Click here for the full report PDF
Well into the third year of the global pandemic, with record inflation and the uncertain outcomes of geopolitical issues roiling global markets, the cannabis industry has nevertheless continued upon a similar path as recent years. Public polling continues to show that the overwhelming majority of U.S. adults support the legalization of marijuana for both medical and recreational adult-use. Yet, legislative solutions are unlikely due to Congressional dysfunction and the shift in focus to the midterm elections. Although various efforts to legalize marijuana and end the cannabis industry’s inability to access the financial system have been introduced in Congress, nothing appears imminent. Additionally, employers around the country are being squeezed by the competing pressures of increasing legalization, availability of cannabis, and increased protections for the employees who use it.
The cannabis industry is not immune from market forces. As more states legalize marijuana, there will no doubt be an increase in distressed cannabis businesses as companies grapple with new and complex regulations while also potentially facing the effects of a global economic downturn. Cannabis companies, unable to access the benefits under the federal bankruptcy code, may need to consider new “escape valves” if facing insolvency.
There are bright spots such as the edibles market, which is expected to do even better in 2022 than in prior years. However, federal illegality will likely continue to complicate regulatory efforts by the U.S. Food and Drug Administration to provide much-needed rules and guidance in this area.
Other agencies may yet choose to tackle issues that could reverberate within the cannabis industry. The U.S. Patent and Trademark Office, for example, has increasingly been granting cannabis-related patents and is also involved in litigation that could impact companies’ ability to obtain trademarks under federal law.
Halfway through the year, where do things stand and what is coming down the road? In the following pages, members of Foley & Lardner’s nationally recognized Cannabis Industry Team will share their perspectives and offer insights on the critical issues and inherent challenges facing this exciting and developing industry.
Table of Contents and Authors:
10 | Patent – Benjamin Berkowitz
11 | Labor – Patrick McMahon
13 | Environmental – Nicholas Johnson
14 | Social Equity – Lauren Carboni, Danny Bencivenga