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Cannabis Litigation: The Importance of Litigation Holds

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We regularly cover litigation on the blog, but today we’re going to cover how to prepare for cannabis litigation that may or may not come. And while it’s always important to have effective systems in place, it becomes even more paramount when our clients realize how involved the discovery process is in the American litigation system. If implemented properly, a proper litigation hold can save a lot of expense and headache down the line – for our clients and for us.

What is a litigation hold?

When a lawsuit is filed or – is even reasonably anticipated – the rules of civil procedure in both federal and state courts impose a burden to preserve all potentially relevant records and information. For example, Federal Rule of Civil Procedure (“FRCP”) 37(e) provides:

“(e) Failure to Preserve Electronically Stored Information. If electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery, the court:

(1) upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice; or

(2) only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation may:

(A) presume that the lost information was unfavorable to the party;

(B) instruct the jury that it may or must presume the information was unfavorable to the party; or

(C) dismiss the action or enter a default judgment.”

Essentially, the litigation hold puts everyone and their key custodians of documents and records on notice that a certain scope of information must be preserved (and later, compiled and produced in the discovery process). And as FRCP 37(e) makes clear, if that isn’t done properly (or worse, if it isn’t done intentionally), there can be severe consequences: those include dismissal (if you’re the plaintiff) or a default judgment (if you’re the defendant).

How to implement a good litigation hold

First, it’s important to identify the scope or universe of what needs to be preserved in any burgeoning cannabis business dispute. Think beyond the specific dispute/issue or claims/defenses. What may be deemed “relevant” can be extremely broad in the discovery context.

Second, identify and implement protocols for everything that may hold those records. While this previously meant file cabinets of papers, it now typically means emails, documents, spreadsheets, etc. But, don’t stop there: is there company software people collaborate or communication on? Are employees given company phones? It’s important to think beyond emails and documents because most likely, discovery is going to require it all.

Finally, follow up regularly to ensure all employees are sticking to the litigation hold as long as necessary. It sometimes makes sense to assign oversight to key individuals who can check that the systems are working on a quarterly or annual basis.

Conclusion

Litigation holds can be tedious processes so it’s best to tackle this head on. Typically, nothing causes more delay and stress in a lawsuit than a client that doesn’t have a handle on its evidence – whether it’s evidence it should have but doesn’t, or evidence that it finds piece by piece over an extended period of time because the client or the information is disorganized.

And for our proactive readers, it’s never too early to develop a general plan that can ensure a litigation hold can be effectively prepared in the future. Identifying where data is stored in active systems, making sure backups are regularly produced, and developing exit checklists for when employees leave a company can ensure all relevant data are preserved and accessible.



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More Bad News for Intoxicating Hemp (California, Missouri, New Jersey)

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Last week, I wrote a post entitled “Loper Comes For the DEA. Will it Matter Though?” In that post, I discussed a brand new federal Fourth Circuit Court of Appeals case that concluded that hemp derivatives like THC-O are not controlled substances. The hemp community has largely celebrated this as a win, even though as I wrote in that post and back in July, none of this really matters if Congress bans intoxicating hemp products – which looks like it will happen.

On the heels of the Fourth Circuit case, a few things happened that don’t make life easier for people who want intoxicating hemp products.

Probably the most significant of the bad news, the California Department of Public Health (CDPH) issued emergency regulations to ban a series of intoxicating hemp products. A lot has been written about these regulations, but it’s worth pointing out that California’s hemp law (AB-45) was already not very favorable to smokable hemp products.

For example, AB-45 already prohibits smokable hemp products. And more notably, it defines THC to include THCA and “any tetrahydrocannabinol, including, but not limited to, Delta-8-tetrahydrocannabinol, Delta-9-tetrahydrocannabinol, and Delta-10-tetrahydrocannabinol, however derived”. In other words, all of the various things that are defined as THC – and there are many – must already not exceed 0.3% in the aggregate. This means that a host of products were already de facto banned in the state.

While, to be sure, the new emergency regulations take things farther, I think it would be inaccurate to describe this as a “sea change” in how hemp products are regulated in the state. What remains to be seen is whether CDPH or other agencies ramp up enforcement in any meaningful way. It’s California, so my guess is no.

California’s not the only state taking aim at intoxicating hemp products. Just the other day, Missouri’s Attorney General created a new task force to crack down on intoxicating hemp products. New Jersey’s Governor also signed a bill cracking down on intoxicating hemp products.

All this just adds to the long list of states and municipalities that had been going after unregulated intoxicating hemp products prior to the Fourth Circuit’s decision – often for violations of state or local law which are unlikely to be impacted by the federal case. And of course, if Congress gets around to banning intoxicating hemp products, that will likely be the last straw for many of these products.



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How Do You Make Cannabis-Infused Nutella?

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cannabis nutella recipe

Cannabis-infused foods have become increasingly popular as more individuals explore the therapeutic and recreational benefits of cannabis. One delectable way to enjoy these benefits is through a homemade cannabis-infused Nutella. This rich and creamy spread combines the classic flavors of chocolate and hazelnut while incorporating the effects of cannabis. Whether you’re looking to enhance your breakfast, elevate your desserts, or simply indulge in a tasty treat, this guide will walk you through the process of creating your own cannabis-infused Nutella at home.

With a little bit of effort, a keen eye for detail, and some carefully selected ingredients, you can craft a delicious spread that not only satisfies your sweet tooth but also provides the unique benefits associated with cannabis consumption. The process of infusing cannabis into oils or butters allows you to harness the power of this plant and incorporate it into a wide array of culinary delights. By following the step-by-step instructions outlined in this guide, you will learn how to properly decarboxylate the cannabis, infuse it into a neutral oil, and then seamlessly incorporate it into a homemade Nutella recipe that will leave you craving more.

 

 Understanding Cannabis Infusion

Before we dive into the recipe, it’s essential to grasp the fundamentals of cannabis infusion. Infusing cannabis into oils or butters allows you to incorporate its effects into a variety of dishes. The two most common methods are:

 

  • Cannabis-Infused Oil: This is made by gently heating cannabis in a neutral oil, such as coconut oil or olive oil. The cannabinoids are absorbed into the oil, making it a versatile ingredient for cooking and baking.

  • Cannabis-Infused Butter:  Similar to oil, butter can also be infused with cannabis, creating a rich base for many recipes.

For this Nutella recipe, we will focus on using cannabis-infused oil, but you can easily substitute it with infused butter if you prefer.

 

 Ingredients

 For the Cannabis-Infused Oil

  • 1 cup of neutral oil** (coconut oil or olive oil are excellent choices)

  • 7-14 grams of cannabis flower** (decarboxylated)

  • heesecloth or a fine mesh strainer**

 

For the Nutella

  • 1 cup hazelnuts

  • 1 cup powdered sugar

  • 1/2 cup cocoa powder

  • 1/2 cup cannabis-infused oil

  • 1 teaspoon vanilla extract

  • 1/4 teaspoon salt

  • 1/2 cup milk(or a milk alternative for a vegan version)

 

 Step-by-Step Guide to Making Cannabis-Infused Nutella

 

Step 1: Decarboxylate the Cannabis

Decarboxylation is a crucial step that activates the cannabinoids in cannabis, making them effective when consumed. Here’s how to do it:

1. Preheat your oven to 240°F (115°C).

2. Break the cannabis buds into smaller pieces and spread them evenly on a baking sheet.

3. Bake for 30-40 minutes, stirring occasionally to ensure even heating.

4. Remove from the oven and allow it to cool.

 

 Step 2: Prepare the Cannabis-Infused Oil

 

1. Combine the decarboxylated cannabis and oil in a slow cooker or double boiler.

2. Heat gently on low for 2-3 hours, stirring occasionally. Keep the temperature below 200°F (93°C) to prevent burning the cannabis.

3. Strain the oil through cheesecloth or a fine mesh strainer into a clean glass jar, discarding the plant material. Your cannabis-infused oil is now ready for use!

 

Step 3: Roast the Hazelnuts

 

1. Preheat your oven to 350°F (175°C).

2. Spread the hazelnuts on a baking sheet and roast for about 10-15 minutes, or until they are golden brown and fragrant.

3. Remove from the oven and let them cool slightly. Once cooled, rub the hazelnuts in a clean kitchen towel to remove the skins.

 

Step 4: Make the Nutella

 

1. In a food processor, add the roasted hazelnuts and process until they turn into a smooth paste. This may take several minutes, so be patient.

2. Add the powdered sugar, cocoa powder, cannabis-infused oil, vanilla extract, and salt Blend until well combined and smooth.

3. Gradually add the milk  (or milk alternative) until you achieve your desired consistency. You may need to adjust the amount based on how thick you want your Nutella to be.

4.  Taste and adjust the sweetness or cocoa level as needed.

 

Step 5: Store Your Cannabis-Infused Nutella

 

1. Transfer the Nutella into a clean jar or airtight container.

2. Store in the refrigerator  for up to two weeks. The Nutella may thicken in the fridge; simply let it sit at room temperature for a few minutes before using.

 

 

 

Tips for Enjoying Cannabis-Infused Nutella

 

  • Spread on Toast:  Use it as a delicious spread on toast or bagels for a delightful breakfast.

  • Dip Fresh Fruits: Pair it with fresh fruits like strawberries or bananas for a tasty snack.

  • Incorporate into Baking: Use it in baked goods like brownies or cookies for an extra kick.

  • Top Pancakes and Waffles: Drizzle it over pancakes or waffles for a decadent brunch treat.

 

Dosing and Safety Considerations

When making cannabis-infused products, understanding dosing is crucial for a safe and enjoyable experience:

  • Calculate Potency: The potency of your cannabis-infused oil will depend on the strain used and the amount of cannabis. Use a dosage calculator or consult resources to estimate the THC/CBD content.

  • Start Low, Go Slow: If you’re new to cannabis edibles, begin with a small amount of Nutella and wait at least an hour to gauge its effects before consuming more.

  • Label Your Products: Clearly label homemade cannabis-infused products to avoid accidental consumption by others, especially children.

 

 

Conclusion

 

Creating cannabis-infused Nutella in the comfort of your own home is not only a fun and engaging process, but it is also an incredibly rewarding experience that allows you to indulge in the delightful and harmonious combination of rich chocolate and nutty hazelnut flavors, all while simultaneously experiencing the myriad benefits that cannabis has to offer. This unique culinary endeavor invites you to explore the art of infusion, transforming simple ingredients into a luxurious spread that elevates your culinary creations to new heights. With just a handful of straightforward steps and a few carefully selected ingredients, you can craft a versatile and decadent spread that enhances everything from your morning toast to your favorite desserts. The beauty of this homemade cannabis-infused Nutella lies in its adaptability; you can use it in various ways, whether as a sumptuous topping, a flavorful filling, or even as a delightful dip for fresh fruits.

 

CANNABIS-INFUSED NUT BUTTER, READ ON…

CANNABIS NUT BUTTER

CANNABIS NUT BETTER RECIPE, HOW DO YOU MAKE IT?



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Oregon Cannabis Roundup: Fall 2024

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Now that Labor Day is in the rear view and people are paying attention again, it seems like a good time to drop a line on Oregon cannabis. Here are some highlights, to launch you into fall.

OLCC’s 2024-2028 Strategic Plan

A draft of the 2024-2028 Strategic Plan was first circulated at a Commission meeting in June, and finalized and published sometime last month. The Plan covers both alcohol and cannabis, because OLCC regulates both of those things. The Plan is probably very interesting and salient to various people inside of the Commission; less so to most of the rest of us. Still, it contains a couple of highlights for the local cannabis industry.

License reassignment program

Finally. The Plan sets forth a delayed initiative to “establish criteria and process for marijuana license reassignment that offer opportunities for qualified members of underserved communities and those historically affected by cannabis criminalization.” That longish, unpaced sentence belies a welcome sentiment.

The license reassignment concept came in through House Bill 4016 in the 2022 legislative session. If you are interested in the background on this, please read our 2022 posts here and here. And also this post from February, where I explained why this should be coming in 2024. My guess (just a guess) is that delays here stem from OLCC conferral with the State DOJ, to try to minimize lawsuit exposure. Regardless, let’s hope the Commission can find a way to get more diversity into the license pool.

Improved licensing processes

The Plan adopts a goal to “improve licensing processes to eliminate unnecessary burden on applicants, increase efficiency and reduce wait-times [sic].”

I love this goal too. Even in the best of times, OLCC marijuana licensing has been a three- to four-month process. In the worst of times, it bogged down entirely due to a combination of application volume, insufficient staff, and excessive application requirements. Today, we’re somewhere in the middle, with applications submitted on or before June 3 being assigned to investigators (a typical license issuance might occur 6-8 weeks after such assignment).

Related to this “optimization” goal, OLCC began a phased rollout of its new Cannabis and Alcohol Management Program (CAMP) earlier this spring. We all sort of hated it– the system was cumbersome and frustrating in various ways. Things seem to be improving somewhat, though, and OLCC has been responsive in working through snags.

In all, we’re happy to see a focus on pace and refinement. Buyers and sellers of Oregon cannabis licenses would welcome “increased efficiency and reduced wait times” now that OLCC is no longer taking new marijuana license applications in almost all categories. Closing on these transactions is pegged directly to OLCC license issuance, which extends nearly all sales timelines (and sometimes tanks them).

Rules review

Another goal that jumped out for me was OLCC’s initiative to “conduct a multi-year review and revision of our rules structure and language [with industry parties, including licensees].”

You may appreciate that most or all OLCC cannabis rules did come through a review and vetting process. Many collaborators weigh in prior to rulemaking, at the legislative level, and others through rules advisory committees (RACs) hosted by OLCC. Things change, though, and in my opinion many of the OLCC marijuana rules—where the Commission isn’t pinned down by statute—could use a second look. In the most general sense, I’d like to see cannabis in Oregon regulated more like alcohol, despite the chain-of-custody difference. It can be done.

OLCC in general

From this observer’s perspective—informed in part by talking with Commission staff—things have settled down inside of OLCC. Staff will acknowledge that last year’s La Mota and liquor-hoarding scandals cast a pall over the Commission, but the shadow has passed (even with La Mota hanging onto its licenses). The Commission’s marijuana side, by all reports, is very collaborative, better systematized, and back to “business as usual”– especially now that licenses are capped.

Speaking of license caps, last month a RAC convened on the topic. I’ve explained that, due to House Bill 4121, we probably won’t see an increase in producer or retailer licenses in most of our lifetimes. That is still the case. Wholesale licensing, on the other hand, could open up as soon as next year, and processing perhaps in 2026 or 2027. The way the statutory language is written, OLCC would open the portal when licenses dip below certain counts. Interestingly, OLCC will have to come up with application denial criteria for relevant, previous applicants.

Elsewhere, OLCC is still active in the Cannabis Regulators Association (Cann-Ra), an organization for cannabis regulators all around the United States. Historically, Oregon has purchased a statewide membership, which means that OLCC and other Oregon agencies regulating cannabis – including OHA, DOR and ODWR – are also at the table. Hopefully OLCC finds a way to export some of its best ideas (e.g. early removal of resident-ownership requirements; interstate compact promotion), while leaving off some of the historically frustrating strictures (e.g. individual plant tagging; opaque and inconsistent enforcement rules and policies).

Ballot Measure 119 – cannabis labor peace agreements

This one is on the November 5 ballot as an initiated state statute, and I’m surprised people aren’t talking about it more.

If Measure 119 passes, every cannabis retailer and processor will be required to submit a signed labor peace agreement to OLCC. Measure 119 would not apply to producers, wholesalers, or labs. (Note: I’m a union guy, but I also believe the requirement for producers, in particular, would be a shit show. It’s neither here nor there.)

Compulsory peace agreements aren’t anything new in cannabis, although it would be something different here in Oregon. California, for example, requires labor peace agreements for many of its cannabis licensees, and has for many years. We had clients struggle with the concept initially, and we saw some fumbled roll-outs, but people eventually adjusted.

Measure 119 further provides that retailers and processors would be required to remain neutral, under the peace agreements, when labor organizations communicate with employees about collective bargaining rights “with any licensure or renewal application.” That part is not exactly clear to me; let’s see how it goes.

The United Food and Commercial Workers Local 555 spent a good deal of money to get Measure 119 on the ballot, rounding up some 163,000 signatures when only 117,173 were required. This follows on a stymied effort to get House Bill 3183 passed last year, which would have accomplished the same thing legislatively.

I’m not aware of any polling on Measure 119, but my guess is that it will pass– Oregon is a “union” state, consistently outpacing the U.S. at large in per capita union membership. So this is one to watch.

Rumblings on legislative priorities

The 2025 Oregon legislative session will be a long session, stretching from January into the summer. The deadline for pre-session bill filing isn’t until December 13, so we are a ways out on seeing any concrete proposals of record. That said, CIAO keeps its legislative priorities list updated here, and it has been in active discussions with membership as to what folks would like to see.

Here at the firm, we’ve been talking with a few private parties on special interest bills, and you can expect to see certain cannabis bills that expired in 2024’s short session to be revived. We’ll check in on all of this in January, as we always do here on the blog.

In the meantime, here’s to a beautiful September, with nobody’s farm smoked out by the fires. See you soon.



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