As our Los Angeles marijuana lawyers understand it, auto insurance premiums in states that adopted legal medical cannabis fell by an average of $22 annually after legalization. The research was published in the journal Health Economics, which looked at insurance premium information from 2014 to 2019. Authors of the study speculate that it may have something to do with people opting for cannabis over alcohol, thereby reducing instances of drunk driving. It’s not that driving while under the influence of cannabis is any safer, but at least anecdotally, those under the influence of cannabis are less likely to get behind the wheel in the first place, compared to those under the influence of alcohol.

While a reduction of $22 in insurance premiums over the course of a year may not seem all that significant, one must consider that amplified by each individual on the road. And if the reason for the decline is that there is link between legal cannabis and road safety that in turn leads to fewer drunk driving crashes (and associated costs), that starts to look much more significant.

The researchers determined that legalization of medical marijuana collectively results in $1.5 billion in lower auto insurance premiums. If all states were to legalize marijuana, researchers surmise, that could result in an additional $900 million in reduced premiums. The combined total impact of would be $2.4 billion less we’d all be paying for car insurance if medical marijuana was accessible across the U.S.

What’s more, given that the amount we pay for auto insurance is directly tied to how much property is damaged and how severely people are injured in crashes, the lowered premiums are indicative of safer roadways overall when medical marijuana is made legal.

Of course, as our Los Angeles marijuana lawyers are aware, this isn’t the first study to debunk the myth that legalized marijuana makes roads less safe. But what is unique about it is that it highlights car insurance trends. Most previous analysis focused on the correlation between road safety based on traffic deaths and state marijuana reforms. But the latter type of study overlooks the fact that traffic deaths only account for a small number of overall traffic crashes (only about .5 percent). Insurance premiums, however, provide us with a more complete picture of how marijuana laws impact actual day-to-day safety on our roads.

The key takeaway, according to the co-author of the study, was that even though driving high is very dangerous, medical cannabis makes roads safer by reducing the prevalence of drunk driving. Beyond the substitution effect theory, analysis shows that people who use cannabis in place of other drugs are more likely to either stay home or go to house parties, rather than gather at bars that will require them to drive home after a certain point.

Another analysis found that states with legalized marijuana also actually have fewer instances of people driving under the influence of THC than in states where marijuana criminalization has remained intact.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

Medical Marijuana Legalization Linked To Reduced Drunk Driving And Safer Roads, Study On Auto Insurance Data Suggests, June 20, 2022, By Kyle Jaeger, Marijuana Moment

Although our Los Angeles marijuana business lawyers know this news might cause wariness among those in the pot industry, it’s worth pointing out that such data is already gleaned from businesses in other industries, such as convenience stores, car dealers, liquor stores, and casinos. It may in fact by a sign that the federal government is starting (albeit at a snail’s pace) to recognize the state-legal cannabis market as legitimate.

The Treasury’s Office of the Comptroller of the Currency posted its notice in the Federal Register indicating that it plans to keep tabs on cannabis companies as part of its regular yearly filings required of banks. In addition to marijuana businesses, other markets of emerging interest to federal financial regulators are ATM operators and crypto asset traders. The Money Laundering Risk system used by the OCC boosts the ability of federal investigators and banks to flag and investigate potential money laundering risks.

Public comment on these proposed changes is open through early August.

We don’t know exactly how information gleaned from those bank-submitted Risk Summary Forms are analyzed, but the notice indicates the data is used to help authorities better pinpoint those that “may pose heightened risk” of money laundering activities.

As of last September, it was reported there were more than 750 banks and credit unions actively serving cannabis company clients. That was an uptick of 7 percent since the previous quarter.

Within the last year, the U.S. Census Bureau also began gathering information on state government revenues generated from state-legal marijuana. Also, the U.S. Economic Classification Policy Committee issued a recommendation to include marijuana companies as an official designation within the North American Industry Classification System. This system helps the government keep tabs on market and employment information on industries throughout all of North America.

Why Money Laundering is a Concern in the Marijuana Industry

Historically, marijuana has been not only illegal, but considered incredibly dangerous. Despite the fact that many states have passed laws making cultivation, sale, and possession of the drug legal for medicinal and/or recreational uses, it remains, per federal law, a Schedule I narcotic – the classification with the tightest restrictions, indicating a powerfully-addictive substance with no medicinal value. The 2018 Farm Bill removed the sale of hemp and hemp-derived CBD products from the federal law.

Still, banks and other financial institutions are in a tight spot when it comes to accepting marijuana business clients because they’re regulated by federal law. That means they must navigate federal anti-money laundering statutes – knowing full-well they’re engaging in financial transactions involving proceeds generated from the sale of cannabis.

The Financial Crimes Enforcement Network has released specific guidance for financial institutions regarding the provision of services to both hemp business customers and marijuana business customers, but these are still technically in conflict with federal law. The FinCEN guidance doesn’t legalize such activities, and it doesn’t expressly rule out law enforcement action by federal banking regulators or criminal law enforcement agencies.

Still, following the FinCEN’s guidance is important for marijuana-related businesses to ensure their compliance with the Cole Memorandum principles, as well as applicable state laws. As our Los Angeles marijuana business lawyers can explain, doing so is likely to substantially reduce the odds you’re going to run up against federal enforcement action.

Guidance issued in 2014 by the U.S. Department of Justice indicated that prosecution of a financial institution under federal money-laundering laws might be appropriate if it were discovered a business to whom the institution provided banking services was violating the Cole Memo provisions, such as selling cannabis across state lines. Willful blindness to violation of state marijuana laws might also be grounds for federal prosecution of a bank, per the DOJ guidance. The DOJ puts the burden on the banks to effectively identify the nature/scope of their marijuana company customers’ activities and to implement continual monitoring to ensure there are no Cole Memo violations.

Ensuring you are fully in compliance with all state laws, the Cole Memo, and other relevant provisions of law, contract with an experienced marijuana business attorney.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

Cannabis Banking: Proceed with Caution, February 6, 2020, By James J. Black, marc-Alain Galeazzi, American Bar Association

More Blog Entries:

Feds to Return $1.1 Million in Marijuana Fund Seizures, May 14, 2022, Los Angeles Marijuana Lawyer Blog

Funds at issue belonged to Empyreal Logistics, an armored car company based in Pennsylvania that was targeted by local and federal task forces in San Bernardino County in November and December. As our Los Angeles marijuana business lawyers understand it, the cars were carrying cannabis business cash in conjunction with legal marijuana operations in California. A task force comprised of the Federal Bureau of Investigation (FBI), the Drug Enforcement Administration (DEA), and the San Bernardino County sheriff’s office resulted in confiscation of cash.

While the company was operating legally under state law, the problem is the conflict with existing federal forfeiture laws, which open the door to target even compliant businesses. This is not new. Civil forfeiture law has enabled law enforcement agencies to seize millions from legal business proceeds – with threats to keep it. That’s precisely what happened here – and Empyreal Logistics sued.

With the funds’ return, the lawsuit against the federal agencies will be dropped – though this fails to set a hard-and-fast precedent for future cases. Unless/until federal marijuana laws change, legitimate marijuana businesses will continue to face the potential threat of civil forfeiture. Without black-and-white legal protections at the federal level, companies remain especially vulnerable to the whims of various administrations.

Further, although the case against the feds has been dropped, claims against the San Bernardino Sheriff’s Department remain open. A spokesman for that agency said the federal settlement is under review by its office.

It’s worth noting that this particular sheriff’s office leads the Inland Regional Narcotics Enforcement Team, which allows local agencies to partner with federal agencies in civil forfeiture cases – and collect up to 80 percent of the proceeds from those civil forfeiture cases in their jurisdiction. That means the sheriff’s office would have been entitled to as much as $800,000 from these two busts. The motivation not to immediately acquiesce seems fairly clear – despite the fact that both medicinal and recreational marijuana are legal in California.

At the federal level, marijuana remains classified as a Schedule I drug – alongside heroin and cocaine. The classification is supposed to be reserved for drugs that are both highly addictive and harmful with no medicinal value. Marijuana clearly doesn’t fit, but federal lawmakers have yet to agree on a plan to reschedule.

Beyond the California seizures, there is another pending case involving the same company in Kansas, where a driver was stopped while en route to Colorado, transporting cash from a medical marijuana dispensary in Missouri.

As Los Angeles marijuana business lawyers, we recognize delivery companies are especially vulnerable to law enforcement action. It is imperative for any company transporting cannabis, CBD, hemp, or related cash and products to be working closely with a legal advisor, ensuring every step is legally compliant, substantially narrowing the window of opportunity for adverse legal action that could be financially detrimental to your operations.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

The Feds Will Return More Than $1 Million in Marijuana Money That California Cops Stole From Armored Cars, April 14, 2022, By Jason Sullum, Reason.com

This made good sense for several reasons:

• Most marijuana convictions were for non-violent, low-level offenses.
• Minorities and the economically disadvantaged were greatly disproportionately impacted by marijuana laws.
• To right the injustice of people now making good money (it’s a multi-billion dollar industry in California) for the same activity that previously sent others to prison.

But despite this and a 2018 law passed with the intention of speeding up the process for tens of thousands of Californians still stuck grappling with felony and misdemeanor marijuana convictions on their record, our Riverside marijuana lawyers know that the process has been slow-going. This fact was confirmed by a recent Los Angeles Times investigation.

It’s worth noting that the process was never going to be fully automatic. But at this point, there are still an estimated 34,000 people in the state with marijuana crimes on their record that haven’t been processed for the clean slate they deserve. There were twice that many before last August, which is when the Times started raising questions about why it was taking so long (presumably lighting a fire under officials to prioritize the effort).

It appears the primary bottleneck in the process that involves 58 prosecutors’ offices and the state Department of Justice is the courts. Some counties have been working with a fair amount of diligence to clear records for people in their communities. In total, 117,000 cases have been processed in California. Others, however, have been incredibly slow. For example, in San Bernardino and Riverside Counties, not a single case has been processed. Others, like Kern County, are only at 18 percent.

AB 1793 was supposed to help clear prior marijuana convictions en masse, allowing counties to bypass the need to take every case to court via individual petition. The goal was to deliver these rights to people without making them jump through a dozen hoops to obtain relief. But while most district attorneys complied with the deadline for submitting the estimated 192,000 eligible cases to the courts, the courts weren’t given a deadline to process them. That’s where most all of these cases are stuck – despite the fact that courts received nearly $17 million from the state to get the job done.

Officials with the courts pin the blame on COVID, staff shortages, case management systems that are outdated, and older records that necessitate manual reviews. But it’s not difficult to see delays as a continuing pattern of disparate justice for people of color. In San Berndardino County alone, some 5,400 cannabis convictions are pending. In San Bernardino, another 21,000.

A clean slate is more than simply a self-esteem issue. Criminal convictions for cannabis offenses – particularly at the felony level – can result in individuals being turned down for jobs, certain types of licensure, housing, higher education, and other opportunities. In at least a couple of cases, individuals were jailed and falsely accused of felonies because their marijuana convictions at the local or state level hadn’t been updated.

For those who still have outstanding criminal records, working with an experienced marijuana lawyer to petition the court to expedite the processing of your case may be advantageous for those who need their case to be cleared faster (usually for work, school, or housing).

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, labs, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

California was supposed to clear cannabis convictions. Tens of thousands are still languishing, Jan. 13, 2022, By Kiera Feldman, The Los Angeles Times

Existing statute classifies marijuana as a schedule I narcotic, dangerously addictive like heroin and with no medicinal value. This classification is clearly arcane, but it doesn’t negate the fact that people can still face substantial criminal penalties for federal cannabis violations. Unless and until marijuana is legalized at the federal level, it is imperative to take these seriously and work with a long-time cannabis criminal defense lawyer.

Consider the case of a 26-year-old Maryland man who has been jailed in a maximum security federal prison for close to a year, awaiting trial on federal marijuana conspiracy charge, which is something of a gray area of the law as state laws grow more lenient. He and nearly a dozen others are accused of transporting more than 1,000 kilograms of cannabis from California to Maryland over the course of two years. If convicted, he faces a maximum sentence of 15 years.

According to Insider, his story started out similar to many California cannabis entrepreneurs, but it was the alleged sales across state lines that found him on the wrong side of the law. A high school dropout, he was reportedly just looking for a way to make a living. After moving to California several years ago, he joined the legal marijuana cultivation industry. According to his criminal defense lawyer, he was trying to launch a marijuana company in the golden state, where he was growing cannabis. He knew some of the others indicted with him, but not all of them. When he learned of the charges, he fled to Guatemala, though he ultimately returned and was taken in by federal agents to face the pending charges.

While 35 states allow medicinal marijuana and 15 – plus Washington, D.C., – allow it for adult recreational use, failure to deschedule the drug at the federal level has led to cases like this: Individuals who are facing stark prison sentences for the very same actions through which others are profiting by the billions. Although most cannabis-related charges stem from state-level violations, penalties for federal violations are often much stiffer. A 15-year sentence is harsher than what some face or receive for rape or murder. This is part of the reason it’s imperative to continue fighting for federal descheduling.

The defendant’s attorney had tried to argue the prosecution was unconstitutional on the basis his client was denied equal rights under the law, but the motion was denied. This is despite the fact that a marijuana business lawyer could be on the phone one minute with a client facing felony criminal charges for marijuana sales, and the next with a different client preparing to invest millions expanding their cannabis corporation. We’re talking about virtually the same actions, yet with two staunchly different outcomes.

Although the defendant in this case is White, we’re also aware of the fact that prisons are full of Black and Brown Americans facing state-level charges for marijuana possession. Minorities account for approximately half of those arrested for violation of marijuana laws, despite being less than a third of the total population. Those with low incomes also tend to be hit hard.

Regulations are one thing. As cannabis attorneys, we fully recognize the necessity of setting and abiding certain rules and protocols with regard to cannabis cultivation, sales and usage. However, a person who fails to abide all the rules to the letter when trying to launch a business shouldn’t be facing a 15-year prison sentence. A permit violation instead seems more appropriate.

Most Americans seem to agree. The majority support:

• Expunging records for those who have already served time for possession or sales of marijuana.
• Legalization of marijuana in some form (91 percent).
• Legalization for both recreational and medicinal use (60 percent).

There is some recognition of this fact in policy changes. For example, there are increasingly policies that block previous offenders from the burgeoning bud industry and instead open the doors to them.

If you are accused of violating state or federal marijuana laws, our Los Angeles cannabis criminal defense lawyers can help.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

A 26-year-old who wanted to join the legal cannabis industry now sits in prison. Drug policy experts say he’s caught in a ‘gray area’ only federal legalization can clear up. June 4, 2021, By Haven Orecchio-Egresitz, Insider.com

Of course, lack of harmony between the state and federal positions on marijuana is nothing new. But it’s important for marijuana businesses in cities close to international borders to use extra caution, and consult with a California cannabis lawyer for insight on how best to protect their investment, operation and employees from legal headaches. As The Los Angeles Times reported recently, those in Imperial and San Diego counties especially need to beware due to the closeness of the U.S.-Mexico border. The U.S. Boarder Patrol has the authority to establish checkpoints that stretch as far north as 100 miles past the international line.

In one reason case, a small van transporting about $15,000 of marijuana wholesale – locally grown, certified and state-legal – from Imperial County to a state-licensed dispensary about three hours north. However, it was stopped at a Border Patrol checkpoint on the highway – 20 miles from the actual U.S.-Mexico boarder. The distributor reports federal agents seized the entire load.

It’s incidents like this that have prompted some marijuana dispensaries, delivery operators and others to avoid these areas – especially Imperial County. That’s been problematic for several operators in that region.

For example, one of the few state-certified testing labs in Southern California revealed it no longer makes testing trips to cannabis farms and dispensaries in Imperial County. The risk is just too great. In turn, that makes it tough for legal operators to do business there, but some say they’ve been left with little choice. As the lab’s CEO put it: “They’ve trapped a corner of the state.”

At any given time, there could be up to nine checkpoints within 65 miles north of the U.S.-California border. Primarily, these exist along I-5 North, I-8 West and I-15 North, with some on more rural stretches.

As far as federal agents are concerned, setting up these checkpoints allows for an additional measure to halt illegal immigration of people coming in through Mexico who may have slipped passed the border without detection.

It is true that the region is a hot spot for drug trafficking across the border. The checkpoints are viewed as the final defense before those substances reach larger distribution hubs in other areas. Big drug busts involving cocaine, heroine, methamphetamine and fentanyl are reported with some regularity. But there is still a question of how much authority federal agents have when it comes to accosting citizens of the U.S., particularly those who routinely cross the border for school, work or errands. Nonetheless, courts have ruled time and again in the government’s favor. The lines have gotten blurrier though since California legalized marijuana for recreational use four years ago (though sales didn’t ramp up until two years ago). The U.S. government’s position is that marijuana (containing more than 0.3 percent THC concentration) is still illegal, classified as a Schedule I narcotic.

Therefore, it remains subject to federal forfeiture if a load happens to cross a U.S. border checkpoint – even one dozens of miles from the U.S. border. But that doesn’t mean it’s always seized. There are reports of substantial volumes of state-legal cannabis products being quietly ushered through these checkpoints. But there is no clear distinction between what’s legal and what isn’t. The state itself has a host of stringent rules for any company legally transporting marijuana. The product needs to be locked and secured, not visible from outside, protected by a security system and clearly packaged and labeled.

Distributors need to ensure their transport operators are licensed, permitted and have all their documentation and shipping manifests easily accessible when they approach one of these checkpoints. But then, it’s up to the discretion of federal agents. Some cannabis companies say their drivers aren’t hassled much when they pass through the checkpoints, which sometimes aren’t even open. But because much is left up to the agents, it’s still possible that a load with every T crossed and I dotted can be seized.

That means state-legal marijuana businesses are ultimately taking a gamble at every checkpoint they approach. Consult with an experienced Los Angeles marijuana business lawyer for information about the best ways to protect your company and your people and to be prepared in the event you are ensnared in a legal issue. The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734. Additional Resources: Border Patrol checkpoints are a risky reality for California cannabis companies, July 4, 2020, The Los Angeles Times

The suits allege that Case Mandel and his Cannadips business operations, used fictional projections — inflated by as much as 2,000 percent — to deliberately mislead lenders into investing in his cannabis companies, then Mandel supposedly held the funds without ever intending to repay them.

Lawsuits, Lawsuits, Lawsuits Of the three lawsuits, the first was filed in the district court of Clark County, Nevada. While the second was filed in Humboldt County, California, against Mandel, Trinidad Consulting, and Trinidad Management, LLC, which has been trading as Cannadips. Then a federal lawsuit was filed in the U.S. District Court for Nevada this month, and names the same targets as those listed in the California suit.

Throughout the lawsuits, Mandel is presented as the alleged mastermind behind a dishonest ploy to attract investments and loans via deliberately misleading tactics and documentation.

When our Los Angeles marijuana business attorneys reviewed the federal lawsuit, they quickly saw it mirrored the suits already filed in California and Nevada state courts. All three gave detail on the extent someone seemingly above board appears to have gone, in order to manipulate investors, partners and lenders for personal financial gain.

The State Lawsuit The lawsuit presented in state court alleges Mandel was desperate to raise money, and he began his fraudulent activity in July 2018. Initially, Mandel borrowed $500,000, then another $500,000 in 2019. Next, when claiming more money was needed for marketing to attract sufficient funding to repay the large loan, Mandel borrowed a further $200,000, bringing the grand total to $1.2 million. Of which, the lawsuit alleges none has been paid back as yet.

Federal Legal Action The federal legal action is consistent in that it centers around Case Mandel, a well-known cannabis entrepreneur in the marijuana industry, and various businesses operated by Mandel under the trading name, Cannadips. The charges accuse Mandel of obtaining $1.2 million from investors by way of fraud, unjust enrichment, breach of contract and blatant misrepresentation.

Plaintiffs — Aether Gardens and Solace Holdings LLLP, together with Telloni Holdings Limited, established in the British Virgin Islands and now located in London — claim they were tricked with business numbers inflated by some 2000 percent, to loan Mandel $1.2 million to fund a cannabidiol (CBD) business.

The federal complaint notes a series of blatant misrepresentations made by Mandel, including the deployment of make-believe projections, intended to lure Solace and affiliates to enter deals that Mandel had no intention of fulfilling.

Implications Amid California’s budding cannabis industry, suits of this kind reveal a darker side to quickly changing industries. Claims of fraud, deception and misrepresentation serve as reminders to business people of all sorts, and point to the importance of doing one’s own due diligence, digging a little deeper into numbers, double checking with impartial sources and really getting a good sense check on the state of affairs before entering into investment deals of any kind.

Sadly, that just makes securing capital from investors and lenders that much more difficult for the many honest, hardworking and law abiding businesses operating within the cannabis industry. The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734. Additional Resources: Solace Holdings LLLC vs. Case Mandel (Clark County, Nevada) Telloni Holdings Limited vs. Case Mandel (Humboldt County, California) Solace Holdings LLLC, Aether Gardens vs. Case Mandel (U.S. District Court for Nevada)

During the raids, California Police seized $1.5 billion worth of illegally grown marijuana. Under California’s “Campaign Against Marijuana Planting” (CAMP) activity, the operations lead authorities to seize and destroy 953,459 plants grown at 345 different cannabis grow sites throughout Southern, Central and Northern California. The November 4 raids also saw 168 weapons confiscated by police.

By comparison, this most recent clampdown resulted in almost three times as many arrests than did the CAMP raids of 2018. At that time, 52 people were arrested and 614,267 illegally grown marijuana plants were destroyed. Similarly, way back in 2009, agents also made big inroads when they seized 4.5 million illegally grown marijuana plants.

If you need legal advice for illegal growing or possession of marijuana, our Orange County cannabis criminal defense lawyers are here for you.

Protecting the Community and the Environment When speaking about the success of this CAMP activity, Attorney General Xavier Becerra noted that removing illegal growers from the landscape will help protect local wildlife, waterways and the unsuspecting public from the effects of exposure to multiple hazardous chemicals.

“Illegal cannabis growers are devastating our communities. Criminals who disregard life, poison our waters, damage our public lands, and weaponized the illegal cannabis black market will be brought to justice,” Becerra said.

An official statement from the California Attorney General’s Office noted that the targeted sites were filled with trash and debris, prohibited pesticides (including aluminum phosphate, methyl parathion, carbonfuran, and other illegal fertilizers), and were at fault for releasing large amounts of these hazardous substances into California’s waterways.

Raids Sending a Message The California Department of Justice spearhead these CAMP raids, and teams involved issued more than 120 search warrants across 35 different Californian counties. Agents who brought production at scores of illegal cannabis growth sites to a halt have helped to reduce the threat of harmful chemicals and dangerous criminal activity, to which the public would otherwise have been exposed.

This kind of law enforcement activity parlays nicely with other state attempts to curtail the illicit marijuana market, such as Assembly Bill 97, which permits $30,000 per-day-fines for illegal cannabis business operations. The bill was intended to encourage black market businesses to apply for state commercial cannabis licenses, and takes a tougher stance than the smaller illegal business activity fines which business owners have basically ignored thus far.

Legal Implications At this point, industry insiders are happy to see law enforcement branches taking action against illegal cannabis businesses, who seem to have been operating relatively uninterrupted for a very long time. Raids such as these are especially satisfying to marijuana business owners who’ve paid hundreds of thousands of dollars to ensure their operations are legitimate and continuing to meet state requirements.

Hopefully, sustained law enforcement activity of this kind will also encourage other illicit businesses to convert their operations to legal outfits as well. It seems consistent and firm reminders may be required to serve as ongoing persuaders, at least for now. About Cannabis Law Group The Los Angeles CANNABIS LAW Group represents growers dispensaries, ancillary companies, patients and those facing criminal marijuana charges. Call us at 949-375-4734. Additional Resources: Assembly Bill 97

One of the main problems is the lack of a reliable quantifiable standard to gauge intoxication. With alcohol, adults over 21 in all 50 states are considered impaired by alcohol if their blood concentration of the substance is 0.08 percent or higher. This is called the per se limit.

As our marijuana DUI defense lawyers can explain, there is no per se limit for marijuana in California or in most other states, whether the drug is legal or not. Even in states where there is a per se limit, such evidence can be vexing for prosecutors because it’s undeniably inaccurate when it comes to actually proving intoxication. Unlike alcohol, which dissipates very quickly from the bloodstream, THC (the intoxicating element in marijuana) is processed much slower by the body. A person may have used the drug the day before – or use it regularly – and no longer be intoxicated, but still meet the per se threshold.

The other issue is that because marijuana is legal, the mere smell of it is no longer enough to form the basis of reasonable suspicion necessary to conduct a search of a vehicle and/or person.

Bruce Landsberg, vice chairman of the National Transportation Safety Board, stated these aspects of marijuana legalization has raised the concern that our roads may no longer be as safe. The fact is, he said, we understand less about cannabis’ intoxicating properties – and how to accurately measure it biologically – than we do alcohol. This has resulted in practical concerns in terms of enforcement.

Enforcing California Marijuana DUI Law

In California, Vehicle Code 23152f prohibits anyone from driving under the influence of drugs. Proving it in court, however, can be another matter altogether.

Police agencies have expressed worry that absent any quantifiable standard to measure cannabis intoxication, those arrested for driving under the influence of it will be rejected by the courts. In fact, as our Los Angeles marijuana DUI lawyers can explain, this has happened in a number of cases throughout the country where police officers weren’t experts on assessing the effects of marijuana use.

There are ways to ascertain whether a motorist is impaired by marijuana, including Standardized Field Sobriety Testing. Additionally, officers can be trained as Drug Recognition Experts. But both of these are non-chemical and, in truth, somewhat subjective and open to interpretation in court. Plus, DRE training can be costly and not every agency can afford it. Ultimately, the science has not been developed yet to determine what THC level in a person’s body can definitively tell us whether someone is intoxicated – and we may never have it, given that one’s body chemistry and personal tolerance vary so significantly.

Even if an accurate per se limit could be identified, the reality is there is no accurate roadside test to detect it. There are some devices on the market, but they have been successfully challenged in court cases. A California company does plan to release a THC-detecting breathalyzer on the market sometime next year, but again, the presence of the drug alone isn’t proof positive of impairment.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

Feds worry about catching those driving while high in states that legalize weed, By Jonathan D. Salant, NJ.com

But that certainty stemmed from the fact she could find no other obvious cause for why a woman with healthy organs, no alcohol or other drugs in her system and no obvious illness would have been discovered dead on her couch.

Can THC Really Result in a Fatal Overdose?

Probably not. Although this may have been a tough case to crack, the reality is Americans use billions of cannabis products annually. This has been true for a long time, not just since legalization came about, and this is the very first time an overdose has been formally attributed to cannabis – and skeptics abound.

The coroner noted that THC, the psychoactive ingredient in marijuana, can result in severe heart palpitations and anxiety, perhaps leading to heart failure, and it was present in 15 times the detectable amount in this patient. Although this might seem startling at first, the reality is marijuana in the bloodstream is not like alcohol; it passes slowly through the system and lingers, long after the effects. A regular user could have high levels of concentration in their blood, yet not even be “high.”

While our cannabis lawyers concede the circumstances are puzzling, a number of medical and scientific experts have expressed deep skepticism, especially given an asserted conclusion of 100 percent certainty when the report reflected circumstantial evidence and process of elimination AND there have been no recorded deaths attributable to marijuana overdose, per to the National Institute on Drug Abuse. A number of medical experts quoted in a series of media reports called the coroner’s conclusion “highly unlikely.”

This was despite the fact that decedent reportedly at 8.4 nanograms of THC in her system. Some states have arbitrarily considered that 0.5 nanograms is the point at which drivers can be considered “impaired,” but most doctors and scientists dispute this as, again, the concentration of THC in the blood is not an accurate measure of one’s impairment, based on the way it’s processed by the body.

One addiction professor and scientist told CBS News he was skeptical after reviewing the autopsy report, noting that 8.4 nanograms “is not very high.”

Cannabis Company Liability Concerns Raised Amid Overdose Death Report

Any credible report of a marijuana overdose death would have cannabis attorneys concerned for several reasons.

First and foremost is the health and safety of the public. Given the rarity of such an occurrence, it would be imperative to find out exactly what happened – and why. Marijuana is now such a widely-used substance in the U.S. (some 22 million reported using cannabis at least once the last 30 days), and it is true the drug’s potency is much more powerful than in decades’ past.

The other concern would be for our Los Angeles cannabis business clients who might be vulnerable to potential liability – civil and possibly even criminal – were there to be a spate of marijuana overdose deaths. This has never occurred before, but theoretically, potential claims might include:

• Product liability. If a product is inherently dangerous and consumers aren’t warned about it, product manufacturers – as well as everyone else in the supply chain – can potentially be held legally responsible under a theory of strict products liability. One might also be liable to pay damages for general negligence in supplying the drug.
• Criminal charges. Defendants across the country have been charged with felonies, some sentenced to decades behind bars, for supplying them with the drug that ultimately killed them. The U.S. Supreme Court’s 2014 ruling in Burrage v. U.S. held that prosecutors in these cases must meet the “but-for” standard of evidence. In other words, they must show that but-for that consumption of that particular drug, the person would not have died.

These outcomes are unlikely, to be honest, though as seasoned cannabis litigators, we know complacency isn’t an option.

Although coroners’ claims tend to be given greater weight than most, it seems fairly unlikely this one’s assertion would stand up in court.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734. Additional Resources:

Experts skeptical of Louisiana woman’s deadly weed overdose, June 6, 2019, New York Post

But what if a person is found with pot in prison?

That was the question before a California appellate court weighing the legality of five convictions for possession of marijuana while incarcerated by the state. The court ruled to overturn those criminal cannabis convictions.

Justices did note that while ingesting or smoking marijuana while in prison may still be considered a felony charge, possession of the drug isn’t spelled out in the plain language of pertinent statutes, California Health and Safety Code section 11362.45 and 11362.1, which expressly impose penalties for use, but not possession.

Cannabis defense attorneys need to stress this point also: Just because an inmate won’t be criminally penalized for possession of the drug behind bars doesn’t mean there won’t be consequences. That’s because even if an inmate won’t be criminally prosecuted for possession, it’s still barred by prison regulations. Same with cell phones and other contraband.

Still, this is important because while they may face additional penalties for violating the rules of the prisons, they won’t have years more tacked onto their sentences for felony charges.

History of Drug Possession in Prison Cases

In reaching its conclusion, the court took note of a similar argument weighted by the 4th Appellate District in 1993, when an inmate checking into a minimum security prison as required by the terms of his work-furlough probation program, smuggled drugs into the facility to assist with chronic back pain and a sleep disorder.

Defendant in that case had a prescription for the drugs, so he was lawfully allowed to have them. However, he didn’t have approval from the jail (whose authorities had deemed those medications too strong) and instead tried to smuggle the pills between his toes.

He was charged violations of California Penal Code sections 4573 as well as 4573.5, prohibition on individuals bringing any controlled substances into prison – regardless of whether they had a prescription from a medical doctor.

State prosecutors argued the jail had a right to bar persons from introducing any controlled substances into a penal institution – whether a person had a doctor’s prescription or not. The appeals court rejected that argument for purpose in favor of the plain language of the statute in question – which allowed holds that one may bring controlled substances into a prison if an exception applies – which in that case it did. The court rejected the Attorney General’s argument that this reasoning would bring “absurd results” because No. 1, inmates were already allowed to bring their prescriptions to the jail so long as they were prescribed (they just aren’t allowed to take them without corrections oversight) and No. 2, one can still face adverse consequences for violating prison rules – which are separate and distinct from criminal law.

If you are arrested in California and have marijuana/edibles/tinctures, etc. on your person, as long as you’re 21 and it’s within state-regulated amounts, by the appellate court’s ruling, you are probably within your legal right to have it on you in the facility. However, if you consume it there, you could still be facing big trouble.

Our cannabis criminal defense lawyers can help answer your questions, should you have them.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

People v. Raybon, June 11, 2019, California Court of Appeal, Third Appellate District

Legitimate cannabis companies say they’re being crippled, some already driven out, by the presence of unlicensed operations. Los Angeles marijuana business lawyers know these firms have an unfair market advantage over those abiding the law because they are burdened by the intense regulatory oversight developed by the California Cannabis Control Bureau.

It’s a process that involves rigorous (and expensive) pesticide testing. Cannabis dispensaries not weighed down by these requirements – among others – effectively carving out an unfair financial advantage over licensed dispensaries. Customers may opt to purchase the drug legally, especially for concentrates and edibles, which are bound by stringent labeling and packaging requirements. On the other hand, they can get it for a whole lot cheaper from an unlicensed dealer.

L.A. Warns: Patronize Illegal Pot Shops at Your Own Risk

The city attorney informed consumers who purchase from shops that aren’t legal that they do so at their own risk.

Cannabis pesticide testing regulations were rolled out in three phases last year, staring in January and ending in December.

• Phase I required cannabis testing of moisture content, solvents and processing chemicals, pesticides, fungus impurities, homogeneity testing of edibles and checks for dangerous bacterial impurities like Salmonella and E. coli.
• Phase II in July added to this list tests for residual solvents, chemicals and pesticides as well as tests for foreign materials.
• Phase III added tests for mycotoxins, terpenoids and heavy metals.

The city attorney noted the public should care just as much about the chemicals and pesticides in their pot as they do their romaine lettuce, as tainted cannabis can be just as dangerous.

Dispensaries, Property Owners, Business Operators and Real Estate Firms in Prosecutor’s Crosshairs

Los Angeles dispensary defense attorneys see this move by Los Angeles leaders as “warning shot.” Dispensaries that have been skating under the radar should seek legal advice even if you haven’t been targeted for the city’s action yet. We can work to help you develop an above-board business plan and paperwork to at least stand in line for a legal shop, or else help you tie up legal loose ends while closing or relocating.

At a press conference, the city attorney stated the dispensary named a defendant in the lawsuit did not have a state license and was selling marijuana products that were contaminated with a type of fungicide/plant growth regulator called paclobutrazol. In chronic toxicity studies by the California Department of Environmental Protection, the chemical was found to be dangerous to humans, and is thus barred by the state’s cannabis control board.

The city is seeking retroactive reimbursement of $20,000 in penalties per-day, which he said could ultimately total $7 million, as the dispensary has been operating with no license for more than 12 months.

The owner of the property as well as the real estate company that leased it to the illegal operation are also named as defendants in the lawsuit, which asserts these ancillary firms knowingly rented the site to the owner knowing what it was being used for and intentionally leaving that element out of the written lease. He said there is evidence of several property owners and brokers engaging in similar “schemes.”

The property owner disputed this, saying he thought the property was going to be used for lawful purposes, and that his control of the property was limited once the lease was signed.

Other unlicensed cannabis dispensaries in Los Angeles have been receiving notices of utility shut-off if they do not vacate the properties.

Whether the city presses criminal charges or not, unlicensed facilities could face steep fines, civil forfeiture action and personal financial ruin if the city prevails in such a case. Prompt, knowledgeable legal advise is an imperative.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

More Blog Entries:

Los Angeles Sues Unlicensed Cannabis Dispensary, April 18, 2019, By A.J. Herrington, High Times

Los Angeles Legal Marijuana Shops Bear Brunt of Black Market Burden, May 1, 2019, Los Angeles Dispensary Defense Attorney Blog

Ever since Prop. 64 legalized marijuana, the drug has been readily available in many communities throughout the state – just not always on the up-and-up. Because illicit marijuana sales bypass the regulatory framework set forth by the Bureau of Cannabis Control (which includes seed-to-sale tracking, laboratory testing for pesticides and potency and stringent rules on regulation), they have carved themselves an unfair market advantage.

Our Los Angeles marijuana business lawyers work with these firms to help ensure they are abiding regulatory compliance and also to fight back against the unlawful sales that threaten their livelihood. We also help cannabis entrepreneurs trying to do it the right way, despite numerous setbacks due to bureaucracy, do all they can to claw their way into the market. We also help those facing federal and state marijuana criminal charges, regulating that a big part of the problem is the lack of uniformity not just throughout the country from state-to-state but within California from community to community.

How Unlawful Cannabis is Gaining an Edge in California

Recently, The New York Times detailed these struggles, including the recent law enforcement crackdown on illicit marijuana grow operations throughout Southern California. These include hundreds law enforcement raids for illicit cultivation, sales and delivery services. The sheriff’s office in Mendicino County reportedly just shut down one center that was processing more than 500 pounds of the drug daily.

This is Prop. 64 one year later, with the unlicensed, unlawful market not stubbornly refusing to stall, but gaining steam in some areas. There is good money in going under the radar. In a single raid recently, agents in Mendicino seized $5 million.

National Guard troopers that had been stationed at the Mexican border following directive from the White House shortly before the election have now been deployed to Northern California to help state authorities grappling with the issue.

The fact that we have more law enforcement raids on cannabis operations in California undoubtedly undoubtedly strikes a fair number as startling – and seemingly defeats the purpose touted by proponents of legalization. Prop. 64 was supposed to mean the state would be counting up the tax revenues, not spending more public funds on expensive criminal enforcement action.

Meanwhile, many law enforcement communities – particularly those in Los Angeles – say they are wary to pursue criminal charges to prosecute marijuana offenses. They’re sensitive to the profoundly adverse impact that a decades-long failed War on Drugs had on minority communities. At the same time, many of these operators are flagrantly thumbing their nose at the law. Our Los Angeles marijuana business attorneys know the conflict is forcing cannabis firms out-of-business – in a way we haven’t seen in other states like Colorado, Oregon and Washington, which legalized the drug for recreation before California. In fact, in those states, there has been an uptick of 50 percent in sales for legalized marijuana. However, they could soon be feeling the impact too. That’s because in California (as they are now starting to see in Oregon) there is a glut of weed that is manufactured. Unfortunately, as with everything else in California, the problem is larger-than-life.

Sales in Colorado, Oregon and Washington grew well above 50 percent for each of the first three years of legalization. The problem in California (which we’re also starting to see in Oregon too) is the glut of supply.

Los Angeles and Orange County owners of licensed marijuana businesses say they have seen a steep drop in sales in recent months, and blame the black market. Others note that Prop. 64 gave substantial latitude to local agencies with regard to regulation. We have 500 cities that don’t allow retail businesses to operate within their boundaries. They have also demanded the state crack down on deliveries from other communities, saying it violates the spirit of the law. However, this also leaves substantial populations under-served for a high-demand product/medicine. Heavy regulations don’t help.

Some wonder if the state has been “setting itself up to lose.” The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

‘Getting Worse, Not Better’: Illegal Pot Market Booming in California Despite Legalization, April 27, 2019, The New York Times More Blog Entries: California Employers Ease Zero Tolerance on Cannabis, April 15, 2019, Los Angeles Marijuana Business Lawyer

The Orange County Register reports The Pentagon is reviewing the federal security clearance of California tech billionaire Elon Musk following an on-air marijuana toke on a comedian’s podcast last fall. Musk reportedly refiled the SF-86 security form required of federal contractors and/or employees who seek security clearance. The form requires filers to answer truthfully whether they have used any illegal drugs at any point in the previous seven years. Musk reportedly had a higher-level secret clearance, thanks to his position spearheading a company (Space Exploration Technologies Corp. – SpaceX for short) that is permitted launch of military spy satellites.

The company’s day-to-day operations aren’t overseen by Musk, and the company won several national security space launch contracts in the wake of the podcast, but the Register reports it’s only with the refiling that Musk may have some issues.

Employers, Contractors Allowed to Set Ground Rules for Off-the-Clock Cannabis Use

Los Angeles marijuana employment attorneys know that while most people aren’t grappling with billions of dollars or military spy programs and top-level security clearance, many ARE dealing with employers who are leery of cannabis use.

Some key points for employees to know are:

• Federal law places very few restrictions on employer drug testing of employees or prospective hires.
• The right to drug test employees/potential hires extends beyond just those in government jobs to those in the private sector too.
• California courts have held that the employer’s reason for drug testing does need to be balanced with the right of the employee for privacy.
• State courts have held it is lawful for employers in California to require applicants to pass a drug test as a condition of employment – so long as all applicants for a certain position are tested and there is no singling-out of applicants on an unlawful basis.

Although California law allows individuals to use marijuana for medicine or for recreation, there is no requirement that employers must hire a person who tests positive for marijuana. In fact, the California Supreme Court has held that employers are not required to do so – even if they are prescribed the drug for a disability.

Still, employers may be on less solid legal ground in drug-testing existing employees, absent some reason to suspect drug use.

In most cases, one’s off-the-clock use of the drug in California is increasingly less of an issue, as the stigma of marijuana use subsides. But as Musk found out, even billionaires aren’t necessarily immune from the impact in some cases, particularly considering marijuana use remains a federal crime, despite the fact that nearly three dozen states have taken measures to decriminalize it.

How On-Air Use of Pot Could Impact Musk’s Security Clearance

Musk’s decision to smoke marijuana during a podcast discussion with comedian Joe Rogan highlights the discrepancies between state and federal law pertaining to marijuana, but as many federal attorneys noted, the security clearance challenges should come as no surprise.

Although it’s possible the U.S. Defense Department could simply close the case and update Musk’s record without issue, it should be noted that smoking marijuana is considered a “serious breach of security protocol” and rounds for termination of a federal employee or loss of clearance for a contractor. A department spokesperson said the agency doesn’t comment on individual applications, reapplications and reviews for individual security clearances.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

Elon Musk’s security clearance under review over pot use, March 7, 2019, Bloomberg

More Blog Entries:

San Bernardino Cannabis Landlord Arrested in Raid at Her Home, March 11, 2019, L.A. Marijuana Employment Attorney Blog

When California legalized cannabis for recreational purposes with Prop. 64, broadly opening the market for adult consumers earlier this year, it did not legalize all cultivation, production, sale and possession of the drug. Instead, marijuana legalization was inducted into a highly-regulated market. And while criminal arrests for cannabis possession are down, there is still a risk of running afoul of state regulations and criminal codes.

This summer, a crime report issued by the state revealed that while marijuana-related arrests in mid-2018 saw a significant drop this year compared to last (56 percent overall, with felony marijuana arrests down 74 percent), there is still a risk that Californians and visitors could face substantial jail or prison terms, hefty fines and criminal records. Still, the number facing those risks fell by 8,000 from 2016 to 2017.

Los Angeles marijuana criminal defense attorneys as well as those with the Drug Policy Alliance and other supporters who have long-backed marijuana legalization efforts, overall this is good news, as it means less taxpayer-funded law enforcement resources are being dedicated to non-violent drug-related offenses, and the focus now can rightly shift to more serious crimes.

Still, the laws for cannabis cultivation, production and possession still leave the door wide open for adverse contact with local law enforcement agencies – and a potential criminal record. In October, the California Attorney General initiated a widespread crackdown on unlawful cultivation of marijuana, arresting 52 people statewide, eradicating more than 614,000 plants at more than 250 cannabis farms that were allegedly operating illegally. Officials also seized some 110 firearms over the course of the 12-week operation, which targeted cannabis cultivation the counties of Los Angeles, San Diego, San Bernardino and Riverside, according to the California Department of Justice press release. A particular focus of the enforcement effort were drug traffickers diverting public water and land resources and using unlawful pesticides, including one called carbofuran, which can be extremely dangerous.

Still, most people arrested for marijuana in Los Angeles and across the state are nabbed for misdemeanors. The San Jose Mercury News reported in July that of all marijuana-related arrests in California in 2017, roughly 2,100 were for felony offenses while another 4,000 were for misdemeanor marijuana offenses. Unfortunately (though not surprisingly, given the long history of drug enforcement), people of color are disproportionately targeted – to a significant degree. White, non-Hispanic defendants accounted for 24 percent of the total felony arrests last year. Those identified as Hispanic accounted for 40 percent and black people accounted for 21 percent. This is despite the fact that research has time and again shown all three to consume marijuana at largely the same rates.

While Proposition 64 did significantly reduce penalties for just about every marijuana crime in California (possession with intent to sell was downgraded from felony to misdemeanor, transporting up to one ounce went from being a misdemeanor to lawful for anyone over the age of 21), it’s still a felony crime to employ minors to sell marijuana or to grow substantial amounts of the plant absent a license. Most legal marijuana advocates never expected that marijuana crimes would be entirely eradicated by California’s new law, nor was there an expectation that these laws would root out the underlying racism that apparently exists in drug law enforcement.

Still, it does seem to our marijuana criminal defense attorneys in Los Angeles that law enforcement agencies in California are starting to get the message, recognizing that if the penalty for a crime has been reduced from five years to six months, their resources are better spent elsewhere.

The biggest issue – one many law enforcement agencies say has become more problematic since legalization – is driving under the influence of marijuana. It’s not as easy to identify as drunk driving because marijuana is not processed as quickly through the human body as alcohol, but police agencies are investing in more drug recognition experts (DREs) to try to secure more convictions. California Vehicle Code 23152(f) allows up to 6 months in jail, a $1,000 fine, 3-9 months of DUI school and up to 10 months of a suspended license (or restricted license) for conviction on just the first offense.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

Prop. 64 didn’t legalize every cannabis crime, but arrests are falling fast, July 11, 2018, By Brooke Staggs, San Jose Mercury News

More Blog Entries:

California Cannabis Insurance: Risks and Regulations, Dec. 5, 2018, Los Angeles Criminal Defense Lawyer Blog