IRS Allows Reduction of Gross Receipts For State-Legal Cannabis Businesses

On Saturday, September 12, 2020, the Internal Revenue Service (“IRS”) updated a marijuana industry frequently asked questions (“FAQ”) page that provides relief to state-legal cannabis businesses. The FAQ announces that state-legal cannabis businesses can reduce their gross receipts by using an alternative accounting method under Section 471 of the Internal Revenue Code (the “Code”). Read More ›

Federal Court Signals Municipalities Cannot Give Preference to Residents for Marijuana Licenses

As we have previously reported, the city of Portland, Maine, has been the most prominent recent test case over municipalities seeking to favor their own residents in marijuana licensing. 

On August 14, 2020, a federal court granted a preliminary injunction in favor of out-of-state businesses claiming that the City’s licensing system unconstitutionally favored residents over non-residents by basing licensing decisions in part on whether an applicant is a Maine resident. August 14, 2020 Order, Wellness Connection v. City of Portland, Docket No. 2:20-CV-00208-NT (W.D. Maine). In granting the injunction, the court held that the City failed to justify that its residency preference was necessary to achieve a legitimate purpose, which the City argued “was to ensure that the City understood the amount and quality of oversight and could easily verify any past violations.” Id. at 24. Read More ›

Why Cannabis Companies Need to Care About the TCPA

Cannabis companies nationwide are facing yet another statutory obstacle that can have serious (and potential ruinous) consequences for the emerging industry if not appropriately addressed—the Telephone Consumer Protection Act (“TCPA”). There is a recent uptick in class-action lawsuits filed against cannabis companies across the country premised on alleged violations of the TCPA including lawsuits in Michigan and California. These complaints allege cannabis companies sent unsolicited marketing text messages or placed automated phone calls to individuals without their consent. Cannabis dispensaries and other cannabis-related businesses should add TCPA compliance protocols to their checklist of regulatory requirements to be satisfied in this quickly emerging industry.  Read More ›

Michigan Adopts New Hemp Law for Federal Approval of Hemp Program; What’s Next?

On July 8, 2020, the Michigan Industrial Hemp Growers Act (“IHGA”), 2020 PA 137, MCL 333.28101-333.28701, went into effect (which was somewhat surprising since the legislation was reported from committee only a few weeks beforehand).  The new law creates a regulatory scheme for industrial hemp that should allow Michigan to obtain approval from the United States Department of Agriculture (“USDA”) of its plan to administer an industrial hemp program under the 2018 Farm Bill.  Currently, the Michigan Department of Agriculture and Rural Development (“MDARD”) administers an industrial hemp pilot program under the Industrial Hemp Research and Development Act (“IHRDA”), MCL 286.841-286.859, pursuant to the 2014 Farm Bill. Read More ›

Michigan’s Marijuana Regulatory Agency Releases New Application Forms for Medical and Recreational Facilities: What to Know

Late last month, Michigan’s Marijuana Regulatory Agency (“MRA”) released its new Medical Marijuana Facilities License and Marijuana Establishment License (adult-use) application forms and instructions.  Read More ›

After Maine Agrees to Drop Residency Requirement for Marijuana Licenses, Challengers File Suit Against Residency Preference in City Ordinance

Faced with a lawsuit challenging the constitutionality of its residency requirement for marijuana licensees, the State of Maine has agreed to no longer enforce the requirement. 

As we wrote about recently, out-of-state businesses had challenged as unconstitutional a provision in Maine’s marijuana licensing rules that required the majority of the ownership interest and all of the officers, directors, managers, and general partners of business applicants to be held by Maine residents. However, after being “advised by the Attorney General that the [Residency Requirement] is subject to significant constitutional challenges and is not likely to withstand such challenges . . . , defendants will not be enforcing the Residency Requirement or any agency rules, regulations or guidance which enforce or implement the Residency Requirement.” Stipulation of Dismissal, NPG, LLC, et al. v. Figueroa, Case No. 1:20-cv-00107-NT (D. Maine, May 11, 2020). Read More ›

Michigan Marijuana Regulatory Agency Furloughs Likely to Cost State Money

As Michigan, like every other state, has grappled with enormous budget pressures as a result of restrictions needed to battle the scourge of the COVID-19 pandemic, one rare bright spot has been increasing tax revenues from the sale of cannabis products. April sales data from Michigan’s Marijuana Regulatory Agency (MRA) shows roughly $34 million in medical marijuana sales, and a record $28 million in adult-use sales. Those sales have generated $2.8 million in marijuana excise tax revenue and $3.7 million in sales tax revenue. Read More ›

Maine’s Marijuana License Residency Requirement Challenged in Court; Could Illinois and Michigan Laws and Ordinances Face Similar Scrutiny?

In 2016, Maine voters opted to legalize adult-use marijuana in their state (medical marijuana has been legal since 1999). After spending a few years fleshing out the details and implementing the regulatory structure, state officials recently began accepting applications for licenses for adult-use marijuana businesses. Just last month, Maine issued 31 conditional licenses. Read More ›

FDA Sends CBD Warning to Ex-NFLer making COVID-19 Claims

Neuro XPF, a company which sells CBD was ordered to stop selling its CBD products by the FDA because it make claims related to preventing the contraction of COVID-19.

Neuro XPF stated that “your best defense against the COVID-19 blitz starts with a strong immune system.” Kyle Turley also has been tweeting that CBD can “prevent and cure” the coronavirus as well as “other diseases.” Read More ›

Michigan Continues to Respond to Cannabis Industry Needs

Over the last week, as states continue to react to the COVID-19 crisis, we have reported on regulatory changes and “stay at home” orders in Michigan and Illinois, and their impacts on the cannabis industry. At Dykema’s COVID-19 Resource Center, we have compiled and are updating on a daily basis a Quick Reference Guide to State-Level Shelter-in-Place Orders and Essential Services Provisions. Read More ›