PRESS RELEASE: Attorney Adam Kraut to Run for NRA Board of Directors

It is with distinct honor and privilege that we announce that Firearms Industry Consulting Group® (FICG®) Attorney Adam Kraut is running for the NRA Board of Directors.

For those who don’t know Adam, he’s an ardent and steadfast defender of the Second Amendment and Article 1, Section 21 in both of his careers. Whether he is acting as general manager of King Shooter Supply in King of Prussia or actively defending the Second Amendment in state or federal court, Adam is the next generation of Second Amendment Advocates that we need to install in the NRA. As Adam declared,

Some days of the week I spend arming the free world and other days I fight back against unconstitutional laws and regulations from behind a desk or educating my fellow citizens at firearms law seminars.

But this barely scratches the surface as to Adam’s background, knowledge and experience, both in and out of a courtroom. As declared by Chief Counsel Joshua Prince, who was recently awarded the Defender of Justice Award and is an NRA Benefactor who is being inducted into the Charleston Heston Society and Golden Ring of Freedom,

I cannot think of another individual that I would rather have at the helm of the NRA representing me nor a better litigator and defender of justice than Adam. Having litigated cases with Adam, I know he has the skill and, if necessary, the tenacity to ensure that ALL firearm rights are protected. Adam will bring with him, as the next generation of Second Amendment Advocates, the understanding and steadfast devotion to preserving the inalienable right of the people to keep and bear arms, including those currently within the purview of the National Firearms Act (NFA). If you are an NFA collector, such as myself, you know your rights will be protected by Adam.

But if you aren’t satisfied with Chief Counsel Prince’s endorsement, just look to Adam’s website, where he has more than two dozen endorsements from leading Firearm Industry members and provides further background on himself and his accomplishments. From Rockwell Tactical, to John Hollister (formerly of AAC), to Patton Media and Consulting, the Firearms Industry supports Adam!

However, Adam cannot do it without YOUR support. We are asking that any NRA member who is either (1) a life member or (2) a member for the past 5 years, sign his petition. He needs 250 signatures to be placed on the ballot and we fully anticipate, knowing Adam, that he’ll end up with several thousand signatures. As we’ve heard that he doesn’t get enough email at the office, please make sure to request his petition (as each request is another email for him) and send him back an executed copy…we don’t want him thinking that the legal profession is just an 80 hr work week!

You can find out further information about Adam and how to sign his petition on his website: and his Facebook page.

We sincerely hope that you will take the time to support a TRUE Second Amendment advocate.

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The Department Of Justice’s Policy On Marijuana And Its Affects On Financing For Marijuana Related Businesses

As most readers of this blog are aware, marijuana is now legal in some form in half of the states, including Pennsylvania. Although legal in half of the states, marijuana related businesses remain subject to federal prosecution under the Controlled Substance Act (“CSA”) because it remains listed as a Schedule I drug. Until the DEA reclassifies marijuana, marijuana related businesses are subject to enforcement and prosecution under the CSA. The CSA specifically states that the federal law does not preempt state law on the same subject matter. How do marijuana related businesses and financial institutions resolve this conflict between state laws and federal law.

Initially, financial institutions wouldn’t go near marijuana related businesses.  The risk of federal prosecution was too much for banks even if the marijuana related business was in compliance with state laws.

Through a series of three internal memos authored by former Deputy Attorney General, James Cole, the DOJ outlined its policy on enforcement of federal law and prosecution of marijuana related businesses and helped to alleviate the concerns of financial institutions.

The first memo dated June 29, 2011, clarified the DOJ’s position after an earlier Ogden Memo. The Ogden Memo focused the DOJ’s enforcement and prosecutorial efforts on illegal enterprises, gangs and cartels and viewed the prosecution of those individuals taking medical marijuana pursuant to an applicable state law as an inefficient use of federal resources. The First Cole Memo seemingly contradicted this when it stated that the Ogden Memo was never intended to shield such activities from enforcement action and prosecution, even when those actions comport with state law. The First Cole Memo reinforced that state laws were not a defense to enforcement of federal law when such enforcement was consistent with resources and focus of the individual judicial districts. The First Cole Memo was a major blow to marijuana related business as banks were unwilling to provide financing given the threat of federal prosecution and forfeiture under the CSA.

The Second Cole Memo dated August 29, 2013, helped to ease these concerns and fears when it listed eight (8) priorities of the DOJ’s for enforcement of the CSA on marijuana related activities.

The Second Cole Memo priorities are as follows:

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

The Second Cole Memo priorities provided some reassurance to marijuana related businesses that so long as they were in compliance with their respective state laws they were not likely to be the subject of federal action against them.

The Third Cole Memo, dated February 14, 2014, was issued concurrently with a memo from the Department of Treasury, Financial Crimes Enforcement Network (“FinCEN”) to provide guidance and clarification to marijuana related businesses and banks providing financing to those business. Essentially, the two memos were issued to guide banks and lending institutions financing marijuana related businesses with regards to the DOJ’s focus on financial crimes for which marijuana related conduct is a predicate. The memos stated that money laundering statutes, the unlicensed money remitter statute, and the Bank Secrecy Act remain in effect with respect marijuana related activities. However, the two memos provide guidance to banks on how they can provide services to marijuana related businesses and not run a foul of the DOJ and/or the Department of Treasury.

The FinCEN Memo, in particular, states that in assessing the risk of providing services to marijuana related businesses, a financial institution should perform customer due diligence that includes: (i) verifying with the appropriate state authorities whether the business is duly licensed and registered; (ii) reviewing the license application (and related documentation) submitted by the business for obtaining a state license to operate its marijuana-related business; (iii) requesting from state licensing and enforcement authorities available information about the business and related parties; (iv) developing an understanding of the normal and expected activity for the business, including the types of products to be sold and the type of customers to be served (e.g., medical versus recreational customers); (v) ongoing monitoring of publicly available sources for adverse information about the business and related parties; (vi) ongoing monitoring for suspicious activity, including for any of the red flags described in this guidance; and (vii) refreshing information obtained as part of customer due diligence on a periodic basis and commensurate with the risk.

The FinCEN Memo further states a financial institution may reasonably rely on the accuracy of information provided by state licensing authorities, where states make such information available.

In effect the memos provided a blue print for marijuana related businesses to follow when they attempt to obtain financing from a bank.

1. Make sure your marijuana related business is licensed under state law and has procedures in place to ensure ongoing compliance with state and local laws regulations, and ordnances;

2. Have a proper understanding of all state and federal law including the Cole Memo priorities;

3. Screen all employees and any other parties related to the business to confirm they are properly licensed, if required, and to verify that they have no previous criminal records, especially drug related criminal records;

4. Provide a business plan or model which includes information such as: 1) the type of activity the business will engage in (grower /processor, dispensary, etc.); 2) product being manufactured, grown or sold; 3) proposed number employees; 4) proposed location of business; and 6) list of assets, liabilities, and possible investors;

5. Have procedures in place to properly document all of the activities of your marijuana related business; and

6. Have a monitoring and security system in place to prevent adverse public information and suspicious activity.

Generally, operate a marijuana related business like a normal business but keep in mind it is subject to unique legal requirements and rules which require your knowledge, understanding, and compliance.

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Say What?!?! ATF Re-Opens Comment Period for ATF-4473

In an extremely unusual turn of event, yesterday, the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”) re-opened its comment period relative to its proposed changes to the ATF-4473 form, to provide an additional 30 days for comments.

Our readers probably remember our April blog entitled ATF Soliciting Comments on Proposed Revisions to the Firearms Transaction Record “4473”, where we alerted the Firearms Industry about ATF’s intent (seemingly in violation of the Administrative Procedures Act) to address, among other things, medical marijuana users.

Our friends at Cannabis Industry Law Group (“CILG”), a division of Civil Rights Defense Firm, P.C.,  filed a Comment in opposition to ATF’s proposed changes and pointing out that 27 C.F.R. 478.11 already acknowledges that the use of physician prescribed controlled substances does not result in a prohibition and that ATF is the incorrect federal administrative agency for determinations of prohibition under 18 U.S.C. 922(g). For those unaware, CILG’s stated purpose is to “protect, defend and assert the legal rights of businesses, professionals and individuals to operate lawful cannabis-related businesses and professions and to use cannabis medication without discrimination.”

Firearms Industry Consulting Group® (“FICG®”), a division of Prince Law Offices, P.C., also filed a Comment in opposition to ATF’s proposed changes, where we raised numerous issues, including that ATF cannot redefine a “fugitive from justice” in these proceedings and issues relating to the certification statement. FICG® also requested that ATF revise the 4473 Form, consistent with the ATF Form 1 and Form 4, whereby it would include fields for fictitious entities, instead of requiring FFLs to draft and attach a fictitious entity form as required by 27 C.F.R. 478.124(g), for which, ATF provides no sample form.

At the present time, it is unknown why ATF has elected to re-open the comment period and to provide an additional 30 days – unless it was at the behest of the National Firearms Act Trade and Collectors Association (“NFACTA”), which has become notorious in past several years in petitioning ATF to take regulatory action contrary to the Firearm Industry’s interest. Nevertheless, if you did not have opportunity to file a comment, we highly recommend that you do or at least file a statement supporting FICG’s and CILG’s Comments. If we learn anything more about ATF’s (nefarious) motives in re-opening the comment period, we will be sure to let our readers know.

If you are a Firearm Industry member and would like representation in drafting comments to federal rulemaking proposals, including in relation to the 4473, contact us at 888-313-0416 or and we’ll be happy to discuss how we can ensure that your issues and concerns are considered in the rulemaking process.

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PA Supreme Court Affirms that Castle Doctrine is an Inherent Right

In a decision issued in Commonwealth v Childs on July 19, 2016 relating to the retroactive effect of Pennsylvania’s Stand Your Ground law (HB40 of 2011), the Pennsylvania Supreme Court acknowledged that the Castle Doctrine is an inherent right, dating back to biblical times, and that the Right existed in common law, long before being codified as part of our Stand Your Ground law in 2011.

Specifically, the Court declared:

When this Court addressed the castle doctrine in 1952, we explained that it “has always been recognized as the law in this State” and that the castle doctrine’s acceptance is “universal.” Commonwealth v. Fraser, 85 A.2d 126,128 (Pa. 1952).

The Court went on to explain:

Although the castle doctrine has existed at common law in this Commonwealth essentially since its founding, it was not codified in Pennsylvania until 1972, with the enactment of 18 Pa.C.S.A. § 505. In enacting section 505, the legislature sought “to codify existing case law pertaining to ‘self-defense’ and to cover in a single rule the law governing the use of defensive force.” 18 Pa.C.S.A. § 505 (amended June 28, 2011).

I must admit that it is refreshing to see such a decision which was not decided along party lines and acknowledges inalienable rights.

While the Court did not address whether Stand Your Ground is an inalienable Right, I was previously published in Volume 27, Issue 1, of the St. Thomas Law Review on The Inalienable Right to Stand Your Ground. Hopefully, in the future, we’ll see the Pennsylvania Supreme Court acknowledge that Stand Your Ground is an inalienable Right.


Filed under Firearms Law, Pennsylvania Firearms Law

Governor Wolf passes new law allowing research into industrial hemp.

Pennsylvania has taken another step forward in legitimizing the production of Cannabis. In this instance, it’s industrial hemp. On July 19, 2016, Governor Tom Wolf signed a new law providing for industrial hemp research. House Bill No. 967, now Act 92 was approved by Governor Wolf and amends Title 3 (Agriculture) of the Pennsylvania Consolidated Statutes, providing for industrial hemp research; imposing powers and duties on the Department of Agriculture and the Legislative Reference Bureau; and imposing civil and criminal penalties.

Industrial hemp is a variety of the Cannabis sativa plant species grown specifically for the industrial uses of its derived products. Industrial hemp was one of the first plants to be spun into usable fiber 10,000 years ago. Industrial hemp can be refined into a variety of commercial items including paper, textiles, clothing, biodegradable plastics, paint, insulation, biofuel, food, and animal feed.

Industrial hemp grows in a variety of climates and soil types, is naturally resistant to most pests, and grows very tightly spaced allowing it to outcompete most weeds. Industrial hemp is a natural substitute for cotton and wood fiber.

Under the law “Industrial hemp” is define as “the plant Cannabis sativa L and any part of the plant, whether growing or not, with a delta-9 24 tetrahydrocannabinol (THC) concentration of not more than 0.3% on a 25 dry-weight basis. Both recreational marijuana and industrial hemp are derived from the Cannabis sativa plant but they are distinct strains with unique biochemical compositions and uses. Industrial hemp has lower concentrations of THC and higher concentrations of cannabidiol (CBD), which decreases or eliminates its psychoactive effects. Industrial hemp has absolutely no value as a recreational drug.

“William Penn himself was an advocate of hemp growth, and in 1683, one of the first laws passed by the General Assembly in Pennsylvania was a law to encourage every farmer to grow hemp,” said Governor Wolf.

The new law authorizes industrial hemp to be grown or cultivated by the Department of Agriculture or an institution of higher education for the purposes of research conducted under an agricultural pilot program. The law authorizes the Department and/or institutions of higher education to begin cultivating hemp for research purposes, either by themselves or via independent contractors.

The new law is another step forward in creating new business opportunities for cannabis growers in Pennsylvania.

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DDTC Issues Guidance on ITAR Registration


On Friday July 22, 2016, the Directorate of Defense Trade Controls (“DDTC”) released a letter issuing guidance on the requirement of firearm manufacturers and gunsmiths to register with DDTC under the International Traffic in Arms Regulations (“ITAR”).

There has been constant discussion on the internet regarding whether an individual who has obtained a federal firearms license (“FFL”) is required to register for ITAR. Some of the Industry Operations Inspectors (“IOIs”) have taken it upon themselves to inform Type 07 FFLs that they must register for ITAR without any guidance from DDTC. There are certain instances where an FFL does not need to register for ITAR.

22 C.F.R. § 122.1 discusses the registration requirements for ITAR.

(a) Any person who engages in the United States in the business of manufacturing or exporting or temporarily importing defense articles, or furnishing defense services, is required to register with the Directorate of Defense Trade Controls under § 122.2. For the purpose of this subchapter, engaging in such a business requires only one occasion of manufacturing or exporting or temporarily importing a defense article or furnishing a defense service. A manufacturer who does not engage in exporting must nevertheless register.

The crux of the registration for ITAR (for most FFLs) lies within the definition of manufacturing. DDTC has not promulgated a definition for manufacturing which is the source of a lot of confusion and misinformation.

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DDTC’s letter states that individuals who “do not actually manufacture ITAR-controlled firearms (including by engaging in the activities described below, which DDTC has found in specific cases to constitute manufacturing) need not register with DDTC – even if they have an FFL from ATF.” This is because the requirements for obtaining an FFL are separate and distinct of the requirements for registering under ITAR.

As DDTC does not have a definition for the term “manufacturing”, it relies on “the ordinary, contemporary, common meaning of the term.”

DDTC’s guidance is only in relation to “domestic (U.S.) activities involving firearms (as defined in Category I(j)(1) of the United States Munitions List (USML) (22 CFR § 121.1)) and related ammunition that are .50 caliber (12.7 mm) or smaller – i.e., firearms in Category I, paragraphs (a) and (b), related items in paragraphs (e)-(h), and ammunition in Category III(a) for those firearms. Activities involving items elsewhere on the USML, including Category I, paragraphs (c) and (d), are not included in the scope of this guidance.”

DDTC has found that the following instances do not require registration.

a)  Occasional assembly of firearm parts and kits that do not require cutting, drilling, or machining;

b)  Firearm repairs involving one-for-one drop-in replacement parts that do not require any cutting, drilling, or machining for installation;

c)  Repairs involving replacement parts that do not improve the accuracy, caliber, or other aspects of firearm operation;

d)  Hydrographic paint or Cerakote application or bluing treatments for a firearm;

e)  Attachment of accessories to a completed firearm without drilling, cutting, or machining—such as attaching a scope, sling, or light to existing mounts or hooks, or attaching a flash suppressor, sound suppressor, muzzle brake, or similar item to a pre- threaded muzzle;

f)  Cosmetic additions and alterations (including engraving) that do not improve the accuracy, caliber, or other aspects of firearm operation beyond its original capabilities;

g)  Machining new dovetails or drilling and tapping new holes for the installation of sights which do not improve the accuracy or operation of the firearm beyond its original capabilities; and

h)  Manual loading or reloading of ammunition of .50 caliber or smaller.

The guidance goes on to clarify that “[a]ctivities limited to the domestic sale or resale of firearms, the occasional assembly of firearms without drilling, cutting, or machining, and/or specific gunsmithing activities that do not improve the accuracy, caliber, or operations of the firearm beyond its original capabilities (as described above) are not manufacturing within the context of the ITAR. If you are not manufacturing, exporting, temporarily importing or brokering defense articles or services, you are not required to register with DDTC.”

Which then begs the question, what does DDTC require the registration under ITAR for?

DDTC states that if you are engaged in any of the following you are required to register for under ITAR.

a)  Use of any special tooling or equipment upgrading in order to improve the capability of assembled or repaired firearms;

b)  Modifications to a firearm that change round capacity;

c)  The production of firearm parts (including, but not limited to, barrels, stocks, cylinders, breech mechanisms, triggers, silencers, or suppressors);

d)  The systemized production of ammunition, including the automated loading or reloading of ammunition;

e)  The machining or cutting of firearms, e.g., threading of muzzles or muzzle brake installation requiring machining, that results in an enhanced capability;

f)  Rechambering firearms through machining, cutting, or drilling;

g)  Chambering, cutting, or threading barrel blanks; and

h)  Blueprinting firearms by machining the barrel.

Of particular interest is the guidance that now offering barrel threading services will result in an FFL being required to register for ITAR. This will certainly put a financial burden on the smaller gunsmiths who are threading barrels as registration for ITAR is $2,250 a year.


Additionally, the penalties for violating ITAR are significant and able to be applied retroactively. Penalties for each violation of ITAR can result in up to $1,000,000 in fines and 20 years imprisonment. 22 U.S.C. § 2778(c)

DDTC does allow for voluntary disclosures of violations.

“The Department may consider a voluntary disclosure as a mitigating factor in determining the administrative penalties, if any, that should be imposed. Failure to report a violation may result in circumstances detrimental to U.S. national security and foreign policy interests, and will be an adverse factor in determining the appropriate disposition of such violations.” 22 C.F.R. § 127.12.

Lastly, DDTC does have a mechanism for an individual or company to inquire whether the activity they are engaging in requires registration under ITAR. This is an area that myself and Attorney Joshua Prince have experience in. It is certainly advised that a determination from DDTC is sought prior to engaging in the activity (if it is unknown or questionable whether it would require registration under ITAR) in order to mitigate any potential penalties.


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Filed under ATF, Firearms Law, Uncategorized

Private room rentals under 30 days are subject to PA’s 6% Hotel Occupancy Tax

Any Pennsylvania home owner who rents out an extra room or rooms on a short term basis either privately or through an online site like Airbnb is subject to Pennsylvania’s 6 percent Hotel Occupancy Tax. (See 61 Pa. Code § 38 et seq.). Under Pennsylvania law, the hotel occupancy tax applies when renting out a property – including a house, room, or apartment – to a guest for periods of less than 30 days. In addition to hotels, the tax applies to rentals of rooms, apartments and houses arranged through online or third-party brokers such as Airbnb. The tax rate is the same as the sales tax, 6 percent. The Pennsylvania Department Of Revenue will also collect an addition 1 percent local hotel tax in Allegheny and Philadelphia counties which is remitted to those counties. Some counties impose an additional tax collected by the county treasurer.

Some home sharing or third party brokers like Airbnb voluntarily collect and remit the Pennsylvania hotel occupancy tax on behalf of hosts. In June of this year, Airbnb agreed to collect Pennsylvania’s 6 percent hotel occupancy tax and remit proceeds to the state, beginning July 1. “This agreement allows the state of Pennsylvania to harness the economic impact of home sharing while also making it easier for Airbnb hosts – the vast majority of whom are middle-class people sharing their own home – to comply with state tax laws,” said Josh Meltzer, Airbnb regional director of public policy.

Last July, a law took effect in Philadelphia legalizing short-term rentals through Airbnb and other entities, such as Craigslist. As of July 15, the City began collecting an 8.5 percent occupancy tax, paid by renters staying in homes. The City generated additional tax revenue of $1.2 million through June of 2016.  The State believes that the 6 percent tax will add at least another million tax revenue annually.

The hotel industry pushed for the tax measure as an equalizer with the short term room renters. Taxpayers should check with the company to determine who is responsible for collecting and remitting the state and/or local tax.

If the individual tax payer pays the tax he must register to collect the tax before collecting the tax. Taxpayers must register with the Department of Revenue for a Sales, Use, and Hotel Occupancy Tax License using Form PA-100. For assistance completing the form, call 717-787-1064. After registering and obtaining a Sales, Use, and Hotel Occupancy Tax license and account number, taxpayers must file returns and remit the tax electronically using e-TIDES, the department’s online system for business taxes.

Hotel occupancy taxes are separate from income earned from renting short-term lodging. Income from short term lodging should be reported on the Pennsylvania Personal Income Tax Schedule C – Profit or Loss from Business or Profession. Income from property rentals for 30 days or more which are not subject to the hotel occupancy tax should be reported using Schedules E, Rents and Royalty Income (Loss).

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