Cannabis Law: An Update on Recent Developments Related to the Cannabis Industry, 2023


Stanley S. Jutkowitz

Seyfarth Shaw LLP
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Katrina Bennett

Seyfarth Shaw LLP
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Patrick T. Muffo

Seyfarth Shaw LLP
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Avrohom Colev Posen

Seyfarth Shaw LLP
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§ 1.1. Introduction

As in past years, laws and regulations relating to cannabis and the cannabis industry are evolving at a dizzying pace. In order to put current developments in context, it is important to understand the current state of the law regarding marijuana.

The starting point is the Controlled Substances Act, 21 U.S.C. § 801 et. seq. (“CSA”), passed in 1970 to regulate the manufacture, use, and distribution of certain controlled substances for medical, scientific and industrial purposes and to prevent these substances from being used for illegal purposes. The CSA classified various drugs and chemicals into five categories, or schedules. Marijuana, along with heroin, cocaine, LSD and other substances, was placed on the most restrictive schedule, Schedule 1. The CSA prohibits the manufacture, distribution, sale possession or use of marijuana. Also, the CSA operates to prohibit the transportation of marijuana across state lines, even between states that have passed laws legalizing marijuana, as well as international borders.

Despite the existence of the CSA, as of today, thirty-nine states plus the District of Columbia, Guam, Puerto Rico and the U.S. Virgin Islands have laws legalizing marijuana for medical use, and twenty-one of those states, plus D.C. and Guam a have legalized marijuana for recreational use, as well. Legislation to legalize marijuana is currently expected to work its way through other state legislatures. Since the CSA is the law of the land, the question remains as to how states can “legalize” marijuana consistent with the preemption doctrine.

The laws relating to marijuana and hemp became very complicated at the end of 2018, with the passage of the Agricultural Improvement Act of 2018, the Farm Bill. It is important to understand that both hemp and marijuana come from the same species of plant, Cannabis sativa L., and both were included in the definition of marijuana in the CSA. Both marijuana and hemp contain a number of chemical compounds, the two most known of which are THC (the psychoactive compound) and CBD. The legal difference is that hemp contains less than 3% THC. Part of the confusion revolves around the other chemical compound, CBD, which is extremely popular and ubiquitous in the market place. CBD comes from both hemp and marijuana. Further complicating the situation is that there is no standard for measuring THC content in a cannabis plant, so what might be classified as hemp by one state might be classified as marijuana by a different state.

While hemp is technically legal under federal law, the Food and Drug Administration maintains jurisdiction over hemp (and therefore CBD) to the extent it is marketed as a food or dietary supplement or as a drug. Also, the state statutory and regulatory framework for hemp and CBD derived from hemp remains very confusing and is rapidly evolving.

This section will focus on recent case law developments in cannabis.

§ 1.2. Contracts

Praetorian Global Inc. v. Eel River Organics LLC, A164245 (Court of Appeal of the State of California, First Appellate District)

Date: October 10, 2022


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