The 16th Amendment to the U.S. Constitution provides that, “Congress shall have power to lay and collect taxes on incomes, from whatever source derived…”. According to § 162 of the Internal Revenue Code, businesses are generally allowed to deduct from their adjusted gross income the ordinary and necessary expenses they incur in carrying on their business. 26 U.S.C. § 162. One pesky provision in the Internal Revenue Code, § 280E, disallows these business expense deductions “if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted.” 26 U.S.C. § 280E. Because marijuana is still illegal at the federal level under the Controlled Substances Act, according to § 280E, businesses that are engaged in the growing, manufacturing, or sale of marijuana are not entitled to deduct their ordinary and necessary business expenses from their adjusted gross income under § 162.

Continue Reading Tax Woes of the Cannabis Plant

Under, the Racketeer Influenced and Corrupt Organization Act (RICO), it is illegal “for any person through a pattern of racketeering activity… to acquire or maintain…any interest in or control of any enterprise which is engaged in, or the activities affect, interstate of foreign commerce”. Because marijuana remains illegal under the federal Controlled Substances Act, state-legal marijuana businesses, by definition, involve racketeering activity in violation of RICO. When the government employs RICO against a defendant, the prosecution must prove, under 18 U.S.C. § 1962, that a person: (i) through the commission of two or more acts (ii) constituting a pattern of racketeering activity (iii) directly or indirectly invested in, maintained an interest in, or participated in, an enterprise, (iv) the activities of which affected interstate or foreign commerce. In addition to criminal liability, RICO also provides a civil cause of action for a party injured by the racketeering activity; in a civil RICO claim, a plaintiff must prove the elements, an injury to property or business, and proximate cause.

Continue Reading RICO Liability for Marijuana Enterprises

Even though the Food and Drug Administration (“FDA”) has come out against the sale of CBD-infused foods and dietary supplements, a cursory search for “CBD” on Amazon reveals a plethora of hemp extract and hemp oil products, including gummies, tinctures, creams, and capsules. Because of the FDA’s prohibition on the sale of CBD-infused foods and beverages and the recent shift in federal law to legalize hemp and hemp products, manufacturers and marketers alike have latched on to the buzzwords “hemp” and “hemp extract” to sell CBD products. But, from a consumer’s perspective, what is the difference between a 1000mg, 50,000mg, and a 400,000mg product? Most likely, not a whole lot.

Continue Reading The Labeling Paradox: Navigating Between Hemp, Hemp Extract, and CBD Products

In a case of first impression, the New Jersey Appellate Division held in January 2020 that an employee’s costs to use medical marijuana to treat chronic pain resulting from a work place injury is reimbursable by his employer.

This case arose out of a construction accident in 2001. Vincent Hager was working on a construction site when a truck delivering concrete dumped its load on him. Following the accident, Hager immediately experienced lower back pain that radiated down both legs, which he described as a “shooting and stabbing pain.” Initially, Hager’s employer, M&K, denied Hager’s workers’ compensation claim. While the claim was pending, Hager began to treat his injuries/pain with marijuana, as made available by New Jersey’s Compassionate Use Medical Marijuana Act (MMA), and sued M&K for reimbursement.


Continue Reading Employee’s Cost of Medical Marijuana to Treat Work Place Injury Reimbursable by Employer

New Jersey is now among the first three states to have its Hemp Program approved by the United States Department of Agriculture (the “USDA”). The 2018 Farm Bill legalized industrial hemp production nationwide by removing hemp and its derivatives, such as CBD, from the definition of marijuana under the Controlled Substances Act (“CSA”) and by providing a detailed framework for the cultivation of hemp.

Continue Reading Growing, Processing, and Handling Hemp Now Legal in New Jersey – Apply Today

In June 2019, the Legislature passed the New Jersey Hemp Farming Act (the “HFA”). This is great news for the “Garden State.” New Jersey has hundreds of thousands of acres in farmland and hemp cultivation may prove to be a lucrative business.

Previously, hemp cultivation in New Jersey was limited to non-germinating seeds and stalks

CBD products: you may have seen them at your local grocery store, convenience store, or chiropractor’s office in the form of gummies, brownies, sodas, and cookies. CBD is one of many cannabinoids found in the cannabis plant. Unlike THC, which gives users a “high,” CBD contains little to no psychoactive properties, but comes with many benefits. CBD is being heavily studied and is showing great promise as a nutritional and wellness supplement. CBD products are currently being used to treat pain, inflammation, stress, and symptoms resulting from a wide range of medical conditions, such as epilepsy, multiple sclerosis, arthritis, anxiety, and chronic pain. CBD binds to the body’s cannabinoid receptors to induce feelings of calmness and pain relief. It has been hailed as a safer, more natural alternative to opioids and other addictive drugs.

While the CBD craze has resulted in an influx of CBD products hitting the market, the CBD market remains unregulated and susceptible to abuse and deceptive practices. The Food and Drug Administration (FDA) seized various CBD products from store shelves across the country after health claims relating to products which are not approved by the FDA, but suggest they are approved and/or intended for use in the diagnosis, cure, mitigation, treatment, or prevention of diseases like cancer and Alzheimer’s disease. After the passage of the Agricultural Improvement Act (the “Farm Bill”), which legalized the cultivation, processing, and sale of hemp and hemp products, the FDA Commissioner reaffirmed that CBD, regardless of whether or not it is derived from hemp, cannot be lawfully marketed with a claim of therapeutic benefit without prior FDA approval.


Continue Reading The ABCs of CBD in Food and Beverages

This article was co-authored with Bojana Petkovic, Project Manager, at LoudCloudHealth.com

The trend of cannabis legalization is spreading throughout the globe. Uruguay and Canada became the first two countries to fully legalize the plant for both medicinal and recreational purposes. The USA has not yet done the same on a federal level, nevertheless some states have already passed laws that allow growing, processing, distributing, and using cannabis products.

In this article, we discuss the world of cannabis legalization, talk a little bit about the history involved as well as the public’s opinion, potential benefits and risks of cannabis use, and more.


Continue Reading An Introduction to Cannabis Legalization

In December 2018, Congress approved the Agriculture Improvement Act of 2018 (the “Farm Bill”) which authorized the production of hemp and removed hemp and hemp seeds from the DEA’s schedule of illegal Controlled Substances. After passage of the Farm Bill, questions arose with respect to interstate hemp transportation and who could obtain a license to produce hemp. Adding to the confusion, a number of Midwestern states seized hemp traveling through their borders and charged drivers with felonies for interstate drug trafficking.

Continue Reading USDA Clarifies Hemp Production, Use, and Transportation

After passage of the Agricultural Improvement Act of 2018 (“The Farm Bill”), many professionals in the cannabis industry wondered how the new law would affect the U.S. Patent and Trademark Office’s (USPTO) stance on trade and service marks for cannabis sativa L species (hemp) and hemp-related goods and services.

Continue Reading USPTO Provides New Guidance for Registration of Cannabis and Cannabis-Related Marks