United States: Cannabis Investing—A Safe High?

Last Updated: March 24 2016
Article by Adam Dunst

The successive legalization of adult recreational use of marijuana in four states—Colorado, Washington, Oregon and Alaska—and the District of Columbia, as well as legalization of marijuana for medical use to varying degrees in 23 states, has triggered the interest of potential private equity investors who are seeking to claim an early stake in a growing industry with potentially high returns. Altogether, nearly half of the states in the US have legalized the use of marijuana to some degree for medical and/or recreational purposes, each state with its own set of restrictions. The legal marijuana industry has been valued at $1.5 billion in 20131, $2.7 billion in 20141, $3.5 billion in 20151, and is projected to reach $8 billion by 2018. 2 Furthermore, several ballot and legislative actions are currently being planned with respect to legalization of marijuana in 2016 in a number of states. 3 According to one industry research group, 14 states are projected to pass new adult recreational use laws by 2020. 4 Nevertheless, while the industry and its anticipated potential growth may create excitement, investors should be cognizant of the various legal risks involved in investing in the industry, especially since the laws surrounding cannabis seem to be continuously in flux, involve federal versus state considerations, and are not likely to be consolidated in the near future.

Federal law - Illegality and Uncertainty

The US federal government's position regarding the legality of marijuana is not consistent with state-level legalization developments, causing confusion as to the legal implications for the cannabis industry. At the federal level, marijuana is still classified as a Schedule I substance, along with heroin, LSD, peyote, and ecstasy, under the federal Controlled Substances Act (CSA) of 1970. 5 According to the CSA, Schedule I substances have (a) no currently accepted medical use in the US, (b) a lack of accepted safety for use under medical supervision, and (c) a high potential for abuse. 6

In the landmark case Gonzales v. Raich7, the US Supreme Court upheld Congress' power under the Commerce Clause under the Constitution to prohibit purely intrastate cultivation and possession of marijuana, even where a state approves its use for medicinal purposes. As such, businesses that engage in any form of commerce in the marijuana industry, whether as manufacturers, distributors or dispensaries, as well as individuals who purchase and use marijuana-derived products, remain subject to possible federal prosecution and seizure of assets. The risk for a private equity investor is that federal enforcement could lead to dissolution or discontinuance of operations, leaving investors with no recourse to recover their funds. Given the illegality of marijuana under federal law, private equity investors should also be aware that investing in a marijuana-related business may violate the federal antimoney laundering statutes, 18 U.S.C. §1956 and §1957. 8

The US Department of Justice under the Obama administration has published several guidances9 regarding marijuana enforcement and the interpretation of the CSA in light of state-level legalization efforts and the ensuing legal uncertainty, the most recent of which, also known as the "Cole Memo" 10 published on August 29, 2013, reflects the administration's approach to state reform. The Cole Memo clarified that it will not challenge state laws and will generally rely on state and local enforcement agencies to address marijuana activity as long as marijuana sales do not conflict with the following eight federal enforcement priorities to: 11

  1. Prevent distribution of marijuana to minors;
  2. Prevent revenue from the sale of marijuana going to criminal enterprises, gangs, and cartels;
  3. Prevent diversion of marijuana from the state where it is legal under state law in some form to other states;
  4. Prevent state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity;
  5. Prevent violence and the use of firearms in the cultivation and distribution of marijuana;
  6. Prevent drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use;
  7. Prevent the growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands; and
  8. Prevent marijuana possession or use on federal property.

The US Congress has also shown some signs that it prefers to defer to state or local enforcement agencies regarding the regulation of state-legal medical marijuana. The bipartisan spending bill passed by Congress in December 2014 and then renewed in December 2015 included a section, also known as the Rohrabacher-Farr Medical Marijuana Amendment (the Amendment), which prohibits the Department of Justice from expending any federal funds to prevent each of the District of Columbia and 32 other listed states from implementing its own district or state laws that authorize the use, distribution, possession, or cultivation of medical marijuana. 12 On October 19, 2015, in U.S. v Marin Alliance for Medical Marijuana (MAMM), the US District Court for the Northern District of California held that under the Amendment, the Department of Justice's permanent injunction against MAMM's distribution of medical marijuana could only be enforced against MAMM insofar as that organization is in violation of state laws that authorize the use, distribution, possession, or cultivation of medical marijuana. 13

While the guidance in the Cole Memo and the Amendment reflect the Obama administration's level of deference to state laws, investors should be reminded that guidance is not law and that the Amendment will expire when the current fiscal year concludes on September 30, 2016, if not renewed by the next congressional spending bill. 14 The congressional spending bill for the fiscal year ending September 30, 2016 does not preclude a federal prosecutor or a state attorney general from pursuing violators of the CSA who use, distribute, possess or cultivate marijuana for non-medical purposes.

Nevertheless, while there is uncertainty regarding how the federal government will interpret and enforce the CSA going forward, perhaps the Compassionate Access, Research, Expansion, and Respect States Act (CARERS) of 2015, a comprehensive piece of federal medical marijuana legislation introduced in the US Congress, may help to settle the state-federal conflict over the legality of medical marijuana. The CARERS Act would have farreaching impacts, including: (a) allowing state programs to continue without federal interference; (b) transferring marijuana from Schedule I to Schedule II of the CSA; (c) removing cannabidiol from the definition of marijuana; and (d) creating access to banking services for legal marijuana businesses. 15

State laws - Variations and Uncertainty

Interested investors should also be aware that a patchwork of varying state laws makes a one-size-fitsall approach to investment decisions impossible. For recreational marijuana, differences across state laws where there is any recreational legality include the amount of marijuana that an individual can possess, number of plants one can grow for recreational purposes, and license application requirements. 16 Furthermore, for a particular state that has at least in some part legalized marijuana, it is possible that not every governing authority is on board with the legalization. For example, although Oregon has legalized adult recreational use, dozens of cities and counties in Oregon have banned or put moratoriums on marijuana sales. 17

For medical marijuana, differences across the 23 states that have legalized marijuana for medical use to some degree include restrictions with respect to the amount of marijuana that patients may possess, number of plants they may grow for medical purposes, whether dispensaries are allowed, the types of medical conditions legally treatable with marijuana, and whether other states' medical marijuana cards are recognized. 18 States also vary on the forms of medical marijuana they allow. For instance, many states allow marijuana-derived products with cannabidiol (CBD), a compound that possesses anti-inflammatory, antioxidant, anti-anxiety, and anticonvulsant effects that can help to treat diseases such as epilepsy, PTSD, schizophrenia and multiple sclerosis, but restrict marijuana-derived products with tetrahydrocannabinol (THC), a compound that induces psychoactive effects. 19

Private equity investors should also be aware of potential criminal liability depending on their own state laws. Investors located in states where marijuana remains illegal may be at risk of prosecution under state conspiracy, aiding and abetting laws and money laundering statutes, and may be at risk of losing their investments or proceeds under state criminal and civil forfeiture laws. 20

Investor Compliance Requirements

Investors interested in an equity stake in marijuana businesses may be required to comply with certain state requirements, such as residency requirements, and financial and criminal background checks. Equity investors in marijuana businesses may be required to meet specific criteria in order for a business to apply for and maintain a license to conduct business in the marijuana industry. With respect to private equity funds that invest in marijuana businesses in states where such investments are legal, analyses should be conducted in each such tate to determine the applicability of such state's compliance requirements to the general partner, passive limited partners and the fund managers. The following table summarizes residency requirements for owners or investors in marijuana businesses in the four states where adult recreational marijuana use has been legalized:



In order to be eligible to apply for Marijuana Enforcement Division (MED) Medical Marijuana Business License or MED Retail Marijuana Business License, all owners21 must be residents of Colorado for two years prior to application. 22



Six-month residency in Washington is required for new license applications and for new financiers and members of the business. 23 A marijuana license applicant means any person or entity who is considered as a true party of interest in a marijuana license, and includes (i) any entity or person who is in receipt of, or has the right to receive, a percentage of the gross or net profit from the licensed business during any full or partial calendar or fiscal year and (ii) any entity or person who exercises control over the licensed business in exchange for money or expertise. 24



Two-year residency requirement (until January 1, 2020) for all applicants listed on a license application, including all partners in a limited partnership, all members of a limited liability company, all directors and principal officers of a corporate entity, and any individual who owns or controls at least 10 percent of the business. 25 At least one applicant or the sum of applicants listed must be a "legitimate owner" (own at least 51 percent) of the business. 26



Effective as of February 21, 2016, marijuana businesses must be 100 percent owned by residents of Alaska, which means all partners of a partnership, all members of a limited liability company, and all shareholders of a corporation must be residents of Alaska. 27

To be an Alaska resident, a license applicant must meet the residency requirement for voting in Alaska and must not be registered to vote in any other state. 28 A person other than a licensee may not have a direct or indirect financial interest in the business for which a marijuana establishment license is issued. 29

Other Considerations

(1) Financial Institutions

Financial institutions have been reluctant to provide services to marijuana-related businesses. Thus, on February 14, 2014, to allay their concerns of violating the CSA, US Treasury's Financial Crimes Enforcement Network (FinCEN) published guidance intending to (a) clarify how banks can provide services to marijuana-related businesses consistent with their Bank Secrecy Act obligations, (b) enhance the availability of financial services for marijuanarelated businesses, and (c) enhance the financial transparency of marijuana-related businesses. 30

The FinCEN guidance also discusses appropriate customer due diligence and thorough risk analysis to be conducted by financial institutions, and creates a three-tiered system for filing Suspicious Activity Reports (SARs) for marijuanarelated businesses. For example, financial institutions must use the following labels when filing SARs based on their reasonable belief as to whether the business implicates one of the Cole Memo priorities: "Marijuana Limited" for a business that does not implicate a Cole Memo priority, "Marijuana Priority" for a business implicating one or more of the Cole Memo enforcement priorities, and "Marijuana Termination" for when a financial institution terminates a relationship with a marijuana-related business. 31

In conjunction with the February 14, 2014 FinCEN guidance, the Department of Justice also published guidance on the same day as the FinCEN guidance regarding marijuana-based financial crimes. It clarified that if a bank offers services to marijuana-related businesses whose activities do not implicate any of the eight enforcement priorities outlined in the Cole Memo, then prosecution may not be appropriate. 32 The February 14, 2014 FinCEN guidance and Department of Justice guidance, and further developments, such as the Marijuana Businesses Access to Banking Act of 2015, which has been introduced and is pending before Congress, were created to protect financial institutions that provide financial services to marijuana-related businesses. 33

However, nothing in the February 14, 2014 FinCEN guidance and Department of Justice guidance precludes investigation or prosecution, even in the absence of implicating one of the eight Cole Memo priorities, and providing financial services to marijuana-related businesses still remains illegal under federal law. Furthermore, on January 5, 2016, a federal judge in Denver rejected a Colorado credit union's bid to force the Federal Reserve Bank of Kansas City to grant it a master account to serve Colorado's legal marijuana businesses, on the grounds that the master account would violate federal law. 34 Because of risk aversion tendencies by financial institutions, the marijuana industry is still driven primarily by cash transactions. 35 As such, these businesses are unable to reap the potential benefits of loan services or credit cards, and must incur costs and expenses for security, such as safes, armored vehicles and security guards to prevent theft.

(2) Issues of Transportation

Interstate transportation of marijuana is prohibited under the CSA, and this includes transportation among states that have legalized marijuana such as Washington and Oregon. 36 In fact, the US Drug Enforcement Administration has provided a chart that explains the penalties for trafficking marijuana. 37 Thus, marijuana must be consumed in the same state of purchase and cannot be transported from a producer in one state to a distribution or retailer in another. Furthermore, there are legal implications of transporting marijuana within a particular state. First, if marijuana is illegal within a particular state, transportation of marijuana will also be illegal in that state. 38 In states that have legalized marijuana to some degree, the laws regarding transportation are different for individual users and for marijuana businesses, with requirements differing from state to state. 39

(3) No Tax Benefits

Investors should be reminded that due to the Schedule I status of marijuana under the CSA, a number of standard tax exemptions for businesses do not apply to sales of marijuana under the Internal Revenue Code § 280E. 40 As such, businesses can legally deduct only the cost of goods sold and cannot legally deduct significant business expenses such as employee wages, rent, health insurance premiums, utility costs and advertising. 41 Thus, while a typical business pay taxes on net profits, marijuana-related businesses should pay taxes on their gross income. Furthermore, states may impose various excise and sales taxes on the sale of marijuana and marijuana infused products. For example, Colorado imposes 15 percent marijuana excise tax, plus 10 percent retail marijuana special sales tax, plus 2.9 percent retail and medical marijuana sales tax. 42

(4) Restricted Advertising Opportunities

Marijuana-related businesses may be limited in their marketing and advertising options, given that television networks can be subject to legal prohibitions with regards to transmitting advertisements to promote the sale of marijuana. Section 843 of the CSA prohibits using "communications facilities" to transmit advertisements for the sale of Schedule I drugs such as marijuana. 43 Despite the legalization of marijuana in Colorado, the first television commercial advertising the sale of recreational marijuana scheduled to air on Denver-based ABC affiliate KMGH was pulled at the last minute due to concerns about the lack of clarity around federal regulations that prohibit marijuana advertising on television. 44 While the Federal Communications Commission (FCC) has not yet issued any guidance or rulings with respect to marijuana advertisements, it is possible that the FCC will not renew a broadcaster's license the following year if a broadcaster has committed a felony by violating Section 843 of the CSA. 45 Therefore, broadcasters may continue to show reluctance with regards to airing advertisements promoting the sale of marijuana on television.

Furthermore, marijuana-related businesses may face restrictions with regards to using the U.S. Postal Service to distribute advertisements. For example, a notice issued by the Portland, Oregon, District Mailing Requirements Office, US Postal Service on November 27, 2015, wrote: "If an advertisement solicits the mailing of controlled substances such as marijuana, it would violate USPS mailing standards. Marijuana is classified as a Schedule I controlled substance.... CSA § 843(c) does make it unlawful to place an ad in any publication with the purpose of seeking or offering illegally to receive, buy, or distribute a Schedule I controlled substance.... If an advertisement advocates the purchase of clinical marijuana through a Medical Marijuana Dispensary, it does not comply with CSA § 843(c)." 46 This notice effectively ended any distribution of any marijuana advertisement through this local office in Oregon. While it is unclear whether this notice affects other US Postal Service offices in other states, since the notice did not directly come from US Postal Services headquarters, advertising efforts via the postal service in other states may be obstructed in the future.

(5) Intellectual Property

Under the US trademark laws, federal trademark registration can be granted only in connection with goods and services lawfully regulated by commerce. 47 Thus, the US Patent and Trademark Office (USPTO) has consistently refused to register marijuana-related trademarks, given the illegal status of marijuana under the CSA. However, the USPTO may trademark ancillary products (e.g., noninfused foods and candies sold in dispensaries) that are not related to the production and dissemination of marijuana. 48 Further, a business may protect its brand by registering its trademark with one or more states where marijuana is legal and where its brand or logo actually qualifies for a trademark, as long as it does not infringe any other trademarks. 49


In sum, there is a range of legal issues in the marijuana industry that warrant careful consideration by potential investors, including private equity investors. Investing in the legal marijuana industry requires an understanding of the implications of the most recent changes to laws and regulations, proposed bills, other publications by federal or state authorities, and court cases. In particular, in 2016, potential investors should stay abreast of the status of bills under discussion in Congress, such as the CARERS Act of 2015 and the Marijuana Businesses Access to Banking Act of 2015 (as mentioned above), and the status of pending marijuana legalization bills in several states, including Massachusetts, California, Maine, Arizona, Nevada, Vermont and Rhode Island. 50

* Written with significant assistance from Taeyoung Kim, Analyst, Corporate Practice.


1.The State of Legal Marijuana Markets, 3rd Edition, ArcView Market Research, January 26, 2015.

2."Why Legal Cannabis Is 2015's Best Startup Opportunity," Forbes, February 5, 2015. http://www.forbes.com/sites/caroltice/2015/02/05/why-legal-cannabis-is-2015s-best-startup-opportunity/#365b7f36a4a7

3."STATE VIEW: The year of marijuana; Another prohibition is about to fall - to our benefit," MetroWest Daily News, January 3, 2016.

4.The State of Legal Marijuana Markets, 3rd Edition, ArcView Market Research, January 26, 2015.

5.Title 21 U.S.C.A. Controlled Substances Act § 812 - Schedules of controlled substances.


7.Gonzales v. Raich, 545 U.S.1 (2005).

8.Title 18 U.S.C.A. §1956 - Laundering of monetary instruments; §1957 - Engaging in monetary transactions in property derived from specified unlawful activity.

9.Investigations and Prosecutions in States Authorizing the Medical Use of Marijuana, US Department of Justice, Office of the Deputy Attorney General, David W. Ogden, October 19, 2009; and Guidance Regarding the Ogden Memo in Jurisdictions Seeking to Authorize Marijuana for Medical Use, US Department of Justice, Office of the Deputy Attorney General, James M. Cole, June 29, 2011.

10.Guidance Regarding Marijuana Enforcement, US Department of Justice, Office of the Deputy Attorney General, James M. Cole, August 29, 2013.


12.2016 Consolidated Appropriations Act §542 (2015). States include: Alabama, Alaska, Arizona, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, Oregon, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Washington, and Wisconsin.

13.U.S. v. Marin Alliance for Medical Marijuana, No. C98-00086 CRB (2015). California passed the Compassionate Use Act in 1996. In 1998, the Department of Justice filed an action in the US District Court for the Northern District of California seeking declaratory and injunctive relief against MAMM, a medical marijuana dispensary in California, on the grounds that it was engaged in the distribution of marijuana in violation of the CSA even though MAMM's activities were legal under California law. MAMM continued to operate, and another round of lawsuits ensued, as a result of which the US District Court for the Northern District of California ordered a permanent injunction against MAMM in 2002. In response to MAMM's continued operations, the US Attorney's Office pressed for enforcement action against MAMM in 2011. After the passage of the 2015 congressional spending bill that included the Amendment as Section 538 of the bill, MAMM argued that the injunction was now unenforceable under Section 538 and should therefore be dissolved.

14."Congress' Conflicting Approach Toward Medical Marijuana," Law360, January 13, 2016. https://www.law360.com/articles/745597/congress-conflicting-approachtoward-medical-marijuana

15.S.683 - Compassionate Access, Research Expansion, and Respect States Act of 2015, 114th Congress (2015-2016).

16.Marijuana Resource Center: State Laws Related to Marijuana, Office of National Drug Control Policy. https://www.whitehouse.gov/ondcp/state-laws-related-to-marijuana

17."Oregon Cities/Counties Opt Out of Legal Cannabis", Cannabis Public Media, August 28, 2015. http://www.marijuanapublicmedia.org/oregon-citiescounty-opt-out-of-legal-cannabis/

18.Marijuana Resource Center: State Laws Related to Marijuana, Office of National Drug Control Policy. https://www.whitehouse.gov/ondcp/state-laws-related-to-marijuana

19."5 Must-Know Facts About Cannabidiol," Leaf Science, February 23, 2014. http://www.leafscience.com/2014/02/23/5-must-know-facts-cannabidiol-cbd/

20.In New York, for instance, the following laws may apply: N.Y. Criminal Procedure Law §20.20 - Geographical jurisdiction of offenses; jurisdiction of state; N.Y. Penal Law §470 - Money Laundering; N.Y. Penal Law §480 - Criminal Forfeiture; and New York's Civil Practice Laws and Rules Article 13-A - Proceeds of a Crime - Forfeiture.

21.According to Current Amalgamated Retail Marijuana Rules by Colorado's Marijuana Enforcement Division, R 103, "Owner" means "the Person or Persons whose beneficial interest in the license is such that they bear risk of loss other than as an insurer, have an opportunity to gain profit from the operation or sale of the establishment, and have a controlling interest in a Retail Marijuana Establishment license...," updated November 30, 2015.

22.Business License Applicant Criteria, Colorado Department of Revenue, Enforcement Division. https://www.colorado.gov/pacific/enforcement/application-and-licensing-marijuana-enforcement

23.Marijuana Licensing FAQ, Washington State Liquor and Cannabis Board. http://www.liq.wa.gov/mjlicense/mj_licensing_faq

24.Title 314 Washington Administrative Code, Chapter 55 §10 and §35.

25.Temporary Rules on Recreational Marijuana 845-025-1045 - Qualifications of an Applicant, Oregon Liquor Control Commission, Division 25, updated December 21, 2015.


27.Title 3 Alaska Administrative Code 306.015 - License conditions.



30.BSA Expectations Regarding Marijuana-Related Businesses, Guidance FIN-2014-G001, Department of the Treasury, FinCEN, February 14, 2014.


32.Guidance Regarding Marijuana Related Financial Crimes, Department of Justice, Office of the Deputy Attorney General, James M. Cole, February 14, 2014.

33.S.1726 - Marijuana Businesses Access to Banking Act of 2015, 114th Congress (2015-2016).

34.Fourth Corner Credit Union v. Federal Reserve Bank of Kansas City, No. 15-cv-01633-RBJ, 2016 WL 54129 (D. Colo. Jan. 5, 2016).

35.For instance, Chase bank recently closed the account of a California-based online media company that operates a website discussing the health benefits of marijuana because of "reputational risk," according to Forbes. "Chase Closes A Marijuana Media Account," Forbes, February 4, 2016.

36."Moving Marijuana Across State Lines: Still A Felony," Canna Law Blog, January 6, 2015. http://www.cannalawblog.com/moving-marijuana-across-state-lines-still-a-felony/

37.Federal Trafficking Penalties for Marijuana, Hashish and Hashish Oil, Schedule I Substances, US Drug Enforcement Administration. http://www.dea.gov/druginfo/ftp_chart2.pdf

38."Transporting Marijuana: Laws and Regulations", FindLaw, Thomson Reuters. http://smallbusiness.findlaw.com/business-laws-and-regulations/transporting-marijuana-laws-and-regulations.html

39. Id.

  • 40. 26 U.S. Code §280E - Expenditures in connection with the illegal sale of drugs.
  • 41."Internal Revenue Code Section 280E: Creating an Impossible Situation For Legitimate Businesses," National Cannabis Industry Association. https://thecannabisindustry.org/uploads/2015-280E-White-Paper.pdf

    42.Colorado Marijuana Tax Data, Colorado Department of Revenue. https://www.colorado.gov/pacific/revenue/colorado-marijuana-tax-data

    43.Title 21 U.S.C.A. Controlled Substances Act § 843 - Prohibited acts. The term "communication facility" means any and all public and private instrumentalities used or useful in the transmission of writing, signs, signals, pictures, or sounds of all kinds and includes mail, telephone, wire, radio, and all other means of communication.

    44."Marijuana Advertising: You Can't Do that On TV," Canna Law Blog, July 26, 2015. http://www.cannalawblog.com/marijuana-advertising-you-cant-do-that-on-tv/


    46.Mailpieces Containing Advertisements About Marijuana, U.S. Postal Service, Portland District Mailing Requirements, November 27, 2015.

    48."Marijuana Trademarks," Canna Law Blog, September 29, 2014. http://www.cannalawblog.com/marijuana-trademarks/

    49.In Colorado, there are approximately 700 trade names and 200 trademarks registered that include the word "marijuana" or a synonym.

    50."STATE VIEW: The year of marijuana; Another prohibition is about to fall - to our benefit," MetroWest Daily News, January 3, 2016.

    Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.

    The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

    To print this article, all you need is to be registered on Mondaq.com.

    Click to Login as an existing user or Register so you can print this article.

    Events from this Firm
    24 Oct 2017, Seminar, Washington, DC, United States

    The Dentons Forum for Women Executives invites you to join us for a luncheon featuring guest speaker Liza Mundy, journalist and author. Ms. Mundy recently released her latest book, Code Girls, the riveting untold story of more than 10,000 spirited young American women who cracked German and Japanese codes to help win World War II.

    27 Oct 2017, Seminar, New York, United States

    Please join us for a milestone event, our 10th annual CLE Seminar for In-House Counsel.

    1 Nov 2017, Seminar, Washington, DC, United States

    Celebrate the 58th anniversary of Dentons' Government Contracts practice

    In association with
    Related Video
    Up-coming Events Search
    Font Size:
    Mondaq on Twitter
    Register for Access and our Free Biweekly Alert for
    This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
    Email Address
    Company Name
    Confirm Password
    Mondaq Topics -- Select your Interests
     Law Performance
     Law Practice
     Media & IT
     Real Estate
     Wealth Mgt
    Asia Pacific
    European Union
    Latin America
    Middle East
    United States
    Worldwide Updates
    Check to state you have read and
    agree to our Terms and Conditions

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    If you do not want us to provide your name and email address you may opt out by clicking here .

    If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.