In the Weeds: Delta-8 Warnings, Cannabis Use for Athletes and Use in California Healthcare Facilities

October 5, 2021
Newsworthy Highlights

FDA and CDC Issue Warnings on Delta-8 Use. In response to a marked uptick in reported adverse reactions and hospitalizations, the U.S. Food and Drug Administration (FDA ) and the Centers for Disease Control and Prevention (CDC) separately issued consumer warnings addressing Delta-8 risks. Each agency identified adverse health reports to national and state poison control centers. The agencies also highlighted potentially harmful ingredients that may be used in these unregulated products.

World Anti-Doping Agency to Review Cannabis Ban. The 2021 Tokyo Olympics raised the profile of athletes and cannabis use after an athlete was suspended for testing positive for cannabis. Cannabis is currently on the 2021 List of Prohibited Substances and Methods, which is a mandatory international standard and details the substances and methods that are prohibited in and out of competition. After receiving a number of requests, the World Anti-Doping Agency announced it will initiate a scientific review of the status of cannabis. The announcement makes it clear, however, that cannabis is and will continue to be on the list in 2022.

SEC Alleges C3 International Misled Investors. In a recent complaint filed in the U.S. District Court for the Central District of California, the Securities and Exchange Commission (SEC) alleged that C3 International Inc. and its owners misled investors through misrepresentations, omissions and false statements about the patent status and likelihood for insurance reimbursement for the company’s “cannabis pill” called Idrasil®. The complaint seeks (i) injunctions prohibiting future violations of the federal securities, (ii) an order barring the owners from acting as officers or directors of any issuer whose securities are registered or which is required to file reports with the SEC, (iii) an order for all defendants to disgorge ill-gotten gains plus pre-judgment interest, and (iv) an order imposing civil penalties on all defendants.

Grassroots Federal/State Legislative Highlights

D.C. Schedules Hearing on Bill to Legalize Recreational Marijuana. The D.C. Committee of the Whole, Committee on the Judiciary and Public Safety, and Committee on Business and Economic Development will hold a public hearing Nov. 19, 2021, to consider two bills: (i) Bill 24-113, Medical Cannabis Amendment Act of 2021; and (ii) Bill 24-118, Comprehensive Cannabis Legalization and Regulation Act of 2021. Anyone wishing to testify must register by the close of business on Nov. 17, 2021. Testimony is limited to three minutes.

Kansas City, Missouri’s City Council Limits Pre-employment Marijuana Testing. On Sept. 23, 2021, Kansas City, Missouri’s City Council approved local Ordinance No. 210627, which prevents pre-employment marijuana testing for most prospective government employees as a condition of employment. There are exceptions for certain government employees, such as police officers, any position requiring a commercial driver’s license and any position where the employee could significantly impact the health and safety of other employees or members of the public.

Oregon Liquor and Cannabis Commission Issues Mandatory Product Recall. On Sept. 21, 2021, the Oregon Liquor and Cannabis Commission (OLCC) issued a mandatory recall for a product labeled as a hemp tincture, because the product contains undisclosed levels of THC that can get consumers high. According to the announcement, the product was available for purchase only through OLCC-licensed retailers, and OLCC provided notice to cannabis retailers about the recall and put a hold on the product in the OLCC cannabis tracking system.

California to Allow Medical Cannabis in Healthcare Facilities. On Sept. 28, 2021, California Gov. Gavin Newsom signed Senate Bill 311, also known as Ryan’s Law, to allow a terminally ill patient to use medical cannabis in a healthcare facility (excluding chemical dependency recovery and state hospitals). The law requires healthcare facilities to reasonably restrict the manner in which a patient stores and uses medical cannabis and requires the medical cannabis to be in a locked container. The use of the medical cannabis must also be included in the patient’s medical record. Healthcare facilities must develop written guidelines for the use of medical cannabis. The law prohibits patients from inhaling or vaping cannabis and restricts the use of any form of cannabis in emergency rooms. Healthcare facility compliance is not a condition to obtain or renew a license as a healthcare facility. Finally, the law does not permit a healthcare facility to prohibit a patient’s use of medical cannabis solely because cannabis is a Schedule 1 controlled substance.

Investments and Transactions Highlights

SKYMINT Acquires 3Fifteen Cannabis. On Sept. 21, 2021, SKYMINT, a Michigan vertically integrated cannabis company, announced  the acquisition of 3Fifteen Cannabis, a Michigan licensed medical and recreational cannabis dispensary company, and the concurrent closing of a $70 million senior secured term loan from Tropics LP, an affiliate of SunStream Bancorp Inc. According to the announcement, with this acquisition, SKYMINT has the capability to serve nearly 90 percent of the Michigan adult market.

“In the Weeds” is McGuireWoods’ biweekly ounce of highlights in the budding cannabis, hemp and CBD industries. For more information, see our newsletter archive, our Edible Bites podcast series, or visit our Cannabis, Hemp & CBD practice.