MONEY alternative assets

New York Proposes Bitcoin Regulations

Bitcoin (virtual currency) coins
Benoit Tessier—Reuters

New regulations may make Bitcoin safer. But some people think they will also ruin what made virtual currencies attractive.

Bitcoin may have just taken a huge step toward entering the financial mainstream.

On Thursday, Benjamin Lawsky, superintendent for New York’s Department of Financial Services, proposed new rules for virtual currency businesses. The “BitLicense” plan, which if approved would apply to all companies that store, control, buy, sell, transfer, or exchange Bitcoins (or other cryptocurrency), makes New York the first state to attempt virtual currency regulation.

“In developing this regulatory framework, we have sought to strike an appropriate balance that helps protect consumers and root out illegal activity—without stifling beneficial innovation,” wrote Lawsky in a post on Reddit.com’s Bitcoin discussion board, a popular gathering places for the currency’s advocates.

“These regulations include provisions to help safeguard customer assets, protect against cyber hacking, and prevent the abuse of virtual currencies for illegal activity, such as money laundering.”

The proposed rules won’t take effect yet. First is a public comment period of 45 days, starting on July 23rd. After that, the department will revise the proposal and release it for another round of review.

Regulation represents a turning point in Bitcoin’s history. The currency is perhaps best known for not being subject to government oversight and has been championed (and vilified) for its freedom from official scrutiny. Bitcoin transactions are anonymous, providing a new level of privacy to online commerce. Unfortunately, this feature has also proven attractive to criminals. Detractors frequently cite the currency’s widely publicized use as a means to sell drugs, launder money, and allegedly fund murder-for-hire.

The failure of Mt. Gox, one of Bitcoin’s largest exchanges, following the theft of more than $450 million in virtual currency, also drew attention to Bitcoin’s lack of consumer protections. In his Reddit post, Lawsky specifically referenced Mt. Gox as a reason why “setting up common sense rules of the road is vital to the long-term future of the virtual currency industry, as well as the safety and soundness of customer assets.”

New York’s proposed regulations require digital currency companies operating within the state to record the identity of their customers, including their name and physical address. All Bitcoin transactions must be recorded, and companies would be required to inform regulators if they observe any activity involving Bitcoins worth $10,000 or more.

The proposal also places a strong emphasis on protecting legitimate users of virtual currency. New York is seeking to require that Bitcoin businesses explain “all material risks” associated with Bitcoin use to their customers, as well as provide strong cybersecurity to shield their virtual vaults from hackers. In order to ensure companies remain solvent, Bitcoin licensees would have to hold as much Bitcoin as they owe in some combination of virtual currency and actual dollars.

Cameron and Tyler Winklevoss, two of Bitcoin’s largest investors, endorsed the new proposal. “We are pleased that Superintendent Lawsky and the Department of Financial Services have embraced bitcoin and digital assets and created a regulatory framework that protects consumers,” Cameron Winklevoss said in an email to the Wall Street Journal. “We look forward to New York State becoming the hub of this exciting new technology.”

Gil Luria, an analyst at Wedbush Securities, also saw the regulations as beneficial for companies built around virtual currency. “Bitcoin businesses in the U.S. have been looking forward to being regulated,” Luria told the New York Times. “This is a very big important first step, but it’s not the ultimate step.”

However, this excitement was not universally shared by the internet Bitcoin community. Soon after posting a statement on Reddit, Lawsky was inundated with comments calling his proposal everything from misguided to fascist. “These rules and regulations are so totalitarian it’s almost hilarious,” wrote one user. Others suggested New York’s proposal would increase the value of Bitcoins not tied to a known identity or push major Bitcoin operations outside the United States.

One particularly controversial aspect of the law appears to ban the creation of any new cryptocurrency by an unlicensed entity. This would not only put a stop to virtual currency innovation (other Bitcoin-like monies include Litecoin, Peercoin, and the mostly satirical Dogecoin) but could theoretically put Bitcoin’s anonymous creator, known by the name Satoshi Nakamoto, in danger of prosecution if he failed to apply for a BitLicense.

One major issue not yet settled is whether other states, or the federal government, will use this proposal as a model for their own regulations. Until some form of regulation is widely adopted, New York’s effort will have a limited effect on Bitcoin business. “I think ultimately, these rules are going to be good for the industry,” Lawsky told the Times. “The question is if this will spread further.”

TIME apps

NYC to Lyft Drivers: We May Impound Your Car

A Post-Taxi Population Opts For Ride-sharing
Hunter Perry, a regular Lyft user, gets picked up on July 16, 2013 near his office on Harrison Avenue. Boston Globe—Boston Globe/Getty Images

Regulators warn Lyft drivers that safety and emissions violations could carry stiff penalties

Just two days before Lyft was planning to debut its ride sharing service in New York City’s outer boroughs, city officials warned that the service remained “unauthorized” and that participating drivers could face stiff penalties.

“Lyft has not complied with [the New York City Taxi and Limousine Commission's] safety requirements and other licensing criteria to verify the integrity and qualifications of the drivers or vehicles used in their service,” the New York City TLC said in a statement, “and Lyft does not hold a license to dispatch cars to pick up passengers.”

Unlicensed drivers who fall short of drug, background, emissions or safety standards could face fines of up to $2,000 or even risk losing their vehicles, the agency warned. Licensed drivers could also be subject to fines of up to $2,000 for accepting a ride through an unlicensed dispatcher.

The warning came as Lyft prepared to debut its service on Friday in Brooklyn and Queens, recruiting 500 new drivers and promoting two weeks of free trips for new riders.

Lyft argues that its drivers face stricter background and safety standards than New York taxi drivers, and that some 75,000 people have already used the app to hail one of their iconic mustachioed cars.

“The public is reminded that they should not get into a vehicle without a TLC license,” the TLC warned (emphasis theirs). The public may decide for themselves, however, on Friday at 7 p.m., when the service is scheduled to roll out regardless of the TLC’s warnings.

MONEY

Does Anybody Need a Money-Market Fund Anymore?

New regulations are meant to protect money market mutual funds from another 2008-like panic.

On Thursday, the Wall Street Journal reported that the Securities and Exchange Commission is expected to approve new regulations for money-market mutual funds. Remember money-market funds? Before the financial crisis, these funds were very popular places to stash money because each share was expected to maintain $1 value. Your principal would remain the same, and the fund would pay substantially higher interest rates than a bank savings account.

But these days for retail investors, money-market mutual funds are something of an afterthought.

So why is the SEC intent on regulating them now? And will tighter rules push them further into irrelevance? Here’s what you need to know:

What going on?

A money-market fund is a mutual fund that’s required by law to invest only in low-risk securities. (Don’t confuse funds with money-market accounts at FDIC-insured banks. These rules don’t affect those.)

There are different kinds of money-market funds. Some are aimed at retail investors. So-called prime institutional funds, on the other hand, are higher-yielding products used by companies and large investors to stash their cash. The big news in the proposed rules affects just the prime institutional funds.

Prime institutional funds would have to let their share price float with the market, effectively removing the $1 share price expectation.

The SEC reportedly also wants to impose restrictions preventing investors from pulling their money out of these funds during times of instability, or discouraging them from doing so by charging a withdrawal fee. It’s unclear from the reporting so far which kinds of funds this would affect.

Why is the SEC doing this?

As MONEY’s Penelope Wang wrote in 2012 when rumors of new regulations were first circulating, the financial crisis revealed serious vulnerabilities to money-market funds. When shares in a $62 billion fund fell under $1 in 2008, it triggered a run on money markets.

In order to stabilize the funds, Washington was forced to step in and offer FDIC insurance (the same insurance that protects your bank account). That insurance ran out in 2009, and now the funds are once again unprotected against another run.

The majority of the SEC believes a primary way to prevent future panics is to remind investors that money-market funds are not the same as an FDIC-insured money-market account at a bank. Before the crisis, the funds seemed like a can’t-lose proposition. The safety of a savings account with double the return? Sign me up. But as investors learned, you actually can lose.

What does it mean for you?

Not much, at least not right away. The floating rate rules only apply to prime institutional funds, which the Wall Street Journal says make up about 37% of the industry.

The change also won’t be very important until money-market funds look more attractive than they do today. Historically low interest rates from the Federal Reserve have actually made conventional savings accounts a more lucrative place to deposit money than money-market funds. The average money-market fund returns 0.01% interest according to iMoney.net. That’s slightly less than a checking account.

Investors have already responded to money funds’ poor value proposition by pulling their money out. In August of 2008, iMoney shows there was $758.3 billion invested in prime money fund assets. In March of 2014, that number had gone down to $497.3 billion.

Finally, it appears unlikely that money-market funds will ever be as desirable as they were pre-crisis. As the WSJ’s Andrew Ackerman points out, money funds previously offered high returns, $1-to-$1 security, and liquidity. Interest rates have killed the returns, and the new regulations will limit liquidity and kill the dollar-for-dollar promise.

Don’t count the lobbyists out yet

Fund companies are really, really unhappy about the SEC’s proposed regulations. They’ve been fighting the rules for years, and until there’s an official announcement, you shouldn’t be sure anything is actually going to happen.

Others are worried the new regulations, specifically redemption restrictions, might actually cause runs on the market as investors fear they could be prevented from pulling money out if things get worse.

But the SEC may have picked a perfect time to do this. With rates so low, few retail savers care much about money-market funds. That wasn’t true back when yields were richer and any new regulation of money-market funds might have been met with a hue and cry from middle-class savers. Today? Crickets.

MONEY Tourism

7 Cities Where the Sharing Economy Is Freshly Under Attack

140529_FF_NerdWallet_Lyft_1
A Lyft car in San Francisco courtesy of Lyft

As Uber, Lyft, and airbnb expand around the globe, even smaller cities like Grand Rapids are feeling forced to regulate sharing economy businesses.

Big cities such as San Francisco and New York have been confronting the unusual tax and regulatory conundrums posed by sharing economy businesses like Lyft, Uber, and Airbnb for years. Now it’s Grand Rapids’ turn.

As rideshare services like Uber and Lyft expand rapidly around the globe, and as short-term rental operations like airbnb grow to the point of being genuine competitors to hotels, local officials don’t quite know what to make of them—and the kneejerk reaction of regulators is often to side with the tradition businesses these sharing economy services intend to disrupt.

It hasn’t helped that sharing economy businesses have been featured in a string of ugly incidents lately. There was the “XXX Freak Fest” orgy that took place when an unsuspecting tenant rented out his New York City apartment on airbnb last Month. Then there was an Uber driver accused of assault in Oklahoma City, and another Uber driver in San Francisco who was charged with hitting a passenger, and who was found to have convictions for felony drug dealing and misdemeanor battery, despite being subjected to Uber’s background check.

What’s more, no fewer than 14 states have issued warnings–fairly vague, sometimes misleading, but still scary warnings–about the insurance risks in driving or being a passenger in rideshare operations. The companies whose business models are being threatened by the sharing economy are taking action too: In Las Vegas, for instance, a local cab company posted a memo warning that it would terminate any “driver that picks up a passenger using an Uber, Lyft or Sidecar application” in a company taxi or limo. And even cities that seem more open to rideshare businesses sometimes aren’t entirely on board with how these tech companies operate. The Times-Picayune reported that the New Orleans city council is discussing new regulations that would allow Uber’s ridesharing service, but would keep certain taxi rules–such as $25 minimums for luxury sedan rides–that defy “Uber’s insistence on open market pricing.”

As for individual cities in the U.S. and Europe that are stepping up efforts to rein in or ban sharing economy businesses entirely, here are seven hot spots:

Albuquerque, New Mexico
In late May, the New Mexico Public Regulation Commission voted unanimously to order the ridesharing service Lyft to cease operations in the state. Why? The same reason most often cited against ridesharing companies: They’re accused of being commercial taxi services whose drivers don’t have the appropriate licenses and certificates, and who haven’t paid the same fees as taxis. The commission warned Lyft and its drivers that each violation is subjected to a fine up to $10,000.

Barcelona, Spain
After being pressured by taxi companies and hotels, among others, officials in Barcelona are trying to crack down on Uber and airbnb and other sharing economy businesses, with tough fines for unlicensed drivers and a temporary freeze on licenses for owners who want to rent apartments as tourist lodging.

Brussels, Belgium
Uber launched in Brussels in February, and in April, officials banned the service in the city, threatening to hit drivers with a €10,000 fine for picking up a passenger via the app.

Buffalo, New York
A month after Lyft introduced its rideshare service in Buffalo in late April, the city’s director of permits and inspections recommended that police issue summonses to Lyft drivers, who he has determined to be the equivalent of unlicensed livery cab drivers. He also threatened that cars used in rideshare operations could be impounded.

Grand Rapids, Michigan
Strict new regulations are being proposed for owners who want to rent rooms via airbnb or other short-term services. If accepted, a homeowner would have to pay $291 for a license, the home must be owner-occupied in order to advertise room rentals (i.e., no vacation rentals), and only one room in the home can be rented at a time. Also, the city would grant no more than 200 licenses, and owners would have to notify all neighbors within 300 feet of the property about the rental situation. As tough as these rules seem, they could have been worse: A year ago, Grand Rapids was suggesting that homeowners would have to pay $2,000 for a license to advertise and rent via airbnb.

Kansas City, Missouri
Police began issuing tickets to Lyft drivers in Kansas City soon after the service was launched in late April. City officials had deemed that the rideshare service was illegal because drivers hadn’t gone through the training and certification required of taxi drivers. After some legal maneuvering, Lyft is still in action in the city, and a lengthy court battle is expected before the situation is settled.

Malibu, California
The Malibu city council recent voted in favor of issuing subpoenas to over 60 short-term lodging rental websites, including airbnb, according to the Los Angeles Times. There are hundreds of ads for short-term vacation rentals in Malibu, but only around 50 are officially registered with the city and pay the same 12% tax that hotels pay. Officials want to make sure that the city isn’t missing out on hundreds of thousands of dollars in taxes from other rentals. They’re also hoping to crack down on the “party house” atmosphere in neighborhoods that have become popular for vacation rentals.

TIME Transportation

Virginia Sends Cease-and-Desist Letters to Uber and Lyft

Lyft
A Lyft car crosses Market Street in San Francisco, Jan. 17, 2013. Jeff Chiu—AP

But Lyft says it’ll keep operating in the state, in defiance of the cease and desist order

Updated at 2:43 p.m.

The Virginia Department of Motor Vehicles issued cease and desist letters Friday to the taxi-alternative services Uber and Lyft, signaling an escalation of the showdown between regulators around the country and the two transportation startups.

“I am once again making clear that Uber must case and desist operating in Virignia until it obtains proper authority,” DMV Commissioner Richard Holcomb said the letter sent to Uber. Holcomb added that Uber drivers themselves face civil penalties if they operate in Virginia.

Uber received its first warning from the Virginia DMV more than six months ago, when it was told it needed to “obtain authority before operating in Virginia,” Holcomb’s letter.

Lyft, which received a nearly identical letter with a warning to its own drivers, told TIME it won’t stop operating in Virginia.

“We’ve reviewed state transportation codes and believe we are following the applicable rules,” Lyft spokesperson Chelsea Wilson told TIME. “We’ll continue normal operations as we work to make policy progress.”

In a statement, Uber called the letter “shocking and unexpected.”

“This decision is not in the best interest of Uber partners, who have been using the technology to make a living, create new jobs and contribute to the economy – or residents who rely on Uber for access to affordable, reliable transportation alternatives,” the company said. “We look forward to continuing to work with the Virginia DMV to find a permanent home for ridesharing in the Commonwealth.”

The letters represent the latest volley in an ongoing faceoff between services like Lyft and Uber, which provide alternatives to traditional taxis. Regulatorssupported by groups that represent traditional taxi drivers—have been trying to impose restrictions on the services. The showdown is in turn part of a larger picture of cities grappling with how to regulate a peer-to-peer sharing economy—which includes companies like the hotel-alternative Airbnb—made possible by the ubiquitous mobile Internet.

TIME Regulation

Carl Icahn Denies Insider Trading

The investor says he has "never given out inside information”

Is Carl Icahn, one of the world’s best known and most successful investors, guilty of insider trading? When I reached him at his vacation home in the Hamptons on Saturday to discuss the topic following reports that the SEC, FBI, and Manhattan prosecutors are investigating whether he may have leaked illegal stock information to golfer Phil Mickelson and Vegas gambler William T. Walters, his answer was an unequivocal “No.”

“I am very proud of my 50 year unblemished record,” Icahn said, “and I have never given out inside information.” Icahn said he’s never met Mickelson or even spoken to him. But he does know Walters—indeed, the two are friendly, and socialize a couple of times a year (Icahn makes trips to Vegas and has business interests there).

That relationship seems to be the crux of the case that prosecutors would like to build around Icahn, which begins three years ago back in 2011, when the billionaire activist investor got interested in the consumer goods company Clorox. By February of that year, Icahn had built up a 9.1 percent stake in the company, and in July of the same year, he announced an unsolicited takeover bid. According to news reports about the investigation, just a few days before that bid, both Walters and Mickelson made big money trading Clorox. The question is, did Icahn tip Walters, who then tipped Mickelson, whom he ran into occasionally on the golf circuit (Walters owns a course)?

Icahn and Walters certainly chatted about stocks—Icahn talks about stocks with everyone. But I think it’s probably unlikely that Icahn, who’s one of the savviest investors around, would have knowingly given Walters insider information that would have compromised his multi-decade career and put him in the line of fire of regulators eager to bring down a big Wall Street fish. I think what’s much more likely is that Walters was a close listener, and observer, of Icahn. Walters, like many people close to Icahn (and even more who don’t know him personally at all), followed what he was doing in the markets. When they met, in Vegas or elsewhere, they’d sometimes talk about stocks. But that in itself isn’t illegal—in fact, under insider trading laws, it’s not even illegal to tell someone that you are planning to trade a stock, unless it breaches a duty of confidentiality to your own investors (which doesn’t appear to have been the case here, but that’s a legal matter that still has to be teased out).

In the end, Icahn never completed the tender offer for Clorox. But anyone who follows his career knows that he often buys up a lot of a stock before ultimately trying to gain a board seat or even buy the company. It’s not exactly a stealth strategy. And all of those moves typically drive up the price of the stock in question. That’s exactly why people follow his moves and try to buy what he does. It’s possible that Walters was a good observer of that behavior, and it’s also possible that Icahn may have talked up his interest in Clorox to him in the run up to his buyout offer. But I’m disinclined to think that this is a guy who’d risk an iconic career by giving illegal insider tips to anyone. It will be interesting to see how this investigation shapes up. Icahn claims he has yet to be contacted by any of the authorities. “We are always very careful to observe all legal requirements in all of our activities,” he told me.

You can bet that prosecutors will be looking closely in the coming weeks and months to make sure that every i has been dotted.

TIME Regulation

Carl Icahn, Phil Mickelson Reportedly Facing Insider Trading Investigation

File photo of Billionaire activist-investor Icahn in New York
Billionaire activist-investor Carl Icahn gives an interview on FOX Business Network's Neil Cavuto show in New York in this Feb. 11, 2014 file photo. The U.S. Federal Bureau of Investigation and the Securities and Exchange Commission are investigating possible insider trading involving Icahn, golfer Phil Mickelson and Las Vegas gambler William Walters. Brendan McDermid—Reuters

Carl Icahn, Phil Mickelson and Bill Walters are under investigation by the FBI for insider trading, sources said

Updated at 10:30pm ET

In one of the most high-profile probes of recent years, billionaire investor Carl Icahn, champion golfer Phil Mickelson and highly successful sports bettor William T. “Billy” Walters are facing an investigation for insider trading, according to multiple reports.

Federal sources are investigating whether Icahn, who is one of the richest men in America, illicitly disclosed non-public information to Walters at the time that he was launching a takeover bid of the company Clorox in 2011, unnamed sources told the New York Times. The Wall Street Journal and Reuters have also reported on the investigation.

The Federal Bureau of Investigation and the Securities and Exchange Commission are also examining whether Walters passed a tip to Mickelson, based on a study of their trading patterns of Clorox stock.

Icahn began amassing shares in Clorox in early 2011. Shares in the company rose by about 6 percent in February when he disclosed his stake. In the days before Icahn announced his unsolicited takeover bid, there was unusual trading activity in shares of Clorox and options to buy the stock, a red flag for regulators.

Icahn told the Times, “I don’t give out inside information,” adding that “for 50 years I have had an unblemished record.” He added he was unaware of any investigation, according to CNBC reporter Scott Wapner.

Walters declined to comment, while a lawyer for Mickelson denied there was an investigation, according to the Wall Street Journal. But Mickelson indicated he was aware of an investigation, Reuters reports.

“I have done absolutely nothing wrong,” Mickelson told Reuters Saturday. “I have cooperated with the government in this investigation and will continue to do so. I wish I could fully discuss this matter, but under the current circumstances it’s just not possible.”

Mickelson, Walters and Icahn have not been accused of any wrongdoing.

The probe is a prominent one for regulators who typically investigate Wall Street traders and corporate executives. It comes amidst a push against insider trading that has yielded 85 convictions and guilty pleas out of 90 people charged by prosecutors in Manhattan federal court since August 2009, the Journal reports.

[NYT]

TIME Television

Cable Industry Frets Over Future of Your Television Bundle

Change is coming to the way you watch television, and there will be winners and losers. At the annual cable industry conference, insiders are squirming in their seats.

LOS ANGELES—Cable television’s lucrative strategy of “bundling”—charging customers for a package of channels rather than allowing them to pay only for the ones they want—came under attack here Tuesday during the first day of the National Cable & Telecommunications Association’s annual Cable Show.

Jerry Kent, the CEO of Suddenlink, a regional cable broadband service, said during a panel discussion that when it comes to bundling, the industry is “at a tipping point.” The model will fail, he warned, as soon as “certain cable operations stop carrying certain programmers because it’s too expensive,” he said. “Or when people start disconnecting” because their cable bill is too high.

Nancy Dubuc, the president and CEO of A+E Networks, who spoke on the same panel was even more blunt. “A la carte is already coming,” she said, as the audience, nearly all of whom draws a paycheck from the bundling model, squirmed in their seats.

While the pay-TV industry, which includes cable, as well as satellite and fiber providers, like Verizon FiOS, has quietly relied on bundling as their lifeblood for decades, the model has drawn fire in recent years. That’s partly because the price of those expanded basic cable bundles have grown at more than twice the rate of inflation every year for the past 17 years, according to data from the Federal Communications Commission. And it’s partly because Americans’ TV-watching habits have started to change. Consumers can now purchase many episodes and series “a la carte” through online companies, like Apple’s iTunes or Google Play.

Just last week, the premium cable channel HBO agreed to allow Amazon Prime customers to stream popular shows like “The Wire,” “The Sopranos,” and, at some point in the near future, newer series like “Girls.” (Disclosure: TIME’s parent company, Time Warner, is the owner of HBO as well as several other cable television channels that benefit from bundling.)

The discussion about bundling comes just a week after the Supreme Court heard a case involving a small start-up, Aereo, that has built its business model around snatching broadcast signals from the airwaves, “recording” them onto the cloud, and delivering customers a premium, a la carte experience—all without paying content producers pricey “retransmission fees.” If the justices decide in favor of Aereo and it was widely adopted, the consumer need to pay for a bundle of cable channels may be further eroded.

With all these changes, industry has reason to squirm. In a report last year, media analysts at the investment firm Needham & Company estimated that if all TV content were unbundled, the TV industry would take a $70 billion dollar hit, and all but 15 or 20 channels would disappear. During an afternoon event at the Cable Show, Amdocs, a company that works in customer experience, announced their findings from a survey of North American households: more than half would prefer to pay individually for channels they actually want, rather than a large bundle of choices.

Kent and his fellow cable execs, including Rob Marcus of Time Warner Cable, which is no longer owned by Time Warner, pointed the finger at programmers, like ESPN or the Disney Channel, which charge large fees to distribution companies for the privilege of transporting their content to customers. Distributors, whose customers demand channels like ESPN, have no choice but to pay programmers’ high prices, a cost that’s passed onto customers themselves.

Partly in response to rapidly rising customer costs, the FCC proposed rules last month that would limit programmers’ ability to leverage high prices from distributors. For the same reason, Canadian regulators directed TV companies late last year to offer customers a la carte choices by 2015.

John Skipper, the president of ESPN, a network owned by the Walt Disney Company, who spoke on the same panel as Kent and Dubuc, said the reaction against bundling was unfounded. He lamented “that old canard” that only a few people are watching sports while “grandmothers are paying for it” through bundling. “It’s a nice rhetorical device, but it’s not fact,” he said, adding that ESPN was “the single greatest buttress in the pay-TV package.”

Skipper went onto slam online video-streaming sites, like Netflix and Amazon, which he said were encroaching on the old guard’s business model. “Shame on us if we don’t protect our turf,” he said.

TIME Drugs

Colorado Takes Another Look at Pot Edibles After Deaths

Edible marijuana products are pictured on display at a medical marijuana dispensary in Denver on April 18, 2014.
Edible marijuana products are pictured on display at a medical marijuana dispensary in Denver on April 18, 2014. Ed Andrieski—AP

Two recent deaths linked to edible marijuana products have led a regulatory task force to consider new packaging rules during a meeting set for Wednesday, including the implementation of a limit on the amount of THC in a "single serving" of a product

A regulatory task force will meet in Colorado on Wednesday to consider revising rules that govern the packaging requirements around edible marijuana products, after two high-profile deaths were linked to pot comestibles.

The meeting in Aurora will consider whether rules should be implemented to limit the amount of THC—the active ingredient in marijuana—in a “single serving” size of 10mg. Currently no requirement exists that edible marijuana products come in single-serving sizes, KUSA-TV reports.

The meeting comes after a 19-year-old leapt to his death from a building after reportedly consuming 65 mg of THC in a marijuana cookie. In another instance, police say a Denver man ate THC-infused candy before shooting and killing his wife.

[KUSA-TV]

TIME Law

The FDA Plans to Ban E-Cigarette Sales to Minors

Talia Eisenberg, co-founder of the Henley Vaporium, uses her vaping device in New York, Feb. 20, 2014.
Talia Eisenberg, co-founder of the Henley Vaporium, uses her vaping device in New York, Feb. 20, 2014. Frank Franklin II—AP

The Food and Drug Administration has proposed rules that include requiring the markers of e-cigarettes and other tobacco-related products to register their ingredients in the next two years, marking a first step toward national regulation

Updated 9:41 a.m. ET Thursday

The FDA announced Thursday long-awaited regulations for electronic cigarettes that would for the first time ban their sale to minors and require health warnings on the devices nationwide.

The FDA rules will require that makers of e-cigarettes and other tobacco-related products register their products and ingredients with the FDA within the next two years. The FDA-required warning labels will caution users against the risks of nicotine addiction.

“This proposed rule is the latest step in our efforts to make the next generation tobacco-free,” said outgoing U.S. Department of Health and Human Services Secretary Kathleen Sebelius in a statement. Sebelius announced her upcoming retirement earlier this month.

However, the government will not immediately restrict television advertisements and flavorings that could target younger consumers.

The new regulations will be open to public comment and the possibility of legal challenges before becoming final.

E-cigarettes have been exploding in popularity, recently becoming a multibillion-dollar industry. Cities and states across the U.S. have already begun imposing their own restrictions on the nicotine-delivering devices in the absence of federal regulations.

“I call the market for e-cigarettes the wild, wild West in the absence of regulations,” Mitchell Zeller, director of the FDA’s Center for Tobacco Products, told reporters, the Los Angeles Times reports.

The health impact of the devices remains unclear.

This post has been updated to reflect the FDA’s publication of its proposed rules.

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