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We are extremely pleased to announce the launch of our Global Medical Cannabis Dashboard, a new interactive tool covering cannabis regulatory regimes in 112 countries (and counting) across the world. We reached out to our global network of healthcare regulatory specialist lawyers across 39 Baker McKenzie offices and 70+ of our correspondent firms and asked them to share their knowledge on this subject. Our resulting dashboard is unique in its scope and stretch and we invite you to explore it yourself. Our dashboard covers the overall feasibility of marketing medical cannabis, permissibility of medical cannabis in its raw form and in pharmaceuticals, clinical trials, export/import, recreational use, hemp definitions, and private sector involvement for each jurisdiction. This tool enables users to see overviews of cannabis regulations globally in the form of interactive heat and geographical maps, with the option to select specific regions, countries, or specific responses, to quickly and easily spot local and global trends. For the purposes of our…

This article referenced in this post was originally published in Volume 99, Issue 11, of CCH’s Taxes—The Tax Magazine (November 2021). In the November 2021 edition of International Tax Watch in TAXES – The Tax Magazine, Tom Firestone, Scott Frewing, Ethan Kroll, Erika Van Horne, Stewart Lipeles, and Julia Skubis Weber explore the U.S. international tax implications of section 280E, concluding that section 280E should not disallow deductions for expenses U.S. persons incur in connection with: maintaining cannabis IP in, and licensing that IP from, the United States;engaging in cannabis R&D in the United States; andassisting with and overseeing from the United States non-U.S. operations that manufacture, market, distribute, dispense, and sell cannabis products outside the United States, where it is legal to do so. They also determine that section 280E should not disallow deductions against tested or subpart F income for expenses CFCs incur in connection with manufacturing, marketing, distributing, dispensing, and selling cannabis products outside the United States, where…

The U.S. Department of Agriculture (“USDA”) released on January 15, 2021, a final rule package designed to serve as the framework for a U.S. hemp industry that gained federal legal status a little more than two years ago. The 301-page package delivers some changes from an October 2019 interim final rule that provided initial guidelines to implement the 2018 Agriculture Improvement Act (known colloquially as the “2018 Farm Bill”). The 2018 law removed hemp from the Controlled Substances Act and set a legal definition for hemp as 0.3 delta-9-tetrahydrocannabinol (“THC”) on a dry weight basis. The final rule package, which takes effect March 22, 2021, provides steps for the USDA to review and approve plans submitted by state, territorial and tribal governments for regulating hemp production. The rule also lays out how the USDA will regulate farmers in states or tribal lands that have not outlawed hemp but also have not submitted plans. The finished regulations come after 5,900 public comments…

This article was originally published by Law360 on December 16, 2020. On Nov. 3, Oregon passed Measure 110, a novel law[1] that reclassifies personal or noncommercial possession of controlled substances such as heroin, cocaine and methamphetamines, from a Class A misdemeanor to a Class E violation, punishable only by a $100 fine.[2] It also establishes a drug addiction treatment and recovery program funded in part by the state’s marijuana tax revenue and state prison savings.[3] In 1973, Oregon was the first state to decriminalize possession of small amounts of marijuana. Could Measure 110 be the first step to legalization of cocaine and heroin throughout the U.S.? Similarities to Marijuana Reform The broader drug decriminalization movement grows out of, and shares many similarities with, the marijuana reform movement. Like marijuana reform, it is driven by sophisticated, organized, long-term policy advocacy. For example, according to Ballotpedia, the largest contributor to the Measure 110 campaign was the Drug Policy Alliance, or DPA, which contributed over…

This article was originally published by Law360 on December 2, 2020. “You have a row of dominoes set up, you knock over the first one, and what will happen to the last one is the certainty that it will go over very quickly.” —Dwight D. Eisenhower What did this election do for the marijuana industry? A lot. Four states — three traditionally red — voted to legalize recreational marijuana while a fifth, one of the reddest, voted to legalize medicinal marijuana. These reforms will likely create a domino effect, leading other states to reform their laws and will likely also force change at the federal level. In short, the elections could mark a turning point for marijuana law and policy throughout the United States. What the States Did Three traditionally red states, Arizona, Montana and South Dakota — plus New Jersey — voted to legalize recreational marijuana, while Mississippi voted to legalize medical marijuana. In Arizona, marijuana reform received approximately 300,000…

The Bank Secrecy Act (“BSA”) implementing regulations at 31 CFR Chapter X require covered financial institutions to file reports of suspicious transactions with the Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) in circumstances where the bank knows, suspects, or has reason to suspect that the transaction “involves funds from illegal activities.”  The requirement to file such suspicious activity reports or “SARs” arises under federal law.  Marijuana-related business activity that has been legalized under certain state laws—e.g., recreational cannabis dispensaries in Colorado—remains illegal under the federal Controlled Substances Act.  The conflict between state and federal law is, in the words of Attorney General William Barr, “intolerable.” But thanks to FinCEN guidance, banks’ SAR filing obligations with regard to so-called “plant-touching” customers are relatively clear.  But what about so-called “ancillary businesses” that only service plant touching businesses?  Here, the situation is much less clear. FinCen’s 2014 Guidance FinCEN published guidance in 2014—”BSA Expectations Regarding Marijuana-Related Businesses”—to clarify that “the obligation to…

As the market for hemp derived CBD has exploded, there is increasing interest in international trade in these products and the materials used to make them, including in the United States. For example, a US-based manufacturer of hemp-derived CBD edibles might import the active ingredient for manufacturing and then export the finished product overseas. US-based companies could also be interested in importing or exporting raw materials such as industrial hemp, hemp seeds, or other hemp-derived products. Below we summarize some of the key US trade compliance considerations for companies seeking to import or export these products. Because every export from the United States by definition involves an import into another country, there will always be at least one other jurisdiction’s import laws to consider.[1] What should you know about US export controls and economic sanctions? The first step in determining whether a particular export is permissible under US export controls laws is determining whether the product is described in an…

On July 21, 2020, the U.S. Food and Drug Administration issued its draft guidance on clinical research for the development of drugs that contain cannabis or cannabis-derived compounds of botanical origin (as opposed to synthetic). The draft guidance isentitled “Cannabis and Cannabis-Derived Compounds: Quality Considerations for Clinical Research, Draft Guidance for Industry.”  The guidance provides some clarity on the use of cannabis in clinical research in light of the changes made by The Agriculture Improvement Act of 2018, Public Law 115-334 (the 2018 Farm Bill) which federally legalized hemp and cannabis derivatives that contain no more than 0.3 percent THC on a dry weight basis.  Specifically, the draft guidance outlines the FDA’s “current thinking” on: (1) the source of cannabis and cannabis-derived compounds for clinical research; (2) quality considerations for developing drugs that contain cannabis and cannabis-derived compounds; and (3) how to calculate the THC percentage in botanical raw materials, extracts, and finished products. Source of cannabis and cannabis-derived compounds The draft guidance…

The Department of Justice recently took the extraordinary step of releasing a previously confidential memo from its Office of Legal Counsel concluding that DEA’s long-standing policy on marijuana research violates federal law and U.S. treaty obligations. Why did DOJ do this? What does the memo mean for the future of marijuana research? In this podcast, Matt Zorn and Shane Pennington, the lawyers who litigated this case, explain how they got DOJ to release the memo and what it all means. Global Cannabis Compliance Podcast · Podcast Episode 5

In August, the FBI announced that it would be focusing on public corruption in state marijuana licensing. In September, the Mayor of Fall River, Massachusetts was indicted for extorting more than $250,000 in bribes from cannabis businesses in return for assistance with licenses.  In October, alleged Rudolph Giuliani associates Lev Parnas and Igor Fruman were indicted for, among other things, a scheme to make illegal campaign finance donations in connection with a planned recreational marijuana business in Nevada.  Last week, the US Department of Justice announced charges against two officials of the city of Calexico, California (a small city about 120 miles east of San Diego) for soliciting $35,000 in cash bribes from an undercover FBI agent whom they believed represented investors seeking to open a cannabis dispensary.  As far as we are aware, this is the first time that the FBI has used an undercover agent in a case involving corruption in state cannabis licensing. California law provides local jurisdictions…