TerrAscend Corp., a North American cannabis operator led by FreshDirect founder Jason Ackerman, has recruited a new chief legal officer as the number of U.S. lawyers in the cannabis space continue to expand.

“This is a rapidly growing industry—no pun intended—but the landscape and laws are changing on a day-to-day basis,” said Jason Marks, who most recently served as general counsel at German biotech InflaRx NV. “Every state has a different law and it’s unclear what’s going to happen at the federal level. As a lawyer, being able to advise a business on that cutting edge is amazing.”

Marks spent 15 years in-house in the pharmaceutical and medical device industry, working in key legal roles at Alcon Inc., Bausch Health Cos. Inc., and Stryker Corp. He said he was drawn to TerrAscend by Ackerman, whom Marks credited for taking “FreshDirect from zero to almost $1 billion.”

Ackerman, who stepped down in September 2018 as chairman and CEO of the online grocery, joined the board of TerrAscend and became its executive chairman in November 2019. Ackerman said in a statement that Marks’ life sciences expertise would “bring a unique perspective to our executive team.”

TerrAscend, which cultivates, processes, and sells cannabinoid-based products, must involve lawyers in nearly all its decisions, said Marks, noting the ongoing uncertainty about the legality of those products under various state and federal laws. TerrAscend, which has received financial backing from cannabis industry leader Canopy Growth Corp., is publicly traded in Canada.

The Ontario-based company is lining up new satellite office space in New York, said Marks, who has been working from his home in Princeton, N.J. since Aug. 3. Marks is now assembling a team he hopes will help TerrAscend navigate the legal and regulatory complexities it will face.

“Everything I’ve done in my career since moving in-house has been to help people, help patients,” said Marks, citing the opioid crisis and those suffering from anxiety as potentially benefiting from a widespread legalization of recreational marijuana use.

For that Marks needs lawyers, and lots of them, which is tricky given that some major U.S. law firms have been reluctant to embrace cannabis companies as clients given varying bar association rules in different states.

Increased Legitimacy

Marks said he’s been pleasantly surprised by the number of firms “dipping their toe” into the space.

Steptoe & Johnson was recently retained by TerrAscend to handle litigation, Marks said. The company also works with Canada’s Blake, Cassels & Graydon; Cooley; Fox Rothschild; Norton Rose Fulbright; and Saul Ewing Arnstein & Lehr. The latter, which absorbed Chicago’s Arnstein & Lehr, where Marks began his career, does cannabis law and labor and employment work, he said.

“Everything’s changing right now,” Marks said. “Two years ago, I probably wouldn’t have taken this job.”

Christopher Davis, a former Schulte Roth & Zabel associate who since 2017 has served as executive director of the International Cannabis Bar Association, told Bloomberg Law in an email that his Oakland, Calif.-based organization has roughly 700 members. With the specter of federal criminal enforcement continuing to dwindle, he said more traditional law firm practices are willing to take on cannabis issues.

“People are certainly getting more comfortable with the idea of representing cannabis companies despite the conflict between federal and state laws,” Davis said. Federal criminal enforcement bodies like the Drug Enforcement Administration, he said, “don’t have a place in regulating these state-run economies.”

While the Trump administration has cast a skeptical eye on the cannabis sector—federal acceptance federal acceptance of recreational marijuana use would expedite access to routine banking services—Marks reiterated it’s at the state level where opportunities exist since business constraints south of the U.S.-Canada border impact TerrAscend’s bottom line.

States like Pennsylvania, where the company supplies local dispensaries selling medicinal marijuana, have markets that are as large as Canada, Marks said. Getting jurisdictional limitations to fall will play a key part in whether TerrAscend can realize its ambitions as a health care company.

In-House Outlook

One of Marks’ first moves at TerrAscend has been analyzing how the company’s legal group functions. Marks developed an appreciation for legal operations during his time in the pharmaceutical industry.

At Bausch Health, a Canadian company formerly known as Valeant Pharmaceuticals International Inc. that has faced years of regulatory scrutiny over its financial disclosures, Marks set up a litigation group and an enterprise risk management system.

“Over the years I’ve tried to develop my own personal billing guidelines and expectations for how work gets done,” said Marks, who spent over two years as head of litigation and government investigations at Bausch Health.

He expects TerrAscend will adopt a new contract management system and other new technologies like artificial intelligence. “Those are areas where legal can drive immediate value to an organization,” said Marks, whose hire was brokered by Jen Katzburg, director of recruiting at New York’s Gravity Sourcing Inc.

Marks takes over as TerrAscend’s top lawyer from Brian Feldman, a former Fried, Frank, Harris, Shriver & Jacobson associate and hedge fund general counsel hired by the company in April 2019. Feldman didn’t respond to a request for comment about his departure.