Higher Law: Big Law Firm Sues Feds for Cannabis Docs | Harvesting a Trademark Suit | 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. And no, my parents most definitely did not grease the skids so I could author your cannabis law newsletter.
This week, we look at one law firm's mission to find out just how the U.S. government is treating marijuana businesspeople at the border. Plus, a judge in a trademark infringement suit says California can have two "Harvests," for now. And scroll down to see a very busy week in Who Got the Work.
Thanks for reading and for your continued tips and feedback. Please keep them coming at cmiller@alm.com. Or you can call me at 916-448-2935. Follow me on Twitter at @capitalaccounts.
Davis Wright Sues Feds for Marijuana Docs
Last year, I wrote about the troubles international cannabis professionals and investors -- particularly those from Canada -- are encountering when they try to enter the United States. Marijuana may be legal in the Great White North but some American border agents have been turning around, or even banning permanently, Canadian cannabis workers, venture capitalists and even a landlord with ties to state-licensed marijuana operations in the U.S..
Well, last week, the Seattle office of Davis Wright Tremaine sued U.S. Customers and Border Protection in federal court for documents that the firm's lawyers hope will shed light on the agency's policies and practices regarding marijuana business travelers.
Davis Wright is the sole plaintiff in the Freedom of Information Act lawsuit, although its attorneys represent state-licensed medical and recreational cannabis operators.
“CBP’s refusal to produce documents responsive to the FOIA requests has hampered the firm’s ability to participate as an informed citizen and to adequately represent its clients,” partner John McKay, a former U.S. attorney in Seattle, and associate Chris Morley wrote in the complaint.
The attorneys say the federal government never responded to a records request the firm submitted last September for any documents about the "policy or practice of denying foreign nationals entry to the U.S. due to their involvement with cannabis businesses in the U.S. and abroad."
A CBP spokesman declined to comment on the lawsuit.
“CBP has created a lot of confusion and uncertainty at the border,” Morley said in an interview. “Our clients are entitled to know how this policy is being enforced.”
The case has been assigned to Chief U.S. District Judge Ricardo Martinez of the U.S. District Court for Washington's western district.
The Fight Over 'Harvest' Continues...
There will be two "Harvests" in California, for now. A state judge in San Francisco has declined to issue a preliminary injunction blocking Arizona-based Harvest Enterprises from using the Harvest name on its California dispensaries.
Harvest on Geary Inc., the operator of two marijuana outlets in San Francisco, accused Harvest of Arizona of infringing on its California mark, registered in 2015, with its new Harvest of Napa medicinal dispensary. But Superior Court Judge Richard Ulmer Jr. said the Arizona company has been using the Harvest name and a related website since 2013.
"At this juncture, plaintiffs' chances of prevailing on their trademark infringement claim appear to be a toss-up; they have not proven likelihood of success on the merits," Ulmer wrote in his decision.
Also, said Ulmer, Harvest on Geary's proof of suffering interim harm "is thin."
"The lead argument is that their San Francisco employees saw job postings for defendants' Napa store and were 'concerned about their job security,'' Ulmer wrote. "Why employees of a recreational cannabis store 50 miles away is not clear."
Who Got the Work
• Fox Rothschild partner Joshua Horn led a team that scrutinized Foothill Capital Management's proposed cannabis growth fund to assure the U.S. Securities and Exchange Commission that the new mutual fund would not be engaged in federally illegal activity, such as growing, processing or extracting marijuana. The commission approved the submission and the Cannabis Growth Fund launched on Feb. 26.
• Boston firm Smith Costello & Crawford became the second-highest grossing lobbying shop in Massachusetts last year due in part to its work for marijuana-related clients, according to Commonwealth Magazine. The lobbying operation's clients include Good Chemistry, Garden Remedies, Green Soul Organics, Happy Valley Ventures, and Weston Roots Assets.
• Spending on marijuana-related lobbying in New Jersey quadrupled from $330,935 in 2017 to $1.36 million in 2018, according to a report by NJ Advance Media. As state leaders in 2018 moved toward enacting a recreational market, the biggest lobbying spenders in included Eaze Solutions Inc., Acreage Holdings and Compassionate Care Research Institute Inc.
• As we noted last week, Reed Smith has brought on Marc Hauser, former chair of the Napa Valley boutique GVM Law, as co-vice chair of the cannabis practice. My colleague Xiumei Dong recently caught up with Hauser for some reflection. “The legal cannabis industry is still relatively new in this country and quickly changing,” Hauser said. “As more investment capital comes in, as competition from the legal Canadian companies comes in, as companies are quickly trying to gain a national presence, as a result, there is a lot of consolidation.”
• Attorneys from two Canadian firms, Bennett Jones and Fasken worked on Arizona-based Harvest Health and Recreation Inc.'s planned acquisition of Illinois-based Verano Holdings, a deal valued at $850 million. Following completion of the deal, Harvest will hold licenses allowing it to operate up to 200 facilities, including 123 dispensaries, across 16 states and territories, according to a statement released by the companies.
• Deutsche Process, a North Carolina company that makes equipment for, among other sources, the cannabis industry, has retained Holland & Knight to lobby on Capitol Hill, according to a federal registration. The company plans to lobby on implementation of the 2018 Farm Bill, which allowed for the legalization of hemp, as well as "FDA and USDA regulation of cannabis." Holland & Knight also lobbies for Eaze Solutions Inc.
In the Weeds!
>> A lawyer, a lobbyist and a farmer had visions of creating the "gold standard" of Montana medical marijuana operations in 2004. Seven years later they were facing felony charges when federal agents raided 24 dispensaries across the state. Now as Montana leaders consider a possible 2020 ballot measure that would legalize recreational marijuana, two that would "Today, as Montana once again considers changes to state marijuana laws—two of the early visionaries tell a cautionary tale of the best of intentions gone sideways." The Missoulian
>> An injured New Hampshire worker can be reimbursed for medically prescribed marijuana, the state's Supreme Court held. A labor appeals board had concluded that nothing in New Hampshire's medical marijuana statute required health insurance companies to cover prescribed cannabis costs. But the high court said the state's workers compensation law doesn't bar such reimbursements. Law.com
>> Connecticut-permitted marijuana growers can't make political donations to state lawmakers, an elections commission recently ruled. The Elections Enforcement Commission said a law barring contributions from state contractors also applies to medical marijuana cultivators because the value of each license exceeds $50,000. Andrew Glassman, a lawyer for the Connecticut Medical Cannabis Council, told the Hartford Courant "there’s no question that there’s a bona fide First Amendment right that’s being improperly circumscribed." Hartford Courant
>> Does descheduling marijuana without conditions amount to corporate welfare? Stanford University psychiatry professor Keith Humphreys says that no longer subjecting cannabis businesses to 280E tax write-off restrictions "would grant the marijuana industry $5 billion in tax write-offs over 10 years." Democratic politicians might be better off considering provocative changes, such as only allowing nonprofits or public benefit corporations to sell cannabis or adopting a "state store" approach. The Washington Post
>> A quick update from the states … Florida lawmakers voted to allow smokable marijuana as Gov. Ron DeSantis had asked Miami Herald … Black legislators in New York say they'll block legalization efforts unless people of color are guaranteed a share of the recreational market The New York Times … A Minnesota Senate committee killed a bill to legalize recreational use Minnesota Public Radio … South Dakota's Senate failed to override Gov. Kristi Noem's veto of a bill legalizing industrial hemp Argus Leader … New Jersey Gov. Phil Murphy and legislative leaders say they've finalized a deal on recreational marijuana and a vote will come soon NJ.com … New Mexico lawmakers are considering a bill that would allow recreational sales through state-owned shops Santa Fe New Mexican
All the Things for Your Calendar
March 18-20 - Americans for Safe Access hosts Unity Conference 2019 in Washington, D.C. Mary Shapiro, founder of Evoke Law, and Bridget Hill-Zayat, of counsel at Hoban Law Group, are scheduled to speak.
March 19 - Smith, Gambrell & Russell hosts a symposium, "Cannabis Laws: Getting into the Weeds" in the firm's Atlanta office. Speakers include SGR attorneys Steve O'Day, Greg Kirsch, Matt Clarke and Anne Pitter.
March 20 - The California Cannabis Industry Association's fourth annual policy conference takes place in Sacramento. Tentatively scheduled speakers include Lori Ajax, chief of California's Bureau of Cannabis Control; Nicole Elliott, senior advisor on cannabis to Gov. Gavin Newsom; and Nicole Howell Neubert of Clark Neubert LLP.
