Federal decriminalization of cannabis, Agreements to Agree, and other legal news to ponder from Cape Law Firm

Historic federal Bill to decriminalize cannabis (marijuana) – the MORE Act – might plow new ground for an alternative crop.

The Marijuana Opportunity Reinvestment and Expungement Act (MORE Act) was introduced in the House and Senate in July and is expected to go to a vote in the House soon. The Bill replaces the term “marijuana” with the term “cannabis” throughout the U.S. Code and removes it from the list of federally controlled substances. Other notable changes the bill would bring about include:

  • a 5% tax on cannabis products
  • collection & publication of demographics on cannabis businesses and employees
  • allows the Small Business Administration to make loans and services available to cannabis businesses
  • establishes a trust fund to support people affected by the war on drugs
  • establishes a process to expunge convictions and review sentences of federal cannabis

With the 2018 Farm Bill legalizing hemp, this Bill marks another significant step towards a comprehensive regulatory system for cannabis. Whether the Bill can pass both Houses in a presidential election year is probably a challenge. Even if it fails this year, the building momentum around cannabis will likely see future legislation expanding legalization. And since cannabis is a plant, we feel pretty sure that it will eventually be farmed on a much wider scale than it has been for the last several decades.

An “Agreement to Agree” turns rotten for prospective licensee

An ag biotech company that employed tissue culture to propagate fruit trees found itself on the outside looking in for commercializing a new apple cultivar released by Washington State University.

Phytelligence entered into a propagation research agreement with WSU which provided an option to enter a separate agreement if the apple cultivar was released for commercial sale. WSU later sought proposals for potential licensees, including Phytelligence, but Phytelligence didn’t respond. Phytelligence eventually requested a license after WSU had granted an exclusive license to another company. Phytelligence sued, arguing that its research agreement provided an option to license the cultivar. The Federal Circuit confirmed that the option in the research agreement amounted to little more than an unenforceable “agreement to agree” that required a further meeting of the minds to be complete.

This case is a reminder that an agreement that leaves too much to be worked out later is really nothing more than wishful thinking.

Cape Law Firm’s Frequently (or Randomly) Asked Questions

“What’s the deal with dicamba and Enlist? Can these be used in the upcoming season?”

The U.S. 9th Circuit Court of Appeals was regularly in Ag headlines this year due to two cases that challenged the FIFRA registrations of herbicides used in herbicide-tolerant crops – Xtend (dicamba-tolerant) and Enlist (2,4-D, glyphosate, glufosinate tolerant). The Court vacated one registration but left the other in place. The short answer heading into the 2021 season:

  • Don’t apply dicamba over the top of Xtend crops. The FIFRA registrations for XtendiMax, FeXapan, and Engenia herbicides – the three dicamba formulations approved for OVT application on Xtend beans/cotton – were vacated.
  • You can apply Enlist Duo (a 2,4-D & glyphosate combo) OVT Enlist crops. Its FIFRA registration was upheld by the Court.

As they always say, “Read and follow the label,” although that has gotten a lot harder in the last few years. Good luck!

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