KMK Law Cannabis & Craft Beer Blog

Since August of 2013, this country’s nascent marijuana industry has been propped up by “The Cole Memo,” a 4-page guidance document from then-Deputy AG James Cole outlining the factors to be considered by the Department of Justice in enforcing the federal ban on marijuana distribution and sale in view of the handful of states which – at that time – had begun to legalize it in one form or another. That memo was followed in February of 2014 by a Treasury Department memo wherein the Financial Crimes Enforcement Network (FinCEN) mirrored the Cole Memo guidelines for banks. Fast forward to 2018, and 35 states plus the District of Columbia have legalized or decriminalized marijuana possession and use for either medical purposes, recreational purposes, or both.

New rules regulating the Ohio Medical Marijuana Control Program became effective on September 8^th.  These recently finalized rules can be found in Ohio Administrative Code (“OAC”) Sections 3796:3, 4, 6, 7, 8 (http://codes.ohio.gov/oac/). 

In the previous part of this two-part series, we discussed five special considerations that should be contemplated by emerging medical marijuana companies and their investors. In this post, we will cover the remaining five risk factors that should be disclosed in the company’s private offering materials, which consist of the following:

In this first post of a two-part series, we will examine five of the ten important risk factors that should be considered by medical marijuana companies and their investors.

The old real estate adage “location, location, location” takes on new meaning in the context of the medical marijuana industry. 

In the recently enacted Medical Marijuana Control Program, the Ohio legislature provided municipalities with the authority to limit or prohibit, effectively “zone-out”, local medical marijuana operations.

On Tuesday August 1^st, Senator Corey Booker (D-NJ) introduced the Marijuana Justice Act – legislation that would decriminalize marijuana at the federal level. The bill would remove marijuana from Schedule I of the Controlled Substances Act, and therefore eliminate the need to rely on the “Cole Memo” to resolve the tension between states that have legalized marijuana – either in medicinal or recreational forms – and the federal government, which still treats possession and distribution of marijuana in any form as a felony.

The State of Ohio Board of Pharmacy just released its draft dispensary districts. As you’ve probably heard, medical cannabis is roughly a year away from becoming reality in Ohio, and this step provides some initial insight into where a patient might be able to obtain medical cannabis with a physician’s prescription.

Although about half of the states have legalized medical marijuana, and the department of justice has declared it to be a low enforcement priority, marijuana is still a controlled substance under federal law, with criminal penalties for possession and sale.

Ohio’s Department of Commerce is ramping up efforts to begin the state’s medical marijuana program.  Standards and licensing procedures for cultivators, laboratories, dispensaries and others will be set up over the next year, and the program must be fully up and running by the summer of 2018.  But at the same time, the federal Drug Enforcement Agency (“DEA”) is doubling down on the marijuana ban, keeping the drug listed alongside heroin as a top-level controlled substance.