use of marijuana for adults ages 21 and older. The constitutional amendment provides for the Cannabis Regulatory Commission to regulate recreational marijuana and subjects all retail sales of recreational marijuana products to state sales tax.

The Cannabis Regulatory Commission and New Jersey lawmakers will address the regulatory issues that will determine the amount individuals can possess legally, the requirements for operating dispensaries for sale of cannabis, and taxation by state and local authorities. This process is expected to take up to approximately one year.

New Jersey has approved the use of medical marijuana since 2013. Under 2019 amendments to the Jake Honig Compassionate Use Act, employers are not permitted to discriminate against those who use cannabis for medical reasons.

  1. South Dakota – South Dakota’s Constitutional Amendment A passed with 53% voting “yes” and 47% voting “no.” Effective July 1, 2021, the new law permits individuals 21 years of age or older to possess and use one ounce or less of marijuana and to grow up to six marijuana plants on the grounds of a private residence.

No later than April 1, 2022, the South Dakota Department of Revenue is required to issue rules and regulations related to the commercial sale, cultivation, and testing of marijuana. The new law also directs the legislature to pass laws regulating the cultivation, processing, and sale of hemp and medical marijuana by April 1, 2022.

The new law does not require employers to permit or accommodate conduct authorized by it. It also does not affect an employer’s ability to restrict the use of marijuana by employees.

Next Steps

Employers should review their drug and alcohol policies – especially drug and alcohol testing policies – for compliance with applicable state laws.

While marijuana remains a Schedule I drug under the federal Controlled Substances Act, the trend in the courts over the last three years is to disregard marijuana’s status under federal law and to enforce state laws instead (with the exception of federally regulated employees such as those regulated by the U.S. Department of Transportation).

Employers must be familiar with the marijuana laws in the states where they operate before taking employment actions against those who use marijuana.

Jackson Lewis P.C. © 2020
For more articles on marijuana legalization, visit the National Law Review Biotech, Food, Drug section.