Diane Romza-Kutz, Carl Rowley, and Susan Werstak of Thompson Coburn’s cannabis practice attended the 2016 Cannabis Business Summit hosted by the National Cannabis Industry Association in Oakland, Calif., in late June. The conference’s keynote speaker was Gavin Newsom, Lieutenant Governor of California. In addition, Oakland Mayor Libby Shaaf addressed the audience. More than 3,000 members from all sectors of the cannabis industry attended the summit.
Thompson Coburn presentations
The summit began its June 22 agenda with Carl Rowley’s panel discussion entitled “Product Liability and Mass Tort Litigation: Will the cannabis industry be next?” Carl and the panel discussed the risks of mass tort litigation against the industry in light of recent product liability lawsuits filed in Colorado. Carl also discussed strategies to avoid falling victim to those lawsuits, fielding questions from industry leaders in the audience. The panelists strongly encouraged cannabis businesses to engage legal representation now to help formulate litigation-avoidance strategies.
The afternoon sessions included Diane Romza-Kutz’s panel entitled “FDA Regulatory Compliance.” Diane and her panel discussed a wide array of regulatory issues, including food and additive labeling and safety, also fielding questions from industry leaders. Her overall message was that the FDA persists in its position that cannabis is a drug and, as such, has not been demonstrated to be safe and effective. This combined with the fact that it remains as a Schedule I controlled substance poses challenges for the industry but such are not insurmountable. It is clear that there is growing pressure on the federal agencies to recognize cannabis and its legitimate uses and in so doing develop appropriate federal regulations. Diane explained that it would be beneficial for the cannabis industry to implement best practices solutions now by treating their businesses as if they already were regulated by the FDA and implementing standard operating procedures that eventually will be required by the FDA, such as batch testing, labeling practices which otherwise comport with FDA standards, and implementing good manufacturing practices, as well as regular supply chain audits.
All eyes on California
Because the conference was in California, topics of key importance included the Medical Marijuana Regulation and Safety Act (expected sometime next year) and the Adult Use of Marijuana Act, which has been placed on the November ballot. Gavin Newsom addressed both issues, stating that the time has come for cannabis access that is both regulated and safe. Newsom is the highest-ranking elected official ever to address a cannabis industry conference.
Tension between state/federal regulations continues
In speaking with attendees, it was clear that the continued tension between state and federal regulations remains the number one concern of the cannabis industry. Some businesses have sought to avoid this tension by engaging in business that offer cannabis-related products and services, such as greenhouse supplies. There was a great deal of discussion about de-scheduling cannabis or changing how cannabis is scheduled and how that would impact the industry. Finally, there appeared to be a growing consensus that the industry itself was looking inward to professionalize its practices to establish credibility within the mainstream of the medical business world.
Overall, the programming and discussions that emanated from the conference continued to push the cannabis industry in the right direction. Advocating for the industry to better itself and improve business practices, conference attendees set a strong platform for future growth and increasing acceptance of this developing industry.
Carl Rowley is co-chair of the firm's Consumer Products Litigation Practice and Mass Tort Practice.
Diane Romza-Kutz is a Life Sciences partner in the firm's Health Care group.
Sue Werstak is a partner in the firm’s Consumer Products Litigation Practice and co-vice chair of its Mass Tort Practice.