psychedelics regulation laws

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.

9. Insurance

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.

10. Immigration

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

Conclusion

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

States can typically waive repayments of most unemployment insurance if there is no fraud involved. But that’s not the case for the Pandemic Unemployment Assistance program.

Original Source: cnbc.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

icon startup 3d printed homes austin 21Katie 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.

10. Utah
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

See Also:

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

States are emptying their unemployment funds, and even the federal fund designed as a backstop is likely to run out of money

States are emptying their unemployment funds, and even the federal fund designed as a backstop is likely to run out of money

The current real unemployment rate is 20.8%, the highest since the Great Depression.

Many states’ unemployment funds aren’t robust enough to meet growing demand.

Typically states can apply for help from the Federal Unemployment Account, but even that could run out, experts warn.

“No system is designed for [this] level of unemployment,” former North Carolina budget director Lee Roberts told Business Insider.
Roberts said it was “highly likely” states would begin limiting the duration and dollar amount of payouts to prevent the coffers from running dry.

Over the last five weeks, more than 26 million Americans have filed for unemployment. That’s in addition to the 7.1 million already out of work, according to the Bureau of Labor Statistics.

The result is a real unemployment rate of 20.6%, the highest since the Great Depression.See the rest of the story at Business Insider

 

Original Source: States are emptying their unemployment funds, and even the federal fund designed as a backstop is likely to run out of money

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