Oliver Herzfeld

As readers of Alex Malyshev's column in the New York Law Journal already know, we have written quite extensively about the growing pains New York has experienced in rolling out its adult-use #cannabis program. The process is still unfolding, and the Office of Cannabis Management (OCM) has come under quite a bit of criticism this year from the Governor, ultimately resulting in the departure of its inaugural director, Chris Alexander. While it appears that New York is currently re-assessing its approach to the roll-out, while simultaneously balancing the interests of multiple (sometimes competing) stakeholders in the ecosystem, it is also important to take a step back and look at movement on the national level, and how it might impact New York in the years to come. Sarah H. Ganley Read more about this development in our article behind a paywall Cannabis Law 2030: The Potential Impact of Federal Regulation on New York’s Legalization of Cannabis | New York Law Journal  https://lnkd.in/eeRV5FNm

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Join me and Jonathan Keselenko next Friday for a webinar on critical updates to New Jersey’s cannabis marketplace! As a market that the Cannabis Regulatory Commission expects will eclipse $1 billion in sales, increased growth brings additional challenges and opportunities in New Jersey. Many will ask: How do I compliantly bring on new investors and/or owners? How do I utilize investment incentives newly authorized by the New Jersey Legislature that would allow me to compliantly own up to 35% in up to seven cannabis businesses? How do I appropriately, and compliantly, engage with unions in light of my labor peace agreement and regulatory and statutory obligations? Foley Hoag’s New Jersey Cannabis team will discuss: -Common regulatory infractions and best practices. -Considerations associated with any new investments into cannabis businesses and regulatory limitations imposed with respect to same. -Labor issues faced by cannabis companies, including negotiating a labor peace agreement, what to expect after an LPA is signed, and what happens after you are organized. https://lnkd.in/epUN-8cF

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Update on Raising Capital for Maryland Social Equity Cannabis Businesses This is an update of an earlier summary of raising capital for Maryland cannabis businesses based on recent state guidance on financing options. High level (please read the article and speak with an attorney before structuring any deal) summary of the regulatory requirements as they pertain to transactions: Ban on Conditional License Ownership Changes and Transfers: No ownership interest changes are permissible before the award of a conditional license, and conditional licenses are not transferable. Equity Ownership Requirements: Social Equity Applicants (SEA) must hold at least 65% of the equity, and the individual(s) listed as SEA on the application must maintain at least 51% of the equity in the business. Investors are permitted to get a preferential return on their investment if, after a return of capital, future distributions of profit follow the cap table. Mergers & Acquisitions Prohibited for Five Years: No transfers of control are permissible for five years after final licensure. Definition of Control A specific definition of control is provided. Equity Transfers – Material and Non-Material Upon final licensure, transfers of five percent or less of equity do not require MCA approval. Option Restrictions Investors may not hold options or other convertible instruments that would allow them to purchase control after the five-year lapse period. Management Agreement (MSA) Restrictions MCA approval is needed for an MSA. MSAs are subject to fee and other restrictions. Debt Maryland's statute and regulations do not discuss debt. However, guidance issued by the MCA states that certain secured creditors may obtain a security interest in the proceeds of the sale of a cannabis license. Transfer Waiver Limited circumstances may waive the five-year restriction on transfers of ownership. License Caps A person or entity may not own or control more than one cannabis grower license (standard or micro), one cannabis processor license (standard or micro), and four cannabis dispensary licenses (standard or micro). These restrictions do not apply to passive investors. Strawman Ownership and Criminal Penalties House Bill 272 (which has been signed) includes penalties for strawman ownership of a social equity license (i.e., ownership that is purely nominal and purely for meeting the requirements of social equity licensure) of a fine of up to $2,500 and imprisonment for up to one year. Link to my full article below which goes into greater detail and includes links to the relevant guidance, statute, regulations, and bill. Thanks to our Vicente LLP intern Elena Markos, J.D. for her assistance with this article.

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New THC-infused Beverage Reporting and Fees                 By May 14, 2024, Connecticut businesses that sell THC-infused beverages must take inventory of all products, both on the sales floor and in storage. Then, by June 14, 2024, businesses must report all such products in their possession to the Connecticut Department of Consumer Protection (“DCP”) and pay to DCP $1.00 per container.  The inventory and associated fee are being implemented as part of new legislation recently passed by the Connecticut General Assembly.                 THC-infused beverages are nonalcoholic drinks that contain THC (tetrahydrocannabinol), and may be displayed as “hemp-derived,” Delta-8, Delta-9, Delta 10, THCA, HHC or similar wording, according to DCP. If businesses are unsure if they have THC-infused beverages, DCP recommends contacting suppliers.                 After July 1, 2024, only licensed cannabis retailers and package store permittees may sell THC-infused beverages. Furthermore, after October 1, 2024, the THC-infused beverages sold by package stores and cannabis retailers will be restricted to drinks containing no more than 3 mg of THC per 12-ounce container. There are other packaging and labeling standards required under the new legislation along with a prohibition against sales of THC-infused beverages to minors.                 Businesses in possession of THC-infused beverages previously allowed, may continue to sell those produced through June 30, 2024 provided they submit the required inventory and pay the necessary fees.                 Package stores and cannabis retailers already licensed by DCP are directed to log into their eLicense account and use the “License Maintenance” function. All other businesses will be able to file the inventory and pay the requisite fee beginning May 14, 2024 by logging into an existing DCP account or creating a new eLicense account to file TCH-infused beverage reports.                 Carmody Torrance Sandak & Hennessey continues to monitor this and its attorneys are available for information. Contact partner Liz Suchy at 203-252-2656 for more information.  

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This Friday, September 13 from 10:00 am -12:15 pm ET, I will be speaking on Data Licensing at the New York City Bar Association's program on IP Licensing. While data licensing is obviously an important component of the Adtech world, it can be a new and different source of revenue for almost any company. This "basics" session is a terrific primer on the details around how to protect and deal with the legal issues around the licensing of data. Hope you can make it!

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Read Ian Stewart’s newest #cannabislaw Insight on the DOJ’s formal rulemaking process to move #marijuana to Schedule III of the Controlled Substances Act, and why robust commentary from cannabis businesses, state regulators, trade organizations and ancillary industries is expected. Read it here: https://lnkd.in/gca63-na #WilsonElser #cannabisindustry #cannabismarket

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Joshua S. Bauchner, Partner and Chair of the Cannabis, Hemp, and Psychedelics Practice Group at Mandelbaum Barrett PC, was featured in a Bloomberg Law article, where he provides insights into a landmark ruling that is reshaping New York's cannabis regulations. Acting as counsel for the plaintiffs, Joshua discusses key issues such as the "true party of interest" framework and buffer zone regulations, both highlighted in Justice Kevin Bryant's decision. #CannabisLegal #LegalInsights #NYCannabisLaw #ConstitutionalRights #LegalRefinement #CannabisIndustry #NewYorkLegal

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Thanks to Sophie and the NJ Monitor for the insightful coverage on this perplexing issue! We came full circle - purpose was to prevent sales to minors, and we got right back to where we started. #hemp #cannabis #mblawfirm

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Raising Capital for Maryland Social Equity Cannabis Businesses Congratulations to those who won a cannabis social equity license in the Maryland lottery. If you were among the lucky winners, what is next (besides priority licensing items items)? For most winners, raising money to build their businesses is the top priority. Importantly, if a capital raise for a Maryland cannabis social equity licensee is improperly structured, well-intended efforts to raise money may violate Maryland law and result in revocation of a license or even jail time. So, how can you ensure compliance with Maryland law? By following the below high level (please read the article and speak with an attorney before structuring any deal) summary of the regulatory requirements as they pertain to transactions: Ban on Conditional License Ownership Changes and Transfers No ownership interest changes are permissible before the award of a conditional license, and conditional licenses are not transferable. Equity Ownership Requirements Social Equity Applicants (SEA) must hold at least 65% of the equity, and the individual(s) listed as SEA on the application must maintain at least 51% of the equity in the business. Mergers & Acquisitions Prohibited for Five Years No transfers of control are permissible for five years after final licensure. Definition of Control A specific definition of control is provided. Equity Transfers – Material and Non-Material Upon final licensure, transfers of five percent or less of equity do not require MCA approval. Option Restrictions Investors may not hold options or other convertible instruments that would allow them to purchase control after the five-year lapse period. Management Agreement (MSA) Restrictions MCA approval is needed for an MSA. MSAs are subject to fee and other restrictions. Debt Maryland's statute and regulations do not discuss debt. However, guidance issued by the MCA states that certain secured creditors may obtain a security interest in the proceeds of the sale of a cannabis license. Transfer Waiver Limited circumstances may waive the five-year restriction on transfers of ownership. License Caps A person or entity may not own or control more than one cannabis grower license (standard or micro), one cannabis processor license (standard or micro), and four cannabis dispensary licenses (standard or micro). These restrictions do not apply to passive investors. Strawman Ownership and Criminal Penalties House Bill 272 (which has been signed) includes penalties for strawman ownership of a social equity license (i.e., ownership that is purely nominal and purely for meeting the requirements of social equity licensure) of a fine of up to $2,500 and imprisonment for up to one year. Link to my full article below which goes into greater detail and includes links to the relevant guidance, statute, regulations, and bill. Thanks to our Vicente LLP intern Elena Markos for her assistance with this article.

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⚖️ Greenberg Traurig has launched a new legal blog focused on the intricacies of Chapter 93A, the Massachusetts Consumer Protection Act. The firm’s Massachusetts Chapter 93A Insights explores Chapter 93A, discussing the legal landscape of consumer rights and business responsibilities, and provides valuable insights and information to help understand and navigate this area of law and its impact on businesses. The blog will be edited by Litigation Shareholder David Thomas and Litigation Associate Angela Bunnell. 💻 Read more in our press release: https://buff.ly/3TkhZD1. #GTNews #GTBlogs #MassachusettsLaw #ConsumerProtection #GTBoston

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NY UPDATE! OCM will be considering proposal of amended advertisement regulations at today's meeting. ✨️Some notable changes based upon my quick skim so far: the ban on discount/loyalty programs has been removed and the ban on product packages depicting cannabis products or paraphernalia has also been removed. ✨️These amendments were likely proposed at least partly in response to the Leafly lawsuit (which is currently being appealed). Happy reading! #lawyerlife #regulatorycompliance #newyorknewyork #ocm Rudick Law Group, PLLC https://lnkd.in/eeTmnSQ4

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Cooley lawyers Michael Egan and Liza Cotter will explore the intersection of data privacy, cybersecurity and artificial intelligence in a session at the ACC NYC’s 2024 General Counsel Toolkit on June 6. 📆 View more details at the link below. For more AI resources and to see the team's full capabilities in this evolving space, visit our #CooleyAI page here: https://bit.ly/CooleyAI #AI #artificialintelligence #cybersecurity #dataprivacy

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In this insightful interview at NECANN NJ 2024, Tony Gallo, a leading expert in cannabis security, sits down to discuss the latest trends and challenges in the industry. Taking place at the New Jersey Convention & Exposition Center, this conversation dives into two critical topics: the evolving regulatory landscape and innovative security solutions for cannabis businesses. Whether you're an industry professional or just curious about the cannabis sector, this interview provides valuable insights and perspectives. https://lnkd.in/gb--4aMV

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Check out our new blog post - The Connecticut Bar Rules on Advertising for Lawyers and Law Firms https://loom.ly/a3tFCh0 smallfirmware.com www.smallfirmware.com

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I recently presented “Marijuana Business Law in New Jersey” for National Business Institute, which you can now watch OnDemand! Use promo code FPDN50A at checkout to get $50 off your purchase. Check it out at https://lnkd.in/eqw8b-BW National Business Institute (NBI, Inc.) #cannabis #marijuana #law #mblawfirm

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Listen below! DC Counsel, Rick Robinson, recently joined Kitchen Tape podcast hosts for a conversation about intellectual property and how copyright law applies to chefs and content creators in the food industry. They also discussed the realities of what is, and is not, able to be copyrighted and how creatives can protect their own intellectual property. Kitchen Tape is a weekly podcast that harmonizes flavors and friendships. Each episode, the hosts interview guests from all walks of the culinary world and discuss different paths in food outside of traditional restaurant kitchens. https://lnkd.in/eXcyBdNG

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