This document summarizes various legal issues facing the marijuana industry. Federal law currently prohibits marijuana under the Controlled Substances Act, though some states have legalized it, creating a conflict. Federal memos have taken a lighter enforcement approach but do not prevent prosecution. Banks avoid the industry due to money laundering laws. Tax laws also pose challenges, as businesses cannot deduct normal expenses. States have established regulatory regimes for licensing businesses but face pushback from localities and landlords. Trademarking of brands could help the industry expand if federal law changes.

1. HILARY V. BRICKEN
MARIJUANA LEGALIZATION,
REGULATION, BUSINESS
LAW, AND INDUSTRY ISSUES

2. Federal vs. State Conflict
- Federal pre-emption
- The Supremacy Clause
- The Commerce Clause
- Gonzales v. Raich
Bottom line
THE FEDS TRUMP ALL (for now)

3. Federal memos
- What do the memos mean?
- Yellow light for States’ rights?
- Ogden memo 2009
- Cole memo 2011
- Cole memo 2013
+ “The Great Eight”

4. Federal Enforcement
- Do the Federal memos matter?
- U.S. Attorneys have prosecutorial discretion
- Lack of uniformity in enforcement
- Raids versus “Landlord letters.”

5. Banking Woes
- Why can’t dispensaries get bank accounts?
+ Money laundering
+ Anti-Secrecy Act
+ Controlled Substances Act (conspiracy)
+ No third-party processing
- How do some dispensaries have bank accounts?
- What’s the solution?

6. The Tax Man Cometh
- Will the IRS treat marijuana businesses like other
businesses?
+ 26 U.S. Code Section 280E – Expenditures in
connection with illegal sale of drugs
- C.H.A.M.P
- Olive (on appeal in the 9th circuit)
- How to navigate 280e?

7. Marijuana regulatory regimes
- Recreational versus medical
- Dealing with the Feds
- Typical barriers to entry:
+ Residency requirements
+ Liquidity requirements
+ Permits and licensing
+ Distance requirements
+ Real property requirements
+ Security
+ Traceability
+ Competency
+ Experience
+ Operational plans
+ Investment
+ State and local taxes
+ Dealing with multiple
regulatory agencies

8. Landlords: Tough Love
- Landlords face liability from marijuana commercial tenants:
+ Civil asset forfeiture by the Feds
+ Tenant revolts
+ Mortgage foreclosure
- Make your lease marijuana-friendly:
+ Permitted Use should be clear
+ Addendums
> Loitering
> Odor
> Signage
+ Escape clauses

9. DEALING WITH THE LOCALS: A MIXED BAG
Police powers
allow cities and
counties to regulate
Know the law
even as
it changes
Moratoria
versus regulation

10. NAVIGATING PUSHBACK FROM LOCALS
Federal prohibition
emboldens
cities to ban
Is it worth it to fight?
Does your client
have standing?

11. - Federal trademarks. Good luck.
- State trademarks. Sure.
- Why does trademark matter?
+ National expansion.
+ Licensing.
+ Legitimization.
Marijuana Branding:
The Power of Trademark
TM

12. HILARY V. BRICKEN
hilary@harrismoure.com
206.224.5657
+ cannalawgroup.com
+ cannalawblog.com
harrismoure.com