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A New Leaf: How 1 CLO Works With Cannabis Industry

As California revs up to legalize recreational marijuana use, several medical marijuana dispensaries and collectives are finding their product of choice getting wrapped up in revamped regulation, along with increased M&A work and investment deals.

Many cannabis sellers have not hired in-house counsel, and use only outside counsel to cut through the legal morass. But for at least one cannabis-related company, hiring a full-time chief legal officer was the best way to peer through the smoke.

Eaze, a technology company that connects medical marijuana patients with cannabis delivery services, hired Michael "Mickey" Brandis this summer to lead all legal affairs. Day to day, Brandis handles issues that might cross any in-house legal chief's desk: employment, intellectual property, corporate, advertising and operations matters. Where the job differs from a typical in-house role, he said, is in working with Eaze's unique business partners—cannabis dispensaries.

"Having served as a general counsel at four other companies in the last 20 years in Silicon Valley, my day is not that different than a day at any other technology company," Brandis said, "other than the fact that we're in a new industry that is highly regulated." 

Adult recreational marijuana use, which is different from medical marijuana use, is slowly gaining popularity across U.S. states. Last year, California, Nevada, Massachusetts and Maine all passed legislation allowing for the recreational use of marijuana.

California's legislative timeline on legalization is complex, said Clarke Neubert attorney Nicole Howell Neubert, whose practice deals with cannabis law and policy.

Neubert explained that, in the past 20 years, California has passed law after law that created a difficult web of bureaucracy, oversight and licensing that, only recently, became streamlined.

Medical cannabis use was first legalized in California in 1996 with Proposition 215. Close to 20 years later, the California governor signed the Medical Cannabis Safety and Regulation Act (MCSRA), which set up the Bureau of Medical Cannabis Recreation. In 2016, California voters passed Proposition 64, which will allow adults recreational marijuana use starting in 2018. In June, the California senate passed SB 94, which repealed the earlier MCSRA and introduced a comprehensive set of regulations for medicinal cannabis sellers and recreational cannabis sellers.

Brandis said that while Eaze isn't directly affected by medical and recreational marijuana use legislation, its business partners are. Eaze is a "platform," Brandis said, that connects licensed dispensaries with card-holding medical marijuana users. And Brandis rejects the common description of the company: the Uber for weed.

"We're more like Amazon, a platform that allows people to order goods and have them delivered," Brandis said. "We don't deliver the product. The delivery is solely the responsibility of the licensed dispensary."

Despite not being a direct cannabis seller, Eaze takes a proactive approach to cannabis policy and legislation, Brandis said. For example, he said, the company won't operate with any dispensaries that aren't properly licensed in California.

"Yes, we have to coordinate with our dispensary partners on all compliance issues," Brandis said. "Even though it is their responsibility to be compliant, we want to make sure of it."

Brandis said he also wants to be proactive in meeting with regulators and informing them about safe cannabis delivery. Laws about cannabis delivery itself, he noted, "are being written as we speak."

In all of his conversations with regulators, Brandis stresses safety.

"The basis for Eaze's input into lawmaking and writing regulations is that, fundamentally, we believe the approach we're taking, and the comment we offer to legislators and regulators, is specific to public safety," Brandis said. "[We want] the commercial cannabis market in California to be a safe and trusted market, unlike the illicit market."

Contact David Ruiz at druiz@alm.com.

Contributing Author

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David Ruiz

David Ruiz is the in-house counsel reporter for the San Francisco-based legal affairs paper The Recorder. Ruiz has written for The Sacramento Bee,...

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