Introduction

On February 1, Senior U.S. District Judge R. Brooke Jackson of the U.S. District Court for the District of Colorado denied Mackie A. Barch (Mackie) and Trellis Holdings Maryland, Inc. (Trellis and together with Mackie, defendants) motion to vacate the original judgment entered into on September 7, 2022, awarding $6.4 million to David J. Bartch (plaintiff) as a result of defendants’ breach of contract. In reaching his ruling, Judge Jackson was unpersuaded by defendants’ argument that the court lacks subject matter jurisdiction over this matter because the plaintiff’s injury is not redressable by a federal court because marijuana is illegal under federal law, and federal courts therefore cannot adjudicate marijuana cases. Judge Jackson further went on to specify that the conduct at the center of this dispute (defendants’ agreement to return plaintiff’s ownership interest upon the successful licensing of Doctor’s Orders Maryland (DOMD)) would not have “affected the amount of cannabis that the company [DOMD] cultivated or distributed” in violation of the Controlled Substances Act (CSA). The decision to ultimately defend and extend Article III jurisdiction in cases arising out of cannabis business disputes is an interesting shift that highlights the sway of public opinion to the side of the legalization of marijuana on the federal level.

One of the most interesting aspects of marijuana law and policy in the U.S. is its tendency to strike at our most foundational democratic principles. In 2005, the U.S. Supreme Court held, in Gonzales v. Raich,[1] that Congress has the power to regulate the purely intrastate cultivation, manufacture, distribution, possession, and use of marijuana under the commerce clause, even if the marijuana never crosses state lines, because marijuana-related activity has a “substantial affect” on interstate commerce. Several challenges have been made to this conclusion since Gonzales was decided, none of which have been successful to date.

Whether you believe that cannabis legalization has occurred too quickly or too slowly, one thing is certain: recent developments herald a potentially seismic shift in federal cannabis policy in the U.S. Reflecting on our article from September, which discussed the U.S. Department of Health and Human Services’ (HHS) recommendation to the Drug Enforcement Administration (DEA) to reschedule cannabis from Schedule I to Schedule III of the Controlled Substances Act (CSA), it is clear that the landscape continues to evolve rapidly. Since that publication, numerous noteworthy developments have unfolded, along with a growing discourse on the potential unintended consequences of such a reclassification. This article aims to catch readers up on the latest developments in federal cannabis legalization.

The Virginia Cannabis Control Authority (CCA), which assumed oversight of Virginia’s medical cannabis program from the Board of Pharmacy as of January 1, has promulgated regulations to govern medical cannabis operations in the Commonwealth. The regulations are largely similar to those that existed under the Board of Pharmacy, but they bring the Commonwealth one step closer to opening applications for the state’s single unlicensed health service area (HSA).

Recently enacted Pennsylvania Senate Bill 773 (SB773) introduces several amendments intended to expand opportunities and increase competition among existing cannabis licensees in Pennsylvania. The bill seeks to support independent licensees in the state and is a response to the consolidation among licensees that many states have seen as state-legal marijuana operators struggle under the weight of federal prohibition and competition from the unregulated marketplace.

With rapid technological advances, expanded regulatory oversight, and constantly shifting market dynamics, owning and operating a business in the modern world has become an increasingly difficult challenge. Chief among the challenges that business owners face is the likelihood of financial distress, a daunting scenario that can arise from market downturns, management issues, or unexpected crises. When a business finds itself in financial turmoil, it is crucial that business owners and investors have viable options for navigating these challenges. Traditionally, bankruptcy is the primary avenue of relief for distressed businesses, offering a structured way to address financial woes and creditor claims.