Tag: Compliance
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Francoise Gilbert on Colorado’s New Privacy Law: Are You Ready?

Effective Sept. 1, 2018, Colorado will require all entities that process or store certain personal information of Colorado residents, regardless of whether the entity is located within or outside of Colorado, to have formal data security and data disposal programs. This is the result of the adoption of Bill 18-1128 “Concerning Strengthening Provisions for Consumer Data Privacy,” signed into law at the end of May 2018, to amend and supplement existing law …. Previously, the definition of “personal identifying information” under the Colorado law was limited to a resident’s first name or initial and last name in combination with the individual’s Social Security, driver’s license, or identification card number, or a credit or debit card or bank account number, combined with a password or access code. The new definition includes additional forms of identification, such as student, military, passport, and health insurance identification number, as well as other types of information, such as medical information or biometric data. It also includes username or e-email address in combination with a password or security question answers that would permit access to an online account …. Organizations that collect personal identifying information of Colorado residents and that do not yet have the written programs necessary to formalize their data protection practices urgently need to focus on compliance. — Francoise Gilbert, Greenberg Traurig
Francoise Gilbert, a partner at Greenberg Traurig, is the author of the two volume treatise “Global Privacy and Security Law” (Wolters Kluwer Publishing), covering 68 countries. Her practice has focused on information privacy and security for more than 25 years. She advises clients on the entire spectrum of domestic and international privacy and cyber security issues legal issues, such as Internet of Things, smart cities, artificial intelligence, analytics, digital advertising and other cutting-edge developments that rely on the extensive use of personal data.She is one of the featured speakers at the Privacy+Security Forum which takes place Oct. 3-5, 2018, in Washington, DC.
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McLoughlin on Artificial Intelligence in Banking

“Capital adequacy requirements are not the only kind of regulation that AI is helping banks to meet. An even bigger area is monitoring of trading activities for misconduct and abuse. The Bank of England estimates that misconduct by traders has cost banks a global cumulative of $320 billion to date. For this very large reason, banks are aggressively deploying machine learning to monitor the behavior of their traders and detect unusual behavior.”
Read Michael McLoughlin’s post on LinkedIn.
Michael McLoughlin is Global Digital Transformation Partner & Advocate with Microsoft.
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Joshua Gold on Cyber Crime and Insurance

With the amount of trickery going into thefts and embezzlements these days, crime insurance companies too often use the many steps involved in a fraudulent scheme to argue that losses are indirect and otherwise uncovered.
The recent decisions of the Second Circuit and Sixth Circuit on the “direct loss” argument and the scope of computer fraud coverage are important victories for policyholders generally, making clear that where the predominant step in the chain is some type of covered fraudulent misconduct involving a computer, a court is not going to entertain a direct loss defense to excuse the insurance company from paying.
As such, policyholders should be familiar with their crime coverage and promptly notify all potentially implicated lines of insurance coverage when a cybercriminal is afoot. — Joshua Gold, Anderson Kill
Read Josh’s complete article.
Joshua Gold is Chair of Anderson Kill’s Cyber Insurance Recovery Practice and was amicus counsel for United Policyholders in the Medidata Solutions, Inc. v. Federal Insurance Company case before the Second Circuit.
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Halligan, Weyland on Cybersecurity, Trade Secret Asset Management and the Defend Trade Secret Act of 2016

“Cybersecurity protection against outsider theft has largely succeeded, if competently crafted business methods are strictly followed. The more intractable problem of insider theft is now the major concern, and traditional cybersecurity methods are unavailing. The ever-higher digital barriers placed around the corporation and its sensitive data are no defense against data theft by people allowed inside the digital walls in the normal course of business.”
Read their complete post on LinkedIn.
R. Mark Halligan is a Partner and Trial Lawyer at FisherBroyles, LLP. Mr. Halligan has taught Advanced Trade Secrets Law in the John Marshall Law School LLM program for 24 years.
Richard F. Weyand is the President of the Trade Secret Office, Inc. www.thetso.com
See R. Mark Halligan and Richard F. Weyand Trade Secret Asset Management 2018: A Guide to Information and Asset Management Including RICO and Blockchainavailable on Amazon. https://www.amazon.com/dp/0997070986
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Judy Selby on Improving Cyber and Privacy Board Reporting

“While general awareness of cyber risks among corporate boards is increasing, even the most motivated and knowledgeable directors cannot effectively fulfill their duties without receiving appropriate data about the organization’s risk profile. Unfortunately, however, there appears to be a disconnect between management and boards when it comes to cyber risk reporting . . . In order for directors to effectively discharge their duty of active, informed, and engaged oversight, the information they receive must be relevant, understandable, reliable, and objective.”
Judy Selby, JD
Judy Selby Consulting
Read the full article and Judy’s tips for improving board reporting.
Judy Selby of Judy Selby Consulting
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BitSight Releases eBook on Use of A.I. & Big Data in Continuous Cyber Risk Monitoring

“With every reported data breach or cyberattack, the cyber risk landscape gets a little more complex. Cyber criminals create new attack vectors, cybersecurity professionals develop new controls to protect their systems, the criminals get to work circumventing the controls, and so on.The result of this back and forth is that cyber risk professionals have a huge variety of risk factors to worry about. In response, risk managers and security specialists need to develop extremely complex cybersecurity programs to make sure all of their bases are covered.
“With so many cybersecurity risks to consider, it’s inevitable that some will receive less attention than they deserve. Unfortunately, these overlooked risk factors could play a role in your next cyberattack, and if your financial services firm isn’t prepared, that could be extremely costly.” Read more.
We’re looking forward to seeing the BitSight team in Bermuda Dec. 6-7, 2018, at the International Cyber Risk Management Conference.
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CBD: Confusing Regulations May Soon Find at Least Some Clarity — But Proceed With Caution
By Tom Hagy
July 16, 2018Proponents say the medical benefits are many and magnificent.
You can feel better without feeling stoned. While that will be disappointing to some, people enduring a variety of ailments may find relief, proponents and some studies say. From inflammation to pain to anxiety. From arthritis to alcoholism to diabetes. From psychoses to seizures. Cannabidiol may cure what ails you. And in many cases the science is there, even studies sponsored by the government, say the folks at Project CBD.
While the regulations vary from state to state, and the definitions can be confusing, clarity is coming for at least the hemp-derived variety of products – as opposed to its sister cannabis plant, marijuana – with the likely passage of Senate Majority Leader Mitch McConnell’s Hemp Farm Bill. The measure is also noteworthy because it has drawn rare bipartisan support.
CBD can be found in just about anything, from skin care products to pain medications to anti-seizure drugs—even beer. Companies, including large retailers, like Target, have tried to sell or are selling products containing CBD online or across state lines.
While small compared to the marijuana industry, CBD is on a serious growth trajectory.
“Spending on legal cannabis worldwide is expected to hit $57 billion by 2027,” according to an article at Forbes.com, written by Thomas Pellechia, citing the research of Arcview Market Research and BDS Analytics. “The largest group of cannabis buyers will be in North America, going from $9.2 billion in 2017 to $47.3 billion a decade later.”
In a release from MarketNewsUpdates.com, “A new report by cannabis/legal marijuana market analysts firm Hemp Business Journal projects that the U.S. CBD market will grow to $2.1 billion by 2020, an astronomical jump in value compared to last year’s CBD market of $202 million. As the market continues to swell, it is expected the space will reach the billion-dollar status as product diversification and global demand drive revenue levels. One of the major drivers for the CBD market is the growing list of health benefits of CBD oil.”
Proceed with Caution
In his post for the Canna Law Blog – a must-follow for any attorney or company interested in the legal aspects of cannabis – attorney Daniel Shortt of Harris Bricken tells businesses they must know the rules.
“It is no secret that CBD is having a moment right now. Unlike its cousin tetrahydrocannabinol (THC), which is another cannabinoid found in the cannabis plant, CBD is not psychoactive. It has been growing in popularity for years for medical and other applications, but has really taken off lately.”
Shortt offered five questions businesses must ask before diving in. Here is a truncated version of that list:
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What is the source of the CBD? Is it coming from a licensed source? Is it derived from industrial hemp?
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What do the lab tests say? You must be sure the products do not contain THC (or more than .3%).
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Where is the CBD going to be sold? State laws vary and if you violate them you could face criminal sanctions. Read more here: https://www.cannalawblog.com/industrial-hemp-dont-forget-about-state-law/
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What claims are you making about CBD? Are you claiming the product treats disease? You don’t want to make health claims or allow others to make them via testimonials on your website, for example.
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Has the law changed? You must keep up with federal and state laws.
Read more.

Writing for the online news service CBD Origin, Aaron Cadena echoes Shortt’s first point, saying legality of CBD has to do with its origin. Does it come from hemp or does it come from marijuana? “[B]oth are members of the cannabis family,” Cadena writes, “so they do share a lot of characteristics. There is, however, a crucial difference between the two–the amount of psychoactive THC each plant produces …. In other words, marijuana can get you really high, while hemp has such a low amount of THC, that it would be impossible to get high off it.”
“Botanically speaking, there’s not a shred of difference between the two plants: Both are cannabis Sativa under the Linnean definition*,” writes Chris Roberts for Leafly.com. “Legally speaking, the two do indeed have a binary difference: One is federally legal, and the other is not.” (* Named for Swedish botanist Carolus Linnaeus or his modern system of botany and zoology. Who knew.)
It is because of these psychoactive differences that CBD taken from hemp – with no such effects – is legal almost everywhere in the U.S., while the legality of marijuana-derived products is a mixed bag.
Cadena’s article includes a survey of the various state laws regulating both forms of CBD. Read the full article to see which 46 states have legalized CBD with a prescription, the 17 that have specific legislation for THC levels and which conditions it’s to be used for, and the 29 states that have fully legalized medical use of both forms of CBD.
ProCon.org offered another survey, current as of May 8, 2018, providing summaries of the law in each state. The organization commented that “we do not consider passing a CBD-specific law to be the equivalent of making medical marijuana legal because these laws do not recognize the use of marijuana plant for medical purposes.” (For their survey of medical marijuana states, go here: https://medicalmarijuana.procon.org/view.resource.php?resourceID=000881.)
The Hoosiers Take the Lead
Right now, Indiana has “the most robust regulations of hemp-derived CBD products.” In his post for the Canna Law Blog, Shortt wrote that, as of March 21, 2018, the state allows the distribution and retail sale of “low-THC hemp extract,” defined as a product “(1) derived from Cannabis sativa L. that meets the definition of industrial hemp; (2) that contains not more than 0.3% delta-9-THC (including precursors); and (3) that contains no other controlled substances.”
This is interesting, Shortt says, because it shows that Indiana is officially aware of CBD products and decided to allow their sale. “The catch is that those sales are restricted to a certain class of CBD products, and they are heavily regulated,” he says.
The list of labeling requirements will be a challenge for companies distributing across state lines. Some will not be selling in Indiana and others will comply, Shortt predicts.
“Indiana is unique in the sense that it allows CBD and also regulates its sale so robustly. Let’s hope for more positive cannabis developments in the Hoosier State,” Shortt writes.
Shortly after the Ninth Circuit’s CBD ruling, on May 22, 2018, the DEA issued an internal directive regarding products derived from cannabis but are not marijuana. They referenced an earlier Ninth Circuit ruling from 2004 which enjoined the DEA from enforcing certain THC regulations (See Hemp Industries Ass’n v. DEA, 357 F.3d 1012 (9th Cir. 2004)).”
Responding to various inquires, the DEA issued the following to agency personnel:
“Products and materials that are made from the cannabis plant and which fall outside the CSA definition of marijuana (such as sterilized seeds, oil or cake made from the seeds, and mature stalks) are not controlled under the CSA. Such products may accordingly be sold and otherwise distributed throughout the United States without restriction under the CSA or its implementing regulations. The mere presence of cannabinoids is not itself dispositive as to whether a substance is within the scope of the CSA; the dispositive question is whether the substance falls within the CSA definition of marijuana.”
“[A]ny product that the U.S. Customs and Border Protection determines to be made from the cannabis plant but which falls outside the CSA definition of marijuana may be imported into the United States without restriction under the Controlled Substances Import and Export Act. The same considerations apply to exports of such products from the United States, provided further that it is lawful to import such products under the laws of the country of destination.”
The DEA explained, though, that its statements regarding the drug code for marijuana extract and regarding resin remain the same. “[T]he drug code for marijuana extract extends no further than the CSA does, and it thus does not apply to materials outside the CSA definition of marijuana.”
Mona Zhang, writing for Forbes.com, said there are CBD producers who source their hemp from cultivators that operate under the Farm Bill. “But given how widespread these products are, it’s unlikely that all of them were sourced from research hemp. And state laws on CBD and hemp vary widely. Colorado, which legalized adult-use marijuana in 2012, has a robust industrial hemp program and is home to the first U.S.-bred certified hemp seed. But in Massachusetts, where you can now grow marijuana at home, it’s still a crime to grow hemp without a state license …”
If only someone would do something at the federal level.
Clarity on the Horizon?

Harris Bricken attorney Shortt notes that U.S. Senate Majority Leader Mitch McConnell – in an attempt to settle the CBD matter – introduced a bill to legalize hemp on the federal level, an initiative that is getting rare bipartisan support: the Hemp Farming Act of 2018 or S.2667.
Shortt said that, while subject to change, hemp would be defined as: “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-0 [THC] concentration of not more than 0.3 percent on a dry weight basis.”
“This proposed definition is significant,” Shortt writes, “because it specifically includes the term ‘extracts,’ thereby undermining the DEA’s much-maligned ‘marihuana extract’ rule, which broadly defines any extract from the cannabis plant as ‘marijuana’ and not hemp. The proposed ‘hemp’ definition also includes ‘cannabinoids’ contained in hemp which could add much needed legal certainty to the already booming CBD market. The Act would also explicitly remove hemp from the Controlled Substances Act’s definition of marijuana.”
Jason Amatucci, co-founder of CBD producer Anavii Market, said the Hemp Farming Act has bi-partisan support and has a “decent chance of actually getting signed into law this year.”
“It’s time the federal government changes the way it looks at hemp,” Sen. McConnell said when he announced the measure, adding, it will “modernize federal law in this area and empower American farmers to explore this promising new market.”
“The future of the legal American hemp derived CBD oil industry looks very bright even though some folks are still confused about the legality nuances. This new law will even further solidify the legality and legitimacy of the hemp derived CBD industry,” Amatucci says.
Sidebar: Marihuana?
For the etymology nerds out there, like me, Washington Post writer Christopher Ingraham wrote a piece on the DEA’s insistence on spelling marijuana with an “h” instead of a “j” – something this one-time Spanish student found jarring. I imagine actual Spanish-speaking people would say something like, “Yeah, we have bigger things to worry about,” except in Spanish. Ingraham uncovers some surprising theories but little hope for change. Read it now.
It’s ironic, I suppose, that the only letter the government is avoiding is the letter “j,” as in “jay” for joint. Maybe that’s the real reason for their spelling.
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CBD: Legal or Not? | Webinar | Aug. 16, 2018 | 2pm

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DATE: Thursday, Aug. 16, 2018
TIME: 2 p.m. EDT; 1 p.m. CDT; 12 p.m. MDT; 11 a.m. PDT
PLACE: Your computer
PRICE: $197 per dial-in site (unlimited attendance at one location) through Aug. 3, $247 thereafter
Register by Aug. 3 and save!
For more information, email leslie.davidson@litigationconferences.com.
Your webinar registration includes:
• A site license to attend this webinar (invite as many people in one location as you can fit around your computer at no extra charge).
• Downloadable PowerPoint presentations from our speakers.
• The opportunity to connect directly with speakers during the audience Q&A session.
• At least one-hour of CLE credit.
Speakers
Daniel Shortt
Harris Bricken
Seattle
Alison Malsbury
Harris Bricken
San Francisco[/two-fifths-first][three-fifths]
With so many studies coming out on the benefits of CBD, a lot of people and companies see tremendous market opportunities and are diving in.
Whether derived from industrial hemp or marijuana, these days CBD can be found in just about anything, from skin care products to pain medications to anti-seizure drugs—even beer. Companies, including large retailers like Target, have tried to sell or are selling products containing CBD online or across state lines.
But determining the legal status of CBD isn’t easy. Because CBD is a cannabis derivative, the biggest question, of course, is whether or not it’s even legal under state and federal law. How you answer that could mean the difference between significant revenue gains and significant losses—even the possibility of criminal prosecution—for your clients.
So, what do current federal laws say about the use of CBD? How do individual state regulations affect the legal status of CBD? What do the 2014 Federal Farm Bill and the Controlled Substances Act say about growing hemp? And what are the legal and business implications for companies operating in this space?
Get answers to these questions and more when you register to attend “CBD: Legal or Not? How State and Federal Laws Govern the Manufacture, Marketing, and Distribution of CBD Products” on Thursday, Aug. 16, 2018. Listen as experts Daniel Shortt and Alison Malsbury, both attorneys with Harris Bricken, provide information that can help your clients determine whether or not what they’re doing with CBD is legal.
You’ll learn about the two primary sources of legal CBD—industrial hemp cultivated in the U.S and hemp from abroad—and how the two distinct pathways differ. You’ll get practical do’s and don’ts for working lawfully in the hemp-CBD world despite its precarious legal status. You’ll come away with the most current data on the legalities of using CBD that could change the advice you give your clients about working within the law and avoiding possible criminal prosecution.
Who Should Attend
Whether you’re a local government official, state regulator, or an attorney with clients in the state-legal cannabis industry—anyone who needs to make sense of the current laws that govern the manufacture, marketing, sales, and distribution of products containing CBD—this is one webinar you can’t afford to miss.
For one low price—just $197 (through Aug. 3, $247 thereafter)—you and your entire team at one location can take part in this fast-paced, insightful webinar. Best of all, you’ll be able to connect personally with our speakers when we open things up for questions from the audience.
Here is just some of what you’ll learn during this in-depth 90-minute session:
• How to interpret current state and federal laws governing the use and sale of products containing CBD.
• The key questions to ask that will help determine if your CBD comes from a legal source—and what to do if it doesn’t.
• How to find out which part of the plant your CBD is created from—and how what you learn could affect the legal status of your product.
• What FDA approval of the first CBD drug, Epidiolex, means for the industry.
• Marketing: The claims you can (and shouldn’t) make about your CBD products.
• What the FDA has to say about marketing CBD as a supplement.
• Is trademark protection possible under current law for CBD products—and if it is, how do you get it?
• The prerequisites for legally selling CBD products across state lines or in stores that aren’t licensed to sell marijuana.And more!
Speaker Bios
Daniel Shortt is an attorney with Harris Bricken and works extensively with entrepreneurs in the cannabis industry. He is an authority on legal issues relating to CBD and hemp laws and has spoken on these topics at events across the country and overseas.
Mr. Shortt helps clients with corporate formation, transactional, licensing, regulatory, and litigation needs. He writes for the award-winning Canna Law Blog and speaks to media outlets about his perspective on legal issues in marijuana and hemp.
Mr. Shortt graduated from the University of Washington School of Law where he worked extensively with the Washington State Liquor and Cannabis Board to fund and establish the Cannabis Law and Policy Project (CLPP). He then served as the editor of the CLPP blog and as a Hazelton Fellow researching cannabis law.
Alison Malsbury is an attorney with Harris Bricken. She focuses her practice on corporate and intellectual property transactions, working primarily with cannabis, tech, and entertainment clients. Ms. Malsbury has assisted clients with contracts, company formation, intellectual property protection, and regulatory compliance, and has worked with creative entrepreneurs at all stages of business development. She has a growing practice representing celebrities on cannabis endorsement deals and helping cosmetic and skin care companies navigate the complex CBD laws.
Before joining Harris Bricken, Ms. Malsbury worked with the in-house legal team of one of the largest software companies in the world on its trademark and technology licensing issues.
Ms. Malsbury graduated cum laude from Santa Clara University School of Law where she was the technical editor for the Santa Clara Journal of International Law.
REGISTER NOW
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