Archives for October, 2014

AG Eric Holder is “Cautiously Optimistic” About Legalized Marijuana

One of the most stress inducing facts about being involved in a medical marijuana business is that, despite the reform of numerous State laws, cannabis remains completely illegal under Federal law.  Due to that conflict, medical marijuana patients, doctors, caregivers and dispensaries are constantly under the looming threat of Federal law enforcement action.

But in an interview with CNN, Attorney General Eric Holder stated that he is “cautiously optimistic” about the prospects of legal cannabis, particularly in regard to the recent changes in Colorado and Washington.  Holder will be leaving office soon, but it is refreshing to see the nation’s top law enforcement official taking a common sense approach to marijuana laws.

Holder did, however, stop short of a completely hands-off approach to legal cannabis.  His office maintains that it is still monitoring cannabis use and distribution pursuant to the eight guidelines it issued last year.  Holder also said he has made it clear to governors in states that have legalized that the Feds will not hold back if the regulations put into place by those states are deemed insufficient.

Boynton Beach Joins Cities Banning Medical Marijuana Dispensaries

As I have pointed out in several prior postings (here and here), many cities in Florida are not exactly rolling out the red carpet for medical marijuana businesses.  The latest city to approve a measure restricting cannabis dispensaries is Boynton Beach, which last week approved a measure that would outlaw dispensaries for a full year if voters approve medical marijuana on November 4th.  That year long ban on dispensaries would allow the City time to formulate regulations and rules at the local level that would be aimed at controlling those businesses.

So, if you have your eye on Boynton Beach as a possible location for your prospective business venture, you will have to wait at least a year and after that your chances will depend on what regulations the city comes up with in the meantime.

 

Today is the Last Day to Register to Vote in Time for Nov. 4th Election

We spend a lot of time on these pages discussing how Amendment 2 might be implemented in Florida and other items of concern to potential medical marijuana entrepreneurs and patients.  However, we must never lose sight of the fact that, unless Amendment 2 receives at least 60% of the vote on November 4th, the point is moot.  Without winning the election, everything else is just hot air.

With that being said, it is worth reminding people that every vote counts.  And if you aren’t already registered to vote, today is your last chance to get registered if you want to vote on November 4th.

The anti-marijuana forces are in full swing.  The negative and misleading TV ads have started flooding the airwaves.  The billionaire casino tycoon, Sheldon Adelson, has decided to drop another 1.5 million on his anti-cannabis crusade.  We are going to need every vote we can get.

Remember, you can’t hit a home run if you don’t step up to the plate.  Don’t be left out on November 4th.  REGISTER TO VOTE!

More info on registering to vote can be found at this link.

Marijuana Businesses Struggle with Branding Due to Lack of Trademark Protection

In a previous posting, I outlined how some cannabis businesses are being denied the ability to file for bankruptcy.  The reason being that bankruptcy is governed by federal law, and marijuana is still completely illegal under federal law.

Another area where this conflict in laws is causing an issue is the ability of cannabis businesses to properly protect their brands and names under trademark law.  As with bankruptcy, the most effective means of protecting intellectual property is by using the federal trademark system.  While some states also offer their own trademark registration, if you want to have nationwide protection, you must avail yourself of the federal system.

Because marijuana is still prohibited under federal law, the federal patent and trademark office will not issue trademarks for marijuana-based products or businesses.  This is becoming a serious issue for some pot businesses because their brands are being harmed by knock-off products and unethical competitors and they are finding that they don’t have adequate legal avenues to remedy those situations.

Consider that you are a medical marijuana dispensary and you spend  considerable time and effort creating and marketing s specific strain of cannabis.  You give that strain a recognizable name and as people become aware of the quality of that strain, demand for it soars.  Then, along comes a shady dispensary owner who begins selling low grade cannabis but markets it under the same name as the strain you have worked so hard to market and brand.  If you were selling any other product, you could sue the shady character for violating your trademark.  But because it’s cannabis and that is illegal under federal law, you will be out of luck.

This is just another example of the unique issues that are faced by cannabis entrepreneurs and if you are considering getting into that business, it’s something you should be aware of.

 

Going Broke Isn’t Easy For Medical Marijuana Businesses

No one ever enters a business venture intending to fail, but the harsh reality is that many businesses don’t survive despite the best intentions of the people who launch them.  So, as you launch any new endeavor, it is always prudent to think about what you will do if all doesn’t go as planned.  As they say:  plan for the best, but prepare for the worst.

This maxim may be more difficult for Medical Marijuana entrepreneurs to follow.  Particularly in light of a recent Federal Court ruling concerning the availability of bankruptcy relief to businesses engaged in the cultivation or distribution of medical cannabis.

A U.S. Bankruptcy Court Judge in Denver Colorado recently dismissed a case filed by a marijuana business owner because the business activities violate federal law.  The case involved a  wholesale distributor of cannabis who found himself with over a half million dollars worth of debt that he simply could no longer handle.  Like many businessmen in his situation, he sought protection by filing Chapter 7 bankruptcy, which would allow a court appointed trustee to marshal the remaining business assets, satisfy the creditors to the best degree possible, and then discharge the debts.

The Court denied the business the ability to avail itself of bankruptcy protection by holding that it would be impermissible to allow the trustee to take possession of cannabis or profits from the sale of cannabis, which is a direct violation of Federal law.

This case points out yet another area of concern that results from the contradiction between state law’s that allow medical marijuana and federal laws which prohibit it.  It is also another concern that prospective marijuana entrepreneurs in Florida need to be aware of and plan accordingly for.