February 26, 2018 was an Interesting Day for Medical Marijuana
A Federal judge in New York dismissed a lawsuit challenging the scheduling of marijuana as a class I drug. Several challenges to its classification had been brought in the past and all have been unsuccessful since marijuana was classified during the Nixon administration. This lawsuit sought to demonstrate that the classification was wrong because there are medical benefits from marijuana, which means it should not be classified as class I. The criteria for class 1 drugs includes that the drug has a high potential for abuse, no currently accepted medical use in treatment and a lack of accepted safety for use of the drug under medical supervision. The plaintiffs in the case included children and a war veteran with debilitating diseases, each of whom provided evidence of the significant medical benefits provided by marijuana. Of note, the federal court made clear that it was dismissing the lawsuit not because it found that marijuana lacks medical benefits, but because of a procedural issue – the plaintiffs had not first sought to obtain FDA review of the classification and therefore could not – yet – proceed in federal court. A very sympathetic group of plaintiffs, with compelling evidence of accepted medical use in treatment, and they faired no better than the others who have tried this path in the past. Take away - using the federal courts to reclassify marijuana is a long shot.
On the same day, it was announced that the first pure-play marijuana company will be publicly listed on a major stock exchange. Chronos Group, one of Canada’s largest medical marijuana companies, announced that it will start trading on the NASDAQ Global Market exchange. It will be interesting to watch the market’s reaction as this will be the first opportunity for many investors to invest in a marijuana business. Will institutional investors get behind medical marijuana? Will the financial markets drive changes that the courts have not?
Pashman Stein Walder Hayden is carefully monitoring developments in New Jersey and federally with respect to marijuana legislation and will be available to help its clients navigate the sure-to-be complex regulatory framework of this potential business frontier.
Please contact Sean Mack at firstname.lastname@example.org or 201.270.4919 for further information.