The Rhode Island Department of Health (DOH) intends to stand up cannabis testing facilities, according to the agency's notice on Licensing Analytical Laboratories for Sampling and Testing Medical Marijuana. The public has until the close of business today (January 18, 2018) to submit comments on the new proposal, which will also add a new licensing fee of $5,000 per laboratory once the proposed rule becomes law. Comments should be submitted to Paula Pullano at the DOH at 3 Capitol Hill in Providence or by email at paula.pullano@health.ri.gov.

Currently, testing cannabis grow for such things as pesticides, metals, solvents and potency are left up to the state's licensed cultivators and dispensaries. This added oversight will "establish minimum standards for licensing analytical laboratories to collect, sample, and analyze medical marijuana products cultivated and/or manufactured by registered compassion centers and licensed cultivators."

The DOH reasons that the "key benefits" for the new licensed cannabis testing laboratories include the following as stated in the notice (link above):

• Prevents conflict of interest between growers and testers of medical marijuana, which could lead to inaccurate testing by personnel who lack the appropriate expertise in testing, or misrepresentation of the content of medical marijuana by those parties who stand to gain from selling less potent products at a higher price.
  
  
• Allows for patients to glean accurate information regarding cannabidiol ("CBD") and tetrahydrocannabinol ("THC") content, which helps mitigate the risks of patients mistakenly consuming medical marijuana products of unexpected potency, including potentially reducing the need for medical assistance due to such exposure.
  
  
• Mitigates the risk of illness, incapacitation, or death caused by contaminants such as pesticides, metals, microbiological agents, or solvents.
  
  
• Laboratory safety and security helps mitigate the risk of theft of marijuana, decreases costs associated with crime such as property damage and law enforcement costs, and prevents the diversion of medical marijuana into the black market (and the downstream effects of diversion, such as enriching criminal actors).

What do you do when your largest customer goes bankrupt? Panic? Probably. But, once the immediate panic subsides, some smart business owners call their insurance company and put in a claim under their “accounts receivable insurance” policy. Accounts receivable and other similar trade debt make up a significant portion of any small business’s assets, and business owners are often unaware that they can be insured. These policies may cover about 90% or more of the lost revenue due to a customer’s bankruptcy or other covered events.

Trade credit insurance is a risk management tool that protects businesses from many of the risks involved in extending credit to customer. Moreover, businesses insured with trade credit insurance often find it easier to obtain financing against their assets and, have also used such policies to increase sales through new lines of credit and extensions to new and existing customers or to pursue new, larger customers that would have otherwise seemed too risky. 

This protection also allows companies to strengthen cashflows without the increased exposure associated with customer defaults. Banks are more likely to extend financing to companies with stronger balance sheets, and may consider the existence of such insurance in determining whether to increase or expand the insured’s credit limits. Businesses would be well advised to talk to their insurance broker to determine whether this type of insurance makes sense considering their customer mix, accounts receivable exposure, and the need to obtain more financing or credit. For legal advice about this business management tool or other business issues, contact our business lawyers, PLDO Partner Brian J. Lamoureux at bjl@pldolaw.com or Attorney Christopher F. Homsy at chomsy@pldolaw.com or call 401-824-5100.

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MEDICAL SERVICE ORGANIZATIONS: AN EMERGING BUSINESS MODEL FOR PHYSICIANS AND PATIENT CARE

Medical practices are becoming more complicated due to the burden of a myriad of laws and regulations. As a result, a new business model has emerged called “Medical Service Organizations.” In a recently released video and podcast series by health care lawyer, litigator and arbitrator Frank E. Reardon, Attorney Reardon discusses how a Medical Service Organization (MSO) is organized to ensure compliance with state and federal regulations and explains how the administration of MSOs aim to keep patient care in the hands of the physicians. He also provides insight into MSO fee structures, including safe harbor provisions. The informational series includes a video and a Q&A interview podcast that are available on the firm’s website by clicking onto the PLDO Broadcast Center. If you would like to contact Attorney Reardon for further information on Medical Services Organizations or other health care law issues, please call 401-824-5100 or email freardon@pldolaw.com.

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"M&A DUE DILIGENCE: KEY COMPONENTS AND CONSIDERATIONS" WEBINAR,
JAN. 22 - BE OUR GUEST

Complimentary registration to a live webinar on the key considerations and components of “Mergers & Acquisitions Due Diligence,” featuring PLDO Managing Principal Gary R. Pannone, is available to PLDO guests. To register as a PLDO guest, click here.

In the webinar, Attorney Pannone will cover the fundamentals of mergers and acquisitions, legal matters and considerations, financial options in the due diligence process, and other important topics. All attendees will receive a comprehensive M&A check list detailing each element of the due diligence process prepared by Attorney Pannone. The event is scheduled for Monday, January 22 from 3:00 pm to 4:00 pm (ET) and is being hosted by The Knowledge Group.

Attorney Pannone has been representing closely-held business owners for over thirty years in a wide range of areas including business formations, corporate restructuring, mergers, acquisitions and corporate compliance. He is a prominent member of the legal community and a Fellow of the American Bar Foundation. For the past two years, he has been recognized by his peers as metropolitan/Providence 2017 and 2018 “Lawyer of the Year” by Best Lawyers® in his practice areas. To contact Attorney Pannone, call 401-824-5100 or email gpannone@pldolaw.com.

The Knowledge Group is a leading producer of regulatory focused webcasts. Continuing professional education credits are approved for this webinar.

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