Articles

By: Brendon Friesen

More than a year has passed since Governor Kasich signed House Bill 523, legalizing medical marijuana (MMJ) in Ohio and making our state the 25th to adopt such a program. At the time, those interested in getting involved — as a cultivator, processor, dispensary, or physician — had little information on exactly what the program would look like from a practical and economic standpoint.

Rules and regulations are now being created by the Medical Marijuana Control Program (MMCP), part of the Ohio Department of Commerce that regulates Ohio’s MMJ program.

Over the past year, the MMCP developed rules for the program, but not without overhauling them several times – often in response to public comment and hearings held in Columbus, Ohio. Based on these rules, here are some “must knows” for anyone thinking about starting MMJ operations:

Cultivators

Cultivators grow cannabis for later production into medicine. There are two levels of cultivators: Level 1 may grow from 25,000 to 75,000 square feet of cannabis; Level 2 may grow from 3,000 to 9,000 square feet of cannabis. The MMCP received a total of 185 applications: 109 (Level 1) and 76 (Level 2). Cultivators also have the difficult task of selecting a growing space that qualifies under the rules: 1.) Cannot be closer than 500 feet to any school, public park, library, and other facilities; 2.) Has the blessing of the municipality, which is permitted to opt-out of the program.

Cultivators are the first group to receive a final set of rules and the application for submission to the MMCP. Applications were due in June, 2017. Cultivators will not know whether they are granted a license until November, 2017, and they are required to begin cultivation within nine months of obtaining a license.

Processors

Processors extract oils from the plant material that have a medicinal effect on the patient. The extracted oils — Tetrahydrocannabinol (THC) and Cannabidiol (CBD) — can be placed into a variety of consumer productions such as vape cartridges, transdermal patches, edibles, capsules, topical ointments and tinctures, which are used to treat the symptoms of many diseases and conditions.

Processors received a final set of regulations in August, which were effective September 8, 2017. Applications will be due later this fall.

Dispensaries

Unlike cultivators and processors, dispensary licenses will be divided up among the various regions created by the MMCP. For example, Cuyahoga County will have up to five dispensaries. Dispensary rules were also finalized in August and made effective September 8, 2017. Applications are due November 17, 2017.

Among other requirements, physicians must obtain a certification from the Ohio Medical Board in order to recommend (not prescribe) MMJ to patients that suffer from one or more of the 24 qualifying diseases and conditions.

Until patients can receive legal recommendations from their physicians under the Ohio program, criminal charges for possession of the drug is subject to the affirmative defense granted to patients by House Bill 523.

Looking forward

There is still a lot of work for the MMCP to meet its September 8, 2018 deadline. Cultivators have to build-out their facilities and get plants under lights and harvested. Then the processing and dispensing can begin. It is going to be tight – particularly with licenses for facilities to do the required testing of the cannabis products not coming available until July of 2018. We will continue to keep you apprised as the program develops. In the meantime, please contact me at (216) 453-5906 with questions.

Helpful links:

-Click here to read Mansour Gavin’s June 2016 Article on MMJ in Ohio, “Canna-business.”

-To be directed to the official medical marijuana website for the State of Ohio click here.

If you have further questions, please contact Miles Welo in our Corporate and Business Services and Estate Planning and Probate Group.

Attorney at Law magazine named Mansour Gavin Shareholder Chuck Brown as attorney of the month. Chuck has had a celebrated career in law and in Cleveland — did you know he served first as a magistrate, then as a chief magistrate, then as a probate court mediator before he joined our firm?

In the article, Chuck talks about his experience in probate law, saying: “I never planned on specializing in probate until the opportunity presented itself. As I gained a deeper understanding of probate law, I realized this specialty impacts a vast number of people and can be highly complex and nuanced.” He also talks about why Mansour Gavin was such a good fit for him considering his strengths in probate law and the attorneys we have to support that practice and work as a team. Read the whole article here. If you have questions, please contact Chuck Brown at cbrown@mggmlpa.com.

By:  Miles Welo

Sweeping changes to federal taxation: What you need to know

2018 will bring sweeping changes to the federal tax policy as the House and Senate passed a bill known as the Tax Cuts and Jobs Act.

We prepared this brief analysis of the bill to provide you with important information for your personal interests, business planning, and estate planning.

 Estate tax

2017: Each individual is entitled to a lifetime exemption of $5.49 million (or nearly $11 million for married couples), which means a person can transfer up to $5.49 million dollars without being taxed, but are taxed at 40% on the amount transferred after $5.49 million.

New Law: the bill doubles the exemption levels to approximately $11.2 million for individuals and over $22 million for married couples. The bill keeps intact the tax of 40% for any transfer beyond the exemption limits.

Individual Tax Brackets

2017: There are currently seven individual tax brackets: 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%.

New Law: There will remain seven individual tax brackets (with five of the brackets reduced) and they are as follows: 10%, 12%, 22%, 24% 32% 35%, and 37%.

Corporate Taxes

2017: the corporate tax rate is currently 35%.

New Law: the bill lowers the corporate tax rate from 35% to 21%.

Standard Deduction

2017: the standard deduction is currently $6,350 for individual filers, and $12,700 for married couples filing jointly.

New Law: the standard deduction has nearly doubled, as it has increased to $12,000 for individual filers, and $24,000 for married couples filing jointly.

State and Local Tax (SALT) Deductions

2017: Taxpayers who itemize their taxes can deduct state and local property, real estate, and either state and local income or sales taxes.

New Law: the new bill allows taxpayers who itemize their deductions to deduct their state individual income, sales, and property taxes up to a limit of $10,000.

President Trump plans to sign the bill before the end of 2017. Stay tuned, the sweeping changes to our Federal tax system will likely have a significant impact on your personal, business, and estate planning objectives.

Have questions about tax reform? Call our tax experts, Tom Turner, Julie (Fischer) Taft or Miles Welo, in our Estate Planning and Probate Group.

Data breaches. Ransomware. The “dark web.” Today’s cyberspace monsters are enough to give you nightmares during the day.

In response, Mansour Gavin hosted a seminar and panel discussion on cybersecurity on August 11 to answer questions about how best to protect yourself – and your business – from being hacked. Speakers included Ryan MacFarlane, Special Agent of the Cleveland Division of the FBI; John FitzGerald of United Agencies Insurance Group; Michael McCartney of Digits, LLC, a digital forensic services company; and Mansour Gavin attorney Ed Patton.

The group emphasized the importance of password selection, two-factor authentication, external e-mail tagging, and especially, employee awareness training – as approximately 75 percent of breaches occur because of an employee’s unintentional action. Panelists also strongly encouraged companies to develop or re-visit their cyber policies to ensure they are up-to-date, as security issues are now prevalent in every industry. As McCartney put it, “It’s no longer an ‘if’ but a ‘when.’”

For any legal questions concerning cyber policies or breach notification requirements, please contact Ed Patton at 216-523-1500. And if you were unable make this discussion, please stay tuned – an update on cybersecurity trends is one of several seminar topics planned for Mansour Gavin’s seminar series in 2018.

 

Mansour Gavin is pleased to recognize Julie A. (Fischer) Taft for her recent appointments to the boards of two local organizations. Julie will serve as vice president for the Estate Planning Council of Cleveland as well as the chair of the Cleveland Metropolitan Bar Association’s Estate Planning, Probate and Trust Law Section. Julie is an attorney in the Estate Planning and Probate and Corporate and Business Services practice areas.

A Federal District Court Judge in Texas issued a nationwide injunction blocking the roll out of the new overtime rule that was to become effective next week on December 1, 2016.  This injunction effectively puts the implementation of the new salary test for overtime on hold unless the Federal Court of Appeals overturns the injunction.

Background

Many of you remember that President Barack Obama directed the Department of Labor to modernize long existing overtime rules that applied to employees that were exempt under overtime law because they were classified as executive, administrative or professional employees (with some other special exemptions).  In response, the Department of Labor issued a new rule which raised the minimum salary level for exempt employees from $455 per week ($23,660 annually) to $921 per week ($47,892 annually) with an automatic adjustment that would go into effect in 2020.  The rule had the effect of immediately moving many employees that would otherwise have met one of the exempt classifications into a non-exempt status because of the salary test and would have required the payment of overtime for any hours worked over 40 in a work week for employees not meeting the new salary level regardless of classification.  The rule was set to become effective December 1, 2016.

The Plano Texas Chamber of Commerce and several other business organizations filed suit against the Department of Labor.  This suit was joined with another lawsuit filed by over 20 states challenging the authority of the Department of Labor to issue the new rule.

Court’s Decision

The U.S. District Court Judge, Judge Amos L. Mazzant, concluded that the Department of Labor overstepped its authority by issuing a de facto salary level test and an automatic inflation rider, which effectively supplanted the duties test established by Congress; specifically, Congress did not intend to categorically exclude an employee with executive, administrative or professional duties from the exemption.  Further the Court specifically enjoined the final rule on a nationwide basis, thus effectively blocking implementation of the rule even in states that were not part of the lawsuit. (See decision)

What does this mean?

The proposed increase of the salary threshold was certainly unpopular with a number of businesses, nonprofit organizations, business groups and other political groups.  With the new administration taking over in January, it’s unclear whether President-Elect Trump’s Administration will choose to support the Department of Labor’s position if the Department of Labor chooses to appeal the injunctive order.  Even if the order is appealed, it’s unclear how quickly a Federal Court of Appeals will hear the case.  Traditionally, appeals take months, if not longer, to work their way through the appeal process.

Ironically, many businesses took steps to plan for the implementation of the new overtime rule by raising salaries of those that would otherwise be classified as exempt.  More importantly, however, come December 1, 2016, the old rules will remain in effect and employees who are otherwise classified as exempt and paid on a salary basis will not be entitled to overtime if their salary exceeds $23,660 annually.

Stay tuned, we don’t think this is over yet…

For more information on this and other matters, please contact Mansour Gavin’s Labor and Employment Practice Group.

Legal Disclaimer

The information contained on this web site and any linked resource is intended to provide general information and does not constitute legal advice. The content is not guaranteed to be correct, complete, or up-to-date. This web site is not intended to create an attorney-client relationship between you and Mansour Gavin LPA or any of its associates, and you should not act or rely on any information in this web site without seeking the advice of an attorney.

Ohio has joined 15 other states that permit the creation of family trust companies with its recent enactment of the Ohio Family Trust Company Act (“OFTCA”). Ohio Family Trust Companies (“OFTCs”) are highly effective tools for families of significant wealth to preserve their assets from federal income, gift, estate and generation-skipping tax consequences. OFCTs allow for family involvement in decision-making and control over the investment assets. They also serve as a vehicle for younger generations to become educated about the family’s assets and trained in governance issues.

Prior to the OFTCA, families interested in setting up a family trust company had to look outside the state of Ohio. Now that the OFTCA is in effect, a win-win situation exists for Ohio families and the state of Ohio. The OFTCA secured a home-court advantage for families by eliminating travel and set up costs families once had to incur from operating out-of-state family trust companies. Since there is no requirement to live in the state where the family trust company is established, Ohio has an opportunity to attract families from other states to bring their business and investments into Ohio.

Generally, there are two varieties of OFTCs; licensed and unlicensed. A licensed OFTC permits services to a broad range of clients but must abide by capital, insurance, pledge and nexus requirements. An unlicensed OFTC limits services to only family members but offers notable advantages, such as not being subject to banking regulations and no requirement to register with the SEC as a Registered Investment Advisor. The only obligation an unlicensed OFTC has is the annual submission of an affidavit to the Department of Financial Institutions confirming compliance with statutory limitations.

Families with significant wealth and succession concerns should carefully consider the advantages of OFCTs under the new law. This looks to be a game changer!

If you have any questions about the new OFTC legislation, please contact Mansour Gavin’s Estate Planning Group.

LEGAL DISCLAIMER

The information contained on this web site and any linked resource is intended to provide general information and does not constitute legal advice. The content is not guaranteed to be correct, complete, or up-to-date. This web site is not intended to create an attorney-client relationship between you and Mansour Gavin LPA or any of its associates, and you should not act or rely on any information in this web site without seeking the advice of an attorney.

The United States Department of Labor has issued new versions of its Fair Labor Standards Act (Federal Minimum Wage) and Employee Polygraph Protection Act posters. As of August 1, 2016, covered employers must display the revised versions of the posters. The new posters may be downloaded from the links below. The Department of Labor expects to make print copies available for order soon.

For the Fair Labor Standards Act (Federal Minimum Wage) downloadable poster click here.  For the Employee Polygraph Protection Act downloadable poster click here.

For more information regarding these postings or other employment posting requirements, please contact Mansour Gavin’s Labor and Employment Practice Group.

LEGAL DISCLAIMER

The information contained on this web site and any linked resource is intended to provide general information and does not constitute legal advice. The content is not guaranteed to be correct, complete, or up-to-date. This web site is not intended to create an attorney-client relationship between you and Mansour Gavin LPA or any of its associates, and you should not act or rely on any information in this web site without seeking the advice of an attorney.