Michael Cooper, Managing Member at MadisonJay Solutions- Interview Series

Regardless of the sector or state market a business operates in, staying compliant with all state cannabis regulations is paramount. Across virtually every market, industry professionals agree that regulators are notoriously strict. Noncompliance can mean hell to pay—on top of exorbitant fees and citations. Even a minor oversight, like a few mislabeled plants in a cultivation room or a couple of missing samples in a testing lab, can trigger substantial fines and further regulatory action.

To discuss the importance of compliance across state markets—and the similarities between alcohol and cannabis regulation—mycannabis.com spoke with Michael Cooper, Managing Member at MadisonJay Solutions.

What were the main fields of law that you studied while attending Harvard Law School? What interested you about studying those fields of law in particular?

One of the great things about a place like Harvard Law is that you come out with a broad, generalist’s education. Because your classmates will practice across the entire spectrum of legal specialties, HLS doesn’t focus on any singular area. For areas that rapidly develop (and continue to develop) after graduation, such as cannabis, that generalist’s background is tremendously helpful.

At the same time, Harvard Law provides you with a fantastic opportunity to learn not only from the leading academics on a given subject, but frequently practitioners as well. When I took Mergers & Acquisitions, the professor was one of the most impactful judges in the nation on corporate governance matters in Delaware. When I took Antitrust, the professor was a leading appellate court judge who had been equally influential in that area. When I took Sports Law, we not only had a professor who had been at the cutting edge of the subject in private practice, but he frequently brought in guest speakers who could speak to what they actually sought in their endorsement deals.

Harvard Law provides a great legal education, but one of the things my pathway highlighted is the importance of thinking practically about the law and understanding how these rules apply not only in theory but also in the real world.

How did serving as a law clerk to a judge on the U.S. Court of Appeals for the Fifth Circuit provide you with a more in-depth understanding of your legal specialties than just about any other experience could have provided?

If you talk to almost any lawyer who has had the privilege to clerk for a judge, they will tell you it’s the best possible training for a young lawyer. Law school teaches you the theory of law, but clerking allows you to understand how the brilliant, hard-working judges of this country actually translate that legal theory into decisions. Having seen those decisions getting made and understanding the way that different judges approach the thorniest of legal questions is a fascinating, unique way to be trained as a young lawyer.

While litigating at Cravath, Swaine & Moore LLP, how did that role strengthen your skills and strategies with how you work with/approach regulatory agencies? What industries were your clients primarily working in, and how did your duties and expectations change depending on what industry they worked in?

Cravath is known as one of the most respected law firms in the country for good reason. You and your colleagues are retained for the nation’s leading companies’ most challenging problems, and you are expected to work tirelessly to solve them.

Cravath attorneys are generalists; the speciality is handling “bet the company” matters whether it’s a pharmaceutical client or a gaming client. One thing that does is sharpen your ability to block out the noise and provide actionable advice that cuts to the heart of the matter.  In an industry that has so many competing external considerations, that experience has been invaluable. Of course, as important as that focus is on the client-facing side, it’s equally crucial when dealing with regulators. Understanding what matters and what doesn’t, and being able to convey it clearly, is just as important with a state cannabis regulator as it was earlier in my career with the DOJ or SEC.

Last, it’s a great reminder to be responsive and present for your clients. Even when the financial stakes don’t run to 9-figures, it’s important to remember just how high the stakes are for your client.  When a client has a problem, you need to treat it like a top priority because it is assuredly a top priority for them.

How did your experience with Cravath and defending clients against regulatory agencies pay off when serving with the National Cannabis Industry Association? How did that role increase your knowledge of policy making and planning?

NCIA is at the forefront of such an impactful movement. Yet cannabinoid reform is also a fast-moving issue, where new markets continue to open and the absence of federal reform creates new pain points. Much like my work at Cravath, the key in Washington, whether you’re meeting with a regulator or a congressional office, is to make the impact of small details tangible. You are dealing with smart, hard-working individuals, but individuals who have an exceptionally broad set of responsibilities. It’s our job on the policy side to be able to explain why something matters, and how different approaches can best effectuate their goals.

Based on your experience with the alcohol industry and businesses, what are some similarities between alcohol and the cannabis industry? Given that they’re both adult intoxicants but are legal for a majority of people to purchase, what are some important lessons that cannabis companies could learn from alcohol businesses?

Certainly when you talk about adult-use, both are highly regulated products that are used by responsible adults in social contexts. In the longer term, I anticipate greater convergence between these regulatory structures so that consumer preference is driving decision-making as opposed to any type of regulatory thumb on the scale.

When you talk about lessons from alcoholic beverages, there are a number given the many post-Prohibition decades. From a consumer standpoint, it’s always important to provide products that meet consumer expectations. That’s why regulated markets are so important.  Looking at the regulatory side, one thing that has been very successful in the alcoholic beverage space is providing opportunities for consumers to socialize and enjoy those products together. That’s an area where cannabis regulation will need to continue to evolve to meet consumer demand and preferences since it doesn’t exist in a number of markets. From an industry standpoint, a related key is understanding your consumer, offering differentiated products that meet consumers where they are, and having marketing that (in these highly regulated spaces) explains why a given product is aligned with a given consumer.

With the cannabis business clients you work with through MadisonJay Solutions, what are the most common regulatory and legal issues that they have to hire you over? Do those issues change frequency depending on what state cannabis market the client is located in?

The biggest question we get at MadisonJay is how can we help our clients build credible regulatory strategies for the future? In other words, in every industry companies need to have credible business strategies to succeed. But in a highly regulated space, such as this, where products or forms of marketing may be permitted in one market or channel but not another or where those may be permitted today but are unlikely to be permitted in the future, it is essential that operators have a credible regulatory plan for the future.

From your experience and industry insight, what will be the biggest legal and policy-related ripple effects that will come from the recent partial rescheduling? How do you think the FDA would regulate the cannabis industry? Or would it be another three-letter agency entirely that would regulate those federally registered businesses?

Rescheduling, and its impacts, are still very much in flux. But it is clear that depending on the “what” and “how” of the final resolution, there will be opportunities in some sectors. What savvy operators are doing today are building out plans that allow them to thrive and leverage those opportunities in different potential future regulatory landscapes. One point that we highlight to clients and policymakers is that being static is not a viable strategy here because you cannot simply ignore opportunities that your competitors are seizing because the market does not permit you to do so.

In terms of longer term regulation, NCIA has long advocated for a leading role for TTB when we secure comprehensive reform. We will continue, however, to monitor this area and make practical recommendations on policy that reflect the changes that the industry faces ahead.

Looking forward, what further federal and state cannabis reforms are still needed?

The directional trend here is clear: cannabinoid prohibition is falling. Tremendous progress has been made, but there is still much more to do. One of the reasons that I enjoy my policy role at NCIA so much is that this window for progress is right now. And there is a real opportunity to get these right, especially if we can highlight the lessons learned in these state markets and avoid reinventing the wheel where it’s not necessary.

In terms of examples of specific reforms, NCIA believes that the rescheduling of medical cannabis has been a significant, and long-overdue, outcome. That said, we believe that this treatment must be extended to all cannabis, including adult-use. NCIA is actively implementing a multi-pronged strategy to make that a reality.

Of course, the form of rescheduling matters greatly. We were delighted that the rescheduling order for medical cannabis called for retroactive relief from 280E, an issue that NCIA has driven to the forefront of the national conversation because it is so impactful for this industry. Few things would provide great financial relief to struggling adult-use small businesses and equity operators than 280E retroactivity. That is a perfect example of an important idea going from NCIA policy position to NCIA white paper to appearing in the rescheduling order.

More broadly, we are focused on achieving comprehensive reform. It should be treated the same as any other business. That means access to banking, but also access to capital. It means protecting employees of these businesses responding to the will of state voters from penalties when they go for things like a home mortgage. In short, NCIA continues to work tirelessly on behalf of the industry because inaction has such real costs for the men and women across the nation who bear the burden of inaction.

Thank you for joining us, Michael! For more information on MadisonJay, please visit its website.