Pay Cannabis Tax with Cryptocurrency? California Takes a Look.

We’ve written about the potential benefits of harnessing the power of blockchain technology to track and trace cannabis from seed to sale and provide an effective regulatory tool for governments (see here and here). We’ve also warned of the risks and dangers (and outright scams) associated with many cryptocurrencies and the heightened risks that come when a federally prohibited substance is combined with use of typically anonymous cryptocurrencies.

I have been writing and speaking about the potential benefits of blockchain in a variety of contexts, not limited to cannabis. Last month, I spoke about the benefits of blockchain for local governments on a panel hosted by the International City Managers Association, Government Finance Officers Association, and National League of Cities. The consensus in terms of local government use is that blockchain technology has the potential to provide tremendous benefits to local governments in terms of efficiency and transparency, but that it is still very much in the development stages and great skepticism should be exercised when presented with opportunities to implement it. There are still a great deal of scams and misinformation surrounding blockchain technology, especially in the context of cryptocurrency.

A handful of cities and states are pioneering the way forward in adoption of blockchain technology use. This week, California Assembly Members Ting and McCarty introduced AB 953, which would allow local governments accept city or county cannabis license tax amounts due by payment using “stablecoins.” The bill would authorize local governments to either accept stablecoins directly into a digital wallet controlled by that jurisdiction or to utilize a third-party digital asset payment processor that allows for the immediate conversion of any payments made by stablecoins into United States dollars and deposit into an account of that jurisdiction. The vulnerability of digital wallets is explained in my white paper.

A stablecoin is defined in the bill as: “a digital asset that has price stable characteristics pegged to United States dollars and United States dollars serve as collateral to that digital asset.”

Digital asset is defined as “a digital representation of value that is used as a medium of exchange, unit of account, or store of value and is not legal tender, whether or not denominated in legal tender.”

We are very interested in watching how this bill plays out in the Assembly, and will keep the blog updated as things progress. We are skeptical that this particular proposal will succeed, but encouraged that the State Legislature continues to search for viable banking solutions for the cannabis industry. Stay tuned: the bill may be heard in committee on March 24.

source https://www.cannalawblog.com/pay-cannabis-tax-with-cryptocurrency-california-takes-a-look/

California May Try to Fill the Gaps on Provisional Licensing

California’s cannabis licensing process has been a mess for applicants since pretty much day one. Annual license applications have disappeared into a black hole for months, the window for obtaining temporary licenses was very small and many have expired, and many local jurisdictions decided to make up their own phased permitting processes that in many cases ensured that many operators could never be eligible for temporary licenses (e.g., Phase 3 applicants in Los Angeles).

For any applicant who was lucky enough to obtain a state temporary license in 2018, efforts are underway at the state level to relieve some of applicants’ fears surrounding the fact that most of those temporary applications are set to expire in the next few months and that there is no clear understanding of the provisional licensing process. A new California senate bill (SB-67) would reinstate expired temporary licenses and would fill the gaps in the provisional licensing scheme through mid-2020. This would allow operators who received temporary licenses in 2018 to actually become operational rather than sit and wait on annual licenses to be issued.

For some background, I wrote recently the provisional licensing scheme that was intended to act as a band-aid in light of the fact that temporary licenses were going away by the end of 2018 and the fact that annual applications took extreme amounts of time to review. To recap: if an operator who once held a temporary license filed an annual application, submitted evidence of CEQA compliance, and paid the fee, the state agency could issue a year-long provisional license. But the provisional licensing regime is not free from problems.

The first issue with provisional licenses is that they are only allowed to be issued through the end of 2019. This effectively placed about a similar one-year time frame as with temporary licenses. The second problem with provisionals is that there has been virtually no guidance from the state agencies on how to obtain them. The regulations don’t mention provisionals, and only the California Department of Food and Agriculture (or “CDFA”) published guidance on how to get them. That guidance makes it appear like they are issued at the CDFA’s total discretion after an applicant makes the required annual filings. This is problematic because there is no clear time frame or review process. In other words, an operator could file a complete annual application, and the CDFA could sit on it for months before issuing a provisional.

SB-67 might just fix some of these problems. SB-67’s key provision is that when an applicant files its annual license application, its temporary licenses shall remain valid—even if those licenses had previously expired. These extended temporary licenses would only stay effective until an annual license is issued or denied, a provisional license is issued, an application is disqualified or abandoned, or the end of 2019, whichever is earliest.

This is a lot to unpack, but essentially what it means is that if applicants file annuals before the date of  temporary license expiration, those applicants will still have temporary approval until a provisional license is issued. This will help dispel any lack of clarity surrounding the provisional licensing process but will still not change the fact that annuals will need to be submitted as soon as possible.

Another notable part about SB-67 is that if passed, it would first extend the time to issue provisionals through July 1, 2020. This will give the agencies more time in actually issuing provisional licenses past 2019. But problematically, there will be a six-month window where licensees who don’t have provisionals will lose their extended temporary licenses. There may just be another bill on the table later this year to address this very same issue.

SB-67 ultimately will only benefit those few operators and may signal that the state agencies are still so overwhelmed with applications that they won’t be able to process them on time. We’ll be sure to keep our readers up to speed on any updates on SB-67 or the provisional licensing laws.

source https://www.cannalawblog.com/california-may-try-to-fill-the-gaps-on-provisional-licensing/

Keeping Up with Harris Bricken: Cannabis Law Events

February’s webinar “West coast Hemp-CBD After the Farm Bill” was a success! All of those involved at Harris Bricken enjoy hearing your positive words and questions. For those seeking more of the valuable information throughout the webinar, March holds many opportunities for you to attend events where Harris Bricken attorneys will be presenting. Read on to find out more.

The Seminar Group – Owning and Operating a Winery | March 14, 2:30 PM PST | Wineries and vineyards are subject to a mosaic of legal and regulatory hindrances. Businesses should not just be reactive to regulation but help sculpt it from the ground up. This two-day CLE will take place in Napa California covering a broad range of winery related topics, seeking to arm businesses with up-to-date information from industry pioneers. Hilary Bricken provides guidance in exploring marijuana diversification, including everything from land use ordinances, and water laws to co-locations of regulatory bodies and taxation.

Argent Communications Group – 2019 California Land Use Law & Policy Conference | March 18, 4:30 PM PST | The last few months have seen rapid change to land use laws and regulations. Recreational cannabis is the newest industry affected by the strict land use regulations that state and local Californian governments set in place. Hilary Bricken addresses land use concerns and talks strategy for successful retail sales that will keep the cannabis industry thriving.

Philadelphia Bar institute: 2019 Medical Marijuana & Hemp Law Symposium | March 22, 9:00 AM – 4:30 PM | During the Philadelphia Bar Institute’s second annual event, Hilary Bricken will be a part of an expert panel discussing the current state of Pennsylvania’s medical marijuana program.  This symposium will provide an extensive look at the industry and how Pennsylvania’s implementation of its program has and will impact the state.

American Bar Association – Dazed and Confused: Legal Considerations in the Business of Legalized Marijuana | March 28 – 30 | Though cannabis use remains prohibited at a federal level, medicinal cannabis is legal in 32 states and recreationally legal in 10 states, with legalization throughout Canada on October 17^. The conflicting laws present unique challenges for business in the cannabis industry to protect and enforce their intellectual property. joined by a panel of experts, Alison Malsbury will provide a in depth view of the varied issues that companies in the cannabis industry should consider when running a marijuana business.

The Seminar Group – The Business of Marijuana | March 28, 9:00 AM – 5:00 PM (PST) & March 29, 9:00 AM – 5:00 PM (PST) | This seminar will canvass topics related to California’s medical and recreational cannabis laws.  On day one, Griffen Thorne offers his expertise on Intellectual property and licensing agreements, including: federal and state trademarks; cross-border licensing agreements; the future of intellectual property, and cannabis and hemp. On day two, Daniel Shortt gives a CBD update, focusing on the legal classifications under federal law.  Program Chair, Hilary Bricken, will discuss product liability and insurance as it relates to the cannabis industry.

State Bar of Michigan – Marijuana Law: Wild, Wild West of Marihuana Law | March 28 12:00 PM – March 30 12:00 PM (ET) | The State Bar of Michigan’s Marijuana law section hosts their first out-of-state event in Breckenridge, Colorado. Hilary Bricken will examine the state of marijuana law including business law updates, criminal defense and various other cannabis-related issues.

Join us at these upcoming events!

source https://www.cannalawblog.com/keeping-up-with-harris-bricken-cannabis-law-events/

New Developments Regarding Oregon Hemp

Last week, the Oregon Department of Agriculture (“ODA”) submitted a letter of intent to the U.S. Department of Agriculture (“USDA”) in which the state agency conveyed its decision to submit a state hemp plan, pursuant to the Agriculture Improvement Act of 2018 (“2018 Farm Bill”).

In addition to legalizing the production of hemp by removing the crop from the list of controlled substances, the 2018 Farm Bill delegates to states and Indian tribes the broad authority to regulate and limit the production of hemp and hemp products within their territories. Specifically, Subtitle G of the new Farm Bill sets forth a regulatory scheme by which states and Indian tribes may seek primary regulatory authority over hemp production. To obtain primary regulatory authority, states and Indian tribes must submit a plan to the USDA Secretary for review and approval. However, before the Secretary may review and approve state plans it must promulgate rules and regulations pertaining to these plans.

As such, ODA Director Alexis Taylor expressed to the Secretary her department’s eagerness to receive direction from the USDA regarding requirements for state implementation plans. Specifically, Taylor raised the need for requirements in solving the growing confusion surrounding interstate transportation of hemp. The ODA Director explained that delays in rule making are subjecting Oregon’s hemp industry to “unnecessary transportation and commerce restrictions” and further stated that “having additional guidance to allow the flow of hemp in interstate commerce would be critical to farmers in Oregon.” Indeed, as we previously explained, the interstate transportation of hemp is lawful for hemp grown under a plan approved by the USDA, pursuant to the 2018 Farm Bill.

The ODA’s letter highlights the state’s robust regulation of the crop and the agency’s desire to remain at the forefront of hemp production. The ODA’s strong aspirations for hemp were also reflected domestically this past week. Indeed, a few days before it released its statement to the USDA, the Oregon department filed temporary hemp rules under Oregon Administrative Rules 603-048. The temporary rules, which became effective immediately, bring the ODA testing rules for industrial hemp intended for human consumption and hemp items in compliance with those of the Oregon Health Authority (“OHA”) as required by ORS 571.330. (That statute provides that industrial hemp intended for human consumption and hemp items must be tested similarly to marijuana under OHA’s rules. The OHA recently adopted new testing rules for marijuana, which forced the ODA to amend its rules.)

In addition to revising the ODA testing rules, the proposed rules clarify recordkeeping requirements. The Oregon department announced it would develop a template that registrant growers and handlers will be able to use to ensure their recordkeeping sufficiently meets ODA requirements. The template will be released on the ODA’s website as soon as it will be available. Finally, as we explained recently, the state legislature will likely pass a hemp bill this session.

For more information on Oregon hemp, please contact us.

source https://www.cannalawblog.com/new-developments-regarding-oregon-hemp/

Cannabis Patents are Approaching the Patent Trial and Appeal Board

In keeping with last week’s cannabis patent litigation update, it’s important to discuss a landmark decision that was made by the U.S. Patent and Trademark Office (“USPTO”) Patent Trial and Appeal Board (“PTAB”) on claims involving a cannabis patent just two months ago. On January 3, 2019, the PTAB published its Final Written Decision in the case, Insys Development Co, Inc. v. GW Pharma Ltd., et al. (IPR 2017-00503). SPOILER ALERT: the PTAB found two claims to be unpatentable as obvious, and the remaining eleven claims to be valid (and potentially enforceable in litigation).

In this case, the subject patent was U.S. Patent No. 9,066,920 – “Use of one or a combination of phyto-cannabinoids in the treatment of epilepsy” (“the 920 Patent”). The 920 Patent was originally assigned to GW Pharma Ltd. (“GW Pharma”) and Otsuka Pharmaceuticals Co., Ltd. Some background on GW Pharma: it owns an extensive patent portfolio, many of which are directed to treat disease using cannabis-based formulations. Notably, GW Pharma made history by becoming the first entity to receive FDA approval of the drug, Epidiolex, which contains CBD. Epidiolex was approved to treat two rare forms of epilepsy: Dravet syndrome and Lennox-Gastaut syndrome.

Insys Development Company, Inc. (“Insys Development”) is a pharmaceutical company that focuses on cannabinoids and drug delivery systems. Insys Development petitioned the USPTO for an inter partes review (“IPR”) in December 2016 to cancel all thirteen claims of the 920 Patent as obvious based on scientific articles as well as one of GW Pharma’s own published PCT applications.

The two patent claims that were invalidated related to dosing. Although the daily CBD dose given to epileptic patients in the studies was less than the 400 milligrams described in the 920 Patent, the PTAB said it was “logical to think” a higher dose could “increase the anticonvulsant effect.” The PTAB continued, “We find on this record that petitioner has shown sufficiently that a [person of skill in the art] would have a reason to, and a reasonable expectation of success in, increasing the dosage of CBD to at least 400 mg/day to treat partial seizure.”

The remaining eleven claims that survived PTAB review outline additional requirements for administering CBD to treat epilepsy. The PTAB disagreed with Insys Development that these claims were obvious. One claim requires that the CBD be present as a plant extract. Another claim requires the CBD be administered with the cannabinoid THCV. In sum, the PTAB concluded that “[it] find[s] that [Insys Development] has not shown sufficiently where each of the limitations of [these] claims is taught or why a [person of skill in the art] would have combined the teachings of the various references to arrive at the claimed invention with a reasonable expectation of success.”

Consistent with the UCANN case, a key thing to note is that the PTAB treated this cannabis patent IPR challenge as any other, and the fact that cannabis remains a Schedule I drug was not raised as an issue. Coming full circle, it’s likely that IPR challenges of cannabis patents are going to join the overall growing trend of cannabis patent applications and cannabis lawsuits filed.

We’ll know whether either side appeals the Final Written Decision by March 8, 2019.  If an appeal does happen, the case can go through a panel rehearing and then the Federal Circuit, or straight to the Federal Circuit.  Either way, we will keep you posted.

source https://www.cannalawblog.com/cannabis-patents-are-approaching-the-patent-trial-and-appeal-board/

Causes, Treatment, And Expectancy of Life for Mesothelioma Patients

Mesothelioma is known to have a poor prognosis, as it is one of the most aggressive forms of cancer. Being diagnosed with mesothelioma can be shocking, often leaving patients with many questions and few answers. Organizations like The Asbestos Cancer Organization offer patients a plethora of information regarding treatment options as well as mesothelioma alternative treatments.

As this disease carries a 20 to 50 year latency period, it is typically difficult to catch stage 1 mesothelioma. Often times patients are not diagnosed until the later stages mesothelioma such as stage 4 mesothelioma.

Causes of mesothelioma

Asbestos exposure is the only known cause of mesothelioma, although there are some other factors that can increase the risk of developing the disease. Exposure to asbestos usually occurs at the workplace but has also occurred in homes, schools, and other environments. Symptoms usually take 20 to 50 years and can mimic other diseases, which often prolongs the diagnosis or can even lead to a misdiagnosis. As a result, many people who have been diagnosed with mesothelioma choose to take action against their former employers which typically leading them to file a mesothelioma claim or filing a mesothelioma lawsuit. Each state has its own statute of limitations when it comes to these forms of lawsuits, speak with a West Virginia mesothelioma attorney to get a better grasp on West Virginia mesothelioma statutes of limitations.

Factors Affecting Treatment

As with all forms of cancer, various factors will play a role in a mesothelioma prognosis for a patient. The age of the patient is a critical part to consider as this can affect how well he or she can respond to chemotherapy treatments or other forms of conventional mesothelioma treatment. The second consideration is overall health. A patient already has a pre-existing medical condition or generally in poor health may find it difficult to undergo treatment for mesothelioma. Other risk factors, such as smoking, can also reduce the average life expectancy of mesothelioma. The prognosis of a patient is partly related to the nature of their mesothelioma diagnosis, including mesothelial cell location and type, as well as the stage of mesothelioma. Stage 3 mesothelioma and stage 4 mesothelioma typically have the poorest prognosis.

Types of Mesothelioma

The symptoms and manifestations of cancer vary depending on the type of mesothelioma. Pericardial mesothelioma, peritoneal mesothelioma, and pleural mesothelioma are the main forms of this disease. Of these three types, pericardial mesothelioma has the worst prognosis, as it is the most difficult to diagnose. Filing a mesothelioma claim in West Virginia can be challenging, but a Charlotte WV mesothelioma lawyer can help with this.

However, the prognosis for peritoneal mesothelioma has improved in recent years due to more recent treatments such as intraperitoneal hypothermal chemotherapy.

Mesothelioma stage and treatment options

Staging is another important element in determining the estimated life expectancy. Mesothelioma is classified into four major stages. Early detection is ideal for longer life, but many patients are faced with late detection and therefore a narrower range of cancer treatment options that are too costly.

The first stages allow for more aggressive treatments, while stages 3 and 4 limits what the body can handle. Late stage mesothelioma treatments often focus on improving the quality of life for a patient and are usually not as aggressive. Stage 1 usually involves surgery with the possibility of chemotherapy and radiotherapy, while stage 2 also includes options for surgery, chemotherapy, and radiotherapy. Some oncology specialists may also recommend multimodal treatments, which have been shown to prolong the life of some patients, including surgery, chemotherapy, radiotherapy and some forms of surgery. Natural mesothelioma treatments are on the rise as options for patients.

The average life span of mesothelioma patients

Stage 1 mesothelioma is often times not diagnosed as the cancer is in its early stages and symptoms can often times appear to physicians as symptoms from another disease. According to previous survival statistics, they have an average life expectancy of about 21 months. Sex, age, health, and other risk factors may decrease or prolong this estimate. Without treatment, some patients have lived for more than one year, others less than 6 months.

For stage 2 patients, life expectancy is usually 19 months. Stage 3 patients have an average lifespan of 16 months and Stage 4 typically has 12 months. Only 9% of individuals diagnosed survive for more than 5 years.

In the end, the forecasts vary from one patient to another because doctors take into account all the important factors. While new mesothelioma treatment can prolong life, it is ultimately up to the patient to decide which path they would like to take. But in the end, if you have been diagnosed with mesothelioma, mesothelioma claims can assist you with compensation for treatment and other damages. Speak with a West Virginia mesothelioma lawyer about filing a mesothelioma lawsuit.

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Phase 3 Marijuana Dispensary Licensing in L.A. Finally Takes Shape