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Disturbing Trend: Hemp Landlords Increasingly Subjected to Criminal Prosecution

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In my last post regarding the rise of civil asset forfeiture in Oregon’s ongoing war on cannabis, I noted some commonalities in law enforcement’s approach to civil forfeiture of land allegedly used to grow illegal cannabis, namely that the landowner leased the property to a third party for the express purpose of growing legal hemp. Since that post, I have become aware of an additional and more disturbing trend: law enforcement is also charging the landowners with crimes.

In the cases I am aware of in this genre, which arise primarily in southern and central Oregon counties, law enforcement and prosecutors are undeterred by the fact that the landowners took pains to protect themselves in their written leases, which generally prohibits the use of their land for anything other than lawful and permitted hemp production, often with the assistance of counsel. Many prosecutors describe the leases as mere paperwork meant to obscure a criminal conspiracy. In other cases, prosecutors are going to great lengths to not only charge landowners with crimes in connection with the conduct they allege their tenants engaged in, they are also seizing any and all of the landowners’ bank accounts, including those that have no connection whatsoever to the operations on the land that they allege are illegal grows. The Madras Pioneer wrote about one such case last month.

Is it illegal to lease land to a licensed hemp grower? As a matter of law, the answer is clearly no. But in practice, Oregon law enforcement appears to be putting the squeeze on landowners by roping them into criminal culpability based on vague allegations of a conspiracy with their tenants. It is unclear how Oregon landowners can protect themselves in this seemingly escalating war on cannabis, but the purpose of these efforts is clear: local law enforcement, prosecutors, and other officials simply want to make their jurisdictions inhospitable to cannabis grows, regardless of legality.

You can contact Kevin Jacoby at info@gl-lg.com or (503) 488-5424.

https://greenlightlawgroup.com/blog/disturbing-trend-hemp-landlords-increasingly-subjected-to-criminal-prosecution



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Despite Decriminalization Of Adult Recreational Use Of Marijuana, Court Finds Its Use Is Not Lawful

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Nevada’s voters decriminalized adult recreational use of marijuana by voter initiative.  See Secretary of State, Statewide Ballot Initiative Question No. 2, 14 (Nov. 8, 2016, effective Jan. 1, 2017).  Marijuana nonetheless remains illegal under federal law and may be prosecuted under the Controlled Substances Act. See 21 U.S.C. § 844(a).   The question therefore arises whether adult recreational use o f marijuana is “lawful” in Nevada.

NRS 613.333 grants employees a private right of action if they are terminated for engaging in “the lawful use in this state of any product outside the premises of the employer during the employee’s nonworking hours”.   When the Palace Station casino terminated one if its dealers for a positive test for marijuana, he sued for lost wages and benefits under the statute.  Yesterday, the Nevada Supreme Court held that because federal law criminalizes the possession of marijuana in Nevada, its use is not lawful in the state.  Therefore, the erstwhile employee had no cause of action under NRS 613.333.  Ceballos v. NP Palace, LLC, 138 Nev. Adv. Op. 58.

The World’s Birthday And The Man Who Hired Mark Twain

According to the Mayan long count calendar, the world began on August 11, 3114 B.C.E. under the Gregorian calendar.   However, this information was lost after the fall of the Mayan empire and the Spanish takeover of their lands.  It turns out that the man, Joseph Goodman, who eventually deciphered the calendar was the same person who hired Samuel Clemens, aka Mark Twain, as a contributor to Nevada’s first printed newspaper, the Territorial Enterprise.  

As a Jew, Goodman may have been pleased to discover that the Mayans’ creation date is relatively close to the date of creation according to the Hebrew calendar – October 7, 3761 B.C.E.  Because the years count up from creation under the Hebrew calendar, the year of creation can determined by subtracting the year under the Gregorian calendar from the year in the Hebrew calendar (taking into account that the years start on different dates under each calendar).



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OLCC Task Force Develops Legislative Proposals For 2023 on Water Rights, Cannabinoids, and Illegal Production

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An Oregon legislative task force established pursuant to HB 3000 (2021) and SB 1564 (2022) is developing policy proposals for 2023 relating to intoxicating cannabinoid products, illegal cannabis production, and water rights issues. The task force established subcommittees for each of the three issue areas, and this blog post will discuss the activities of each subcommittee and what legislative and regulatory changes are likely coming down the pipeline.

Cannabinoid Subcommittee

The subcommittee on cannabinoid products focuses on three issues: (1) new licensing and testing requirements for adult use cannabinoid products, (2) curtailing sales of cannabinoid products to minors, and (3) changes to state laws regulating hemp products.

This subcommittee is considering new licenses for the sale, wholesale, secondary processing, and export/import of “adult use cannabis items” that contain less than 0.3% THC. A representative of the Oregon Department of Agriculture (ODA) indicated that the agency already possesses rulemaking authority to require additional licensing, and the agency will likely soon begin rulemaking for secondary processing licensing. Hemp products from outside Oregon may be regulated under new secondary testing requirements, and products exported out of Oregon may need to include “handoff documents” so that businesses importing the products understand the content and testing results of the cannabis products. The handoff documents are proposed due to the absence of uniform testing and labeling requirements at the federal level under the 2018 Farm Bill.

As for preventing the sale of cannabinoid products to minors, HB 3000 already affirmed that only individuals aged 21 or over can purchase adult use cannabis items, unless the individual possesses a medical marijuana card and is over the age of 18. To ensure that stores are complying with this regulation, the subcommittee is recommending new statutory authority for OLCC to create a minor decoy program to test whether businesses are selling adult use cannabis items to persons under the age of 21.

Finally, regarding new regulations of hemp products, the task force is focusing on the fact that a hemp product can fall under 0.3% THC concentration threshold, but still contain enough THC per milligram to make the product intoxicating. Current regulation allows hemp edibles to contain up to 20 mg of THC per container and 100 mg for tinctures. The subcommittee therefore is considering new labelling requires to disclose total THC content, rather than just disclosing THC concentration. Additionally, METRC tracking requirements may soon apply to hemp and adult use cannabis items. ODA possesses authority pursuant to HB 3000 to establish tracking requirements, and a representative of the agency stated that rulemaking to require METRC tracking may begin soon.

Law Enforcement Subcommittee

The main topic for the law enforcement subcommittee centers on procedures and efficiency in executing search warrants. The first major consideration is amending ORS 133.575, which currently provides “(1) Except as provided in ORS 136.583, a search warrant may be executed only within the period and at the times authorized by the warrant and only by a police officer. A police officer charged with its execution may be accompanied by such other persons as may be reasonably necessary for the successful execution of the warrant with all practicable safety.” (Emphasis added by GLLG.)

The line “with all practicable safety” forbids non-law enforcement personnel, such as OLCC and ODA employees, from assisting police in execution of a search warrant unless law enforcement convinces the judge issuing the warrant that additional personnel are needed to ensure safety in executing the warrant. The task force subcommittee is considering statutory changes to remove the “with all practicable safety” requirement, as well as incorporating a non-exhaustive list of the type of agency and department personnel who can accompany law enforcement in executing a warrant.

A clear motivation behind the proposed statutory change is law enforcement’s desire for OLCC to accompany them in raiding cannabis grows so police can take advantage OLCC Lightlab testing machines. Our previous blog posts (Operation Table Rock I & II) discuss how OLCC and law enforcement used these machines last summer to malign many good actors in Oregon’s hemp industry. Relatedly, the subcommittee will likely recommend extending the January 1, 2024, sunset provision applicable to OLCC’s presumptive testing authority.

The other major development coming from the law enforcement subcommittee is a policy decision to increase the use of multijurisdictional search warrants to combat illegal grows working over multiple counties. ORS 133.545 allows most judges in Oregon to issue multijurisdictional warrants upon finding that at least one object of the search warrant relates to an offense committed or triable within the jurisdiction of the court issuing the warrant. Judicial resources are a central motive in expanding the use of multijurisdictional warrants. For example, if a marijuana conspiracy occurs in Portland but the actual grow operation is in a less funded rural county, a judge in Multnomah County can seek the warrant and thereby save the rural county’s scarce judicial resources.

Water Resources Subcommittee

HB 4061 (2022) created more stringent record keeping requirements for water suppliers and purchasers. The bill also created new crimes for individuals who haul water to illicit marijuana grows. Implementation of this legislation is a major focus of the water resources subcommittee, which is also considering changes to state law regarding water contaminates and site cleanup at illicit grows.

A representative of the Oregon Water Resource Department (WRD) stated in a subcommittee meeting that the agency is seeing registered water haulers exercising more caution when working with cannabis grows and WRD believes there is some decrease in the number of water haulers working with illicit grows. The agency believes there are still issues with unregistered water haulers working with illicit grow operators. Section 41 of HB 3000 created new criminal penalties for illicit cannabis production, and the water resources subcommittee is considering the addition of aggravating circumstances to increase penalties based upon the amount of water diversion or number of plants at an illegal grow operation.

Another proposed reform would require hemp and marijuana production license applicants to include proof of water rights or an agreement with a water hauler to provide water to the applicants proposed cannabis grow site. ODA license applications currently require an attestation regarding water use permitting. Other changes include increased license sanctions for water right violations, new criminal sanctions for illicit pesticide use, limitations on genetic engineering of cannabinoids, and new regulations to stop cross pollination of hemp and marijuana crops.

Source:

https://greenlightlawgroup.com/blog/olcc-task-force-develops-legislative-proposals-for-2023-on-water-rights-cannabinoids-and-illegal-production



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Advertising and Regulation of CBD Products

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If you have been to any kind of spa, beauty supply store or health food store in the past four years, chances are you have seen, if not purchased, a product with cannabidiol (CBD). The 2018 passage of the Farm Bill removed hemp-deprived products, like CBD, from the Controlled Substances Act, leading to a flood of CBD products to the consumer marketplace that boast a wide variety of health and beauty claims, from relieved pain to lessened anxiety, among many others.

However, these products are being produced and marketed in a largely unregulated fashion, falling through the cracks of Food & Drug Administration (FDA) regulatory oversight. Recent studies by the University of Wisconsin-Madison School of Pharmacy, Johns Hopkins Medicine and the University of Kentucky College of Medicine have found dangerous levels of inaccuracy in the labeling and marketing of these products. Specifically, these studies have found the majority of products were labeled with dramatically incorrect CBD levels and many products even contained undisclosed levels of delta-9-tetrahydrocannabinol (THC), the psychoactive ingredient in cannabis that produces a “high.”

The UW-Madison study analyzed beverages, oils and other miscellaneous CBD products (such as chocolate bars, honey and transdermal patches). Researchers determined that among the beverages analyzed (such as coffee, seltzer, kombucha, water, tea and beer), 78 percent were over-labeled (containing less than 90 percent of the CBD they claimed to) and 7 percent were under-labeled (containing 110 percent or more of the CBD they claimed). Of the oils, researchers found roughly one-third were appropriately labeled and another third were under-labeled, with one product shockingly containing nearly 130 percent of what was indicated on the label. Of the miscellaneous products, 67 percent were found to be over-labeled. THC was detected in 24 percent of the beverages, 55 percent of the oils and 71 percent of miscellaneous products.

A recent Johns Hopkins Medicine study found, of 105 products tested, only 85 percent actually had the correct amount of CBD claimed on the label. Of those products, 18 percent were under-labeled and 58 percent were over-labeled. THC was found (within the legal limits) in 35 percent of the products; however, 11 percent of those were labeled “THC Free” while 51 percent did not reference THC at all on the label. CBD products that are mislabeled as THC-free can create problems for individuals subject to workplace drug testing. Despite not being approved by the FDA to treat any of these conditions, 28 percent of the products analyzed made therapeutic claims (mostly about pain and inflammation). While “pain relief” may seem like a standard description, it is a drug claim that requires certain approvals from the FDA. Pain relief products can contain CBD, but the claim itself should be based on something approved for that purpose. Similarly, 15 percent of products tested made a beauty claim (e.g., reduce wrinkles), which typically isn’t subject to the same regulatory process as a drug claim but still requires adequate testing.

Researchers at the University of Kentucky College of Medicine found nearly half of the products analyzed were incorrectly labeled, the majority of which contained 90 percent or less CBD than claimed.

The vast inaccuracies of CBD product labeling and unsubstantiated claims pose a serious health risk to consumers and violate the fundamentals of marketing, perpetuating consumer distrust and harming the industry. At least one company has taken matters into its own hands and successfully brought a National Advertising Division challenge to a competitor’s CBD content claim, which it alleged significantly overstated the actual amount of CBD in the product.

There are obvious dangers for people using products with unknown active ingredient levels or unknown psychoactive ingredients. Over-dosing can cause unexpected side effects and adverse interactions with other drugs. Under-dosing can diminish or fail to generate potential therapeutic benefits consumers may seek. Overall, the CBD industry will suffer from this as will anyone who could actually reap the benefits from CBD.

Notably, the FDA isn’t unaware of these issues. It advised consumers to be cautious of unproven claims after its own testing revealed many products did not contain the advertised level of CBD. Because CBD is the active ingredient in the prescription anti-seizure drug Epidiolex, however, there are significant regulatory hurdles to its use in food or dietary supplements. Thus far, as a matter of enforcement discretion, the agency has only brought action against anyone making aggressive drug claims, such as the treatment of cancer and Alzheimer’s. This leaves a massive hole in CBD regulation, particularly in light of the growing evidence that many products misstate their ingredients. Some states have attempted to fill the gap with new licensing requirements for CBD products, but class action lawsuits may be more consequential for CBD sellers in the short term. For example, Curaleaf was sued in May for selling CBD drops that contained THC. The label did not have a warning about THC, which is required by law in Oregon. While the massive CBD market presents opportunity, the relative lack of a regulatory structure continues to create risk. Until Congress takes action and develops a pathway for approval and regulation, businesses will continue to struggle with the lack of clarity in this area.

John Ferry
Laura Macherelli
Lee Rosebush
Randal Shaheen

 

Source:  https://www.jdsupra.com/legalnews/advertising-and-regulation-of-cbd-5466174/



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