Client Alerts, News Articles & Blog Posts

Everything you need to know about BMD and the industry.

Will Federal Legislation Open Cannabis Acquisition Floodgate?

Are potential buyers quietly lobbying at federal and state levels to kick open the door to launch a new round of strategic acquisitions? Will presently pending federal legislation, the SAFE and MORE Acts, providing safe harbor for banks and re- or de-scheduling marijuana, be sufficient to mobilize into action major non-cannabis companies that previously shunned the cannabis industry due to the unknown implications of owning businesses whose activities are illegal under federal law?

When tobacco giant Altria invested $1.8 billion in Cronos, and beverage behemoth Constellation Brands invested in Canopy, the investments did not require the assumption of a smorgasbord of unknown risks that come with investing in federally illegal enterprises since neither Cronos nor Canopy had any “illegal” US operations. These include key business issues and concerns, such as banking relationships (almost certainly mitigated by the SAFE Act), stock exchange listings and liquor licensing.

It was recently disclosed that Altria, which has been acquiring ancillary cannabis businesses and intellectual property since its Cronos deal, has engaged lobbyists to promote its cannabis interests. It wouldn’t be much of a leap to speculate that they, and other potential strategic tobacco, beverage and pharma company investors, are both carefully analyzing the pending legislation in the US and actively working to firmly place their feet in the open door and widen the porthole, facilitating a new wave of acquisition activity.

Right now, as the financial performance of cannabis businesses is beginning to pop, the shelves of the acquisition market are fully stocked with potential acquisitions candidates of all sizes, shapes and flavors. If the door is opened, competition and pricing could be eye popping. Think “first mover advantage.”

Stay tuned.

For questions, please contact Business and Corporate Law Member and Managing Partner of BMD's Phoenix/Scottsdale location Stephen Lenn at salenn@bmdllc.com, or 480.687.9747.

COVID, Privacy and More! New Challenges for Physicians in 2021

While hopefully we are coming out of the pandemic, the legal repercussions related to legislative initiatives and other actions during that time continue to apply to businesses in general and healthcare practices. It is a helpful reminder that practices make certain that they maintain accurate records in order to satisfy the reporting requirements under the various COVID-related bills and protect yourself from future employment claims.

Banking and Cannabis: Bank Lending, The Next Frontier

A fortuitous combination of developments and circumstances present the banking and cannabis industries a large opportunity to enhance each of their respective bottom lines: conventional bank lending, payment processing, treasury management and other services, and bank administered SBA and revenue bond financing to cannabis businesses.

EKRA Updates: COVID-19 Testing, Employment Agreements, and More

Ever since the Eliminating Kickbacks in Recovery Act (“EKRA”) was passed by Congress in 2018, we have been waiting to see how the law is interpreted and ultimately enforced. As a reminder, EKRA seeks to eliminate kickbacks in return for patient referrals to facilities that treat those overcoming addiction, such as recovery homes, clinical treatment centers, and laboratories. (NOTE: EKRA applies to all laboratories, not just those related to addiction treatment.) It is essentially an expansion of the Anti-Kickback Statute, which only applies to those services that are reimbursable through federal healthcare programs such as Medicare and Medicaid, to now also cover services reimbursable through private insurers.

New Interpretation of the Fair Debt Collection Practices Act Rocks the Industry

It’s not lost on us that our interpretation of § 1692c(b) runs the risk of upsetting the status quo in the debt-collection industry. This quote from the Eleventh Circuit Court of Appeal in its April 21, 2021 opinion from the case of Hunstein v. Preferred Collection and Management Services, Inc. is possibly the biggest understatement in the history of the Fair Debt Collection Practices Act. At a minimum, the Eleventh Circuit’s opinion has sent shockwaves and fear throughout multiple sectors of the financial services industry.

Construction Industry Trends and Predictions Through 2021 and Beyond: Insurance and Emerging Threats

A 2021 survey identified three key issues impacting the construction industry in 2021: (1) the financial health of contractors; (2) the continuing risk of the pandemic; and (3) technology driving productivity, but also increasing the risk of cybersecurity threats. With this backdrop, insurance premiums in the construction industry are generally on the rise in 2021.