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Texas Business Bankruptcy Laws Unveiled: Essential Knowledge for Businesses

Navigating Texas Business Bankruptcy Laws

At Ritter Spencer Cheng PLLC, we understand Texas businesses’ complexities and challenges, especially when navigating the uncertain waters of bankruptcy. As a law firm deeply rooted in the intricacies of Texas business bankruptcy laws, our mission is to provide clarity and guidance to businesses grappling with financial difficulties. We believe in empowering our clients with knowledge and legal expertise to make informed decisions about their future.

Bankruptcy, often perceived as daunting, is a legal mechanism designed to aid businesses and individuals overwhelmed by debt. It’s a path towards financial recovery, offering a fresh start to those burdened by unmanageable financial obligations. In Texas, understanding the nuances of bankruptcy court proceedings, the bankruptcy code, and the roles of key players like the bankruptcy trustee is crucial for any business considering this step.

Understanding Bankruptcy: Basic Concepts and Importance

Bankruptcy, grounded in federal laws and overseen by United States Courts, offers a lifeline for businesses grappling with financial difficulties. This legal process provides a structured approach for managing various debts, including unsecured debt, allowing for partial or complete repayment or, in some cases, business dissolution to resolve outstanding liabilities.

In Texas–and throughout the United States–the bankruptcy system is designed to cater to diverse financial scenarios. It’s crucial for businesses, whether small or large, to comprehend the procedures and effects of the bankruptcy code, including the automatic stay and the impact of bankruptcy court orders, which have distinct implications for business and personal assets, strategic decision-making, and overall financial health.

Distinguishing between personal and business bankruptcy is essential. Personal bankruptcy addresses individual debts and liabilities, while business bankruptcy deals with a business entity’s financial obligations. For business owners personally liable for business debts, this distinction can blur, affecting personal financial stability as well.

At Ritter Spencer Cheng PLLC, we view bankruptcy not as a failure but as a strategic decision for business restructuring or orderly closure. We assist our clients in making informed decisions, comprehending the impacts on assets and liabilities, and skillfully navigating the complexities of bankruptcy law, from filing petitions to understanding court outcomes.

Types of Bankruptcy Available for Texas Businesses

In Texas, businesses have multiple bankruptcy options to address specific financial circumstances. Understanding these options is essential to choosing the most appropriate financial recovery or restructuring path.

Chapter 7 Bankruptcy

Chapter 7 is ideal for businesses that must cease operations and address financial obligations that cannot adequately be resolved without wasting assets. In this process, the debtor’s estate is evaluated, and a court-appointed trustee liquidates nonexempt assets from this estate to pay creditors. This path is typically chosen by businesses or individual business owners with no viable future seeking a responsible way to settle the debts of the business.

Chapter 11 Bankruptcy

Chapter 11 is tailored for businesses looking to restructure while continuing operations. This complex form of bankruptcy involves creating a debt repayment plan, often necessitating negotiations to repay creditors over an agreed timeframe. Chapter 11 can be an intricate legal process, but it allows a business to reorganize its debts and operations to become profitable again. It’s particularly relevant for businesses that face temporary financial trouble but have a solid foundation for future success.

Chapter 13 Bankruptcy

While less common for businesses, Chapter 13 is an option for sole proprietors who intertwine personal and business finances. It allows for creating a repayment plan to settle debts over three to five years, keeping personal and business assets intact. This option is suitable for those with regular income who can demonstrate the capability to adhere to a repayment plan.

Subchapter V of Chapter 11

Tailored for Texas small businesses, Subchapter V, under the Small Business Reorganization Act, simplifies the bankruptcy process, making it more accessible and efficient for small enterprises.

At Ritter Spencer Cheng PLLC, we guide clients through these options, focusing on unsecured debts, secured creditors, and the bankruptcy process, providing the necessary guidance and representation for informed decision-making.

Chapter 11 Bankruptcy: A Closer Look

Chapter 11 bankruptcy, complex yet beneficial, allows businesses to restructure while continuing operations, which is ideal for larger enterprises with significant assets. In this process, the business proposes a reorganization plan for court and creditor approval, detailing debt management strategies, such as renegotiating terms with creditors, asset sales, and operational restructuring. The aim is to return to profitability and manage debts sustainably.

As a “debtor in possession,” the business retains control over its assets and operations, although the bankruptcy court supervises significant decisions. An automatic stay during Chapter 11 prevents creditor actions, providing breathing space to negotiate and develop the reorganization plan.

Chapter 11 is a vital option for businesses with potential for future profitability. At Ritter Spencer Cheng PLLC, our expertise in guiding businesses through Chapter 11 includes drafting reorganization plans and handling negotiations with creditors and stakeholders.

Subchapter V of Chapter 11: Tailored for Small Business

Subchapter V of Chapter 11, introduced in the Small Business Reorganization Act, offers small businesses a more streamlined, cost-effective bankruptcy process. It simplifies reorganization, making bankruptcy more accessible compared to traditional Chapter 11.

In Subchapter V, debtors maintain control over business operations while collaborating with a bankruptcy trustee overseeing the reorganization. Its benefits include an expedited process and reduced costs. Unique to Subchapter V is the ability to propose a repayment plan without creditors’ approval, provided the plan is fair. This feature allows more flexibility in debt restructuring, including some otherwise non-dischargeable debts.

Eligibility Criteria for Each Bankruptcy Type

Determining eligibility for each bankruptcy type requires an in-depth analysis of the business’s financial situation, including the total amount of business debt. This assessment helps decide whether Chapter 7, Chapter 11, or Subchapter V is the most appropriate path for the business.

Chapter 7 Eligibility: To file for Chapter 7, most individuals must pass an onerous means test to assess their income and expenses, but individuals with a majority of business debts, such as guaranties, are exempt from that test. There are very few individuals and businesses that are prohibited from filing a chapter 7 case. This chapter is typically suited for businesses that have shut down or are in the process of shutting down and need a way to resolve multiple creditor claims. Individuals filing chapter 7 are able to obtain a discharge and begin a free start on life.
Chapter 11 Eligibility: Chapter 11 is generally available to most businesses, regardless of size. It is also available to individuals but is often cost-prohibitive. Chapter 11 especially suited for corporations, partnerships, and LLCs. However, the cost and complexity of Chapter 11 make it more viable for larger businesses with substantial assets and operations.
Chapter 13 Eligibility: For Chapter 13, eligibility is limited to individuals, including sole proprietors, with regular income and whose debts fall within certain limits. This option is not available to corporations or partnerships.
Subchapter V Eligibility: To be eligible for Subchapter V, a business must meet specific criteria, including a debt limit and the requirement that at least half its debts are business-related. This option is tailored for small businesses and small business owners.

The Process of Filing for Bankruptcy in Texas

The bankruptcy filing process in Texas involves several steps, each requiring careful attention and adherence to legal procedures.

Consultation with a Bankruptcy Attorney: The first step is to consult with an experienced bankruptcy lawyer. This is where our team at Ritter Spencer Cheng PLLC comes in, offering a free consultation to understand your situation and advise on the best course of action.
Gathering Financial Documentation: Businesses must gather detailed financial records, including lists of assets, debts, income, and expenses.
Filing the Bankruptcy Petition: The bankruptcy process begins with filing a petition in the bankruptcy court. This includes submitting the necessary forms and documentation.
Automatic Stay: An automatic stay goes into effect upon filing, temporarily halting most creditors’ collection efforts against the business.
Meeting of Creditors: The debtor must attend a meeting of creditors, where they answer questions under oath about their finances and bankruptcy filing.
Bankruptcy Trustee’s Role: In Chapter 7 and Subchapter V, a trustee is appointed to oversee the case. In chapter 7, the trustee acts as a liquidator and takes over all aspects of the business. The Subchapter V trustee is designed to facilitate the business in the bankruptcy so that it can exit bankruptcy with a confirmed plan.
Reorganization or Liquidation: Depending on the chapter filed, the business either proceeds with liquidation (Chapter 7) or works on a reorganization plan (Chapter 11 or Subchapter V).
Court Approval and Discharge: In reorganization bankruptcies, the court must approve the proposed plan. Following the completion of the plan or liquidation process, the bankruptcy judge may grant a discharge of remaining debts.

The Role of Legal Counsel in Business Bankruptcy

The complexity of the bankruptcy process underscores the importance of having skilled legal counsel. At Ritter Spencer Cheng PLLC, we play a pivotal role in guiding businesses through each stage of bankruptcy.

Initial Assessment: Our first task is to thoroughly assess the business’s financial situation, offering insight into the most suitable bankruptcy chapter.
Filing Assistance: We assist in preparing and filing the bankruptcy petition, ensuring accuracy and completeness in documentation.
Representation: Our attorneys represent the business in all required hearings and meetings, including meeting creditors and court proceedings.
Negotiation and Advocacy: In reorganization bankruptcies, we negotiate with creditors and advocate for the business’s interests in developing a feasible repayment plan.
Guidance on Legal Obligations: We ensure the business complies with all legal requirements, avoiding potential pitfalls that could complicate the bankruptcy case.
Post-Bankruptcy Advice: After the bankruptcy process, we guide rebuilding credit, managing finances, and minimizing the risk of future financial distress.

Ritter Spencer Cheng PLLC: Your Partner in Navigating Bankruptcy

As experienced bankruptcy attorneys, we at Ritter Spencer Cheng PLLC are committed to guiding our clients through the complexities of the bankruptcy process. Our approach is tailored to each client’s unique situation, providing personalized legal strategies and support.

Expert Legal Representation: We offer skilled legal representation in all aspects of the bankruptcy process, from filing to discharge.
Strategic Financial Planning: Our team helps clients develop strategic plans for financial recovery and stability post-bankruptcy.
Ongoing Support: We provide ongoing support and counsel, helping clients navigate the legal and financial landscape after bankruptcy.

Next Steps: Securing a Stronger Financial Future

Understanding Texas business bankruptcy laws and navigating the bankruptcy process can be challenging, but with the right legal partner, it becomes a manageable path to financial recovery. Ritter Spencer Cheng PLLC is committed to providing businesses with the guidance and support they need to make informed decisions about bankruptcy and financial restructuring.

If your business is facing financial difficulties and considering bankruptcy, we encourage you to reach out for a consultation. Our team is ready to assess your situation and advise on the best action. Contact us today to take the first step towards financial recovery and stability.

December 7, 2023
Bankruptcy Law, Business Law, Corporate Law, News, Small Business

5 Things to Know About Chapter 11 Bankruptcy

Although bankruptcy can seem like an intimidating subject, business owners can tackle this complex process with help from an experienced commercial bankruptcy attorney. Each chapter of bankruptcy is different and has its own unique requirements, which is why businesses should speak with competent bankruptcy counsel at the first sign of financial trouble to have the best chance of a favorable outcome in court. Ritter Spencer Cheng, a Dallas law firm that specializes in Dallas bankruptcy filings, can help your business understand Chapter 11 bankruptcy and determine if it is the right financial move for your company.

November 10, 2023
Bankruptcy Law

Ritter Spencer Cheng Associate Rae Guyse Provides Practical Guidance on Risk Management for Hemp and Cannabis Businesses

Rae Guyse, Associate at Ritter Spencer Cheng, recently authored an article in the Texas Hemp Reporter entitled Practical Risk Management Tips for Texas Hemp and Cannabis Businesses. The article can be read here: Practical Risk Management Tips for Texas Hemp and Cannabis Businesses – Texas Hemp Reporter.

Rae joined Ritter Spencer Cheng after spending three years as an insurance recovery litigator, helping companies maximize their insurance payout in claims against their insurers. She now uses her insurance background to help hemp and cannabis businesses understand their risk management and insurance needs. Rae can assist you in reviewing your insurance policy before you sign the dotted line to ensure proper coverage. You can reach Rae at 214-295-5070, or email admin@ritterspencer.com to schedule a consultation with her.

October 31, 2023
News

Is Amanita Muscaria Legal? What Sellers of Amanita Muscaria Products Need to Know

Amanita muscaria, also known as fly agaric or fly amanita, is a distinctively colorful and iconic mushroom species that has captivated the human imagination for centuries. It is one of the most widely recognized mushrooms, with its signature red cap with white dots making an appearance throughout pop culture from Nintendo’s Mario to the mushroom emoji on everyone’s iPhone.

In traditional cultures, these mushrooms have been used for spiritual and medicinal purposes, primarily in shamanic practices. In low doses, the mushroom has calming and sedative effects. At high doses, the mushroom has psychedelic effects capable of intense hallucinations, thanks to psychedelic compounds muscimol and ibotenic acid present in the fungus. Amanita Muscaria seems to be having a cultural renaissance of sorts, with new products from vapes to chocolates popping up on the market all across the United States.

Federal Regulation

At the federal level, Amanita muscaria mushrooms are not specifically listed as controlled substances under the Controlled Substances Act (CSA). However, the CSA does classify psychoactive substances, such as psilocybin and psilocin found in “magic mushrooms,” as Schedule I drugs, meaning they are considered to have a high potential for abuse and no accepted medical use. While amanita muscaria has so far flown under the radar at the federal level, its potential health risks and psychoactive effects may lead to eventual regulation.

While it is generally possible to manufacture, distribute, sell, and even obtain a federal trademark for amanita muscaria products, the Food and Drug Administration (FDA) retains regulation over any food, drug, or cosmetic sold in interstate commerce. Currently, amanita muscaria mushrooms supplement products fall into the Dietary Supplement Health and Education Act of 1994 (DSHEA), which regulates vitamins, minerals, herbs and other botanicals which can be sold without FDA approval. Under DSHEA, manufacturers and distributors of dietary supplements and dietary ingredients are prohibited from marketing products that are adulterated or misbranded. Manufacturers are held responsible for evaluating the safety and labeling of their products before marketing to ensure that they meet all the requirements of the Federal Food, Drug, and Cosmetic Act as amended by DSHEA and FDA regulations. The FDA has not approved amanita or its chemicals to be sold as food additives or as a drug to treat medical conditions.

Per DSHEA regulations, amanita products, like all other supplements subject to these regulations, must not make claims to treat, diagnose, cure or alleviate the effects of diseases. Instead, labels may only include statements that “describe the role of a nutrient or dietary ingredient intended to affect the structure or function in humans,” and must be accompanied by a boldface statement stating “This statement has not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease.”

Most importantly, own label distributors and holders of amanita muscaria products subject to DSHEA must ensure compliance with Current Good Manufacturing Practice (“cGMP”) regulations. 21 CFR part 111. Many private label companies believe that cGMP compliance is the responsibility of the manufacturer; however, own label distributors are required to maintain oversight of the manufacturer and to ensure that the manufacturer is adhering to cGMP regulations. Currently, own label distributors are responsible for verifying that their products conform to the established specifications. The FDA’s Small Entity Compliance Guide: Current Good Manufacturing Practice in Manufacturing, Packaging, Labeling, or Holding Operations for Dietary Supplements is a great resource for learning about cGMP regulations. Absent compliance, if the FDA inspects your facility or warehouse, you will receive a Form 483 citing inspector observations. Failure to respond to the Form 483 may result in a warning letter being issued from the FDA.

FDA has the authority to take action against any adulterated or misbranded dietary supplement product after it reaches the market. Therefore, it is important to follow all applicable regulations, including mandatory cGMP compliance for dietary supplement products containing amanita muscaria.

State Regulation

Amanita Muscaria has been largely unregulated at the state level, including in Texas, and is not specifically addressed in controlled substance laws for the vast majority of states. In Louisiana, it is illegal to grow, sell, possess amanita muscaria under Louisiana State Act 159, unless it is used strictly decorative purposes. As awareness of amanita muscaria products continues to grow, other states may decide to schedule amanita muscaria or otherwise impose regulations.However, even though not explicitly mentioned under state laws, the legal status of amanita mushrooms can be ambiguous, and possession or distribution of may be subject to interpretation under analog laws or local ordinances.

For example, the Florida Department of Agriculture and Consumer Services put a stop to the sales of amanita by one company, based on the fact that products were sold for consumption, which drew scrutiny from the agency because the FDA has not approved amanita as a consumable food. Products may also find themselves in conflict with local laws (in addition to federal regulations) if they contain dangerous levels of heavy metals or other harmful substances, under regulations that prohibit the sale of products that contain “poisonous or deleterious” substances, for example. It is advisable to consult state-specific legislation and a skilled attorney to understand the regulations in each jurisdiction you are seeking to sell amanita products in.

Conclusion

It is important for your amanita muscaria business to ensure that it is compliant with all federal and local regulations. The regulation of these mushrooms may change over time given the possible health impacts these products, so it is important to stay apprised of any change in regulations. Additionally, labeling laws at the federal and state levels impact amanita muscaria products and you must ensure that your labels are compliant prior to commencing sale. The lawyers at Ritter Spencer Cheng PLLC have worked in the amanita muscaria and alternative substance industry for years and are experienced in navigating the complex regulatory landscape governing amanita muscaria products.

___________________________________________________________

Rae Guyse is an associate attorney with Ritter Spencer Cheng PLLC who handles matters in alternative and psychedelic medicine in addition to cannabis and hemp regulatory matters. Chelsie Spencer, a founding principal with Ritter Spencer Cheng PLLC, represents amanita muscaria companies and other companies in the alternative substance industries in all areas of compliance. The lawyers at Ritter Spencer Cheng are prepared to advise your amanita muscaria business in all facets of the industry, including regulatory and compliance issues. Contact Ritter Spencer Cheng or give us a call at 214.295.5070 for more information.

October 20, 2023
Amanita Muscaria

Announcing Ritter Spencer Cheng PLLC

Ritter Spencer Cheng PLLC is pleased to announce the addition of Richard Y. Cheng as a Managing Member of the firm. This strategic appointment strengthens the firm’s commitment to delivering top-notch legal services and marks a significant milestone in its ongoing growth and development.

Richard brings a wealth of legal experience to Ritter Spencer Cheng PLLC. His practice focuses on corporate transactions, regulatory & compliance, governmental investigations, and administrative appeals. Richard has an impressive track record in healthcare law, and represents all facets of the healthcare industry from post-acute care providers, physicians, investment platforms (e.g. private equity, family office, accredited investors, etc.) in healthcare, retail medicine providers (e.g. med spas, IV hydration bars), management services organizations (MSOs), dental service organizations (DSOs), ancillary providers (e.g. labs, pharmacies, rehabilitation providers, ASCs, urgent care centers) digital healthcare companies, veterinarians, chiropractors and wellness companies. Richard’s unique practice combines his corporate transaction background with his regulatory background, making him an experienced practitioner well versed in Stark Law, the Anti-Kickback Statute, False Claims Act, HIPAA, HITECH Act, the Civil Monetary Penalties Law, corporate practice of medicine, Medicare conditions of participation, and other healthcare regulatory issues.

“We are thrilled to welcome Richard to our team,” said Chelsie Spencer, Managing Attorney at Ritter Spencer Cheng PLLC. “Richard’s demonstrated experience as a health care law attorney is invaluable to clients navigating complex regulatory schemes within the healthcare sector and his corporate M&A experience uniquely qualifies him as a seasoned professional to advise clients on how to properly structure transactions in a highly regulated industry like healthcare. Also, as a colleague in the cannabis industry, Richard has been representing clients regularly in the cannabis space for many years. We look forward to building a firm that offers exceptional representation for our cannabis clients in Texas and the surrounding region.”

The addition of Richard Y. Cheng also expands the firm’s renowned alternative substances practice, which currently includes cannabis, kratom, ketamine, psychedelics, and more. With his expertise in cannabis, ketamine, and kratom, the firm is uniquely poised to provide comprehensive legal services to clients in this sector. Ritter Spencer Cheng PLLC remains steadfast in its mission to provide the highest quality legal services to its clients. For more information about Ritter Spencer Cheng PLLC and its legal services, please visit www.ritterspencercheng.com.

September 28, 2023
Cannabis Law, Corporate Law, Healthcare Law

Is Kratom Legal in Texas – New Wellness Trend, or Legal Question Mark?

Kratom Industry in Texas – New Wellness Trend, or Legal Question Mark?

Kratom (Mitragyna speciosa) is a plant native to Southeast Asia that has been used in traditional medicine and cultural practices[1] for centuries. It has become increasing popular in Texas (like the rest of the Western world) over the past several years, and is most commonly sold as a powder, tea, or in capsules. Kratom products can be found online, at smoke and vape shops, and at gas stations across the state. Botanical vendors, often selling both kratom and kava products, are popping up all over Texas, selling kratom infused elixers that tout a range of wellness benefits depending on the different strain of the plant being used: for example, “white vein” kratom, is known for uplifting and energizing effects while red vein kratom is known for its pain relieving and relaxation effects. Kratom has gained popularity over the years in wellness communities, often discussed as a an alternative for chronic pain relief, and a social alternative to alcohol (though, the FDA has cracked down on kratom companies that market products with medical claims). The U.S. kratom industry is estimated to be worth over $1.3 billion, with an estimated 15 million consumers based on a 2021 estimate.[3]

However, there has also been public concern and national headlines calling into question the safety of kratom. The DEA has listed kratom as a Drug and Chemical of Concern[4]. The FDA has not approved any prescription or over-the-counter drug products containing kratom, and the agency has been quite vocal about its concerns regarding the safety of kratom.[5] NPR recently reported on several recent lawsuits targeting kratom that were filed after a series of kratom overdoses.[6]

When kratom is consumed, the compounds in the plant bind to opioid receptors in the brain, mimicking the effect of traditional opioids – which also gives it its pain-relieving effects.[7] While low doses of kratom most often result in a mild euphoric effect, acting as a natural stimulant and pain reliever, high doses can lead to adverse effects. However, rates of addiction and overdose are much lower than other opioid drugs, and there is some scientific evidence supporting kratom’s effectiveness as a treatment for opioid addiction.[8] There has also been concern about the lack of regulations around kratom products allowing manufacturers to add dangerous additives to products with little consequence.

The attorneys at Ritter Spencer Cheng have represented kratom clients across the nation and in Texas for many years. Our team is experienced in navigating federal issues impacting kratom, such as FDA issues impacting import, and Texas kratom regulations. Texas recently joined several states across the nation in passing kratom regulations.

LEGAL STATUS OF KRATOM IN TEXAS

Kratom has not been scheduled federally, however, products containing kratom are subject to United States Food and Drug Administration (“FDA”) oversight and compliance with applicable Food and Drug Cosmetic Act (“FD&C Act”) regulations.

While kratom has been largely unregulated in Texas, Texas passed the Texas Kratom Consumer Health and Safety Protection Act (the “Act”) in May 2023. The Act becomes effective on September 1, 2023. The Act prohibits the sale of kratom to anyone under the age of 18 in Texas and puts in place standards to increase the safety of available products. The Act will require kratom product labels to include direction on product use and the recommended serving size, and prohibits any kratom product that: is contaminated with any “dangerous non-kratom substance affecting the quality or strength of the product…”; is ”contaminated with a “poisonous or otherwise deleterious non-kratom substance”; has a level of 7-hydroxymitragynine in an alkaloid fraction greater than two percent of overall alkaloid composition; or that contains any synthetic alkaloid. [9] Violating the chapter will result in a $250 for first violations, $500 for a second violation, and $1000 for each subsequent violation. The Act does not define what will qualify as a “dangerous,” “poisonous,” or “deleterious” substance.

Recently, there have been a number of seizures of kratom products across the nation by the FDA. In May 2023, the FDA seized more of than $3 million worth of kratom products in Oklahoma from Botanic Tonics.[10] And in July, the FDA reissued an import alert for kratom[11] allowing for the detention of supplements and bulk dietary ingredients containing kratom, which it identifies as an unapproved drug”. The FDA has issued similar import alerts for kratom since 2012. Under the FDA’s view, there is an absence of history of use or other evidence of the safety of kratom as a dietary ingredient. Kratom products intended for use as a dietary supplement may be refused admission at a port of entry. Specifically, advertising products containing kratom in conjunction with medical claims regarding diagnosis, cure, treatment, mitigation, or prevention of disease places the product under section 201(g) of the FD&C Act. Because the FDA’s stance is that kratom has not been recognized as safe and effective for diagnosis, treatment, mitigation, cure or prevention, the product qualifies as a “new drug” under FD&C Act § 321(p). Under FD&C Act §§ 331(d) and 355(a), “new drugs” are prohibited from introduction into commerce absent prior FDA approval. This reveals the tension between the FDA and kratom manufacturers and distributors. The FDA has issued numerous warning letters to kratom companies that are making claims related to pain treatment, palliative treatments, blood pressure treatment, and others.[12]

While it is uncertain if and when federal regulations will be put in place for kratom, it wouldn’t be a surprising development. The DEA issued a temporary ban of kratom and urged that it be placed on Schedule I of the Controlled Substances Act back in 2016.[13] The ban was delayed indefinitely after public outcry, particularly by kratom industry associations.[14] However, as the popularity of the product continues to grow, we continue to follow federal and state developments.

It is important for your Texas kratom business to ensure that it is compliant with the new Texas kratom regulations. There are also special considerations for risk management in kratom product labeling, claims formulations, and other kratom business considerations. The kratom lawyers at Ritter Spencer Cheng PLLC have worked in the kratom industry for years and are experienced in navigating the complex regulatory landscape governing kratom products.

___________________________________________________________

Rae Guyse is an associate attorney with Ritter Spencer Cheng PLLC who handles matters in alternative and psychedelic medicine in addition to cannabis and hemp regulatory matters. Chelsie Spencer, a founding principal with Ritter Spencer Cheng PLLC, represents kratom companies and other companies in the alternative substance industries in all areas of compliance. The lawyers at Ritter Spencer Cheng are prepared to advise your kratom business in all facets of the industry, including regulatory and compliance issues. Contact Ritter Spencer Cheng or give us a call at 214.295.5070 for more information.

[1] The History of Kratom: Origins, Cultural Significance, and Traditional Use – Programming Insider

[3] https://drive.google.com/file/d/1ChyAKfdOrWzckau9kKwWti1F47D0WjUO/view

[4] Drug Fact Sheet: Kratom (dea.gov)

[5] FDA and Kratom | FDA

[6] Kratom at the center of a spate of wrongful death lawsuits : NPR

[7] Is Kratom an Opioid or a Narcotic? No! (cfah.org)

[8] Wilson, L. L., Chakraborty, S., Eans, S. O., Cirino, T. J., Stacy, H. M., Simons, C. A., … & McLaughlin, J. P. (2021). Kratom alkaloids, natural and semi-synthetic, show less physical dependence and ameliorate opioid withdrawal. Cellular and molecular neurobiology, 41(5), 1131-1143

[9] 87(R) HB 1097 – Introduced version (texas.gov)

[10] FDA seizes $3 million worth of kratom (naturalproductsinsider.com)

[11] Import Alert 54-15 (fda.gov)

[12] https://www.natlawreview.com/article/fda-issues-warning-letters-to-companies-illegally-selling-unapproved-misbranded#:~:text=On%20June%2025%2C%20FDA%20issued%20warning%20letters%20to,treat%20or%20cure%20opioid%20addiction%20and%20withdrawal%20symptoms.

[13] https://www.federalregister.gov/documents/2016/08/31/2016-20803/schedules-of-controlled-substances-temporary-placement-of-mitragynine-and-7-hydroxymitragynine-into

[14] https://kratomguides.com/dea-kratom-ban-update-2019/

September 19, 2023
News

Rae Guyse: Best Lawyers: Ones to Watch® in America

Excellence in the Legal Realm

In the vast and intricate tapestry of the legal world, certain individuals stand out for their expertise, passion, dedication, and the indelible mark they leave on their field. Rae Guyse, an Associate Attorney at Ritter Spencer Cheng PLLC, is one such luminary, recently shining even brighter with her recognition by the esteemed “Best Lawyers: Ones to Watch” award.

Celebrating Legal Brilliance

“Best Lawyers,” a name synonymous with excellence in the legal profession, has a storied tradition of spotlighting the crème de la crème of attorneys worldwide. Their “Ones to Watch” award is particularly special. It’s not just a nod to an attorney’s past achievements but a resounding affirmation of their potential to shape the future of law.

Delving into Rae’s Journey

Rae’s foray into the legal world, especially her focus on the cannabis and litigation practice groups, has been remarkable. In an industry rife with complexities, especially concerning the burgeoning sectors of hemp, cannabis, and alternative medicine, Rae has emerged as a beacon of knowledge and guidance.

Her academic laurels, crowned by her graduation with honors from the University of Texas School of Law in 2020, set the stage for her professional journey. But her real-world prowess, from assisting a diverse clientele ranging from dispensaries to processors, truly sets her apart. Rae’s nuanced understanding of insurance programs and innovative approach to risk management challenges make her an invaluable asset to clients and the legal community.

A Glimpse into the Future

Recognition by “Best Lawyers” is more than just an accolade; it’s a testament to Rae’s unparalleled expertise and promising legal trajectory. As regulations and landscapes evolve, especially in the dynamic world of cannabis and hemp, Rae is poised to be at the forefront, guiding, influencing, and shaping its course.

The legal community and its observers have much to look forward to, with professionals like Rae Guyse leading the charge. Her recent recognition is a personal achievement and a celebration for the entire legal fraternity, heralding the bright future ahead.

September 8, 2023
Cannabis Law, CBD, Trademark

Chelsie Spencer: A Global Top 200 Cannabis Lawyer for 2023-2024

A Legal Force in Cannabis

In the ever-changing world of cannabis law, it’s essential to have knowledgeable and forward-thinking experts. Chelsie Spencer is one such expert. Recently, she earned a spot on the prestigious “Global Top 200 Cannabis Lawyers” list for 2023-2024. Let’s explore what this award means and why Chelsie is a name you should know in the cannabis legal sphere.

Forbes’ Seal of Approval

Forbes Magazine has described Chelsie as the “rare friendly face amid a cutthroat CBD hurricane.” This speaks to her unique blend of expertise and approachability in the complex world of CBD law.

Versatility in Practice

Chelsie leads the cannabis practice at Ritter Spencer Cheng PLLC, representing a diverse clientele, from dispensaries to growers and beyond. Her work isn’t just about courtrooms; it’s about shaping businesses through licensing, regulatory compliance, and other critical operational aspects.

A Trademark Authority

Beyond cannabis, Chelsie is a seasoned trademark attorney. She has an impressive track record of securing federal trademarks and managing global trademark portfolios. This dual expertise makes her a valuable asset to clients in the cannabis industry and beyond.

Accolades and Recognition

Chelsie has received national recognition, including titles like Super Lawyer in Cannabis Practice by Thomson Reuters and the Client Champion award by Martindale-Hubbell. The “Global Top 200 Cannabis Lawyer” accolade for 2023-2024 adds another layer of prestige to her already impressive resume.

Leadership and Policy Influence

Chelsie isn’t just about legal representation; she’s about shaping the industry. She serves in leadership roles in various cannabis-related organizations and has been instrumental in drafting legislation at both state and federal levels.

A Well-Deserved Honor

The “Global Top 200 Cannabis Lawyer” award for 2023-2024 is more than just a title; it recognizes Chelsie Spencer’s comprehensive expertise and influence in the cannabis legal field. As the industry continues to evolve, experts like Chelsie will undoubtedly be at the forefront, guiding it towards a more regulated and prosperous future.

September 8, 2023
Cannabis Law, CBD, Trademark

The Pros and Cons of Arbitration

At the beginning of a legal dispute, parties should review the business contract to see if an arbitration clause is included. Arbitration is a private method of legal conflict resolution where a dispute is submitted to one or more arbitrators instead of a judge. Unlike a dispute in court, the parties select the arbitrator(s), and also pay the fees of the arbitrator(s). The arbitrator renders an arbitration award to conclude the dispute. Unless an exception applies, the arbitration award cannot be appealed, but it can be enforced in court. In Texas, you may be required to arbitrate if the contract has an arbitration clause. Organizations must understand the potential positives and negatives of the arbitration process. Read below to understand the pros and cons of legal arbitration and how the Dallas law firm of Ritter Spencer Cheng PLLC can help parties involved in a legal dispute make the right decision for their business.

August 19, 2023
Arbitration

Chelsie Spencer: Best Lawyers: Ones to Watch® in America

A Leader in the Legal Community

In American law’s vast and intricate landscape, it is crucial to recognize and celebrate the trailblazers who are making significant strides in their respective fields. One such legal expert is Chelsie Spencer, who has recently been honored to be included in the prestigious 2024 edition of the Best Lawyers: Ones to Watch^® in America. The Best Lawyers: Ones to Watch^® in America award is awarded to attorneys for outstanding professional excellence in private practice. This accolade is a testament to Chelsie’s unwavering dedication, expertise, and contributions to the legal community, particularly in the cannabis and hemp industries.

Pioneering the CBD and Cannabis Legal Landscape

Chelsie’s reputation in the cannabis industry speaks for itself. Forbes Magazine’s portrayal of her as a “trusted ally amidst the tumultuous CBD (cannabidiol) storms” captures the essence of her role in this rapidly evolving industry. Leading the cannabis practice at Ritter Spencer Cheng PLLC, Chelsie’s clientele spans a broad spectrum, from local dispensaries to national manufacturers. She is deeply involved in transactional aspects, focusing on licensing, regulatory compliance, and other business intricacies. Furthermore, she is a recognized voice in the industry, frequently sharing insights and forecasts at national symposiums.

Beyond Cannabis: Trademark Mastery

While Chelsie’s achievements in the cannabis sector are noteworthy, her expertise doesn’t end there. She’s also a formidable force in the world of trademarks. With a track record of securing federal trademarks and managing global trademark strategies, she’s carved a niche in this domain. Her work involves not just the registration of trademarks but also navigating the complex waters of transactional challenges, making her services invaluable to businesses across various sectors.

A Tapestry of Achievements and Recognitions

The Best Lawyers: Ones to Watch^® in America honor is a milestone in Chelsie’s career, but it’s just one of many. She’s previously been spotlighted as a Super Lawyer in the Cannabis practice by Thomson Reuters and has clinched the Client Champion honor from Martindale-Hubbell. Additionally, her leadership roles, notably as the President of the Texas Hemp Legal Fund and Vice President of the Texas Cannabis Council’s Board of Directors, speaks to her commitment to the industry and her desire to shape its future.

In law, where change is the only constant, professionals like Chelsie Spencer are invaluable. They don’t just adapt to change; they drive it. Her recognition as one of the Best Lawyers: Ones to Watch^® in America is not just a personal achievement; it’s an affirmation of her contributions to the broader legal community. As the legal landscape continues to evolve, with new challenges and opportunities emerging, it’s heartening to know that experts like Chelsie are at the forefront, guiding, influencing, and shaping its future.

August 17, 2023
Cannabis Law, CBD, Trademark