Cannabis Business Legal News

The U.S. Drug Enforcement Administration’s (DEA) recent recommendation to reschedule marijuana (cannabis) from Schedule I of the Controlled Substances Act (CSA) to Schedule III of the CSA has received praise and criticism on both sides of the aisle and among those in between. The strong likelihood that the DEA’s recommendation will become reality prompts us to consider what is down the pike as a result of this rescheduling, especially for state-legal cannabis businesses. Of particular interest will be the impact of rescheduling on: (1) the federal tax code and the ability to deduct ordinary and necessary business-related expenses, (2) access to traditional banking services, (3) and the opening of interstate commerce. Each ramification is discussed in turn below.

The U.S. Drug Enforcement Administration has announced its intention to reschedule cannabis from a Schedule I to a Schedule III drug, marking a significant shift in federal drug policy. This move, prompted by the Biden Administration's review and supported by various governmental agencies, could reshape how cannabis is treated in the eyes of the law, potentially easing business operations, expanding access to traditional banking services, and fostering medical research.

In October of 2022, the Biden Administration started an official cannabis policy review process, which began with granting pardons to all people convicted of simple cannabis possession under federal law. At the time, this was considered to be the most extensive White House action taken to date on federal drug policy in quite some time. Over the last year, the process shifted to the review of cannabis policy by certain critical governmental agencies, including the Food & Drug Administration (FDA). The FDA conducted its review, and then provided comment to the National Institute on Drug Abuse (NIDA) and Department of Health and Human Services (HHS).

Earlier this summer, the Food & Drug Administration (FDA) issued draft guidance for those researching the use of psychedelics to treat certain serious medical conditions including major depressive disorder, PTSD, and substance use disorders. This is the very first time the FDA has provided guidance to the ever growing list of entities conducting research on these controlled substances for the purpose of setting up clinical trials. 

Earlier this month, the U.S. Senate Banking Committee met to discuss the SAFE Banking Act, a critical piece of proposed legislation that would make it easier for the cannabis industry to secure and utilize much needed banking services. Overall, the fact that the Act has warranted extensive discussion by legislators is promising, but passage of the Act as currently styled still seems relatively far off. The meeting, which was entitled “Examining Cannabis Banking Challenges of Small Businesses and Workers,” heard testimony from bipartisan lawmakers, including the Senators who reintroduced the bill (Jeff Merkley and Steve Daines).

Many of us following the ever expanding cannabis industry in the United States have seen more and more CBD-infused food and drink products hitting the market and becoming readily available for consumers.

Last week, La Shawn K. Ford, a Democratic member of the Illinois House of Representatives, introduced the Compassionate Use and Research of Entheogens Act, or CURE Act, as the very first bill during the opening session of Illinois 103^rd General Assembly. Entheogen is a term used to describe a psychoactive, hallucinogenic substance or preparation (such as psilocybin, the active component in so called “magic mushrooms”) especially when derived from plants or fungi and used in religious, spiritual, or ritualistic contexts.

Last month, the Illinois Department of Finance and Professional Regulation (IDFPR), announced that it would begin accepting applications for 55 new adult-use cannabis retail licenses after January 30, 2023. The IDFPR, the governmental entity tasked with regulating the recreational cannabis dispensaries in Illinois, has issued guidelines for what is being called the Social Equity Criterial Lottery. In order to be issued a conditional license pursuant to this application and lottery process, an applicant must be able to establish that it is 51% or more owned or controlled by one or more individuals who each meet the combination of at least one of the criteria under two distinct categories (A and B) set forth by the IDFPR.

On Friday, April 1, 2022, the U.S House of representatives voted to pass the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, which decriminalizes cannabis at the federal level. The vote was made mostly along party lines. The legislation will now move to the Senate. The MORE Act would be revolutionary legislation for the cannabis industry and individuals adversely affected by harsh penalties for cannabis convictions. The Act, which was first approved by the House of Representatives judiciary committee in late 2019, would officially remove cannabis from the ...

On Monday October 18, 2021, the Drug Enforcement Administration (DEA) issued a notice through the Federal Register that proposed a large increase in production quotas for a number of controlled substances including cannabis and psilocybin (the active compound in so called “magic mushrooms”). Cannabis and psilocybin are currently categorized as Schedule I drugs in the Controlled Substances Act (CSA), meaning that pursuant to the CSA, these are drugs with no currently accepted medical use and a high potential for abuse. The notice issue by the DEA, however, signals a potential ...

The emerging cannabis industry in Illinois has plenty of regulatory issues to contend with including labeling, packaging, destruction and disposal of cannabis, security, inventory, and recordkeeping just to name a few. Dispensaries and other cannabis related businesses should take care not to overlook another highly-regulated area—text message and telephone marketing.

The Telephone Consumer Protection Act (TCPA) regulates how companies can utilize telephone calls and text messages as part of their marketing strategies. All companies should take note, as the penalties ...

Cannabis, or “marihuana” as it is referred to in the Controlled Substances Act (CSA), has been federally illegal in the United States since 1937. Yesterday, Senate Majority Leader Chuck Schumer (D-NY) announced that he will make legislation ending the federal prohibition of cannabis a top priority. In the recent press conference, Senator Schumer introduced a draft of the Cannabis Administration and Opportunity Act (the “CAOA”), which would lift the federal prohibition on cannabis and, critically, allow state-compliant cannabis businesses to have access to ...

After months and months of controversy around how Illinois managed the scoring and award of the first round of adult-use recreational cannabis retail licenses, Governor J.B. Pritzker has signed a new bill that not only expands the number of licenses to be awarded, but shakes up and expedites how the licenses will be issued. The new legislation expands the number of adult use cannabis retail licenses in Illinois from the originally allotted seventy-five, to one hundred and seventy-five. This bill (HB1443) is a critical step forward in what has been a tumultuous roll out of the state’s ...

Today, two Republican Congressmen introduced the “Common Sense Cannabis Reform for Veterans, Small Businesses, and Medical Professionals Act.” Representatives David Joyce (R-OH) Ohio and Don Young (R-AK) are the sponsors of the Act.  Joyce and Young are also the current co-chairs of the bipartisan Congressional Cannabis Caucus. This Caucus was launched in 2017 by well-known cannabis advocates, former Rep. Dana Rohrabacher, (R-CA) Earl Blumenauer (D-OR), former Colorado Rep. and current Colorado Governor, Jared Polis, and the aforementioned Rep. Young. The Act would ...

On the heels of the historic vote by the United Nations, which for the first time recognized the medicinal properties of cannabis and removed it from the most restricted substances under the 1961 Convention on Narcotic Drugs, the United States House of Representatives has voted to decriminalize cannabis. While certainly historic in every sense, this is potentially more of a symbolic moment, displaying the US legislature’s sluggish progress towards accepting the pro-cannabis opinions held by an ever increasing majority of their constituents (2/3 support legalization in some ...

Earlier this week, on November 20^th, the House of Representatives judiciary committee approved a bill –The Marijuana Opportunity, Reinvestment, and Expungement Act (“the MORE Act”) – that would legalize cannabis at the federal level. The next step in the process will be a formal floor vote in the House, assuming the Act is not marked by any other committees for review. This is the first time a congressional committee has passed a bill that would legalize cannabis at the federal level. The Act will now need to pass the House vote before moving on to the Senate for ...

Gov. Pritzker Signs Law Expanding Illinois’ Medical Cannabis Program & Makes it Permanent

Until recently, Illinois’ medical cannabis program was technically a pilot program and it even had an expiration date in 2020. This changed when Gov. J.B. Pritzker signed a new medical cannabis law for Illinois, which will also legalize recreational adult-use cannabis on January 1, 2020. 

The new medical cannabis law had bipartisan support in the Illinois legislature and votes cast earlier this year showed lawmakers’ desire to not only make the medical cannabis program permanent, but ...

Capping off a historic legislative session, last Friday afternoon, the Illinois House voted to approve the Cannabis Regulation and Tax Act (“CRTA”), which will legalize the use of cannabis for recreational purposes by individuals 21 and older. The State Senate approved the bill earlier in the week. Governor J.B. Pritzker, who has championed the legalization of adult use recreational cannabis, is expected to sign the bill into law. Legal sale (from licensed sellers) and possession of cannabis is scheduled to begin on January 1, 2020. While Illinois is the 11^th state to legalize ...

Illinois legislators recently returned from a break and the legalization of cannabis in Illinois appears to be taking center stage. State Rep. Kelly Cassidy, an established cannabis advocate and one of the state’s leaders in the push for legalization, is hoping that legislation will be introduced in full detail this week. A prior version of the bill, which was much less detailed than the version expected to be introduced in the coming days, was introduced in January and passed by the Senate Executive Committee last month.

The legislation has received support from new Governor J.B ...

While many following the rise of the cannabis industry in the United States have seen CBD-infused food and drink products hitting the market, what many may not know is that CBD-infused products remain illegal at the federal level. CBD, short for cannabidiol, is a compound in cannabis which has recognized medical value, but does not produce the high or euphoria created by the more commonly known cannabis compound THC. Congress legalized CBD derived from hemp in December of 2018.

Last summer, the FDA approved Epidiolex, the very first CBD medication cleared for patient use in the ...

As many following the state of cannabis law in Illinois know, State Rep. Kelly Cassidy and State Sen. Heather Steans have been working on a proposal for the legalization of adult-use recreational cannabis for some time. They introduced a bill in 2018 but decided not to pursue passage until 2019. Their bill remains in the works, as Rep. Cassidy and Sen. Steans continue to negotiate with state lawmakers, governmental bodies, and Governor Pritzker. While there are some indications that an updated version of the Steans/Cassidy bill will be reintroduced as early as April, State Rep. Carol ...

Though the government shutdown continues, the new 116^th Congress is hard at work and cannabis legislation appears to be a hot topic. In the first three weeks of 2019, three separate cannabis related bills were filed. Here is what you need to know:

The Regulate Marijuana Like Alcohol Act, introduced by Rep. Earl Blumenauer (D-OR), was actually initially introduced last year by Jared Polis (D-CO), who is now Colorado’s governor. The Act, which reserved the bill number H.R. 420 (yes, you read that right), would bring about the most significant alteration in federal cannabis law this ...

Last night, J.B. Pritzker, the Democratic candidate for Illinois Governor defeated incumbent Republican Bruce Rauner at the polls. Pritzker will be sworn in as governor on January 9, 2019. One of many issues on which the two candidates were divided was the legalization of recreational adult use cannabis in Illinois. Governor Rauner was a staunch opponent to the legalization of recreational cannabis. He was also seen as the driving force behind keeping Illinois’ Medical Cannabis Pilot Program, which was largely put in place by former Governor Pat Quinn’s administration, one of ...

In June of 2018, in a landmark decision, the FDA issued its first approval of a medicine derived from cannabis, Epidiolex. Manufactured by Britain’s GW Pharmaceuticals, Epidiolex was developed to treat two rare and severe seizure disorders in young children (Dravet syndrome and Lennox-Gastaut syndrome). However, the approval faced a significant legal barrier as cannabis, and products derived from the plant, remained a Schedule I drug in the eyes of the DEA. Schedule I drugs are defined by the DEA as having no currently accepted medical use and a high potential for abuse.

That ...

On June 25, 2018, for the first time in its history, the Food and Drug Administration approved the use of a drug derived directly from cannabis. The drug, called Epidiolex, treats two specific epileptic syndromes – Dravet syndrome and Lennox-Gastaut syndrome – both of which can affect infants and children under the age of five. This decision comes following extensive clinical studies of the cannabis based medicine. In the past, the FDA has only approved synthetic variations of Tetrahydrocannabinol (THC) and other cannabis compounds (typically for use in combatting nausea and ...