Posts tagged Lindsey Weidenbach
First Vaping Lawsuit Filed in Washington State

As reported in an article in the Seattle Times, the first vaping lawsuit was filed in Washington state.

A Puyallup Tribal Policy officer who fell ill with lipoid pneumonia after vaping cannabis oil, is suing distributors of vape cartridges, along with cannabis producers and processors. Named defendants include CannaBrand Solutions in Everett, Conscious Cannabis in Spokane Valley, Rainbow’s Aloft in Colville, Leafwerx in Wenatchee, MFused in Spokane, and Jane’s Garden in Lake Stevens.

As of September 17, 530 cases of lung injuries associated with e-cigarettes or vaping products have been reported to the Centers for Disease Control and Prevention (CDC), with patients in 38 states, including Washington.

JDSA Law is committed to following these developments and will keep you updated as events and details continue to unfold.

Opportunities Abound in Local Opportunity Zones

Congress made several significant changes to the individual income tax when it passed the Tax Cuts and Jobs Act of 2017. The creation of the Opportunity Zone program is among these changes. This law, codified in the Internal Revenue Code, creates tax breaks and incentives for those who invest their money into designated “opportunity” zones. In short, the Opportunity Zone program is an economic development tool designed to spur economic development and job creation in distressed communities. An Opportunity Zone is a designated economically-distressed area where new investments, under certain conditions, may be eligible for preferential tax treatment. Our local officials in Chelan and Douglas County proactively sought the designation of a large number of properties within each of the counties as Opportunity Zones, which requests were ultimately approved by Governor Inslee among a total of 139 census tracts approved as Opportunity Zones in 36 counties within Washington. You can find these properties through this mapping feature.

In order to invest within an Opportunity Zone and qualify for these new tax breaks, an investor must first form a Qualified Opportunity Fund (“QOF”), which can be either a partnership (including limited liability companies) or a corporation. This fund is the vehicle which then makes the investments in the eligible property located in an Opportunity Zone. The tax benefits for these investments are reminiscent of the benefits associated with 1031 exchanges, but with the potential for even more advantageous tax breaks.

Deferring Tax on Capital Gains

Investors into Opportunity Zones can defer tax on prior capital gains invested into a QOF until the earlier of the date on which the investment in the QOF is sold, or December 31, 2026.

  • If the QOF is held for longer than five years, there is a 10% exclusion on the deferred gain

  • If the QOF is held for longer than seven years, there is an additional 5% (for a total of 15%) exclusion on capital gain

  • If the investor holds the investment in the QOF for at least ten years, the investor is eligible for an increase in basis of the QOF investment equal to its fair market value – meaning that there would be no capital gains tax levied at all.


In order to take advantage of the deferral, there are a few requirements.

  • The 180-Day Window. The investment into the QOF must be made within 180 days of the sale of other property. An investor cannot utilize the Opportunity Zone program if they already have the cash and simply want to invest. There has to be a triggering sale of property with capital gains and then a reinvestment of those funds within the 180-day window.

  • The Fund. The fund has to be set up in accordance with the Internal Revenue Code and the recently released proposed regulations. As noted above, the fund can be a partnership tax entity or a corporation. The QOF must designate a fund manager.

  • The Investment. The QOF must use at least 90% of the funds it receives to invest in qualifying property within an Opportunity Zone. The investment must improve existing property and/or consist of a new build. The investment can also be made into a new or existing business that is located within an Opportunity Zone.

  • The December 31, 2026 Window. The capital gains exclusion incentives are based on the length of time that the investment is held and time-capped as of the end of 2026. An investor can still invest in 2019 in order to hit the seven year window of time for exclusion of capital gains.


The tax breaks associated with the investment into Opportunity Zones could have a lasting impact on many taxpayers. An investor does not need to create their own fund and there are many funds all over the country, which are currently formed and trying to raise capital. If you are a property or business owner that has been considering a sale that would trigger capital gains, now may be a great time to sell and reinvest those funds into a QOF fund. On the flip side, if you are a property or business owner located in an Opportunity Zone, you should consider leveraging these tax incentives to get new investors. The Opportunity Zone regulations are complex. Investors considering the Opportunity Zone Program should consult with their attorney and tax adviser to ensure full compliance with the rules and regulations in order to achieve the maximum tax benefits contemplated under the Act.

Email Lindsey J. Weidenbach or Michelle A. Green at JDSA Law for assistance or call (509) 662-3685.

Estate Planning During Your Divorce

Estate planning and divorce proceedings are two aspects of life that are often placed at either end of a relationship spectrum. Both are sensitive topics that often force an uncomfortable conversation, and both are frequently avoided – whether at the end of our lives, or the end of our marriage. However, these two areas of the law have more in common than you might first imagine.

Almost every married person who drafts a Will leaves their assets to their surviving spouse. But what happens if you pass away while in the midst of a divorce? Unless and until the divorce is finalized, the terms of your Last Will and Testament control. In most cases, this means that the soon–to-be ex-spouse receives all of your property. Leaving all assets to your spouse has many tax-related benefits, but it may not be right for you if you’re going through a divorce.

Assets left to a spouse are not (generally) taxable upon the death of the first spouse. Therefore, most Wills direct all assets to the surviving spouse to save taxes. If this is how your Will is written, and you pass away in the middle of a divorce, your soon-to-be ex-spouse will receive all of your property.

In Washington, a dissolution of marriage proceeding is terminated if one of the individuals dies before the divorce is finalized.  The Court views divorce as personal and can no longer facilitate the dissolution of marriage proceeding without both parties present.  If a party dies, it’s as if the divorce proceeding was dismissed – as if it never happened.  From a policy standpoint, this makes sense because the courts want people to have the ability to change their mind and cancel a divorce proceeding before it is finalized. However, if the divorce is dismissed because a party dies, the Court cannot rewrite the Will, and in most cases, all assets of the deceased spouse will be provided to the surviving spouse.  

Broader implications

This could have large consequences with second marriages and children from a prior spouse.  If the surviving spouse is not the blood relative to some or all of the deceased spouses children, the Will could (depending on how it is written) give the surviving spouse the ability to disinherit children.    

When going through a divorce, it is very important to have a new Will drafted immediately, one that clearly states that you are married but getting a divorce and thus expressly do not leave any assets to your current spouse.  This language must be clearly articulated in the Will or the soon-to-be ex-spouse could challenge the new Will as an “omitted spouse”.

What about cohabitation?

It is not only married persons who should consider the need for estate planning.  Individuals who cohabitate in a manner consistent with a marriage-like relationship may naturally assume their partner would inherit their belongings in the same way – as a spouse would under the law.  This is not correct. Even in a relationship lasting for decades, the law in Washington does not grant your domestic partner any rights to your personal property, if you do not have a Will in place.  

Making sure your wishes, and those of your domestic partner, are reflected in a Will may be of even higher importance under these circumstances.  However, in the event your co-habitational relationship ends, the law does not operate in the same way as with married persons, and any distribution you have made to your ex-partner would be enforced. 

Bringing it all together

Protecting assets and heirs is a hallmark of estate planning and marriage dissolution.  When going through a divorce, a new Will protects for your family and assets.

Continued Attempts to Resolve Banking Conflicts for Cannabis Businesses

On August 24, the Washington department of Financial Institution joined forces with 12 other states, urging Congressional leaders to provide clarity on regulations for serving state-licensed cannabis businesses.  This request to Congress is an act of persistence – as it is not the first time this action has been implored. 

Governors, state Attorney Generals, and state banking associations have previously requested Congressional clarity, and permanent solutions, for banking issues in the industry.  All prior attempts have failed.

In the August 24 letter, authored by Robin L. Weissmann, Secretary for the Pennsylvania Department of Banking and Securities, 13 state banking regulators requested Congress to develop legislation that creates safe harbor for financial institutions to service the cannabis businesses that are operating legally under state law.  The letter emphasizes: as more states legalize cannabis for medical and recreational purposes, the importance for financial institutions to be able help these business clients protect their assets will continue to grow.

Without this legislation, this “cash and carry” industry will continue to raise concerns regarding public safety, tracking the flow of funds, and utilizing the services of traditional financial institutions.  

Hopefully this plea will be the catalyst to finally define this landscape for both financial institutions and cannabis businesses.  The current banking situation is unsafe and the federal government must develop a permanent solution.   

The Cannabis team at JDSA Law is committed to following these developments and will keep you updated as events continue to unfold.

Cannabis Amnesty Program May Be Coming Soon

For "Undisclosed" True Party of Interest (TPOI) violations

The objective of the program is to allow cannabis businesses to come into compliance with ownership and financing regulations without fear of license revocation.

In late June, the Washington State Liquor and Cannabis Board (WSLCB) proposed a “Hidden Ownership Amnesty Program” for licensees with undisclosed true parties of interest.  By statue, there is no warning issued for a true party of interest violation.  The only remedy available to the WSLCB is the revocation of the license.  The objective of the program is to allow cannabis businesses to come into compliance with ownership and financing regulations without fear of license revocation.

Who Is Classified as a TPOI?

A True Party of Interest (TPOI) includes the following:

  • Those legal owners who possess any stock or membership interest in a licensed cannabis business

  • Spouses, even for marriages after the initial licensing was completed

  • Business partners or any other party who has the right to receive any percentage of the gross or net profits from a licensed business

  • Anyone exerting management control over the license

  • Certain commission relationships

Each TPOI is vetted and investigated by the WSLCB to ensure they pass a federal background check, and to ensure funds were raised in the state by legal means. Only vetted TPOI’s can control daily business operations and interests.

Some Highlights:

While this Amnesty program is still in the proposal phase, many are speculating as to the requirements applicants will have to meet, and if all applications will be approved.  It has been reported that:

  • The WSLCB will open a '30 day window' for applicants to apply for this amnesty provision

  • A 'special' application will be required and an additional ‘filing fee’ may be required when the application is submitted

  • 'Qualified' applicants (those not currently under investigation) can apply but application for amnesty will not necessarily guaranteed

Will the Amnesty program be approved?  

Additional details are still being discussed.  JDSA Law is committed to keeping you up to date, our Cannabis Law team will update this blog as developments continue to unfold.

Tax Rules and Alimony – Changes Impacting Spousal Support

For over 75 years, payers of alimony (a.k.a. spousal support or spousal maintenance) were allowed to take a tax deduction for the amount of alimony paid to their ex-spouse.  This shifted the income tax burden to the receiver of alimony, which in any instances increased the amount of income available to spouses transitioning to two households.

Under the new Tax Cuts and Job Act (TCJA), alimony will be treated differently for divorce or separation documents put into effect after December 31, 2018. 

What Does This Mean?

In brief, the new tax rule eliminates the payer’s ability to deduct alimony from their federal taxes.  However, this all depends on when you execute, or executed, your alimony agreement or court order.  For instance: 

Current Payers of Alimony or Receivers of Alimony

  • For those who already pay or receive alimony, the TCJA changes will not affect you.   

    • Payers – you may continue to deduct alimony from your federal income taxes

    • Recipients of alimony – you will continue to report alimony payments as taxable income

  • This tax treatment will continue to apply even if your alimony agreement or court order is subsequently changed – unless the modification specifically states that the TCJA treatment of alimony payments now applies

Payers of Alimony or Receivers of Alimony  documents executed before
January 1, 2019

  • Similarly, for those who execute alimony documents before January 1, 2019, the TCJA changes will not affect you.   

    • Payers may deduct alimony from federal income taxes

    • Recipients of alimony will report alimony payments as taxable income

  • This tax treatment will continue to apply even if your alimony agreement or court order is subsequently changed – unless the modification specifically states that the TCJA treatment of alimony payments now applies

Payers of Alimony or Receivers of Alimony – documents executed after
January 1, 2019

  • Payers of alimony – you cannot deduct alimony from your federal income taxes; you will have to pay tax on the income transferred to the alimony recipient

  • Recipients of alimony – you will not include monies received from alimony in your taxable income

  • For tax purposes, alimony will be treated the same as child support, which is not taxable income to the recipient

What Happens Next?

It is still unclear exactly how the new alimony tax rules will impact divorces. 

Historically, spouses who were required to pay alimony, did so knowing they could deduct those payments from their taxable income which was an incentive instead of battling the subject in court.  Without this tax incentive, spouses may argue over the alimony payment amount which in turn could turn out to be less alimony for the receiving spouse.  Additionally, the change in the law may impact how child support is calculated in cases involving minor children. 

JDSA Law is committed to staying well-informed on how these tax changes will impact you. Listen to our recent podcast for more on this topic – or connect with us, Jordan Miller (Family Law) and Lindsey Weidenbach (Tax Changes), for assistance. 

Cannabis-based Medicine Approved by FDA

Last month, the U.S. Food and Drug Administration (FDA) approved the first drug to utilize the marijuana plant-derived ingredient cannabidiol (CBD).  This medicine has been approved to treat seizures associated with two severe forms of epilepsy in patients aged two or older. 

However, it cannot be sold in the U.S. – yet.

The medication, Epidiolex, developed by British company, GW Pharmaceuticals, can’t be sold until the Drug Enforcement Administration (DEA) changes how it classifies CBD.  Nonetheless, this approval from the FDA is a major milestone in bringing safe, effective cannabinoid-based medications to patients.  And it offers new hope, especially to parents of children suffering from certain devastating neurological disorders.

GW Pharmaceuticals, has been working for decades to get this medication approved in the U.S.  This approval comes after a four-year series of trials showing the benefits of CBD in relieving seizures in patients with Lennox-Gastaut and Dravet epilepsy.  As an oral medication, Epidiolex is expected to be safer and more reliable than CBD products currently available through marijuana dispensaries or the Internet.

CBD is a compound typically found in very small quantities of marijuana.  It has been of interest to scientists and the public for several years, due to its anti-seizure properties and other possible therapeutic benefits.

Will the DEA change the CBD classification?  Stay tuned to find out.  JDSA Law is committed to keeping you up to date, and will update this blog as developments occur.

U.S. Senate Passes Legislation to Legalize Hemp

On June 28, the U.S. Senate passed its 2018 Farm Bill that includes provisions to legalize hemp as an agricultural commodity for the first time since the 1930’s.  Senate Majority Leader Mitch McConnell initially proposed the Hemp Farming Act of 2018 as a stand-alone bill, but eventually rolled it into the larger farm legislation to ensure a greater chance of success. The 2018 Farm Bill was approved by the full Senate with a resounding 86-11 vote.

What Does This Mean?

This U.S. Senate approved bill would:

  • Legalize hemp, removing it from the federal Controlled Substances Act

  • Allow the plant to be grown, processed and sold as an agricultural commodity

  • Permit the states to regulate hemp without fear of federal intervention

  • Allow hemp farmers to apply for crop insurance or research grants from the federal Department of Agriculture

So, what’s next?

The farm legislation from both the Senate and House will now move to a joint Congressional committee that will merge both chambers' bills into a single piece of legislation to be sent to President Trump's desk. Although the future of the bill's hemp provision is uncertain, all indications are that Mitch McConnell will fight hard for the survival of his hemp proposal.

JDSA Law is committed to staying up to date on the progress of the Farm Bill, and will post updates to the JDSA Blog as this legislation changes.


New Cannabis Packaging and Labeling Requirements

Attention Cannabis Processors and Retailers

The Washington State Liquor and Cannabis Board (WSLCB) recently adopted new cannabis “Packaging and Labeling Requirements” that will be effective January 1, 2019. 

The requirements were updated with the goal of making labels easier to read, easier to understand, and less burdensome to businesses.  Licensees are allowed to ‘phase-in’ the new requirements to minimize impacts and costs, however, all label changes must be in effect by January 1, 2019. 

So, what does this mean?

Listed below are some of the packaging and labeling changes. However, cannabis licensees are encouraged to review the entire revised law as this section has been significantly enhanced.

  • A new universal symbol is being introduced

    • This new symbol will replace the warning labels “this contains marijuana” and “for use for people 21 and older”

  • The following is now required on all labels:

    • “Warning – May be habit forming”

    • “Unlawful outside Washington State”

    • "It is illegal to operate a motor vehicle while under the influence of marijuana"; and

    • The new marijuana universal symbol referenced above

  • The following is now considered optional on labels:

    • Harvest date

    • “Best by” date

    • Manufactured date

  • Products such as capsules and lozenges, approved by the WSLCB on a case by case basis, may be packaged loosely in a child-proof, resealable package

Other Important Changes

  • Producers and processors may offer accompanying materials, lab results, pesticide use, and other information related to cannabis production and manufacturing, via an internet link, web address or QR code. Previously, this information was to be provided in print format to the retail stores.

  • The definition of what is appealing to children, and the definition of a cartoon has been updated

  • It also appears that all infused edibles‘ labels must be reapproved by January 1, 2019

As part of this rulemaking project, the WSLCB is working to create more resources and guidance materials — for packaging and labeling for licensees — as well as process improvements to the cannabis-infused edibles product, packaging and labeling review program.

More Resources

New Universal Symbol

New Universal Symbol

Not For Kids - logo

Not For Kids - logo

Online Retailers: Be Ready to Collect Sales Tax

In a recent U.S. Supreme Court decision, States will now be able to collect sales tax from internet retailers who sell their products online.  This change appears to be a big victory for the States, and is expected to increase revenue that individual States argued they have been missing out on for decades.

Prior to this ruling, the law did not require businesses to collect sales tax on customer’s purchases if the business was shipping the purchase to a State where the business did not have a physical presence. In these situations, customers who resided in a State with sales tax were required to report and pay ‘use tax’ for their online purchase directly to their home State.  This tax reporting requirement was not widely known, and the home States seldom received the use tax.  This is all about to change as a result of this recent U.S. Supreme Court decision.

What Does This Means for Businesses?

Under the U.S. Supreme Court’s decision, States can now pass laws requiring sellers – without a physical presence in the State to which they are shipping – to collect that State’s sales tax from customers and send the collected sales taxes to that State.  What is not yet clear is whether Federal legislation will provide details on how sales tax collection will take place, or if each State will be responsible for carrying out their own specific sales tax collection program.

JDSA is also following the question of whether the ruling requires all Internet companies to collect sales tax.

Could this only apply to larger companies? 

For example, what about the smaller retailer who sells on eBay or Etsy?  Will they also face the same sales tax collection requirement?  This ruling, though favorable to State revenue, could create an undue burden on small, online retailers.  Tax planning and a full understanding of the collection process will be key to compliance.

Attorneys at JDSA Law are monitoring this developing legislation closely.  Stay close, by reading our blog for how this change could impact you.