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California Emergency Cannabis Regulations

What’s New? The California Bureau of Cannabis Control (BCC) along with the Departments of Public Health and Food & Agriculture issued emergency regulations to fully implement the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) and provide guidance for California cannabis businesses heading into 2018. We have focused on the select regulations to generally determine how cannabis businesses will be affected as to: Packaging/Labeling Branding Advertising Product Recall Packaging/Labeling: Packaging and labeling requirements included in the regulations issued by the Department of Public Health require two types of labels for all cannabis products: primary panel and informational panel. Primary Panel The “primary panel” is defined as the part of a label that is most likely to be displayed, presented, shown, or reviewed by a customer at the point of retail sale. The primary panel requires multiple data points, for example: the type of cannabis/cannabis product, total milligrams of THC and/or CBD, and the universal symbol for cannabis: All text on the primary panel must be at least size 6pt font, but may require a larger font size so the primary panel is “in relation” to the size of the container.  Informational Panel The “informational panel” means any part of the label that is not the primary panel. The informational panel must present the requisite warning language as well as other required labeling information, including nutritional information for edibles. Information required by MAUCRSA or by the emergency regulations not specifically designated to the primary panel belongs in the informational panel. All text in the informational panel must be at least size 6pt font, but may require a larger font...

Global Cannabis Marketplace

The United States is viewed as the land of opportunity, prosperity, and innovation. Americans take pride in the country’s historically progressive policies and contributions to advancements in medicine, technology, and science. However, when it comes to cannabis, the U.S. federal government is lagging behind the international marketplace. Over the past decade, individual states have made great progress in creating momentum for legalization of cannabis in America. Currently, 29 states and the District of Columbia allow access to medical cannabis, and more will follow suit. Yet, for the next four years (at least), the outlook on federal legalization is extremely bleak, especially given the key players in the Trump administration, specifically, Attorney General Jeff Sessions. On multiple occasions, Sessions has consistently re-affirmed he is not in favor of legalizing cannabis and has stated that he does not want the Department of Justice (DOJ) restricted from enforcing the Controlled Substances Act. But the administration has not explicitly overturned the Cole Memo . . . at least for now. Bottom line—despite best efforts, federal legalization in America is not likely coming anytime soon. The inability to transport cannabis across state lines and national borders stifles the development of national cannabis brands, and also puts American cannabis businesses at a significant disadvantage internationally. International medical cannabis trade has already begun, and is expected to expand rapidly. In 2017, Germany, Greece, and Poland joined Austria, Britain, Croatia, the Czech Republic, Denmark, Finland, France, Ireland, Italy, Macedonia, the Netherlands, Portugal, Romania, Slovenia, Spain, and Sweden on the list of European countries to have legalized medical cannabis in some form. Additionally, the Prime Minister of Luxembourg...

How to Deal with a Cease & Desist Letter

Receiving a cease and desist letter can evoke a flurry of emotions. Fear of litigation, defensiveness of your brand, concern for the future of your business, etc. But, taking a step back, it is important to understand what a cease and desist letter is, how it is used as a strategic enforcement tool, and what you should do if you are the recipient. What is a Cease and Desist Letter?  A cease and desist (C&D) letter, or a “demand” letter, is correspondence, typically written by a lawyer on behalf of another business or person, who wants you to stop doing something that allegedly violates their rights. In the trademark context, the letter typically demands that you cease using a trademark that is identical or similar to a mark owned by the other party. When these letters are written by lawyers, they can often be several pages long and contain confusing legal references, making it seem that you are clearly in violation of the law and must accede to their demands . . . or else. Conversely, when the letter is written by a non-lawyer using a template letter from the Internet, the letter may not provide enough substance for you to adequately assess your legal position. Regardless of who sent the letter, it is important to remember that the statements are merely allegations. That said, a C&D letter should be treated with the utmost concern until you are able to determine whether the alleged claims have any merit. What to Do (and Not to Do) If you Receive a Cease and Desist Letter? DO’s (1) Take a deep breath...

The Claim Game: FDA Monitoring & Challenging Health Claims for Cannabis Products

There is increasing recognition of the healing potential of cannabis. Even the FDA has approved two synthetic marijuana-based medicines for treatment of nausea in chemotherapy patients and to increase appetite in AIDS patients suffering extreme weight loss. However, since the FDA’s approval of new drugs relies on testing and clinical trials, the status of cannabis as a Schedule I controlled substance thwarts a progressive scientific environment that enables research into the plant’s effects on a myriad of diseases and symptoms, including cancer, multiple sclerosis, chronic pain, arthritis, gastro-intestinal disorders, movement disorders, HIV/AIDS, and conditions related to aging. Unable to obtain comprehensive scientific proof, patients seeking non-traditional, non-pharma treatment of diseases and symptoms rely largely on anecdotal and testimonial statements from others experiencing their same condition. Until the FDA formally recognizes cannabis’s healing properties, manufacturers of cannabis products must take great care in making health claims. Earlier in October 2017, the U.S. Food and Drug Administration (FDA) Commissioner suggested that the FDA may begin “cracking down” on health claims for marijuana products. The FDA recognizes that it bears a responsibility to start addressing this issue, citing as an a example arguably problematic unsubstantiated “claims that marijuana has antitumor effects in the setting of cancer.” But, the FDA is no stranger to cannabis products. In 2015 and 2016, it sent a slew of warning letters to companies making claims about the health benefits of cannabidiol (CBD), such as “strengthens immune system,” “Will alleviate all kinds of anxiety and inflammation problems,” and “CBD kills breast cancer.” In keeping with the FDA’s broad powers, beware that after sending a warning letter, the FDA...

Is CBD Federally Legal?

Cannabidiol (CBD) is one of the primary cannabinoids naturally occurring in plants with the genus Cannabis sativa L. CBD is non-intoxicating and often used in products to combat pain, inflammation, and anxiety. Sales of products containing cannibidiol (CBD) continue to increase as consumers begin to recognize the health benefits CBD affords. While most cannabis products are sold through highly regulated dispensaries, products containing CBD derived from Cannabis ruderalis or “hemp” (as differentiated from Cannabis sativa or Cannabis indica), are regularly available through retail channels, particularly e-commerce. Setting aside whether CBD has beneficial properties and should be re-scheduled, de-scheduled, or legalized, we attempt to clarify the current federal landscape for CBD, which is surrounded with controversy and confusion. Controlled Substances Act (CSA) Definition of “Marijuana” The CSA defines “marijuana” as including “all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin.” 21 U.S.C. § 802(16). This statutory definition expressly excludes “the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.” Marijuana (unlawful): Live & dead cannabis plants Cannabis seeds Cannabis resin from any part of the plant Anything derived from cannabis seeds Anything derived from cannabis resin “Not” marijuana (lawful): Mature cannabis stalks Fiber of...

Summary of Pending California Cannabis Legislation

As the California state legislature is back from summer recess, it is an apt opportunity to provide an overview of the pending legislation relating to cannabis trademarks, advertisement, packaging, and labeling. Unsurprisingly, child protection from cannabis products is one of the major drivers in these proposed bills. Additionally, the legislature’s regulations are designed to promote consumer safety and prevent overconsumption, require truth in advertising, and of course, preventing illegal distribution. AB 64 — Licensure, Regulation, & Trademark AB 64 creates the ability for cannabusinesses to obtain California state trademark registrations. As we discuss in our article “Cannabis IP Myths,” federal trademark registration is not permitted for products that violate the Controlled Substances Act, but federal protection is available for ancillary cannabis services that do not “touch the plant.” Even with this limitation, it is worth federally registering your brand. A federal registered mark appears on the United States Patent and Trademark Office database, where its very presence serves as a deterrent to others contemplating adoption of the same or a similar mark, and can be leveraged in enforcement efforts. Aside from national federal protection, state trademark registrations grant rights to a particular mark within an entire state. This differs from common law (unregistered) rights, which only protects a mark in the specific geographic in which it is used. Most states where cannabis is regulated will grant state registrations for marks covering cannabis goods or services that touch the plant. Though California voluntarily follows the federal regime and will not register marks for cannabis goods or services. AB 64 would lift this ban and create two specific classes: Class 500 for...