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for the Insurance Industry

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It’s In the House!

On Tuesday September 21, 2021, the House of Representatives (“House”) passed an amendment adding the Secure and Fair Enforcement (“SAFE”) Banking Act to the National Defense Authorization Act (“NDAA”). The SAFE Act aims to protect banks that serve businesses in the legal cannabis industry. How is this related to national security you ask? Rep. Ed Perlmutter, (D-Colo) stated, “I’ve been talking for years about the serious public safety threat that exists in our communities. The SAFE Banking Act will strengthen the security of our financial system and keep bad actors like cartels out of the cannabis industry,”

I think that is a pretty good argument. We will see what happens.

It’s In the Senate …

The Clarifying Law Around Insurance of Marijuana Act (“CLAIMS Act”), which generally provides a safe harbor from penalties or other adverse agency action for insurance companies that provide services to cannabis-related legitimate businesses in jurisdictions where such activity is legal, seems to be stuck in committee. It was referred to the Senate’s Committee on Banking, Housing, and Urban Affairs back in March and we haven’t heard a peep. Cannabis Courtroom has a phone call into Senator Dick Durbin (D-Il) for comment on the status of the bill. We will keep you posted on this important legislation.

It’s In Philadelphia …

Philadelphia employers should take note of new employment laws in the City of Brotherly Love. Effective January 1, 2022, a new city ordinance will prohibit employers from requiring job applicants to submit to a marijuana drug test as a condition of employment. Exceptions to the law included employees in safety related positions such as police and fire, positions requiring commercial driver’s licenses and childcare. The ordinance does not provide a specific penalty for violations of the ordinance, by employers in Philadelphia should be aware. Why do I suddenly have a taste for a Cheesesteak????

(“RICO”) Suave….

On July 6, 2021, Valley Greens Retail Outlet, Inc., a retail cannabis business, doing business as March and Ash, (“Valley”) filed suit against a local group of businesses and individuals (“Defendants”) in San Diego California. The suit alleges that Defendants are running illegal cannabis dispensaries in violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”). While its original use was to prosecute the mafia as well as others who were actively engaged in organized crime, its application has been more widespread. RICO also permits a private individual “damaged in his business or property” by a “racketeer” to file a private civil suit. RICO also allows a Plaintiff to recovery treble damages. The complaint does not specify the damages sought but it will be substantial.  It is interesting to see Cannabis companies used as a weapon. The matter is set for hearing in January of 2022.

Valley Greens Retail Outlet, Inc. v. Garmo et al. 37-2021 00028821- CU-RI-CTK


On August 17, 2021, an Oklahoma businessman, Victor Ngo, plead guilty to one count of making a false statement to a bank in the United States District Court for the Western District of Oklahoma. The United States alleged that Mr. Ngo opened a bank account by misrepresenting his cannabis company as a health and wellness company when it really was engaged in marijuana sales.

Mr. Ngo plead guilty to laundering over than $770,000 and agreed to forfeit $621,570. Sentencing is expected in October and Mr. Ngo is facing up to 30 years and a fine of up to $1 million.

Be careful out there!

Oh Canada….

On Monday, September 27, 2021, U.S. District Judge Paul Crotty in New York dismissed a lawsuit that alleged Tilray Inc, fraudulently overstated the value of a marketing and revenue-sharing agreement with Authentic Brands Group Inc. Tilray  is based in Canada and has recently become one of the largest cannabis companies in the world.

The judge ruled that Plaintiff’s failed to establish that Tilray Inc. engaged in “conscious misbehavior or recklessness” in touting the agreement even though Tilray clearly overestimated the value of the agreement.

However, the Judge allowed Plaintiff’s leave to file an amended complaint to try to remedy the defect in the pleadings.

Kassin et al v Tilray Inc et al, U.S. District Court, Southern District of New York, No. 20-03459.

Lawyer Joke of the Day

With cannabis being legal for over a year in Canada, every province has access to weed except Quebec.

They only get oui’d.

Make sure you check out our submission next issue… it will be scary.

Jason Morgan Roberts is an Attorney and Legal Commentator in the Chicagoland Area

[email protected]