Compliance

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On September 23, Principal Deputy Assistant Attorney General Nicole M. Argentieri announced that the U.S. Department of Justice (DOJ) updated its guidance on the Evaluation of Corporate Compliance Programs (ECCP). The DOJ’s ECCP serves as a roadmap for federal prosecutors to use when evaluating the effectiveness of corporate compliance programs. Therefore, companies should also pay close attention to this guidance when reviewing their compliance programs. Ultimately, a company’s efforts to design, regularly evaluate, and update its compliance program in line with this guidance could inform criminal investigations, charging decisions, and case resolutions.

What Happened

On September 14, Virginia’s Attorney General (AG) Jason Miyares issued a letter to the registered agent of the Good Vibes Shop, a Radford, VA store, for selling tetrahydrocannabinol (THC) products without proper labeling and packaging. The AG’s letter alleges that the store’s THC products lacked child-resistant packaging and appropriate labeling, including ingredient lists, THC content, and age restrictions, in violation of the Virginia Consumer Protection Act (VCPA). As we have recently discussed, the AG’s letter is part of a broader effort among states to protect consumers amid the evolving federal and state cannabis regulatory landscape.

Earlier this month, 20 Democratic state attorneys general (AG) filed an amicus brief supporting the U.S. Food and Drug Administration’s (FDA) marketing denial orders (MDOs) of premarket tobacco applications (PMTAs) for flavored electronic nicotine delivery systems (ENDS or e-cigarettes) currently under review by the U.S. Supreme Court. The brief not only demonstrates which side these states support, but also identifies specific enforcement priorities for these states.

On August 1, Missouri Governor Michael Parson issued Executive Order 24-10 (the EO), a bold move aimed at addressing consumer safety concerns surrounding unregulated psychoactive cannabis products. The EO sparked a legal battle with the Missouri Hemp Trade Association (MO Hemp), which claims that by designating these products as adulterated and imposing an embargo under the EO, the Missouri Department of Health and Senior Services (DHSS) violated Missouri law. The governor’s action is yet another example of a state taking aggressive steps to address gaps left by the lack of federal regulations to ensure consumer safety in the burgeoning industrial hemp industry.

On August 2, the U.S. Court of Appeals for the Eighth Circuit decided a case addressing Nebraska’s authority to require tribal cigarette manufacturers that are not parties to the Master Settlement Agreement (MSA) to comply with the state’s escrow statute with respect to cigarettes sold in Indian country. See HCI Distrib., Inc. v. Peterson, No. 23-2311 (8th Cir., Aug. 2, 2024).

Massachusetts Attorney General (AG) Andrea Joy Campbell announced a $4 million settlement with Next Step Healthcare, LLC (Next Step), a Massachusetts-based long-term care management company, in a deal that the AG described as the largest-ever nursing home settlement in Massachusetts. According to the AG’s announcement, Next Step operates 16 nursing homes in Massachusetts.

We have previously reported on the proliferation of tobacco product flavor bans imposed by localities and subsequent legal challenges throughout the U.S. See Oregon Court Upholds Local Tobacco Product Flavor Ban; Troutman Pepper Tobacco Team Featured in Vapor Voice Post on Ninth Circuit’s Holding that L.A. County’s Flavor Ban Is Not Preempted; Philadelphia…

Introduction

The medicinal and recreational use and popularity of marijuana has continuously grown throughout the U.S. since Oregon became the first state to decriminalize marijuana in 1973. To date, thirty-eight states and the District of Columbia have implemented medical marijuana programs, twenty-five of which have also expanded into adult-use.

Just before the close of the Colorado legislature’s 2024 session, lawmakers approved a bill aimed at streamlining several deficiencies in the state’s regulation of marijuana businesses. While not all the bill’s intended fixes were passed, certain provisions will facilitate significant changes for businesses, including for licensing processes, contaminant testing protocols, reporting obligations, compliance procedures, and operations management practices. Several notable changes are discussed below.