On November 3, 2020, voters in Oregon approved Measure 109, paving the way for a regime of psilocybin for therapeutic uses in a few years.
Oregon and Psilocybin: Does the Approved Ballot Measure Language Stand a Chance
Oregon Psychedelics: Petition to Legalize Psilocybin for Therapy Moves Forward
Oregon Psychedelics: Psilocybin on the Ballot this November!
Oregon 2020 Election: Vote Yes! on Measure 109
Oregon Psilocybin: Does Measure 109 Go Far Enough? Does it Go Too Far?
Large cities across the country have also adopted decriminalization measures for psilocybin and other entheogenic (psychedelic) plants, including Ann Arbor, Denver, Oakland, Santa Cruz, and most recently, Washington, D.C. (but we note that decriminalization is not legalization). It’s only matter of time before states follow Oregon’s approach and start regulating psilocybin.
Assuming the federal government does not change federal law first (and this is certainly a possibility given the Food and Drug Administration’s approval of drug trials for psilocybin), it’s very likely that many of the legal issues that will face the regulated psilocybin will be similar, if not identical, to issues facing the state-regulated cannabis industry.
In a previous post, we discussed similarities and differences between the movements to legalize psilocybin and cannabis. In this post, we’ll look at the top eight issues that will likely carry over from cannabis to psychedelic drugs more generally.
1. Federal Legality
Even if states follow Oregon’s move and legalize psilocybin therapy, that won’t change federal law. Currently, psilocybin is a Schedule I narcotic under the federal Controlled Substances Act (CSA). This means that it and other entheogenic plants or psychedelic substances are treated the same way as heroin. It remains to be seen whether the federal government would take the same path of non-enforcement of the CSA against psilocybin operators in states that regulate psilocybin uses or sales. In other words, it’s unclear whether there will ever be anything like a Cole Memo for psilocybin. But inevitably, there will be tension between state and federal law.
2. Contract Issues
Whether or not the federal government takes a position of non-enforcement, psilocybin contracts will face serious issues given the state of federal law. Federal (and possibly even state) courts may refuse to enforce contracts that involve a federally illegal substance, even if authorized by state law. This issue still comes up for cannabis operators and can be a huge concern. For some of our articles on federal legality, see:
Cannabis Litigation: Another Blow to the Illegality Defense (Kennedy v. Helix TCS, Inc.)
Federal Courts are Going Backward on Cannabis
3. Tax Problems
The bane of many cannabis operators’ existence is Internal Revenue Code § 280E, and things will be no different for psychedelics companies so long as psychedelics remain on Schedule I of the CSA. This section states:
No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted.
In other words, companies that traffic in certain controlled substances have immense limitations on what they can deduct when paying federal taxes. State law doesn’t change this. For more of our analysis on § 280E, see:
Marijuana Businesses and IRC 280E – More Clarity?
Marijuana Taxes: The IRS On Section 280E
Why we love the Harborside § IRC 280E Appeal
4. Access to Banking
On par with 280E in terms of annoyance for cannabis companies is lack of access to banking. Despite the fact that in 2014, the Financial Crimes Enforcement Network (FinCEN) issued a memo providing guidance for banks that wanted to bank cannabis monies, many banks didn’t jump on board. Even today, it can be difficult for cannabis companies in regulated states to gain access to banking. It can even be a challenge for hemp companies to access banks, even though hemp is now legal and even though FinCen and the National Credit Union Association have provided hemp banking guidance. These problems will no doubt persist for psychedelics businesses.
5. No Federal Trademarks
Trademarks will not be issued for goods or services that are not legal (you can read our analysis of trademark legality issues here). If states regulate psilocybin, they may allow licensees to obtain state-level trademarks, but those same companies will not be able to obtain trademark registrations from the United States Patent and Trademark Office unless and until federal law changes. This means that, like cannabis companies, psilocybin companies will only be able to have very limited trademark protection.
6. No Bankruptcy Protection
Bankruptcy protection is not available for cannabis companies due to federal illegality (see our analysis here). Those problems will persist for psychedelics companies as well.
7. RICO Suits
Historically, our cannabis lawyers have seen a ton of civil RICO litigation in federal courts across the United States. RICO (the Racketeer Influenced and Corrupt Organizations Act) is a federal statute that provides for a civil cause of action for acts performed as part of an ongoing criminal organization (in addition to criminal penalties). These suits were often filed by neighbors of cannabis cultivators trying to allege a conspiracy in an effort to shut down the cultivator and their suppliers. They have become less and less common over the years but we fully anticipate seeing a plethora of RICO suits for psychedelics companies in regulated states.
For more on cannabis RICO litigation, check out the following:
Much Ado about RICO
Much Ado About RICO and Cannabis, Part 2
Much Ado About RICO and Cannabis, Part 3
Much Ado About RICO and Cannabis, Part 4
Much Ado About Rico and Cannabis, Part 5: Multi-State Update
The Neighborhood “Gangbusters”: Avoiding RICO Cannabis Lawsuits
Cannabis RICO Lawsuits are Failing: Oregon and Colorado Updates
Federal Court Dismisses RICO Claims: Remedies Would Violate Federal Law
8. Leasing Issues
Federal legality also affects leasing. As we explained previously for cannabis leases:
once the landlord’s bank uncovers that it is leasing its property to a cannabis tenant (because its paid in cash one too many times or because the bank checks up on the collateral), mortgage violations abound. Why? Because this (usually) boilerplate document dictates that no waste or illegal activity take place on the collateral real property, and a cannabis tenant directly violates federal law and therefore the mortgage agreement between the landlord and its bank. This situation should be quarterbacked from the outset of the cannabis tenant and landlord relationship since it’s highly unlikely that the landlord will be able to successfully push back on the bank and will face losing the property to the bank as a result.
In other words, leasing to psilocybin tenants will be a risk for landlords, even in the event of state regulations. This usually translates to much higher rent and much more aggressive lease terms (e.g., tons of guarantees from affiliates and owners of the tenant, hyper-aggressive termination rights, and maybe even security interests).These businesses will also have problems with bank financing for real property.
Companies who traffic in Schedule I controlled substances will have issues getting insurance. Everything from using title insurance to facilitate real estate transactions to obtaining ordinary insurance policies will be more of a challenge for the psychedelic industry. Today, insurance is fairly available for cannabis businesses, but this was not always the case. Expect to see many issues in the early stages of legalization and regulation.
Any non-U.S. citizen who participates in the future psychedelics industry, even if it is state legal, will risk being denied entry into the United States, banned from the United States, or denied citizenship. While the Biden Administration will take less of an aggressive role on immigration policy than President Trump, risks based on violating federal law probably won’t go away. Business owners will need to seriously consider the impact of immigration laws on their proposed business model. For some posts on cannabis immigration issues, see:
Cannabis and Immigration: Marijuana Activity a Conditional Bar to Obtaining U.S. Citizenship
Bumps Ahead: The U.S. Border After Canada Cannabis Legalization
Once states get around to regulating psilocybin and other entheogens, it’s clear that businesses will face many hurdles. Fortunately enough, the regulatory lessons learned in the cannabis industry seem like they will all apply, at least to the extent that the federal government takes the same position it has taken for the cannabis industry, which remains to be seen. Stay tuned to the Canna Law Blog for more updates.
The post Top 10 Lessons from Cannabis for the Future Regulated Psychedelic Industry appeared first on Harris Bricken.
Original Source: harrisbricken.com
As businesses across the United States reopen, business owners are trying to figure out how to keep their employees and customers safe from the potential spread of COVID-19. As such, experts are gearing up for a possible wave of COVID-related liability suits in the coming months. To stem the possible tide of litigation, some states have passed protection laws, and Congress is considering a federal mandate. In the meantime, here are some tips to help you shore up your own defenses.
What is COVID-19 business liability protection?
As many businesses continue to experience the negative economic effects of the pandemic and the virus continues to spread across the country, business owners are weighing how to reopen safely. Some business owners are concerned that they will be sued, as has happened to some major retail chains.
Liability protections would shield businesses, schools and other institutions from such lawsuits as long as the businesses were operating in good faith and were following approved safety guidelines. Such protections would require the complainant to prove, without a shadow of a doubt, that the business in question was negligible in its efforts to reduce potential exposure to COVID-19.
What steps can you take now to protect your business against COVID-19 lawsuits?
As lawmakers consider their next move, legal experts are providing outside advice to small business owners who are looking to avoid COVID-related lawsuits. Andrea Sager, a small business attorney and entrepreneur, even created a free, downloadable liability waiver for consumers to sign before they enter a business. Though she believes a judge could choose to not enforce the document, she said it was important that reopening businesses cover their bases.
“I’m trying to ensure that my clients and all the small businesses are protected to reduce their liability,” Sager said. Businesses that have a brick-and-mortar presence should have customers sign a waiver, because “these lawsuits are going to take off,” she said.
In addition, Sager noted the following suggestions for businesses that are trying to prevent costly COVID-related claims:
Get familiar with your insurance policy.
Though not every business insurance policy is the same, there may be language in your agreement that helps with litigation costs. Even if your policy has general liability insurance, Sager said it might not be enough.
“We know that not all insurance companies act the same way, and there will be some small businesses that say, ‘I can just call my insurance company,'” she said. “But that company will come up with some loophole to leave the business owner high and dry. Without the federal law, I think that even if a small business owner has insurance, not all of them will be covered.”
Implement CDC guidelines.
Some states don’t have mask mandates or social distancing policies in place, but businesses can establish their own policies. By enforcing guidelines set by the Centers for Disease Control and Prevention, you can establish a standard that could hold up in court.
By enforcing stricter rules, “if somebody wants to sue you, you can say, ‘Look, this will go a lot further to protect people coming to my place of business,'” Sager said. “By following the law and taking it a step further, you can ensure that you won’t be held responsible.”
Reopen only if you can do so legally.
Governors have set the rules for which types of businesses can reopen. If your business is not allowed to reopen and you do so anyway, you could be hit with fees or arrested by local police. If your business is hit with a COVID-related lawsuit, a judge can note that you willfully ignored state rules and thus cast an unfavorable judgment against your interests. Before reopening, be sure to check local and state guidelines to make sure your business is cleared to reopen.
Communicate with your customers and employees.
When dealing with any kind of safety precaution, it’s imperative to share your efforts with your employees and the general public. For example, if people coming to your business know you require a mask, they should have no excuse for showing up without one. If they do, you can point to your rules and deny them entry without fear of any credible backlash in court.
Your employees should be among the first to know about your safety precautions. However, make sure to consider the stipulations of the Americans with Disabilities Act (ADA), Sager said.
“Do not ask your employees to sign a waiver, because there are completely different considerations there with workers’ compensation and possibly even ADA measures to consider,” Sager said. Measures vary by state and by employee, “because if you can allow your employees to work remotely, you should do that for as long as possible,” she said.
What liability protections have some states already established?
In the absence of a federal mandate for COVID-related business liability protection, some states have taken it upon themselves to create their own policies. As of August 2020, measures have already been taken in Wyoming, Utah, Oklahoma, Arkansas, Alabama, Georgia and North Carolina, while lawmakers in Minnesota, Iowa, Illinois, Ohio, Pennsylvania, New York, New Jersey, South Carolina, Mississippi, Tennessee, Louisiana, New Mexico and Arizona have legislation in the works. Though provisions vary by state, here are some overarching themes that lawmakers have implemented:
Retroactive protections. The first case of COVID-19 in the U.S. was diagnosed in Washington state on January 20. Due to a lack of testing at that time, it’s impossible to know when the virus spread to different parts of the country. As such, states that have put their protections in place have backdated their rules. For example, Iowa’s law covers any liability dating back to Jan. 1, while states such as Louisiana, Kansas and Alabama have opted to cover only as far back as mid-March, when widespread shutdown orders were put in place.
Doesn’t protect willful negligence. As more states begin to establish mandatory mask policies, or even reverse some shutdown measures, state governments are stipulating that COVID liability protection rules will not protect businesses that fail to comply with public safety measures. If it can be proven that a business failed to meet guidelines at the federal, state or local levels, they can be found guilty of gross negligence and left vulnerable to a liability lawsuit.
Protections for health care providers. In addition to protections for retail and other brick-and-mortar establishments, some states have baked amendments into their provisions that protect health care providers from liability. Because these businesses are often visited by sick individuals, this kind of measure actively protects against the potential for a person to file claim that their COVID-19 diagnosis was directly linked to the business. Yet like other small business owners, medical practitioners can be shielded from potential litigation as long as they properly follow guidelines.
Some major retail and fast-food chains have already been hit with COVID-related lawsuits. Last month, CNBC reported that Walmart, Safeway, McDonald’s and Amazon have faced such litigation. Once open, a business runs the risk of becoming a transmission site for the virus, regardless of how it operates. That’s why any discussion about business liability protection at the state and federal levels have been an all-encompassing topic.
Each state’s anti-liability measure is different. What may have passed in Wyoming is likely to differ in many ways from the bill passed in Ohio, for example. If your small business is in any of the states listed above, or if your state legislature is currently examining a similar measure, you should pay close attention to the guidelines laid out by your elected officials. Failing to meet the state’s guidelines could leave you wide open for crippling legal fees, exhaustive court expenses and a costly settlement.
What the federal government is considering
Senate Republicans recently unveiled their stimulus plan to the country. GOP members stressed the importance of the bill’s litigation protections. In fact, so important was the measure that Senate Majority Leader Mitch McConnell called it a “red line” issue, stressing that the bill would not pass without the provision.
“We need to provide protection, litigation protection, for those who have been on the front lines,” he said on Fox News back in April. “We can’t pass another bill unless we have liability protection.” He echoed that sentiment while speaking with reporters after the bill’s introduction, even though top Democrats have balked at the bill in its entirety for various reasons.
If passed, the proposed bill would standardize business liability protection during the pandemic. Like the provisions already passed at the state level, the federal liability protections would shield health care providers and employers, as well as school districts, from any lawsuits levied against them for exposure to the novel coronavirus. If a business were to be found guilty of gross negligence that led to the COVID-19 exposure, that business could still be targeted for a small business lawsuit.
While it’s still unclear what, if any, measures Congress will pass, Sager said she hopes the litigation protections make the final cut. Without them, she said, scores of businesses in states that don’t have any provisions in place could be forced to shut down because of deep legal fees.
“Unfortunately, there are some governors that want to leave it up to the local governments to make a response,” she said. “The mandate should come from the federal government because we need something that will be enforceable throughout the whole country.”
Original Source: business.com
In prior blog posts (see here, here, and here), I described how we field regular inquiries regarding international cannabis, both from companies inside the U.S. looking internationally and from international companies looking to the U.S. market. This post deals with geography issues for international companies seeking to enter the U.S. market.
Where to locate your business?
If you have spent any time in the U.S., you know that it is very easy to travel from one state to another and that, except for weather, geography and regional cultural differences, the U.S. feels quite homogeneous. That means that as a business owner you will want to focus on where your customer base will be and whether you need to be near your customer base or can do your business from a nearby state.
For retail businesses, you will need to set up shop where your customer base is. For wholesale or e-commerce companies, you have more flexibility on where to set up your base of operations. Even retail businesses can set up operations in another region or state if it makes sense.
For instance, if California were a sovereign nation, its economy would be the 5th largest in the world. That makes California extremely attractive to businesses. But California also comes with a host of potential negative issues in both the cannabis and non-cannabis realms, whereas Nevada, which is next to California, has more favorable cannabis laws and regulations and a favorable enforcement history. Nevada’s employment laws favor employers, with much fewer regulations (including business tax levies) to deal with than California.
Ease of transportation logistics.
Most products in the U.S. travel by semi-trailer truck. If your cannabis-hemp business will have multiple locations in multiple states, or if you will be shipping directly to customers in multiple states, then you will want to consider locating close to good road transportation infrastructure. Las Vegas is situated on the I-15 freeway corridor and is only 6-8 hours from the major California and Arizona markets; 12 hours from Colorado, and 18 hours from Washington.
Looking to the eastern US, locations such as Nashville, Tennessee and Atlanta, Georgia are strong candidates for a logistics hub because each is within 12-18 hours of retail markets from Boston, Massachusetts) to Miami, Florida and many midwestern US states.
U.S. employment generally.
Each U.S. state has its own employment laws, with some states heavily favoring employee rights and others more favoring the employer. This is generally reflected in state employment tax and insurance requirements.
As noted above, Nevada is very employer-friendly, while California is extremely employee-friendly. Tennessee and Georgia are each employer-friendly states.
Depending on your business needs, you should consider whether the location of your business center or your logistics hub will be more important than the location of your employees. Consider the roles of your employees. You may prefer to have an employee based in a different geographic area than your retail locations or your logistics hub.
When you are considering employees, it is generally best to hire in an employer-friendly state as you test the U.S. market for your products.
Is state registration required?
Once you determine the geographic scope of your business, you need to determine whether you need to register to do business in a particular U.S. state, even if you are only storing product and conducting e-commerce in that state.
Each state will have its own department of labor (regarding employee matters), department of revenue (regarding taxation matters), department of commerce (regarding general business matters), and cannabis regulatory department (which could be under a state’s department of agriculture, department of alcohol and tobacco, or another specialty department).
Your particular activities within each state will dictate with which departments you need to register. You will find that most state departments are extremely accommodating, so you should plan to reach out early in your decision process. That is especially true if you are undecided as to which U.S. states will be optimal for your initial business operations.
The post International Cannabis: Guidance for Companies Entering the U.S. Market, Part 4 – Geography Matters appeared first on Harris Bricken.
Original Source: harrisbricken.com
Katie Canales/Business Insider
Home improvement site HomeAdvisor found the 10 most popular US states for tiny home living.
The site zeroed in on the states with the most Instagram posts that were tagged with the #tinyliving hashtag.
Some of the best US states for tiny living include California, Florida, and Texas.
The tiny home movement has gained traction in the US in recent years, offering a lifestyle that’s potentially less expensive, more mobile, and more sustainable.
Visit Business Insider’s homepage for more stories.
The tiny home movement has captured the hearts of Americans in recent years.
Tiny homes are defined as abodes that are under 400 square feet. The movement has picked up steam, with many opting for the tiny lifestyle to save money or to be able to travel freely. Sustainable energy use and waste systems are also key drivers, though the tiny home life isn’t always as glamorous as it looks.
A 2020 report from home improvement site HomeAdvisor zeroed in on the most popular states for the tiny home life — or at least the states with the most active tiny home Instagrammers. HomeAdvisor scraped Instagram for posts tagged with the #tinyliving hashtag and tagged somewhere in each state, such as in a city or a restaurant. It also considered the amount of activity the posts got through comments and likes. The site didn’t factor in posts that didn’t have a location tag.
Here are the top 10 most popular US states for tiny living, according to HomeAdvisor.
Mike Morgan/For The Washington Post via Getty Images
HomeAdvisor found 1,613 photos tagged in Utah or roughly 3% of all photos scraped by the home improvement website in the US.
Tiny homeowners are tasked with making sure that zoning ordinances in their desired location allow them to legally live in the small abodes.
According to a 2018 Daily Herald report, Utah was a bit slow to adjust city codes to accommodate smaller homes. But progress has been made in recent years, and now the state is riding the tiny home train full throttle.
9. New York
Christina Horsten/picture alliance via Getty Images
The report found 1,787 photos with the hashtag #tinyliving in the state of New York.
State officials recently adopted Appendix Q: Tiny Houses, a measure legitimizing safe building standards for 400-square-foot houses on foundations, according to B&B Tiny Houses. The appendix became law earlier this year.
8. North Carolina
Mike Morgan/For The Washington Post via Getty Images
According to a 2019 memo from the North Carolina Department of Insurance, “tiny homes are acceptable as permanent single-family dwellings in North Carolina provided they meet the following minimum requirements.”
Tiny home builders in the state, like Wishbone Tiny Homes in Asheville, offer various models and customization options.
See the rest of the story at Business Insider
Former Under Armour CEO Kevin Plank just sold his Washington, DC, mansion for $17 million — 60% of its 2018 asking price. Take a look inside.Oprah Winfrey built a $2.6 billion fortune off of her beloved talk show. From a $25 million private jet to multiple island homes, here’s how the media mogul makes and spends her fortune.We asked a career expert to build the perfect resume. Here’s a template you can use to update your CV and land a dream job.
SEE ALSO: An Austin startup can 3D-print tiny homes in 24 hours for a fraction of the cost of traditional homebuilding — here’s how Icon could revolutionize affordable housing
Original Source: feedproxy.google.com