Hilary Bricken Makes the Move to Husch Blackwell – Cannabis Business Executive

Los Angeles-based lawyer Hilary Bricken has officially joined Husch Blackwell, a leading business-focused law firm with 20 offices throughout the country and a thousand attorneys servicing a national footprint of clients from industrial sectors ranging from energy, education, healthcare, real estate, and manufacturing to financial services, technology, life sciences, and transportation, and the many industries they encompass. Formerly with Harris Bricken (now Harris Sliwoski), Bricken joins the firm as a partner in the Los Angeles office and as a member of its Food Systems industry group, with a decided focus on the cannabis industry of course.

Well-known in the cannabis industry through her work at Harris Bricken as well as her analysis of the industry on the law firm blog, Bricken is a business law attorney with expertise in an array of practice areas. According to an announcement of her hiring, Bricken “has more than a decade of experience in guiding clients of all sizes in cannabis licensing; marijuana and industrial hemp regulatory compliance; mergers and acquisitions; corporate and transactional matters, including negotiating management services agreements, fee slotting agreements, cultivation supply agreements, and intellectual property licensing agreements; receiverships; dissolution and wind downs; and financing and debt restructuring.”

Bricken has also been recognized by her legal peers for her work. Per the announcement, “She is one of only 11 attorneys in the United States to earn Chambers USA’s highest designation for Cannabis Law and joins a team that is recognized by both Chambers USA and Legal 500.” Steve Levine, a partner and co-leader of the firm’s cannabis practice, also is quoted as saying, “[Hilary’s] West Coast presence and significant experience will greatly benefit our clients and we’re thrilled she’s joined Husch Blackwell.”

Cannabis Business Executive spoke Tuesday with Bricken by phone about the move to a much larger firm, and while we had the opportunity we also peppered her with off-topic questions of industry interest that she graciously answered with the even-handed insight that one could argue has become her trademark. She joined her previous law firm in 2010.

“I started as an associate,” she recalled. “I didn’t know anything or anybody, and I went into litigation. I was originally helping to foreclose on security interest, basically on hard money loans, and I was going around and seizing people’s assets with the sheriff in Seattle.”

Cannabis came calling quickly. “After about nine months of litigation,” she said, “a partner in the firm came to me and said, ‘We’re considering these other practice areas, and a criminal defense attorney has approached us with a book of business. It’s medical cannabis, people who have corporate needs and structuring needs, and transactional needs. Would you be interested because no elder partner wants to take that work.’

“But it was perfect for a young lawyer, rife with risk, a lot of opportunity,” she added, “and I literally by myself took the ball and ran with it and developed it into a wholesale practice area that eventually would lead to building a team at one point of probably 10 to 15 people at a boutique firm.”

In the beginning, the work was only in Washington state. “California had had medical cannabis since ‘96. Washington and Oregon had had it since ’98,” said Bricken, “so they had established medical cannabis markets, but business lawyers were rarely helping out. So, I filled that need, but it was only in Washington in the beginning, and then in 2012, I got licensed in California, and in 2014, I got licensed in Florida.”

As for where she was based during that time, “Oh my gosh, a variety of places,” she said. “Because I’m licensed in these three states, and I have a husband who’s a physician, and he jumps around, I’ve split time between Florida, Washington, California, and the Midwest. Now I think most of my time is going to be split between the Midwest and the West Coast. My book is national, my clients are really everywhere, and I’ve been able to help them with a variety of matters. As a result, one of my best clients is out of Maryland, and I help them with various regulatory matters all across the country. So, for this position, I’m going to be based out of LA, but I’ll split time between offices as needed for clients.”

In addition to the firm’s business-minded practice, which Bricken finds attractive, she is quoted in the announcement as saying that the move “allows me to tap into additional resources and focus more of my time on clients.” I asked her to expound upon making a move like this when she already had national recognition.

“It was not an easy decision for me,” she first confided. “Yes, I had national recognition, but I wanted a national set of tools, meaning lawyers in multiple different industries with multiple different skill sets, so I could have expanded offerings to my clients so that I don’t have to refer anybody out for labor and employment work, or tax work, or these other specialty areas. And especially with prospective rescheduling on the horizon, I felt like I needed to at least have access to lawyers that were in life sciences, that deal with the FDA and the drug development process, because that’ll create a whole other level of need and services for attorneys if that occurs with HHS and DEA.

“So even though I had the national profile, the national visibility, and I have this national book,” she added, “I wanted to be able to offer these kinds of advanced high-level services with specialty attorneys across the nation, if that’s what my clients wanted. And big and small, they’ve wanted to do cross-border transactions nationally, or take their brand into another state, and now I feel like I have the arsenal to enable them to do that with me still by their side.”

She was also enthused about bringing existing clients with her. “I will be providing the same level of service – regulatory, transactional, corporate governance – for both cannabis companies that hold licenses, and ancillary companies that render goods and services to those particular companies,” she said. “I am bringing clients over – very happy about it – and they range from U.S. publicly-traded companies on customary stock exchanges, to publicly-traded cannabis MSOs, to individuals to small businesses, to startups, to physicians and medical service organizations. It really kind of runs the gamut between small, midsize, and large businesses.”

Steve Levine, in a call Wednesday with Cannabis Business Executive, added of her appointment, “My Southern California basis is limited, and she has a great base, and frankly more touches on the regulatory side, so it really was synergistic and a lot of different ways, and on the personal side, she’s a great person.”

I asked him about the suggestion in the announcement that her addition was also tied to the revived prospect of rescheduling cannabis. “I think there’s still a lot of work ahead of us as it relates to whether it is going to Schedule 3 or not, but obviously there’s more momentum,” he said. “We were just fortunate Hilary was in a position where she was looking for some change, and looking for a platform that can better serve her existing client base and frankly allows her to go out and get new clients and develop those in a way that the other firm was probably unable to service. Cannabis is a multidisciplinary space now, it’s not just left up to cannabis attorneys, and to have a platform like Husch Blackwell was really attractive to her, and we saw it as a great opportunity.”

A Chamber’s Band 1-recognized attorney just like Bricken, Levine has been in the cannabis space since 2009, at first working out of Denver with his colleague Marshall Custer, with whom he practiced law for over 10 years. “We joined Husch Blackwell in 2014,” he added. “My view is that we were the first cannabis practices in the country, but while plenty of people were doing it, we just kind of hid it behind closed doors.”

Today, the practice has expanded significantly. “We have close to 80 attorneys touching our cannabis practice across the country,” said Levine. “We have a core team primarily based out of Denver with about nine attorneys now, and we have Brent Salmons in Washington, DC.. The rest of the 80 attorneys that I mentioned are not quote unquote cannabis attorneys, but range from tax professionals, real estate to intellectual property, all of which we have called upon to service our clients over the past close to nine years at Husch Blackwell.”

Rescheduling and Interstate Commerce

As mentioned, we ran a few additional questions by Bricken while we had her. Do she think interstate commerce is far away?

“It depends on what we’re talking about,” she said. “If we get a reschedule for medical cannabis businesses that follows that path, interstate commerce is a reality that’s potentially very close. If it’s adult use, that does not comport with a reschedule, and interstate commerce is going to be far off, unless states want to start taking the chance of interstate commerce by passing their own laws to enable that, like California. So, it’s still a mixed bag. But I feel like the closest path to interstate commerce is in the event of this reschedule for medical cannabis, drug development companies, pharmacy use, anybody else that’s in that chain of distribution and custody in lockstep with FDA and DEA.”

Can the DEA carve that out to say, ‘We’re only going to reschedule for medical.’ “I don’t think they’re going to have a choice,” replied Bricken. “Because with the Scheduled 3 categorizing, it’s going to become a prescription drug. and drug developers will go after a variety of compounds to develop drugs out of cannabis. And then we’re going to have these adult-use markets, and without an enforcement memo or a change in law or carve out to preserve those, I don’t think anybody can predict whether or not we’re going to be able to have these parallel markets. And certainly, we will have an affirmative conflict with existing state medical cannabis laws and a new Schedule 3 designation.”

Does that that mean if you have a home grow, you’re all of a sudden a pharmacist, or does all home grow have to go away? “They may have to,” she said. “If this even happens, DEA will have to rule-make around the schedule, and yes, they could create some caveats. It is highly unlikely though, that they would permit something like that, because their whole job is to prevent diversion, and they could see medical home grow as a marketplace for bad activity. And the other question is, what are states going to do with states’ rights, and how far will they take this? I imagine, whatever happens, we will see a lot of litigation.”

Big Smoke, Big Booze

Assuming she had seen it, I asked Bricken about the recent report issued by CPEAR, a group funded by big alcohol and big tobacco, that advocated for a series of measures at the national level to ostensibly combat the illicit market, including tax stamps. Could their worldview prevail?

“I think anything’s possible with lobbying in the US – and I think that those industries are very used to having strong government relations, to get a seat at the table so that they’re not on the menu,” she replied. “Yes, there’s a chance, and I think the policy people are going to be mindful of that. And I’m sure on some level if we were to go with that kind of framework, if Congress is smart, they will pick and choose the positive aspects of those industries; namely, sufficient control to enable a stronger competitive cannabis market that’s also not going to have this huge negative societal impact. That’s ideally how it would work.

“But I don’t think you can eliminate those interests from the table because they have very turnkey scalable models that would support cannabis distribution,” she added. “So, I don’t think they can be ignored. Do I think they’re going to prevail 100 percent? Probably not. My hope is that some kind of reasonable middle ground is struck that will preserve small and medium businesses but allow the big competitors to compete and let the market control.”

State by State Regulations

With respect to the regulatory landscape, I wondered how Bricken views the work of state regulators and the promulgation of their cannabis programs.

“I think that the state regulators have a very tough job, because they’re pulling out a myriad of regulations really from the ether, because they have no blueprint,” she replied. “They can borrow from alcohol; they can borrow from health care; but this substance is really neither one of those things. And I think what we’re going to see is states continuing to borrow from each other, and hopefully one of them will strike it right with the gold standard on timing of licensing, reasonableness of fees, and, of course, a program that’s livable from a profitability perspective.

“But I don’t think any of them have had to do that because they either under-regulate to the point of being wild west or they over-regulate to the point of strangulation, like in California,” she added. “So, there’s still a lot to learn. I respect that their jobs are difficult and there’s no blueprint, but my hope is in five to 10 years, I’m not talking like this anymore because they’ve struck the balance within which licensees can live. It’s very difficult because, yes, there are illegal markets everywhere for pretty much everything, but in cannabis, it’s unparalleled, because people are still trying to adjust their psyches about where they source their cannabis, from the legal market versus the illegal, whereas, with alcohol, I don’t think anybody’s rushing to someone’s bathtub with a Tupperware to get gin anymore.”

The Survival of Craft and Legacy Producers

I was curious what Bricken, whose client-base is mostly California-based, thinks about the future of the legacy and craft growers in a market gearing up for massive growth, where the history of the creation of previous industries in this country dictates that previous incarnations of craft must go away, to be replaced by a nationally constructed industry out of which a craft component will one day be created.

“For legacy,” she said, “the states have to incentivize their participation in the licensed market, and they need to make it as reasonably easy as possible for those folks to come in or they’ll just go to-ground and they’ll never convert, because there’s no good reason to do so. And cracking that participatory culture in cannabis is very hard, because the legacy operators see transparency, having to pay taxes, being heavily regulated, as kind of a personal and cultural afront.

“But what you’ve painted the picture of is inevitable,” she added. “These bigger interests will come in, and if you’re not ready to play ball with them or compete with them, they will eventually eliminate you. They’ll outspend you, they’ll out-market you, and I don’t think that’s what we want from our legacy cultivators, because we’ll lose very good varietal product, we’ll lose unique brands, we’ll lose the terroir that’s associated with that, and it will become highly commercialized with very little variety and competition for consumers.

“So, I’m very pro-capitalist in this capacity,” she continued. “Let the market control but make the market accessible so that we can have good competition. And some of these legacy cultivators are extremely intelligent. Even though they may not be sophisticated as businesspeople, they can learn, but if they’re immediately put off by over-regulation, arbitrary barriers to entry, and lack of access to capital because of those things, they will not come to heel, and I think both the industry and consumers are the losers in that situation.”

I noted that trust was also a victim after most legacy operators failed and often pernicious experiences with bad actors entering the space during the so-called green rush. “Yeah, a lot of failure, and those people go back to where they came from, which is the illegal market, and it just fuels the undermining of these democratic experiments,” she concurred. “I would hope over the years people have learned you don’t have to be as hardcore. You can police accordingly, but you don’t have to be as hardcore on initial barriers to entry, just police accordingly. And since we don’t have the Cole Memo from the feds anymore, I think the states should take that as an opportunity to welcome and make life easy for licensees, and then police them, audit them, investigate them, and then kick out the bad actors after they’ve had a chance at least to perform.”

The Three Major Killers of These Cannabis Experiments

I also noted the obvious, that doing away with 280E would be huge for small cannabis businesses. “It would be massive for everybody,” responded Bricken. “Nobody wants to be an effective corporate income tax rate of 70 to 80 percent. It’s a killer. There are probably two to three major killers of these cannabis experiments, and that’s one of them.”

What, I asked, are the other ones? “I would say lack of access to financial institutions,” she said. “Even though we have the FinCen guidelines, again, huge barriers to entry, massively expensive, so they can’t on the whole bank. And that would even go into being able to access loans and credit; they can’t use the credit card networks.

“And then I’d say the third one, which is insidious, is local control,” she continued. “Big, big local control hangups, where the state may be a friendly state, and maybe even the county or the city voted for it, but the locality doesn’t want it in their backyard. And that’s been an incredible hangup in many of these states that turned into cannabis deserts where the illegal market thrives, and the state’s not meeting tax revenue goals as was promised to voters. So, local control is the silent but deadly pillar that’s also strangling the industry.”

Bricken added that, time permitting, she would continue to write articles, now for the Husch Blackwell cannabis blog, Cannabis Law Now. I wondered if she wanted to have an ongoing role in shaping the future of this industry.

“Oh, yeah,” she responded enthusiastically. “I’d love to have a place at the table with the policy folks. My issue is, I’m very real world-oriented, and I’m not an idealist. So, I’d probably lean too far into just open competition and letting people in, to a degree, with sufficient guardrails and controls. But I’d like to have a voice from the business perspective and the people who want to compete or have an exit or just thrive. And I don’t know what that looks like anymore, because we have such diverse voices at the table, and cannabis has a lot of infighting where the interests don’t always align. I would like everybody to get on the same page about collective goals, but there are so many. But of course, I’d love to be part of the policy talks if they would have me as a kind of hands-on business practitioner.”

Ketamine Clinics and Psychedelic Advocacy

I asked about the mention in the announcement that, “In addition to her successful cannabis practice, Bricken has a growing healthcare and emerging therapies practice where she represents providers, clinics, and the businesses that support this growing area of treatment, including for the off-label application of a variety of scheduled drugs.” Is it separate from her other work at the firm?

“It’s related, but it’s separate,” she clarified. “I represent probably half a dozen ketamine clinics, and these clinics have been around for two decades. It’s exclusively controlled by healthcare laws, FDA regulations, DEA. Ketamine is Schedule 3, which is ironic, because that’s potentially where cannabis is headed, but I typically represent physicians and medical groups and medical services organizations in the application of ketamine for essentially treatment resistant mood disorders. So, off-label drugs are very popular in the United States and encouraged by the FDA for exploration.

“Probably the most famous one is Viagra, which was a heart medication that failed miserably as a heart medication,” she continued. “But it obviously had some interesting side effects, and essentially was turned into the number one ED drug on the market. That’s off-label use, where these physicians, within their professional judgment, are prescribing and applying these drugs with patients to determine their efficacy. And we already have a prescription-based nasal spray called esketamine that went through FDA trials, and there’s even more that are up in the queue. But for now, physicians are being very innovative with this particular practice. So, I’m in that sphere, too.”

I asked about additional work in the emerging psychedelics space. “What’s funny is ketamine, while it’s a surgical anesthetic in small doses, has psychedelic properties,” she said. “I’m already in that capacity. Do I think I’m going to delve into psilocybin and MDMA and DMT as they come up? If those drugs can get federal clearance, or state programs open up that support their application and use within a regulated environment, I would be more than excited to explore those. I really like what’s happening with ketamine in that its innovative and involves healthcare and entrepreneurial. Any combination of those three, I’m going to be game to look at it.”

I wondered if, when she was in law school, she could have ever imagined that her destiny was to become a cannabis legal expert.

“Never,” she stated. “Not a day in my life. No, I went to law school at the University of Miami in Coral Gables, and I swore up and down I would be an immigration lawyer and speak and do business in Spanish and English, and this is the furthest thing from that. I failed.”

Did she still have a softness for immigration issues? “I do,” she said, “and we come across these issues in cannabis, where a bunch of foreigners want to immigrate to do work here. I think the melting pot and support of the melting pot and how that fuels the economy and grows us all as people, I’m a big fan. And that’s really truly what I wanted to do. I thought being in Miami, I’m at the gate to the southeast, for central South America, and it just didn’t happen because the ‘08 financial crisis happened and there were no jobs. My husband was in the military, and he got stationed out at Joint Base Lewis-McChord in Tacoma. That’s how I wound up in Washington, and not a soul would hire me. I didn’t know anybody, and I started at what I guess now is going to be called Harris Sliwoski as an hourly employee. I think I was making 10 bucks an hour before they hired me.”

And now, years later, she finds herself at Husch Blackwell, with the resources and the national footprint she will be able to employ in the service of her clients, no matter what state they may want to enter.

“I very much hope so,” she said, “because as the state’s come online, I can’t personally chase every single one, and I don’t think that’s a good use of my time. But I want to be able to say to my clients, ‘We can keep it inhouse, here’s my colleague, he or she knows a ton, and they will be helpful to you to get you across the finish line,’ but I’ll keep that contextual knowledge about the file, which is so big, and I’ve had many clients for more than a decade now, and I’m really proud of that, for that reason.”