This revenue growth has been driven by an increasing number of states opting to legalize marijuana. But despite this trend towards legalization at the state level, marijuana remains illegal under federal law—it is classified as a Schedule I controlled substance under the Comprehensive Drug Abuse Prevention and Control Act of 1970, 21 U.S.C. §801–971 (1970), (“Controlled Substances Act” or “CSA”), raising the specter of section 280E.By enacting section 280E, Congress sought to reverse a then-recent Tax Court decision: The 1981 landmark case of Edmondson v. Commissioner. In that case, the Tax Court allowed a trafficker of amphetamines, cocaine, and cannabis to deduct ordinary and necessary business expenses related to an illicit drug business.

The Tenth Circuit agreed. It held that private parties had no right to enforce the Controlled Substance Act (“CSA”), 21 U.S.C. §§ 801-904 (the federal criminal law regulating controlled substances, including marijuana), against states without identifying an independent federal right. Since no such right existed, the action against the states could not stand.

der federal law. Gonzales v. Raich, 545 U.S. 1 (2005) Canna Provisions, Inc., et. al. v. Garland, No. 23-cv-30113 (D. Mass. 2023).United States v. Lopez, 514 U.S. 549, 559 (1995)Wickard v. Filburn, 317 U.S. 111 (1942) (holding that Congress has the authority to regulate wheat that is grown and consumed for personal use and does not enter the intrastate market because such personal use would have a substantial affect on the interstate wheat market). Plaintiff’s complaint at 31-32 (“From 2012 to 2022, the amount of marijuana seized by U.S. Customs and Border Protection declined by almost 95%; from 2021 to 2022 alone, the volume of marijuana seized by the agency declined by around 50%.” (citation omitted)).Id. at 9 (“This fungibility in turn meant that ‘it is not feasible to distinguish, in terms of controls, between controlled substances manufactured and distributed interstate and controlled substances manufactured and distributed intrastate.'” citing Raich, U.S. 545 at 12 n.20 (quoting 21 U.S.C. § 801(5))).Id. at 10.Id. at 32-33 (Including the annual renewal of the medical enforcement appropriations rider; the legalization of medical marijuana in Washington D.C. and legalization in the U.S. Territories; the DOJ’s 2013 Cole Memorandum and AG Merrick Garland’s adherence to this rescinded policy).Id. at 5-8 (Specifically, U.S.C. § 280E, as well as Small Business Administration, Housing and Urban Development, and federal firearms laws). DOJ motion to dismiss at 6 (citing Dantzler, Inc. v. Empresas Berrios Inventory & Operations, Inc., 958 F.3d 38, 47 (1st Cir. 2020)).Id. at 7. (Citing Reddy v. Foster, 845 F.3d 493, 500, 503 (1st Cir. 2017)). 141 S. Ct. 2104 (2021). DOJ motion to dismiss at 8-9.Id. at 9.Lopez, 514 U.S. at 558-59. DOJ Motion to Dismiss at 12 (citing Gonzales, 545 U.S. at 19). Id. at 13-14.Id. at 16.Id. (“Where intrastate economic activity substantially affects interstate commerce, the precise nature of the economic interaction between the intrastate activity and interstate

The legal marijuana industry has grown rapidly in the U.S., with 38 states, three territories, and the District of Columbia legalizing its use for medical and/or recreational purposes. However, despite the industry’s growth, marijuana businesses continue to face significant challenges with payment processing and banking, primarily due to the federal prohibition of marijuana. This conflict between federal and state laws has led to an exploration of alternative financial systems, including the use of cryptocurrencies.The Banking Challenge for Marijuana RetailersThe primary challenge for marijuana retailers is the inaccessibility of traditional banking services. Despite the state-level legalization of marijuana, the substance remains illegal under the Controlled Substances Act, 21 U.S.C. § 801, et seq., meaning that banks who provide services to marijuana businesses could be perceived as violating anti-money laundering laws.While federal regulators have issued guidance clarifying how financial institutions can permissibly service marijuana businesses, many financial institutions remain hesitant, primarily due to the lack of complete assurance of protection from the federal government, as well as from the increased administration and oversight required to bank marijuana businesses. Moreover, for the financial institutions who do bank marijuana businesses, the costs of these services can be prohibitive.The final result is that many marijuana businesses cannot find a depository institution to do business with. Marijuana businesses are thus forced to transact in cash, which creates several challenges related to receiving customer payments, sending payments to third parties, and securely storing large amounts of currency.Cryptocurrency: A Potential Solution?Cryptocurrencies may

for inconsistent practicesFocus policies on employee’s ability to work and overall conduct, not testing schedulesMaryland and Federal HistoryPreviously, medical marijuana was legalized in Maryland in 2014 and became operational by 2017. That same year, workers’ compensation attorneys anticipated many disputes over authorization of medical marijuana, including whether marijuana prescribed to treat a work-related injury should be subject to the Maryland Workers’ Compensation medical bill guidelines. The key question was how to handle the issue given that federal law prohibited marijuana use despite state legalization of medical use.Now, the same question faces workers’ compensation parties in Maryland: How will medical expenses for marijuana be treated if the drug is prescribed to treat a compensable work-related injury in Maryland since federal law prohibits the drug? Federal law still classifies cannabis as a Schedule I controlled substance under the federal Controlled Substances Act (21 U.S.C. § 801), which prohibits the manufacture, distribution, dispensation and possession of marijuana.According to a March 2023 Congressional research memorandum, adult use of cannabis (18 years and older) increased from 6.3 percent in 2008 to 13.7 percent in 2021 in the United States.[1] Further, the increase in states adopting both medical and recreational cannabis legislation continues to shed doubt on the federal Schedule I drug classification attached to cannabis. Such classification relies on the Drug Enforcement Administration (DEA) and Food and Drug Administration (FDA) finding that cannabis has a high potential for abuse and no currently accepted medical use in the United States. As more states legalize medical and recreational use, however, we can expect federal law to change as well. Currently, 38 states plus the District of Columbia have medical marijuana programs.[2] Further, 23 states plus D.C. have legalized marijuana.Drug Testing and TerminationMany employers and insurers have exp

kewise explained that "the policy of Chapter 11 is to permit successful rehabilitation of debtors."NLRBv. Bildisco & Bildisco, 465 U.S. 513, 527 (1984). AccordUnited States v. Whiting Pools, Inc., 462 U.S. 198, 203 (1983) (quoting legislative history).[2] Indeed, many notable business owners, such asWalt Disney, Henry Ford, and Milton Hershey, as well as blue-chip companies, such as General Motors, Sears,J.C. Penney, K-Mart,American Airlines, Polaroid, and Marvel, have benefitted from bankruptcy protection.[3] Financially distressed companies in states where cannabis is legal have to rely on limited state law options to address insolvency issues, such as workouts, receiverships and assignments for the benefit of creditors.[4] An increasing number of states across the country continue down the path of legalization of cannabis. There are currently 24 states in the United States that have legalized its recreational use and many more have approved cannabis for medical purposes as well.[5] 21 U.S.C. § 801 et seq.[6] A U.S. Department of Justice memorandum dated April 26, 2017, and issued to all trustees stated:In recent months we have noticed an increase in the number of bankruptcy cases involving marijuana assets. This is to reiterate and emphasize the importance of prompt notification to your United States Trustee whenever you uncover a marijuana asset in a case assigned to you. Our goal is to ensure that trustees are not placed in the untenable position of violating federal law by liquidating, receiving proceeds from, or in any way administering marijuana assets. It is the policy of the United States Trustee Program that the United States Trustees shall move to dismiss or object in all cases involving marijuana assets on grounds that such assets may not be administered under the Bankruptcy Code even if trustees or other parties object on the same or different grounds.[7] Companies that are directly involved in the manufacture, sale, and distribution of cannabis have been easily deni

in a residential district, close to a school, or within 400 feet of an existing retailer. All existing illegal businesses must have had an active business license with the city as of December 31, 2022, and a certificate of occupancy prior to the date on which the application is submitted. Existing illegal businesses have 30 days to shut down operations if their license application is denied, after which they are subject to five-figure fines, property sealing, remediation, and other penalties. Finally, under the new law, the mayor must notify commercial property owners that rent to illegal cannabis businesses of the illegal activities and their liability for those activities, including fines of up to $10,000 and remediation. We will be tracking the implementation of the MCAA and how it impacts the cannabis market in the District of Columbia.8. Federal Cannabis Status Prevents Federal Trademark ProtectionUnder the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. Chapter 9 and CSA, 21 U.S.C. §§801 et seq., cannabis businesses cannot obtain federal trademark protection or file trademark enforcement actions in federal court for violations of any brand names for cannabis products. Instead, cannabis businesses must rely on state trademark laws, where permissible. Federal registrations for CBD products or services are similarly very difficult to obtain. Businesses seeking federal trademark protection for cannabis have taken creative approaches by seeking protection for any aspects of their businesses that are not federally prohibited such as associated clothing, smoking accessories, or retail store services for other products or attempting to limit the scope of their filings to exclude any prohibited products. The US Patent and Trademark Office (USPTO) closely scrutinizes any applications that may cover cannabis products to avoid approval of these marks.9. Ongoing Enforcement Against Illegal OperationsAs jurisdictions throughout the United States and globally continue to legalize co

requiring that, with certain exceptions, the articles of incorporation state the "purpose of the corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California . . .". Cal. Corp. Code § 202(b)(1)(A). In addition, the GCL authorizes a corporation (other than corporation subject to the Banking law or a professional corporation) to engage in any business activity, subject to any limitation in the articles of incorporation and to "compliance with any other applicable laws". Cal. Corp. Code § 206. As of March 1, 2023, 21 states, Washington D.C., Guam, and the Northern Mariana Islands have enacted laws allowing the recreational use of marijuana. Congressional Research Service, The Federal Status of Marijuana and the Expanding Policy Gap with States (March 6, 2021). At the same time, federal authorities strictly regulate marijuana as a Schedule I controlled substance under the federal Controlled Substances Act, 21 U.S.C. § 801 et seq. So does "lawful" in Section 206 refer only to California law such that a corporation may have a "lawful" purpose even when that purpose violates federal law? The California Secretary of State's office seems to have at least implicitly adopted this view since it has established an online portal, Cannabizfile, providing information on how to start a cannabis related business.Section 206 refers to "applicable laws" and federal law may certainly apply to a marijuana related corporation. Again, the question is whether "laws" refers only to state law or also includes federal laws.[View source.]

Defocus medical marijuana close up cannabis buds with doctors stethoscope on white background.Federal Prohibition is Preventing Widespread and Additional ResearchThe Mayo Clinic recently published a special edition of its Mayo Clinic Magazine, titled Medical Marijuana: The Science and Benefits. It discusses how medical marijuana can be used to relieve pain, treat anxiety, and improve sleep, and addresses the many uses and medical benefits of CBD. This is just the latest of a slew of research publications touting the benefits and real uses of cannabis in recent years. Though such publications have become commonplace, cannabis remains a Schedule I drug.According to the United States Drug Enforcement Agency, substances categorized as Schedule I within the meaning of the Controlled Substances Act, 21 U.S.C. 801 et seq., have “no currently acceptable medical use and a high potential for abuse.” As the body of research on marijuana grows, it will only become harder for the federal government to maintain its position that marijuana has “no currently acceptable medical use.” Thirty-eight states have already approved medical marijuana legislation. The sky has not fallen. By failing to take marijuana off the Schedule I list, the federal government is doing the entire country a disservice, posing barriers to crucial research that might further our understanding of marijuana and its physiological benefits, and preventing regulatory authorities from establishing proper guidelines for the safe and effective use of cannabis as medicine.Doctors are Unwilling to Recommend Cannabis Without this ResearchIn the absence of extensive research and medical guidelines, many doctors are hesitant to recommend cannabis to their patients, even in cases where it could be highly beneficial. Another result of marijuana

— and ignored a “steady stream of red flags” that indicated the company was allowing opioids to be diverted into illegal channels. Plaintiffs claimed that any demand on the board would have been futile, with the familiar theory that the entire board allegedly faced liability for violating these regulations, and thus was conflicted. The court rejected that demand futility theory, ruling that because prior courts had held that there was no underlying regulatory violation, there was no pleaded basis to conclude that the board was acting out of its self-interest to avoid liability for the (nonexistent) violation. The longevity of the defense win has since been thrown into doubt — in fact, AmerisourceBergen is now under a legal threat greater than a run-rate derivative lawsuit. On December 29, 2022, the U.S. Department of Justice lodged a civil complaint against AmerisourceBergen and two of its subsidiaries for allegedly diverting the opioids in violation of the Controlled Substances Act (21 U.S.C. §§ 801 et seq). And, predictably, the plaintiffs behind the failed derivative lawsuit are now asking the court to vacate the judgment so that they can refile by cutting and pasting the government’s allegations into what could be a much more substantial contingency-free derivative action.** Goodwin represented Citrix Systems, Inc. in the putative class action.[View source.]