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The risk of corruption in state cannabis licensing has once again been highlighted by recent reports that a federal grand jury has subpoenaed at least seven Massachusetts cities, including Boston, for information about contracts between cannabis firms and municipalities. The subpoenas apparently relate to “host community agreements,”  a contract between individual cannabis operators and their host community that is required by state law in Massachusetts.  Host community agreements, and similar arrangements in other states that have legalized cannabis, are well intentioned.  But like any arrangement that involves payment for permission to operate, they can be abused for corrupt ends.       …

The term cannabis has been in the spotlight recently not only in Thailand but also around the world as there have been many recent developments regarding medical and recreational cannabis that are worth noting and have spurred investments in many parts of the world, notably North America and some parts of Europe. For Thailand, with the recent legalization of medical cannabis, the topic is still a new one as regulations are still shaping up. However, it cannot be denied that investment opportunities come with such development, either in the short or long run, and this is where we must try…

As discussed in our previous post, Mexican lawmakers had until the end of October to issue regulations on cannabis. Nonetheless, and even though a preliminary draft bill for cannabis legalization was recently introduced in the Congress, the Mexican Senate now believes that additional time will be needed to reach an agreement on how cannabis should be regulated. On October 28, 2019, three days prior to the deadline, the Mexican Senate requested an extension from the Mexican Supreme Court of Justice. The extension was granted through an Accord dated October 31, 2019. Pursuant to the Accord, published on the Supreme Court’s…

On Tuesday, October 29, the US Department of Agriculture (USDA) established the US Domestic Hemp Production Program through the issuance of an interim final rule (the “Rule”). The USDA published the Rule on Thursday, October 31, in the Federal Register. The Rule took effect upon publication, but the USDA will take comment for 60 days. Pursuant to the Agricultural Improvement Act of 2018 (the “2018 Farm Bill”), the Rule outlines provisions for states and Indian tribes to submit their plans for the domestic regulation of hemp. Such plans will need to be approved by the USDA. The Rule also establishes…

Cannabis was high on Australia’s regulatory agenda in September, with two significant developments. In our last post we discussed the tabling of Professor John McMillan AO’s Final Report in Parliament on 5 September 2019, which recommended extensive amendments to the regime for cultivation, production and manufacture of medicinal cannabis in Australia. In this post we discuss the move to legalise the personal possession and use of small amounts of cannabis in the Australian Capital Territory (ACT). On 25 September 2019, the ACT Legislative Assembly voted to legalise the personal possession and cultivation of cannabis under the Drugs of Dependence (Personal…

Although prosecution of state-legal sales by licensed and compliant cannabis businesses may not be a current priority for federal law enforcement, prosecution of corruption in the industry clearly is. Consider the following, all of which have occurred within the last three months: The indictment of alleged Rudolph Giuliani associates Lev Parnas and Igor Fruman for, among other things, a scheme to make illegal campaign finance donations in connection with a planned recreational marijuana business in Nevada (according to various reports, they were also interested in licenses in New York, California and Florida); An announcement by the FBI that, “As an…

Executive summary Professor John McMillan AO’s Final Report of the review of Australia’s medicinal cannabis framework under the Narcotic Drugs Act 1967 (Cth) (ND Act) was tabled in Parliament on 5 September 2019, ahead of the 29 October 2019 target date. A link to the Final Report is here. The review was conducted on the extensive amendments made to the ND Act in 2016, which established a regime for the cultivation, production and manufacture of medicinal cannabis in Australia. The Final Report contains 26 recommendations to improve the efficiency and effectiveness of the regulatory regime including: a new single licensing…

Welcome to the Global Cannabis Compliance Podcast Series. Because we have received so many requests from readers for more information about the topics we have been covering, we have decided to start a podcast series featuring in-depth discussions with experts. Like the blog, the podcast series will cover all aspects of cannabis compliance including existing laws and proposed legislation in various countries and U.S. states, significant court cases and judicial decisions, enforcement trends, and best practices in compliance. If you have any suggestions for podcast topics, please let us know. Episode 1 – On the Cannabis Industry in Africa Countries…

Cannabis legalization is proceeding in Mexico after several years of no action. In 2017, Mexico published an amendment to its General Health Law that allowed THC use for medical purposes and ordered the government to implement secondary regulations to support the new law. At first, nothing happened. However, in August 2019, the Supreme Court of Justice in Mexico granted an amparo (constitutional) injunction to an underage child suffering from West syndrome, a condition that required CBD and THC dosing as part of his medical treatment. The Court determined that the child´s right to health services was violated because the Ministry…

The cannabis industry operates at a disadvantage vis a vis other industries because Section 280E of the Internal Revenue Code prohibits business expense deductions for businesses that “traffic” in federally controlled substances, including cannabis. As a result, cannabis companies pay taxes on gross rather than net profits. In the latest defeat for cannabis companies in the Tax Court, Boulder Alternative Care, LLC (“Boulder”), a Colorado dispensary, lost its bid to obtain ordinary business expense deductions for its legal operations (Docket No. 16495-16). Boulder argued that it was entitled to those deductions because Colorado, not federal, law controls. Boulder’s position was…