On Fox’s Physician Law blog, associate Richard Holzworth recently outlined the requirements for physicians in Pennsylvania who wish to issue medical marijuana “certifications” to their patients under Act 16, the commonwealth’s recently signed law legalizing medical marijuana.

Pennsylvania flag on a white backgroundIn April 2016, Gov. Tom Wolf signed into law Pennsylvania’s compassionate medical cannabis legislation (Act 16), effectively legalizing medical marijuana in the Commonwealth. Since that time, the Pennsylvania Department of Health (DOH) has awarded 12 licenses to grow medical marijuana and 27 licenses to operate medical marijuana dispensaries. It is anticipated that the grow operations and dispensaries will be open for business in early 2018. Although the proponents of medical marijuana have enjoyed widespread support (as evidenced by the 29 states that have enacted a medical marijuana law, including six since 2016), those in the industry are left to trust that Pennsylvania physicians will register with the DOH and send patients to the dispensaries. In other words, now that the legal medical marijuana system is in place, the onus is on physicians to ensure that patients have access to treatment.

It is important for medical professionals to understand that they are not permitted to “prescribe” medical cannabis products. Rather, physicians who have met the registration requirements of Act 16 are permitted to issue “certifications” to patients who qualify for medical marijuana treatment.

To read Richard’s full discussion of the steps physicians must take to comply with Act 16, please visit the Physician Law blog.

Citrus greening, a disease that has been slowly spreading throughout Florida since 2004, has been putting the squeeze on Florida’s key agricultural crop (the citrus industry in Florida is worth $10.7 billion).  Citrus greening impairs the citrus trees ability to produce fruit and eventually kills the trees.  Many Florida citrus farmers are turning to other crops to replace their orange juice and citrus fruit business including olives, hops (for beer), pomegranates, and even pongamia (a type of legume).

Another crop that has been proposed for the Florida agriculture industry as a replacement for oranges is hemp.  Hemp can be used in the industrial market for fibers, rope, construction, paper, insulation materials and clothing.

Hemp was a key crop in the early years of America providing rope, clothing and sail material among other materials.  Hemp was a favored crop because it grew quickly with little cultivation and, even today, can be found growing wild in many parts of the mid-west.  President Thomas Jefferson invented the hemp brake which was used to separate fibers from the stalk of the hemp plant.  It has also been reported that Thomas Jefferson said this about hemp:

Hemp is of first necessity to the wealth and protection of the country.

In 1937, the cultivation of hemp was made virtually impossible with the passage of the The Marijuana Tax Act.   And, hemp was banned for good in 1957 mostly because it looked too similar to marijuana despite the fact that it produces little to no THC.

With medical marijuana and recreational marijuana being legalized on the state level across the country, hemp has also slowly started to make a come back.

In 2017, the Florida Legislature took the baby step of passing Florida Statute s. 1004.4473 which has created an industrial hemp pilot program in Florida.  The pilot program permits the two Florida land grant universities — University of Florida and Florida A&M University — to develop public-private partnerships to produce hemp, analyze results and report back to the Legislature.


Dori K. Stibolt is a West Palm Beach, Florida based partner with Fox Rothschild LLP.  She focuses her practice on litigation and labor and employment issues and has taken a special interest in the cannabis business.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

New Jersey map outline
Copyright: adamgolabek / 123RF Stock Photo

Peter Kelly writes:

New Jersey Governor Phil Murphy signed an executive order directing the New Jersey Department of Health and the Board of Medical Examiners to review the state’s existing medical marijuana program with a focus on ways to expand access to marijuana for medical purposes. The review will include:

  1. An evaluation of the current rules regulating operating and siting of dispensaries and cultivation facilities with particular focus on whether relaxation of rules should be revised to remove obstructions to expansion;
  2. A review of the current process for obtaining a license to operate, including recommendations to expedite the process;
  3. An examination of conditions for participating physicians to ensure such requirements are not onerous;
  4. An analysis of the current list of debilitating conditions for which use my be authorized and a recommendation as to whether doctors should be given flexibility to make such determination on their own;
  5. An assessment of the methods through which patients obtain medical marijuana and whether rules should be amended to approve additional methods to facilitate patient access;
  6. A review of regulations governing the forms in which medical marijuana can be ingested; and
  7. Any other aspect of the program that hinders or fails to effectively achieve the statutory objective of ensuring safe access to medical marijuana for patients in need.

The Executive Order mandates that the DOH and BME complete the review within 60 days and requires that the review’s findings be submitted along with recommendations for new rules and regulations or for the elimination of existing ones.

According to Governor Murphy, the goal of the review is to eliminate barriers to access for patients who suffer from illnesses that could be treated with medical marijuana. The state’s current program limits prescriptions to only those who have certain state-approved conditions and the more than 15,000 enrollees have access to only five dispensaries in the state.

You can find Executive Order #6 at the New Jersey state government website.


Peter F. Kelly is a partner in the firm’s Corporate Department and Cannabis Law Practice, resident in its Princeton, NJ, office.

Jack Praetzellis writes:

Green California Vector IllustrationCalifornia law requires all contracts to have a “lawful object”.  Previously, this posed a problem for contracts involving cannabis since cannabis-related contracts are largely unlawful under federal law.  On January 1, 2018, California enacted Civil Code Section 1550.5. That Code Section explicitly states that cannabis-related contracts have a lawful object under California law.

California’s new law provides that commercial activity relating to adult-use cannabis conducted in compliance with California law is deemed to be the lawful object of a contract.  Section 1550.5 means that cannabis businesses can enter into and enforce contracts knowing that courts will not (or at least, should not) find their contracts invalid for lack of a lawful object.

Businesses in the cannabis industry should draft their contracts to take advantage of this change in the law and there are at least two immediate implications.  First, choice of law provisions should require application of California law (e.g., this contract shall be governed by California law).  Second, forum selection clauses should be used to make it mandatory that any claims relating to the contract be brought in California State Courts and not in any United States District Court (e.g., any action relating to this contract shall be decided by the Superior Court for the City and County of San Francisco).


Jack Praetzellis is an associate in the Litigation Department, resident in the San Francisco office.

Following up on my post from earlier this week, the Florida Senate Health committee unanimously passed SB 1134 which would strip out the requirement that black farmers who want to obtain a coveted medical marijuana license be a member of the Florida Chapter of the Black Farmers and Agriculturalists Association (which has closed its membership).

As I explained in my earlier posts (here and here), Columbus Smith, a black farmer from Panama City, filed a lawsuit challenging the law implementing Amendment Two (medical marijuana) alleging that the law was unconstitutional.

Recently, a Leon County, Florida Judge sided with Smith and granted a temporary injunction in the case, which signals that Smith’s case has a strong likelihood of prevailing in court.


Dori K. Stibolt is a West Palm Beach, Florida based partner with Fox Rothschild LLP.  She focuses her practice on litigation and labor and employment issues and has taken a special interest in the cannabis business.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

Jack Praetzellis writes:

Sunset at Manhattan Beach and Pier in Southern California, Los Angeles.California Governor Jerry Brown signed an amendment to California Evidence Code Section 956 ominously known as the “crime-fraud exception”.  The newly-revised Code Section attempts to address the tension between state and federal law governing cannabis.

Under normal circumstances, California’s attorney-client privilege makes confidential communications among an attorney and a client exempt from disclosure.  Essentially, neither a lawyer nor a client can be compelled to testify about the substance of their communications.

The crime-fraud exception punctures the attorney-client privilege.  It provides that if a client used the services of a lawyer to commit a crime or a fraud, then the attorney-client privilege doesn’t apply.  The conflict between state and federal laws governing cannabis raises the specter of whether or not legal advice about cannabis falls into the crime-fraud exception.

Under California’s newly enacted Evidence Code Section 956(b), so long as an attorney “advises the client on conflicts with respect to federal law,” the crime-fraud exception won’t impact the attorney-client privilege where the advice is “rendered in compliance on state and local laws on medical cannabis or adult-use cannabis.”

Before celebrating, however, be mindful of Federal Rule of Evidence 501.  Where federal law governs a claim, federal courts do not apply state law privileges and therefore will not apply Evidence Code Section 956(b).  And obviously no similar special exception has been written in to federal law.

What’s the takeaway?  If you are providing or receiving advice about cannabis in California, be sure that some of the advice concerns conflicts with respect to federal law.  While it’s not guaranteed to preserve the attorney-client privilege under all circumstances (see Federal Rule of Evidence 501), it’s undoubtedly better than nothing.


Jack Praetzellis is an associate in the Litigation Department, resident in the San Francisco office.

Last week, Leon County, Florida Circuit Judge Charles Dodson granted a temporary injunction sought by Columbus Smith regarding a portion of the Florida law passed last year to implement Amendment Two (medical marijuana).  I posted before about Smith’s lawsuit.

The law implementing Amendment Two called for an overall increase of 10 licenses for Medical Marijuana Treatment Center (Florida has a vertical integrated license structure which means licensed Medical Marijuana Treatment Centers grow, distribute and sell medical marijuana) by October 3, 2017.  But, the law also provided that one (1) of those licenses go to a black farmer who had been a party to settled lawsuits (known as Pigford I and Pigford II) regarding discrimination by the federal government against black farmers.  The law also said that the black farmer who receives the medical marijuana license would have to be a member of the Black Farmers and Agriculturalists Association-Florida Chapter.  Mr. Smith had been a member of Pigford I and Pigford II, but the Black Farmers and Agriculturalists Association had closed their membership and would not issue a membership to Mr, Smith.

The Florida Constitution bars “special” laws that relate to a “grant of privilege to a private corporation.”  Mr. Smith’s lawsuit alleged the medical marijuana law violated that part of the Constitution.

In issuing the temporary injunction, Judge Dodson ruled that Mr. Smith has a substantial likelihood of success of proving that the law is unconstitutional.

Plaintiff will likely suffer irreparable harm if this court does not enjoin the department from issuing the black farmer license because the law only applies to members of the association and plaintiff … will not be able to apply or qualify for such a license, because he is not a member of the association.

Judge Dodson’s Court Order also asked both sides to come up with a plan to resolve the issue by June, 2018.

Senate budget chief Rob Bradley, a Fleming Island Republican, said the Legislature will likely strip out the part of the law requiring membership in the association for an applicant to be eligible for the black-farmer license.


Dori K. Stibolt is a West Palm Beach, Florida based partner with Fox Rothschild LLP.  She focuses her practice on litigation and labor and employment issues and has taken a special interest in the cannabis business.  You can contact Dori at 561-804-4417 or dstibolt@foxrothschild.com.

As a follow-up to yesterday’s post regarding the status of FinCEN’s 2014 marijuana banking guidance in light of the Attorney General’s policy reversal on marijuana enforcement at the federal level, we have received written confirmation from FinCEN that its 2014 guidance remains in place.  In response to our inquiries, FinCEN provided us with the following statement:

“The SAR reporting structure laid out in the February 14, 2014 guidance remains in place.  FinCEN will continue to work closely with law enforcement and the financial sector to combat illicit finance, and we will notify the financial sector of any changes to FinCEN’s SAR reporting expectations.”

In addition, the two U.S. Senators from Colorado, Michael Bennet (D) and Cory Gardner (R), announced that they have sent a letter to FinCEN urging the agency to retain its 2014 marijuana banking guidance.  In their press release, the senators warned that “repealing the guidance could increase the amount of cash used by marijuana businesses, raising public safety issues and reducing the oversight and transparency of marijuana transactions.”  A copy of their letter is available here.

We are closely monitoring this area and will provide timely updates as to any developments.

Reuters is reporting today that the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) was caught off guard by Attorney General Jeff Sessions’ announcement last week that the Justice Department was reversing its policy regarding enforcement of federal marijuana laws.  A FinCEN spokesman said in a statement that his agency’s prior pronouncement regarding marijuana banking nevertheless “remains in place,”  referring to guidance issued in February 2014 to clarify Bank Secrecy Act expectations for financial institutions seeking to provide services to marijuana-related businesses.  That guidance described how financial institutions could provide banking services to marijuana businesses consistent with their BSA obligations despite the fact that the manufacture, distribution, and dispensing of marijuana is illegal under federal law.  And as we recently reported, 400 banks and credit unions were actively serving the marijuana industry prior to the Attorney General’s announcement.

Reuters reports that FinCEN received no advance warning of the Attorney General’s announcement, according to sources, and a Justice Department spokesman declined to comment about whether his agency had coordinated with FinCEN prior to the announcement.  The Justice Department’s policy reversal has understandably sowed confusion among financial institutions as to whether they can continue to do business with marijuana businesses, and FinCEN’s confirmation that its 2014 guidance remains in place should provide some measure of comfort to affected banks and credit unions.

It is worth noting that FinCEN’s current director – Kenneth A. Blanco, who assumed the role just last month — spent the last 28 years of his career as a Justice Department prosecutor, most recently serving as Acting Assistant Attorney General of the Criminal Division.  During his tenure at the Justice Department, he was the chief of numerous sections, including the Money Laundering and Asset Recovery Section, the Narcotic and Dangerous Drug Section, and the Organized Crime and Gang Section, among others.  We have yet to see whether Mr. Blanco will implement major policy changes at FinCEN, and whether his agency maintains its marijuana banking stance, or aligns with his former agency’s policy shift, may well be one of the first major policy decisions he has to confront.

As part of his recent guidance regarding federal Marijuana Enforcement, U.S. Attorney General Jeff Sessions indicated he would place more discretion in the hands of individual federal prosecutors in enforcing the Controlled Substances Act. As we noted in our initial analysis of this decision, businesses would be wise to gain an understanding of the serving U.S. Attorney in their federal district, and whether he or she has made any statements regarding their position on medical or recreational cannabis.

Cannabis and the law
Copyright: jirkaejc / 123RF Stock Photo

While some in the industry are still reeling from the announcement, statements by U.S. Attorneys have given some comfort to licensed business in states where cannabis is legal. The Huffington Post has a good rundown of many such statements, including from federal prosecutors in Alaska, California, Colorado, Maine, Massachusetts, Oregon, and Washington. (Marijuana Industry Not Freaking Out Over Threat Of Federal Crackdown, via Huffington Post).

PennLive also posted a piece highlighting the reactions of several Pennsylvania politicians to the announcement and its effect on the Commonwealth’s Medical Marijuana Program, including that of David Freed, U.S. Attorney for the Middle District of Pennsylvania. Freed stated:

“Having been involved as a state prosecutor in the drafting of that legislation, I believe that there are sufficient safeguards in the law to ensure that the products will be used as intended under the supervision of medical professionals…While I cannot state that there will never be an issue in this area meriting federal involvement, my office has no intention of disrupting Pennsylvania’s medical marijuana program or related financial transactions.”

(While feds say states can’t legalize marijuana anymore, Pa. will leave medical pot alone, via PennLive)

While it is yet unclear how the announcement of Attorney General Sessions, or individual statements referenced above, will affect any future enforcement actions, business should cautiously continue business as usual while always ensuring that all operations remain strictly compliant with the law of your state.


Joseph McNelis works in Fox Rothschild’s Blue Bell, PA office and focuses his practice on labor and employment matters. Joe also tracks legal developments in the cannabis industry in Pennsylvania and nationwide. Joe can be contacted at 610-397-2332 or jmcnelis@foxrothschild.com.