Legal Archives - Green Market Report

Sean HockingAugust 22, 2019

By Teri Buhl

Three South Florida men have been arrested as part of a ring of cannabis stock manipulators by the Northern Ohio Department of Justice.

Charles Vaccaro, Eli Taieb, and Dror Svorai were all charged with securities fraud, wire fraud, and conspiracy after two FBI agents went undercover posing as bad actors willing to funnel the trio’s illegal stock gains back into their U.S. bank accounts.

The cannabis stocks involved in the scheme include: PotNetwork Holdings ($POTN), Vaper Group ($VPOR), and White Label Liquid ($WLAB).

Pot Network Holdings Facebook Page

All three men were released on million dollar secured bonds and Taieb and Svorai had to turn over their passports. Svorai was assigned a GPS tracking ankle bracelet.

The scheme involved the men using private investment companies they owned to make PIPE investments in the stocks eventually owning up to around 20% of the company. PIPE’s are a public investment in a private entity achieved through making a debt investment that converts to common stock when the company can’t pay the high interest loan. It’s often known as death spiral investing because the conversion rates enable the investors to get millions of shares with relatively small investments. By operating in this fashion the three men investing as an undisclosed group means that public shareholders cannot see how much ownership control of the stock they really have.

Charles Vaccaro first made contact with the undercover FBI agent in July 2019 when he said he was looking for someone to help them liquidate around $100 million in stock in multiple companies and it had to be processed in a foreign brokerage account because the Securities and Exchange Commission was getting tougher on U.S. broker dealers liquidating large blocks of penny stock.

Charles Vaccaro

All three companies traded on what is known as the OTC Markets. The FBI affidavit filed in federal court says Eli Taieb told the undercover agent they would spend $100,000 to $200,000 on paid promoters to pump the stock once their shares converted.

The idea was that the FBI agent(s) would sell their shares at the height of the pump with the goal of liquidated $1 million shares a week and take a 20% clearing fee. Then the FBI agent was supposed to launder the remaining profits into nominated U.S. bank accounts. One of the bank accounts set up to receive the illicit funds was a Well Fargo account for D&D Capital, a company owned by Dror and his brother Dekel.

Dror Svorai

Dror Svorai told the agent they could make $2 to $3 million within a month. The outlined plan was to start with Vapor Group then move on to PotNetwork Holdings. Vaccaro controlled PotNetworks and Svorai controlled Vapor Group. Svorai said between the three men they controlled in the region of 6 to 7 billion shares of Vapor Group.

The agent, on expressing concern about trading volume because some stocks had warning symbols, was brushed off by Taieb with the excuse on why it wouldn’t matter saying.

“we can make a lot of money doing this,

not just make a living.”

Svorai also explained, if they had to, they could also “bring in awareness”. The FBI agent said in the affidavit he thought that this meant a paid promotion campaign. But Cannabis Law Report has learned Svorai was actually talking about hiring the Awareness Consulting Network owned by Edris Mendez. ACN is known as a third party payer.

The FBI eventually arrested the trio on July 19^th 2019 and asked the judge to seal the case because the investigation is ongoing. They also seized the D&D Capital bank account. The case was unsealed a week later and first reported by Michael Goode who tracks small cap stock fraud on his blog Goodetrades.com.

A total of five stocks were in the scheme detailed to the FBI which also included two bitcoin companies Clic Technology and Canna Corporation which owns Northway Mining.

Cannabis Law Report has tracked a number of companies that promoted the stocks and disclosed they were paid by ACN. It appears the arrested trio’s relationship with ACN goes back to at least January 2017.

The promoters include:

AwesomeStocks.com owned by Adam L. Garcia. Garcia bought his investor list from a known bad actor named Drew Ciccarelli from Charleston, South Carolina.
SmallCapFirm.com owned by Enrique Pena
StockwireNews.com owned by Kai Parker
ProtraderElite.com owned by Rafael Pereira
Thewolfofpennystocks.com owned by Richard Eillis

The securities and exchange commission allows promoters to write positive research on stocks as long as they disclose who is paying them. Because the trio hired a third party payer to pay off the promoters they can try and hide who is really paying for the campaign.

According to research undertaken by Cannabis Law Report Vapor Group had at least five paid promotions in the last two years. Copies of the email campaigns were obtained by Cannabis Law Report showing the following promotions happened:

Jan 9, 2017 by Rafael Pereira
Apr 30 thru May 1, 2019 by Enrique Pena
May 8 and 9, 2019 by Richard Ellis
May 12 and 13, 2019 by Enrique Pena
May 16, 2019 by Adam L. Garcia
PotNetwork Holding has at least two paid promotions this year (2019)
May 1, 2019 by Adam Garcia
June 4 and 5, 2019 by Richard Eillis

PotNetwork Holdings had a higher stock price than Vapor Group with a spike in January 2018 to $.85 from a low a few weeks prior of $.06. The company got the attention of top cannabis analyst Alan Brochstein who began questioning the outstanding share count compared to what the company was reporting. Brochstein is also the owner of media outlet, New Cannabis Ventures. PotNetwork has changed their business plan multiple times but eventually began selling CBD products.

In June 2018 Brochstein wrote, “While it is positive that the company has finally filed with the SEC after several years of trading as a cannabis penny stock without having met this criterion previously, the information provided in the filing is inadequate and in many ways reflects poorly on the company. Even if one is willing to look beyond some yellow and red flags, the valuation appears to be very difficult to justify.”

Meanwhile Charles Vaccaro who was PotNetwork Holdings past president in 2014 was being sued in Connecticut federal court by tough guy hedge fund manager, Steven Hicks of Southridge Capital. Vaccaro was accused of controlling the company behind the scenes still and ordering the company not to allow Southridge to convert debt to stock on a stock purchase agreement.

It transpires PotNetwork Holdings took money from Southridge as a loan and didn’t pay Southridge back. The case is ongoing. A review of federal court cases across the United States shows the actions in the Southridge suit was a pattern of self-dealing lead by Vaccaro and Svorai in many stocks they controlled.

Vaccaro has a history of bad behavior. He ran a broker dealer called FI trading that was expelled from FINRA in 2003. In 2015 while working at another trading group he didn’t pay a customer dispute award and FINRA took away his broker dealer license. A review of multiple trading chat rooms show warnings about Vaccaro at more than one prop trading group for allegedly taking client money.

Some of Vaccaro’s alleged ill-gotten gains were spent on a 70-foot Italian-made Azimut yacht that he named C-Weed.

Azimut Yacht

Florida llc records show they boat was set up in his name in 2017. Last year he was charged with four misdemeanors when the boat, docked in trendy Montauk, New York, was leaking waste into Lake Montauk. Apparently no one bothered to pump out the yachts four toilets. At the time of the arrest the East End Hampton cops also found out the State of Florida had outstanding charges against him for unpaid taxes. Vaccaro currently is selling a near million two bedroom high rise apartment with ocean views in Sunny Isles Beach Florida. He also owns a home in Port Washington, New York.

Alex Spiro, Partner, Quinn Emanuel

Vaccaro hired an expensive Quinn Emanuel white color defense lawyer named Alex Spiro. Attorney Spiro was also recently hired by cannabis investor Andy Defrancesco for the Aphria class action shareholder fraud suit he is fighting. It’s unclear if the two men have invested together in the past.

Steven Dettelbach, Partner, Backer & Hostetler

Taieb is being defended by Steven Dettelbach of Backer & Hostetler who was the former U.S. Attorney for Northern Ohio. Svorai is being represented by Florida –based sole practitioner David Sobel.

David Sobel

Also See

WARNING LETTER: PotNetwork Holdings, Inc.MARCS-CMS 564030 — MAR 28, 2019

I’m a professional financial investigative journalist who has written for the Greenwich Time, Hearst CT Newspapers, Forbes Magazine, Fortune.com, The Atlantic.com, New York Magazine, New York Post, Trader Monthly, Housingwire, ML-Implode, The Business Insider, Long Island Business News, Dealbreaker, New York Observer, Bitcoin Magazine, DealFlow Media, SIRF.org and more. For the last five years I have been a contributing reporter for Market Nexus Media who publishes a financial trade publication called Growth Capital Investor.

I earned my breaking/investigative news chops reporting during the financial crisis in 2008 for the Sunday edition of the New York Post. I was one of the first to report on the missteps at IndyMac that lead to government investigations and lawsuits against the banks founders. Caught hedge funds like Carrington Capital abusing investors without disclosing conflicts of interest with senior RMBS bond holders; they were sued by Wilbur Ross for Civil RICO. I exposed Bear Stearns misleading their own investors and monoline insurers on the quality of the loans in their mortgage-backed securities, which led to a fraud lawsuit against JP Morgan/Bear Stearns and the $13 billion settlement with the DOJ in 2013. Since 2010 multiple Wall Street firms, that my reporting warned about first, have been [JP Morgan, SpongeTech, Security Savings Bank, SAC Capital, Palm Beach Capital Management, New Stream Capital, NIR Group/Cory Ribotsky, Bear Stearns RMBS Traders, Mike Perry IndyMac CEO, Steven Muehler and the Nanocap MarketPlace, Barry Honig and The Frost Group] investigated or charged for financial violations by the FBI/SEC/State AG or shut down by bank regulators.

The Huffington Post named me the number three most dangerous financial journalist for being willing to challenge the establishment and inform readers best. I’m working on trade-marking “Smashmouth Journalism”

Read More About Teri’s Work At: https://www.teribuhl.com/about/

Mark TaylorAugust 21, 2019

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AUTHOR: Mark Taylor

PUBLISHER: CANNABIS LAW REPORT

Cannabis treatments are too expensive and do not come with enough test evidence to be effective, UK authorities have said.

The National Institute for Health and Care Excellence (NICE) reviewed evidence for the benefits and costs of cannabis-based medicinal products and drew up guidance for health professionals and the public.

The watchdog refused to allow its national health service to prescribe medical cannabis for children with severe epilepsy because there is “not enough evidence it works”, a decision which angered campaigners and parents who said their children will suffer as a result.

It also said current treatments for adults suffering severe symptoms were “not cost effective”.

A concurrent review by NHS England, which overseas budget, planning, and day-to-day operations of the commissioning side of the English health service has said more research and trials are needed, however. It also said the children’s experiences on medicinal cannabis in the should be taken into account as evidence of how well the drug works.

In November 2018, the legal status of cannabis was changed to allow specialist clinicians to legally prescribe cannabis-derived medicinal products to patients with an exceptional clinical need, following a high-profile media campaign.

However, health professionals have been reluctant to prescribe cannabis-based medicines in the UK because of the lack of clinical trial evidence of its benefits and safety.
NICE said more “gold standard” randomised controlled trials, were necessary, in which a group of people on medicinal cannabis would be compared with a similar group of people on other medication. This would answer questions about safety and efficacy, they said.

The watchdog said a network of children’s doctors should be created to collect evidence and advice on difficult cases. Doctors are unwilling to prescribe medicinal cannabis, it said, as they are worried about the possible long-term effects on the brain, particularly from longer term exposure to THC, the psychoactive constituent in cannabis.

THC (delta-9-Tetrahydracannabinol) and CBD (cannabidiol) are the two elements that have been most investigated for their medicinal value.

The guidance said for people with MS, Sativex can be an effective treatment when the individual which has not responded to other therapies, however it does not recommend it due to the costs involved.

The calculations used to reach this decision indicated that Sativex would be cost effective if the list price was reduced from £375 to £188 per pack. The draft NICE guideline also does not recommend the use of cannabis-based medicinal products for people with chronic pain, including people with MS experiencing nerve pain.

Pro-cannabis charities for individuals suffering debilitating illnesses have also reacted angrily.

“The MS Trust is hugely disappointed that, once again, Sativex has been turned down because it is too expensive for the NHS,” said Paru Naik, Health Professional Programme Director, MS Trust. “The MS Trust is reviewing the draft guideline from NICE and we will respond to the consultation process.”

The Trust is encouraging responses to the guideline which can be sent via the NICE website by 5pm on 5 September 2019. The final guideline is expected to be published in November 2019.

NHS England said more clinical trials on medicinal cannabis need to be carried out and a “UK-wide paediatric specialist clinical network” should be created to help “very cautious” doctors, by providing expert advice on complex cases.

These comments were welcomed by the Medical Cannabis Clinicians Society (MCCC), whose executive director Hannah Deacon spoke to ITV News in the UK about the issue.

Her eight-year-old son Alfie Dingley suffers from severe epilepsy, and was the first of a small number of patients in the UK to receive an NHS prescription for medical cannabis.

Ms Deacon said NICE had shown “no empathy to the families that I work with that are funding private prescriptions because the NHS doctors will not prescribe”.

“There is no thought of what is going to happen to those poor children if those families run out of money,” she said.

Doctors don’t have any education, training, and they don’t understand, she said.

“The government has failed them, the government are failing the families I work with, whose children will become seriously ill if they’re not helped urgently and I just think it’s a complete mess,” she said.

The NHS report, titled Barriers to accessing cannabis-based products for medicinal use on NHS prescription, was commissioned by Health Secretary Matt Hancock after “heart wrenching” meetings with the parents of ill children.

Another cannabis-based drug, nabilone, was recommended in the draft guidance as an add-on treatment for adults with chemotherapy-induced nausea and vomiting, but only if other conventional licensed medicines do not work.

Prof Mike Barnes, the chair of the Medical Cannabis Clinicians Society, said NICE was incorrect in wanting to assess medical cannabis on the basis of the same sort of trials used to approve conventional medicines.
Barnes, medical director of a chain of private clinics using medicinal cannabis currently advertising to recruit more doctors, said NICE failed to take into account alternative, valid sources of evidence and that the NICE committee was made up of people with negative views about cannabis.

“Those with positive views were excluded from the process,” he said.

Sean HockingAugust 21, 2019

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AUTHOR: “Jordan Zoot. “aBIZinaBOX Inc., CPA’s“

PUBLISHER: CANNABIS LAW REPORT

IRS Updates CTR Exams – While we do a very significant amount of writing for our clients, partners, friends and the cannabis industry in California as a whole, we also do a very substantial amount of reading, and perhaps our three “go-to reads” are

Tax Talk – Virginia La Torre Jecker, Esq or Let’s Talk About US Tax“ – Virginia is the expert to turn to when it comes to US tax matters affecting international individuals Many US persons face US tax issues simply because they live abroad, purchase foreign assets or have a non-US spouse.

Tax Litigator Blog written by the attorneys at Hochman Salkin Toscher Perez P.C. whom we have known for quite some time, and we regard as among the best of breed tax litigators and criminal tax attorneys on the West Coast.

John Schroyer’s Columns at MJBizDaily – John is one of the few cannabis industry reporters in that covers the legal industry in California that understands what investigative journalism is all about.

Each of the three sources listed above has unique features and content that complement our ability to keep our followers informed and up to date. We thought that preface was long overdue, and now to today’s article.

IIRS Updates CTR Exams

Steve Toscher, Esq. has written an article that seeks to summarize an update to Internal Revenue Manual [“IRM”] Sec. 4.10.4 entitled “The IRS Is Using Its Big Data and Reminds Us and Its Agents That They Have Access to Records of Large Cash Transactions at Financial Institutions“.

The IRS has recently provided interim guidance to clarify actions IRS Examiners must take to analyze and document Currency Transaction Report (CTR) data during an audit. The Guidance, which is effective immediately, will be incorporated into IRM 4.10.4, Examination of Returns, Examinations of Income.

Prior to incorporation, IRM 4.10.4 provided very little guidance on when and how to use the Financial Crimes Enforcement Network’s (FinCEN) Currency Transaction Reports [See Structuring Rules ]. However, this new guidance assists examiners during an audit of a taxpayer’s returns and income.

The Guidance

Financial institutions are required to report all transactions of currency that exceed $10,000 by filing a FinCEN CTR. Information from this filing may be used by an examiner to decide whether to use additional auditing techniques, question sources of income for which tax has not been withheld, and generate leads for potential unreported income, money laundering transactions, and other tax avoidance schemes.

IRS Updates CTR Exams

A CTR provides information that an individual was involved in a transaction that exceeded $10,000. It does not provide information as to who the money belonged to. To remedy this situation, the Guidance has provided the following actions an examiner should take to determine whether the individual names on a CTR is the taxpayer in question:

The examiner must confirm the information on the CTR is for the taxpayer in question.
The examiner must confirm the bank account on the CTR is the taxpayer’s, or whether the bank account belongs to an entity related to the taxpayer.
The examiner must trace the transaction on the CTR to the taxpayer’s bank account.
The examiner must determine the origin of the transaction.
If the examiner is unable to establish a relationship between the CTR and taxpayer through an analysis of the financial accounts, the examiner should ask the taxpayer if they were involved in cash transactions over $10,000.
If the examiner cannot trace the transaction and the taxpayer denies involvement in transactions over $10,000, the examiner may consider issuing a summons for the bank account listed on the CTR.

Examiners must document the steps taken to trace a CTR and their conclusions.

IRS Updates CTR Exams

Our view is that Mr. Toscher’s analysis is an excellent start, but it fails to highlight a number of concerns that perhaps are more apparent to us as CPA’s. They include

A rather unexpected and inept focus by the document’s authors on withdrawals from accounts and financial institutions for expenditures, as the funds in those accounts, have already been traced.

Financial institutions, including casinos, must report each receipt and each withdrawal of currency exceeding $10,000 by filing a FinCEN Currency Transaction Report (CTR). See IRM 4.26.5.4.1, Currency Transaction Reports, for information on the FinCEN forms used for reporting CTRs.

The concept of FinCen Query Request [‘FCQ”] needs to be elaborated upon [1]

IRS Updates CTR Exams

The Title 31 implications for structuring transactions to avoid the rules require further development, particularly for non-plant touching businesses that serve the cannabis industry, particularly Circular 230 Practitioners.

IRS Updates CTR Exams

[1] FinCEN Query (FCQ) is an on-line database query application that replaced the Web-based Currency and Banking Retrieval System (WebCBRS) on February 1, 2014, for all Bank Secrecy Act (BSA) users and on March 31, 2014, for all other IRS users. The FCQ application was developed by the Financial Crimes Enforcement Network (FinCEN) as part of the BSA Information Technology Modernization Program and is accessed via the secure FinCEN Portal at https://bsa.fincen.gov. The FCQ application supports a wide range of law enforcement and regulatory users for access to perform report and data information queries on the millions of BSA reports housed within the FCQ database. The system is designed to provide users with expanded query capabilities, including the ability to query multiple fields, use of four available search options, and use of various search methods to narrow or expand query results.

BSA report filings, as required under 31 USC Chapter 53 and 31 CFR Chapter X, are input and processed through the FinCEN BSA E-Filing System located at http://bsaefiling.fincen.treas.gov. E-filing of these reports became mandatory on April 1, 2013, with the exception of the Report of Foreign Bank and Financial Accounts (FBAR) and Form 8300, Report of Cash Payments Over $10,000 Received in Trade or Business. E-filing of FBAR became mandatory on July 1, 2013. Form 8300 filers currently have the option to file these reports electronically or in paper format. FinCEN Form 105, Report of International Transportation of Currency and Monetary Instruments (CMIR), is submitted and processed through the U.S. Customs and Border Protection in the Homeland Security Department.

Sean HockingAugust 20, 2019

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AUTHOR: “Jordan Zoot. “aBIZinaBOX Inc., CPA’s“

PUBLISHER: CANNABIS LAW REPORT

IDPH Making Effort – we are somewhat pleasantly SHOCKED and SURPRISED that the Illinois Dept. of Public Health in particular, and State of Illinois government, in general, seems to be making a REAL and CONCERTED effort to implement cannabis policy.

A bit of background is in order – I am personally licensed as a CPA in California, Florida, Illinois, New York, and Texas. The firm is licensed in California, Florida, Illinois and Oregon [due to quirks of CPA licensing at the firm and individual levels and types of practice services performed. I spent the first nineteen years of my career located in New York City, the next eighteen in Chicago, and have had an increasing presence in Oakland over the past three years. Our cannabis industry involvement since roughly 2001 has been entirely in California due to our perception that Illinois state government was corrupt as hell…and that even extended to my home town off Evanston [See outrageous lease ordinance for cannabis dispensary implemented by Evanston City Council when Illinois first legalized MMJ at ) Ordinance 40-O-15 Authorizing City Manager to Execute a Lease Agreement for City-Owned Property at 1804 Maple Avenue and Illinois Cannabis Corruption and Secrecy ] A US District Court Judge forced Illinois to add intractable pain to the MMJ statutes qualifying condition in January 2018 [See Article here.] We have addressed the outrageous terms of that lease elsewhere.

IDPH Making Effort To Get It Right

Keep in mind that the State of Illinois legalized medical cannabis [“MMJ”], in August 2013 [Illinois Governor Patrick Quinn signed Public Act 098-0122 “The Compassionate Use of Medical Cannabis Pilot Program Act” into law with an effective date of January 1, 2014 (the “Medical Cannabis Act”)].

The Illinois Legislature passed legislation on June 4, 2018, which would allow potentially thousands of patients to receive medical marijuana as an alternative to highly addictive opioids, a move that could provide a notable boost to MMJ sales. The state’s Governor signed the legislation in August 2018. The legislation allowed the use of medical cannabis as an alternative to opioids – a development that could eventually generate hundreds of millions of dollars in additional MMJ sales. Marijuana Business Daily estimates the move could add tens of thousands of new patients to a program that has roughly 42,000 currently registered.

Illinois had been a highly restrictive MMJ market. But the Marijuana Policy Project noted some key provisions of the legislation that will ease restrictions, including:

Qualifying patients will receive provisional registration allowing them to purchase medical marijuana for 90 days while their application is being processed (or until it is denied).

Criminal background checks and fingerprint requirements will be eliminated for all participants/applicants in the existing MMJ program and the new Opioid Alternative Pilot Program.

IDPH Making Effort To Get It Right

Illinois became the country’s first state to legalize recreational marijuana cultivation and sales through its Legislature, a landmark move that paves the way for the creation of one of the nation’s largest adult-use cannabis markets offering “huge” business opportunities on May 31, 2019 [See Illinois Adult Use and Illinois Cannabis Priorities , and Illinois House Bill 1438.]

It seems that after the difficult climb to legalize adult-use Illinois has started to get its act together. Illinois Governor J.B. Pritzker signed new legislation on

MMJ qualifying conditions added are chronic pain, anorexia nervosa, irritable bowel syndrome, migraines, osteoarthritis, anorexia nervosa, Ehlers-Danlos syndrome, Neuro-Behcet’s autoimmune disease, neuropathy, polycystic kidney disease and superior canal dehiscence syndrome. Chronic pain tends to be the leading driver for MMJ sales.

Nurse practitioners and physician’s assistants, like doctors, now can certify patients for the program. [This is groundbreaking for MMJ programs]

The expansion gives added heft to a program that was bolstered substantially in late January when an opioid alternative pilot program kicked in. Former Republican Gov. Bruce Rauner signed that legislation.

IDPH Making Effort To Get It Right

We note that the enactment of adult-use legislation usually results in a decline in MMJ use of cannabis. However, Illinois has done something very encouraging in this regard.

The state’s MMJ program is that there is only a 1% sales tax.

Buyers of adult-use cannabis products, on the other hand, can expect to pay a retail tax of 19.55%-34.75%, depending on the product’s potency, according to the Marijuana Policy Project.

The Marijuana Business Factbook recently projected that the Illinois MMJ market would generate $200 million-$240 million in sales in 2019, up from $132.9 million in 2018.

While we have been reluctant to involve our practice in the Illinois cannabis market for close to twenty years, we may test the water. The first major step in this direction is that I have personally applied for an Illinois MMJ card due to my continuing struggle with diabetic neuropathy in my feet. The background to my healthcare team includes my Endocrinologist and Neuromuscular Neurologist at Northwestern Memorial, and Wound Care/ and Pain Management at Shirley Ryan Ability Labf/k/a Rehabilitation Institute of Chicago [“RIC”].

IDPH Making Effort To Get It Right

We are going to try both topical CBD for day time use and a high-concentration THC product for night-time pain use. The current Illinois MMJ program Dehabilitating Conditions list is here. The website for the IDPH Opioid Alternative Pilot Program is here. The overall growth of the Illinois MMJ program can be tracked here. The main website for the Illinois MMJ Cannabis Program.

If you are a licensee or are seriously considering applying for a license for a “plant-touching” cannabis business in Illinois preferably in Cook, Lake or McHenry County, we would REALLY like to hear from you. We have very deep and extensive experience with the legal cannabis industry on the Federal level, with extensive experience in California, and significant experience in Oregon. We would be willing to substantially discount our fees and dive into the Illinois cannabis market if we had a significant client. Our further preference is for an operator that is either substantially capitalized or venture-funded with a minimum of $2MM capitalization. Our experience is that we are overpowered for a “mom and pop” and most “friends and family” operations. If you have the interest, enter your contact information below.

Heather AllmanAugust 16, 2019

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AUTHOR: Heather Allman

PUBLISHER: CANNABIS LAW REPORT

Through late July, the 2019 Cannabis Crusade saw daily cannabis-related news and a literal state of medical marijuana commotion. A timeline of Florida’s battle for solid ground has been outlined in depth throughout my previous articles.

While the strong Florida medical marijuana Crusaders marched forward, the state itself and the legislators who comprise the Rear Battalion lost some footing.

On July 11, 2019, a Florida Appellate Court ruled in the highly-publicized Florigrown lawsuit that the state’s vertical integration was unfair and unconstitutional.

Further explanation and clarity was offered by Beau R Whitney, Vice President and Senior Economist at New Frontier Data, with his insightful Florida Court Rules Vertical Integration Unconstitutional: So, What Now? :

“A Florida court of appeals decision last month ruled that the state’s regulatory framework for its medical cannabis program mandating vertical integration was unconstitutional. What does it mean for Florida’s system, or for other states? What are the associated implications? They may prove vast, impacting not only Florida’s system, but other state regulatory structures throughout the country.

Immediately, regulators in other states with newly legalized programs will seek to avoid similar pitfalls while striking an effective regulatory balance: Oregon’s unlimited license policy is an opposite example of what other states yet prefer to avoid. Florida’s blueprint for vertical integration had been an obvious bulwark against unlimited licensure, but the court essentially deemed it to be an overcorrection.

Vertical integration allows a company to control all factors of production, from seed to sale in terms of the cannabis trade. The benefits of vertical integration are derived through being able to manage all aspects of the supply chain, affording ultimate control over internal costs of production. There are also associated tax advantages (for now), as one division can pass through costs throughout the chain.”

However, the state is slowly earning back some much-needed ground with tactical policy advancements. Coastal Breeze News reported on July 21, 2019 that Florida currently is Working Together to Fix a Broken Political System.

Florida’s marijuana future is showing promise. NORML Outreach Director Kevin Mahmalji reported that one Florida Municipality Is Considering Marijuana Decriminalization Measure. For such an initiative to come to fruition, Florida must consider and adopt good, balanced cannabis frameworks, such as the vital GCP Responsible Cannabis Framework.

On July 18, 2019, in the current spirit of national cannabis cooperation, Bipartisan Lawmakers File Congressional Bill To Encourage Marijuana and CBD Research: “A bipartisan group of House members introduced a bill on Wednesday that would eliminate barriers to research into medical cannabis,“ a bill that is gaining new co-sponsors weekly.

Although thirty-three states and the District of Columbia have legalized the medical use of cannabis, according to the National Center for Biotechnological Information, 15 Challenges and Barriers in Conducting Cannabis Research still exist: “Despite these changes in state policy and the increasing prevalence of cannabis use and its implications for population health, the federal government has not legalized cannabis and continues to enforce restrictive policies and regulations on research into the health harms or benefits of cannabis products that are available to consumers in a majority of states.”

In late July 2019, Marijuana hearings and reform bills directly affecting the marijuana industry were introduced in the U.S. Congress: “Cannabis has gone from the butt of jokes on Capitol Hill to milestone hearings and the introduction of landmark legalization reform packages that offer the potential to pave the way for billions of dollars in new business opportunities nationwide.

The current situation is in stark contrast to just a couple of years ago, showing how far and how quickly marijuana reform has come in Washington DC – even if it doesn’t appear at the moment to have a good chance to pass the full Congress. But the efforts could set the foundation for passage of major reform in the next few years.”

What specific growth did the current Florida program experience? It begins and ends with Curaleaf.

In mid July, Wakefield, Florida-based Curaleaf continues expansion as largest US marijuana company with $875M Grassroots merger, according to Shira Schoenberg: “The Wakefield-based marijuana company Curaleaf announced Wednesday that it had signed an agreement to acquire the Illinois-based Grassroots. It is part of a continued expansion that Curaleaf says has made it the largest marijuana company in the world based on revenue, and the largest operational marijuana company in the U.S. Curaleaf’s revenues are expected to be nearly double that of its closest U.S. competitor.”

In more notable state growth, Liberty Health Sciences, another rapidly expanding Florida licensed dispensary, also made news.

Liberty Health Sciences Ranks #2 In Flower Sales In Florida, according to a report on cannabis sales: “It has the second highest sales of smokable marijuana in the state of Florida with 16 dispensaries open. Liberty was one of the first companies in the state to provide smokable medical marijuana in all of its dispensaries when bill (SB 182) was signed into law in March 2019.

Flower sales of Liberty and Papa’s Herb brands is the driving factor of the significant market success for this growing category and the Company continues to cultivate brand recognition and attract a constant stream of new patients.”

Greg Miller, Executive Director, NICI offered a fresh perspective on the strong foothold of Florida’s Liberty Health Sciences in his enlightening piece on how This Company Is Raking in the Cash in Florida: “In terms of infrastructure, companies with a medical dispensary now have the edge over companies entering the market after recreational legalization. Current medical dispensaries pretty much already have everything needed in place to sell recreational cannabis.

With 10,000 new patients signing up each month, there’s a cannabis land rush in Florida right now. And if you’ve been following along with industry news, you may have seen that this company is second highest in sales for smokable cannabis in the Sunshine State.

Currently, Liberty Health Sciences Inc. has 16 open dispensaries in Florida, and it plans to open three more dispensaries in August. It is also one of the first companies in the state to offer smokable medical marijuana.”

Liberty Health Sciences » STOCK » Liberty Health Sciences Inc. (LHS.CN) (OTCQX: LHSIF)

Trulieve Cannabis has planted itself firmly in its home market of Florida. This state dispensary frontrunner announced that Availability Of Flower Boosted Florida’s Medical Marijuana Market In Q2: “Tallahassee, Florida-based Trulieve Cannabis Corp. benefited from 19% medical marijuana patient growth in The Sunshine State in the second quarter, fueled largely by the introduction of smokable flower in the state’s medical market, the company said Wednesday.

Flower accounted for half of product sales in Florida in the quarter, the company said — a quarter-over-quarter increase of about 20%.”

Trulieve Cannabis Corp.» STOCK » Trulieve Cannabis Corp. (OTCQX: TCNFF

How did the setbacks of our current state program play out nationally in July 2019?

The latest assault on Florida’s fledgling cannabis program was highlighted by both CNN and Cannabis Business Times: FDA Issues Warning to Curaleaf for ‘Unsubstantiated’ CBD Health Claims: “The warning letter included some examples of how Curaleaf Hemp products have been marketed on the company’s social media accounts.”

The fallout for Curaleaf is examined further in A Bump in the Road to Cannabis Scale: “Investors immediately slammed U.S. Cannabis stocks, which resulted in a decline of 3.6% for the NICI U.S. Cannabis Index. Curaleaf’s stock suffered more, selling off 7% and continuing its decline yesterday.”

MarketWatch continued to pay close attention to Curaleaf trading with a July 24, 2019 report stock fluctuations in Curaleaf shares tumble 8% after FDA sends warning letter over CBD health claims.

Paula Krasney outlines allowed CBD claims in Proceed with Caution: Marketing Claims for Cannabis and CBD Products. And yes, there are also solid cannabis advertising guidelines available for Florida to adopt statewide, such as the NACB National Advertising Standards: “Cannabis advertising serves as the public face of the industry, and is thus essential to establishing a trustworthy, professional, and ethical business space. The NACB believes that self-regulation is the most effective way for the cannabis industry to control its own destiny. With consumer-targeted ads becoming more prevalent, we need to self-regulate or we will face charges by heavy-handed government-driven rules that may hinder business’s ability to market to and educate consumers.”

These NACB national advertising standards clearly establish how important it is “that the Cannabis industry develop a robust set of business-approved guidelines to build trust amongst market participants and local state and national regulators. The self-regulatory model has worked for organizations like FINRA and the MPAA, and it can work for cannabis.”

Curaleaf » STOCK » Curaleaf Holdings (CURLF:OTCQX) » LEARN » WeedWeek’s Green Rush Glossary– Alex Halperin

In early August, J. Phillip noted that Cannabis Stocks Bounce Back As FDA Signals Key Regulatory Developments: “The industry got a massive boost after the United States Food and Drug Administration made efforts to speed up the process of creating the framework for the usage of CBD. The arguments in favor of CBD are compelling. It does not have a psychoactive effect and is well known for helping people deal with anxiety, pain, and inflammation among others.

The agency is ‘expediting its work’ in order to address the CBD issue. Considering the fact that CBD is all set to become one of the biggest industries in the years to come, many of the leading cannabis companies want to have some regulatory clarity from the FDA regarding its stand on the substance.”

What Summer 2019 growth happened in the medical marijuana program at large?

With the newfound prevalence of CBD, there is plenty of misinformation to go around without unproven health claims. On July 25, 2019, The Conversation published Cannabis: Misinformation About CBD Can Be Life-Threatening: “CBD is largely non-intoxicating and therefore is thought to be non-addictive. It also appears to be relatively safe to use. It’s no wonder CBD has garnered so much excitement and positive attention.”

By August, A Petition Milestone signals Recreational Marijuana Is One Step Closer in Florida made headlines, marking a big win overall for marijuana and allowing the possibility for advancement in our state’s medical program.

Exciting dispensary news that another licensee Florida Pot Operator Gets ‘Okay’ For More Storefronts was announced on August 9, 2019: “State health officials have agreed to allow a second Florida medical marijuana operator to exceed a statutory limit on storefronts. The cap on dispensaries, now set at 35 for each operator, was included in a 2017 state law carrying out a constitutional amendment that broadly legalized medical marijuana in Florida.

Health officials on Monday agreed to allow Alpha Foliage, which operates as Surterra, to open six more dispensaries. The company sued after the Department of Health allowed a competitor, Trulieve, to exceed the statutory cap. Surterra attorneys asked the state to interpret the law consistent with the way it did for Trulieve.”

Now that the state has 148 locations, Florida lawmakers and department administrators must pay attention to patient demand and start the Edibles engine. Finalized rules for the state dispensaries to follow must be released so that production and sales can begin immediately. It is long overdue, two years overdue, and Florida patients are entitled to Edibles.

In the meantime, Floridians will have to celebrate the small victories: Palm Beach County law restricts Police Officers from searching vehicles under certain circumstances.

How is the current Florida education system experiencing growth from marijuana reform?

The state’s policymakers at University of West Florida have developed a course called Changing Normative Environment, covering “Medical Marijuana (MMJ) to Recreational Marijuana (RMJ), and the many ways that medical marijuana has influenced social norms and behaviors related to marijuana usage.”

Brittany Shammas announced on August 7, 2019 that a Florida College Will Offer Medical Marijuana Classes: “Miami Dade College officials are working on new classes and a certificate program that’ll prepare students for jobs in the medical marijuana industry. But, administrators stress, they won’t be teaching kids how to grow weed. Instead, they’re developing courses on the biology and chemistry of marijuana, as well as the plant’s historical usage and evolving regulation.

That means students will be taught the academic side of marijuana: the physiology of the plant, its natural properties, its medical usage, and how it relates to other medically important plants. They’ll learn about cultivation and extraction, but mostly from a ‘theoretical standpoint,’ says Mark Meade, chair of the college’s Biology, Health, and Wellness Department.”

Florida 2017 legislation “calls for FAMU to receive $10 from each $75 identification card obtained by those approved to purchase medical marijuana. As of last October, the university had received $885,000, according to the Florida Department of Health,” concerning Florida A & M University and its inaugural MMERI, or Medical Marijuana Education Research Initiative, as reported by The Tallahassee Democrat.

Nationally, University of California, Davis “Partners With DEA-Approved Company to Conduct Cannabis Research – Researchers Will Seek to Better Understand the Science of Cannabis,” as outlined by Amy Quinton.

Are there corresponding educational setbacks with this new norm of marijuana use?

This USA Today’s opinion warns younger users that Marijuana needs warning labels like tobacco for associated mental, physical health risks.

What about physician educational setbacks concerning the new norm of cannabis use?

Bottom line: physicians-in-training are not prepared to prescribe medical marijuana.

In November 2017, Drug and Alcohol Dependence, warned: “With even more states on the cusp of legalizing medical marijuana, physician training should adapt to encompass this new reality of medical practice. (1) While most physicians-in-training think education about medical marijuana should be required; (2) only 9% of medical schools have medical marijuana documented in their curriculum; and (3) education can improve physician preparedness to prescribe medical marijuana.”

How can we improve awareness of cannabis as a medicine within the medical community?

“Why are some doctors still reluctant to prescribe medical cannabis despite evidence of its efficacy? The principal reason is the lack of education. Most doctors have never studied medical cannabis, they only know that cannabis is a drug and that it has no medical application, because that is what they were taught at the university.

This poses a problem because despite the fact that this plant has been medicinally used for thousands of years, doctors are not taught anything about the history of plants with medicinal properties, nor have they studied the endocannabinoid system, the endogenous system that we all have that is the basis of how cannabis works and acts therapeutically in our bodies.

This system was discovered more than 25 years ago, and yet it is still not taught in most universities. It is a shame because it’s such an important system brings balance – so called homeostasis to our bodies.”

For further insight, the Society of Cannabis Clinicians offers a comprehensive report on Educating Healthcare Professionals About the Medical Use of Cannabis.

Sean HockingAugust 16, 2019

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AUTHOR: Patrick McKnight

PUBLISHER: CANNABIS LAW REPORT

August 16, 2019

New Jersey May Renew Push to Legalize Marijuana in 2019

Recent comments from Governor Phil Murphy and Senate President Steve Sweeney suggest one final legislative effort to legalize marijuana in 2019.

“I think I’ve been consistent that I hoped we could have one more shot at this,” Murphy told reporters last week. “Getting something to happen sooner, if we have a real shot at that, I’d be all in. … Count me all in to try and work toward that.”

The Governor’s promised to legalize marijuana within his first 100 days in office. That was nearly two years ago. The following year and half have been a rollercoaster of rising and falling expectations for reform advocates. After Murphy and Sweeney came to an early 2019 agreement regarding how recreational marijuana would be taxed, the stage appeared finally set for a legislative vote.

In a surprise decision, the vote was called off at the last minute due to a lack of support. Sweeney then announced the measure would be on hold until it could be presented as a ballot initiative for voters to decide in 2020. The legislative effort to legalize marijuana thus appeared on indefinite hiatus. Both leaders’ recent comments indicate otherwise.

Shortly after the New Jersey bill was tabled earlier this year, Illinois passed a legalization bill through its legislature. Perhaps more important for economic considerations in the northeast, the State of New York decriminalized marijuana in July. New Jersey politicians may now feel in danger of losing a first-mover advantage in the region.

Governor Murphy has been more successful in expanding New Jersey’s medical marijuana program through executive action. In July he also signed a new bill to further loosen restrictions and increase access to the program. Enrollment has increased from 15,000 to nearly 50,000 patients since Murphy took office.

New York Decriminalization Bill Signed Into Law

The New York legislature passed a decriminalization bill in June. Governor Andrew Cuomo signed the bill into law in late July. The law both expunges many past convictions for marijuana possession and reduces penalties in the future. Advocates initially proposed full legalization but shifted strategy after it became clear they lacked enough votes.

“It does do two good things,” said Emma Goodman, a staff attorney in Legal Aid Society’s special litigation unit. Goodman worked with legislators to lobby for legalization.

“It makes something that was a misdemeanor now a violation, and it automatically expunges old misdemeanor convictions,” Goodman said. “That’s more than a lot of states have done. The problem is that it’s just getting rid of one very small amount of low-level offenses and it’s not actually legalizing marijuana … violations are still arrestable offenses in New York.”

New York’s medical marijuana program has approximately 102,000 patients. Some Empire State doctors have begun advocating for expanding the program as a safer alternative than opiates for treating chronic pain.

Pennsylvania Expands Medical Marijuana Program

Pennsylvania now includes anxiety and Tourette’s on the list of qualifying conditions for enrollment in its medical marijuana program. The recent move by the Pennsylvania Health Department will allow medical marijuana for conditions beyond cancer, epilepsy, seizures, post-traumatic stress disorder, and terminal illness. Similar decisions in other states have led to significant increases in enrollment.

The Keystone State currently has nearly 116,000 patients certified for participation in its medical marijuana program. The program is relatively new, coming online in February 2018.

“The first year that the state’s medical marijuana program has been operational tells us that this program is working to help Pennsylvanians in need of this medication,” Governor Tom Wolf said. “Patients are realizing the benefits and there has been steady, positive progress that I am pleased to report.”

In its first full year, Pennsylvania collected $2 million in tax revenue from growers and processors. Dispensaries reported $132 million in sales. The program has also expanded to allow patients to purchase marijuana is dried leaf form. Initially only pills, liquids, or topical ointments were permitted.

“Our goal for the next year and beyond is to increase the number of grower/processors and dispensaries operating, to register even more physicians and to continue the growth of our scientific, medically based program,” said Department of Health Secretary Dr. Rachel Levine said.

Pennsylvania’s medical marijuana program is noteworthy for its promotion of scientific testing. As part of the program, the state certified eight academic clinical research centers. The mission of the clinical program is to conduct, “Research on the therapeutic or palliative efficacy of medical marijuana limited to the serious medical conditions defined by the act and the temporary regulations.” The state also has four approved laboratories for quality testing and sampling.

Efforts to legalize recreational marijuana have struggled to gain traction. In July, a county judge made headlines when he predicted legalizing marijuana would produce “carnage” on Pennsylvania roadways.

“Marijuana is an hallucinogen,” said Dauphin County Judge William T. Tully. “The idea of legalizing it given the carnage that is likely to result is incomprehensible to me.”

Governor Wolf and Lieutenant Governor Fetterman have expressed their support to “take a serious look” at legalizing recreational marijuana.

Patrick McKnight
Law Clerk
Wilson Elser Moskowitz Edelman & Dicker LLP
Two Commerce Square, 2001 Market Street, Suite 3100
Philadelphia, PA 19103
215.606.3994 (Direct)
215.627.6900 (Main)
215.627.2665 (Fax)
patrick.mcknight@wilsonelser.com

Mark TaylorAugust 15, 2019

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AUTHOR: Mark Taylor

PUBLISHER: CANNABIS LAW REPORT

Luxembourg is to become the first European Union country to fully legalize cannabis. The country’s health minister said within two years, residents aged over 18 will be able to buy marijuana for recreational purposes.

A newly-created regulator will oversee production, distribution, and oversight.

Officials are drawing up legislation to be unveiled later this year, which will detail the type of cannabis to be supplied and the taxation levels.

Tourists beware, it is almost certain that non-residents will be unable to purchase cannabis in Luxembourg, and it is also expected that home-growing will be banned. Punishments for breaking the laws are predicted to be severe.

Residents under 18 but over the age of 12 won’t be criminalized for possessing less than 5 grams but can expect a large fine.

In an interview with Politico, Etienne Schneider encouraged other EU member states to follow Luxembourg’s leading, citing strides taken in Canada, Uruguay, and parts of the US.

Luxembourg had previously legalized cannabis for medicinal purposes, and recreational use was partially decriminalized for small amounts, although growing, selling and producing the drug remains a criminal activity punishable by law.

The EU state is aiming to follow Canada’s lead and allow residents to hold up to 30g, and tax recouped will go into drug education programs, along with addiction recovery treatments.

“The drug legislation we have been applying for 50 years has not worked,” said the health minister of Luxembourg, Etienne Schneider. “Prohibiting products has made them more attractive to young people. I’m hoping all of us [in the EU] will take a more open-minded attitude toward drugs.”

Less than a dozen EU states have decriminalized cannabis in some minor form, but the drug remains prohibited at the international level, and users even in liberal areas such as Spain and Portugal can expect some level of punishment if caught.

Luxembourg’s move is against the grain within the EU and may cause friction with neighboring states. Germany has no desire to form a recreational market, having enough problems getting a medicinal industry off the ground.

France, along with Ireland and Switzerland, has floated medicinal cannabis trials, but all have added the caveat that such a move will not lead to an adult recreational market.

At EU level, Brussels is keen on reviewing rules around medicinal cannabis research in order to allow firms to push ahead with trials and tests, but the formation of legislation is slow, and a recent European Parliament election has also added to shifting priorities.

Sean HockingAugust 15, 2019

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AUTHOR: “Jordan Zoot. “aBIZinaBOX Inc., CPA’s“

PUBLISHER: CANNABIS LAW REPORT

Cannabis-Sharia-Finance

Cannabis-Sharia-Finance – Our attempt at covering a topic we wish we knew more about – expert input welcomed for an update/edit.

Sharia, Islamic Law and Narcotics or Psychoactive Drugs

Marijuana, hemp, or hashish is a psychoactive drug from the Cannabis plant, used for recreational or medical purposes. The main psychotropic ingredient of cannabis is a compound called tetrahydrocannabinol or better known as (THC), a compound responsible for causing an intoxicating effect. Marijuana can be consumed by smoking, vaporizing, within the food, or as an extract. Under Sharia law, marijuana is categorized under narcotics or “Mukhaddirāt.” In Arabic, muhkadirat or narcotics are any substance that makes a person feels sluggish and lazy, deprives sensation, and covers mind.

Regarding the Sharia rule on narcotics, there is no reference to drugs or narcotics in the early years of the Islamic era, even in the holy scripts of the Quran or the Sunna. Classical fuqaha’ (jurists) did not define what narcotic is even though they talked about various types of intoxicants. Instead, they focused on the general principles regarding intoxication to explain rulings. To understand how the jurists extrapolate a judgment regarding marijuana, we need to understand the reason for the prohibition of wine and alcohol beverages. Sharia law prohibits consuming wine and alcohol beverages, considering it as one of the major sins. The majority of the fuqaha’ (Maliki, Shafi’i, and Hanbali schools of thoughts) said that the reason for the prohibition of wine is the intoxication based on the Prophetic hadith states that “Every drink that causes intoxication is forbidden.”[1]

Cannabis-Sharia-Finance

Based on the prohibition of wine, as a general principle, intoxicants that alter an individual’s mind or affect perception, judgment, behavior, and ability to think are impermissible under Sharia. Therefore, recreational marijuana is forbidden.

Medical Use of Marijuana

Under Sharia, it is permissible to use marijuana for medical purposes under the “Doctrine of necessity,” one of the Islamic Jurisprudence principles that states “necessities permit the forbidden.” However, permissibility is not ultimate, several conditions must be met. The purpose of these conditions is to ensure that there is a real and absolute necessity. Using cannabis-based products and narcotics in general for medical treatment is permissible in the following cases:

1. If the need for using such substance was an absolute necessity or “dharura” because necessity is the only exception that can make what originally forbidden to permissible. Relieving symptoms of pain, chronic conditions, or acute severe pain is a medical necessity.
2. If the medicine is prescribed by a qualified and trustworthy physician who is considered as an expert in the field.
3. In the absence of alternative lawful medicine that has the same efficiency.
4. Using minimal amount to meet the patient medical need, and any over need doses considered impermissible.
5. If the medicine does not cause harm that equal to or greater than the damage that already existed based on the Prophet’s (peace be upon him) saying: “There should be neither harming nor reciprocating harm.”

In summary, using narcotics–including cannabis– for recreational purposes is forbidden under Sharia because it is intoxicant that affects the person’s mind and judgment. Using cannabis for medical reason is permissible as long as the condition stipulated above are met.

Cannabis-Sharia-Finance

[1] Sahih Muslim, Book of drinks, Ch.7, every intoxicant is wine and every wine is forbidden, No. 2001. [A]

Sharia Law and Commercial Finance Transactions

[I pirated this from the website of the Federal Reserve Branch in Richmond, VA merely to share some background about Islamic finance rules] I have some background with this because a number of our clients do business here in Chicago with Devon Bank which is one of the US FDIC Chartered Banks that offers Islamic Finance products.

Islamic finance may be rooted in ancient texts, but as an industry it is relatively young.

The broader field of Islamic economics originated in 1930s India, when the country’s Muslim population, then about one-fifth of its total, feared marginalization by British colonialism and the Hindu-led movement for Indian independence. Heavily indebted Muslim farmers throughout the country were at risk of losing their land. Scholars blamed an abandonment of Islamic principles and called for a return to “true” Islam. Economist Timur Kuran of Duke University, author of several books and articles on Islamic economics, has argued that this revival was part of a broader movement to restore Muslims to their faith, carve out an identity for Muslim minorities, and generally protect Muslim interests. The state of Pakistan emerged from the same effort.

Usury discussions in religious texts far predate this movement, of course. Many followers of Islam, along with other religions, loosened usury restrictions over time, until the last century when older notions of usurious interest were revitalized. Still, what constitutes riba has long been controversial. To some scholars, it means excessive interest — which led poor, indebted citizens to slavery in medieval times — while to others, it means any interest at all. Scholars have also disagreed on the virtues of charging interest for business investment versus consumption, allowing for inflation compensation, and a host of other matters.

Cannabis-Sharia-Finance

Modern Islamic finance takes the narrower interpretation that no interest is permissible. Three alternative products are available in the United States. One of the most common contracts is musharaka, in which the lender and customer own an asset together, with the borrower’s share of the property increasing gradually with his payments until he assumes ownership entirely, with profits and losses shared. In a murabaha contract, the lender purchases an asset — a home or even commercial equipment — on behalf of a borrower, who gradually pays back the principal plus an agreed-upon markup and assumes ownership at the end. Ijara contracts resemble a lease-to-own arrangement that includes both repayment of principal and a rental fee for exclusive use of the asset.

The first bank following Islamic law opened in Egypt in 1963. Following the global oil boom, the industry developed in earnest in the Middle East in the mid-1970s. In the 1990s, the first international accounting standards were developed for Islamic finance, and the first market emerged for Islamic bonds. Those bonds, called sukuk, tie investments to tangible assets that issue payment streams based on their revenues, much like securitized equity financing.

Islamic finance came to the United States in the 1980s when two institutions opened on the West Coast. Their investment and home finance services were available only regionally. The market broadened considerably in the late 1990s, paralleling the Muslim population growth in the United States: 50 percent in the 1990s, and two-thirds in the 2000s.

Cannabis-Sharia-Finance

The institutions operational today provide services in several states, most prevalently where the Muslim population is concentrated. University Islamic Financial (a subsidiary of University Bank) based in Ann Arbor, Mich., serving the large Muslim population of metropolitan Detroit and surrounding states, is the first and only exclusively Sharia-compliant bank in the United States — it offers no other products. Devon Bank in Chicago is the only other bank regularly offering Islamic financing products. Reston, Va.- based Guidance Residential is the largest nonbank financial institution offering Islamic finance services, having provided more than $3 billion — which it claims is nearly 80 percent of the total — in musharaka mortgage financing in 22 states since its doors opened in 2002. California-based LARIBA is another large Islamic mortgage lender, and it also provides business financing.

We are certainly not experts on these topics and would welcome some expertise to refine this piece.

[A] See Medical Marijuana under Sharia

Sean HockingAugust 14, 2019

If you wish to re-publish this story please do so with following accreditation

AUTHOR: Halston Puchek, Hoban Law Group

PUBLISHER: CANNABIS LAW REPORT

If you’re asking yourself who’s buying CBD products, just take a stroll to your local grocery store and mosey over to the vitamins and supplements section. Prepare to be overwhelmed by the thousands of nutraceutical “wellness” products filling the shelves – everything from melatonin chocolates for sleep-aid to echinacea for immune support – and yes, very recently products containing the compound that’s outshined Beyonce in popularity, CBD. Each year, shoppers spend billions on these items. Now that CBD has a place on these shelves, and it’s looking like it’s going to stay that way given that the leading trade association for nutraceutical products, AHPA, is hosting a CBD-tailored event in Denver later this month.

Regarding unregulated wellness products and the Food and Drug Administration, there’s been a long-standing issue concerning claims being made, a reality the cannabinoid-infused industry must reckon with. We’ve seen some of the largest hemp market companies be warned by the FDA, Charlotte’s Web Botanicals in 2017 and in recent weeks Curaleaf. It’s a clear message and one every supplement and vitamin product at Whole Foods, Natural Grocers, Kroger or elsewhere has to abide by: you can’t claim these products are “intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease and/or intended to affect the structure or any function of the body.”

With an industry less than five years old, shoppers must confront that poor-quality, misrepresented CBD products are out there. It’s no surprise that in an industry that could hit $20 billion by 2024, bandwagon jumpers will try to make a quick buck.

With that in mind, where you shop for CBD makes a big difference. You don’t expect to find the same products at 7/11 and Whole Foods. If you’re the kind of shopper who loves to do research on your own, by all means, navigate the market unaccompanied. For those of us who don’t have the time (or the interest) to dive into the weeds alone, there are emerging retailers taking the snake oil out of the equation.

Take ehemp.com, a forthcoming marketplace for hemp-based products. They sought guidance from the leading cannabusiness law firm, Hoban Law Group, in establishing a rigorous vetting process to ensure CBD-containing products sold on the site abide by existing federal guidelines for natural products. President of ehemp, Jessica Lesesky, stresses the point, “We want to be a legitimizing force. That’s why we make a commitment to our shoppers that what’s on the label is actually inside the bottle.”

Despite the challenges, she’s highly optimistic: “From what I’ve seen, this is a like-minded community of businesses,” she says, “The majority are focused on people over profit. I’ve heard all the pitches in retail and e-commerce. What struck me was how different the conversations were when I entered the hemp space. These companies are purpose-driven and the discussion always starts with the ‘Why.’ Whether they have a touching personal story or they genuinely find joy in helping people, there’s a mentality of ‘a rising-tide-lifts-all-boats’ and a collective goal to protect consumers from bad actors.”

So who’s buying CBD and why?

Founder of 101CBD.org, Justin Benton, says this of the majority of his CBD customers, “These are members of the baby boomer generation and retirees who have tried many products – regulated medications and wellness alternatives – but found little to no relief. If there’s something out there that can help them, they deserve access. We follow up with our customers on how our Raw CBD product treated their body and the responses we get indicate we’re on the right path. We’re flooded with feedback from our repeat customers that we’re providing something that works for them. To us, that’s what this is all about. Our clients are realizing that they don’t have to live like this anymore.”

CBD customers are you, your neighbors, your friends, your family – everyone dealing with mounting health challenges and physical and emotional stressors. Give informed consumers a choice and they’ll start to exercise it. At the end of the day, hemp has been hanging out on Mother Earth for thousands of years. Some of us are simply choosing to heal.

Halston Puchek, Hoban Law Group

This article has been prepared for informational and general guidance purposes only; it does not constitute legal or professional advice. You should not act upon the information contained herein without obtaining specific professional advice. No representation or warranty (express or implied) is made to the accuracy or completeness of the information contained in this publication. Hoban Law Group, its members, employees, and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based thereupon.

Sean HockingAugust 13, 2019

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AUTHOR: “Jordan Zoot. “aBIZinaBOX Inc., CPA’s“

PUBLISHER: CANNABIS LAW REPORT

California DOJ Medical Cannabis Rule Summary -The 16-page document from Attorney General Xavier Becerra’s office is “a good, solid first step” for enforcement, Kazan said. It spells out what is and what isn’t lawful grow.“I appreciate that it is coming from the top,” he said. The document summarizes more than 20 years of state laws, regulations, and guidelines concerning the growing, distribution and transportation of medicinal cannabis in the Golden State. The purpose of the release was “to reflect the evolution of cannabis legalization in California,” according to a statement from the Attorney General’s Office.

California has no uniform marijuana policy despite voter-approved initiatives that have legalized medicinal and recreational cannabis. Each local government is given latitude to decide for itself whether to allow cannabis businesses to operate. When it comes to seizing product or even involving the federal government, Spiker said law enforcement in the past has tended to ‘shoot first, aim later.’ This document provides police with a reminder that “we have a licensed, legal industry, let’s make sure that’s in the back of our minds,” he said. The summary also lets medicinal cannabis patients know both their rights and their responsibilities, he said.” I think they’re collating all these different laws and regulations into one document for the medical industry,” Spiker said.

CA DOJ Medical Cannabis

In 1996, California voters approved Proposition 215, the Compassionate Use Act of 1996, which exempted certain patients and their primary caregivers from criminal liability under state law for the possession and cultivation of marijuana for medicinal use. (Health & Saf. Code, § 11362.5.1 ) In 2003, the California Legislature enacted Senate Bill 420, the Medical Marijuana Program Act, which clarified requirements related to medical marijuana. Pursuant to the legislation, the Office of the Attorney General is required to adopt “guidelines to ensure the security and non-diversion of cannabis grown for medical use.” (§ 11362.81, subd. (d).) To fulfill this mandate, the Office of the Attorney General is re-issuing and updating these guidelines to (1) ensure that cannabis grown for medicinal purposes remains secure and does not find its way to non-patients or illicit markets; (2) help law enforcement agencies perform their duties effectively and in accordance with California law; and, (3) help patients and primary caregivers understand how they may cultivate, transport, deliver, possess, and use medicinal cannabis under California law.2

We are going to have quite a bit to say about the document…as a start…

There is no mention or discussion of Attorney General Brown’s 2008 Memorandum
There is no acknowledgement of possible limitations due ot the “safe and affordable” language in Proposition 215.
The guidelines do not distinguish between “collectives,” “cooperatives” and “Chapter 22 cooperative associations. “CCA”s”

Our take away for medical cannabis is, that the only thing that has really changed is you had better get a license.

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