In this week’s edition:

• Trump Supports Federal Cannabis Rescheduling and Florida Adult-Use Legalization
• Opinion Poll Indicates Cannabis Legalization a Vote-Winner in Swing States
• Fourth Circuit Rules THC-O Acetate Meets 2018 Farm Bill’s Definition of Hemp
• Federal Appeals Court Rejects Blanket Gun Ban for Cannabis Consumers
• CA’s Newsom Announces Ban on Hemp Intoxicating Products
• Nebraska Officials Post Two Medical Cannabis Initiatives For November Ballot

Federal

Former President Donald Trump Announces Support for Cannabis Rescheduling – In a recent post on Truth Social, Trump indicated that a future administration would back the Drug Enforcement Administration’s (DEA) rescheduling process as well as cannabis industry access to banking services. “As President, we will continue to focus on research to unlock the medical uses of marijuana to a Schedule 3 drug, and work with Congress to pass common sense laws, including safe banking for state authorized companies. . . .” The former president also reiterated his support for adult-use legalization in Florida. Indeed, Trump has previously noted that cannabis legalization is “going to be very good” for Florida and that medical cannabis is “amazing” for patients. Trump recently met with the CEO of a major cannabis company, as well as with a Florida GOP state senator in favor of cannabis reform.

Opinion Poll Indicates Cannabis Legalization a Vote-Winner in Swing States – A new public opinion survey in the key presidential election swing states of Pennsylvania, Michigan and Wisconsin shows that voters strongly support cannabis reform, with 84 percent of respondents in favor of medical cannabis and 62 percent backing broader adult use legalization. The poll from Ragnar Research also found nearly two in three Florida voters (65 percent) support an adult use legalization measure on that state’s November ballot.

Experts Say Hurdles Remain for Cannabis Legalization Under Harris-Walz Ticket – According to Saphira Galoob, executive director of the National Cannabis Roundtable, “Having a pro-legalization ticket is a tremendous asset to advancing cannabis reform.” Galoob noted that the Biden-Harris administration had made more progress on cannabis issues than any previous presidency, and it is likely that a Harris-Walz ticket would build on that foundation. Both Harris and Walz have been vocal supporters of full legalization. 

CRS Report on Rescheduling and Banking – In a new report, the Congressional Research Service stated that federal cannabis rescheduling is “unlikely” to improve banking access for state-legal cannabis businesses. The report emphasizes that because the proposal to move cannabis from Schedule I to Schedule III under the Controlled Substances Act would not federally legalize cannabis, the impact of rescheduling on banking access would be minimal. While rescheduling would allow state-licensed cannabis businesses to finally take advantage of federal tax deductions that they are currently barred from utilizing, the expectation is that many financial institutions would continue to avoid servicing the industry out of concern they could face penalties for violating anti-money laundering laws. Nonetheless, as noted by Congressional Cannabis Caucus co-chair Rep. Earl Blumenauer (D-OR) in a recent interview, rescheduling could accelerate efforts to pass bipartisan cannabis banking legislation.

DEA Reminds Public Cannabis Users Remain Subject to Arrest – Spurred by recent legalization of cannabis in Ohio and Michigan, DEA agents took to the airwaves to remind the public that it can and may still make arrests for cannabis use—a fact that has always remained true despite successful state legalization efforts. Speaking to an Ohio State University-owned NPR affiliate, the agency explained that its primary concern remains those involved in the manufacture and distribution of illegal substances. “Can a student be arrested by a federal agent? . . . Yes, but that is not our intent or our goal to arrest users . . . who might have a substance on their person,” DEA spokesperson Brian McNeal told WOSU. For its part, the DEA’s Detroit office recently announced an initiative targeting college campuses and surrounding communities in Ohio and Michigan. The initiative, according to the DEA, is more about education and resource distribution than enforcement. McNeal said the DEA wants to raise awareness about drug abuse and the risks associated with synthetic drugs, which have become increasingly potent and therefore possibly dangerous. 

Federal Appeals Court Rejects Blanket Gun Ban for Cannabis Consumers – The Fifth Circuit Court of Appeals ruled in United States v. Connelly that Second Amendment rights cannot be infringed solely based upon one’s prior substance abuse. Analogizing to a lack of historical precedent for stripping alcoholics of their Second Amendment rights, the Court wrote “The government provides no meaningful response to the fact that neither Congress nor the states disarmed alcoholics, the group most closely analogous to marijuana users in the 18th and 19th centuries. … Our history and tradition may support some limits on a presently intoxicated person’s right to carry a weapon, … but they do not support disarming a sober person based solely on past substance usage.” The ruling marks the second time in recent years that judges on the Fifth Circuit have held that federal statutes should not be applied so broadly that it criminalizes all gun owners with a history of cannabis use.

States

AR – Arkansas activists submitted a final batch of signatures to qualify a medical cannabis expansion initiative for the November ballot. The proposal is principally aimed at building upon the state’s existing medical cannabis program, which was created under an earlier voter-approved measure. The new initiative would allow healthcare professionals to issue recommendations to patients for any condition they see fit as well as permit patients to grow their own cannabis at home. Further, the measure includes a trigger provision that would end cannabis prohibition altogether in Arkansas if the federal government enacts legalization.

IL – Illinois officials announced on Thursday that they are awarding $35 million in grants to 88 local organizations, using funds generated from taxes on adult-use cannabis sales, to support community reinvestment efforts. The funding is offered through the state’s Restore, Reinvest, Renew (R3) program established in 2019; the program requires 25 percent of cannabis tax revenue to support areas most harmed by the “disproportionate damage caused by the war on drugs,” the Illinois Criminal Justice Information Authority (ICJIA) said. Since launching the R3 program, Illinois has awarded over $244 million in cannabis revenue-funded grants.

IL–After years of uncertainty regarding whether dual-purposes dispensaries (licensed to serve both medical and recreational customers) could sell products grown by social equity licensees to medical customers, the Illinois Cannabis Regulation Oversight Officer told reporters that her office has “been telling dispensaries” they can sell these products to medical patients. Although no official notice has posted, the change allows medical patients to buy products made by social equity licensees without paying recreational taxes.

KY – More than 2,600 applications were filed with the Kentucky Office of Medical Cannabis for medical cannabis licenses. While the majority of applications (over 2,200) were for dispensary licenses, only 48 dispensaries will be allowed by the state.

NE – State officials announced that two separate medical cannabis initiatives will appear on the ballot for the general election in November. One of the measures will legalize medical cannabis, while the other establishes a regulatory framework for the production and sale of medical cannabis products.

Hemp

Fourth Circuit Court of Appeals – The U.S. Court of Appeals for the Fourth Circuit ruled that THC-O acetate, an analogue of THC, meets the legal definition of hemp under the 2018 Farm Bill, contradicting the DEA's stance in letter guidance that THC-O is a schedule I controlled substance. This follows a similar decision by the Ninth Circuit Court in 2022, which rejected the DEA's interpretation regarding cannabinoids like delta-8 THC, citing the Farm Bill's clear definition of hemp. The Fourth Circuit's ruling stems from a case involving Tonya Anderson, who was fired after testing positive for drugs after using hemp-derived products for medical reasons. Anderson sued her employer for disability discrimination, claiming her use of legal hemp products was protected under federal law.

AR – Hemp manufacturers challenging the state’s recent law restricting hemp-derived intoxicants filed a brief in which they claim to have uncovered “smoking-gun evidence” from state regulators showing the law is unconstitutionally vague and the definition of industrial hemp is impermissibly narrower than the 2018 Farm Bill. The evidence cited includes transcripts and an official memorandum from state regulators. The U.S. Court of Appeals for the Eighth Circuit is set to hear oral arguments this month on the preliminary injunction issued in this case, which blocked officials from enforcing the law during the litigation.

CA – Last week, Gov. Gavin Newsom (D) announced emergency regulations banning products derived from industrial hemp that contain intoxicating cannabinoids and set a minimum age of 21 for purchasing hemp products. Supporters, like California's Department of Cannabis Control, praised the move as a necessary step for aligning products with state laws, while critics from the hemp industry argue that it overreaches and could harm businesses by restricting most hemp products. The emergency regulations will reportedly take effect upon approval by the state’s Office of Administrative Law (OAL), with enforcement led by state and local agencies. Following submission of the proposed regulations to OAL, stakeholders will reportedly have five calendar days to submit comments.

GA – The Department of Agriculture is accepting public comments on proposed hemp product restriction rules, which include licensing requirements for consumable hemp wholesalers and retailers in the state.

MI – The Michigan Cannabis Regulatory Agency has announced that it will begin conducting unannounced inspections of licensed cannabis businesses in the state, instead of semi-annual scheduled inspections, beginning on October 1.

MO– Governor Mike Parson's (R) executive order to ban the sale of hemp intoxicating edibles and beverages, citing concerns over deceptive packaging and unregulated substances, has caused uncertainty among local hemp business. Though portions of the ban (such as the prohibition on the sale of hemp intoxicating products in liquor stores) have been delayed, hemp businesses are considering closing or moving operations due to the potential impact on their livelihood. In response, the Missouri Hemp Trade Association has filed a lawsuit to block the order, arguing that the ban is illegal under state law. While the state government, including the Department of Health and Senior Services, claims it has the authority to enforce the ban to protect children from unregulated products, hemp industry leaders believe the order overreaches, affecting products that are tested and sold only to adults.

NY – A group of hemp product retailers have filed for a preliminary injunction to block raids by New York state and city officials associated with a crackdown on unregulated cannabis sellers. The retailers’ complaint describes raids being conducted by inspectors with the Office of Cannabis Management, "accompanied by a double-digit contingent of heavily armed police wearing body armor, and without notice, probable cause, or a warrant," which have resulted in the seizure of legal hemp products. The retailers allege that the raids and seizures are being conducted pursuant to cannabis regulations that do not apply to licensed hemp retailers. A hearing on the motion for preliminary injunction has been set for September 13, 2024.

Business

U.S. Cannabis Companies Expanding Internationally – Increased demand for U.S. cannabis products and new opportunities in Europe are driving international expansion of U.S. cannabis companies, including both established and newer companies looking for more welcoming markets. While nationwide legalization in countries such as Germany facilitate the expansion of U.S. cannabis companies abroad, other countries present more challenging regulatory schemes, such as the government distribution model in Canada and the pilot programs in Switzerland.

Home Depot To Stop Drug Testing for Cannabis – Home Depot, the sixth-largest employer in the U.S., has announced changes to its drug testing policies that will remove cannabis screenings and stop pre-employment drug testing for most new workers. The changes are slated to take effect in September. Home Depot is among other major employers who have made changes to their cannabis drug screening policies, including Amazon.

Volkswagen To Use Hemp for Leather Alternative – Following Germany’s legalization of adult use cannabis, Volkswagen has announced a new partnership with start-up business Revoltech GmbH to develop a cannabis-based leather alternative for its vehicle interiors.

Medicine

Nurse Practitioner Students Overwhelmingly Support Medical Cannabis Legalization – A study from Simmons University's Nursing School found that while most nurse practitioner (NP) students support legalizing medical cannabis and believe it should be taught in their curriculum, only 30 percent reported receiving thorough education on the topic. The survey of 115 NP students revealed that 94 percent favored medical cannabis legalization and 97 percent wanted related education, but many struggled to correctly identify conditions approved by states for its use. The study calls for NP programs to address gaps in knowledge about medical cannabis’s mechanisms, uses, and side effects.

Psychedelics

Continuing Research Indicates Psychedelic’s Treatment Potential for Drug and Alcohol Addiction – Two new studies on psychedelics suggest promising treatments for alcohol use disorder (AUD). One study, published by Research Square, found that a single dose of psilocybin reduced alcohol cravings and consumption in patients over 12 weeks, with participants reporting increased confidence in abstaining from alcohol. Coauthored by National Institute on Drug Abuse Director Nora Volkow, the study also linked psilocybin to a reduction in heavy drinking days but acknowledged limitations like a small sample size and lack of a control group. Another study, published by the journal Progress in Neuro-Psychopharmacology and Biological Psychiatry, reviewed prior research on classic psychedelics like psilocybin and LSD, finding that they may help treat drug addiction by modulating brain neuroplasticity. Both studies highlight the need for more research to understand the long-term efficacy of psychedelic-assisted treatments, especially given the variability in individual responses.

Psilocybin, Combined With Psychotherapy, Shows Promise in Treating Depressive Disorders – Research, published in the journal Current Medical Research and Opinion,  indicates psilocybin has a favorable safety profile, low abuse potential, and can provide sustained benefits regarding depression for up to 12 months post-treatment. While psilocybin may be a valuable addition to current treatments for depression, further studies are needed to confirm its effectiveness and explore the synergy between psilocybin and psychological support during therapy.

Dentons speaks

Dentons Partner Eric Berlin discussed the cannabis rescheduling process and related timelines on Sept. 2, 2024 with The Dales Report (video here). 

Dentons Partner Joanne Caceres delivered a lecture on Cannabis Law and Business Implications at Rowan University.

Please click here for more information on the Dentons US Cannabis group.

Authored by associates Malina Dumas, Lauren Estevez, Seena Forouzan, Jacob Raver, Sarah Pennington Richards, and Margo Wilkinson Smith.