Cannabis Business Blog

Recreational cannabis became legal across Canada in 2018, and 33 U.S. states have legalized it at least for medical purposes (10 for recreational). Yet, there are numerous reports of the U.S. Customs and Border Protection (CBP) detaining Canadian citizens at the border—then permanently banning them from entry—when they admit to having even tenuous connections to the legal cannabis industry. This enforcement policy stifles cross-border business relationships, and raises ominous concerns about the freedoms of speech and association for U.S. citizens as well.

The shredding of the Cole memo last month leaves the cannabis industry in an uncertain regulatory environment.

Industry-wide anxiety of this sort can sometimes breed business disputes that wind up in litigation.  Besides being expensive, defending a lawsuit from a business partner, investor, supplier, or employee can be a major distraction from your business goals.

If tensions are simmering in your company, maybe it’s time to address any legal loose ends governing your business relationships.  Virtually every lawsuit ever filed could have been avoided had the parties identified sources of conflict early and attempted to resolve their differences.

Here are some key questions to help identify whether legal issues may be bubbling beneath the surface of your cannabis business.

Here at GSB, we work with those in the cannabis industry (like producers, processors, retailers and ancillary service providers) and those in the alcoholic beverage industry (like wineries, breweries, distilleries, hotels and restaurants).

Washington utilized its alcoholic beverage rules as a model for the cannabis rules.  So, anytime there is a “gap” in the cannabis rules, we look to the alcoholic beverage rules to predict the LCB’s likely position on any given topic.

Despite the significant overlaps, we often see a love/hate relationship between the alcoholic beverage and cannabis industries. 

Justice Department has options to crack down, but may galvanize the push for even wider legalization

In statements that were perhaps inevitable but nonetheless surprising to the cannabis industry, White House Press Secretary Sean Spicer on February 23, 2017, provided the first official comments on how the Trump administration may address recreational marijuana.

Responding to a question from an Arkansas reporter regarding medical marijuana, Spicer indicated that the Trump administration sees “a big difference” between medical and recreational marijuana, stating that federal law needs to be followed “when it comes to recreational marijuana and other drugs of that nature.”

Spicer also indicated that enforcement decisions will primarily be a Department of Justice (“DOJ”) matter, stating that enforcement is “a question for the Department of Justice,” but that he believed there would be “greater enforcement of [federal law], because again, there’s a big difference between medical use, which Congress has, through an appropriations rider in 2014, made very clear what their intent was on how the Department of Justice would handle that issue,” which, Spicer stated, is “very different from the recreational use, which is something the Department of Justice will be further looking into.”

Although Spicer’s statements should probably not be considered as the Trump administration’s definitive policy statement on recreational marijuana use, they do raise a variety of concerns for cannabis businesses.