Tag Archive for: cannabis

hand holding a piece of paper with marijuana leaf shape cut out

The Impact of the Legalization of Recreational Cannabis in New Jersey

By: Jon Avidor and Ilana Faibish

On February 22, 2021, after years of failed legislative attempts, New Jersey’s Governor Phil Murphy signed three bills that together launch a marijuana industry in New Jersey and put an end to thousands of arrests. This comes after New Jersey voters approved in November with a 67% vote “New Jersey Public Question 1”, an amendment to the state constitution to legalize adult recreational use of cannabis. The amendment provides for the state to establish a regulated market for the cultivation, distribution, and sale of cannabis. As a result, New Jersey has joined the minority of states to fully legalize adult recreational cannabis use. 

As the guinea pig for recreational legalization in the tri-state area, other states in the northeast will likely look to the Garden State to address some of the hurdles that coincide with legalization, namely, decriminalizing marijuana possession as a matter of law, creating a regulatory commission, and finalizing a taxation plan which implements social equity. New Jersey’s approval is paving the way for New York and other northeastern states to legalize, as evinced in the New York governor’s announcement calling for statewide legalization of recreational marijuana shortly after New Jersey’s amendment to the state constitution.

Decriminalizing Marijuana Possession and Creating a Regulatory Commission 

The first aspect of legalization of adult recreational cannabis use and possession is reconciling legalization with criminal legislation and penalties already in place. For example, in New Jersey, the law currently imposes a maximum penalty of six months in prison and a $1,000 fine for marijuana possession of 50 grams or less. This reconciliation is addressed in three bills which New Jersey Governor Phil Murphy signed into law on February 22, 2021. As a result, possession of up to six ounces of marijuana by people age 21 or older is now legal. Moreover, the legislation eases penalties for minors for possession of marijuana. Importantly, distribution and growing cannabis without a license remain illegal.

Furthermore, this new legislation proposes a regulatory and licensing scheme, whereby the State will expand the duties of its existing Cannabis Regulatory Commission implemented for regulatory distribution of medical marijuana to additionally issue and cap the number of recreational marijuana licenses for merchants in six “marketplace” classes, including (i) growers; (ii) processors; (iii) wholesalers; (iv) distributors; (v) retailers; and (vi) delivery services. The cap is intended to support small businesses as the Commission sets aside 25% of licenses for “microbusinesses” and the issuance of licenses is intended to benefit “significantly involved” New Jersey residents. Additionally, the new legislation gives licensing preferences to residents of zones that reflect areas disparately impacted by prohibition with a goal that 30% of all issued licenses would be issued to minority, women’s, and disabled veterans businesses.

In New York, Governor Cuomo signed legislation to decriminalize the penalties for unlawful possession of marijuana, as well as a process to expunge records for non-violent convictions. Since then, Cuomo has been involved in discussions for legalizing adult-use cannabis. Recently, Cuomo released a proposal to create a new Office of Cannabis Management as part of a comprehensive system to oversee and regulate cannabis in New York, emulating the framework set by New Jersey. Similarly, in addition to rolling out a legalization plan that complies with national standards to promote responsible use, Governor Cuomo’s proposal also places a large focus on creating licensing opportunities and assistance to entrepreneurs in communities of color who have been disproportionately impacted by the war on drugs.

Finalizing a Taxation Plan

State executives and legislatures recognize that legalizing and regulating adult-use cannabis creates a path of opportunity to generate massive revenue. For instance, the tentative taxation plan proposed by New Jersey projects a state sales tax on marijuana sales at a rate of 6.6% generating nearly $2 billion in revenue annually once the market develops producing about $126 million in tax revenue. Additionally, localities have the option to charge up an extra 2% tax on sales.

Moreover, to address historical racial disparities and statistical evidence showing that Black Americans are at least 3.6 times more likely to be charged with marijuana possession, New Jersey legislation includes a “social equity” excise tax on cannabis purchases to fund communities impacted by prohibition. However, the excise fee is optional meaning that the Cannabis Regulatory Commission is free to reject it, and the bill does not specify communities entitled to the benefits of the excise tax. If the Commission implements the excise tax, then the funds would be distributed to social equity programs such as educational support, economic development, social support services, and legal aid. 

In New York, once the proposal to legalize recreational marijuana use is fully implemented, the marijuana industry is expected to generate more than $300 million in tax revenue, which according to Governor Cuomo is “much needed.”


Until New York decides to move forward with mere plans to fully legalize adult-use recreational marijuana, it is uncertain what New Jersey’s legalization means for cannabis use and possession in its easily accessible New York neighbor less than 10,000 feet across the Hudson River. Governor Cuomo’s proposal seemingly emulates many aspects of the framework implemented by New Jersey. It will be interesting to see where they might differ when the time comes.

History of Marijuana Treatment in the United States

By: Sarah Siegel and Danika Johnson

Marijuana use in the United States has been a topic of debate for decades. From being accepted to highly regulated and criminalized, marijuana use has gained significant importance and credibility in the modern age.

While the cannabis plant can be used for various reasons, for example, hemp for fabrics, the use of marijuana for the body dates to the 1850s. In the 1850s, marijuana was available in pharmacies for the medical treatment of nausea, pain, and other ailments. Marijuana was a popular ingredient used in medicines and tinctures. At the turn of the 19th century, government regulation of marijuana began. The Pure Food and Drug Act in 1906 made the labeling of any cannabis in over-the-counter remedies a requirement.

Only a few years after the passage of the Pure Food and Drug Act and as a result of the Mexican Revolution of 1910, the United States saw an influx of Mexican immigrants into the U.S. Mexican immigrants brought with them the marijuana plant and introduced recreational use, and by the 1930s, it became popular throughout the U.S. In 1913, California was the first state to outlaw cannabis, followed by Utah in 1914. Following the Alcohol Prohibition Era, marijuana was seen as the readily available and inexpensive alternative to alcohol, making it even more popular in America.

Since marijuana was used mostly in the Mexican and Black communities, marijuana became the next target for xenophobic fears. Massive unemployment increased public resentment and fear of Mexican immigrants. Journalists, newspapers, and the media all contributed to the negative treatment of marijuana in American culture at the time. By 1931, 29 states outlawed marijuana. The Federal Bureau of Narcotics Commissioner then started a propaganda campaign throughout the U.S. claiming that marijuana caused insanity, reckless and criminal behavior, and death. This effort was made to encourage the remaining states to adopt the Uniform State Narcotic Drug Act.

The adoption of the Uniform State Narcotic Drug Act was not enough. A national propaganda campaign against the “evil weed” pushed for the growing concern Americans had about marijuana. An example includes Reefer Madness, a 1936 film renamed “Tell Your Children,” which showcases a group of students committing crimes after smoking marijuana. The FBN Commissioner published in the American magazine, Marijuana, Assassin of Youth, to continue lobby efforts for the adoption of federal legislation. In 1937, the Marijuana Tax Act was passed by Congress, imposing federal taxes on transfers of the drug and requiring persons dealing in marijuana register their names and places of business with the IRS.

Not everyone in the United States gave in to the national propaganda campaigns. The New York Academy of Medicine issued the LaGuardia Committee Report in 1944, laying out the results of a five-year comprehensive study. They found that marijuana did not lead to the use of morphine, heroin, or cocaine, was not the determining factor in the commission of crime, and the overall publicity regarding its catastrophic effects was unfounded. By the 1950s through the 1960s and 1970s, attitudes towards cannabis use began to shift, increasing marijuana uses acceptance, especially among youth.

While American culture began to shift to acceptance, the federal government continued to criminalize marijuana. In 1970, the Controlled Substances Act was passed, labeling marijuana a Schedule I substance. This imposed many restrictions, some of which are still prevalent today. While states have moved towards legalizing or decriminalizing marijuana, and many individuals have created new businesses, federal legislation prevents those businesses from fully participating in the financial industry.

As states to continue to pass measures to legalize or decriminalize and remove harsh restrictions on marijuana, the hope is that the federal government will follow suit.  Significant campaigns throughout the nation and general acceptance for its use will encourage federal legislation to decriminalize marijuana and allow this industry to expand and develop further.

Examining the SAFE Banking Act’s Potential Impact on the Cannabis Industry

By: Jon Avidor and Liam McKillop

Last September, the Secure and Fair Enforcement Banking Act of 2019 (the “SAFE Banking Act”) garnered enough votes in the House of Representatives to pass through to the Senate. This was an important first step for a bill that cannabis-related businesses are relying on to gain access to basic financial services that are currently unavailable to them. While the bill asserts that the main purpose of providing safe harbors to depository institutions that provide financial services to state-legal cannabis-related business to be an increase in public safety by reducing the amount of cash-on-hand to be held and transported, the effects of such an enactment will be much further reaching for the entire cannabis industry.

Currently, federally chartered depository institutions will not work with legitimate businesses within the cannabis industry due to the potential enforcement of severe penalties from federal banking regulators. The cash-dominant nature of the industry provides an abundance of headaches for these businesses, from the constant security needed to protect their cash on hand, to the overwhelming administrative recordkeeping required to account for every transaction, to the ability to acquire loans from banks for the financing of real estate acquisitions instead of having to use all-cash, therefore, depleting their capital on hand. This results in cannabis-related businesses being forced to seek out the services of state-chartered banks and credit unions who are willing to work with legal cannabis businesses within their jurisdiction. However, the strict reporting requirements imposed on these state-chartered banks make these services very expensive, sometimes costing around $5,000 per month in fees just to operate a checking account.

At a high level, the SAFE Banking Act would work to provide these depository institutions with protections from various federal banking regulators (i.e., the Federal Reserve, the Bureau of Consumer Financial Protection, and the Department of the Treasury) for their provision of basic financial services to legal cannabis business. Protection from federal regulators is necessary because the capital maintained by these state-legal cannabis businesses is directly tied into various cannabis-related operations that are illegal at the federal level due to the classification of cannabis as a Schedule I drug under the Controlled Substances Act (“CSA”). These financial services include things such as operating a checking account, obtaining a loan, or setting up an employee 401-k program—all things that a “normal” business would not have to think twice about obtaining as part of their standard operations—but also services that are almost entirely unavailable to legitimate cannabis-related businesses. Advocates of the bill believe that allowing basic financial services to these cannabis-related businesses will help reduce crime and fraud throughout the industry related to both the holding of large amounts of cash and the proper record-keeping procedures associated with such. Proponents also express hope that the bill will finally lead to more consistent growth within the industry, by allowing banks to funnel money into these companies and removing one of the largest concerns of potential investors.

However, as noted above, the passing of the bill through the Democratic-controlled House was simply just the first step, and the cannabis industry is anxiously awaiting a potential showdown in the Republican-controlled Senate. While there was not much doubt about the bill’s ability to pass through the House, concerns which loomed large about opponents within the Senate putting up a fight or using stall-tactics to prevent a vote have come to light. Currently, the bill is in a holding period, as it was referred to the Committee on Banking, Housing, and Urban Affairs after being received in the Senate. In December 2019, Mike Crapo (R-Idaho) the Chairman of that Committee had this to say in a statement expressing his lack of support for the SAFE Banking Act: “Significant concerns remain that the [bill] does not address the high-level potency of marijuana, marketing tactics to children, lack of research on marijuana’s effects, and the need to prevent bad actors and cartels from using the banks to disguise ill-gotten cash to launder money into the financial system.”  This statement echoes the concerns of most opponents who believe that the bill is just a partial solution and any real fix to the banking issues that plague the industry not come without a re-scheduling of the drug under the CSA.

While it seems unlikely that a final resolution for the bill will be reached in the near future, the steps taken thus far can still be viewed as a positive for the cannabis industry. The bill making it through the House was a monumental step, and even if voted down in the Senate, it has still laid the necessary groundwork for future relevant legislation. The bill has also worked to spark awareness and conversation around the extremely restrictive financial constraints which the legal cannabis industry currently faces. While actual victories are always better than moral victories, any and all forward progress is important to the long term stability sought throughout the industry

Cannabis Advertising Laws: The States’ Way or the Highway

By: Jon Avidor, Sarah Siegel and Liam McKillop

As cannabis continues to be classified as a Schedule I drug under the Controlled Substances Act, federal law prohibits any written advertisement placed in a newspaper, magazine, on the internet, or in any other publication which has the purpose of “seeking or offering illegally to receive, buy, or distribute [cannabis].” While this broad legislation significantly limits the available advertising options for cannabis companies and retailers, it only applies to advertisements that seek to facilitate a transaction of the good and is silent as to advertisements whose purpose is to promote the use of cannabis. However, most states have enacted legislation that places further restrictions on the content, nature, location, and size of cannabis advertising. This article seeks to give an overview of the various forms of state regulation—with a specific focus on states with legal recreational programs—on cannabis advertising, by exploring the similarities and differences between the legislation and examining the different rules in place for both traditional advertising and digital advertising.

Digital Advertising Landscape

The digital marketing platforms available to cannabis companies and retailers are currently extremely limited. In general, TV and Radio broadcasters steer away from cannabis advertisements, largely due to uncertainty about FCC policy and concerns with their FCC licenses being taken away. Further, Google and Facebook—the two companies which dominate the online digital advertising market—currently severely restrict the advertising options for cannabis businesses. Google lists cannabis under the headline of “dangerous products and services” which it bans in order to keep people safe from the “promotion of some products or services that cause damage, harm or injury.” It is quite telling of Google’s view on cannabis, as the other good and products listed within this category are guns, explosives, and tobacco; at the same time, Google has a completely separate policy for alcohol advertising. Facebook has a similar ban on advertisements that promote the sale or use of illegal or recreational drugs and provides specific examples of prohibited advertising activity (which includes using images of smoking-related accessories like bongs and rolling papers or images which simply imply the use of a recreational drug). While Facebook has flirted with the idea of revamping its current policies, and recently began to allow the pages of legally operating cannabis retailers to appear in Facebook searches, it’s strict advertising policies still remain intact, much to the dismay of cannabis communities.

Traditional Advertising Landscape

While there is a larger market of available options for cannabis companies and retailers when it comes to print, billboard, and signage advertisements, there are still many restrictions in place which vary from state to state. Colorado—the first state to legalize the recreational use of cannabis—enacted cannabis advertising legislation which is very similar to the state’s laws related to alcohol advertising. The use of outdoor public advertising for cannabis retailers in Colorado is extremely limited, with fixed signs on the zoning lot for the purpose of identifying the location of the business is the only thing permitted. While retailers are prohibited from using billboards in Colorado to advertise their stores and products, about half of the state’s “Adopt-a-Highway” signs display the logos of local cannabis businesses, a “loophole” being exploited by these businesses. Further, the billboard laws do not apply to cannabis companies such as WeedMaps—an app that primarily provides locations and reviews for dispensaries—as the company is not in the business of selling cannabis, permitting the companies “Weed Facts” campaign to be run on billboards within the state. New York has similarly strict restrictions on external signage, requiring the publicly viewable signage of medical cannabis retailers to be non-illuminative and only in black and white colors; just across the water, the state of New Jersey also has identical restrictions in place.

Health and Safety Concerns

The Federal Trade Commission—a government agency in place to protect American consumers—regularly monitors health-related advertising claims and routinely sends warning letters to cannabis companies whose advertisements promote the prevention, treatment, or cure of symptoms without proven scientific evidence to backs up such claims. The FTC takes these matters extremely seriously, requiring any company that receives a warning to notify the FTC of the specific action they took to remedy the agency’s concerns. The warning letters also serve to inform offending cannabis companies of the legal consequences of the prohibited unsubstantial health promotion, which can result in an injunction to both stop sales and force the refund of money to consumers. Most states have further legislation in place to enact specific requirements for cannabis advertisements which make health claims, with all of them requiring similar scientifically proven substantiation of any claims being put forward. The state of Alaska requires five different warnings to be placed on all advertising, including statements such as “[cannabis] has intoxicating effects and may be habit forming and addictive” and  “[t]here are health risks associated with consumption of [cannabis].”

Beyond health concerns, many state laws have checks to ensure that advertisements are not targeting individuals under the age of 21. For instance, California laws require any cannabis advertising placed in digital communications to be displayed only where “at least 71.6% of the audience is reasonably expected to be 21 years of age or older” while also prohibiting signage within 1,000 feet of any elementary school, high school, playground or youth center. The state’s laws further forbid the use of cartoons, music, and symbols which are known to contain elements that appeal to persons younger than 21. 


As the world of cannabis advertising is filled with strict policies that vary across state lines and general confusion about federal guidelines, it is important for a business to err on the side of caution and consult with legal experts when creating advertising campaigns. While successful advertising is rife with creativity, the rigorous health and safety requirements work to remove such ingenuity from the cannabis advertising industry. This puts cannabis retailers and companies in a tough spot, as they need advertisements to promote their business, but always have to keep the consequences of the law in the back of their minds.

The Hazy Relationship between the FDA and CBD

By: Jon Avidor, Sarah Siegel and Liam McKillop

Walking around New York City, it could be easy to be under the impression that the sale of certain CBD products is legal. You can walk into your local convenience store and buy CBD-based chocolate candies over the counter, or you may have walked by one of the various CBD dedicated stores operating in Manhattan. However, in most instances, that is not the case. The legality of the CBD industry is not clearly defined, especially when it comes to CBD-based products such as foods, drinks, cosmetics, and pet goods and how the Food and Drug Administration (“FDA”) regulates the manner in which these products are sold and marketed.

The FDA, which operates as a science-based regulatory agency committed to protecting and promoting public health, has worked to balance the significant public interest and demand for CBD products while continuing to maintain their rigorous public health standards as it relates to drug approval. However, as the popularity of CBD and the industry in general continues to grow—evidenced by estimates that U.S. consumers spent $300 million on CBD foods and drinks throughout 2018—the FDA has continued to come under public pressure to regulate and stay up to date on the legal status of CBD products. 

There are two types of CBD: (1) hemp-based CBD, and (2) THC-based CBD. While both types come from the same plant—Cannabis sativa L.—there are major differences between the chemical makeup of the two after post-harvest, leading to a difference in how the two products are regulated by the FDA. As both types of CBD are common, the legal status of the two individual products has created confusion throughout the CBD industry. 

When the 2018 Farm Bill was signed into law in December 2018, the definition of “hemp” was amended to now be defined as “all parts of the plant Cannabis sativa L. with a delta-9 tetrahydrocannabinol concentration (the component of the plant which is responsible for the “high” attributed to cannabis) of not more than 0.3%.” Further, hemp was removed from the Controlled Substances Act, allowing for hemp-based CBD products to be put into interstate commerce. The result of this is that a majority of CBD products that are sold commercially are hemp-based. However, the Farm Bill ensured that the FDA would continue to have the authority to regulate products that contain cannabis or cannabis-derived compounds under the Federal Food, Drug & Cosmetics Act (“FDC Act”). The FDA has continued to maintain its position that it is currently illegal for THC-based CBD products like foods and drinks to be placed into interstate commerce and/or marketed as a dietary supplement.

Under the FDC Act, any product (excluding foods and drinks) which intends to provide either a therapeutic or medical effect on the body of humans or animals, is a drug. To date, Epidiolex—which is used as a treatment of seizures associated with Lennox-Gastaut syndrome or Dravet syndrome—is the only drug containing CBD which has been approved by the FDA. Further, the FDA has different regulatory standards when it comes to products like foods and drinks and even further differing standards for cosmetic products, with the latter being generally considered to be much less rigorous. For example, with cosmetic products (products which are considered to be “articles intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the body”), there are no pre-approval requirements when it comes to the addition of CBD into these products. 

Meeting the definition “hemp” is only the first step to legally sell a specific type CBD product. The legal status of the product will also depend on its intended use, how the product is labeled and how the product is marketed. For instance, the FDA has concluded that no THC-based CBD product can be marketed or advertised as a dietary supplement, as the FDA has yet to discover scientific evidence which backs up the proposition. The FDA is currently unaware of any evidence which supports CBD products being used as a dietary supplement, and will therefore enforce against companies that market products as such.  it looks to enforce against products which market themselves as such. The FDA worries that such deceptive marketing claims can put the public at risk as individuals may be inclined to attempt to use such products instead of approved treatment methods for their conditions.  

Due to the rapid rise in popularity of CBD and the recent law changes related to hemp and cannabis (which continue to vary at the state and local level), it seems that the goalposts for FDA regulation of CBD products continue to be moved. While the FDA continues to consider public health above and beyond public demand, the FDA also understands that companies are begging for clearer guidelines related to the marketing and sale of their products and that the public wants to know more about the prospective therapeutic and medical benefits of CBD. However, as an agency, the FDA needs to be comfortable with the scientific evidence which supports the purported benefits, and due to the current status of tests and clinical trials, the FDA is not yet there.

The CBD’s of Trademarks

By: Jon Avidor and Joshua Weisenfeld

Recent cannabis legalization in 11 states has pushed congress to more formally address the issue of federal regulation and decriminalization. On December 20, 2018, Congress continued this process and moved forward with partial decriminalization of certain types of cannabis and its derivatives by signing the Agriculture Improvement Act of 2018 (“2018 Farm Bill”) into law. The 2018 Farm Bill reclassified cannabis plants, products, and derivatives containing no more than 0.3% THC as “hemp”, and subsequently removed hemp from the list of controlled substances. Passing this bill alleviated some difficulty when protecting cannabis, CBD, and hemp brands. Often when protecting a brand, companies will register their brand as a federal trademark, which was previously unavailable for hemp and CBD products. However, with the removal of hemp from the controlled substance schedule, the United States Patent and Trademark Office (“USPTO”) could no longer deny trademark registrations on hemp products based on their conflict with federal law, therefore legalizing the registration of hemp trademarks. 

There are various ways to protect trademarks, using both state and federal law. Typically, a company will first attempt to register its mark through the USPTO as a federal trademark, as a federal trademark is enforceable throughout the United States. However, if a federal trademark is unavailable, a company may seek to register their mark within their state of operation, incorporation, or use. A state trademark, however, is only enforceable against infringers within the state of the trademark’s registration; substantially limiting the mark’s protection. 

State registrations have historically been the only option for trademark protection in the hemp and cannabis industries because state trademark offices rely on state law rather than federal law. Subsequently, states that have legalized cannabis tend to have more comprehensive trademark laws that allow for registration of cannabis trademarks.

In practice, the federal trademark registration process requires an applicant to identify the trademark’s use within interstate or international commerce. This is because federal registration is only available for goods or services that are in interstate or international commerce. Meaning if someone were to apply for a federal cannabis trademark, they would have to sign a sworn oath that they are using the mark for goods in interstate commerce, essentially confessing to a violation of federal law. Moreover, the USPTO refuses to register a trademark for any goods or services that violate federal law. So even if someone was willing to admit to the interstate sale of cannabis, the USPTO would refuse to register the mark because cannabis itself violates federal law. Some applicants have attempted to circumvent this rule by showing legal uses of the mark in interstate commerce, but the USPTO has consistently rejected these claims. 

This rigid system, as it relates to hemp, recently changed as a result of the 2018 Farm Bill. The reclassification of certain cannabis plants as legal hemp opened the door for hemp companies to apply for federal trademark registrations, since industrial hemp cultivation, manufacture, and distribution are no longer in violation of federal law. This also means that legal hemp can be placed in interstate commerce, so hemp companies can sign sworn oaths stating that their products, which bear the mark, will be legally sold through interstate commerce. More importantly, this admission would no longer be a confession of a federal crime. 

In May, the USPTO confirmed this approach when it updated its examination guidelines for legal hemp. The examination guidelines offer federal trademark examiners an in-depth review of the USPTO’s practice prior to the 2018 Farm Bill, along with current approval provisions for registering a cannabis trademark in compliance with federal law. The new guidelines no longer permit trademark examiners to reject cannabis trademark applications based on a violation of federal law and lack of lawful use in interstate commerce. The new guidelines will allow for hemp companies to register trademarks on hemp plants, products, and derivatives in the same manner as any other legal mark. USPTO has started to see an influx of CBD-related trademark applications. However, while it typically takes three months for a trademark application to be reviewed by the USPTO, CBD-related trademark applications may take up to a year to be reviewed.

The USPTO doubled down on their previous restrictions for registering cannabis trademarks for products containing more than 0.3% THC, as the 2018 Farm Bill did not change the legality of this variety of cannabis. Meaning cannabis companies will still be forced to register their cannabis trademarks with the state, while hemp companies may begin to avail themselves of the benefits of federal trademark protection.

Comprehensive Drug Abuse Prevention and Control Act & Cannabis

By: Rob Griffitts and Kathryn Jones

The free-spirited attitude of the 1960s counterculture, in part, fueled the crackdown of illicit substances by the following decade’s legislature. The Nixon Administration officially began its “War on Drugs” with the passing of the Comprehensive Drug Abuse Prevention and Control Act of 1970.  While the act was seen by many as a means to stop the flourishing anti-establishment youth culture by outlawing marijuana, this legislation governs much more.  The focus of the act is much broader than regulating marijuana and in fact sought to deal with drug use from a medical perspective, rather than a law enforcement one.  With Titles II and III being added over the following years including the oft-debated Controlled Substances Act (“CSA”) and countless government-sponsored anti-drug campaigns, the Comprehensive Drug Abuse Prevention and Control Act changed America’s attitudes toward not only illicit substances but also legally manufactured drugs.  With cannabis’ legal status within the CSA currently hanging in the balance, it is helpful to understand how this law came to be enacted.

During the 1960s it became clear to the country that drugs, both illicit and legal, were being abused.  With the establishment of the Presidential Commission on Narcotic and Drug Abuse in 1963, work began on an all-encompassing way to tackle drug abuse and consolidate over 50 pieces of drug-related legislation.  The Federal Comprehensive Drug Abuse Prevention and Control Act of 1970 was born with the goal in mind to come at the country’s drug problem from all sides.  Title I focused on rehabilitation, Title II deals with the scheduling and distribution of domestic illicit substances and Title III addresses the import and export of these substances.  The most divisive of the three titles is Title II. 

Title II of the Federal Comprehensive Drug Abuse Prevention and Control Act of 1970, more commonly referred to as the CSA, became effective on May 1, 1971. The purpose of the CSA is to regulate and facilitate the manufacture, distribution, and use of controlled substances for legitimate purposes, and to prevent these substances from being diverted for illegal purposes.  The CSA places various plants, drugs, and chemicals into one of five schedules based on the substance’s medical use, potential for abuse, and safety or dependence liability.  These Schedules mimic those created by the Single Convention on Narcotic Drugs (Single Convention), an international treaty created shortly before the CSA. The CSA also provides a mechanism for substances to be controlled (added to or transferred between schedules) or decontrolled (removed from control).  Importantly, the CSA is the guiding document giving authority to the Drug Enforcement Administration (“DEA”).

In 1973, President Nixon sought to create the DEA in order to combat drug abuse both at home and abroad.  Like with the CSA, the goal was to consolidate the work that was previously being done by several competing agencies, making the DEA the ultimate “superagency” to enforce drug laws. Every pharmacist, manufacturer and drug company must first register with the DEA in order to legally produce and distribute drugs.  The creation of the DEA brought back the law enforcement element of the “War on Drugs”.  The focus once again shifted from a medical approach to a criminal justice one. The mission statement of the DEA even states first that its mission is to “bring to the criminal and civil justice system of the United States… those organizations… involved in the growing, manufacture, or distribution of controlled substances appearing in or destined for illicit traffic in the United States.”  The growing heroin problem in the 1980s saw a greater need for the DEA and eventually, Congress passed the Comprehensive Crime Control Act of 1984 which enhanced penalties for CSA violations, thus making the DEA even more important in drug control.

However, as time moved on and attitudes shifted once again about drug use prevention, certain aspects of the CSA are being scrutinized, particularly the scheduling of cannabis in Schedule I.  Currently, the Trump Administration is in the process of notice and comment on a proposed change that would re-schedule marijuana from the schedule containing drugs with the highest probability of misuse to a schedule in which cannabis could be researched, regulated and ultimately put in consumer products.  It is clear that from the creation of the CSA in the early 1970s that it is a document which is often amended to deal with the issues surrounding drug use. One of the most glaring issues today is the competing federal and state legal statuses of cannabis. In order to do its job effectively as the guiding legislation of drug production and distribution, the CSA may have to change again.

The Implications Behind New York’s Decriminalization of Marijuana

By: Steve Masur and Armando E. Martinez

On June 19, 2019, the New York State Legislature in Albany rejected a cannabis legalization bill, which had enjoyed wide-ranging popular support, leaving many to wonder why. New York is the second state in the tri-state area to reject the legalization of marijuana in the last few months, as New Jersey, its neighbor, narrowly rejected a legalization bill in March. When asked to comment on the results, lawmakers stated that the opposition in legalizing marijuana in New York mainly stemmed from uncertainty as to how to allocate tax revenue. The New York State Legislature, however, made advances towards legalization by passing a marijuana decriminalization bill.

Under New York’s marijuana decriminalization bill, possession of up two ounces of marijuana will now carry a fine between $50 and $200, with the specter of jail time significantly reduced. Further, the bill will establish a process to expunge the marijuana-related convictions for those who have been previously convicted of possession. In effect, the bill will not only limit the amount of marijuana-related convictions we see in the future, but it will also provide 600,000 ex-convicts with a thinner criminal record. This means that ex-convicts who were previously precluded from entering the workforce will now be able to enter it, which could drive economic and entrepreneurial growth in New York.

The legal distinction between decriminalization and legalization is thin, but it merits scrutiny. Decriminalization means that a fine is attached to the possession of marijuana in small amounts, yet jail time is not. Depending on the state, further, possession of a larger amount of marijuana, as well as sales or trafficking of the drug, could result in harsher sentences, such as jail time. By contrast, fines and jail time are completely eliminated under legalization, which may also allow sales. Decriminalization is a step towards legalization, and although this was the last legislative session for the first half of 2019, it most certainly will not be the last time lawmakers revisit this topic in Albany. This is because the economic, social, and political implications of legalizing marijuana could likely have a marked impact on the American macroeconomy.

In 2018, the legal cannabis industry generated approximately $10 billion in revenue. Cannabis-related financial services have surged due to many firms taking advantage of the legalized markets to create and scale cannabis supply chain operations. If cannabis were legalized in New York, jobs would be created on both wholesale and retail front, which would effectively allow the state to enjoy a higher tax revenue. The push for legalization probably failed due to questions about how to allocate this revenue.

When Illinois Gov. J.B. Pritzker signed Illinois’ legalization bill, he stated that legalization would provide opportunities to those in communities who have been direly in need of a second chance. By decriminalizing marijuana in New York, the legislature is close to fully afford the same benefit to its constituents, as this bill is focused on creating on opportunities, not limiting them.  However, decriminalization is still only a half measure. In addition to broadening the tax base, full legalization would provide New York with a new industry and a new basis for entrepreneurial growth, which could make it a leader in terms of growth, especially upstate, where it is needed most.

A2IM Indie Week CLE

By: Steve Masur

On June 17th, 2019, for the 10th anniversary of A2IM Indie Week. Steve Masur moderated and produced a Continuing Learning Education (CLE) series of panels at New York Law School. A2IM Indie Week is a four-day international conference and networking event aimed at maximizing the global impact of Independent music. Indie Week includes keynotes, panels, receptions, exclusive networking sessions, and much more.

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Lauren Mack, Intellectual Property Attorney, Masur Griffitts + LLP



The Music Modernization Act: What You Need to Know


Jennifer Newman Sharpe, General Counsel & Head of Business Affairs, ONErpm



A big thank you to the incredible panelists and all of those who joined us!

Decriminalization in New York: A Half-Baked Measure?

By: Rob Griffitts and Jordan M. Steele

Passed in the twilight hours of New York’s last legislative session, months of negotiations produced a reform that will further decriminalize possession of marijuana. Advocates celebrate the bill for providing vital relief to individuals through expungement of prior misdemeanor convictions for marijuana possession. However, both proponents and critics remain dissatisfied with the compromise. Critics of the bill rail against it for softening the State’s position on possession, while many of those in favor of ratification remain disappointed with its scope. Despite being “decriminalized”, marijuana remains prohibited in the state of New York. This distinction is critical for the burgeoning cannabis industry; distribution will remain a criminal activity, and as a result, there remain substantive health concerns when the product is produced in the absence of oversight.

The New York Reform 

While marijuana possession has been decriminalized in New York for decades, this reform expands upon existing law and provides a means for individuals to have their prior criminal records expunged. The prior law, passed in 1977, decriminalized possession of marijuana for amounts up to 25 grams (approximately one ounce). The new bill does several things, including raising the limit for possession. First, the penalty for possession of less than one ounce will be lowered from $100 to $50 and this amount will not increase because of prior criminal history. Second, the bill provides that possession of one to two ounces, previously a Class B misdemeanor, will become a violation, punishable by a fine of $200. More than two ounces will still be considered a crime, not a violation. Third, smoking marijuana in public will now be considered a violation. It had previously been considered a misdemeanor, a loophole which legalization advocates claimed was used to target racial minorities.

The Effect of the New Bill on Individuals

On the individual level, the bill is a major step forward. Early estimates show that nearly 600,000 New Yorkers could benefit from the expungement of past marijuana convictions. The bill’s sponsor, Senator Jamaal Bailey, has stated that prior convictions for marijuana possession had adversely affected his constituents in the Bronx. Those convictions were “limiting [New Yorkers’] access to housing, access to education, [and] affecting their ability to obtain employment.” In a radio interview on WAMC, Governor Cuomo commented that “it makes the situation much better especially for the black and brown community that has paid such a high price.” Politicians are hopeful that this bill will reduce the disparate impact of the war on drugs on minority communities.

Persisting Prohibition of the Cannabis Industry

Despite the relief the bill offers to individuals, decriminalization is not legalization, and many harms accompanying the prohibition of marijuana still persist. The prohibition continues to fuel an illicit underground distribution network, estimated to be worth $40 billion or more in the U.S. Profits from marijuana distribution in New York continue to go untaxed, and as a result, the state is foregoing a valuable source of revenue. The new bill also misses the opportunity to regulate the industry in order to ensure consumer safety. A regulated market could ensure that marijuana products are free of contamination, labeled for potency, provide adequate warnings to address health concerns and be contained in child-proof packaging. There also still persists the fear of the unequal application of the laws towards minority groups traditionally targeted for drug-related offenses. If history repeats itself, New York could ultimately see certain marijuana arrests increase, which was the result after the first bill decriminalizing marijuana was enacted in 1977. While the bill leaves these issues unaddressed, those in the cannabis industry remain hopeful that this reform provides a step in the right direction on the road to legalization.