These types of contracts diverge from the normal model of cultivation employment, and they can even vary significantly from contract to contract. Basically land owners gain the appropriate cultivation permits from local and state authorities. From there, they contract with experienced cannabis crop growers who conduct the actual farming. Many of these farmers are legacy growers who weren’t successful in landing their own state cultivation permits due to so many barriers to entry. The land owners and the growers then split the profits. Additionally, farmers get their foot in the door of an industry they may not have otherwise. That could result in more opportunities down the line.

Cultivation contracts vary in length and scope, but they typically last a year or so, but some continue in perpetuity until one or both parties dissolves the relationship. Neither should enter such an agreement until having it carefully examined by a California cannabis business lawyer experienced in contract drafting and review. The importance of this is underscored by the fact that there have been numerous lawsuits stemming from these arrangements, with allegations including fraud, breach of contract and labor law violations.

Legal Challenges Involving California Cannabis Farming Contracts

Contract cannabis farming is more common than it used to be, particularly since the adult-legal recreational market has taken off.

Among some of the legal battles that have stemmed from California cannabis farming contracts, as reported by Marijuana Business Daily, were two similar cases filed at opposite ends of the state late last year. They involved farmers who alleged they were taken advantage of by landowners with cultivation licensing. The farmers were reportedly lured into doing all the farming work, but were never paid after the crops were harvested.

In one of the lawsuits, the plaintiff in Sacramento County alleges the defendants, a family company that owns and operates numerous marijuana businesses, defrauded the plaintiffs of some $1.3 million in its sharecropping agreement over the course of two years, plus another $700,000 in crop profits.

In another lawsuit, filed in Los Angeles County, plaintiffs allege they were cheated out of $700,000 in crop profits, plus another $500,000 that plaintiffs had paid to help get the farm up and running.

In both cases, the land owners had the money, the land and the permits – they just didn’t know how to successfully grow and harvest cannabis. Our Los Angeles cannabis contract attorneys note this situation is one with high potential for abuse.

Sharecropping in general isn’t knew to the marijuana industry, and many recognize it as a prime avenue to getting established in the market. Some liken it to an apprenticeship, where individuals learn how to manage another person’s farm before they can take on their own. But serious problems can arise when cannabis contracts aren’t meticulously drawn up. Every detail must be carefully communicated, and there must be stipulations for how to handle what should happen if the farm runs at a loss one season rather than a profit.

Having the specifics clearly and concisely stated in every cannabis contract is critical. We 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:

Contract cannabis farming gaining popularity in California, but practice draws lawsuits, July 15, 2020, By John Schroyer, Marijuana Business Daily

As many industry insiders have echoed, anyone turning a profit in this new era, has to have at least one hand in unregulated dealings. Chris Coulombre, CEO of Pacific Expeditors in Sonoma, has said “I have to imagine that 60 percent of the market overall is probably playing in a parallel markets, but I don’t think they enjoy that. It’s truly a decision of necessity.”

Whispers of retailers selling counterfeit products are rife. Cultivators are known to sell unregulated product on the side. But how can we blame them? Suffering terribly at the hands of price undercutting from illegal competitors, these unregulated exchanges are all taking place in hopes of keeping doors open, and businesses afloat.

The Situation Overview

• State regulators and Californian law enforcement officers are yet to curb the state’s extensive black market activity;
• So much illicit activity exists that authorities simply cannot investigate it all;
• Illegal growers in sizable numbers continue to operate throughout the state; and
• More cannabis is produced than consumed in California, leading growers often to supply and export their surplus crop to illegal interstate markets.

An Industry Fragmented Our Los Angeles cannabis business attorneys know, one of the big problems plaguing the legal California cannabis industry and its growth, is that it arguably cannot get out of its own way. Given the size of the state and the diverse ideas within it, it is very hard to achieve any kind of political unification. And that is a sticking point, because for changes to be made, you need lawmaker support.

As an example, not all industry insider votes supported Proposition 64, and the numerous Californian trade organizations often share differing speaking points for regulators and elected officials. It’s that kind of fragmentation that is hurting. Without unification, how can the industry centralize funds for lobbying activities, legal proposals or ballot measures, let alone make any political progress?

“The divisiveness among the industry is a really difficult component and one that (the California Cannabis Industry Association) is absolutely committed to working on in 2020,” said Lindsay Robinson, CCIA executive director, back in January.

Implications Current conditions show us that incentive exists for illicit growers to obtain licenses. And the number of retailers operating legally in California is so small, they could never move all of the state’s cannabis crop alone. So, it should come as no surprise there is no way of telling when the legal market will exceed the illegal one.

Looking forward, we can expect to see a number of cannabis businesses continuing to keep one foot in each market, while the state works to help legal businesses lower their product prices. Only then will consumers be more attracted to the legal market, which will then help licensed businesses better compete with their illegal counterparts.

To address the fragmentation within the industry, stakeholders must align on their joint political goals, otherwise it will be a very long time before we see any serious systematic changes made.

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: Proposition 64 – The Control, Regulate and Tax of Adult Use Marijuana Act

The idea of cannabis as a religious sacrament isn’t new. Numerous religions – historically and presently – have used cannabis as an entheogen to induce a spiritual experience. Courts, however, haven’t always been so kind.

Last year in Indiana, for example, a judge ruled that a local First Church of Cannabis would not be legally allowed to use marijuana as a religious sacrament, finding it would be impossible to battle illicit drug trade “while allowing a religious exception that would be ripe for abuse.”

But in Indiana, unlike in California, possession of non-medicinal marijuana is still illegal. But as our Los Angeles cannabis church lawyers know, that doesn’t mean cannabis churches here are exactly safe – especially if they’re operating without licensed approval from the state.

Lawsuit Alleges Cannabis Church Raid Unlawful

One cannabis church leader in Humbolt County is suing the state’s Department of Fish and Wildlife for allegedly violating the rights of the church when it raided the property last year and destroyed an uncounted number of cannabis plants located in five greenhouses.

Plaintiffs allege due process right violations. Authorities reportedly came to the site because they had a search warrant, authorized by the court, which allowed them to enter private property, search for evidence of a crime, which could then be seized and used as evidence in a criminal case. However, that is not what they did. They destroyed private property. Plaintiffs claim that destruction was not warranted and in fact illegal.

The CFW claims it is allowed to destroy illegal substances, and that they knew it was illegal because the site wasn’t licensed by either county or state. However, the church argues the farming of cannabis on site wasn’t for commercial purposes, rather for religious ones. A determination on commercial v. religious purpose cultivation is a legal conclusion – one agents with a law enforcement agency aren’t trained or authorized to make. Thus, the church is arguing violation of their 14th Amendment rights.

If the claim doesn’t succeed on violation of 1st Amendment religious rights grounds, there is a good chance it may on 14th Amendment due process grounds.

Los Angeles authorities said they have been essentially been playing wack-a-mole with cannabis churches that close and then reopen a few weeks later under different names and in different locations. Most do conduct religious services and sometimes things like yoga. But they also dispense marijuana, usually for a “suggested donation.” This, the city says, is what differentiates it from a sacrament, noting the Catholic church doesn’t charge for sacramental wine.

Courts Will Have Difficult Questions to Answer

Our cannabis lawyers know that at the heart of these cases, at least on 1st Amendment freedom of religion grounds, are impossibly difficult questions like:

• What is religion?
• How do you prove faith?
• How can you tell if a congregations’ beliefs are sincere?

Those things are somewhat intangible and widely open to interpretation – and notoriously difficult for courts to answer.

What many of these cases may come down to is money. At cannabis churches located throughout the state, people aren’t technically paying for the plant. They are, however, tithing. Some members donate money. Some buy memberships. Some of these churches have been marked on dispensary listing sites – occasionally with prices attached to their selections. These facilities are very likely to run afoul.

People Turn to Black Market When Legal Options are Few

It’s estimated that there are more than 2,800 dispensaries operating without a license in the state.

Even if these facilities didn’t have an unfair economic advantage, not bound to pay heavy taxes and abide a long list of stringent rules applicable to licensed facilities, they might still thrive. That’s because in 80 percent of cities in this state, marijuana dispensaries are banned. That means people essentially have no choice but to turn to these centers. And that could be part of the reason for the rise in cannabis churches too.

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:

Inside the War for California’s Cannabis Churches, Nov. 23, 2019, By Arit John, The New York Times

To start, the idea of tracking marijuana traveling throughout the supply chain sounds simple enough. In theory, all cannabis products would be given unique identification numbers, noting from which ‘batch’ or ‘lot’ they were born. Products would then be sent to labs for testing. Next, approved products would be passed from producer to distributor, and finally to retailers for sale. At each step, the state should be able to track each piece of marijuana as it moves through the chain, making sure nothing is being redirected out of state, and ensuring everybody is paying their required taxes.

But in practice, a few hiccups quickly come to light. First up, only businesses holding ‘provisional’ or ‘annual’ licenses are required to subscribe to the track-and-trace system. And until last month, there were more than 600 marijuana businesses operating on ‘temporary licenses,’ who would not have had to track-and-trace. This means, there was no way regulators could comprehensively account for every legal product moving about the state.

While those 600 temporary cannabis business licenses all expired at the end of July, and many of those cannabis business owners await approvals on provisional or annual license applications (another story in and of itself), Lori Ajax, State Bureau of Cannabis Control (BCC) chief, recently said it’s a priority of the bureau to get all temporary licenses transitioned onto either provisional or annual licenses, as quickly as possible, so those businesses won’t have to halt their operations.

It’s true that when the provisional or annual licenses are approved, those marijuana business owners are immediately required to begin tracking-and-tracing. And as the CCTT is quite complicated, many companies already required to track-and-trace are hiring full-time employees to traverse the system.

Tagging Products Has Proven a Challenge One common complaint from marijuana retailers holding provisional or annual licenses, is that they must apply unique identification tags to all products. And because until very recently, many holders of temporary licenses weren’t held to those same standards, products would reach stores without said tags, leaving retailers having to sticker and tag products, at their own extra labor costs.

But the problem doesn’t stop there. Now with 600 odd businesses in line waiting for the state to approve their new license applications, and often a need to continue earning a living in the meantime, many are generating lots of paperwork for companies adhering to CCTT requirements while trading with businesses not yet in the system.

On the use of CCTT throughout the marketplace, Josh Drayton, communications director for the California Cannabis Industry Association (CCIA) says it’s a patchwork at present. “We’re not seeing it work it’s way all the way through the supply chain, which ultimately means it’s kind of a broken system at the moment,” he said.

Software Compatibility Also a Hurdle Another shared grievance is that CCTT is not properly set up to work smoothly with a common point-of-sale software system used by retailers. CCTT also does not account for businesses like growers or manufacturers awaiting provisional or annual licenses, who may have missing data. As a result, some retailers using that software are forced to simply ‘create’ information in order to move through to the next step within the CCTT platform.

So Was Track-and-Trace Just a Sweetener? One of the promises California’s 2016 Proposition 64 made, was that the state would always be able to locate every piece of marijuana sold, all the way ‘from seed to sale.’ Creating a tracking system then, was always going to be necessary to meet this promise.

Helping to prevent cannabis flowing out onto the black market was another reason. But so far, activity on the illicit market has shown little signs of slowing. One analyst estimates the underground cannabis market in California totals $3.7 billion per year, which outdoes the legal market fourfold.

Some believe the track-and-trace system was only offered up as a way of getting legalized marijuana over the line.

The Burden of Compliance Others believe that requiring compliance with an inventory control system places a needless burden on legal cannabis businesses committed to operating within the law. Amid the many opinions on the matter, one thing is certain, a slow transition to the new system has brought with it a whole lot of new red tape. And manufacturers and vendors may just have to prepare for further hiccups and delays as the industry presses ahead.

Legal Implications Thus Far Thankfully, marijuana businesses still getting up to speed with CCTT have been afforded some leeway. The BCC seems to understand this is a process, and hasn’t made an example of anyone as yet. But there are no assurances from the authorities that this is in fact the case. Most affected by this issue are businesses either moving to, or waiting on their, provisional and annual licenses following the expiration of their initial temporary licenses, as well as any new cannabis business operators coming into the fold. As a result, all industry stakeholders will watch carefully to see just how effective the CCTT system can be as it becomes more widely embraced in the coming months.

Need Legal Help Tracking and Tracing For Your Marijuana Business? Our California marijuana lawyers can help answer any questions you may have.

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: California’s Cannabis Track and Trace (CCTT) System Proposition 64

The catch though, the California Department of Food and Agriculture (CDFA) is yet to show its ability to approve those provisional or permanent licenses, at the same pace applications are being lodged.

The backlog on approvals may be due to the complexity of the licensing application process itself. Tellingly, by mid July 2019, only 2,053 provisional licenses and 230 permanent licenses had been granted. As it stands, when applying for prospective licenses, cannabis farmers are expected to demonstrate compliance with the stringent California Environmental Quality Act (CEQA), as well as submit:

• Background checks;
• Surety bonds;
• Real property documents;
• Detailed site plans;
• Farm management practices;
• Waste management protocols;
• Security procedures; and
• Pesticide measures.

Obviously once these detailed applications are submitted, someone then needs to review them, which is also a lengthy process. The lag time evident in securing updated license approvals is leaving 7,181 cannabis farmers with a dire choice – either cease operating until a new license is approved, or continue growing and selling, and risk fines as high as $30,000 a day for trading without a license. For many growers, who are low on resources, this is a perilous predicament.

As the cannabis industry continues to grow in California, on July 1 Governor Newsom signed Assembly Bill 97 into law. Essentially, AB 97 helps make way for additional provisional licenses and removes a previous barrier, requiring a cannabis farmer to first hold a temporary license before applying for a provisional license. AB 97 not only opens the doors for a new wave of marijuana growers to join the legal cannabis landscape, but a second function of AB 97 also enables the renewal of provisional licenses for growers who have already obtained these. This particular change gives cannabis farmers more time and some leeway to meet the stringent compliance requirements of the CEQA, before securing a permanent annual license.

But AB 97 does not help temporary license holders. Under the current law, temporary licenses cannot be renewed or extended. To assist farmers with expired temporary licenses who are still waiting for their prospective or permanent licenses, Senator Mike McGuire sponsored Senate Bill 67. It sought to extend and reinstate a grower’s temporary license until September 15, 2019, to help farmers continue operating legally, while waiting for the CDFA to grant their subsequent license approvals. In order to benefit from SB 67, growers must have obtained their temporary licenses and applied for a provisional or permanent license prior to the expiration of their temporary license.

Unfortunately for those 7,181 temporary cannabis license holders now needing new licenses, SB 67 has stalled and shows little signs of progressing any further. Legislators appear to believe AB 97 adequately addresses the majority of cannabis business license issues, meaning farmers yet to receive their updated license approvals, must merely wait it out, no matter how long that takes.

Legal Implications Thus Far State lawmakers are yet to offer any assurances of leeway for marijuana farmers now waiting on the CDFA to approval their provisional or permanent cannabis business license applications. Many will watch with interest to see whether examples are made by law enforcement in this area, amid city sanctioned crack downs and blitzes now in effect that target blatant black market cannabis business operations.

Need Legal Help Obtaining or Renewing a Commercial Cannabis Business License? Our Los Angeles cannabis business licensing lawyers can help answer any questions you may have.

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: California Department of Food and Agriculture Assembly Bill 97 Senate Bill 67

For context, in 2018 local law enforcement worked in conjunction with the state Bureau of Cannabis Control, and together they served six unlicensed cannabis businesses with search warrants. These raids resulted in the seizure of more than 1,500 pounds of marijuana, said to carry a street value of $13.5 million.

Comparatively, according to data release in July, within the first half of 2019 alone, the bureau had already served 19 search warrants to unlicensed sellers. Those raids were successful, and saw more than $16.5 million worth, or about 2,500 pounds of illicit marijuana, confiscated. Just shy of $220,000 cash was also seized from cannabis businesses operating illegally during this time.

Proposition 64, which came into effect in November 2016 and permits adult possession (up to an ounce) of marijuana for personal use, was intended to curb the illegal pot market. But so far, this has not been the case. Research firm New Frontier Data estimated the marijuana black market in California was worth $3.7 billion last year alone, which was four times higher than the lawful market.

To help tackle the issue of illegal pot retailers, Governor Gavin Newsom recently threw extra support behind current law enforcement crackdowns. In July, the Governor approved $30,000-a-day fines for cannabis growers, sellers and distributors, who operate throughout California without a license.

Despite this emphatic deterrent, Lindsay Robinson, the California Cannabis Industry Association executive director, says unlicensed retailers, who number in the thousands, continue to operate illegally throughout the state, and many even feel comfortable enough to advertise their businesses.

State officials have conceded they’ve run into problems while working to issue new licenses in the cannabis market. Obstacles such as cities refusing to permit marijuana sales, as well as local and state taxes raising the price of legal marijuana by approximately 45%, have both contributed to an unexpected thwarting of the legal market.

Another challenge for the bureau appears to be staffing. The state’s Department of Finance recently conducted a recent audit which found, the bureau is not properly resourced to handle all the activity it endeavors to fulfill. California has had a year to establish a new bureau that drafts regulations and procedures relating to the legal cannabis market. But auditors reported that only 15 of the Enforcement Unit’s 68 authorized positions had been filled.

Given the Enforcement Unit’s current staffing configuration, “the Bureau’s ability to process complaints, perform inspections and investigations, and review and inspect testing laboratories is severely impacted,” the audit said.

Trade groups in particular have voiced their disappointment, following the unveiling of the new state budget recently signed by Newsom. As it stands, the budget fails to include an industry proposal suggesting an addition of $10 million. That allocation would fund a clamp down on retailers operating without a license, and assign sworn peace officers to follow up by enforcing the law.

Legal Implications Thus Far It remains to be seen whether continued crack down efforts by law enforcement will ultimately deter illegal marijuana businesses. Industry stakeholders will be pulling for law abiding cannabis outfits to benefit from running above board businesses, by way of increased market share.

Need Legal Help Obtaining or Renewing a Commercial Cannabis Business License? Our Los Angeles cannabis business licensing lawyers can help answer any questions you may have.

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: Proposition 64 California Bureau of Cannabis Control California Cannabis Industry Association

CBD is naturally found in cannabis plants, and is widely known for its relaxing properties. But CBD won’t produce a ‘high,’ as it lacks the psychoactive tetrohydrocanabidiol (THC), found in marijuana. CBD-derived products have quickly grown in popularity, thanks largely to a wide range of potential health benefits, including relieving pain, anxiety, seizures and brain injuries.

According to Michael Lux, partner at Crowe accounting firm, the next 6-12 months will involve strategic minority investments in the CBD space. He noted too that while the majority of CBD companies are of interest to investors, they are still less than five years old, so they’d likely need a little more time before preparing to engage in full exit strategies.

US Farm Bill Opened the Gates Over the last eight months, a slew of beauty, personal care, and pet brand products have quickly become available across a variety of retail stores. In part thanks to the US Farm Bill, which was passed in December last year. This bill essentially relaxed restrictions, allowing licensed cannabis growers to produce hemp on an industrial scale, without fear of prosecution. It also relaxed restrictions around selling hemp-derived products interstate. The passing of the US Farm Bill was a tipping point, enabling CBD-derived products to go mainstream.

A recent Forbes report even projected the combined U.S. CBD sales market would likely exceed $20 billion by 2024.

Too Early for Buyouts Meanwhile, one industry banker noted it will be some time before makers of CBD products start to see buyouts from traditional consumer packaged goods (CPG) companies, especially with regard to food and beverage products. Mostly because the Food and Drug Administration (FDA) is still working to outline its CBD regulatory framework, and that tweaking will likely be ongoing. Just last month the FDA announced it has prioritized efforts to establish clearer CBD guidelines, and plans to publish a report this fall.

Until then, companies selling personal care CBD products are particularly well poised to attract strategic investments. That’s because regulators are far more comfortable with non-ingestible products, which significantly minimizes an investor’s risk.

Regulators Pave the Way Once the FDA clarifies its regulations on CDB-derived products, we can expect strategic buyers to show interest in acquiring CBD brands across consumer, pharmaceutical, and food and beverage industries. In the meantime, there are five key regulatory concerns most investors are monitoring before investing in CBD businesses:

1. Drug Enforcement Administration regulation of CBD – marijuana is currently considered a Schedule 1 drug and is not approved for medical use in the U.S.; but hemp is defined as the plant, or any part of the plant containing a THC concentration of no more than 0.3 percent.
2. FDA regulation of CBD products – advertising or using CBD as a dietary supplement is currently prohibited.
3. Some state laws restrict CBD product sales – North Carolina, Maine and New York restrict CBD products, just to name a few, and could severely impact overall CBD product sales.
4. FDA limits advertising and label claims made on CBD products – the agency will diligently pursue companies making unsubstantiated marketing claims.
5. Regulation of CBD products will continue to evolve – a specific internal agency working group will continue to explore options for dietary supplements containing CBD to be marketed lawfully.

Legal Implications Thus Far While CBD businesses continue to blossom, investors will become increasingly active in the growing CBD sector. Investors, like so many other industry stakeholders will watch closely on how ongoing regulations will impact the marketplace. It is clear that no matter how the industry progresses, regulators and legislators will play a large role in defining just how products are developed, where they can be sold, and what can be touted in advertising and marketing efforts.

Need Legal Help Investing in or Acquiring a Commercial Cannabis Business? Our California Hemp & CBD attorneys can help answer any questions you may have.

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: 2018 US Farm Bill FDA Guidelines

Elbowing one’s way into Canadian stock market investments isn’t always a simple task for outsiders, with a fair number of U.S. brokers disallowing international stock trades. Canadian stocks are increasingly an exception to the rule, but it’s likely to be more expensive, and of course, the cannabis market is still burgeoning and volatile, particularly while there are so many conflicting local, state, federal and international rules and regulations.

As far as the marijuana industry goes, investing in public stock of cannabis companies is perhaps at this point one of the least-risky options, as you have no direct involvement in the daily cultivation, production, testing or sales of the products.

There are currently more than 300 publicly-traded marijuana stocks and funds on the U.S. trade markets, and a growing number globally. These can be lucrative for investors willing to take the risk. However, it can also be costly if you aren’t careful/consider the fine print.

It’s a smart idea to consult with a dedicated marijuana law firm before plunking down your hard-earned cash on cannabis stock because there are some potential considerations about which we can advise, especially if you’re a government employee.

Federal Employees, Military Veterans, Those With Security Clearance Should Be Cautious With Cannabis Investment

It was widely reported earlier this year that federal authorities were reviewing the security clearance of billionaire Elon Musk after he reportedly smoked marijuana during a podcast. What has received less attention is the fact that many government workers have come under scrutiny for their connection with cannabis – even when it’s as far removed as international investment.

This might seem odd given the fact we’re soon to have 11 states that have legalized recreational marijuana (Illinois the most recent, and New York and New Jersey could be next) and 33 states have legalized the drug for medicinal purposes. However, the persistent contradicting federal ban on the drug, classified as a Schedule I narcotic, is what is giving federal employees the toughest time.

Use of marijuana by federal workers and even some contractors is forbidden, and the government has made it clear that investment in marijuana business interests is a no-go too.

MarketWatch spotlighted several cases of federal contractors and employees who own stocks in cannabis companies or even cannabis-related firms that were facing potential threats to the security clearance they required in order to do their jobs.

In one recent example, an employee for the Department of Defense, who dutifully listed his cannabis company investments on financial disclosure forms required of certain federal government officers who retain sensitive positions. Soon after, he received a letter informing him that his investment in marijuana stock violated public trust and extended him 30 days to “fix the problem” or else risk losing his security clearance.

Union representatives representing thousands of federal employees for the DOD, some stationed globally, argued this tactic was a means of “picking on” lower-level employees. The average salary of a union DOD employee is about $80,000 a year, yet they risk total loss of that for investing a few hundred dollars every quarter on a fledgling marijuana company.

Although marijuana stock has been outright barred in directive memos by DOD agencies like the Air Force, insiders indicated this was the opinion of a single attorney and not representative of the Pentagon’s official policy.

Discuss Cannabis Investor Risk With Marijuana Lawyer

Cannabis investment law firm attorneys know full well marijuana is not a problem in this country – certainly not to the extent purported by the archaic federal law. More than 45 deaths a day in the U.S. are attributed to opioids, which account for 35 percent of all overdose deaths – yet federal employees are free to invest in public stocks of pharmaceutical companies that sell them. Same with benzodiazepines, antidepressants and other medications. Yet marijuana, which barely registers on these scales as a causal factor, is treated like poison.

Other potential investor risks reported in recent months:

Canadian cannabis business operators and investors may face a lifetime ban by border officials, following the Trump White House’s move to rescind relaxed enforcement of federal marijuana policy set under Obama.

It does seem, at least for now, that marijuana investments should be avoided by federal workers who require a security clearance. Discuss your options with a marijuana investment lawyer in Los Angeles to review your exposure to legal risk. 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:

Owning Marijuana Company Stocks Could Endanger Your Security Clearance, May 2019, Military.com

Similar problems have been reported not just here but in other liberalized state marijuana statutes appear to have had little impact on black market sales. So far, 10 states including California have legalized marijuana for recreational sales.

Not so in Oregon and Washington, a new study suggests, indicating that the way states have written their recreational marijuana laws may play a big role. Since Washington and Oregon legalized recreational marijuana (in 2012 and 2014, respectively) there has actually been a decline in the wealth of marijuana farms throughout the state’s national forests, resulting in reduced adverse ecological impact.

European scholars in an analysis published recently in the journal Ecological Economics, identified a number of health and economic upsides to Oregon and Washington marijuana policy, something California legislators may want to note.

Why WA and OR Have Fewer Illicit Pot Grows Since Going Legal

The data showed decidedly fewer grow sites discovered in national forests since the two states implemented voter-approved recreational marijuana laws.

Researchers specifically analyzed national forest growth because these often resulted in the most substantial and widespread environmental impacts – including displacement of native plants, pollution from fertilizers and pesticides and so-called “wildlife poaching.”

Los Angeles marijuana lawyers also know that when grow sites are established on public land, no matter how seemingly remote, it poses a risk to members of the public who happen to chance upon it. Organized criminal gangs or other operations that establish and monitor such sites may feel they have little to lose by defending it with dangerous force.

At the time Oregon and Washington’s recreational marijuana laws passed, federal forestry data showed nearly 250 illegal marijuana grow sites uncovered between 2004 and 2017 throughout the Northwest Pacific region. Some of the larger illicit cannabis grow sites on these lands had upwards of 100,000 plants each.

After Washington updated its law, law enforcement and park rangers went from discovering an average of 9.2 illicit cannabis farms a year to 1.6 annually. In Oregon, it dropped from 13-a-year to 3.67.

But was it really the recreational laws that made the difference? Researchers opine it wasn’t necessarily the fact that marijuana was made legal that spurred big change. It was more likely a combination of both states having higher-than-average law enforcement officers per capita, plus the fact that illegal cannabis no longer made growers that much more money than legal cannabis. In other words, the risk wasn’t worth the reward.

The same has not held true for California, where many Los Angeles marijuana dispensary lawyers blame the high rate of taxation as a key motivator for consumers to dip into the illegal market – even when the product is less safe and purchasing it is still potentially a legal risk for them too.

Another possible factor to be analyzed by policymakers is that of prohibiting cannabis cultivation for recreational use. Oregon allows it, but Washington strictly outlaws it. Where it’s not allowed on one’s own property people may be more include to seek a sparse are of public lands to reduce detection and penalties.

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:

Illegal Marijuana Grows In Pacific Northwest Declined After Legalization, Study Finds, May 13, 2019, By Kimberly Lawson, Marijuana Moment

More Blog Entries:

California Industrial Hemp Farming: What to Know to Do It Legal, May 9, 2019, California Marijuana Farming Attorney Blog

Los Angeles marijuana lawyers know there has been an uptick among local law enforcement citations for smoking in public areas, particularly those nearby to schools, parks, restaurants, shops and in cars or boats. (No, you cannot light up in a car, even if you’re a passenger.) Police say many individuals aren’t familiar with this provision of the law, and even visitors who have come to the state on vacation end up leaving – well, not on probation, but with wallets $100 lighter. That’s the fine for public marijuana smoking in California.

Common areas in apartments and even balconies are forbidden spots for outdoor pot smoking, though that usually goes unchecked unless your neighbors complain. This restriction has become particularly burdensome for those who use the drug as medicine.

Even recreational users scoff at the law, though. After all, it’s supposed to be regulated the same way as alcohol, and if you can walk into a restaurant or bar and order a drink of alcohol in public, why not allow the same for cannabis?

The City of Los Angeles has issued statements indicating it does not sanction or license consuming marijuana in any public space, though the city’s Department of Cannabis Regulation is working alongside the city’s planning department to establish licensing for public pot consumption lounges. Council is expected to receive those proposals for consideration later this year.

Furthermore, NBC-4 Los Angeles reports a number of advocates have successfully convinced leadership in West Hollywood to to approve plans to open potentially eight new locations for individuals to smoke the drug in public and another eight locations for people to consume edible marijuana products. Some say the permitting process has been moving at a snail’s pace, but at least it’s moving somewhat. Most cities in the state seem keen to keep it under wraps.

California State Restrictions on Public Use

In the meantime, the California Department of Public Health clearly outlines where it is lawful – and unlawful – to consume cannabis in any form. Basically, as our Los Angeles marijuana attorneys can explain, you’re restricted to private residences. That’s if you want to be on the safe side. Technically speaking though, you are expressly prohibited from smoking, using, eating or vaping cannabis in public places or anywhere it is not legal to smoke tobacco. Even private property owners can ban the use of cannabis on their property, which includes not just hotels and resorts but also apartment and condo complex owners.

The law further disallows:

• Using cannabis within 1,000 feet of a daycare center, youth center or school while children are present.
• On federal lands like national parks – even if the park is in California. (It’s under federal jurisdiction, and the drug remains illegal under the U.S. Controlled Substances Act.)

If you are in possession of cannabis in your vehicle, it needs to be in an approved sealed package or container or in the trunk. You can be cited for having an open container of cannabis in your vehicle – either while driving OR riding in the passenger seat, the same way you would alcohol. You also cannot take your cannabis across state lines, even if you’re traveling to a state where cannabis is legal. Also be aware that per California law, employers have the right to bar the use of marijuana by their employees, so it’s a good idea to know what your employer’s policy is before you imbibe – even off-the-clock.

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

Additional Resources:

LA City Considers Opening Places Where You Can Smoke Pot, Feb. 27, 2019, NBC-4 Los Angeles

More Blog Entries:

FDA Ruling Spurs City Crackdowns on CBD Edibles , Feb. 20, 2019, L.A. Marijuana Citation Lawyer Blog

When California voters legalized recreational marijuana for adults in 2016, suddenly there were people getting rich doing the same thing that led to arrests, prosecution and harsh minimum mandatory prison term for tens of thousands. Even after their release from incarceration, the government’s civil seizure of all assets even tenuously connected to drugs, plus the stigma of a permanent “felon” label blocked access to student loans (sometimes any loans), job opportunities and housing options. The racial disparity of the impact stunning. The ACLU reporting blacks were arrested at a rate of four-fold higher than whites, despite basically the same usage rates. It was way worse in some communities, like Oakland, where black residents accounted for 27 percent of the population but 77 percent of those arrested for marijuana.

The concept of “cannabis equity” is that those hit much harder by harsher marijuana laws should now be extended lower entry barriers into the legal California cannabis market. California earned a fair amount of applause for the initiative, one no other legal marijuana state has launched. Funded by $10 million in loans, grants and support services, there are currently just four local branches operating – Los Angeles, Oakland, Sacramento and San Francisco. But some report it’s not going so smoothly. As reported by Pew Charitable Trusts, a number of local equity offices (funded by the state’s Department of Cannabis Control and Regulation) have had trouble with launch – potentially delivering yet another blow to applicants, giving other non-equity program cannabis companies a head start into those markets.

Los Angeles marijuana business attorneys have seen issues with some of the following:

• Funding and staffing shortfalls in social equity programs;
• Extended wait times for business license processing – even once it’s established the applicant does qualify.
• Lax oversight in arrangements made through the program connecting social equity businesses and outside investors, leading many to point out the financial risk this places on the social equity candidate, up to and including loss of his or her fair share in the company. Investors are almost always necessary because social equity applicants aren’t wealthy and may not even have access to typical bank loans. Investors apply through the local agency to partner with a social equity applicant, and the idea is it will ultimately be successful for everyone. But some say it’s turned predatory, with investors targeting social equity applicants for fraud while the state offers little oversight. The most common complaint is an investor using the social equity marijuana applicant to get a foot in the door, then leaving the fledgling business owner without a fair stake in the company.

There is a belief shared among minority community advocates that the social equity system in Los Angeles especially was “set up to fail.”

There is talk more money could be allocated to the programs, which could possibly be used to extend 4-to-5-year no-interest loans to social equity marijuana business owners – so they wouldn’t have to rely as much or at all on private, potentially unscrupulous investors.

Those interested in applying for the cannabis social equity program in Los Angeles would be wise to work with an attorney experienced in marijuana law. You cannot necessarily count on the state to look out for your interests, properly vet investors or protect against fraud. Your attorney can often fill that role and help you navigate this frustrating and slow-moving bureaucracy.

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

Additional Resources:

Challenges – and controversy – swirl around marijuana social equity programs in California, Nov. 29, 2018, Marijuana Business Daily

More Blog Entries:

More California Marijuana Products Passing Stringent Safety Tests, Dec. 16, 2018, Los Angeles Marijuana Lawyer Blog

Prior to this vote, 22 states in the U.S. allowed medicinal marijuana, following California’s 1996 lead to allow patients access to the drug for easing the symptoms of serious illnesses. Increasingly, the drug is being used as a safer, more effective alternative to the extremely addictive and deadly opioids traditionally prescribed for pain (far riskier than pot, despite having a lower scheduled designation under the U.S. Controlled Substances Act).

This rapidly evolving cannabis landscape makes it all the more critical for users, distributors, producers, farmers, ancillary companies, drivers and travelers to consult an experienced Los Angeles cannabis attorney when a legal question crops up.

Still, it’s worth noting that while public support for legal marijuana has never been higher (72 percent of democrats and 52 percent of Republicans are in favor of legalization and two-thirds of states have some type of legal marijuana), many marijuana industry and policy experts say there is no brightline “tipping point” at which legality at the federal level is an inevitable certainty. In fact, some are speculating that following this round, it’s plausible medical marijuana initiatives are going to grind to a halt, and while recreational legalization may expand in those states that already have medical pot, those measures may start hitting a wall too.

The reason? Because it all comes down to the way these measures have come down the pike: Through ballot initiatives filed by voters, rather than bills proposed by state legislators. In the first seven of eight medical marijuana laws (including in California), it began with a ballot initiative. While lawmakers write and pass legislation on key, controversial issues, ballot initiatives rely heavily on public opinion. In the past, such initiatives have limited same-sex marriages – or legalize it. They’ve been used to expand or curtail taxes, minimum wages and spending.

A fair number of ballot initiatives are underwritten by very rich individuals with business interests. For instance in Ohio, pro-marijuana advocates three years ago poured some $20 million into legalization of medical and recreational pot on the same ballot initiative. But voters in Ohio responded with a resounding: No. This was despite the campaign revealing strong support for medical marijuana availability. When marijuana advocacy groups vowed to place a medical marijuana initiative on the ballot in Ohio, the state legislature quickly drafted and passed its own.

In Utah, the governor was a vocal opponent of expanded medical marijuana as indicated on the ballot proposal. But now that it’s passed, he and other lawmakers are in talks to pass an initiative that will supercede it – likely something that will more align with the conservative principles of the Morman Church, widely influential in that region.

The point of all that is: Ballot initiatives can be a powerful means to quickly move the needle toward progress. However, some analysts believe its potential for accomplishing wider access to marijuana is almost exhausted. There are 17 states remaining that have access to no marijuana at all. Of those, just five even allow direct ballot initiatives. In the other states – mostly conservative by a wide margin – lawmakers aren’t showing any indication they are eager to loosen restrictions. And even if the voters wanted such a measure, they have no way to bypass the legislature to get it.

Generally speaking, once a place allows medical marijuana and becomes comfortable with it, they are more likely to be swayed on the benefits of recreational marijuana. However, the remaining “dry” states aren’t likely to be pushed any closer to legalization without federal intervention and THAT is unlikely to happen with President Trump at the helm. The Obama administration was harsh in its approach initially, and later softened. The hope was Trump would further reduce restrictions, but it actually got worse under U.S. Attorney General Jeffrey Sessions, who vowed full enforcement of federal marijuana laws. The president himself has said he supports marijuana legalization, but the future of it is still unclear, even now that Sessions has resigned.

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

Additional Resources:

WHAT DO THE MID-TERMS MEAN FOR MARIJUANA LEGALIZATION IN AMERICA?, Nov. 8, 2018, By Daniel Mallenson, PSMag.com

More Blog Entries:

Cannabis Attorneys: How Outlawing Marijuana Made it More Dangerous, Oct. 30, 2018, L.A. Marijuana Lawyer Blog

As our marijuana lawyers in Los Angeles see it, cannabis prohibition is a pit from which the federal government will need to dig itself out.

Now, a new survey released from The Tylt (the largest and fastest-growing social polling and opinion platform among the youngest adult cohort), indicates it is likely to be increasingly difficult to hold off on the move for too much longer. Specifically, roughly 85 percent back legalized marijuana, and no longer buy into the lie that total prohibition is necessary to keep America’s youth safe. Most said the “War on Drugs” is a failed one and the “War Against Weed” is one that needs a complete overhaul.

Another survey last year found millennials are causing beer sales in the U.S. to tank. Younger users get how dangerous alcohol is, while 9 in 10 said they believed marijuana to be safer. In fact, they don’t believe cannabis to be harmful at all. Almost 90 percent said marijuana has therapeutic benefits likely to be beneficial for public health. Millennials also have no problem with athletes using marijuana as an alternative to prescription pain medications (with almost all saying it was preferable to opioid painkillers).

Increasingly, a number of younger professionals are deciding that even though using alcohol socially can be enjoyable, it’s generally not worth the calories – or the hangovers and embarrassing lack of control (something they need not deal with when using marijuana). Instead, they are smoking the herb occasionally and for pain taking candies and other edibles with cannabidiol (aka CBD) which doesn’t intoxicate users. Many also like the fact the marijuana costs less than alcohol. A gram of marijuana on the street is about $18 versus an average of $6 for a beer at your local bar (though it depends on the city).

As it now stands, nine states (including California) plus Washington D.C. have legalized recreational marijuana. Many more states allow for medicinal marijuana and others allow products that don’t have psychoactive components and help relieve muscle pain or anxiety. Decriminalization in some regions has relaxed attitudes about it generally, especially among youth. In fact, a poll conducted by Yahoo News last year revealed most milennials used marijuana socially, though only a quarter of them just smoke it.

Whereas 2 percent of high school seniors used marijuana daily in 1992, that figure jumped to 6 percent by 2017. (Certainly, we aren’t suggesting that high schoolers use the drug unless there is a medically approved reason to do so. Still these type of polls give us insight into trends. Meanwhile when we look at alcohol use, a poll by the Monitoring the Future Study of some 50,000 teens and younger adults revealed last year the number of college students who consume alcohol daily fell from 6.5 percent in 1980 to 2.2 percent in 2017.

Marijuana attorneys know this is also opening up a number of new markets for marijuana businesses. Those looking to break into possibly new markets with this information should discuss the legal factors they will need to carefully navigate with an experienced L.A. marijuana business attorney. Recreational cannabis is now a $6 billion industry – and apparently growing. These include products like “cannabis-infused sparkling tonic” which is sold in L.A., where many people are seeking low-dose cannabis products.

Many companies are hoping to lure millennials by branding themselves as ‘”lifestyle companies,” but they need to be careful how they do so without running afoul of various state and local regulations. That’s why having an experienced marijuana attorney on your side is so critical.

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

Additional Resources:

Why millennials prefer cannabis to booze: ‘Zero enjoyment out of drinking’ (and it’s cheaper), Sept. 27, 2018, By Karl Paul, Market Watch

More Blog Entries:

Wild Wild West of Marijuana Businesses Coming to an End, Sept. 15, 2018, L.A. Marijuana Attorney Blog

while remaining in compliance with local and state regulations and laws. What happens, though, when a company is found to be in violation of one of those rules? Many businesses are beginning to find out as authorities ramp up efforts to wrangle illegal, unlicensed, and non-compliant marijuana operations in California. Recently more than 500 people were charged with misdemeanors in Los Angeles for their participation in illegal activity at 105 marijuana businesses in the city.

Those charged could face up to six months in jail and a $1,000 in fines for operating marijuana businesses without a license. The crackdown included not only dispensaries, but also extraction labs, cultivation sites, and delivery services, according to Los Angeles Times. Judges have been hearing cases associated with this series of investigations since May, and arraignments will carry into the end of October. So far, 21 have pleaded no contest or guilty and 11 have been dismissed. Other violations included not following security locations or not following rules regarding the business’s location, such as being too close to a school. With the proper future licensing and guidance, some of these businesses could still have a future, but major infractions like location will mean some will have to practically start over from scratch if they hope to continue in the industry. Many have argued excess regulation, monstrously high taxes, and difficulty acquiring licensing have driven marijuana business owners to operate without being in full compliance. In some areas, after state and local taxes are combined, the amount cannabis product is being taxed is up to 50 percent. Business owners who had licenses back when just medical marijuana was legal in California found themselves having to reapply for licenses once the Medicinal and Adult-Use Cannabis Regulation and Safety Act was passed, consolidating guidelines for both medical and recreational marketplaces. Some struggled to align with the new law, even though they had already had been operating for years. While our skilled L.A. marijuana business lawyers agree there is too much red tape holding local business owners back, we also know that citing burdensome rules is not an affirmative defense in court should you get busted.

As Los Angeles City Attorney Mike Feuer has pointed out, clamping down on unregulated and illegal activity is not just about punishing non-compliant businesses. It’s about creating a fair environment for the 165 businesses operating with licenses in the city. They, too, are facing the same challenges as all of the other businesses, but additionally must compete with operators who are padding out their bottom line by cutting corners. This is why our marijuana business attorneys focus so much of our efforts on helping business owners with licensing, business plans, consulting, and compliance. We have said from the beginning that the best way to ensure the strong and successful longevity of your business is to build compliance into your foundation, and a consultation with our firm is the best first step in building that foundation. We want to help businesses before they find themselves in court.

Our marijuana arrest lawyers also have the experience you need, though, should you not take these steps find yourself in trouble with the law.

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

Additional Resources:

Over 500 Charged in LA in Connection to Unlicensed Marijuana Businesses, by Nick Lindsey, Sept. 7, 2018, High Times

More Blog Entries:

Unlicensed Marijuana Firms in L.A. Face Wrath of City Police, Prosecutors, June 4, 2018, Cannabis Law Group