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The FDA, CBD and Risk Compliance | New Cannabis Bill Is Bipartisan | Who Got the Work

Welcome back to Higher Law, our weekly briefing on all things cannabis. I'm Cheryl Miller, reporting for Law.com from Sacramento. I took a quick trip to New York City last week and while paying for my roast beef sandwich at a deli I spotted a stack of CBD-infused brownies for sale next to the cash register. Good thing Scott Gottlieb wasn't with me. (More on that below.)

This week we look at a flurry of FDA activity on cannabis-infused products. Then, the States Act has been revived. Will its promised protections for marijuana-legal states be any more successful this year? And scroll down to see who got the work.

Thanks for continuing to check out Higher Law. Got a tip? A story idea? Feedback? I'll take them all at cmiller@alm.com. Or you can call me at 916-448-2935. Follow me on Twitter at @capitalaccounts.

FDA Sets May Hearings on CBD 

Scott Gottlieb is going out with a bang.

The U.S. Food and Drug Administration commissioner may be leaving the agency on Friday but not without making some significant CBD policy news first.

>> Gottlieb took to Twitter Tuesday to say he was concerned that "several national pharmacy chains and other major retailers have begun to sell or will soon begin to sell cannabidiol (CBD) products in several states." It was an apparent reference to announcements by CVS and Walgreens that they'll stock topical CBD products in 2,300 stores. "We’ll be contacting them to remind them of #FDA obligations and our commitment to protect consumers against products that can put them at risk," Gottlieb tweeted.

>> Also on Tuesday, Gottlieb, in a lengthy statement, laid out steps for potentially regulating CBD products. He set a public hearing on CBD-infused goods for May 31 and called for public comments on the topic. He announced the creation of an internal working group to study how CBD-infused foods and dietary supplements can be legally marketed. And he unveiled a revamped agency FAQ page on CBD with new guidance on cosmetics.

>>The FDA joined the Federal Trade Commission in sending warning letters to three companies accused of making unsubstantiated claims about CBD's ability to stop cancer cells, slow the progression of Alzheimer's and treat substance abuse disorders.

Wilson Elser noted that, for the first time, the FDA scrutinized CBD products' nutrition fact panels and warned that, "to the extent the product labels suggests it is food, it is unlawful to introduce any food into interstate commerce to which CBD has been added."

So what to make of this flurry of CBD pronouncements, other than Gottlieb has tossed a hot-potato issue for incoming acting Commissioner Ned Sharpless to handle?

Harris Bricken's Vince Sliwoski had this take on the Canna Law Blog: The "FDA appears to be moving toward solutions for hemp-CBD in the marketplace, rather than in the opposite direction. People in the market today with products that 1) are responsibly sourced and 2) do not make health claims, have a big head start. Time will tell if those propositions pay off, but they look pretty good right now—at least from an FDA enforcement perspective."

>> More reading: CVS, Walgreens and other retailers face a "range of risks" in selling CBD-infused products. That's what Duane Morris partner Seth Goldbergsaid in an interview with Pot Network.

"We expect that the regulatory framework over the next year will become more certain and provide clarity, but until then, the federal framework is uncertain," Goldberg said. "So you can’t be sure that there won’t be some federal enforcement action."

The 'States Act' Is Back

One week after U.S. House Democrats advanced a landmark bill to give marijuana businesses access to banks, a bipartisan group of lawmakers has reintroduced legislation proposing broad protections for cannabis-legal states.

Sens. Cory Gardner, R-Colorado, and Elizabeth Warren, D-Massachusetts, in the Senate and Reps. Earl Blumenauer, D-Oregon, and Dave Joyce, R-Ohio, in the House said Thursday they're bringing back the Strengthening the Tenth Amendment Through Entrusting States Act, better known as the STATES Act. The bill would exempt marijuana businesses in compliance with state laws from the Controlled Substances Act.

The same lawmakers introduced the States Act last year only to see it blocked by key Republicans controlling the House and Senate. Now, with Democrats controlling the House and lawmakers' successful vote last week to advance the Secure and Fair Enforcement Banking Act, advocates are hoping for a different result.

“The States Act is being reintroduced at a key moment when bipartisan support for cannabis policy reform is at historic levels in both chambers of Congress and among the general public," Aaron Smith, executive director of the National Cannabis Industry Association, said in a prepared statement. "Regulating cannabis is successfully replacing illicit markets with licensed businesses in a growing number of states across the country. This legislation will simply allow those state regulatory programs to succeed without federal interference.”

>>> At least three other bills have been introduced by House Democrats to shield state-compliant marijuana operations from federal prosecution. My colleague Dan Clark reports on one of them, the Respect States’ and Citizens’ Rights Act, at this link on Law.com.

Who Got the Work

  • Justin Brandt, an attorney with the Rose Law Groupin Scottsdale, Arizona, is representing N2 Packaging Systems in an IP theft claim against N2 Pack Canada Inc. The complaint, filed in Maricopa County Superior Court, alleges the Canadian entity started a company named Nitrotin Inc. "to market and sell N2 Packaging's patented nitrogen-based cannabis packaging processes as their own." N2 of Canada also "created a 'copy-cat' website that looks exactly like N2 Packaging's website, the suit alleges. N2 Pack Canada has not yet filed a response or the name of a counsel of record.
  • Bennett Jonesadvised Chicago-based Cresco Labs Inc. in its acquisition of CannaRoyalty Corp. of Ottawa. The transaction, expected to be completed in June, is valued at $823.5 million. CannaRoyalty was represented by Norton Rose Fulbright Canada. CannaRoyalty, doing business as Origin House, has significant growing and distribution operations in California.
  • Andrew Brisbohas been appointed to lead the Michigan's new Marijuana Regulatory Agency, according to the Detroit Free Press. Brisbo, former director of the state's Bureau of Marijuana Regulation, will take on an expanded role as Michigan drafts rules for its new, voter-approved recreational market.
  • Marisa Rodriguez, a former assistant district attorney in San Francisco, has been namedthat city's new director of the Office of Cannabis. Rodriguez replaces Nicole Elliott, who now serves as Gov. Gavin Newsom's senior advisor on cannabis,

In the Weeds...

>>> Marijuana interests have been big donors to Gov. Andrew Cuomo. The New York Post reports that Greenberg Traurig, a registered lobbyist for Acreage Holdings Inc.; Medmen; and the CEO of dispensary operator Columbia Care were among those writing campaign checks totaling $155,510 to Cuomo between January 2017 and November 2018. Cuomo is negotiating with state lawmakers over rules for a recreational market. New York Post

>>> Florida dropped its appeal of a ruling striking down the state's cap on marijuana dispensaries. State health regulators reached a settlement with Trulieve this week that will allow the dispensary chain to open 49 outlets instead of 35, the maximum number under the original rule. David Miller of Nelson Mullins Riley & Scarborough represents Trulieve. Orlando Weekly

>>> More than 400 Michigan communities have decided to ban recreational marijuana. Voters may have given the thumbs-up to an adult-use market in last year's general election, but cities and towns are just saying no, at least for now. "The problem is that what the citizens voted on was five pages of legal mumbo jumbo and some of it is just horrible," said Harrison Township Supervisor Ken Verkest. "Until the state clarifies exactly what some of this stuff means, we’re like sitting ducks here. Detroit Free Press

>>> Two U.S. senators have asked federal finance regulators for more guidance on hemp. Senate Majority Leader Mitch McConnell and Sen. Ron Wyden, D-Oregon, wrote to the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Federal Reserve System and the Farm Credit Administration this week, asking the agencies to ease banks' concerns about serving business customers who work in the legal hemp industry. KQEN

Mark Your Calendar

April 11 Ford Harrison hosts the webinar "Florida Up in Smoke … Medical Marijuana, Drug Testing and the Workplace. " Scheduled presenters are firm partners Amy Turci and David Gobeo.

April 17-19 - The Benzinga Cannabis Capital Conference takes place in Toronto. Scheduled panelists include Brent Johnson, managing attorney at Hoban Law,

April 17 - Farella Braun + Martel hosts a cannabis industry lunch program“What's Next for CBD in Food and Beverages?” in its San Francisco office. Speakers include Farella Senior Associate Jeffrey Hamilton and Eaze Compliance Counsel Alana Joyce.