Cannabis, Hemp & CBD
The cannabis market and its adjacent industries are expanding rapidly, as more states vote to legalize medical and recreational use of marijuana and the federal government continues to develop a regulatory scheme for hemp through enactment of the Agriculture Improvement Act of 2018 (2018 Farm Act). This legal and political shift presents opportunities and complex legal and regulatory challenges.
Navigating the environment at the intersection of state and federal cannabis laws requires in-depth knowledge and extensive experience. Clients expect and need lawyers who work proficiently in a climate of uncertainty and risk. This team closely monitors state and federal developments to offer grounded, timely and practical guidance. McGuireWoods already has the skills and bench depth needed to advance business-minded transactional and regulatory risk mitigation solutions.
McGuireWoods’ dedicated full-service interdisciplinary team of lawyers and government affairs consultants is uniquely equipped to counsel cannabis clients on emerging issues across all areas of the regulatory landscape. We offer significant experience handling issues concerning the U.S. Food and Drug Administration (FDA), Federal Trade Commission (FTC), Drug Enforcement Administration (DEA) and U.S. Department of Agriculture (USDA), as well as state health and agriculture departments and boards of pharmacy.
McGuireWoods’ approach to cannabis goes beyond the typical, narrow view of state regulation or license applications. We guide financial institutions, private equity investors, application developers, food manufacturers, dietary supplement manufacturers, manufacturers and distributors of over-the-counter products and cosmetics, employers, healthcare institutions, physician practices, transporters and ancillary businesses on how to evaluate and navigate issues related to cannabis and cannabis derivatives, such as hemp and CBD. We provide experience-based solutions to federal and state enforcement issues, leading to business-oriented outcomes, even in an uncertain regulatory landscape.
These experienced lawyers and government affairs consultants assist clients with legal and business issues touching cannabis, hemp and CBD businesses, such as corporate formation, licensing, labeling, class action consumer pricing risk, California Proposition 65 compliance, intellectual property and interstate transportation issues.
The team has experience helping financial institutions achieve hemp and marijuana compliance for banking relationships such as those with depositors and lenders. We advise on and draft compliance plans for issues related to suspicious activity reports, Treasury Department (FinCEN) regulations and the National Credit Union Administration, which serves to distinguish reporting requirements for hemp and marijuana businesses.
We navigate regulatory risks in transactional matters and draft risk disclosures for securities and private offerings to help investors understand the financial and legal risks associated with the businesses in which they invest, including the shifting environment involving bankruptcy.
Where We Can Help
- Federal and state political advocacy, consulting and legislative lobbying
- Agricultural and hemp licensing application processes
- Market entry through assistance with regulatory, licensure and corporate formation issues
- 2018 and 2014 Farm Act compliance
- FDA and DEA compliance matters
- FDA, FTC and USDA labeling and product claims compliance
- Interstate transportation of hemp and hemp-derived CBD products
- Clinical research on medical uses of cannabis and its constituents
- Hemp and CBD cosmetic and supplement products
- Branding and intellectual property protection
- Consumer product litigation, product liability and product recalls
- Tax and corporate law issues
- Consumer pricing and fraud considerations
- Quality control and product recalls
- Bankruptcy and distressed assets
- Debt financing due diligence and transaction documentation
- Corporate securities and public offerings
- Food and beverage manufacturer compliance
- Data privacy and security
- Regulation of cannabis and CBD delivery devices
- Labor and employment compliance
- Media relations and strategy
FDA – Pharmaceuticals, Food, Supplements and Cosmetics
- Advised a cannabis client on the impact of FDA approval of a CBD pharmaceutical product.
- Represented a pharmaceutical client on export and interstate movement of CBD products.
- Represented a cosmetic and supplement manufacturer on federal and state product regulatory compliance for hemp-derived CBD products.
- Advised multiple clients on labeling issues and risk of CBD products.
- Advised on issues related to CBD products and hemp growth, transport and processing for a major food distributor.
- Collaborated with a national medical cannabis company on media relations and strategy in Virginia.
- Advised on legal and policy issues on behalf of a client seeking market entry in Virginia, including litigation involving the licensing process and federal public affairs initiatives.
- Assisted a licensed medical CBD oil provider in Florida and Texas with the legislative adoption of CBD oil use and development of the regulatory process for licensure in Virginia.
- Collaborated with a medical marijuana dispensary on legislation related to medical cannabis cultivation in Florida.
Corporate and Transactional
- Represented CRW Capital LLC, a private equity sponsor, in connection with a $34 million investment round for Schwazze (OTCQX: SHWZ), a Denver-based marijuana conglomerate formerly operating as Medicine Man Technologies Inc.
- Represented the developer of synthetically formulated cannabidiol for use in drug development activities, in its sale to a life sciences company.
- Drafted risk disclosures for a private placement offering in cannabis businesses.
- Advised on the acquisition of a CBD beverage company.
- Represented a specialty insurer in its underwriting of policies for state-legal cannabis businesses.
- Represented a specialty insurance group in connection with marijuana enforcement guidance.
- Drafted financial institution marijuana-related, hemp-related and anti-money laundering policies and procedures.
- Advised physician practices on medical cannabis licenses and compliance matters.
Labor and Employment
- Advised a specialty insurer on its underwriting of policies for state-legal cannabis businesses.
- Advised on employment issues for selling CBD products at the in-office retail level.
- Drafted drug-testing policies for nationwide employers that must comply with many state-specific cannabis laws.
- Advised employers about their duty to accommodate individuals who use medicinal cannabis to alleviate symptoms of a disability.
- Hosted a conference on transactional diligence in the cannabis space, gave presentations on shifting labeling laws for hemp and CBD products, and advised on class action litigation risks.
McGuireWoods’ multiplatform approach to informing and educating clients includes conferences, webinars and client alerts, and serves as a dynamic way to keep clients up to date on matters most important to them. For instance, our team prepares and presents regular updates on changes in labeling law and litigation on food and beverages, as well as a comprehensive monthly survey of state pharmacy board opinions and decisions, including considerations of CBD.
Providing clients with comprehensive updates tracking the evolving policy, laws and regulations of the industry is part of a methodology this team has implemented for years. The depth of knowledge and experience we continue to gain through that practice enables us to provide practical, comprehensive advice on topics related to every aspect of the legal and regulatory sector.
Our lawyers work at the cutting edge of cannabis-related legal and regulatory issues, shaping the future of the cannabis industry in the United States.
Disclaimer: Cannabis is classified as a Schedule I controlled substance by the U.S. Drug Enforcement Agency, and therefore, it remains a federal crime to grow, sell and/or use cannabis or related products. Federal enforcement policy may defer to state laws; however, compliance with state laws does not change federal enforcement authority. No content contained herein or advice provided is intended to assist with the violation of any state or federal law.