On June 7^th, Senators Gardner and Elizabeth Warren released a bipartisan marijuana bill that would explicitly allow states to determine the fate of marijuana in their own jurisdictions. Here’s a copy of the bill, entitled the “Strengthening the Tenth Amendment Through Entrusting States Act” (“STATES Act”). Most importantly (and wisely, if anyone wants this bill to go anywhere), it doesn’t change the Controlled Substances Act (CSA) on cannabis scheduling and so even if it passes, cannabis will remain a Schedule I controlled substance. But it will mean the CSA will be amended to give each state the freedom to determine how best to address commercial cannabis activity within its own borders, state-approved commercial cannabis activity will cease to be considered drug trafficking, and proceeds from and assets used in legal cannabis operations would not be subject to forfeiture by the Department of Justice (DOJ).

If the bill passes, the CSA would not apply to:

[A]ny person acting in compliance with State law relating to the manufacture, production, possession, distribution, dispensation, administration, or delivery of marihuana . . . any person acting in compliance with the law of a Federally recognized Indian tribe within its jurisdiction in Indian Country . . . related to the manufacture, production, possession, distribution, dispensation, administration, or delivery of marihuana so long as such jurisdiction is located within a state that permits, respectively, manufacture, production, possession, distribution, dispensation, administration, or delivery of marihuana.

State-legal marijuana businesses would still be in trouble under the CSA for employing anyone “under 18 years of age to manufacture, produce, distribute, dispense, administer, or deliver marihuana.’’ This bill will also remove industrial hemp from the CSA, which would finally square away its precarious legal status regarding its derivative products, like CBD.

Though the Rohrabacher-Blumenauer Amendment prevents the DOJ from interfering with a state’s right to implement medical cannabis laws and regulations, the STATES Act would make it illegal for the Department of Justice to enforce the CSA against state-legal marijuana users or medical or recreational marijuana businesses. Passage of this bill would obviously be a huge, huge step forward for marijuana legalization. This bill would lead to improvements in the banking situation for cannabis businesses and realizing this, some bank are lobbying for cannabis reform to be able to better serve the cannabis industry. Passage will also mean state-legal cannabis businesses can finally secure federally protected trademarks and avail themselves of other federal protections and benefits currently denied to them, including nondiscriminatory tax treatment.

Ironically, the one person we may deserve the most thanks for this big move is Attorney General Jeff Sessions who — as we all know — loathes cannabis. His blitzkrieg to undo state progress on cannabis law reform is backfiring. I previously wrote how Senator Gardner was so irritated by Sessions’s rescinding the 2013 Cole Memo that he took it upon himself to block numerous DOJ appointments. This got President Trump’s attention and led Gardner to receive, according to The Washington Post, “a commitment from the President that the Department of Justice’s rescission of the Cole memo will not impact Colorado’s legal marijuana industry . . . Furthermore, President Trump . . . assured [Gardner] that he will support a federalism-based legislative solution to fix this states’ rights issue once and for all.”  And Trump echoed on June 8^th that he’d “probably” support the STATES Act.

The STATES Act is a bipartisan bill that does not outright legalize marijuana or even re-schedule or decriminalize it. Couple this with President Trump’s strong dislike of Sessions anyway and it does very much look as though the political stars may finally be aligned to see meaningful marijuana law reform at the Congressional level.

Editor’s Note: A version of this post originally appeared in an Above the Law column, also by Hilary Bricken.

The industry on cannabis has become one of the fastest growing industries across the nation over the last several years. With new markets growing in and around the U.S., many polls are reporting that support for cannabis use and legalization, is higher than ever before.

One of the major factors that is moving the industry forward is the amount of legislation that is being put in place around the nation. Many states have decided to build new policies after seeing the success of markets around the West Coast that have been in place for several years now. The benefits of tax revenue and increased influx of capital both add up to make the industry on cannabis extremely enticing for investors.

Individuals who oppose the industry have stated that it could potentially lead to the use of more drugs and that it could potentially increase the issues of opium dependence around the country. Many studies have shown that cannabis can often be extremely beneficial to the same types of pain that many hard narcotics are used to treat. For this reason, cannabis has been said to decrease the amount of drug dependence depending on the situation in various locations around the U.S. and beyond.

One of the main issues that stands in the way of the industry becoming legalized on a wide basis is the legislation from the Federal government. The current scheduling of cannabis means that by government standards, the plant has no potential for medicinal use as well as a high rate of addiction. Both of these claims have been refuted many times over by various scientific studies and medicinal journals. Ironically, the Food and Drug Administration recently approved a drug for sale on the U.S. market that is based in the component known as cannabidiol or CBD within the cannabis plant. This was the first time that a drug has been approved using cannabis, and is continuing to show a massive paradigm shift in the way people think about cannabis throughout the nation and beyond.

Howard Finkelstein, a public defender in Broward County, Florida recently stated that “More people’s lives have been hurt or diminished by the criminal penalties for marijuana possession that have been hurt or diminished by using marijuana. And those same laws have set up a double standard of enforcement and justice along racial lines,” Finkelstein wrote. It is clear that there is a strong need for new legislation. Finkelstein continued to state that “While black and white populations use marijuana in about the same percentages if you are a person of color there is almost a four times greater chance you will be arrested and charged for possessing marijuana in Broward County — despite comprising less than one-third of the community’s population. That unequal enforcement of the law along racial lines has left many feeling that they are second-class citizens who don’t get the same standard of justice that others get — that their justice is separate but not equal. And they would be right.”

The industry on cannabis in the U.S. is very new, which means that there are a lot of factors that need to be ironed out before the industry can begin to operate in a similar manner to other markets. Only time will tell how the combination of new legislation from the federal government in combination with the changing public sentiment, will help to make the marijuana industry normalized throughout the U.S. The hopes are high that the industry will continue to perform to the high standards that it has already set for itself.

Hemp, Inc. (OTC PINK: HEMP), a global leader in the industrial hemp industry with the largest multipurpose industrial hemp processing facility in the western hemisphere, announced today the company commends the U.S. Senate for passing the 2018 Farm Bill in a 86-11 vote, yesterday June 28, 2018.

Bruce Perlowin, CEO of Hemp, Inc., said, “With Veteran Village Kins Community B-Corporations set up in 8 states so far, the legalization of industrial hemp will now allow these future veteran villages to be built and to flourish – creating more support for our veterans than anyone can possibly imagine.” As described below, the Veteran Village Kins Community is designed to grow hemp, and produce CBD products to benefit veterans as well as generate revenue for Hemp, Inc., the Veteran Village, and individual veterans living in the community as well as creating jobs and income for surrounding communities.

To see daily one-minute video updates on Hemp, Inc.’s ongoing progress, go to Bruce Perlowin’s personal FaceBook page. The top Facebook post shows another semi of processed LCM’s being shipped out and the final planting of one of many fields of hemp being grown this year. We also appreciate and encourage everyone to “like”, “comment” and “share” these historical videos documenting the resurgence of hemp to America and the American small family farmer.

The Senate bill includes provisions that would legalize hemp, removing it from the federal list of controlled substances and allowing it to be sold as an agricultural commodity. The bill would also allow hemp cultivators to receive federal crop insurance. Now that hemp legalization language is included in the Farm Bill approved by the Senate, it will be part of discussions by the bicameral conference committee that will merge both the House and Senate bills into a single piece of legislation to be sent to President Trump’s desk for his historic signature, signing the bill into law.

“Consumers across America buy hundreds of millions in retail products every year that contain hemp,” Senate Majority Leader Mitch McConnell (R-KY) said in a floor speech on Thursday, reports Forbes. “But due to outdated federal regulations that do not sufficiently distinguish this industrial crop from its illicit cousin marijuana, American farmers have been mostly unable to meet that multi-million dollar revenue for themselves. It has left consumers with little choice but to buy imported hemp products from foreign-produced hemp.”

According to Hemp Business Journal, the hemp industry is projected to grow 700% and hit $1.8 billion by 2020.

“The Senate’s passage of the Farm Bill with provisions that would allow hemp to become America’s newest agricultural commodity nationwide is desperately what our farmers need to ensure the profitability of their operations for generations to come,” said Hemp, Inc. CEO Bruce Perlowin. “This action brings us one step closer toward creating a new chapter in our country’s history that will end decades of prohibition that have barred many U.S. farmers from having access to this highly profitable plant.”

Hemp, Inc.’s multi-purpose industrial hemp processing facility in Spring Hope, North Carolina became operational in August 2017 after North Carolina allowed farmers to begin planting hemp seeds for the first time in decades. In August 2017, the company also announced the official launch of its NuAxon Tech CO2 Supercritical Extractor. On Nov. 2, 2017, Hemp, Inc. announced the delivery of its advanced cannabidiol (CBD) hemp oil extraction post-processing equipment, thus completing the company’s hemp oil extraction infrastructure. (That’s our Division #2 – Hemp “extraction” infrastructure).

To capture the booming CBD market, Hemp, Inc.’s long-term strategy is to build the world’s largest hemp oil extraction infrastructure by creating joint ventures with multiple companies to house and operate their CBD extraction equipment in its Spring Hope multi-purpose industrial hemp processing facility and in other locations around the country.  This will create a network of extractors as opposed to one giant company trying to dominate the industry. As stated above, there are already Veteran Village Kins Communities B-Corporations already set up in 8 different states because, after all, there are veterans everywhere, and each community will grow their own hemp and will be extracting at the same location to provide bulk CBDs to other companies that are manufacturing their own products.

From Forbes.com:

The non-psychoactive cannabis cousin of marijuana would finally become legal to grow in the United States under a bill overwhelmingly approved by the Senate.

The wide-ranging agriculture and food policy legislation known as the Farm Bill, passed by a vote of 86 – 11 on Thursday, contains provisions to legalize the cultivation, processing and sale of industrial hemp.

The move, championed by Senate Majority Leader Mitch McConnell (R-KY), would also make hemp plants eligible for crop insurance.

“Consumers across America buy hundreds of millions in retail products every year that contain hemp,” McConnell said in a floor speech on Thursday. “But due to outdated federal regulations that do not sufficiently distinguish this industrial crop from its illicit cousin, American farmers have been mostly unable to meet that demand themselves. It’s left consumers with little choice but to buy imported hemp products from foreign-produced hemp.

READ THE FULL ARTICLE

Yesterday, U.S. Senator Chuck Schumer (D-NY) introduced the Marijuana Freedom and Opportunity Act (“MFOA”). The MFOA is also co-sponsored by Senators Bernie Sanders (I-VT), Tim Kaine (D-VA), and Tammy Duckworth (D-IL). Coming on the heels of the STATES Act, the MFOA is the latest–and hopefully a successful–attempt to put an end to America’s unjust and immoral stance on marijuana (show us the way Canada!). The MFOA, as it’s currently drafted, pulls no punches: Its stated purpose is “To decriminalize marijuana, and for other purposes.” It only gets better from there as other provisions are as follows:

• It officially removes “marihuana” (that’s how it’s spelled in the Controlled Substances Act) as a Schedule I drug of the CSA.
• It would create the Marijuana Opportunity Trust Fund (“Fund”) – think social equity programs but on a federal level. The Secretary of Treasury would transfer the greater of ten percent of all tax revenue generated by the cannabis industry or $10 million to the Fund. The amount transferred into the Fund would then be made available to small cannabis businesses owned by women, and by socially and economically disadvantaged individuals. There’s no doubt that America’s “war on drugs” has been implemented by law enforcement to disproportionately affect people of color and the poor. Although the establishment of the Fund won’t be able to right that wrong, it’s a step in the right direction.
• It would authorize up to $250 million over five years for highway safety research and to help expedite the development of enhanced strategies and procedures to reliably determine the impairment of a driver under the influence of THC.
• It authorizes $500 million over five years for critical public health research to better understand the effects of THC on the brain and the efficacy of medicinal marijuana for specific ailments.
• It would allow the Alcohol and Tobacco Tax and Trade Bureau to regulate advertisements and promotions in order to prohibit promotions to individuals 18 years of age and under.
• It authorizes up to $100 million for state and local governments to create expungement or sealing programs for those with prior marijuana convictions.
• It would still grant States the authority to prohibit marijuana if they decided they preferred to live in the dark ages.

The MFOA has a little bit in it for everyone and hopefully that will lead to its passage: The cannabis industry would be able to operate, and therefore bank, without fear of government intervention; Populations disproportionately impacted by the war on cannabis will have access to capital; Funds will be allocated to prevent impaired driving and promotions aimed at minors, and; States can still criminalize cannabis if that’s their cup of non-THC-infused tea. The MFOA still has a long way to go and who knows what the November midterms or how President Trump’s position on it will vacillate from week to week (or day to day) but let’s make sure to contact our federal legislators and tell them that we demand they support the MFOA.

The Food and Drug Administration on June 25 approved for the first time a drug made from cannabidiol (CBD), a molecule derived from the cannabis plant. The drug, Epidiolex, was approved for the treatment of two types of epilepsy, Dravet syndrome and Lennox-Gastaut syndrome, that have been resistant to treatment.

Well-designed clinical trials have shown that the Epidiolex product of CBD can be helpful in reducing or eliminating seizures in these epilepsy syndromes.

While medical marijuana supporters may cite the FDA approval of Epidiolex as evidence of the benefits of marijuana, it is not an endorsement of any CBD or cannabis product. This product differs from most other CBD products available in cannabis dispensaries in that it is a highly concentrated and purified pharmaceutical grade medicine. It is the only CBD product to receive FDA approval, at this time. Other pharmaceutical grade products may be developed and approved in the future. Additionally, this product could be approved by the FDA for other types of epilepsy or diseases.

Read more

Top photo courtesy of Adobe Stock

Cleveland, OH–JUNE 24, 2018 — PRESS RELEASE — The Medical Cannabis Pioneers Picnic will be held at Rid All Green Partnership, a thriving urban farm in Cleveland, Ohio, on July 22, 2018 from 3 p.m. to 7 p.m. Guests will enjoy healthy and organic picnic fare, while several certified-to-recommend doctors from Cleveland/Akron-area private practices discuss their path to recommending cannabis to their patients.

Food and drink included in price of ticket ($16). All children are free. Doctors will be available or patient questions. Cannabis industry businesses and activist organizations will be providing information on the status of Ohio’s medical program and professional opportunities and products. Keynote speakers are Dr. Solomon Zaraa of Compassionate Cleveland and Dr. Janet Levatin of Patient Focus.

A visit to Rid All Farm is always a treat, with “regenerative agriculture” on display amid a campus of greenhouses and orchard in Cleveland’s own “Innovative Agriculture Zone.” Sustainable agriculture talks and tours will be provided by the experts at Rid All. Children’s entertainment will be provided by Magic Nate, energy elixirs provided by Urban Farm Doctor, and food will feature locally-sourced plant-based foods with meat options. Wine-tastings, gift basket raffles, and giveaways throughout the evening.

Midwest CannaWomen is an organization formed by and for women from diverse backgrounds who are pioneering into the Midwest regional cannabis industry. Our mission at Midwest CannaWomen is to provide resources, education, skills training, and unique networking opportunities to women to unify, build a base of support for each other, and to connect with quality opportunities within the industry. Tickets at: https://www.eventbrite.com/e/medical-cannabis-pioneers-picnic-tickets-47119280035

Deeply conservative Oklahoma became the 30^th U.S. state to legalize medical marijuana after voters approved a ballot initiative by a 57-43 margin on June 26. The move signaled new inroads among Bible Belt constituencies, where, by and large, state policies have restricted medical cannabis use to hemp-derived CBD products only.

(Neighboring Texas approved a restrictive low-THC medical cannabis law in 2015. Kansas, to the north, on the other hand, prohibits all uses of cannabis.)

“When you can get a large majority of the Democrats and independents and a third to a half of Republicans to support you, you can get anything passed in Oklahoma,” pollster Bill Shapard told PBS. 

Now, Oklahoma’s conservative state government will spend the next 30 days designing medical marijuana regulations and setting up a marketplace for future sales.

Earlier in the week, the Oklahoma Department of Health submitted draft rules to the governor’s office and to the state legislature.

Department officials will meet July 10 to present those rules to the State Board of Health for further discussion. In short, some sort of medical marijuana information is expected to be made available to Oklahoma residents by July 26; applications will be accepted starting Aug. 25, tentatively.

It’s unclear how many medical dispensaries will be allowed statewide.

For now, the State Board of Health is working with a fairly broad set of rules in the SQ 788 ballot language. By way of example, opponents had suggested that SQ 788 might confer authority to any medical professional, including veterinarians, to recommend a patient use medical marijuana. Industry observers expect that the board will ensure that only board-certified medical doctors or osteopathic physicians be allowed to do so, according to newsok.com. 

Gov. Mary Fallin, indeed, has reservations about the proposed medical framework described in SQ 788. She has also said she plans to call a special legislative session this summer to tighten the regulatory structure of the medical marijuana law. 

“I will be discussing with legislative leaders and state agencies our options going forward on how best to proceed with adding a medical and proper regulatory framework to make sure marijuana use is truly for valid medical illnesses,” she tweeted after SQ 788 passed at the ballot.

As of now, though, the approved ballot measure will allow qualifying Oklahoma residents to grow and sell marijuana for any medical condition (the ballot language did not specify any qualifying conditions). Those who hold a medical marijuana card in Oklahoma will be allowed to possess up to eight ounces of marijuana, six mature plants, six seedlings and as-yet-undefined amount of edibles or cannabis oil concentrate, according to preliminary ballot language.

Medical marijuana will be restricted to any patient 18 or older.

“The passage of State Question 788 highlights the strength and diversity of public support for laws allowing the medical use of marijuana,” Karen O’Keefe, director of state policies for the Marijuana Policy Project, said in a public statement. “Most Oklahomans agree that patients should be able to access medical marijuana safely and legally if their doctors recommend it. It is noteworthy that this measure passed in such a red state during a primary election, when voter turnout tends to be older and more conservative than during a general election. Support for medical marijuana is overwhelming, and it spans the political and demographic spectrums.”

The political makeup of Oklahoma is perhaps the most striking element of this ballot victory. The state favored Donald Trump in the 2016 presidential election (65 percent of voters) over Hillary Clinton (29 percent). And past medical marijuana petition attempts in Oklahoma have come up short. 

“We are pleased to see state officials are already working on developing a regulatory framework for medical marijuana, and we hope they will include patients, advocates, and other stakeholders in the process,” O’Keefe said. “It is important that patients have reliable access to the products that work best for their conditions. Oklahoma officials can learn a lot from the successes and shortcomings of other states’ programs, and hopefully they will create a system that will serve as an example for other states in the region.”

“In spite of a well-financed and misleading opposition campaign, Oklahoma voters proved that medical cannabis is no longer a controversial issue by enacting a sensible law at the ballot box tonight,” said Aaron Smith, executive director of the National Cannabis Industry Association. “We applaud Oklahoma for joining the growing list of states that allow patients to legally access the medicine that works for them.”

Top photo courtesy of Adobe Stock

With the cannabidiol (CBD) industry continuing to boom, I’ve had numerous inquiries from my CBD-selling clients regarding federal trademark protection for their CBD brands, particularly when the CBD they are selling is derived from Farm Bill hemp and grown in accordance with a derivative state program.

I’ve discussed the “legal use in commerce” requirement for federal trademarks at length in other posts, so I won’t go into too much detail here. But the gist is that in order to procure federal trademark protection for your mark, the goods and/or services for which you are claiming trademark protection must be legal pursuant to federal law. Because the manufacture, distribution and dispensing of cannabis is illegal under the Controlled Substances Act, the lawful use in commerce requirement cannot be met.

But what about CBD? This is the question I’m hearing on a near daily basis. If my CBD products are “legal under federal law,” why can’t I obtain federal trademark protection? To begin with, the federal legal status of CBD is still tenuous and complicated, and the USPTO’s position here only serves to affirm that. But there is one particularly informative case that helps to illustrate the USPTO’s position on CBD trademarks.

On December 5, 2014, Stanley Brothers Social Enterprises, LLC filed a U.S. federal trademark application for CHARLOTTE’S WEB, to be used on “plant extracts, namely, hemp oil sold as a critical component or ingredient of dietary supplements.” That application has been alive and the subject of multiple office actions from the examining attorney since, including a final office action that was issued on April 20^th of this year (harsh). This final office action is very interesting, because the refusal to register the mark was made final for unlawful use in commerce on two grounds: Lack of compliance with the Controlled Substances Act (CSA) and lack of compliance with the federal Food, Drug & Cosmetic Act (FDCA). I’ll take each of the USPTO’s lawful use determinations in turn.

The Examining Attorney used a pretty standard argument in deeming the Applicant’s goods unlawful pursuant to the CSA stating:

“[i]n this case, the items or activities in the application with which the mark is used involve a per se violation of federal law. See In re Brown, 119 USPQ2d at 1352. Specifically, federal law prohibits the sale, distribution, dissemination and possession of marijuana. That is, under the [CSA] prohibits, among other things, manufacturing, distributing, dispensing, or possessing certain controlled substances, including marijuana and marijuana-based preparations.”

The Examining Attorney goes on to note that the Applicant’s specimens submitted with its application show that the “goods are dietary supplements infused with or which are comprised of cannabidiol (CBD) which is derived from what applicant has called industrial hemp plants which is grown in Colorado.” The Applicant also provided a statement to the USPTO that the goods are “comprised of CBD derived from the plant Cannabis sativa L and that applicant obtains the CBD from more than just the mature stalks and sterilized seeds of the plant. Applicant processes the entire plant including the resins, stalks, stems, buds and flowers …”. Therefore, the Examining Attorney deemed Applicant’s CBD to be derived from the portions of the hemp plant that are unlawful under the CSA.

Interestingly, the Applicant also made a tertiary argument that CBD is a cannabinoid found in other plants which are not members of the Cannabis Sativa L family such as Echinacea (coneflower), Heliopis helianthoides (oxeye), etc.. Notwithstanding the accuracy of these assertions, this is an argument I’ve seen made on other trademark applications. But the key here is that the CBD contained in Applicant’s goods is not obtained from any of these other plants. It is obtained from Cannabis sativa L, and therefore falls within the definition of marijuana under the CSA.

The Examining Attorney also determined that the Applicant’s goods are not in compliance with the FDCA, which prohibits the introduction or delivery for introduction into interstate commerce of a food to which has been added a drug or a biological product for which substantial clinical investigations have been instituted and for which the existence of such investigations has been made public. 21 U.S.C. §331(11). The U.S. Food and Drug Administration (FDA) has stated that substantial clinical investigations of cannabidiol have begun and thus products containing CBD may not be sold as dietary supplements. Applicant plainly indicates that its goods are a dietary supplement, both in its application and on its website, and the Examining Attorney analyzes why CBD does not fall into any of the FDA exceptions that would allow it to be marketed as such.

In wrapping up his analysis, the Examining Attorney made a final argument entitled “The 2014 Farm Bill Did Not ‘Legalize’ Hemp on a National Level.” The Applicant here argued that “its goods are not prohibited under either the CSA or the FDCA [because] the 2014 Farm Bill, 7 U.S.C. Section 5940, has effectively overruled the FDCA as well as the CSA by declaring that hemp is a legal product at the federal level and that all things made from hemp are, therefore, legal.” Applicant also argues that the omnibus law prohibits the expenditure of federal funds to prohibit the transportation, processing, sale or use of hemp that is grown or cultivated under the 2014 Farm Bill. Here’s the relevant portion of the 2014 Farm Bill:

“[N]otwithstanding the Controlled Substances Act, or any other federal law, an institution of higher education or a State department of agriculture may grow and cultivate hemp if (1) the industrial hemp is grown or cultivated for the purposes of research conducted under an agriculture pilot program or other agricultural academic research and (2) the growing or cultivating of the industrial hemp is allowed under the laws of the State in which such institution of higher education or State department of agriculture is located and such research occurs.” 7 U.S.C. Section 5940(a).

And here is the Examining Attorney’s succinct response:

“Although applicant is correct that the cited portion of the Farm Bill states that ‘industrial hemp’ is Cannabis sativa L which is less than 0.3 percent tetrahydrocannabinol (THC) on a dry weight basis, the Farm Bill did not make ‘hemp’ and everything made or extracted from hemp ‘legal’ on a nationwide basis as applicant contends. Section 7606 of the 2014 Farm Bill, 7 USC Section 5940, merely allowed universities and/or state departments of agriculture to create pilot programs to grow Cannabis sativa L with a THC content of less than 0.3 percent for purposes of conducting academic or scientific or marketing research. However, this marketing research did not extend to general commercial activity nor did it make all hemp related goods ‘lawful’ on a federal level. The 2014 Farm Bill provision, for example, did not allow those participating in a state pilot program to sell seeds or plants to consumers in other states nor did it allow for goods made under the program, such as applicant’s dietary supplements, to be sold in states which have not established similar pilot programs … The Federal Register notice goes on to state that Section 7606 of the 2014 Farm Bill, 7 USC Section 5940, did not amend the federal Food, Drug and Cosmetic Act’s requirements for obtaining FDA approval for new drug applications or the requirements for conducting clinical trials and research prior to such approval, or the FDA’s oversight of marketing claims such as those in the Warning Letter addressed to applicant. With regard to the Controlled Substances Act, the Farm Bill provision did not alter the provisions of the CSA that apply to the dispensing, distribution and manufacture of drug products containing controlled substances. ‘Manufacturers, distributors, dispensers of drug products derived from cannabis plants, as well as those conducting research with drug products, must continue to adhere to CSA requirements.’ Federal Register, Vol. 81, No. 156 (August 12, 2016). With regard to ‘marijuana,’ a Schedule I prohibited substance, this means that anything which falls within the statutory definition of marijuana, 21 USC Section 802(16), cannot be distributed or disseminated in interstate commerce. This means that if applicant is extracting CBD from all parts of the Cannabis sativa L plant, as applicant has stated, then the goods are marijuana and cannot be sold in interstate commerce under the CSA.”

So, there you have it. The USPTO’s take on CBD derived from Farm Bill hemp is that it is, for the reasons outlined above, ineligible for federal trademark protection.

Edmonton, AB – June 26, 2018 – PRESS RELEASE – Aurora Cannabis Inc. announced today that it has agreed to a new $200 million debt facility, with a potential upsize to $250 million, with the Bank of Montreal (“BMO”).

The facility will consist of a $150 million term loan and a $50 million revolving credit facility (together, referred to as the “Loans”), both of which will mature in 2021. A short period after the implementation of Bill C-45 in October 2018, the Company may request an increase of up to a further $45 million to the term loan subject to agreement by BMO and satisfaction of certain legal and business conditions. BMO will also be providing up to $5 million in other credit instruments. Closing of the debt facility is subject to completion of final due diligence, negotiation of definitive documentation, and satisfaction of conditions precedent customary to a financing of this nature.

The debt facility will be primarily secured by Aurora’s production facilities, including Aurora Sky, Aurora Mountain, and Aurora Vie. Strategically located at Edmonton International Airport, Aurora Sky is the world’s most technologically advanced cannabis facility, projected to produce in excess of 100,000 kg per year of high-quality cannabis at low per gram costs, and slated to deliver its first harvest this week.

“Having successfully met all of BMO’s stringent risk assessment and other due diligence criteria to establish this facility reflects well on the maturity, progress and prospects of Aurora, as well as the quality and economic value of our production facilities,” said Terry Booth, CEO. “This is by far the largest traditional debt facility in the cannabis industry to date. The funds provide us additional fuel to complement our end-to-end portfolio of vertically integrated, geographically and horizontally diversified assets, aimed at building a pre-eminent global cannabis company with a superior margin profile.”

Glen Ibbott, CFO of Aurora, added, “The shift to traditional debt financing is significant. Our cost of capital continues to decrease, providing us a distinct competitive advantage as we execute on our growth strategy. The non-dilutive nature and attractive pricing are consistent with Aurora’s commitment to generating shareholder value. We believe this is a major milestone in the cannabis industry and a validation of our operational effectiveness. It also marks an exciting new stage of our long-term relationship with BMO, a Tier 1 bank with a sterling domestic and international reputation.”

The Loans can be repaid without penalty at Aurora’s discretion. The pricing of the Loans is a set margin over the BMO CAD Prime Rate or a Bankers’ Acceptance of appropriate term. Based on the current BMO CAD Prime Rate, the interest payable is expected to be in the mid to high 4% per annum range over the term of the Loans.