Legal Knowledge: A Goldmine for Business Owners and Executives
In today’s complex business landscape, legal knowledge is invaluable. It can mean the difference between thriving and merely surviving in a competitive market. Recognizing this, Legal Opinions has brought together a cadre of attorneys and experts to provide insights and resources on a variety of legal topics. Since 2014, Nevada Business Magazine has been publishing this feature, and the 2024 edition promises to deliver crucial advice to business owners and executives on issues that directly impact their workforce, bottom line, and future endeavors.
If Cannabis Is Rescheduled . . . Then What?
By Alicia R. Ashcraft and Jeffrey F. Barr, Managing Partners at Ashcraft & Barr
On May 20, 2024, the Department of Justice proposed rescheduling cannabis from Schedule I to Schedule III of the Controlled Substances Act (CSA). This is a monumental shift for state-licensed cannabis businesses, although it may not unfold as many expect.
Understanding the Implications of Rescheduling
Substances classified as Schedule I are deemed to have no accepted medical use and a high potential for abuse. Moving cannabis to Schedule III acknowledges its medical benefits and recognizes that it poses less risk than other controlled substances. While this change does not legalize cannabis, it signifies a reduction in federal prohibitions and a growing acknowledgment of its therapeutic uses.
However, cannabis will still be a controlled substance under federal law. The Drug Enforcement Administration (DEA) will hold hearings later this year to discuss this rescheduling further. If approved, the implications for state operators could be significant.
Benefits for State-Licensed Cannabis Businesses
One of the most immediate benefits of rescheduling would be the elimination of Internal Revenue Code 280E, which currently prohibits cannabis businesses from deducting ordinary business expenses. This change would allow these businesses to operate more like traditional enterprises, enhancing their financial viability.
Additionally, rescheduling could alleviate banking challenges faced by the cannabis industry. As a Schedule III substance, cannabis would be treated similarly to other highly regulated substances, potentially increasing access to loans and financial services. Legislative efforts like the Secure and Fair Enforcement Regulation Banking Act (SAFER Banking Act) could further bolster this access.
Moreover, rescheduling would facilitate cannabis research by easing the stringent regulations currently in place. This could lead to increased funding and grants for studies that explore cannabis’s medical applications.
Conclusion
While rescheduling cannabis does not equate to full legalization, the potential benefits for cannabis-related businesses—such as tax deductions, improved banking access, and enhanced research opportunities—mark a significant evolution in the industry.
The When, Who, How and What of Internal Investigations
By Greg Brower and Jamie Leavitt, Brownstein Hyatt Farber Schreck
Internal investigations are crucial for organizations facing allegations of misconduct, such as sexual harassment or policy violations. Understanding when and how to conduct these investigations is essential for mitigating risks.
When Is an Internal Investigation Required?
Not every complaint necessitates a formal investigation. Issues like personality conflicts can often be resolved through mediation. However, allegations that could lead to civil litigation or regulatory scrutiny should always be investigated. A competent, unbiased individual should make this determination.
Who Should Conduct the Investigation?
Deciding whether to conduct an investigation in-house or hire an external investigator depends on various factors, including the complexity of the allegations and the potential for conflicts of interest. Larger organizations may have the resources to handle investigations internally, while smaller companies might benefit from the expertise of an outside firm.
How Should the Investigation Be Conducted?
The scope of the investigation should be clearly defined, including timelines, witness interviews, and document retention. If an external investigator is engaged, budget discussions are also crucial to avoid unmet expectations.
What Is the Deliverable?
The outcome of the investigation should be agreed upon in advance. Depending on the situation, this could be a verbal briefing or a formal written report. Clarity on deliverables helps ensure that the organization receives the necessary insights to address the issues at hand.
Conclusion
Conducting internal investigations properly is vital for organizations to understand the facts surrounding allegations and mitigate potential risks effectively.
Unions Now Have a Fast Track Method for Organizing Employees
By Mark J. Ricciardi, Founding and Managing Partner at Las Vegas Fisher Phillips
Recent changes by the National Labor Relations Board (NLRB) have made it significantly easier for unions to organize employees across various industries. Understanding these changes is crucial for businesses to navigate the evolving labor landscape.
The New Landscape of Union Organizing
The NLRB’s August 2023 decision in Cemex has shifted the burden onto employers to petition for representation elections in response to union recognition demands. This change dismantles decades of precedent that guaranteed employees a secret-ballot election monitored by the NLRB.
Implications for Employers
Employers now face increased challenges during first contract negotiations and upon the expiration of collective bargaining agreements. The NLRB has also implemented a "quickie election" rule, accelerating the timeline between union petitions and elections, making it imperative for employers to be prepared.
Steps for Businesses to Take
To mitigate risks, businesses should train supervisors on lawful responses to union activities, foster positive relationships with employees, and develop tailored compliance strategies that reflect their unique workplace cultures.
Conclusion
With the rise in union election petitions, businesses must adapt to the new regulatory environment and proactively engage with their employees to maintain a positive workplace culture.
Arbitration: Neither Your Business Nor Your Adverse Party Agreed To It? You Both May Still Be Bound!
By R. Duane Frizell, Attorney at Frizell Law Firm
Arbitration is often seen as a preferred method for resolving disputes, but businesses must understand that they may still be bound to arbitration agreements even if they did not sign them.
Understanding Arbitration Agreements
While arbitration is typically a matter of contract, nonsignatories can sometimes be compelled to arbitrate based on various legal theories, including incorporation by reference, assumption, agency, veil-piercing, and estoppel.
The Nevada Supreme Court’s Stance
The Nevada Supreme Court has affirmed that a nonsignatory can be compelled to arbitrate by another nonsignatory if certain conditions are met. This underscores the importance of understanding the implications of arbitration agreements in business dealings.
Conclusion
Businesses should seek legal counsel to navigate the complexities of arbitration agreements and understand their rights and obligations in potential disputes.
Don’t Roll The Dice: Nevada Gaming Operators Must Keep Up With New Cybersecurity Regulations
By John T. Moran, III, Partner at Hutchison & Steffen
Cybersecurity is a pressing concern for gaming operators, especially following high-profile cyberattacks on major companies like MGM Resorts and Caesars Entertainment. Understanding new regulations is crucial for compliance and risk management.
New SEC Cybersecurity Disclosures
The SEC has mandated that reporting companies, including most gaming operators, disclose material cybersecurity incidents within four business days. This includes incidents that jeopardize the confidentiality, integrity, or availability of information systems.
Nevada Gaming Commission’s Cybersecurity Regulations
The Nevada Gaming Commission has also implemented stringent cybersecurity regulations, requiring gaming operators to conduct risk assessments and report cyberattacks within 72 hours. These regulations emphasize the need for robust cybersecurity measures in the gaming industry.
Conclusion
As cyberattacks become more frequent, Nevada gaming operators must prioritize compliance with new regulations and invest in cybersecurity measures to protect their businesses and customers.
Working Capital Adjustments in M&A Transactions
By Krisanne S. Cunningham and Hailey C. Nicklin, Rice Reuther Sullivan & Carroll
Working capital adjustments are a critical aspect of merger and acquisition (M&A) transactions, ensuring that the final purchase price reflects the actual economic value of the business being sold.
Understanding Working Capital
Working capital is defined as the difference between a company’s current assets and current liabilities. Buyers typically seek to acquire companies with positive working capital to ensure operational liquidity post-closing.
The Adjustment Process
Due to the fluctuating nature of working capital, adjustments to the purchase price are often necessary. A post-closing period allows parties to finalize the working capital calculation, ensuring a fair purchase price based on actual figures.
Conclusion
Properly managing working capital adjustments is essential for achieving equitable outcomes in M&A transactions, benefiting both buyers and sellers.
Act Now: Transfer Assets Tax-Free with SLATs Before the 2025 Deadline
By Stephanie B. Casteel, Partner at Snell & Wilmer
With the federal gift and estate tax exemption set to halve after 2025, individuals have a unique opportunity to transfer significant assets tax-free using Spousal Lifetime Access Trusts (SLATs).
The Benefits of SLATs
SLATs allow individuals to transfer assets out of their taxable estate while providing access to those assets for their spouse. This strategy can help individuals lock in the current high exemption amounts while retaining some access to the transferred assets.
Conclusion
As the 2025 deadline approaches, individuals should consider engaging in estate planning to maximize their tax benefits and protect their assets.
Agents Under Powers of Attorney and Successor Trustees: Problems Encountered in Declaring an Individual Incapacitated Under the Estate Plan
By Dana Dwiggins, Partner at Solomon Dwigins, Freer & Steadman
Establishing a clear process for determining incapacity is essential in estate planning. However, challenges often arise in obtaining the necessary certifications from physicians.
The Challenges of Capacity Determination
Physicians may be reluctant to provide certifications due to potential family disputes or lack of familiarity with the patient. This can lead to costly and time-consuming guardianship proceedings.
A Proposed Solution: Capacity Determination Committees
To address these challenges, estate planning attorneys are increasingly drafting documents that allow for the appointment of Capacity Determination Committees. These committees can evaluate an individual’s capacity and provide a more reliable basis for decision-making.
Conclusion
Effective estate planning requires careful consideration of incapacity determination processes to avoid unnecessary complications and ensure that individuals’ wishes are honored.
In conclusion, the legal landscape is ever-evolving, and staying informed is crucial for business owners and executives. The insights provided by experts in Legal Opinions serve as a valuable resource for navigating the complexities of legal issues that impact businesses today. Whether it’s understanding the implications of cannabis rescheduling, managing internal investigations, or complying with new regulations, having access to legal knowledge is indeed worth its weight in gold.