Ansell Grimm & Aaron, PC October 2022 Cannabis Law Update

Joshua S. Bauchner flanked by his Ansell Grimm & Aaron PC colleagues, as he was recently honored as one of the “Innovators of the Year” by the New Jersey Law Journal. — Joshua S. Bauchner, center, flanked by his Ansell Grimm & Aaron PC colleagues, was recently honored by the New Jersey Law Journal as one of its “Innovators of the Year” for 2022. Bauchner is a leading voice in the legal cannabis community, aiding clients in navigating state regulations to find success in the growing cannabis marketplace.

CRC Issues Guidance On WIRES; Raises More Questions Than Answers

On September 9, 2022, the Cannabis Regulatory Commission (CRC) issued long-awaited guidance regarding workplace impairment arising from cannabis use. While the guidance does not address all the issues that employers have faced in recent years, it does provide some needed clarity.

By way of background, on February 22, 2021, Governor Murphy signed the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA) into law. In addition to legalizing the use of marijuana for anyone aged 21 and over, CREAMMA prohibited employers from taking adverse employment action against an employee, such as termination, solely “due to the presence of cannabinoid metabolites in the employee’s bodily fluid.” In other words, under CREAMMA, a positive drug test result for marijuana is insufficient for an employer to conclude that an employee is impaired and to take disciplinary action. Instead, CREAMMA requires the employer to use a Workplace Impairment Recognition Expert (“WIRE”) to conduct “a physical evaluation in order to determine an employee’s state of impairment.”

However, CREAMMA did not establish what credentials, experience, or training a WIRE would need and instead directed the CRC to design and implement a certification process. After much delay, the CRC finally published some guidance to assist employers. While the new guidance does not formulate and approve standards for WIRE certification, it does state that a positive drug test result combined with “evidence-based documentation of physical signs or other evidence of impairment during an employee’s prescribed work hours may be sufficient to support an adverse employment action.”

While WIRE certification is unavailable, the CRC recommends that employers “[d]esignate an interim staff member to assist with making determinations of suspected cannabis use during an employee’s prescribed work hours.” The designated employee “[s]hould be sufficiently trained to determine impairment and qualified to complete [a] Reasonable Suspicion Observation Report [which is a form created by the CRC].”

The report should document “the behavior, physical signs, and evidence that support the employer’s determination that an employee is reasonably suspected of being under the influence during an employee’s prescribed work hours.” The CRC recommends that a second person in addition to the observer, such as a manager or supervisor, be involved as well. Employers should consider using “cognitive impairment test, a scientifically valid, objective, consistently repeatable, standardized automated test of an employee’s impairment, and/or an ocular scan, as physical signs or evidence to establish reasonable suspicion of cannabis use or impairment at work.”

Although this guidance is helpful in some respects, it still leaves employers with much uncertainty. The best course of action is for the CRC to adopt WIRE certification standards as soon as possible as the Legislature intended with the passage of CREAMMA.

Ansell Expands Cannabis Law Practice Group

The Firm added a number of new attorneys to the Practice Group to best serve clients in this multidisciplinary field. Kelsey Barber has taken the lead on applications, Irina Moin is assisting with corporate formation, structure, and governance, and Melanie Scroble and David Lang represent cannabis clients with commercial real estate needs, including leasing, site acquisition, and zoning. Rahool Patel also continues to represent clients in litigation matters, including the still ongoing (and successful) appeal of the 2018 Request for Applications, as well as challenges to municipalities for failing to employ objective criteria in awarding resolutions of support to prospective state applicants.

As a full-service law firm, Ansell attorneys are able to bring their collective experience and skills to serve every client need in this ever-growing, and ever-changing, area of the law.

Second Circuit Holds Classifying Cannabis As A Schedule I Narcotic Is Irrational; Does Nothing About It

According to a ruling recently handed down by the United States Court of Appeals for the Second Circuit, the federal government’s classification of cannabis as a Schedule I controlled substance without medical utility isn’t unconstitutional, but it is “irrational.”

In the matter of United States of America v. Green, Nos. 19-997(L), 19-1027 (Con), __F.4th__ , 2022 WL 3903654 (2d Cir. Aug. 31, 2022), defendants were charged by the United States District Court for the Western District of New York with conspiracy to possess with intent to distribute 100 kilograms or more of marijuana, in violation of 21 U.S.C. §§ 841(a)(1), (b)(1)(B) and 846. Defendants filed a motion to dismiss the narcotics conspiracy count on the grounds that the classification of marijuana under Schedule I of the Controlled Substances Act violates their Fifth Amendment due process and equal protection rights, and that marijuana’s scheduling has no rational basis because it does not meet the statutory criteria for inclusion on Schedule I. The District Court therein denied defendants’ motion, finding they incorrectly sought to tether the rational basis inquiry to the statutory criteria.

On appeal the U.S. Court of Appeals for the Second Circuit affirmed the lower court’s decision, determining:

“[T]he Act’s scheduling criteria are largely irrelevant to our constitutional review because the rational basis test asks only whether Congress could have any conceivable basis for including marijuana on the strictest schedule. Because there are other plausible considerations that could have motivated Congress’s scheduling of marijuana, we conclude that its classification does not violate the [plaintiffs’] due process or equal protection rights.

While the Judges acknowledged that defendants “convincingly argued that it is irrational for the government to maintain that marijuana has no accepted medical use,” they ruled that defendants were required to “do more than show that the legislature’s stated assumptions are irrational; [they] must discredit any conceivable basis which could be advanced to support the challenged provision, regardless of whether that basis has a foundation in the record, or actually motivated the legislature.”

While disheartening, the Second Circuit’s ruling is consistent with other federal courts’ refusal to strike Schedule I classification, reasoning instead that it is the responsibility of federal lawmakers, not federal courts to repeal the prohibition on marijuana.

Psilocybin May Be Next On The List Of Legalized Substances In NJ

In recent years, efforts to decriminalize and legalize the use of psilocybin (colloquially known as “hallucinogenic mushrooms”) for medical, recreational and scientific purposes has been advancing rapidly. In the State of New Jersey, the potential passage of the “Psilocybin Behavioral Health Access and Services Act” (the “Psilocybin Behavioral Act”), introduced by Senate President, Nick Scutari in June of 2022 would see such legalization and sale of hallucinogenic mushrooms in New Jersey businesses and medical facilities, similar to the State’s recent success in recreational cannabis facilities.

If passed, the Psilocybin Behavioral Act would authorize the production of psilocybin for therapeutic use under a controlled environment, and decriminalize and expunge past convictions for certain psilocybin related conduct, including possession.

Although the Psilocybin Behavioral Act posits itself as mental health, rather than revenue generation for the State, it does take some inspiration from the current Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization (CREAMM) Act. Specifically, applicants will be eligible to pursue four different types of licenses, including, a psilocybin product manufacturer, psilocybin service center operator, psilocybin testing laboratory, and psilocybin service facilitator, as well as a psilocybin worker permit.

Ansell Launches Psychedelics Practice

On the heels of its successful cannabis practice, which has included numerous granted licenses for its clients as well as successes in Court litigating cannabis matters, the Firm is excited to announce it is expanding into the realm of psychedelics.

The Firm has an established record in the cannabis space enabling us to serve our clients unlike any other area law firm. By example, we co-hosted the first-ever Cannabis Symposium in New Jersey which drew nearly a thousand people (two other Symposia followed). Joshua S. Bauchner, head of the practice group, is co-chair of the New Jersey State Bar Association Cannabis Law Committee, has spoken at the Cannabis World Congress and Business Expo at the Jacob Javits Center, and has presented CLE’s on cannabis at the NY and NJ State Bar Associations, and at the NORML Legal Conference in Aspen, among other fora across the country.

The Firm also recently was honored by the New Jersey Cannabis Insider as one of three finalists for Excellence in Cannabis Law and has been covered by numerous media outlets and published on the topic.

Now, with the federal government and many states looking to legalize psychedelics, Ansell is expanding the practice to include this emerging area of law. Please contact us at (973) 247-9000 if you are interested in exploring opportunities.

Biden Administration Open to Health Department Role in Potential Use of Psychedelic Therapies

The Biden Administration’s Department of Health and Human Services is actively anticipating that the FDA will approve psychedelic therapies — using psilocybin and MDMA — in the next two years, leading the way for alternative mental health treatments on a federal level.

The plan was revealed in a document coined the “May letter,” a correspondence sent by Assistant Secretary for Substance Abuse and Mental Health Services Administration (SAMHSA), Miriam Delphin-Rittmon to Rep. Madeleine Dean, D-Pa.

Dean had contacted HHS and proposed an interagency task force to lead a public-private partnership to address issues associated with anticipated approval by the FDA of MDMA for the treatment of PTSD and psilocybin for depression “within approximately 24 months,” the letter notes.

Delphin-Rittmon responded:

“SAMHSA agrees that too many Americans are suffering from mental health and substance use issues, which have been exacerbated by the ongoing COVID-19 pandemic, and that we must explore the potential of psychedelic-assisted therapies to address this crisis.”

Delphin thereafter confirmed that SAMHSA was exploring the prospect of establishing a Federal Task Force to monitor and address the numerous complex issues associated with emerging substances including the private sector, and that “collaboration across federal agencies with outside stakeholders will be the most effective way to ensure we are thoughtfully coordinating work on emerging substances.”

The letter marks an about-face from decades of federal drug policy, which classified psychedelics like MDMA and psilocybin as Schedule I narcotics, with no currently accepted medical use and a high potential for abuse.

About Ansell Grimm & Aaron, PC
Ansell Grimm & Aaron, PC was founded in 1929 and has a long history of delivering for clients who come to us to resolve legal matters that are often urgent, stressful, and of great importance. A general practice law firm, Ansell Grimm & Aaron is powered by experienced attorneys who understand that the best outcome is the one that serves the needs of each client.

About the Cannabis Law Practice
Among the leading cannabis firms on the East Coast, we work with cannabis entrepreneurs, industrial hemp producers, ancillary businesses and governing bodies seeking regulatory counsel.

The above is for informational purposes only and does not constitute legal advice. Transmission of the materials and information contained herein is not intended to create, and receipt thereof does not constitute the formation of, an attorney-client relationship. Attorney advertising.