Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:05):
Hello again, and welcome to Just Say No. I'm your
host Maria Calabrey's coming to you on KCAA Radio ten
fifty am one oh six point five FM Radio. What
we've seen take place in the cannabis industry over the
past several years has been the most rapid transformation of
(00:31):
any sector I've ever witnessed. If you consider the cannabis plant,
with three harvestable components, each serving unique purposes, there aren't
too many other crops that can claim that versatility. And
if you're wondering why this topic should matter to you,
(00:53):
consumers and businesses alike, well, the impact of regulatory and
action might just surprise you. So let's get ready to
uncover how cannabis advertising and marketing laws, or the lack thereof,
shape what you know, shape public perception and how brands
(01:13):
can and cannot communicate about cannabis. Hey, whether you're a
consumer looking for answers or a brand seeking clarity, this
conversation matters because it affects all of us. The more
we understand, the better equipped we are to demand transparency
(01:34):
and fairness from both businesses and policymakers. So sit back
and relax as we explore some of the most pressing
themes shaping the cannabis industry with some of the brightest
minds in the space.
Speaker 2 (01:53):
By twenty twenty, Bank of America and Merrill Lynch estimate
that will grow to thirty five billion dollars, and many
experts believe it could eventually reach two hundred billion dollars
each and every year.
Speaker 3 (02:12):
The son wonder, see up this guy me, I can
see so much, father, your monaser, your monases. I'm a
(02:41):
betterfly who is only begone, taking me.
Speaker 1 (02:44):
A while to get it.
Speaker 3 (02:46):
Had to live and cry to appreciate your life. And
what do you give his words when you're holding the
when you hold me so close.
Speaker 1 (02:54):
Someone better and under your I'm brillant to welcome today's
guest attorney, Walter Chad Blackham from McMurray and Schuster. Chad
is an expert in cannabis compliance and litigation, advising businesses
on navigating the complex web of these inconsistent federal and
(03:14):
state laws governing advertising, marketing, privacy, and consumer protection. He's
played a key role in his firms Cannabis, CBD and
HEMP Practice, helping businesses across the industry, from startups to
major enterprises address challenges unique to the cannabis market. His
(03:36):
clients span the entire cannabis vertical, including cultivators, processors, dispensaries, physicians,
and patients. Chad's background includes regulatory compliance work at the
US Department of Homeland Security, giving him a unique perspective
on statutory compliance, privacy, and data security. He can so
(04:00):
for both businesses and consumers in today's cannabis landscape. Whether
you're a cannabis entrepreneur seeking to stay compliant or a
consumer trying to make informed choices, pads insights will be invaluable.
So let's dive in. Welcome Chad, Maria.
Speaker 2 (04:22):
Thank you so much. What a wonderful introduction and what
a tough act to follow, But thank you very much
for having me on.
Speaker 1 (04:29):
It's so great to see you again. Chad and I
participated together in a National Cannabis Industry Association webinar, really
really digging down into the legalities that his firm has
put together a guide on unlocking cannabis compliance. So Chat
(04:49):
getting right into it. How exactly does the patchwork of
marketing and advertising laws with the absence of clear federal
guidance effect the information consumers receive about cannabis products.
Speaker 2 (05:06):
Well, Maria, that word that you use, the patchwork of laws,
that is so apropos and that is so perfect because
what we run into with this situation is something really
really unique. And you know, the only kind of equivalent
I can think of in any other area of the
law is maybe bitcoin or something else that's brand new
like cannabis. But every single state has their own unique
(05:30):
cannabis regime. Now, of course there are crossovers, there's some blend,
there's some feed over, some reciprocity, but what you're looking
at here, as you aptly described, is a complete patchwork
of laws. Now, when these regulators are making these laws,
their primary focus is of course on the licensing, building
out the facilities, some of the ensuing regulatory compliance. But
(05:51):
where does that leave marketing and advertising. Well, it usually
leaves them on the back burner. So one thing that
often happens is you'll have some of the other regulations
in laws that have been built up for gosh, ny
on one hundred years at this point subsumed in you
have all these rules regulations, some that are by constructive notice,
meaning they post something up on the website and you're
(06:13):
expected to know that, but they're bringing in hundreds of
years of regulatory compliance work into the cannabis sector by
virtue of these ud APP laws and consumer protection laws
that we're going to be talking about shortly. So there's
some commonality. A lot of states have similar U to
APP laws, but they all have their own jurisprudence. A
court case in California does not have the same effect
(06:34):
of law as a court case in Ohio when you're
looking at in Ohio law, and you mentioned as well,
there is the absence of clear federal guidance. And I
love the way that you said that because people will
often say that the Feds haven't said anything, they've given
no guidance, and that simply isn't true. It's just what
they've given is so confusing, it's almost worse than no guidance.
(06:57):
So we do have a lack of clear guidance. We
have some conflicting opinions from the DEA the FTC on
items such as novel or minor cannabinoids like delta eight,
other cannabinoids such as CBN and CBG, so we do
have an overlay with the FTC through the FTC Act. However,
(07:18):
that also has these u'ed app laws that we're going
to be getting into. So there again is no clear
set federal law governing the marketing and advertising of cannabis,
so we have to look elsewhere to these laws that
have been on the books for decades.
Speaker 1 (07:32):
Really, wow, and you DAP is unfair deceptive abusive advertising practices.
Speaker 2 (07:40):
Yes, acts or practices, but you hit the unfair, abusive
and deceptive parts and those are what the claims are.
So you got it perfect and.
Speaker 1 (07:49):
It's synonymous basically with consumer protection. Would you say yes?
Speaker 2 (07:53):
One of the things people here think of when they
hear of you DAP or unfair deceptive practices, they think, wow,
this must be a really niche specific item that comes
up in very limited circumstances. To the contrary you DAP.
When I say youd app, I want you to think
of consumer protection. The two are absolutely synonymous. As you said,
(08:18):
when an attorney general brings a consumer protection claim, they're
doing it through a U dept. Statute. When the fifty
state Attorney generals went after Big Tobacco for some of
their concerns around advertising towards children and marketing, it was
through the you Dept statutes. So absolutely consumer protection actions,
whether from a private citizen or a government regulatory body,
(08:40):
will be brought through these you dep statutes.
Speaker 1 (08:44):
Okay, and then what are these list patchwork of inconsistent laws?
What type of legal challenges do they present for well
meaning brands as they try to navigate the using regulations.
Speaker 2 (09:01):
It's really interesting because, especially in the cannabis sector, we
have an industry. We have so many brands out there
who truly are in my opinion, really trying to do
the right thing by consumers. They want to provide medicine
or adult use products in the dosages described accurately, with
a consistent product that people know what they're getting. Thankfully,
(09:26):
there's good news when it comes to the patchwork of
laws insofar as there's a lot of commonality amongst them.
So when we talk about you DAP, what is an
unfair deceptive abuse of actor practice? It's very subjective, right,
It sounds like a catch all termat it is, but
really it's any type of thing that a reasonable consumer
might be misled by. I'm thinking, of course of things
(09:48):
like misrepresentations. Is to price, the availability of a good,
the quality or grade of a good. You know, if
I tell you I'm going to give you a certain
grade of steel, but then sell you a different grade,
You'll probably be upset. That's u DApp Similarly, every single state,
despite the patchwork, has a anti deceptive law on the books,
(10:10):
meaning deceptive acts and practices are prohibited. The federal government
has the same thing through the FTC Section five Act,
So businesses can take some heart and knowing that there
is commonality among the law in the books. But as
I alluded to earlier, the tricky part where you need
legal advice really comes in with the differences between each state.
The law on the books might be similar, but it
(10:32):
doesn't mean it's been interpreted the same in each state.
It doesn't mean it's being viewed the same. It doesn't
even mean that the regulators are enforcing the same laws.
In cannabis, some states are really big on pesticide enforcement
and some aren't.
Speaker 1 (10:45):
Wow. Wow. And then back to the consumer consequence in state, well,
on both of them, the consumer and the brands, the
inconsistencies and the lack of clarity from these federal regulatory
agencies missioned to protect consumers ends up leaving gaps in
(11:11):
consumer education and protection.
Speaker 2 (11:14):
Would you say I absolutely? Would you know there's there's
a fine balance between regulation and over regulation, but we
really aren't at that balance on either side of the
coin right now in the cannabis industry. You know, I
teach a class over at Capital Law School on cannabis
law and policy, and my students are always flabbergasted by
(11:36):
the amount of problems that come up in the packaging
and advertising space. You know, we begin the packaging and
advertising section, their first impulse is, well, the packaging can't lie.
How much more can there possibly be? And then we
get to the seventy pages in the book and they're like, oh,
my gosh, but let me bring one issue up for you,
in particular, just THHC amount. Right when we're simply measuring THHC.
(12:00):
First off, THC content is not the end all be
all of the effects that a particular cannabis product will
have on a patient. So that in of itself is
an issue that people think that is self sufficient. But
when we're looking at THHC content, you know, we have
three ways of measuring that alone. Are we looking at
total THHC to THC? Are we looking at only THHC
(12:21):
nine tetrahydrocannabinol nine. Are we looking at a THHC per
milligram analysis, where it's saying, as is very common with
gummies ten milligrams per gummy, which is really a THC
per weight analysis. So even within such a small things,
how do we measure THHC? There's multiple variations. Then you
get into things like taxation, whether the other cannabinoids other
(12:45):
than THHC and CBD minor cannabinoids are also listed on there,
And of course you get into things such as flavonoids terpenes,
which a lot of bud tenders may not necessarily be
educated on able to inform the cannsumers, let alone the
consumers than themselves. So consumers first and foremost often are
(13:08):
not aware of their rights when it comes to these
ut app laws. They very often provide not.
Speaker 1 (13:14):
To interrupt, but you have just hit where I was
going with this interview. What's in it for me? What's
in it for the consumer? And so you are you
are right on point. So that's that's what I want
to really dig down into.
Speaker 2 (13:30):
Absolutely well, what's in it for consumers is also what's
in it for businesses in this type of space, and
that's something you really do not see in a lot
of industries. The reason for that, I think is in
a typical consumer business relationship, there's a somewhat adversarial relationship
insofar as the business is trying to kind of really
(13:52):
eke out a little bit more margin with the price
that the consumer will find acceptable to a point where
the consumer is not going to reject the good. Cannabis
is a little bit different in that respect. Consumers are
often willing to pay over face value for their good
so long as it has proper consumer protections on it.
You know, it's labeled properly, it doesn't have improper pesticides,
it's been tested appropriately and has a proper certificate of authority.
(14:16):
So what's in it for consumers? Why do they want
their businesses to be legal? Well, the most important part
is you know what you're getting. I talk. As you mentioned, Maria,
a lot of some of my clients are also patients
as well as doctors, and one of the questions, or
one of the issues I run into most often is
consistency in the products. Right, They'll have an edible one
(14:39):
day and then they'll have it the next day, and
the effect is not the exact same. This is a
consumer protection issue relating to the testing, gradiancy and consistency
of the product. So what's in it for consumers is
a more reliable, trustworthy and safe product as we look
to you know, medicinal adoption. We'll get into this later,
(14:59):
I'm sure sure with Schedule three at the end of
this year, in the beginning of next consumer protection is
going to be the name of the game. We know
how cannabis has been viewed. It was viewed back in
the early nineteen hundreds as a potential health item, then
there's a shift towards criminal enforcement through the War on
Drugs up until very recently. If we want to keep
(15:21):
this street going, if we want businesses and the government
and consumers to continue to view cannabis as medicine or
an adult use product, it has to be consistent, has
to be reliable. I mean, gosh, can you imagine if
you go down to the liquor store and you buy
a pack of beer and oops, I'm sorry, this one
has the same ABV as a bottle of vaka because
(15:43):
we mixed it wrong.
Speaker 1 (15:44):
That's what concerns me, the potential that the lack of
clarity and consistency of the legal framework has for unsafe
products and how there are businesses the regulatory gaps to
the detriment of the consumer safety and public health. We
(16:05):
need cohasive standards right that that will make the risk
being flooded with unsafe for on tested products, will help
minimize that and reward the well meaning brands I would imagine.
Speaker 2 (16:19):
One hundred percent. And you see this actually with your
in my work with NCIA in the marketing advertising guidelines
and why it's so important to put these across the
industry very often, for instance, when when you look at
some of the rules and regulations for a processor, for instance,
in many safe processors for those who may not know,
(16:42):
are often responsible for turning raw canvas plant material into
processed forms such as food, beverages, concentrates, edibles, think things
of that nature. Processors in very many situations are subject
to FDA regulations. They're interacting with what was essentially food
they're cooking in many of their operations. And you know,
(17:04):
even even anyone who's watched bar Rescue or thought about
opening a restaurant can tell you there's a lot of
rules and regulations around keeping that clean. So what a
lot of states do is they slip right into the
regulations a single line that says you have to follow
the industry standards for this particular industry, abide by this
(17:25):
particular trade group's requirements. And these are you know, it's
a small single line and the rules and regulations, but
that's a really big undertaking for a lot of these businesses.
Some states require them to act with the type of
propriety that a controlled substance lab would, a vestige of
the fact that cannabis is still Schedule one on the
Control Substances Act. So it's it's really important that we
(17:47):
start trying to find a way to unify this to
create a more cohesiveness in the industry. So businesses aren't,
you know, battling their own their own rules and regulations
and can fall.
Speaker 1 (17:56):
Yeah, And the challenge is that these brands are face
saying that want to operate responsibly in the legally gray space.
There's there's products that are literally dying on the vine.
I hate when I have to disappoint a customer or
(18:20):
a member of our Greenbay Life Hives that falls in
love with I mean, so many of these CBD products
behind me are no longer available. I have to disappoint
them and try to explain to them that the brands
are just they can't carry as many skews, or they
just despite having a great legal counsel like your firm offers,
(18:45):
they just the exposure the risk is too high. You
have many CBD brands that were very hopeful that the
big box stores would carry them, and you did see
CBD products in the bigger box stores. But then because
of this legally gray state space, the big box stores
started the pull and the manufacturers just these brands are
(19:12):
dying on the vine. And you mentioned the FDA, and
they're in action right on. Evaluating CBD as an ingredient
in food or supplements is a big part of it.
And it seems like there's a regulatory game of pingong.
So the FDA throws it back to Congress. Congress throws
(19:35):
it back to the FDA. Then you have the DA
the FTC.
Speaker 2 (19:39):
So it is an absolute mess. So the biggest change
in cannabis policy and probably the last seventy years or
so since the Controlled Substances Act was implemented, was the
twenty eighteen Farm Bill. And what the twenty eighteen Farm
Bill did was it further legalized. After the twenty fourteen
Farm Bill, it further legalized hemp and hemp derived CBD products.
(20:05):
So hemp under the bill is defined as point three
percent or less tetrahydro cannabin all nine THHC nine, so
point three percent or less. The fact that they defined
it only with regards to THHC nine is actually part
of the problem. So we're getting a huge proliferation of
all these CBD products, and many of them are legal, right,
they've got the point three percent or less THHC nine.
(20:27):
But what we've really started to see is this whole
new market that was not anticipated by the twenty eighteen
Farm Bill, not anticipated by cannabis producers, but was anticipated
by the gray market. And we're calling this the hemp
derived cannabinoid or minor canbinoid market. So these are products
that contain point three percent or less THHC nine meet
(20:48):
the federal definition of hemp, are processed into CBD so
or federally illegal CBD, but then contain extremely large amounts
of other cannabinoids, ranging from you know, delta eight to THHCV, THHCA, cbn, CBG.
You know, there's one hundreds of cannabinoids. The list goes
on forever. So we're running into this very unusual situation
(21:11):
where we have some products that are following the letter
of the law, but almost certainly not the spirit, and
this puts consumers and cannabis producers in a really tough space.
You know, technically, these individuals are working with hemp, which
is not cannabis technically, so they can take all the
tax breaks and all the deductions in credits that these
(21:31):
cannabis businesses simply are not able to. And you know
what do they get for following the rules and regulations.
They have a sixty percent effective tax rate. They aren't
able to work hand in glove with regulatory advisors the
same way as other businesses, and it's really a shame.
So the CBD market is in a really, really tough
spot right now for that reason, we have this whole
(21:53):
hemp derived cannabinoid issue as producers and consumer and really
the consumers I think are the ones who out here.
You know, in many in many states in particular, that
do not have medical or recreational or adult use cannabis.
Consumers are looking for a way to consume cannabis legally,
and so many of them will turn to CBD. And
(22:15):
what often happens is you'll have consumers and they'll drive
by stores and they'll say we have THHC here or
Delta eight or by cannabis here, yep. And what the
consumers do not know is that these are hemp derived
cannabinoid products. This isn't to say that all hemp derived
cannabinoid products are bad. We could stand to get a
little more information on some of this is the synthetic ones,
(22:37):
I think, but we know things like CBN CBG. These
are totally fine. But the problem arises when these hemp
derived cannabinoid products are separated out from the typical cannabis
regulatory regimes. The result is they don't They aren't subject
to the same testing, same pesticide restrictions, same quality control.
So you're really relying on the word of the manufacturing
(23:00):
producer rather than any type of consumer compliance efforts to
verify what's going on.
Speaker 1 (23:05):
All right, well, hang on, you're at a perfect perfect
point because we're twenty minutes into the show, and where
I am in California, it is for twenty I mean,
you have just dropped so many You've just dropped twenty
minutes of knowledge bombs on us, and every four to
(23:27):
twenty we have we take a moment to ask our
guests for a quick hit, quick hit four twenty, what
do you got for us?
Speaker 2 (23:35):
I've got a few, but in terms of a knowledge one,
I've got a really good one that I think you
might like. So CBD is legal, but as long as
it contains the point three per center lest THHC nine.
But what a lot of people, as well as manufacturer forms.
What a lot of people may not know, though, is
that the CBD foods and beverages that you find in
(23:56):
gas stations and retail serce, those continue to be federally
illegal even if it's CBD, even if it's point three percent,
even if it has no other cannabinoids in it whatsoever.
And the reason for that is under the Food, Drug
and Cosmetic Act with the FDA, a product can only
be included in food or drink if it's generally recognized
(24:20):
as safe or and I'm not making this up for
the segment, or if it's grass. Right, So unless the
product is grass, exactly unless it's grass, has to go
through a really really lengthy review process before you put
in food or drink. As you can imagine, CBD has
been illegal for the past, you know, near one hundred
years don't have a whole lot of studies showing it
(24:40):
super safe, even though colloquially we know it is. And
as a result, CBD is not grass according to the Food,
Drug and Cosmetic Act and technically cannot be included in
foods or beverages.
Speaker 1 (24:53):
That was a knowledge bomb. It was a potent, important
quick hit. I'm going to use it because every time
I run into somebody who tells me, yeah, but CBDs,
why should you know? I try to get people to
care and understand. People will say, yeah, but CBD is legal.
I'm like, I don't know, it's not not if you
(25:15):
put it in a gummy or a drink mix. Oh yes,
I saw it at Walmart or the gas station. Like
you said, Well, I'm just going to play your quick hit.
I'm just going to send them a link. So how
do we bridge the gap? How do we bridge the
gap to get to a path of clarity? What needs
to change?
Speaker 2 (25:34):
So the first thing that needs to change, thankfully, it
looks like it's going to be happening quite soon, and
that's the rescheduling of cannabis now. So currently cannabis specifically
again tetrahydrocannabinoll nine THHC nine is a Schedule one substance
under the Controlled Substances Act. That is the source of
(25:57):
cannabis's illegality, the reason they're a complete federal prohibition and
I did not did drupt?
Speaker 1 (26:03):
Can you just explain to people, because not everybody knows
what that means to be public enemy number one? What
does that mean? What is Schedule one?
Speaker 2 (26:13):
Public Enemy number one? Is right? So the Controlled Substances
Act places drugs on a schedule of one to five,
one being the most dangerous with the least medical benefit,
in five being the least dangerous with the most potent
medical benefit. Cannabis THHC nine is currently a Schedule one
drug meeting it has no currently accepted medical benefit and
(26:38):
a high potential for mental and physical addiction. The funny thing,
as you may know, is the FDA approved ACBD based
multiple CBD based anti seizure epilepsy drugs for children of
specifically EPI dialects a little bit ago, which seems to
(26:58):
fly in the face of that as well as the
grass tech designation of CBD. But really it's it's it's
quite ironic in that respect that they're saying. In one hand,
you know, it has all this danger, but at the
same time there's certain government patents on seeds and other
production methods, so it really is quite an unusual dichonomy.
(27:19):
But the first thing that really needs to happen is
the change of Schedule one, which looks like it's going
to be happening. So there's a petition to move it
to Schedule three, recommended by HHS Health and Human Services,
kicked over to the Department of Justice. And this is
this is a fun litl quick hit for any attorneys
out there, but the rescheduling process for cannabis is entirely unique,
(27:41):
whole unique. It does not bear any other resemblance to
any other type of rule change or regulation change. Very unusual,
and there's been some uncertainty with the new administration coming
in whether the Schedule three change is going to continue
to happen. Thankfully it looks like it will, but Schedule
three is going to kick cannabis into the third level
(28:01):
of the Controlled Substance Act ME has some currently accepted
medical benefit and a low to mild potential for psychological
or physical abuse, So we're not quite there yet. It's
but it's a lot better. And what's really important about
the Schedule three designation is for medical cannabis businesses, and
you touched on it so beautifully, Maria, that this is
(28:25):
a health and adult recreational use issue, but a lot
of the gateway and they'll of the way we get
our foot in the door is through the medicinal aspect.
And I don't want to speak for you, but I
think we probably share similar views and so far as
that one was the primary use of the plant is
for medical benefit. But one of the great things about
Schedule three is these medical businesses are going to be
(28:45):
able to use FDIC insured banks. Right now, cannabis businesses
cannot use federally insured banks. They are the sounds like
a joke, but they're literally stuffing money into safes and
then carrying ten of thousands of dollars in their car
to their mattress. The Schedule three designation is also going
(29:06):
to open up a few more advertising and marketing restrictions
for them, and is also going to enable medical cannabis
companies to potentially take credits and deductions currently section two
ade of the tax Code, which I'm sure many of
your viewers have heard the name, and if we have time,
I have a fantastic story about how two AD came about.
(29:28):
But currently two ADE prevents cannabis businesses or any business
dealing in a Schedule one or two drug from taking
credits or deductions. The effective tax rate for cannabis businesses
because of this is like sixty percent. In some cases,
they're paying sixty percent of their revenue and taxes extremely high.
Once we get to Schedule three, this won't be an issue.
(29:49):
So they'll have banking access, they'll be able to raise capital,
they'll be able to utilize the US tax code in
the way literally every other type of business can. You know,
I think one of the questions we need to ask
isn't just how do we harmonize the federal laws to
make things better for them, but how they managed to
survive so long the way things are?
Speaker 1 (30:10):
Yeah, exactly. I mean on the road from normalization to legalization.
I mean, anyone out there who has this entrepreneurial spirit
or is coming at it from a whelm meaning place,
look at what you're saddled with. If if you think
(30:31):
this is a green rush, think again, guys, this right right,
this is we need to turn it into a green revolution,
because how could anyone enter into this business unless nothing
against them. But if you're a giant mso, I mean
you have to you have the lawyer up. There's just
(30:56):
you'll get wiped out and find some violations. And with
two ade, if you can't write off your business expenses
on top of having the burden of legal expenses that
unlike any in any other industry, and then you can't
even write those costs off. I mean the consequences and
(31:20):
the consequence back to the consumer is we want well
meeting brands to enter the space. And another episode I'd
love to have you come back for is the impact
of social equity. I mean, how does anybody with a
social equity life right? How do they even want? Our
phones are ringing off the hook. Chat Everyone wants to
(31:41):
chat with you. There's so many questions. So let's hear
the two ade text story. You've got dispensary owners in
La burning to hear this story.
Speaker 2 (31:52):
Really briefly, the social equity idea sounds amazing and I
would love to talk with you on that in the future.
Because a little bit of a tear. Our firm was
actually involved in the most prominent social equity litigation lawsuit
in Ohio for our cannabis systems.
Speaker 1 (32:08):
So well, what was that? What was the lawsuit?
Speaker 2 (32:11):
It was the It was the Pharma Can lawsuit. Two
ends at the end of farmacam but involved a bunch
of companies. We were representing harvest grows in that case.
I'm sure it'll pop up if you check it right.
But the two ad store out. Gosh, I was really
hoping we'd get to it. So that's fantastic.
Speaker 1 (32:30):
So people curious.
Speaker 2 (32:32):
Perfect perfect. So Section two eighty, as I mentioned, prevents
businesses dealing with Schedule one and two drugs from taking
ordinary or necessary business credits and deductions, all credits and deductions. Really,
but the law came about, I believe in the eighties
there was a young man who got pulled over driving
(32:54):
by a cop and the cop searched his car and
he found fairly large amounts of cocaine. He found baggies,
a scale, zip ties, and he said, okay, well you're
clearly trafficking cocaine, and he arrested the man for cocaine trafficking.
At the man's trial, he tried to argue that as
a cocaine trafficker, his profession was cocaine trafficking and therefore
(33:16):
he should be able to deduct the costs of his scales,
his baggies, his zip top, and the court agreed with
him because nothing in the tax code prohibited the deduction
of an illegal business. So two AD was implemented after
that man took the I know it sounds too funny
to be true, but it absolutely is. So two ADE
(33:37):
was implemented by Congress after a cocaine dealer successfully deducted
his scales, baggies, and ties from his taxable basis.
Speaker 1 (33:45):
Okay, well, you're reading my mind because our next segment
is legal updates, and one of the things I love
to do is ask our attorney guest for the craziest
laws and then the most sensible ones. And my crazy
law segment I call I'm not making this up. So
now you're telling me with certainty on my next episode
(34:07):
if I want to throw to a crazy law and
I'm not making this up, I can actually say that
this titye originated from a cocaine dealer claiming and prevailing
on the assertion that he could write off his ziplock
(34:28):
bags and zip ties and all of his business expenses
for running his illegal cocaine operation. That was at one time.
Speaker 2 (34:37):
Okay, that is completely correct. Is hilarious and comic colds
it sounds. But as I saying goes, bad cases make
good law.
Speaker 1 (34:50):
Unbelievable. It's time for nipping in the bade. So what's
one of your one of your as common misconceptions you
run into or something that you would just like to
nip in the bud?
Speaker 3 (35:06):
Well?
Speaker 2 (35:07):
I got a little bit of a fun one first,
but you know, there there, And of course I'm not
a doctrine. None of this is medical advice. This is
all based of you know, things I've read in my
own opinion edification. But one of the most common myths
about cannabis is that it negatively impacts your memory, and
particularly or short and long term memory. Short term more so,
(35:29):
but that can have really deleterious and negative effects over
the long term. There have been fewer studies on this
and many other things. A recent study, actually the two studies.
The first was a long term longitudinal study out out
of Sweden in the Netherlands area, which found that cannabi
long term cannabi in this I believe this was the
first and potentially the only current long term longitudinal cannabis
(35:53):
based study looking individuals over around twenty year period. It
found no correlation between cannabis use and negative memory shorter
long term for long term users using ten plus years
or more at least to join your day, which is
how many of these studies classify heavy users as well.
So that's really a big significant part. The other one
(36:14):
is that there is a recent study and a lot
of people might get a kick out of this, that
cannabis use actually may help prevent Alzheimer's and that specifically
high CBD forms of cannabis can act as a neuroprotectant
for your synapses and help help the signals in your
brain fire and get sent faster. Cannabis has also been
shown to potentially create new neural pathways in your brain.
(36:38):
What's really interesting about that is when we associate new
neural pathways in the brain with drug use. Cannabis is
a drug we often associate in a negative way. It
might be forming an addiction pathway in the case of opiates,
for instance. What we see with cannabis, interestingly, is some
of these pathways are remarkably similar to your brain normal pathways,
(37:01):
just in different sections, not creating the same addictive tendencies,
but potentially providing the same protective benefits.
Speaker 1 (37:10):
Schedule one.
Speaker 2 (37:11):
My uh, exactly exactly.
Speaker 1 (37:17):
I you know, I was familiar with the second study
we had in episode three, we had doctor Minesh gern,
a neuroscientists from me you see, yeah, you see San Francisco,
and he's in Robbin Carhart Harris's world renowned lab studying
(37:37):
the effects of psilocybin and cannabis on the brain. And
he had talked to us about that second study you mentioned.
And when you talk about a neuroprotectant, one other thing
to help substantiate your nipping this myth in the butt,
And who better than to ask a lawyer? The US
(37:59):
government had the patent uncannapinoids as a neuroprotecting until very recently.
Is that correct?
Speaker 2 (38:08):
It absolutely is? Guess how did it?
Speaker 1 (38:13):
Well, that's another episode. We'll have an episode on Harry Anslinger,
the nineteen thirty seven Marijuana Tax Act, Will's falling up,
will follow it through this nineteen seventies, the eighties War
on drugs. That's the whole other episode. But I think
it is so critical and important for people to understand
(38:33):
the consequences of this being on a Schedule one. And
then how those consequences parlay into the advertising and marketing
compliance and how that impacts brands, well meaning brands, guys,
which impact you looking for top shelves premium products that
(38:57):
literally are up in smoke.
Speaker 2 (39:01):
You know the comment there too, the reference to Anslinger
was you highlight a really fantastic part of what the
War on Drugs really did. So cycling back a little bit,
we talked about the grass designation generally recognized as safe.
How do you determine if something is generally recognized is safe?
Speaker 1 (39:23):
Right?
Speaker 2 (39:23):
Well, the federal standard, and this is a federal law
under the Food, Drug and Cosmetic Act, is in order
to determine something as grass, you need what is referred
to as reliable and competent scientific evidence. Now, how on
earth do you get reliable and competent scientific evidence on
a schedule on drug that nobody is allowed to study.
(39:45):
It's kind of a catch twenty two rock and a
hard place thing, right. So, Anslinger and the Control Substance
Act and the War on Drugs, all this put us
in a cart before the horse situation where we're saying
it's not generally recognized as safe, but we're not going
to allow you to study its effects to make any
further determinations on your own behalf.
Speaker 1 (40:04):
It's in a box. It's in a box, and who
better than attorneys to make a case for it. I mean,
it's it's it's it's improperly imprisoned. So we got to
bust it out. We've got to bust it out people.
But it's the people who have the power. So moving
into consumer insights and tips, speaking about people having the power,
(40:28):
I mean, what are the best ways for consumers to
find a trustworthy brand in between all of this navigating
this evolving market with all these twists and turns and nuances.
Speaker 2 (40:41):
Well, the first thing in consumer can do is do
their own research. You know, the larger companies are generally
fairly reputable. If they've been around for a while in
the space, they must be doing something right. But you
can also do is you can actually look at your
local regulatory thought for instances in Ohio, this would be
(41:01):
the Department of Commerce, and they'll list all the enforcement
actions and the letters and the warnings and the concerns
that they send to these companies. Sign up for local
mailing lists for trade industry groups, maybe a local cannabis
group in Ohio. That might be okan, I'm California normal.
For instance, they send out plenty of amazing newsletters and updates,
(41:23):
and you know these consumer groups their their primary focus
is also consumer protection. So getting involved, getting knowledgeable about
the products is the first step. Also, also learn what
works best for you. We talked about this a little bit.
The outset. There is such a prevalent view in marketing
(41:44):
and advertising cannabis that THHC content is king, that consumers
are always chasing the biggest THHC high, that they want
massive ninety percent concentrates or thirty I saw a flower
being advertised thirty eight percent THC content when I was
in Vegas this past weekend, and I have to tell you,
(42:06):
first off, I don't believe it. Second off, who wants that? Right?
So when it comes to making, certainly.
Speaker 1 (42:14):
Not the majority of consumers.
Speaker 2 (42:16):
Certainly not the majority. And you know, there's there's certainly
a market for these special team each products. But if
you have an average consumer who's got you know they're
they're coming to a bud tender and they say, I
have trouble sleeping or I have glaucoma, it makes my
vision bad.
Speaker 1 (42:31):
What do I do?
Speaker 2 (42:32):
And they're not knowledgeable about the effects of terpenes and
other canbinoids. You know, CBN cannabinall is great, is great
for sleep? Nine not so much? Uh CBG a little
if if there's if the bud tender is you know,
oh you have severe pain. I'm going to give you
the strongest product we have. That may not be best
(42:52):
for that particular individual. Maybe they need some terp beta.
Carophyoline is a terpene that is fantastic for pain management.
Maybe they need that, or then they need a high
THC content.
Speaker 1 (43:04):
But what would you find that in? What would you
find that in?
Speaker 2 (43:08):
So so it depends on the product and how it's manufactured.
Terrapines can be inserted and taken out as needed. But
you raise a really interesting point that many states do
not even list what terpenes are on there, right, Yeah,
so that's a whole separate issue outside of even the
THHC content. And then again, most states are only listing TC,
(43:32):
THCA and CBD. You're not You're not getting any knowledge
about any of the other cannabinoids, let alone all these
other phytochemicals inside of the plant. And then of course
you run into things such as the entourage effect where
many people believe that when all of the canbinoids are
included together, they have a more cohesive kind of group
effect than if you single them out as an isolate.
(43:56):
So the first thing consumers really need to do is
find what works best for them, and the way to
do that is to find a knowledgeable bud tender with
a dispensary you like, and if possible, aim for products
that provide the most possible amount of information on THC content,
terpenes and also growing in production methods such as pesticide
(44:17):
usage very important.
Speaker 1 (44:19):
And I mean this is assuming you're in a state
where it's illegal so called legal right absolutely, wow, wow, Chad,
I mean, and that is for products with more than
point three percent THC, that would be if you're in
(44:40):
a state where it's legal, you would get that from
a dispensary. But the point you're making is all this
measurements in benchmarks is based on THC. Well, you're going
to a dispensary. It's not that you're just going to
get something that's gotten greater CBD the zero point three percent.
(45:02):
It's because it's not like you said, you're not looking
for something with thirty eight percent THC it's so much
more than the promise of chasing a high. It's the
intention behind it. And you mentioned some people would like
to have it as an option for sleep, as opposed
to pharmaceutical drugs that don't work for them or have
(45:24):
too many side effects. So it's the intention behind it.
And it's not the THC that's gonna be the be
all and end all. It's the vital cannabinoids. It's the
ter being profile. But it's nuanced. It's nuanced. The science
is nuanced, the applications are nuanced, the law is nuanced.
(45:46):
And I just love speaking with experts like yourself and guys.
I have to say, as a business owner and someone
trying to make my way in this space as a
publishing company, having to be very very concerned about what
type of advertising and marketing materials brands want me to
(46:09):
move forward, you need firms like McMurray and Schuster. I
can't say enough about McMurray and Schuster because just for
the other businesses out there, I'm sure they've all gone
through what I've gone through. I just wanted to get
my hats off to McMurray and Schuster, Chad. Whenever I'm
looking for legal counsel. Yeah, that's just one other suggestion
(46:35):
for businesses. There you go consumer insight and tip what
businesses look for when you're looking to hire a law firm.
What drew me to your law firm and having you
here as a guest today is you guys have a
prolific your founders if you could speak a little bit
about them, past history in unregulated spaces, and there are
(47:01):
so many not bad mouthing anybody, and you're teaching this
is so exciting at a university law to the next
generation of our legal experts in this evolving marketplace. But
what should businesses look for when looking for a law firm?
(47:22):
My pain point was it was disparate. I would talk
to one law firm and say can I get a
trademark on this? They'd say yes. Another law firm they'd
say no. Another law firm that would say, well, I
need a ten thousand dollars retainer, And it seemed like
they wanted tens of thousands of dollars from me to
write a white paper on it to educate them. So
(47:46):
I can't say enough about you guys, And I think
it's because you're sitting on the shoulders of two incredible
women female found it law firm. Tell us a little
bit about the founding partners and about the hit history
and for the businesses out there, what do you look
for when you're vetting a law firm, Because this is
the wild wild West.
Speaker 2 (48:09):
It really is. So we're me in particular, I'm absolutely
blessed to work where I do at McMurray and Schuster.
Our founding partners are hell McMurray and Michelle Schuster. But
as you know, it's a woman owned law firm that
they are both absolutely incredible, really just inspiring women. They
both came all of our partners have, but they in
(48:31):
particular came from separate, big law firms. They both had
histories and consumer protection offices. Is consumer protection chiefs in
the Ohio Department of Commerce, so really storied, decorated public
service record, great service in the private sector for extremely large,
powerful law firms. And they both kind of were sitting
(48:53):
around look at each other one day and they said that,
you know, there's got to be a better way. There
has to be a better work life balance. There's a
point at which you know you can't really produce more
beyond what you're doing. How do we do this, How
do we create a firm that's oriented towards the future
and the next generation of talent, and also specifically, what
areas of law do we look at? So they created
McMurray and Schuster. I cannot say enough positive things about
(49:16):
the firm, and that's not just because they pay me,
but it is I've worked in a lot of places.
Is the best place I've ever worked. And what really
makes it unique is everyone here has come with experience
from highly regulated niche areas, whether it's be consumer protection, yeah, absolutely,
consumer protection, telemarketing. I defend telemarketers, but I never like
(49:39):
to tell anybody that because they assume I'm a bad guy.
But just like our cannabis clients to tell marketers are
the compliant ones. So we bring experienced from these really
highly regulated niche areas with very few or very complex laws.
We do a lot of privacy work as well that
the regulators look at very intensely. They brought me on
(50:00):
in around twenty seventeen twenty eighteen and asked me what
I saw as a great area for the firm. I
told them cannabis, and they were gracious enough to give
me the opportunity to start the practice group and expand it.
So what do businesses need to look for? Well, they
need to look for that, I think. And I'm not
just saying that because.
Speaker 1 (50:18):
I agree I learned the hard way. I've learned the
hard way. But I agree, well, you know, you.
Speaker 2 (50:26):
Learn the hard way, but you'll learned the right way
at the same time, because too many people go down
the track with the wrong firm and then they're two
years into it and they realize it. But the thing
with the cannabis sector you really need to look for
is you need someone who has been in the system
from the beginning, who knows the law. Intimately. You don't
want someone who's an employment lawyer who knows a little cannabis,
(50:49):
a privacy lawyer who knows a little bit of cannabis.
You want a cannabis lawyer first and foremost, who knows employment,
who knows privacy. And you know, we're lucky because we
defend a lot of consumer we defend a lot of
class actions, billion dollar lawsuits despite our small size, which
is really kind of unique. So we've had experience in
(51:10):
all these other areas as well, So it's not just
the cannabis related stuff. But when you're looking for someone
with cannabis issues, and we talked about this at the outset,
there's no overarching federal laws. There's a patchwork of law.
There's no single one that applies. That doesn't mean there
aren't federal laws that apply. They still are, you.
Speaker 1 (51:29):
Know, it's wid still on the hook for them, you're
still on the look for them. You mentioned something earlier
about constructive notice. I mean, whether you know they exist
or not, notice is out there, so you're on the hook, I.
Speaker 2 (51:42):
Mean, And gosh, Maria, that's such good points speaking of
knowing if it's out there or not. I'm not sure
if we're any to get to it later. This large
lawsuit you and I had chatted out about a bit before,
But there is a two billion dollar lawsuit ultimately reduced
to a paltry nine hund and fifty five million on appeal.
(52:02):
But there's a two billion dollar lawsuit against health and
CBD supplement Marketer. And the law that the people suit
under relates to telemarketing, the Telephone Consumer Protection NEC. I
guarantee you ninety percent of cannabis companies have not even
heard of that law. Yet. There's a two billion dollar
lawsuit out there against the company for it, and it
applies to any company making calls or texts through the clients,
(52:26):
which cannabis companies certainly are. So you need to look
for someone who knows the cannabis issues first and foremost,
but you also got to find someone who knows those
blind spots.
Speaker 1 (52:35):
And those ancillary issues that relates. So Chad, I can
talk to you forever. I hope you'll come back. This
has been amazing. I'm a fan of McMurray and Schuster.
I will disclose that I'm not a client. I'm a fan.
Speaker 2 (52:50):
We're a fan of you in greenbe Life as well,
but that's no secret. Ah.
Speaker 1 (52:54):
So before we close today, I just want to thank
thank you Chad for sharing your expertise, your insights into
these legal challenges that do surround cannabis marketing, advertising, and
affect consumer protection. You know your works, the work at
(53:15):
McMurray and Schuster. It's critical as we strive for more
equitable and inform informed right cannabis industry. As we've explored,
the lack of clear, clear regulation has consequenes. It has
high stakes for consumers. It creates confusion, misinformation, potential health
(53:41):
risks from unsafe products coming off of eight decades of
an education vacuum worse than an education vacuum misinformation.
Speaker 3 (53:50):
You know.
Speaker 1 (53:51):
And yeah, and for consumers, it becomes harder to trust
the products they buy. And unless they're excited about them
and really getting the positive effects, they're not going to
create the conversation for their policymakers to know that not
only do we need to reschedule it, we need to
(54:13):
deschedule it at the end of the day. And you know,
these legal gray areas can very unintentionally put consumers and
businesses at risk, especially when you mentioned not one state
has a uniform system. Every state has different laws, and
(54:37):
then you have federal laws and then you have federal
regulatory agencies that are in conflict with one another. Or
the legality is ambiguous, it's vagan, it's ambiguous, Congress says,
from the Hemp Farm Bill. Yeah, and is legal if
it's got point three percent. But then the FDA has
something to say about it, the DEBA has something to
(54:57):
say about it, the FDC has something to say about it.
So you know, right, So for brands, the stakes are
are very high, and we need to support brands that
are struggling to find their way to be pioneers through
this maze to preserve premium top shelf brands, the risk
(55:19):
of legal penalties to these businesses that are trying to
do it right, the challenges they're faced with communicating responsibly
with unclear boundaries, the overall market instability. It makes it
difficult for even the most ethical companies to operate confidently.
(55:39):
And the instability, I'm sorry, it stifles innovation, it increases cost,
and that impacts all of us, because whether you're for
cannabis or not, it's not just the promise of chasing
a high, which which again there's time and place, but
it peeple depend on it. There are pediatric cases where
(56:04):
it's the only thing that helps with seizures, and fortunately
it's now an ingredient in an anti seizure drug EPI dialects.
But it's a game changer for many people where pharmaceutical
drugs just don't have a solution or these side effects
are too negative. And you know, it's also a great
(56:26):
alternative to alcohol. That's a whole other episode. But we
need a cohesive fat regulatory framework that benefits all of us.
And it's important because that's what will foster trust, safety,
and growth both in the marketplace and in our communities,
(56:48):
which is a whole other topic because in California, for
every one legal dispensary, there's four illegal ones and that's
a whole other thing. But until that framework exists, education
is our most powerful tool. So I'm like your biggest
fan because you're teaching and you found a platform a
university that's got it on their curriculum. So you go, Chad,
(57:12):
you know, and as consumers, what could we do well?
We got to stay informed, We've got to ask questions,
we've got to do our research, like Chad said, and
we've got to hold both brands and policymakers accountable. For brands,
focus on transparency as much as you can, and compliance
(57:33):
and get the right advice for compliance. You don't know
it all, trust me, there are I don't even want
to know what potential violations are out there that as
business owners we don't know about, but I'm sure Chad
can tell us and has already today a good amount
(57:54):
of them. So we're all part of this evolving landscape
and together we have power to shape it, and we
want to shape it responsibly. Your feedback is invaluable, so
please reach out with any questions or comments about today's episode,
and reach out with any other topics you'd like to
hear in the future. You can connect with us on
social media or through our website. Thank you for joining
(58:18):
me today on Just Say No. Remember knowledge is power,
and together we are redefining cannabis, one conversation at a time.
Until next time, stay informed, stay curious, and for God's sake,
just say no. That's no with a k KY and
o W. There were two consonants off when they were
(58:40):
saying just say no, so that's it. Thanks a lot.
Just Say No is a greenbee Life presentation, airing live
weekly on Friday afternoons from four to five pm Pacific
on KCA Radio and KCAA TV. Archived audio episodes are
(59:01):
on greenbeelife, greenbelife dot com, iHeartRadio, Spreaker, and most third
party major platforms. For archived videos, check them out on GBLTV,
on greenbeelife YouTube, and Rumble. To follow us our Instagram
(59:22):
and Facebook is at just Say No Radio. To apply
to be a guest on the show or for sponsorship
and advertising opportunities, go to greenbeelife dot com. Forward slash,
just say no and feel free to reach out to
(59:42):
me Maria for any questions. I'm at Maria at greenbelife
dot com or call me at eight one eight seven
five eight six nine two five.
Speaker 2 (59:58):
NBC News on ACAA LOMAL, sponsored by Teamsters Local nineteen
thirty two, Protecting the Future of Working Families Teamsters nineteen
thirty two, dot org
Hello again, and welcome to Just Say No. I'm your
host Maria Calabrey's coming to you on KCAA Radio ten
fifty am one oh six point five FM Radio. What
we've seen take place in the cannabis industry over the
past several years has been the most rapid transformation of
(00:31):
any sector I've ever witnessed. If you consider the cannabis plant,
with three harvestable components, each serving unique purposes, there aren't
too many other crops that can claim that versatility. And
if you're wondering why this topic should matter to you,
(00:53):
consumers and businesses alike, well, the impact of regulatory and
action might just surprise you. So let's get ready to
uncover how cannabis advertising and marketing laws, or the lack thereof,
shape what you know, shape public perception and how brands
(01:13):
can and cannot communicate about cannabis. Hey, whether you're a
consumer looking for answers or a brand seeking clarity, this
conversation matters because it affects all of us. The more
we understand, the better equipped we are to demand transparency
(01:34):
and fairness from both businesses and policymakers. So sit back
and relax as we explore some of the most pressing
themes shaping the cannabis industry with some of the brightest
minds in the space.
Speaker 2 (01:53):
By twenty twenty, Bank of America and Merrill Lynch estimate
that will grow to thirty five billion dollars, and many
experts believe it could eventually reach two hundred billion dollars
each and every year.
Speaker 3 (02:12):
The son wonder, see up this guy me, I can
see so much, father, your monaser, your monases. I'm a
(02:41):
betterfly who is only begone, taking me.
Speaker 1 (02:44):
A while to get it.
Speaker 3 (02:46):
Had to live and cry to appreciate your life. And
what do you give his words when you're holding the
when you hold me so close.
Speaker 1 (02:54):
Someone better and under your I'm brillant to welcome today's
guest attorney, Walter Chad Blackham from McMurray and Schuster. Chad
is an expert in cannabis compliance and litigation, advising businesses
on navigating the complex web of these inconsistent federal and
(03:14):
state laws governing advertising, marketing, privacy, and consumer protection. He's
played a key role in his firms Cannabis, CBD and
HEMP Practice, helping businesses across the industry, from startups to
major enterprises address challenges unique to the cannabis market. His
(03:36):
clients span the entire cannabis vertical, including cultivators, processors, dispensaries, physicians,
and patients. Chad's background includes regulatory compliance work at the
US Department of Homeland Security, giving him a unique perspective
on statutory compliance, privacy, and data security. He can so
(04:00):
for both businesses and consumers in today's cannabis landscape. Whether
you're a cannabis entrepreneur seeking to stay compliant or a
consumer trying to make informed choices, pads insights will be invaluable.
So let's dive in. Welcome Chad, Maria.
Speaker 2 (04:22):
Thank you so much. What a wonderful introduction and what
a tough act to follow, But thank you very much
for having me on.
Speaker 1 (04:29):
It's so great to see you again. Chad and I
participated together in a National Cannabis Industry Association webinar, really
really digging down into the legalities that his firm has
put together a guide on unlocking cannabis compliance. So Chat
(04:49):
getting right into it. How exactly does the patchwork of
marketing and advertising laws with the absence of clear federal
guidance effect the information consumers receive about cannabis products.
Speaker 2 (05:06):
Well, Maria, that word that you use, the patchwork of laws,
that is so apropos and that is so perfect because
what we run into with this situation is something really
really unique. And you know, the only kind of equivalent
I can think of in any other area of the
law is maybe bitcoin or something else that's brand new
like cannabis. But every single state has their own unique
(05:30):
cannabis regime. Now, of course there are crossovers, there's some blend,
there's some feed over, some reciprocity, but what you're looking
at here, as you aptly described, is a complete patchwork
of laws. Now, when these regulators are making these laws,
their primary focus is of course on the licensing, building
out the facilities, some of the ensuing regulatory compliance. But
(05:51):
where does that leave marketing and advertising. Well, it usually
leaves them on the back burner. So one thing that
often happens is you'll have some of the other regulations
in laws that have been built up for gosh, ny
on one hundred years at this point subsumed in you
have all these rules regulations, some that are by constructive notice,
meaning they post something up on the website and you're
(06:13):
expected to know that, but they're bringing in hundreds of
years of regulatory compliance work into the cannabis sector by
virtue of these ud APP laws and consumer protection laws
that we're going to be talking about shortly. So there's
some commonality. A lot of states have similar U to
APP laws, but they all have their own jurisprudence. A
court case in California does not have the same effect
(06:34):
of law as a court case in Ohio when you're
looking at in Ohio law, and you mentioned as well,
there is the absence of clear federal guidance. And I
love the way that you said that because people will
often say that the Feds haven't said anything, they've given
no guidance, and that simply isn't true. It's just what
they've given is so confusing, it's almost worse than no guidance.
(06:57):
So we do have a lack of clear guidance. We
have some conflicting opinions from the DEA the FTC on
items such as novel or minor cannabinoids like delta eight,
other cannabinoids such as CBN and CBG, so we do
have an overlay with the FTC through the FTC Act. However,
(07:18):
that also has these u'ed app laws that we're going
to be getting into. So there again is no clear
set federal law governing the marketing and advertising of cannabis,
so we have to look elsewhere to these laws that
have been on the books for decades.
Speaker 1 (07:32):
Really, wow, and you DAP is unfair deceptive abusive advertising practices.
Speaker 2 (07:40):
Yes, acts or practices, but you hit the unfair, abusive
and deceptive parts and those are what the claims are.
So you got it perfect and.
Speaker 1 (07:49):
It's synonymous basically with consumer protection. Would you say yes?
Speaker 2 (07:53):
One of the things people here think of when they
hear of you DAP or unfair deceptive practices, they think, wow,
this must be a really niche specific item that comes
up in very limited circumstances. To the contrary you DAP.
When I say youd app, I want you to think
of consumer protection. The two are absolutely synonymous. As you said,
(08:18):
when an attorney general brings a consumer protection claim, they're
doing it through a U dept. Statute. When the fifty
state Attorney generals went after Big Tobacco for some of
their concerns around advertising towards children and marketing, it was
through the you Dept statutes. So absolutely consumer protection actions,
whether from a private citizen or a government regulatory body,
(08:40):
will be brought through these you dep statutes.
Speaker 1 (08:44):
Okay, and then what are these list patchwork of inconsistent laws?
What type of legal challenges do they present for well
meaning brands as they try to navigate the using regulations.
Speaker 2 (09:01):
It's really interesting because, especially in the cannabis sector, we
have an industry. We have so many brands out there
who truly are in my opinion, really trying to do
the right thing by consumers. They want to provide medicine
or adult use products in the dosages described accurately, with
a consistent product that people know what they're getting. Thankfully,
(09:26):
there's good news when it comes to the patchwork of
laws insofar as there's a lot of commonality amongst them.
So when we talk about you DAP, what is an
unfair deceptive abuse of actor practice? It's very subjective, right,
It sounds like a catch all termat it is, but
really it's any type of thing that a reasonable consumer
might be misled by. I'm thinking, of course of things
(09:48):
like misrepresentations. Is to price, the availability of a good,
the quality or grade of a good. You know, if
I tell you I'm going to give you a certain
grade of steel, but then sell you a different grade,
You'll probably be upset. That's u DApp Similarly, every single state,
despite the patchwork, has a anti deceptive law on the books,
(10:10):
meaning deceptive acts and practices are prohibited. The federal government
has the same thing through the FTC Section five Act,
So businesses can take some heart and knowing that there
is commonality among the law in the books. But as
I alluded to earlier, the tricky part where you need
legal advice really comes in with the differences between each state.
The law on the books might be similar, but it
(10:32):
doesn't mean it's been interpreted the same in each state.
It doesn't mean it's being viewed the same. It doesn't
even mean that the regulators are enforcing the same laws.
In cannabis, some states are really big on pesticide enforcement
and some aren't.
Speaker 1 (10:45):
Wow. Wow. And then back to the consumer consequence in state, well,
on both of them, the consumer and the brands, the
inconsistencies and the lack of clarity from these federal regulatory
agencies missioned to protect consumers ends up leaving gaps in
(11:11):
consumer education and protection.
Speaker 2 (11:14):
Would you say I absolutely? Would you know there's there's
a fine balance between regulation and over regulation, but we
really aren't at that balance on either side of the
coin right now in the cannabis industry. You know, I
teach a class over at Capital Law School on cannabis
law and policy, and my students are always flabbergasted by
(11:36):
the amount of problems that come up in the packaging
and advertising space. You know, we begin the packaging and
advertising section, their first impulse is, well, the packaging can't lie.
How much more can there possibly be? And then we
get to the seventy pages in the book and they're like, oh,
my gosh, but let me bring one issue up for you,
in particular, just THHC amount. Right when we're simply measuring THHC.
(12:00):
First off, THC content is not the end all be
all of the effects that a particular cannabis product will
have on a patient. So that in of itself is
an issue that people think that is self sufficient. But
when we're looking at THHC content, you know, we have
three ways of measuring that alone. Are we looking at
total THHC to THC? Are we looking at only THHC
(12:21):
nine tetrahydrocannabinol nine. Are we looking at a THHC per
milligram analysis, where it's saying, as is very common with
gummies ten milligrams per gummy, which is really a THC
per weight analysis. So even within such a small things,
how do we measure THHC? There's multiple variations. Then you
get into things like taxation, whether the other cannabinoids other
(12:45):
than THHC and CBD minor cannabinoids are also listed on there,
And of course you get into things such as flavonoids terpenes,
which a lot of bud tenders may not necessarily be
educated on able to inform the cannsumers, let alone the
consumers than themselves. So consumers first and foremost often are
(13:08):
not aware of their rights when it comes to these
ut app laws. They very often provide not.
Speaker 1 (13:14):
To interrupt, but you have just hit where I was
going with this interview. What's in it for me? What's
in it for the consumer? And so you are you
are right on point. So that's that's what I want
to really dig down into.
Speaker 2 (13:30):
Absolutely well, what's in it for consumers is also what's
in it for businesses in this type of space, and
that's something you really do not see in a lot
of industries. The reason for that, I think is in
a typical consumer business relationship, there's a somewhat adversarial relationship
insofar as the business is trying to kind of really
(13:52):
eke out a little bit more margin with the price
that the consumer will find acceptable to a point where
the consumer is not going to reject the good. Cannabis
is a little bit different in that respect. Consumers are
often willing to pay over face value for their good
so long as it has proper consumer protections on it.
You know, it's labeled properly, it doesn't have improper pesticides,
it's been tested appropriately and has a proper certificate of authority.
(14:16):
So what's in it for consumers? Why do they want
their businesses to be legal? Well, the most important part
is you know what you're getting. I talk. As you mentioned, Maria,
a lot of some of my clients are also patients
as well as doctors, and one of the questions, or
one of the issues I run into most often is
consistency in the products. Right, They'll have an edible one
(14:39):
day and then they'll have it the next day, and
the effect is not the exact same. This is a
consumer protection issue relating to the testing, gradiancy and consistency
of the product. So what's in it for consumers is
a more reliable, trustworthy and safe product as we look
to you know, medicinal adoption. We'll get into this later,
(14:59):
I'm sure sure with Schedule three at the end of
this year, in the beginning of next consumer protection is
going to be the name of the game. We know
how cannabis has been viewed. It was viewed back in
the early nineteen hundreds as a potential health item, then
there's a shift towards criminal enforcement through the War on
Drugs up until very recently. If we want to keep
(15:21):
this street going, if we want businesses and the government
and consumers to continue to view cannabis as medicine or
an adult use product, it has to be consistent, has
to be reliable. I mean, gosh, can you imagine if
you go down to the liquor store and you buy
a pack of beer and oops, I'm sorry, this one
has the same ABV as a bottle of vaka because
(15:43):
we mixed it wrong.
Speaker 1 (15:44):
That's what concerns me, the potential that the lack of
clarity and consistency of the legal framework has for unsafe
products and how there are businesses the regulatory gaps to
the detriment of the consumer safety and public health. We
(16:05):
need cohasive standards right that that will make the risk
being flooded with unsafe for on tested products, will help
minimize that and reward the well meaning brands I would imagine.
Speaker 2 (16:19):
One hundred percent. And you see this actually with your
in my work with NCIA in the marketing advertising guidelines
and why it's so important to put these across the
industry very often, for instance, when when you look at
some of the rules and regulations for a processor, for instance,
in many safe processors for those who may not know,
(16:42):
are often responsible for turning raw canvas plant material into
processed forms such as food, beverages, concentrates, edibles, think things
of that nature. Processors in very many situations are subject
to FDA regulations. They're interacting with what was essentially food
they're cooking in many of their operations. And you know,
(17:04):
even even anyone who's watched bar Rescue or thought about
opening a restaurant can tell you there's a lot of
rules and regulations around keeping that clean. So what a
lot of states do is they slip right into the
regulations a single line that says you have to follow
the industry standards for this particular industry, abide by this
(17:25):
particular trade group's requirements. And these are you know, it's
a small single line and the rules and regulations, but
that's a really big undertaking for a lot of these businesses.
Some states require them to act with the type of
propriety that a controlled substance lab would, a vestige of
the fact that cannabis is still Schedule one on the
Control Substances Act. So it's it's really important that we
(17:47):
start trying to find a way to unify this to
create a more cohesiveness in the industry. So businesses aren't,
you know, battling their own their own rules and regulations
and can fall.
Speaker 1 (17:56):
Yeah, And the challenge is that these brands are face
saying that want to operate responsibly in the legally gray space.
There's there's products that are literally dying on the vine.
I hate when I have to disappoint a customer or
(18:20):
a member of our Greenbay Life Hives that falls in
love with I mean, so many of these CBD products
behind me are no longer available. I have to disappoint
them and try to explain to them that the brands
are just they can't carry as many skews, or they
just despite having a great legal counsel like your firm offers,
(18:45):
they just the exposure the risk is too high. You
have many CBD brands that were very hopeful that the
big box stores would carry them, and you did see
CBD products in the bigger box stores. But then because
of this legally gray state space, the big box stores
started the pull and the manufacturers just these brands are
(19:12):
dying on the vine. And you mentioned the FDA, and
they're in action right on. Evaluating CBD as an ingredient
in food or supplements is a big part of it.
And it seems like there's a regulatory game of pingong.
So the FDA throws it back to Congress. Congress throws
(19:35):
it back to the FDA. Then you have the DA
the FTC.
Speaker 2 (19:39):
So it is an absolute mess. So the biggest change
in cannabis policy and probably the last seventy years or
so since the Controlled Substances Act was implemented, was the
twenty eighteen Farm Bill. And what the twenty eighteen Farm
Bill did was it further legalized. After the twenty fourteen
Farm Bill, it further legalized hemp and hemp derived CBD products.
(20:05):
So hemp under the bill is defined as point three
percent or less tetrahydro cannabin all nine THHC nine, so
point three percent or less. The fact that they defined
it only with regards to THHC nine is actually part
of the problem. So we're getting a huge proliferation of
all these CBD products, and many of them are legal, right,
they've got the point three percent or less THHC nine.
(20:27):
But what we've really started to see is this whole
new market that was not anticipated by the twenty eighteen
Farm Bill, not anticipated by cannabis producers, but was anticipated
by the gray market. And we're calling this the hemp
derived cannabinoid or minor canbinoid market. So these are products
that contain point three percent or less THHC nine meet
(20:48):
the federal definition of hemp, are processed into CBD so
or federally illegal CBD, but then contain extremely large amounts
of other cannabinoids, ranging from you know, delta eight to THHCV, THHCA, cbn, CBG.
You know, there's one hundreds of cannabinoids. The list goes
on forever. So we're running into this very unusual situation
(21:11):
where we have some products that are following the letter
of the law, but almost certainly not the spirit, and
this puts consumers and cannabis producers in a really tough space.
You know, technically, these individuals are working with hemp, which
is not cannabis technically, so they can take all the
tax breaks and all the deductions in credits that these
(21:31):
cannabis businesses simply are not able to. And you know
what do they get for following the rules and regulations.
They have a sixty percent effective tax rate. They aren't
able to work hand in glove with regulatory advisors the
same way as other businesses, and it's really a shame.
So the CBD market is in a really, really tough
spot right now for that reason, we have this whole
(21:53):
hemp derived cannabinoid issue as producers and consumer and really
the consumers I think are the ones who out here.
You know, in many in many states in particular, that
do not have medical or recreational or adult use cannabis.
Consumers are looking for a way to consume cannabis legally,
and so many of them will turn to CBD. And
(22:15):
what often happens is you'll have consumers and they'll drive
by stores and they'll say we have THHC here or
Delta eight or by cannabis here, yep. And what the
consumers do not know is that these are hemp derived
cannabinoid products. This isn't to say that all hemp derived
cannabinoid products are bad. We could stand to get a
little more information on some of this is the synthetic ones,
(22:37):
I think, but we know things like CBN CBG. These
are totally fine. But the problem arises when these hemp
derived cannabinoid products are separated out from the typical cannabis
regulatory regimes. The result is they don't They aren't subject
to the same testing, same pesticide restrictions, same quality control.
So you're really relying on the word of the manufacturing
(23:00):
producer rather than any type of consumer compliance efforts to
verify what's going on.
Speaker 1 (23:05):
All right, well, hang on, you're at a perfect perfect
point because we're twenty minutes into the show, and where
I am in California, it is for twenty I mean,
you have just dropped so many You've just dropped twenty
minutes of knowledge bombs on us, and every four to
(23:27):
twenty we have we take a moment to ask our
guests for a quick hit, quick hit four twenty, what
do you got for us?
Speaker 2 (23:35):
I've got a few, but in terms of a knowledge one,
I've got a really good one that I think you
might like. So CBD is legal, but as long as
it contains the point three per center lest THHC nine.
But what a lot of people, as well as manufacturer forms.
What a lot of people may not know, though, is
that the CBD foods and beverages that you find in
(23:56):
gas stations and retail serce, those continue to be federally
illegal even if it's CBD, even if it's point three percent,
even if it has no other cannabinoids in it whatsoever.
And the reason for that is under the Food, Drug
and Cosmetic Act with the FDA, a product can only
be included in food or drink if it's generally recognized
(24:20):
as safe or and I'm not making this up for
the segment, or if it's grass. Right, So unless the
product is grass, exactly unless it's grass, has to go
through a really really lengthy review process before you put
in food or drink. As you can imagine, CBD has
been illegal for the past, you know, near one hundred
years don't have a whole lot of studies showing it
(24:40):
super safe, even though colloquially we know it is. And
as a result, CBD is not grass according to the Food,
Drug and Cosmetic Act and technically cannot be included in
foods or beverages.
Speaker 1 (24:53):
That was a knowledge bomb. It was a potent, important
quick hit. I'm going to use it because every time
I run into somebody who tells me, yeah, but CBDs,
why should you know? I try to get people to
care and understand. People will say, yeah, but CBD is legal.
I'm like, I don't know, it's not not if you
(25:15):
put it in a gummy or a drink mix. Oh yes,
I saw it at Walmart or the gas station. Like
you said, Well, I'm just going to play your quick hit.
I'm just going to send them a link. So how
do we bridge the gap? How do we bridge the
gap to get to a path of clarity? What needs
to change?
Speaker 2 (25:34):
So the first thing that needs to change, thankfully, it
looks like it's going to be happening quite soon, and
that's the rescheduling of cannabis now. So currently cannabis specifically
again tetrahydrocannabinoll nine THHC nine is a Schedule one substance
under the Controlled Substances Act. That is the source of
(25:57):
cannabis's illegality, the reason they're a complete federal prohibition and
I did not did drupt?
Speaker 1 (26:03):
Can you just explain to people, because not everybody knows
what that means to be public enemy number one? What
does that mean? What is Schedule one?
Speaker 2 (26:13):
Public Enemy number one? Is right? So the Controlled Substances
Act places drugs on a schedule of one to five,
one being the most dangerous with the least medical benefit,
in five being the least dangerous with the most potent
medical benefit. Cannabis THHC nine is currently a Schedule one
drug meeting it has no currently accepted medical benefit and
(26:38):
a high potential for mental and physical addiction. The funny thing,
as you may know, is the FDA approved ACBD based
multiple CBD based anti seizure epilepsy drugs for children of
specifically EPI dialects a little bit ago, which seems to
(26:58):
fly in the face of that as well as the
grass tech designation of CBD. But really it's it's it's
quite ironic in that respect that they're saying. In one hand,
you know, it has all this danger, but at the
same time there's certain government patents on seeds and other
production methods, so it really is quite an unusual dichonomy.
(27:19):
But the first thing that really needs to happen is
the change of Schedule one, which looks like it's going
to be happening. So there's a petition to move it
to Schedule three, recommended by HHS Health and Human Services,
kicked over to the Department of Justice. And this is
this is a fun litl quick hit for any attorneys
out there, but the rescheduling process for cannabis is entirely unique,
(27:41):
whole unique. It does not bear any other resemblance to
any other type of rule change or regulation change. Very unusual,
and there's been some uncertainty with the new administration coming
in whether the Schedule three change is going to continue
to happen. Thankfully it looks like it will, but Schedule
three is going to kick cannabis into the third level
(28:01):
of the Controlled Substance Act ME has some currently accepted
medical benefit and a low to mild potential for psychological
or physical abuse, So we're not quite there yet. It's
but it's a lot better. And what's really important about
the Schedule three designation is for medical cannabis businesses, and
you touched on it so beautifully, Maria, that this is
(28:25):
a health and adult recreational use issue, but a lot
of the gateway and they'll of the way we get
our foot in the door is through the medicinal aspect.
And I don't want to speak for you, but I
think we probably share similar views and so far as
that one was the primary use of the plant is
for medical benefit. But one of the great things about
Schedule three is these medical businesses are going to be
(28:45):
able to use FDIC insured banks. Right now, cannabis businesses
cannot use federally insured banks. They are the sounds like
a joke, but they're literally stuffing money into safes and
then carrying ten of thousands of dollars in their car
to their mattress. The Schedule three designation is also going
(29:06):
to open up a few more advertising and marketing restrictions
for them, and is also going to enable medical cannabis
companies to potentially take credits and deductions currently section two
ade of the tax Code, which I'm sure many of
your viewers have heard the name, and if we have time,
I have a fantastic story about how two AD came about.
(29:28):
But currently two ADE prevents cannabis businesses or any business
dealing in a Schedule one or two drug from taking
credits or deductions. The effective tax rate for cannabis businesses
because of this is like sixty percent. In some cases,
they're paying sixty percent of their revenue and taxes extremely high.
Once we get to Schedule three, this won't be an issue.
(29:49):
So they'll have banking access, they'll be able to raise capital,
they'll be able to utilize the US tax code in
the way literally every other type of business can. You know,
I think one of the questions we need to ask
isn't just how do we harmonize the federal laws to
make things better for them, but how they managed to
survive so long the way things are?
Speaker 1 (30:10):
Yeah, exactly. I mean on the road from normalization to legalization.
I mean, anyone out there who has this entrepreneurial spirit
or is coming at it from a whelm meaning place,
look at what you're saddled with. If if you think
(30:31):
this is a green rush, think again, guys, this right right,
this is we need to turn it into a green revolution,
because how could anyone enter into this business unless nothing
against them. But if you're a giant mso, I mean
you have to you have the lawyer up. There's just
(30:56):
you'll get wiped out and find some violations. And with
two ade, if you can't write off your business expenses
on top of having the burden of legal expenses that
unlike any in any other industry, and then you can't
even write those costs off. I mean the consequences and
(31:20):
the consequence back to the consumer is we want well
meeting brands to enter the space. And another episode I'd
love to have you come back for is the impact
of social equity. I mean, how does anybody with a
social equity life right? How do they even want? Our
phones are ringing off the hook. Chat Everyone wants to
(31:41):
chat with you. There's so many questions. So let's hear
the two ade text story. You've got dispensary owners in
La burning to hear this story.
Speaker 2 (31:52):
Really briefly, the social equity idea sounds amazing and I
would love to talk with you on that in the future.
Because a little bit of a tear. Our firm was
actually involved in the most prominent social equity litigation lawsuit
in Ohio for our cannabis systems.
Speaker 1 (32:08):
So well, what was that? What was the lawsuit?
Speaker 2 (32:11):
It was the It was the Pharma Can lawsuit. Two
ends at the end of farmacam but involved a bunch
of companies. We were representing harvest grows in that case.
I'm sure it'll pop up if you check it right.
But the two ad store out. Gosh, I was really
hoping we'd get to it. So that's fantastic.
Speaker 1 (32:30):
So people curious.
Speaker 2 (32:32):
Perfect perfect. So Section two eighty, as I mentioned, prevents
businesses dealing with Schedule one and two drugs from taking
ordinary or necessary business credits and deductions, all credits and deductions. Really,
but the law came about, I believe in the eighties
there was a young man who got pulled over driving
(32:54):
by a cop and the cop searched his car and
he found fairly large amounts of cocaine. He found baggies,
a scale, zip ties, and he said, okay, well you're
clearly trafficking cocaine, and he arrested the man for cocaine trafficking.
At the man's trial, he tried to argue that as
a cocaine trafficker, his profession was cocaine trafficking and therefore
(33:16):
he should be able to deduct the costs of his scales,
his baggies, his zip top, and the court agreed with
him because nothing in the tax code prohibited the deduction
of an illegal business. So two AD was implemented after
that man took the I know it sounds too funny
to be true, but it absolutely is. So two ADE
(33:37):
was implemented by Congress after a cocaine dealer successfully deducted
his scales, baggies, and ties from his taxable basis.
Speaker 1 (33:45):
Okay, well, you're reading my mind because our next segment
is legal updates, and one of the things I love
to do is ask our attorney guest for the craziest
laws and then the most sensible ones. And my crazy
law segment I call I'm not making this up. So
now you're telling me with certainty on my next episode
(34:07):
if I want to throw to a crazy law and
I'm not making this up, I can actually say that
this titye originated from a cocaine dealer claiming and prevailing
on the assertion that he could write off his ziplock
(34:28):
bags and zip ties and all of his business expenses
for running his illegal cocaine operation. That was at one time.
Speaker 2 (34:37):
Okay, that is completely correct. Is hilarious and comic colds
it sounds. But as I saying goes, bad cases make
good law.
Speaker 1 (34:50):
Unbelievable. It's time for nipping in the bade. So what's
one of your one of your as common misconceptions you
run into or something that you would just like to
nip in the bud?
Speaker 3 (35:06):
Well?
Speaker 2 (35:07):
I got a little bit of a fun one first,
but you know, there there, And of course I'm not
a doctrine. None of this is medical advice. This is
all based of you know, things I've read in my
own opinion edification. But one of the most common myths
about cannabis is that it negatively impacts your memory, and
particularly or short and long term memory. Short term more so,
(35:29):
but that can have really deleterious and negative effects over
the long term. There have been fewer studies on this
and many other things. A recent study, actually the two studies.
The first was a long term longitudinal study out out
of Sweden in the Netherlands area, which found that cannabi
long term cannabi in this I believe this was the
first and potentially the only current long term longitudinal cannabis
(35:53):
based study looking individuals over around twenty year period. It
found no correlation between cannabis use and negative memory shorter
long term for long term users using ten plus years
or more at least to join your day, which is
how many of these studies classify heavy users as well.
So that's really a big significant part. The other one
(36:14):
is that there is a recent study and a lot
of people might get a kick out of this, that
cannabis use actually may help prevent Alzheimer's and that specifically
high CBD forms of cannabis can act as a neuroprotectant
for your synapses and help help the signals in your
brain fire and get sent faster. Cannabis has also been
shown to potentially create new neural pathways in your brain.
(36:38):
What's really interesting about that is when we associate new
neural pathways in the brain with drug use. Cannabis is
a drug we often associate in a negative way. It
might be forming an addiction pathway in the case of opiates,
for instance. What we see with cannabis, interestingly, is some
of these pathways are remarkably similar to your brain normal pathways,
(37:01):
just in different sections, not creating the same addictive tendencies,
but potentially providing the same protective benefits.
Speaker 1 (37:10):
Schedule one.
Speaker 2 (37:11):
My uh, exactly exactly.
Speaker 1 (37:17):
I you know, I was familiar with the second study
we had in episode three, we had doctor Minesh gern,
a neuroscientists from me you see, yeah, you see San Francisco,
and he's in Robbin Carhart Harris's world renowned lab studying
(37:37):
the effects of psilocybin and cannabis on the brain. And
he had talked to us about that second study you mentioned.
And when you talk about a neuroprotectant, one other thing
to help substantiate your nipping this myth in the butt,
And who better than to ask a lawyer? The US
(37:59):
government had the patent uncannapinoids as a neuroprotecting until very recently.
Is that correct?
Speaker 2 (38:08):
It absolutely is? Guess how did it?
Speaker 1 (38:13):
Well, that's another episode. We'll have an episode on Harry Anslinger,
the nineteen thirty seven Marijuana Tax Act, Will's falling up,
will follow it through this nineteen seventies, the eighties War
on drugs. That's the whole other episode. But I think
it is so critical and important for people to understand
(38:33):
the consequences of this being on a Schedule one. And
then how those consequences parlay into the advertising and marketing
compliance and how that impacts brands, well meaning brands, guys,
which impact you looking for top shelves premium products that
(38:57):
literally are up in smoke.
Speaker 2 (39:01):
You know the comment there too, the reference to Anslinger
was you highlight a really fantastic part of what the
War on Drugs really did. So cycling back a little bit,
we talked about the grass designation generally recognized as safe.
How do you determine if something is generally recognized is safe?
Speaker 1 (39:23):
Right?
Speaker 2 (39:23):
Well, the federal standard, and this is a federal law
under the Food, Drug and Cosmetic Act, is in order
to determine something as grass, you need what is referred
to as reliable and competent scientific evidence. Now, how on
earth do you get reliable and competent scientific evidence on
a schedule on drug that nobody is allowed to study.
(39:45):
It's kind of a catch twenty two rock and a
hard place thing, right. So, Anslinger and the Control Substance
Act and the War on Drugs, all this put us
in a cart before the horse situation where we're saying
it's not generally recognized as safe, but we're not going
to allow you to study its effects to make any
further determinations on your own behalf.
Speaker 1 (40:04):
It's in a box. It's in a box, and who
better than attorneys to make a case for it. I mean,
it's it's it's it's improperly imprisoned. So we got to
bust it out. We've got to bust it out people.
But it's the people who have the power. So moving
into consumer insights and tips, speaking about people having the power,
(40:28):
I mean, what are the best ways for consumers to
find a trustworthy brand in between all of this navigating
this evolving market with all these twists and turns and nuances.
Speaker 2 (40:41):
Well, the first thing in consumer can do is do
their own research. You know, the larger companies are generally
fairly reputable. If they've been around for a while in
the space, they must be doing something right. But you
can also do is you can actually look at your
local regulatory thought for instances in Ohio, this would be
(41:01):
the Department of Commerce, and they'll list all the enforcement
actions and the letters and the warnings and the concerns
that they send to these companies. Sign up for local
mailing lists for trade industry groups, maybe a local cannabis
group in Ohio. That might be okan, I'm California normal.
For instance, they send out plenty of amazing newsletters and updates,
(41:23):
and you know these consumer groups their their primary focus
is also consumer protection. So getting involved, getting knowledgeable about
the products is the first step. Also, also learn what
works best for you. We talked about this a little bit.
The outset. There is such a prevalent view in marketing
(41:44):
and advertising cannabis that THHC content is king, that consumers
are always chasing the biggest THHC high, that they want
massive ninety percent concentrates or thirty I saw a flower
being advertised thirty eight percent THC content when I was
in Vegas this past weekend, and I have to tell you,
(42:06):
first off, I don't believe it. Second off, who wants that? Right?
So when it comes to making, certainly.
Speaker 1 (42:14):
Not the majority of consumers.
Speaker 2 (42:16):
Certainly not the majority. And you know, there's there's certainly
a market for these special team each products. But if
you have an average consumer who's got you know they're
they're coming to a bud tender and they say, I
have trouble sleeping or I have glaucoma, it makes my
vision bad.
Speaker 1 (42:31):
What do I do?
Speaker 2 (42:32):
And they're not knowledgeable about the effects of terpenes and
other canbinoids. You know, CBN cannabinall is great, is great
for sleep? Nine not so much? Uh CBG a little
if if there's if the bud tender is you know,
oh you have severe pain. I'm going to give you
the strongest product we have. That may not be best
(42:52):
for that particular individual. Maybe they need some terp beta.
Carophyoline is a terpene that is fantastic for pain management.
Maybe they need that, or then they need a high
THC content.
Speaker 1 (43:04):
But what would you find that in? What would you
find that in?
Speaker 2 (43:08):
So so it depends on the product and how it's manufactured.
Terrapines can be inserted and taken out as needed. But
you raise a really interesting point that many states do
not even list what terpenes are on there, right, Yeah,
so that's a whole separate issue outside of even the
THHC content. And then again, most states are only listing TC,
(43:32):
THCA and CBD. You're not You're not getting any knowledge
about any of the other cannabinoids, let alone all these
other phytochemicals inside of the plant. And then of course
you run into things such as the entourage effect where
many people believe that when all of the canbinoids are
included together, they have a more cohesive kind of group
effect than if you single them out as an isolate.
(43:56):
So the first thing consumers really need to do is
find what works best for them, and the way to
do that is to find a knowledgeable bud tender with
a dispensary you like, and if possible, aim for products
that provide the most possible amount of information on THC content,
terpenes and also growing in production methods such as pesticide
(44:17):
usage very important.
Speaker 1 (44:19):
And I mean this is assuming you're in a state
where it's illegal so called legal right absolutely, wow, wow, Chad,
I mean, and that is for products with more than
point three percent THC, that would be if you're in
(44:40):
a state where it's legal, you would get that from
a dispensary. But the point you're making is all this
measurements in benchmarks is based on THC. Well, you're going
to a dispensary. It's not that you're just going to
get something that's gotten greater CBD the zero point three percent.
(45:02):
It's because it's not like you said, you're not looking
for something with thirty eight percent THC it's so much
more than the promise of chasing a high. It's the
intention behind it. And you mentioned some people would like
to have it as an option for sleep, as opposed
to pharmaceutical drugs that don't work for them or have
(45:24):
too many side effects. So it's the intention behind it.
And it's not the THC that's gonna be the be
all and end all. It's the vital cannabinoids. It's the
ter being profile. But it's nuanced. It's nuanced. The science
is nuanced, the applications are nuanced, the law is nuanced.
(45:46):
And I just love speaking with experts like yourself and guys.
I have to say, as a business owner and someone
trying to make my way in this space as a
publishing company, having to be very very concerned about what
type of advertising and marketing materials brands want me to
(46:09):
move forward, you need firms like McMurray and Schuster. I
can't say enough about McMurray and Schuster because just for
the other businesses out there, I'm sure they've all gone
through what I've gone through. I just wanted to get
my hats off to McMurray and Schuster, Chad. Whenever I'm
looking for legal counsel. Yeah, that's just one other suggestion
(46:35):
for businesses. There you go consumer insight and tip what
businesses look for when you're looking to hire a law firm.
What drew me to your law firm and having you
here as a guest today is you guys have a
prolific your founders if you could speak a little bit
about them, past history in unregulated spaces, and there are
(47:01):
so many not bad mouthing anybody, and you're teaching this
is so exciting at a university law to the next
generation of our legal experts in this evolving marketplace. But
what should businesses look for when looking for a law firm?
(47:22):
My pain point was it was disparate. I would talk
to one law firm and say can I get a
trademark on this? They'd say yes. Another law firm they'd
say no. Another law firm that would say, well, I
need a ten thousand dollars retainer, And it seemed like
they wanted tens of thousands of dollars from me to
write a white paper on it to educate them. So
(47:46):
I can't say enough about you guys, And I think
it's because you're sitting on the shoulders of two incredible
women female found it law firm. Tell us a little
bit about the founding partners and about the hit history
and for the businesses out there, what do you look
for when you're vetting a law firm, Because this is
the wild wild West.
Speaker 2 (48:09):
It really is. So we're me in particular, I'm absolutely
blessed to work where I do at McMurray and Schuster.
Our founding partners are hell McMurray and Michelle Schuster. But
as you know, it's a woman owned law firm that
they are both absolutely incredible, really just inspiring women. They
both came all of our partners have, but they in
(48:31):
particular came from separate, big law firms. They both had
histories and consumer protection offices. Is consumer protection chiefs in
the Ohio Department of Commerce, so really storied, decorated public
service record, great service in the private sector for extremely large,
powerful law firms. And they both kind of were sitting
(48:53):
around look at each other one day and they said that,
you know, there's got to be a better way. There
has to be a better work life balance. There's a
point at which you know you can't really produce more
beyond what you're doing. How do we do this, How
do we create a firm that's oriented towards the future
and the next generation of talent, and also specifically, what
areas of law do we look at? So they created
McMurray and Schuster. I cannot say enough positive things about
(49:16):
the firm, and that's not just because they pay me,
but it is I've worked in a lot of places.
Is the best place I've ever worked. And what really
makes it unique is everyone here has come with experience
from highly regulated niche areas, whether it's be consumer protection, yeah, absolutely,
consumer protection, telemarketing. I defend telemarketers, but I never like
(49:39):
to tell anybody that because they assume I'm a bad guy.
But just like our cannabis clients to tell marketers are
the compliant ones. So we bring experienced from these really
highly regulated niche areas with very few or very complex laws.
We do a lot of privacy work as well that
the regulators look at very intensely. They brought me on
(50:00):
in around twenty seventeen twenty eighteen and asked me what
I saw as a great area for the firm. I
told them cannabis, and they were gracious enough to give
me the opportunity to start the practice group and expand it.
So what do businesses need to look for? Well, they
need to look for that, I think. And I'm not
just saying that because.
Speaker 1 (50:18):
I agree I learned the hard way. I've learned the
hard way. But I agree, well, you know, you.
Speaker 2 (50:26):
Learn the hard way, but you'll learned the right way
at the same time, because too many people go down
the track with the wrong firm and then they're two
years into it and they realize it. But the thing
with the cannabis sector you really need to look for
is you need someone who has been in the system
from the beginning, who knows the law. Intimately. You don't
want someone who's an employment lawyer who knows a little cannabis,
(50:49):
a privacy lawyer who knows a little bit of cannabis.
You want a cannabis lawyer first and foremost, who knows employment,
who knows privacy. And you know, we're lucky because we
defend a lot of consumer we defend a lot of
class actions, billion dollar lawsuits despite our small size, which
is really kind of unique. So we've had experience in
(51:10):
all these other areas as well, So it's not just
the cannabis related stuff. But when you're looking for someone
with cannabis issues, and we talked about this at the outset,
there's no overarching federal laws. There's a patchwork of law.
There's no single one that applies. That doesn't mean there
aren't federal laws that apply. They still are, you.
Speaker 1 (51:29):
Know, it's wid still on the hook for them, you're
still on the look for them. You mentioned something earlier
about constructive notice. I mean, whether you know they exist
or not, notice is out there, so you're on the hook, I.
Speaker 2 (51:42):
Mean, And gosh, Maria, that's such good points speaking of
knowing if it's out there or not. I'm not sure
if we're any to get to it later. This large
lawsuit you and I had chatted out about a bit before,
But there is a two billion dollar lawsuit ultimately reduced
to a paltry nine hund and fifty five million on appeal.
(52:02):
But there's a two billion dollar lawsuit against health and
CBD supplement Marketer. And the law that the people suit
under relates to telemarketing, the Telephone Consumer Protection NEC. I
guarantee you ninety percent of cannabis companies have not even
heard of that law. Yet. There's a two billion dollar
lawsuit out there against the company for it, and it
applies to any company making calls or texts through the clients,
(52:26):
which cannabis companies certainly are. So you need to look
for someone who knows the cannabis issues first and foremost,
but you also got to find someone who knows those
blind spots.
Speaker 1 (52:35):
And those ancillary issues that relates. So Chad, I can
talk to you forever. I hope you'll come back. This
has been amazing. I'm a fan of McMurray and Schuster.
I will disclose that I'm not a client. I'm a fan.
Speaker 2 (52:50):
We're a fan of you in greenbe Life as well,
but that's no secret. Ah.
Speaker 1 (52:54):
So before we close today, I just want to thank
thank you Chad for sharing your expertise, your insights into
these legal challenges that do surround cannabis marketing, advertising, and
affect consumer protection. You know your works, the work at
(53:15):
McMurray and Schuster. It's critical as we strive for more
equitable and inform informed right cannabis industry. As we've explored,
the lack of clear, clear regulation has consequenes. It has
high stakes for consumers. It creates confusion, misinformation, potential health
(53:41):
risks from unsafe products coming off of eight decades of
an education vacuum worse than an education vacuum misinformation.
Speaker 3 (53:50):
You know.
Speaker 1 (53:51):
And yeah, and for consumers, it becomes harder to trust
the products they buy. And unless they're excited about them
and really getting the positive effects, they're not going to
create the conversation for their policymakers to know that not
only do we need to reschedule it, we need to
(54:13):
deschedule it at the end of the day. And you know,
these legal gray areas can very unintentionally put consumers and
businesses at risk, especially when you mentioned not one state
has a uniform system. Every state has different laws, and
(54:37):
then you have federal laws and then you have federal
regulatory agencies that are in conflict with one another. Or
the legality is ambiguous, it's vagan, it's ambiguous, Congress says,
from the Hemp Farm Bill. Yeah, and is legal if
it's got point three percent. But then the FDA has
something to say about it, the DEBA has something to
(54:57):
say about it, the FDC has something to say about it.
So you know, right, So for brands, the stakes are
are very high, and we need to support brands that
are struggling to find their way to be pioneers through
this maze to preserve premium top shelf brands, the risk
(55:19):
of legal penalties to these businesses that are trying to
do it right, the challenges they're faced with communicating responsibly
with unclear boundaries, the overall market instability. It makes it
difficult for even the most ethical companies to operate confidently.
(55:39):
And the instability, I'm sorry, it stifles innovation, it increases cost,
and that impacts all of us, because whether you're for
cannabis or not, it's not just the promise of chasing
a high, which which again there's time and place, but
it peeple depend on it. There are pediatric cases where
(56:04):
it's the only thing that helps with seizures, and fortunately
it's now an ingredient in an anti seizure drug EPI dialects.
But it's a game changer for many people where pharmaceutical
drugs just don't have a solution or these side effects
are too negative. And you know, it's also a great
(56:26):
alternative to alcohol. That's a whole other episode. But we
need a cohesive fat regulatory framework that benefits all of us.
And it's important because that's what will foster trust, safety,
and growth both in the marketplace and in our communities,
(56:48):
which is a whole other topic because in California, for
every one legal dispensary, there's four illegal ones and that's
a whole other thing. But until that framework exists, education
is our most powerful tool. So I'm like your biggest
fan because you're teaching and you found a platform a
university that's got it on their curriculum. So you go, Chad,
(57:12):
you know, and as consumers, what could we do well?
We got to stay informed, We've got to ask questions,
we've got to do our research, like Chad said, and
we've got to hold both brands and policymakers accountable. For brands,
focus on transparency as much as you can, and compliance
(57:33):
and get the right advice for compliance. You don't know
it all, trust me, there are I don't even want
to know what potential violations are out there that as
business owners we don't know about, but I'm sure Chad
can tell us and has already today a good amount
(57:54):
of them. So we're all part of this evolving landscape
and together we have power to shape it, and we
want to shape it responsibly. Your feedback is invaluable, so
please reach out with any questions or comments about today's episode,
and reach out with any other topics you'd like to
hear in the future. You can connect with us on
social media or through our website. Thank you for joining
(58:18):
me today on Just Say No. Remember knowledge is power,
and together we are redefining cannabis, one conversation at a time.
Until next time, stay informed, stay curious, and for God's sake,
just say no. That's no with a k KY and
o W. There were two consonants off when they were
(58:40):
saying just say no, so that's it. Thanks a lot.
Just Say No is a greenbee Life presentation, airing live
weekly on Friday afternoons from four to five pm Pacific
on KCA Radio and KCAA TV. Archived audio episodes are
(59:01):
on greenbeelife, greenbelife dot com, iHeartRadio, Spreaker, and most third
party major platforms. For archived videos, check them out on GBLTV,
on greenbeelife YouTube, and Rumble. To follow us our Instagram
(59:22):
and Facebook is at just Say No Radio. To apply
to be a guest on the show or for sponsorship
and advertising opportunities, go to greenbeelife dot com. Forward slash,
just say no and feel free to reach out to
(59:42):
me Maria for any questions. I'm at Maria at greenbelife
dot com or call me at eight one eight seven
five eight six nine two five.
Speaker 2 (59:58):
NBC News on ACAA LOMAL, sponsored by Teamsters Local nineteen
thirty two, Protecting the Future of Working Families Teamsters nineteen
thirty two, dot org
Popular Podcasts
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Cardiac Cowboys
The heart was always off-limits to surgeons. Cutting into it spelled instant death for the patient. That is, until a ragtag group of doctors scattered across the Midwest and Texas decided to throw out the rule book. Working in makeshift laboratories and home garages, using medical devices made from scavenged machine parts and beer tubes, these men and women invented the field of open heart surgery. Odds are, someone you know is alive because of them. So why has history left them behind? Presented by Chris Pine, CARDIAC COWBOYS tells the gripping true story behind the birth of heart surgery, and the young, Greatest Generation doctors who made it happen. For years, they competed and feuded, racing to be the first, the best, and the most prolific. Some appeared on the cover of Time Magazine, operated on kings and advised presidents. Others ended up disgraced, penniless, and convicted of felonies. Together, they ignited a revolution in medicine, and changed the world.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.