Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Hemp Legalization and Other Top Cannabis Law Developments of 2018

Author: Daniel T. McKillop

Date: December 14, 2018

Key Contacts

Back

A Look at Hemp Legalization and
Some of the Most Significant Legal Developments Impacting the Cannabis Industry in 2018

Once President Donald Trump signs the 2018 Farm Bill into law, industrial hemp will be legal in the United States. The bi-partisan legislation, which is expected to fuel massive growth in hemp research, cultivation, distribution, and sales, is just one of the significant cannabis law developments that took place in 2018.

Hemp Legalization and Other Top Cannabis Law Developments of 2018
Photo courtesy of Alex Person (Unsplash.com)

The year began with former Attorney General Jeff Sessions rescinding the Cole Memo, which rattled the cannabis industry at the time but never really materialized into heightened enforcement. Rather, momentum continues to build towards legalization of both medical and recreational marijuana. In fact, more bills to end or amend marijuana prohibition under federal law were filed in the 115th Congress than ever before.

Below is a brief review of some of the most significant legal developments impacting the cannabis industry in 2018:

Industrial Hemp: The Industrial Hemp Farming Act of 2018 will facilitate the commercial cultivation of industrial hemp by amending the Controlled Substances Act (CSA) to exclude “industrial hemp” from the statutory definition of marihuana. Industrial hemp will be defined based on its THC content and set at a threshold of 0.3% THC. Going forward, hemp will be regulated as an agricultural product, which means farmers and medical researchers can apply for insurance, grants, and other funding.

STATES Act: Despite great strides under state law, cannabis remains illegal under federal law, and businesses in states where it is legal still have difficulty securing loans, leasing commercial space, obtaining insurance, and accessing banking services. On June 7, 2018, a bipartisan group of senators and representatives introduced the “Strengthening the Tenth Amendment Through Entrusting States Act” (STATES Act). The proposed legislation (S. 3032H.R. 6043) amends the CSA to exempt marijuana legalized at the state level.

Notably, the STATES Act does not legalize marijuana on the federal level. Rather, it provides that the CSA would no longer apply to persons manufacturing, producing, possessing, distributing, dispensing, administering, or delivering marijuana if doing so in compliance with applicable State law, which would clear the way for banks to transact with cannabis businesses. While its likelihood of passage is uncertain, it enjoys support from both Democrats and Republicans. In addition, President Donald Trump has indicated that he will sign the STATES Act if it reaches his desk. 

Cannabis in the Workplace: The tension between state and federal law continues to cause headaches for employers and employees, with courts reaching divergent decisions on how cannabis should be treated in the workplace. In Cotto v. Ardagh Glass Packaging, Inc., a federal judge ruled that New Jersey’s Compassionate Use of Medical Marijuana Act (CUMMA) does not compel a New Jersey employer to waive mandatory drug testing requirements for a disabled worker. In support, U.S. District Judge Robert Kugler cited that neither the LAD and CUMMA require an employer to waive a drug test as a condition of employment for federally-prohibited substance. “We therefore find that Plaintiff has failed to show that he could perform the ‘essential functions’ of the job he seeks to perform. Ardagh Glass is within its rights to refuse to waive a drug test for federally-prohibited narcotics,” Kugler ruled. In another case decided in 2018, a New Jersey Workers’ Compensation Judge held that Freehold Township must pay for an injured worker’s medical marijuana treatment. In that case, the judge rejected the argument that it’s unconstitutional for a court to order an insurance carrier to pay for treatment because it conflicts with federal law.

Expansion of New Jersey Medical Marijuana Program: Since Gov. Phil Murphy took office in January, the New Jersey’s Medical Marijuana Program has grown significantly, with the addition of new qualifying conditions and patients. In July, the Department of Health announced that the Medicinal Marijuana Program has grown by 10,000 patients since Gov. Phil Murphy took office. To keep up with demand, DOH is currently reviewing nearly 150 applications submitted by businesses vying to be one of the state’s six new Alternative Treatment Centers. The New Jersey Legislature is also poised to approve legislation to significantly expand the state’s medical marijuana program. On November 26, three legislative committees approved a Senate substitute bill combining key provisions of Senate Bill 10 and Senate Bill 2426. Now named the “Jake Honig Compassionate Use Medical Cannabis Act,” the measure would increase the maximum amount of cannabis that may be dispensed to two and one-half ounces, allow advanced practice nurses and physicians assistants to prescribe medical cannabis, and further expand the number of ATCs, among other key changes.

Legalizing Recreational Cannabis: In January, Vermont became the first state in the country to legalize marijuana via legislation rather than a ballot initiative. New Jersey is slowly working towards doing the same, clearing a major hurdle last month. On November 26, the Senate Budget and Appropriations Committee and Assembly Appropriations Committee approved the latest version of Senate Bill 2703, which would legalize the possession and personal use of marijuana for people age 21 and older. Among other key provisions, the bill sets the tax rate on cannabis sales at 12%, with municipalities authorized to assess a 2% tax on sales occurring within their boundaries. Licenses would be available for cannabis growers, processors, wholesalers and retailers, all of which would be overseen by the five-member “Cannabis Regulatory Commission” (CRC).

Looking Ahead to 2019

The cannabis industry is poised to undergo even more changes in the New Year. In New Jersey, legal recreational marijuana should finally become a reality. On Capital Hill, Democratic lawmakers are already planning how to use their new majority in the House of Representative to advance legalization efforts.

The attorneys of  Scarinci Hollenbeck Cannabis Law Practice group will continue to closely monitor legal developments impacting the cannabis industry. We encourage current and prospective members of the New Jersey cannabis industry to check back regularly for updates.

If you have any questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Dan McKillop, at 201-806-3364.

This article is a part of a series pertaining to cannabis legalization in New Jersey and the United States at large. Prior articles in this series are below:

Disclaimer: Possession, use, distribution, and/or sale of cannabis is a Federal crime and is subject to related Federal policy. Legal advice provided by Scarinci Hollenbeck, LLC is designed to counsel clients regarding the validity, scope, meaning, and application of existing and/or proposed cannabis law. Scarinci Hollenbeck, LLC will not provide assistance in circumventing Federal or state cannabis law or policy, and advice provided by our office should not be construed as such.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Corporate Transactions: Best Practices for Successful Deals post image

Corporate Transactions: Best Practices for Successful Deals

Corporate transactions can have significant implications for a corporation and its stakeholders. For deals to be successful, companies must act strategically to maximize value and minimize risk. It is also important to fully understand the legal and financial ramifications of corporate transactions, both in the near and long term. Understanding Corporate Transactions The term “corporate […]

Author: Dan Brecher

Link to post with title - "Corporate Transactions: Best Practices for Successful Deals"
How to Conduct a Fair and Legal Employee Termination in 2025 post image

How to Conduct a Fair and Legal Employee Termination in 2025

Ongoing economic uncertainty is forcing many companies to make tough decisions, which includes lowering staff levels. The legal landscape on both the state and federal level also continues to evolve, especially with significant changes to the priorities of the Equal Employment Opportunity Commission (“EEOC”) under the Trump Administration. Terminating an employee is one of the […]

Author: Angela A. Turiano

Link to post with title - "How to Conduct a Fair and Legal Employee Termination in 2025"
Admin Dissolution for Annual Report: What You Need to Know post image

Admin Dissolution for Annual Report: What You Need to Know

While filing annual reports may seem like a nuisance, failing to do so can have significant ramifications. These include fines, reputational harm, and interruption of your business operations. In basic terms, “admin dissolution for annual report” means that a company is dissolved by the government. This happens because it failed to submit its annual report […]

Author: Dan Brecher

Link to post with title - "Admin Dissolution for Annual Report: What You Need to Know"
What Is Antitrust Litigation Law? post image

What Is Antitrust Litigation Law?

Antitrust laws are designed to ensure that businesses compete fairly. There are three federal antitrust laws that businesses must navigate. These include the Sherman Act, the Federal Trade Commission Act, and the Clayton Act. States also have their own antitrust regimes. These may vary from federal regulations. Understanding antitrust litigation helps businesses navigate these complex […]

Author: Robert E. Levy

Link to post with title - "What Is Antitrust Litigation Law?"
Dissolving Your Business: Essential Legal Steps to Protect Your Interests post image

Dissolving Your Business: Essential Legal Steps to Protect Your Interests

If you’re considering closing your business, it’s crucial to understand that simply shutting your doors does not end your legal obligations. Unless you formally dissolve your business, it continues to exist in the eyes of the law—leaving you exposed to ongoing liabilities such as taxes, compliance violations, and potential lawsuits. Dissolving a business can seem […]

Author: Christopher D. Warren

Link to post with title - "Dissolving Your Business: Essential Legal Steps to Protect Your Interests"
The Role of Corporate Restructuring in Mergers & Acquisitions post image

The Role of Corporate Restructuring in Mergers & Acquisitions

Contrary to what many people think, corporate restructuring isn’t all doom and gloom. Revamping a company’s organizational structure, corporate hierarchy, or operations procedures can help keep your business competitive. This is particularly true during challenging times. Corporate restructuring plays a critical role in modern business strategy. It helps companies adapt quickly to market changes. Following […]

Author: Dan Brecher

Link to post with title - "The Role of Corporate Restructuring in Mergers & Acquisitions"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form. By providing a telephone number and submitting this form you are consenting to be contacted by SMS text message. Message & data rates may apply. You can reply STOP to opt-out of further messaging.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!