Welcome back to Higher Law, our weekly briefing on all things cannabis. I'm Cheryl Miller, reporting for Law.com from Sacramento.

This week we're looking at: Davis Wright Tremaine's FOIA fight over cannabis policies at the U.S. border • A Pennsylvania ruling on medical marijuana-using probationers • Cozen O'Connor's lobbying work for Canopy Growth • MedMen's settlement of an investors' lawsuit

Thanks as always for reading. Send your tips, thoughts and story ideas to [email protected]. You can call me, too, at 916.448.2935. Follow me on Twitter @capitalaccounts.

 

 

Judge Orders Federal Border Officials to Look Harder for Cannabis Documents Sought by Davis Wright Tremaine

A federal judge in Seattle had some pointed words this week for the U.S. Customs and Border Protection agency and its search for records about how it treats international cannabis workers and investors trying to enter the United States.

Davis Wright Tremaine sought the documents last year after amid reports that foreign nationals with ties to the legal Canadian market or state-licensed operations were being denied entry, sometimes permanently. After the CBP did not respond to the firm's request, Davis Wright attorneys sued in the U.S. District Court for the Western District of Washington.

Chief Judge Ricardo Martinez on Tuesday wrote that CBP's attempts to comply with the firm's Freedom of Information Act request were "overly fragmented" and give "an unfortunate appearance of an agency hand picking the documents to provide." CBP acknowledged that it didn't begin looking for the requested records until Davis Wright sued.

"From afar, CBP's actions appear intended to obfuscate and delay and leave the disturbing impression that CBP has spent more time opposing any disclosure than it has searching for responsive records," Martinez wrote. "As CBP specifies, it need not conduct a perfect search, only a reasonable one. But … numerous unresolved factual issues, and others, preclude the Court from concluding that CBP's search was adequate as a matter of law."

Martinez gave the CBP deadlines ranging between 14 and 45 days to consult with an agency employee who may have access to the records sought and to conduct a more thorough search for documents.

Christopher Morley, one of the Davis Wright attorneys working on the case called the ruling "a victory for government accountability."

"We expect CBP will locate and produce more responsive records, but further searching could also reveal that the agency implemented a new policy, and a new interpretation of the Immigration and Nationality Act, in an ad hoc fashion that is inconsistent with required procedures.," Morley said in an email.

Morley was joined on the court filings by partner John McKay, a former U.S. attorney in Seattle, and associate Jordan Harris.

The CBP was represented by Katie Denise Fairchild of the U.S. Attorney's Office. A CBP spokesman said the agency does not comment on court rulings.

 

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Pennsylvania Supreme Court: Probationers Can Use Medical Marijuana

Pennsylvania's Supreme Court today unanimously held that a county's policy barring probationers from using medical marijuana is illegal, my colleague Max Mitchell reports.

The justices said Lebanon County's policy conflicted with immunity provisions in the state Medical Marijuana Act.

"We are cognizant of the district's concerns that medical marijuana use by probationers may, in fact, cause difficulties with court supervision and treatment," Chief Justice Thomas Saylor (above) wrote for the court. "Nevertheless, '[w]here the language of the governing statute is clear (or clear enough) … the solution is legislative — and not judicial — adjustment.'"

ACLU attorney Sara Rose represented the petitioners, and Robert Krandel of the Administrative Office of Pennsylvania Courts argued on behalf of Lebanon County's judicial district.

Lebanon's judicial district argued that courts in Pennsylvania need the power to bar a person's medical marijuana use so the probation department can take a holistic approach to its supervision when probationers suffer dependency issues.

 

 

Who Got the Work

• A team of Reed Smith lawyers represented Perrigo Co. in its $50 million investment and supply agreement with CBD products supplier Kazmira LLC. The team was led by Marc Hauser and included Donna Salcedo, Cheryl Ho and Herb Kozlov working on corporate negotiations, Cori Goldberg and Sung Park handling the hemp and CBD regulatory work and Peter Emmi handling the intellectual property details.

• Cozen O'Connor Public Strategies has registered to lobby for Canadian cannabis giant Canopy Growth Corp. A June 10 filing says the company will lobby for the SAFE Banking Act, the STATES Act and "cannabis and hemp agricultural issues."

• "A litigator with a background in Big Law and a pair of prominent U.S. plaintiffs law firms is the new top lawyer for the latest cannabis company to trade on the Canadian Securities Exchange. Christopher Polaszek will be chief legal officer and corporate secretary for Bluma Wellness Inc., a Toronto-based company with operations in California and Florida," Bloomberg Law reports.

• Preti, Flaherty, Beliveau & Pachios; Cozen O'Connor; and Murray Plumb & Murray filed a complaint Monday in Maine District Court on behalf of High Street Capital Partners and Wellness Connection, a cannabis dispensary. The suit, which seeks to overturn certain requirements for obtaining proper licensing for the sale of cannabis products, targets the City of Portland. Counsel have not yet appeared for the defendant.

• Attorney Blake Osborn of Greenspoon Marder has entered an appearance for commercial seed seller H.E.M.P. Group LLC in a pending breach-of-contract lawsuit. The action was filed April 29 in California's Eastern District Court by Steven Sanders of Sanders & Associates on behalf of GX Farms, which claims H.E.M.P sold the farm defective hemp seeds.

• Douglas Greene of Baker & Hostetler has entered an appearance for Tilray Inc. and other defendants in a pending securities lawsuit. The suit was filed May 4 in the U.S. District Court for New York's Southern District by the Law Office of Thomas G. Amon on behalf of Ganesh Kasilingam. The case is assigned to Judge Paul Crotty.

 

 

In the Weeds…

>> Will insurance coverage extend to recently looted cannabis businesses? Probably yes, writes Pillsbury Winthrop Shaw Pittman counsel Benjamin Tievsky. Despite the historic difficulties faced by legal cannabis businesses in obtaining insurance … the situation has improved in recent years due to increased legalization of marijuana at the state level and the approval of cannabis-specific insurance products by regulators such as the California Department of Insurance." Lost business income due to looting-caused closures may also be covered, he writes. [Law.com]

>> MedMen Enterprises Inc. says it's settled an investor's suit. The dispensary chain on Wednesday announced an agreement to end the suit brought by investors Brent Cox, Omar Mangalji through their firm MMMG-MC Inc. "MedMen issued 1.5 million Class B subordinate voting shares to MMMG-MC as a part of the overall 24 million share settlement with claimants, which included contributions from other parties and allowed the issuance of shares to all MMMG shareholders." Cox and Mangali alleged that MedMen executives enriched themselves at the expense of shareholders. MedMen denied any wrongdoing. MedMen also announced Wednesday that co-founder Adam BIerman stepped down from the board of directors and Andrew Modlin, the company's other co-founder, stepped down as "an observer" to the board. [BusinessWire]

>> Protests have renewed states' focus on cannabis decriminalization and legalization. "We cannot wait until the fall while countless members of the black and brown communities are targeted for marijuana-related offenses," New Jersey state Senator Ronald Rice said of a proposed bill that would reduce penalties for possession of a pound or less of marijuana. Recent protests may give more momentum to measures in New York and Vermont, too. [WeedWeek]

>> The FTC targets another CBD seller for COVID-19 claims. The U.S. Federal Trade Commission sent a warning letter this month to Fresno, California-based CBD Center, telling the operator to remove claims from its Facebook page that researchers "have discovered' that CBD may inhibit COVID-19 infections. "For COVID-19, no such study is currently known to exist for the products identified above," the FTC wrote. "You must immediately cease making all such claims." The agency has sent approximately 250 similar letters to other companies selling products alleging beneficial COVID-19 properties. [FTC]

>> Rec sales in Michigan surpassed medical-use sales for the first time last week. "As of now, both medical and recreational sales have seen a huge increase in average weekly sales since December. Weekly medical sales have nearly doubled, and weekly recreational sales are up more than 800%. While medical marijuana sales totaled $9.97 million between June 8 and June 14, recreational marijuana saw $10.02 million in sales." [MLive]

>> A Bloom Farms investor has sued the California cannabis brand. Demeter Group CEO Jeff Menashe's lawsuit, filed in the Delaware Court of Chancery, alleges that the company misled him about its prospects before he invested $5 million. Menashe is represented by Gerard Fox of Gerard Fox Law. [WeedWeek] and [Bloomberg Law]

 

 

The Calendar Things

June 18 - Expert Webcast presents the webinar "Restructuring Options for Cannabis Companies" at 4 p.m. EDT. Speakers include Oren Bitan, co-chair of Buchalter's cannabis practice.

June 23 - Farella Braun + Martel offers the fourth webinar in its cannabis industry education series with "Overview of the New Privacy Litigation Frontier, Including California Consumer Privacy Act (CCPA) Litigation." Special counsel Sushila Chanana hosts.

June 25 - Wilson Elser hosts the webinar "Cannabis and CBD: Has the Reset Button Been Pushed in 2020?" Presenters are Corey Tobin, senior vice president and cannabis practice lead at Bolton & Company; and Ian Stewart, partner at Wilson Elser Moskowitz Edelman & Dicker.

June 25 - The International Cannabis Bar Association presents the webinar "Employment Issues and the Task of Reopening Amidst a Pandemic and a Social Movement." Panelists are Ed Blanco of the California Agricultural Labor Relations Board, Branden Butler of the California Department of Fair Employment and Housing, Juan Calderon of Cal OSHA, and Dean Rocco of Wilson Elser.