Welcome back to Higher Law, our weekly briefing on all things cannabis. I'm Cheryl Miller, reporting for Law.com from Sacramento, where the California Legislature gavels down for the year tomorrow night. Scroll down to see which cannabis-related bill did not make it to a final vote.

This week we're talking about:

• a landmark ABA conference on marijuana and hemp law
• a U.S. attorney who says it's time for another public debate on pot
• divided agendas on marijuana bills in Congress
• a banking bill that bit the dust in California

Thanks as always for reading – and for all the news and notes you've been sending recently. Keep them coming at [email protected]. You can also reach me at 916.448.2935. Follow me on Twitter @capitalaccounts.

 

 

 

What to Expect: First-Ever ABA Meeting on Marijuana

You know cannabis law has hit the mainstream when several hundred attorneys are preparing to descend on Chicago next week for an American Bar Association conference on marijuana and hemp. Cannabis conferences are nothing new. But this Tort Trial and Insurance Practice Section-sponsored event is significant in that organizers believe it's the first ever ABA-related gathering focused solely on cannabis and hemp.

I asked Michael Drumke, chair of the section's cannabis law and policy committee, about what inspired the decision to host a conference.

"It's happening," Drumke said of the booming state-legal industry, "and there's a need for lawyers on multiple fronts to assist the industry. And, as I've explained to some of my partners and others who raise an eyebrow when they hear about it, it's pretty much everything you might have studied when you were in law school. There's real estate, there's international law, there's intellectual property, banking, insurance, product liability, consumer protection statutes, regulations, government relations, tax issues and all the usual corporate legal services that are needed with the twist that it's still a Schedule 1 drug under the Controlled Substances Act."

The two-day conference, "From Regs to Riches: Navigating the Rapidly Emerging Fields of Cannabis and Hemp Law," includes panels on federal cannabis laws, legal ethics in the space, and the hot topic of employment issues.

"It's a tricky ethical wicket for lawyers," Drumke said of the practice. "It's not without risk to lawyers practicing in the space but we know by the numbers that many firms, including a number of large prominent law firms, have active practice groups."

As a partner with Swanson, Martin & Bell in Chicago, Drumke has a front-row seat to Illinois' move toward state-approved recreational use marijuana sales, which are scheduled to start in January.

"I would expect some legislation coming to clarify things," Drumke said. "And then what you're seeing on the ground is people reacting to the idea of a recreational dispensary being opened in their city or village. And the reactions are interesting. There are people who have questions and concerns. There are municipalities that would like to recognize the revenue."

>> "From Regs to Riches" runs from Sept. 19-20 at the InterContinental Chicago. Registration is available online and at the door.

 

 

California's McGregor Scott Wants to Talk 'Collateral Damage' of Cannabis

McGregor Scott says it's time for California to have a serious talk about pot. Again.

The U.S. attorney for California's Eastern District recently returned from a marijuana "summit" in Portland hosted by his Oregon colleague, Billy Williams. Scott said he was so bothered by some of the things he heard at the event that he's eager for a public debate about the "collateral damage of marijuana that we're not talking about."

"What we've done in California for the last 20 years is tell our kids that marijuana is medicine," Scott (at left) said in a recent interview with Law.com, "and with very, very, very limited exceptions, that's not true."

Scott said he's not changing his enforcement priorities. His office will continue to target the black market, including illegal grows on federal lands where the use of banned toxins have polluted watersheds — an issue he said he doesn't believe is getting the attention it merits.

"What [this event] has motivated me to do is engage a little more in the public dialog on this issue because a lot of the things we've been told in California over the last 20 years just aren't true," he said.

Nicole Elliott, Gov. Gavin Newsom's senior advisor on cannabis, said the state takes the environmental damage caused by illegal grows seriously and has worked with federal authorities and local law enforcement to stop them. She also noted that Proposition 64, the voter-approved measure legalizing adult-use marijuana, mandates child-proof packaging, restricts advertising that can be seen by children and channels tax revenues to programs aimed at preventing substance abuse among kids.

"Prior to regulation, these controls weren't in place," Elliott said.

 

 

Marijuana Agendas Clash on Capitol Hill

Growing public support for marijuana legalization is not translating into legislative action in Congress.

Politico reports that disagreements among Democrats about which marijuana issue to tackle first and how much change to seek are slowing progress on bills such as the SAFE Banking Act, which would offer some protections for financial institutions serving the cannabis industry.

"I don't especially like incrementalism," said Rep. Barbara Lee, a California Democrat and co-sponsor of the MORE Act, a sweeping bill that would end federal prohibition and expunge past marijuana convictions "You know you gotta do this in a big way."

Meanwhile…. A California Banking Bill Stalls

While federal legislation to encourage banks to serve the cannabis industry awaits a vote in Congress, a bill in California to create a closed-loop marijuana banking system quietly died this week.

State Sen. Bob Hertzberg, D-Van Nuys, said he's shelving Senate Bill 51 "to iron out necessary clarifications and implementation details" with the state treasurer and governor. A similar industry-backed bill fizzled in a legislative fiscal committee last year.

"If we're going to do this, we have to do it right," Hertzberg said in a prepared statement. "We owe it to the dozens of cities, counties, and cannabis industry officials who have been supporting this effort to see it through."

Hertzberg said he plans to move the bill when the Legislature reconvenes in January.

Who Got the Work: New GC at Tech Platform

A Boston-based cannabis technology platform announced this week it has tapped a former Morrison & Foerster attorney to be its first general counsel, my colleague Dan Clark reports at Law.com. Marshall Horowitz began working as the top lawyer to TILT Holdings Inc. in July, according to a spokesperson. The spokesperson said Horowitz is based in Los Angeles.

In the Weeds…

  >> An Oregon judge has green-lighted a RICO suit against a grower. U.S. District Court Judge Anna J. Brown said that the owners of Momtazi Vineyard can pursue a complaint they have suffered financial losses tied to a neighboring marijuana operation. Racketeering lawsuits targeting alleged marijuana nuisances have seen limited success in cases throughout the country.[AP] Read the district court's ruling here.

>> Will vaping troubles hurt medical marijuana expansion in New York? Gov. Andrew Cuomo and health commissioner Dr. Howard Zucker warned New Yorkers to avoid vaping in light of highly publicized lung ailments reported nationwide. Asked if the nationwide vaping investigation would prompt the governor to reconsider or revise medical marijuana program guidelines, including its current flower ban, Gov. Cuomo's office demurred, saying it would not reconsider its flower ban. [Rolling Stone]

>> A Massachusetts mayor is accused of shaking down marijuana businesses. Federal prosecutors say Fall River Mayor Jasiel Correia sought $250,000 each from cannabis companies in exchange non-opposition letters that would allow them to operate in the city. Correia has denied the charges, calling them politically motivated. [WBZ CBS Boston]

>> A hemp shipment driver will avoid felony charges. Denis Palamarchuk, who was arrested by Idaho police in January while driving a truckload of Big Sky Scientific hemp from Oregon to Colorado, will plead guilty to a misdemeanor charge of carrying an improperly permitted load. He had originally been charged with felony drug trafficking by the state, which considers plants with any THC content to be marijuana. [KBOI]

>> Mexico is inching closer to medical marijuana legalization. The nation's Supreme Court has ordered the Health Ministry to draft regulations for medical use by February, my colleague Amy Guthrie reports. Juvenal Lobato, a lawyer who has pushed for higher taxes on tobacco and sugary beverages, expects the government to adopt a mixed tax approach for cannabis that applies a flat percentage tax per value, gram, plant or seed – plus the country's 16% sales tax. [Law.com]

>> Maryland's medical marijuana industry is booming. Sales in the first year of the state's regulated market reached $96 million, more than analysts had even projected for year three. Growers are expanding their operations amid hopes that the state will enact recreational-use regs in coming years. [Washington Post]

 

 

The Calendar: All the Things

Sept. 14-15 - NECANN hosts The New Jersey Cannabis Convention in Atlantic City. Scheduled speakers include Vicente Sederberg attorney Jennifer Cabrera, Steve Schain of Hoban Law Group and Matthew Miller of MG Miller Intellectual Property Law.

Sept. 18 - Sheppard, Mullin, Richter & Hampton presents the webinar "Labor and Employment Issues in the Cannabis Industry." Associate Lindsay Stone hosts.

Sept. 18 - The International Cannabis Bar Association will host a social gathering in Chicago leading up to the American Bar Association's Tort Trial and Insurance Practice Section's "From Regs to Riches" event on cannabis law.

Sept. 19 - Claims Magazine hosts a webinar, "Ask the Experts: What you need to know about cannabis." The event is a follow-up to a July webinar that looked at cannabis from the legal, insurance and medical perspectives. Cannasure CEO Patrick McManamon and Ian Stewart, an attorney with Wilson Elser Moskowitz Edelman & Dicker, are scheduled to answer questions.

Sept. 19-20 - The Chicago Cannabis Expo takes place. Scheduled speakers include Clement Hayes, general counsel of Harvest 360 Technologies; Dinsmore of counsel John Mackewich; and Prinz Law Firm partner Amit Bindra.