February Edition 2021

28 The Changing U.S. Cannabis Legal Landscape: Challenges and Opportunities for Israeli Companies and Investors One clear winner in the 2020U.S. election has been the continuing state-level legalization of both medical and recreational cannabis. Four additional states voted to allow recreational use, and Mississippi voters authorized a medical marijuana program. As it stands, 36 states have legalized medical marijuana, and 15 of those states will allow recreational (or “adult use”) marijuana. However, “marijuana” remains fully illegal underU.S. federal law,whichapplies to all individuals and companies in theUnited States in tandem to state laws. Federal law is particularly pronounced in the areas of banking, securities, intellectual property, bankruptcy, immigration and import and export. The United States, unlike many countries, distinguishes between very low-THC cannabis (called “hemp”) and its derivatives including hemp-derived CBD, and all other forms of intoxicating cannabis (called “marijuana”). In the hemp and CBD space, state-level regulators are beginning to step in where federal regulators are moving more slowly. As a result, different sets of laws must be considered by investors, operators, and ancillary businesses, trying to enter the market. This article, published in the US-Israel Legal Review 2020, by Alexander Malyshev and Guy Ben-Ami of Carter Ledyard covers some of the major areas to consider. Click here to read (page 34) SPAC Sponsors Beware: The Rising Threat of Securities Liability Special purpose acquisition companies (SPACs) are an increasingly popular way for an existing private company to become publicly traded without undergoing a traditional initial public offering, and for investors in public markets to invest in growth-stage companies. There can be generous returns for SPAC sponsors, but they should be aware of the liability risk in connectionwith their role. Indeed, litigation arising fromseveral recent SPAC acquisitions, most prominently against Nikola Corporation, underscores the risks for SPAC sponsors. They therefore should be mindful of steps they can take to mitigate these risks in the reverse merger process. In this article, published in the US-Israel Legal Review 2020, partners at Cleary Gottlieb advise those looking to create SPACs and acquire companies through them to carefully consider the accompanying legal risks and the ways to potentially mitigate them. Click here to read (page 40)