The cannabis market is rapidly evolving to include both the medical and recreational production and use of cannabis and cannabis-derived products , medical and other research and development, and cannabis’ industrial derivative, hemp.
On the whole, cannabis stock prices are expected to rise with more favourable legislation, and states which have seen cannabis laws pass are likely only to hand out a finite number of licences.
However, there really is no guarantee that it will, and any change at the federal level is likely to be incremental and gradual.
Where banking and other institutions engage in transactions involving cannabis or proceeds from the sales are concerned, the Bank Secrecy Act, Money Laundering Statute, and Unlicensed Money Transmitter Statute are the three primary federal criminal laws that can be triggered.
Since cannabis is not legal at the federal level, banks generally refuse to provide basic banking services to cannabis businesses.
The Bankruptcy Code includes significant protections to those entities which elect to take advantage of an opportunity for a fresh start, including a broad stay against virtually all creditors, located in any state, from continued attempts to recover property of the bankrupt debtor – even through the state or federal judicial system.
In April of 2017, the Director of the Executive Office for United States Trustees, which oversees the federal government’s interest in bankruptcy cases, made clear that it was the policy of the United States Trustee Program that United States Trustees move to dismiss all cases involving cannabis assets on grounds that such assets may not be administered under the Bankruptcy Code.
However, you must read the policy carefully to determine policy limits and confirm whether certain coverage is carved out.
Since many cannabis-related businesses primarily operate with paper currency, and house a large amount of product that can be stolen and sold on the black market, crime is a significant part of their risk exposure.
Under the Farm Bill, hemp is defined as cannabis but with no more than 0.3% of THC are a set of chemical compounds found in the cannabis plant.
With its legalisation, federal agencies, like the FDA and FTC, must treat CBD and cannabis.
In addition, while off-site usage is protected, the law includes provisions allowing employers to take action against employees who are impaired at work where their performance is lessened or the employee’s conduct interferes with the ability to provide a safe and healthy workplace.
This experience has enabled Mr Clarke to assist clients with their navigation of such regulatory schemes outside of bankruptcy, including in the space of cannabis law.