In recent months, there have been numerous reports of technology software companies servicing the cannabis industry facing financial consequences for that partnership. Firms have been dumped by payment processors, classified as “high risk” by credit card brands and banks (requiring higher fees to handle payments), and overall faced difficulty in the course of day-to-day businesses.

As the legalized cannabis market continues to mature, we’re seeing regulatory headaches continue for ancillary businesses like tech companies, particularly when it comes to handling banking and payment processing. This is true even for companies that never touch a single marijuana plant or product. Businesses working with cannabis growers, producers, and retailers at every leg of the supply chain have found themselves suddenly grappling with growing red tape.

The irony for some of these tech companies is that a primary part of the service they provide to the cannabis industry is the ability to more easily maintain and track regulatory compliance. Some of those who are working high up the compliance chain for these firms have literally helped to write the laws for cities across California. And even they are struggling to maintain operations and meet compliance standards.

Although there are many factors involved, it primarily comes down to one issue: The lack of decriminalization at the federal level. Marijuana remains a Schedule I narcotic per the U.S. government. As long as that is true, that puts every company in the cannabis supply chain in a legal bind, particularly in terms of finances. Banks and other financial institutions that work with cannabis companies could potentially be accused of breaking federal money laundering laws.

Last month, Senators blocked marijuana banking reform that was introduced as a part of a defense bill. The bill, Secure and Fair Enforcement (SAFE) Banking Act, divided some lawmakers and advocates. Although all share the goal of ending cannabis criminalization, there is some pressure to introduce truly bipartisan legislation in a way that’s more incremental. But in the meantime, that doesn’t help companies that are facing the very real – and expensive – consequences of little-to-no progress on this front.

They’re losing their banking and branded card relationships waiting for federal legality. It’s possible that cannabis or partnering tech companies may even be skating on thin ice where fraud laws are concerned if they’re running any type of branded credit card. It’s imperative to work with an experienced marijuana business lawyer who can review all company processes to ensure you’re taking all steps to meet the letter and spirit of the law as a legal cannabis company – or a firm that partners with one.

At the end of the day, every industry has its regulatory risks. For the cannabis industry and those whose work is ancillary to it, the question is what is the nature and degree of that risk relative to the potential opportunities and anticipated ROI. One can reduce the risk to the greatest extent possible by partnering with an experienced California cannabis business lawyer.

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 Companies in California Have Lost Millions Due To Poor Regulations. California’s New Bill Could Change That, Jan. 3, 2022, Keerthi Vedantam, dot.LA

More Blog Entries:

California Cannabis Tax Compliance, Banking Continue to be Challenges in 2022, Dec. 29, 2021, Los Angeles Cannabis Business Lawyer Blog

California Department of Consumer Affairs investigators seized numerous ready-for-sale products from the facility, including Kushy Punch packaged gummies, as well as approximately 7,200 Kushy Vape packaged disposable vaporizers. These products are estimated to carry a combined $21 million street value.

If you need help with business licensing and permits for your cannabis business, our Southern California business marijuana attorneys are here for you.

Kushy Punch Denies Wrong-Doing In a written statement, a lawyer for Kushy Punch confirmed the manufacturing facility and products in question do belong to Kushy Punch, yet denied the company is releasing illegal products for sale.

Instead, the statement claimed the cartridges in question were all found in a box that was labeled for destruction. That’s because the products were no longer viable – their batteries had ceased working while being held in storage for two years or more.

Anonymous Source Claims Kushy Punch Runs Two Separate Businesses An industry insider acquainted with Kushy Punch, claims the state-licensed outfit is running two facilities – one for licensed or above board products, and another specifically for the illicit market.

The source suspects that clean tested marijuana was funneled through the licensed Kushy Punch facility, then out into the legal supply chain. While the cannabis that may not have met with California’s rigid pesticide benchmarks was sent to the illegal kitchen, extraction lab and pen factory.

The informer also claims all of Kushy Punch’s black market operations are going to the Canoga Park facility, and that “they are using untested black market oil that is heavy in pesticide.”

The cannabis company’s legal statement further denies allegations of illegal activity. Instead it claims all Kushy Punch products endure extensive testing to be sure all products are safe, compliant and properly approved for sale.

Photos taken during the initial investigation show the Kushy Punch facility apparently performing petro-solvent extractions, where the THC (the active ingredient in cannabis) is concentrated by a technician. This practice is legal in California, so long as it’s done with a permit. But the extraction method can also concentrate pesticides within the cannabis, as well as the THC. Therein lies the obvious health danger.

Investigations are Ongoing Investigators found the San Fernando Valley facility appeared to be using extracts both in disposable vape pen cartridges as well as legitimate-looking THC food products. When raided, the facility was holding thousands of boxes of Kushy Punch packaged edibles, seemingly ready for sale and consumer consumption.

Bureau of Cannabis Control (BCC) spokesperson, Alex Traverso, said that while the investigation is still ongoing, the initial raid saw “investigators confiscate thousands of illegal cape carts worth millions of dollars.”

Legal Implications A number of cannabis manufacturing companies have existed both pre- and post-licensing eras. It should come as little surprise then that a lure exists for some companies to seek business operations on both legal and illegal sides of the isle. What will be interesting to see play out, is just what will happen if a big, above board player is found to be dabbling in both arenas. It is highly likely that should a licensed cannabis company engage in illegal business activity, that those licenses probably won’t be held for much longer.

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: Bureau of Cannabis Control

Fake THC Cartridges Are Flooding California Of all counterfeit cannabis products, refillable THC cartridges used inside vaping pens are currently most common. Surprisingly, states like California – where recreational cannabis use is legal – appear to be most flooded with counterfeit products. Big brands like Kingpen and Rove have tried to get ahead of counterfeits by repackaging their products, but counterfeits have shown they can keep pace, often reproducing new packaging almost as quickly as the legitimate brands.

And industry insiders unanimously agree, the fakes are getting better all the time. Many knockoff THC vape pens are comprised of illegally but locally grown cannabis, which producers then stuff into refillable cartridge pens, before attaching counterfeit labeling they’ve purchased online, and selling the finished counterfeit pens at discounted prices to illegal pop up shops. To most consumers and law enforcement officials alike, it’s very difficult to tell a real pen from a fake one.

The best way for brands and businesses to protect against counterfeits is to legally trademark cannabis products. Once cannabis companies have a trademark in place, Californian authorities then have jurisdiction to enforce against counterfeits. Without a trademark though, it’s very difficult to prosecute. If you need help trademarking your cannabis products, our marijuana business lawyers of Orange County can help.

A Budding Counterfeit Scene All across California, legitimate cannabis businesses are feeling the pinch. The problem is so wide spread that brazen bootleggers are even advertising counterfeit products on Instagram and Snapchat. An admin for DanksOfficial – a watchdog Instagram account cautioning marijuana users against buying THC cartridges on the black market – who prefers to remain anonymous, says unless consumers can test each cartridge, there’s no way to be sure a vaping cartridge is real or safe. Experts Warn of Health Risks Counterfeits Pose Just as vaping is increasing in popularity across the nation, associated long-term health risks are also becoming increasingly clear. The Center for Disease Control and Prevention (CDC) recently announced that 193 cases of severe lung illness, all possibly linked to vaping, have propped up across 22 states. While the CDC did not share exactly how many cases involved products containing THC, Dr. Illeana Arias, senior scientific advisor and acting deputy director for non-infectious diseases noted “in many cases” patients had confirmed using THC-containing products prior to feeling unwell.

Meanwhile, the California Department of Public Health (CDPH) recently stated as many as 28 cases of acute lung disease among people who recently vaped cannabis products, had been reported across the Golden State. Just this August, the CDPH issued a health alert in Kings County after a cluster of hospitalizations. Between July and August, seven healthy adults were admitted to county hospitals, all showing signs of severe pulmonary disease, after vaping THC products. Nancy Gerking, Kings County assistant director of public health, confirmed the products were all purchased from temporary, unlicensed pop-up shops in the local area.

At about the same time, we also saw the Bureau of Cannabis Control (BCC) launch a public awareness campaign warning consumers about the health risks associated with buying marijuana products from unlicensed dispensaries. That’s because knock off products are completely unregulated and avoid testing for pesticides or other contaminants, which can pose dangerous health risks.

Other industry insiders note, because licensed cannabis growers and businesses cannot distribute their goods to unlicensed stores without risk of suffering heavy fines from regulators, if big brand name products are showing up in unlicensed stores, then those products are almost always fake. Consumers can best protect themselves from subpar goods by buying all cannabis products from licensed, registered cannabis businesses. To check if a California cannabis dispensary is legitimate and meets the state’s high safely standards, enter their business name into the BCC online license search tool (www.CApotcheck.com). Be sure your retailer is listed there, before shopping.

Marked Down Knock Offs Bringing in Big Bucks The state’s registered marijuana operations are projected to make more than $3 billion combined this year. But that number is easily overshadowed by the $8.7 billion in revenue expected to be generated by the unregulated cannabis industry across California in the same time frame.

Legitimate cannabis business operators are at pains to compete. It is widely believed that counterfeits are boosting unlicensed dispensary sales, where business owners can afford to sell cannabis products at lower prices, because they’re skipping out on regulation costs and avoiding taxes.

Authority Clampdowns Showing Signs of Success The Los Angeles Police Department is making strides in limiting the rampant illegal cannabis trade. At the beginning of the year there were almost 300 illegal dispensaries operating in the Los Angeles area, compared to less than 200 today. With authorities primarily focused on closing unlicensed dispensaries, clamping down on counterfeit products is not yet a priority.

Rather than issuing search warrants that could lead to seizing knock off cannabis items, the LAPD is focused on first cutting water and power to properties hosting illegal cannabis activity. While this is a strong first step, some fear counterfeit products not seized when closing down illegal operations, can easily circulate somewhere else down the road.

Legal Implications The black market for cannabis activity is thriving, and counterfeits are boosting sales for unlicensed retailers across the United States. Without regulation, corners are being cut, product safety is in question and health risks are becoming a reality. Additionally, the sophisticated production of knock offs show little signs of slowing down.

In this climate, the best way for cannabis brands to protect the integrity of their products, their brand reputations and the well-being of their customers, is to secure product trademarks, invest in difficult to replicate product packaging, and aggressively pursue counterfeits.

Some industry stakeholders believe knock offs will abate as consumers become more informed over time, and others are frustrated that counterfeits are stoking unlicensed dispensaries, who are taking such a large portion of market share. Either way, legitimate cannabis outfits are working hard to stay licensed, and to keep their businesses running. It seems the longer it takes to clamp down on counterfeits, the harder it will become for legal businesses to continue trading. Let’s hope the ramped up authority crack downs continue to make inroads and pave a smoother path for legal cannabis business owners moving forward. 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: The Center for Disease Prevention and Control California Department of Public Health Bureau for Cannabis Control California

• Breach of Contract;
• Fraud;
• Breach of Fiduciary Duty;
• Conspiracy to Commit Breach of Fiduciary Duty
• Dissolution of Partnership and Corporations;
• Turnover of Corporate Books and Records; and
• Injunctive Relief.

If you need counsel settling cannabis related business disputes, our Los Angeles marijuana business lawyers can help.

Trouble for Taft This particular suit against Taft, Burtin and Holocomb, was filed by two investment companies in the Orange County Superior Court of California. Among other claims, it alleges that Taft ran an unlicensed cannabis outfit in Sonoma County.

The lawsuit further paints a dismal portrait of the defendants, claiming they committed frequent and ongoing “dishonest, corrupt and fraudulent activity.” It also calls Taft a “mercurial and volatile leader,” known for bragging to employees about his big ideas. It calls into question Taft’s ability to lead, while outlining a number of his deliberate fraudulent schemes, and even notes Taft’s invitations to employees to smoke weed with him during business hours.

Smoking Pot on the Job According to the National Safety Council, “workers with substance use disorders miss almost 50 percent more work days than their peers – up to six weeks each year,” and not surprisingly, “absenteeism leads to losses in productivity.” The Council outlines a number of ways in which employers can help to ease this situation, like enacting strong company drug policies, or treating substance abuse as a disease. Smoking pot with employees during work hours is noticeably absent from this list.

This lawsuit also states that 420 Companies entered into a “death spiral” under Taft’s direction, losing revenue and clients at a staggering rate.

Keeping Investors in the Dark Further allegations within the suit claim the defendants failed to seek input from company investors before rejecting a $75 million buyout offer from Acreage Holdings, another operator within the cannabis industry, conducting activity across a number of states. The complaint notes that the defendants believed the company to be worth much more than the offer on the table, so they turned it down.

Having tired of these kinds of claimed business circumstances, the plaintiffs now seek:

• A minimum of $11 million in damages;
• Dissolution of 420 Companies;
• A preliminary injunction against the defendants; and
• A court appointed receiver to oversee management of 420 Companies.

Implications The success of a company often reflects the actions of its leaders, and if the charges outlined in this complaint are found to be correct, it is not surprising that investors are seeking damages and the dissolution of partnerships. One point that is intriguing, is the willingness of a company leader (Taft) to partake in drug use with employees whilst on the clock. Not only does this kind of behavior send an inconsistent message to employees on what is expected of them (i.e. to remain sober and able to operate on full cylinders at all times) but it also calls into question whether or not Taft has his own drug use under control. And if not, is that good for business? At the end of the day, whether one is working in an industry that revolves around drugs or not, employees should be expected to conduct themselves professionally during working hours, and those in leadership positions must lead by example. 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: National Safety Council – Drugs at Work

January 9th marked the end of what state regulators called the grace period for unlicensed marijuana businesses across the state. This was akin to a warning shot, with the agency noting the several hundred unlicensed marijuana retailers and delivery services statewide are “taking their chances.” Even if they do close shop, there is no guarantee authorities wouldn’t take action after the fact, though it’s more probable they’ll want to pursue action against those in active operation.

Licensed L.A. marijuana retailers have been complaining for the last year that black market operators were undercutting their sales with an unfair advantage. The Sacramento raid stemmed from a complaint filed with the BCC, though the agency didn’t indicate where the tip originated.

Many of the shops slated to be targeted were formerly collectives and co-ops allowed to operate through last year despite not having a license. They had protection from state prosecution as designated medical collectives, but that expired officially last month. Unfortunately, while many of these collectives were long-standing, there aren’t that many licenses to go around. Some smaller marijuana businesses may be priced out of licensing in some areas.

Los Angeles marijuana licensing attorneys know it’s been an especially problematic issue in this area because the city has been snail-pace slow to issue licenses. That means despite some of these operations are among those that have been operating legally in the state for two decades. Now, those business owners must decide whether to completely close up shop because the city hasn’t expedited their registrations, or do they take “take their chances” and continue to operate on the black market. Some owners told MjBizDaily.com it wasn’t just themselves they were concerned about; long-time medical marijuana patients would be losing their access too.

Whether we’re going to see a slew of raids is unclear. It will likely depend on the volume of complaints in any given region and the available resources to address it.

Although arrests were made by California state authorities, as future arrests promise also to be, there’s no guarantee operations selling marijuana outside the statutory structure of the state framework won’t risk federal charges, especially if there is any indication the business crossed state borders. The Obama administration’s Cole Memo, which the Trump administration has indicated – at least for now – it will abide, vows Department of Justice expenditures for prosecuting federal marijuana trafficking crimes only extends to those businesses that are following state law.

The business in Sacramento was an unlicensed cannabis delivery service, while the business in in Los Angeles was a retailer. According to regulators’ press release, authorities with bureau’s Division of Investigation seized $250,000 in cannabis and related products from the search in Sacramento County and another nearly $28,000 and two firearms from the unlicensed marijuana store in L.A., where six people were also arrested.

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

Additional Resources:

End of an era: After Jan. 9, California’s unlicensed medical cannabis collectives/co-ops illegal, Feb. 3, 2019, By John Schroyer, MJBizDaily.com

More Blog Entries:

California Ranks in Top 5 for Marijuana Business Entrepreneurs, Feb. 8, 2019, Los Angeles Marijuana Attorney Blog

Cannabis-infused cookies, tinctures and candies have been especially hit hard, with approximately one-third of its product removed from store shelves.

Other problems revealed (albeit on a smaller scale) by state-licensed testing firms are finding too-high levels of solvents, pesticides and bacteria, including salmonella and E. coli.

Within just eight weeks of testing, some 2,000 samples failed out of more than 11,000 Our L.A. marijuana product attorneys understand that in some of those instances, the product had to be destroyed, but a lot of the problems arose from issues with labeling, which are able to be fixed. Just for example, if a label on a container indicates a product has a potency level different than what’s on the label, the product can simply be relabeled and then move to market.

The state has argued that the stringent testing is accomplishing its intended purpose – identifying marijuana products like munchies, concentrates and buds that will be in some way not safe for smoking or eating.

These mandated state testing is new, and a spokesman for the bureau said some bumps along the way were anticipated and it would take time to go smoothly. Companies were given until the start of July to sell off all their stock that didn’t meet the state’s new testing standards.

However, as our marijuana business attorneys in Los Angeles are aware, a number of companies believe the testing standards simply go too far and present a burden that is unnecessarily costly. Some industry advocates which have been sharply critical of government regulations that force both cannabis farmers and producers to hit the nail on the small, arbitrary head with TCH levels, (the chemical in marijuana that causes one to experience a high). State standards require the concentration of this chemical to be within 10 percent of the amount on the label. But marijuana company executives say their products failed the tests even when they were the tiniest bit outside of range.

Some marijuana firms have taken to applying pressure on lawmakers, urging formation of a process by which companies could appeal lab results. That’s because even when the laboratory concedes a mistake, they still have no way to officially reverse the rating, which would allow growers and manufacturers to preserve the product – and not lose the investment they’ve made. No laboratory is going to be 100 percent perfect. Our cannabis lawyers believe that if mistakes are made, it’s only fair there is an avenue for recourse.

In September, a marijuana testing company lobbied with state regulators to expand their rules to allow a test the officials say can reveal a wide range of harmful elements like yeast and mold that aren’t currently on the list of harmful substances for which firms test.

The firm noted instances were mold was discovered on marijuana samples that passed state testing standards. They argue the state needs a bigger net to catch more things. The state Department of Health has said there are no verified reports of marijuana consumption that can be traced back to contaminants like mold or bacteria, though there were three anonymous complaints.

The company has seen examples where mold was on cannabis but the sample passed state tests.

Mislabeling failures accounted for approximately 65 percent of all product failures. Even distribution of THC in products in top priorities. Most of the buds that were tested – 90 percent – made it to market. However, the rejection rate for concentrates like waxes and oils was almost double. Many companies say it isn’t necessarily the quality testing about which they take issue, but rather the costs, which they say is severely straining their coffers as tests are not only expensive but inconsistent and slow-moving. Even a small outdoor marijuana farm in marijuana can expect to shell out as much as $10,000. Marijuana attorneys with the Cannabis Law Group can help ensure your rights – and investment and time – are protected in the course of the state’s new quality testing process. The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734. Additional Resources: Big safety testing failure rate for California pot products, Sept. 11, 2018, Associated Press More Blog Entries: New L.A. Bud Businesses Can’t Ignore Legal Snares, Sept. 28, 2018

Think about champagne. Yes, it is an alcoholic drink. It’s also a grape-growing region in France. If you want to call a liquid beverage “champagne,” law requires that you must grow it in certain parts of France and only in accordance with very specific guidelines that cover everything from planting to pressing to packaging. That’s what allows sellers to charge top dollar for it.

So what does that mean for marijuana growers in California? Many were among the first in the U.S. to practice and perfect careful cultivation techniques when the drug first became legal for medicinal purposes. And unfortunately, while legalizing bud has been boom for consumers, it’s been a bust for growers. It has meant a near-crushing amount of oversight and safety testing. A virtual mountain of regulation, cannabis cultivators are finding that the laws meant to protect the consumer and the environment are being largely placed on their shoulders.

Our California marijuana cultivation attorneys know some of these firms have paid more than $120,000 in consults and fees. Although some can scrape by with money saved and the help of investors, it’s estimated some 10,000 marijuana growers in California may be poised to go up in smoke. By some educated guesses, fewer than 5 percent are going to make through in this era of legalized pot.

That’s why numerous growing are working with MAP, hoping to carve out a niche and a means of specializing and protecting the intellectual property of Northern California growers, whose unique methods of cultivation and strains that may only do well in certain climates.

Last year, the state senate approved a measure that would require the food and agriculture department to cook up a means by which cultivators who are licensed could found their own “appellation standards” and other processes that could be applied to marijuana grown in a very specific geographic place – and to do so within the next three years. Formalizing certain types of marijuana by region of growth, the idea would pay less mind to the city or county where the cannabis is cultivated, but more would be reflective of the communities that have been sewn together in the last two decades. Boundaries would be more cultural and environmental than the arbitrary lines recognized by the government – which in a way, is most appropriate.

However, there is concern this effort may not be feasible long-term as advancements in lighting and grow techniques mean that certain strains that may only thrive in a place near the Hindu Kush mountains of Afghanistan or the hot, humid climate of Jamaica can now be mostly engineered in a greenhouse. But we don’t know to what extent the chemistry is different unfortunately because federal law has prohibited most scientific research on the plant.

Geologists in Portland are studying the effects of how light, soil composition and air all impact the growth and production outcomes of certain strains. That could give us a good sense of whether MAP’s plan is feasible.

California marijuana cultivation lawyers at the Cannabis Law Group are committed to helping cannabis farmers protect their investment and their brand.

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

Additional Resources:

THE QUEST TO MAKE CALIFORNIA’S WEED THE CHAMPAGNE OF CANNABIS, October 2018, By Matt Simon, Wired

More Blog Entries:

The Racketeer Influenced and Corruption Organizations Act, commonly referred to as “RICO,” is a U.S. federal law providing criminal penalties as well as a civil cause of action for acts performed as part of an ongoing criminal organization. It was formed to target the mob.

According to one recent report, these lawsuits are part of a wider strategy nationally to “upend legal weed.” In Oregon, some law firms actually focus exclusively on suing marijuana businesses for racketeering under the RICO statute, 18 U.S.C. Chapter 96. As reported by Willamette Week, a single attorney represented a woman who has sued more than 200 businesses, all that had ever been involved with her neighbor, a single marijuana processing plant that squeezes the THC oil from the flower for use in cannabis-infused candies. That lawsuit alleged that every dispensary and grower that had ever done business with the neighbor conspired to commit crimes that damaged the value of plaintiff’s home. That crime was growing a product deemed illegal by federal law, specifically the Controlled Substances Act.

Aside from the immediate expense to the companies involved, the greater danger with marijuana RICO lawsuits is that if successful, they would be a potentially huge and expensive risk for cannabis companies next to annoyed neighbors. In Oregon particularly, many marijuana businesses are under immense financial strain because of the bargain basement wholesale prices thanks to an over-saturated market.

Plaintiff says that when neighbors grow marijuana next door, it slashes their own home prices because the smell wafting from the farm next door is powerful, “skunk-like” and unmistakable.”

The same attorney representing her has reportedly filed a number of complaints for others in rural Oregon targeting legal marijuana operations. One of those was settled out-of-court.

Attacking state-sanctioned marijuana businesses in courts using RICO is a novel use of the statute, but our L.A. marijuana attorneys recognize it is one that appears to be catching on in other areas of the country as well. Some law firms are actually offering education courses to potential plaintiffs for some $200 each to teach them how to sue marijuana companies using the RICO statute. More than a half a dozen of those cases have been filed in federal courts across the country. As of yet, none of these cases have gone to trial. However, a number of legal strategists think the tactic could work, and that’s something about which our California marijuana lawyers feel we need to warn clients. They need to be prepared for this kind of legal assault, and working with a long-time, well-sourced marijuana law firm is 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:

A Racketeering Lawsuit Brought by an Oregon Equine Lawyer Is Part of a National Strategy to Upend Legal Weed, Aug. 22, 2018, By Katie Shepherd, Willamette Week

More Blog Entries:

New L.A. Bud Businesses Can’t Ignore Legal Snares, Sept. 28, 2018, L.A. Marijuana Attorney Blog

proper use and regulations. The mid-September training is being provided by Riverside County’s Agricultural Commissioner’s Office and California Department of Pesticide Regulation, according to a release from the commissioner’s office. Commercial cultivation is banned in many parts of Riverside County, including the unincorporated areas, but the event is still open to anyone who wants to register.

Pesticides have become a hot-button issue in the marijuana industry, especially over the past few months. As of July 1, the transition period in which licensing authorities did not enforce certain regulatory provisions was no longer in effect. As our experienced attorneys can explain, mandatory laboratory testing was among those regulations that would be enforced. This has meant any cultivators not in compliance with pesticide use are now flagged during testing and their product is not able to make it to market. Even before July 1, pesticides were regularly in the news, with some unlicensed cultivators using toxic pesticides that have been killing off wildlife. Such behavior has had devastating effects on local ecosystems and given responsible cultivators a bad name.

Medicinal and Adult-Use Cannabis Regulation and Safety Act appoints the Department of Pesticide Regulation as the authority on matters of maximum tolerances for pesticides, residue on harvested cannabis, applications, and types of pesticides permitted. Per MAUCRSA, Sec. 41, 26060 (d-g), Department of Food and Agriculture is to be consulted on how guidelines specific to the cannabis industry are set, though cultivators must also follow certain rules already in place, such as prohibition of certain pesticides in the state.

It’s clear to anyone close to the matter that education is the key to everything about the cannabis industry. Through the power of information, scientists have discovered medical breakthroughs involving marijuana. Researchers have gotten a better grasp on the effects of ingesting different doses of cannabis in different ways. This has led to better results for medical patients as well a better understanding for how to safely consume recreational marijuana. Now that experts are learning more about other aspects of the marijuana industry, pesticides and their health and environmental impact are no different. Topics covered in the training include operator identification numbers, pesticide use reporting, private applicator certificates, employer requirements, worker health and safety, and understanding pesticide labels.

In Riverside County, nine cities currently permit both recreational and medical commercial grow operations: Blythe, Cathedral City, Coachella, Desert Hot Springs, Lake Elsinore, Moreno Valley, Palm Desert, Palm Springs, and San Jacinto. Perris allows commercial grows, but only for medical marijuana.

As our Riverside marijuana cultivation lawyers know, pesticides are just one part of a more complicated web of regulations and guidelines necessary for cultivators to operate in compliance. Cultivators must be in compliance with waste disposal regulations, including pesticides, herbicides, irrigation runoff, soil disposal, erosion control, drainage features, chemicals, etc. They must use weighing and measuring devices that meet strict standards. Indoor grows must follow numerous building regulations. Even matters of water supply are under tight scrutiny, such as water suppliers, water diversion, irrigation, groundwater extraction, water discharge, with oversight coming from the Department of Fish and Wildlife and State Water Resources Control Board. Our skilled lawyers can guide your cultivation business through all of these issues and much more.

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:

What Are the Marijuana Laws in Your California City?, Jan. 3, 2018, Orange County Register

More Blog Entries:

Cannabis Cultivators Scouring Legal Ways to Grow, Feb. 4, 2017, Cannabis Law Group

equally important, but less discussed, element is security. Considering some security measures are actually built into the regulations for marijuana businesses, this is certainly not something to be taken lightly. Cannabis Business Times recently broke down security recommendations and requirements for marijuana cultivators, and our experienced legal team can expand on these tips and explain the rules other types of businesses must also understand.

It may seem basic, but one of the most important steps the report outlined was assessing risk. You don’t want to be reactive to your security needs, only putting measures in place after a problem presents itself. It’s important to be proactive, and identify all the risk areas, particularly any touch-points where product could be removed from your facility without your knowledge.

Video surveillance is one of the top methods of security in any type of marijuana business, but there are many aspects that must be taken into consideration before choosing the system that’s right for you. Is the video quality high resolution enough? CA Code of Regulations Div. 42, Ch. 1, Sec. 5044 states that minimum camera resolution must be 1280 x 720 pixels. The ability to identify any person recorded must be clear and certain. Your system cannot be in-house only; it must be accessible through the Internet.State guidelines also very specifically outline camera location protocol. The fixed and permanently mounted cameras need to have a view of 20 feet around all entry and exit points. Rules around storage of back logged surveillance are also very detailed because they must be readily available to view by the Bureau of Cannabis Control, the government oversight organization in charge of setting and enforcing these regulations. Beyond video surveillance in and around your facility, it is often recommended that recording devices be installed in your delivery vehicles to protect your product once it leaves your establishment, as well.

Next consideration is man power. Hiring trained security personnel might not only be a smart thing to do, but it could be required depending on the type of cannabis business you are running. More specifically, retailers must have trained security on staff or hire them as contractors. Beyond the type of personnel your business might be required to have, there are also guidelines about the records you must keep for your employees: lists of who is allowed on the premises and what level of access they have, backlogs of employees for at least seven years, and personnel and training records.

Surely any business owner would have already thought of locks and possibly alarm systems, but many are not aware there are even rules in place about these points. Commercial-grade, non-residential locks are required at all exits and entrances to your facility, but also all limited-access areas in the building. Alarms must be installed, maintained, and monitored by a licensed professional who will also respond when the alarms are activated.

It’s true all of these points could come up in discussions about opening a new business. But the cannabis industry must also be aware that such precautions could also be mandatory for them. That is why it is so important to contact our skilled Los Angeles cannabis business attorneys. We have deep knowledge of the numerous regulations you must consider when running your business, including those associated with security measures.

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:

7 Security Tips for Cannabis Cultivators, Aug. 27, 2018, Melissa Schiller, Cannabis Business Times

More Blog Entries:

Federal Banking Regulations Make Dispensaries Robbery Targets, Nov. 18, 2017, Cannabis Law Group

widespread issue, particularly with more stringent testing regulations recently becoming mandatory. According to a report from Marijuana Business Daily, though, several testing labs have said there is little to be concerned about, especially as these regulations continue to balance out and become more integrated.

The testing labs noted first of all that the two instances of recalls, both in late July, were self-imposed by the companies who manufacture the product. Thousands of marijuana products have passed lab tests and have moved along to retailer shelves. The data from these tests is double checked by the Bureau of Cannabis Control to help ensure product that should have failed the tests does not make it into stores. For the most part, companies have been able to keep up with the new regulations, and the recalls were reportedly a precautionary move by those particular businesses. As understanding of all regulations continues to grow stronger, incidents of product testing failures will continue to decline.As our Riverside marijuana business lawyers can explain, new regulations came into play July 1 of this year which enforced more strict rules about childproof packaging, labeling of THC and CBD levels, and testing for pesticides. For the first half of the year, businesses were operating under a grace period allowed by Proposition 64 in which products simply had to disclose that they had not been tested or that levels were unknown. As it stands, the system requires distributors to have approval from labs before moving product from supplies to the retailers. Which means a recall would only likely occur if there was reason to believe the test results were not accurate. Recalls could, however, also be necessary if a distributor tried to skip this very important step.

All of this is not to say that products are not getting caught up in the testing system before they hits shelves. Bureau of Cannabis Control said 20 percent of products tested as of Aug. 6 failed. While testing labs have the precise equipment to gauge levels of THC and CDB in products, such as edibles, it is up to manufacturers to have percentages on the labels when they are sent to testing. If testers discover the percentage on the label is off by more than 10 percent or the percent on the label, the product is sent back and must be relabeled, adding a lot of extra time, resources, and expense to the production overhead. For example if a product says it is 20 percent CBD, there is a 2 percent margin of error allowed, because 2 is 10 percent of 20. Manufacturers are finding this math to be particularly nightmarish when it comes to labeling product with very low percentages. If a product is labeled as having .1 percent CBD, 10 percent of .1 allows for practically no margin of error at all. Essentially manufacturers must budget for double labeling, which is neither practical nor efficient.

There also are some issues among the testing labs themselves. Without an agreed upon set of standards by which all labs test, each lab could be testing product in different ways, potentially getting different results. Testing equipment manufacturers can offer guidance and their own set of best practices, but that does not help unify all labs under one methodology. Despite these frustrations, testing is a vital part of the marijuana production process. Our skilled attorneys can help prepare your business for what you need to know about remaining in compliance, monitoring your products, and developing relationships with labs you can trust so you can work to avoid product recalls of your own.

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:

California Cannabis Testing Highlights the Importance of Quality Control and Safe Processes, Aug. 14, 2018, CFN Media

More Blog Entries:

Medical Marijuana Recalled over Pesticide Use, May 4, 2016, Cannabis Law Group

world’s largest marijuana market. California Growers Association, based in Northern California, is merging with Southern California Coalition out of Los Angeles to leverage their combined strength when voicing needs of the cannabis industry to political representatives, according to Los Angeles Business Journal. A headquarters location for the far-flung group has not yet been selected.

Anyone who is familiar with the cannabis industry knows there are major cultural differences across the board — from the numerous farmers working the fertile lands of the “Emerald Triangle” in Northern California to posh dispensaries in L.A, and all of the laboratory testers, drivers, and processors in between. Each faction of the industry has different priorities, which has often kept the groups and their interests separate. Many in the state, however, are learning that more can be accomplished when we work together. The new CalGrowers-SoCal Coalition Collaboration is now 1,600 members strong, making the group a force to be reckoned with.There is a lot on the line, of course, for this group, composed of roughly 1,000 growers and about 600 manufacturers, lab workers, delivery drivers, distributors, retailers, and other marijuana industry workers. They are tasked with protecting an industry estimated to be worth $3.7 billion by the end of 2018 and $5.1 billion in 2019, with forecasts only growing from there. One hiccup anywhere along the chain can have vast ripple effects across all areas, making it essential for everyone in the industry to have each others’ backs. If a regulation is hitting distributors especially hard, it could have disastrous economic effects in all directions. All parts of the industry have to work in perfect harmony, so when a risk arises for businesses, consumers, or patients, it is beneficial to all involved that it be addressed quickly and efficiently.

Those who have stood in opposition of marijuana have learned that nothing is more effective than the power of numbers to spread your message. The more people are unified behind the same message, the more it gets repeated and the more traction it gets. That is how we found ourselves in the midst of the anti-marijuana “War on Drugs” that has devastated so many lives in this country. A single idea — “marijuana is dangerous” — gets repeated often enough, in school, by law enforcement, and in public service announcements, and people stop questioning how and why they came to that conclusion. Now, we need to use these same methods to spread the truth about this beneficial drug.

Our trusted cannabis business attorneys in Los Angeles know first-hand the power of working in teams. It is the spirit of teamwork and togetherness that we bring to each of our clients that we serve in the marijuana industry. Our collective knowledge and experience can be an asset to you and the broad network of cannabis businesses we have helped over the years. We are proud to provide consulting services, business plan strategies, and compliance advice to marijuana businesses in Southern California as another key to the long-term growth and success of the cannabis industry in the state.

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:

Leading California Cannabis Industry Trade Associations Collaborate to Create Powerful Political Voice and Unify World’s Largest Cannabis Market, July 27, 2018, By Hezekiah Allen, California Growers Association

More Blog Entries:

Small Marijuana Farmers Take State Department to Court, Feb. 7, 2018, Cannabis Law Group

than it does in California. According to Associated Press, the new law that recently went into effect did not include provisions for how to tax and regulate marijuana production. As our marijuana attorneys can explain, this means while residents can possess and consume cannabis, they cannot open up a business to sell recreational products.

Broken down into more precise terms, this is what adult-use legalization means for those in Vermont. Residents are allowed to have four immature cannabis plants and two mature plants in their homes, so while it’s true there are no stores to purchase from, marijuana can be grown at home. Plants must be in enclosures that are secure and obscured from public view. Renters, however, must have permission from their landlords before they are allowed to begin a grow. Those 21 years and older are allowed to possess up to one ounce of marijuana, but it cannot be consumed in public spaces.Aside from home grows and all their limitations, the only other options Vermont residents have is to procure marijuana by illicit means. This is not unlike the way medical marijuana started in Vermont. Medical marijuana was legalized in the state in 2004 with the passage of Senate Bill 76. This law offered protections to qualifying patients and their caregivers who possessed or cultivated marijuana. The move was more about making sure that people who needed cannabis for health reasons were not treated like criminals, rather than giving them a concrete way to access and distribute cannabis products. As anyone in the medical marijuana industry knows, this is problematic because it limits the ways patients can consume marijuana and is a really imprecise way to attain proper strains and dosages to treat specific symptoms. It wasn’t until 2011 that the infrastructure really began to take shape when Senate Bill 17 allowed four state-licensed nonprofit organizations to dispense medical marijuana.

Vermont is also unusual in that it is the first state to legalize recreational marijuana through legislation rather than a ballot measure. In 2015, legislators attempted to push bills through that would establish a regulated system for recreational cannabis sales, but could not get any traction. A few attempts to legalize possession hit walls in 2017. Finally in early 2018, a possession, use, and cultivation bill passed. Once again, the intention of the state is clear: officials know people are already using marijuana recreationally, and so long as they follow guidelines, there’s no reason they should not be allowed to carry on.

Our Los Angeles recreational marijuana lawyers hope this new law paves the way for a more official adult-use marketplace to be established in Vermont in the near future. Most states have already come to realize the medical benefits of cannabis. The more states recognize cannabis as a benign recreational alternative to already socially acceptable products like alcohol and cigarettes, the quicker we can move forward together as a country. Right now marijuana businesses in California are still stifled by federal laws. The sooner we all unite on this issue, the more opportunities we will have to expand cannabis business ventures nationwide.

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:

Vermont Medical Marijuana Laws & Regulations, Americans for Safe Access

More Blog Entries:

Vermont Governor Signs Recreational Marijuana into Law, Feb. 1, 2018, Marijuana Law Blog

country in the world to legalize adult-use cannabis after Senate recently passed the long-awaited bill. Uruguay was the first country to pass legalization measures, with sales starting last year. Canada’s size and global standing, however, give it a unique opportunity to set the tone for what legal marijuana could look like for the rest of the world. It will still be a couple months of preparations, though, before legal sales can begin, according to Los Angeles Times.

Uruguay has had a complicated relationship with legalization, primarily because the motivation was to regulate out-of-control crime syndicates related to the black market marijuana industry. An micro-managed infrastructure has made for a rocky start getting the legal economy off the ground, but officials are still confident their plans will help eventually neutralize illegal sales.Our Los Angeles cannabis business attorneys know California has played an important role in setting an example for other states and countries. The state is the fifth largest economy in the world, so there has been a great deal of interest in how cannabis legalization would play out. California had an advantage in being the first state to legalize medical marijuana in 1996 with the Compassionate Use Act, so there was already a decent foundation in place when the state moved forward with recreational legalization at the beginning of this year. Still there are issues that exist simply because federal law labels cannabis as a Schedule I narcotic, which means all eyes are officially on Canada to see what comes next. Simply being able to legally trade between provinces opens up a whole new world currently unavailable to cannabis business owners in the U.S.

Indeed the move is already having influence. Britain is beginning to soften on its stodgy anti-marijuana stance by opening discussions about medical marijuana. Like in the U.S., the British government is having a difficult time continuing to deny the growing pile of evidence that cannabis can be a safe and effective treatment for a variety of medical ailments under the proper supervision. While the country is still staunchly opposed to the idea of recreational marijuana, it is no coincidence discussions of lifting its ban for medical purposes aligned with the timing of Canada passing their full legalization bill. Once the medical hurdle is cleared, a lot of haze about the dangers of marijuana is also cleared, and it is easier to have an adult conversation about the matter that isn’t steeped in propaganda.

Indeed it is an exciting moment in history to be at the forefront of what is surely to be the norm as time goes on. Our legal team is prepared to equip new business owners with the tools they need to be a part of this important and groundbreaking movement in a way that is flexible enough to adapt to changes as they occur. With a patchwork of local laws in California on top of state regulations and the federal ban, it is essential to seek the guidance of skilled counsel like ours. Cannabis is clearly the future, and our team will help put you on the right track to be a part of it.

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:

After Canada, will U.K. be next to legalize marijuana?, June 20, 2018, CBS News and Associated Press

More Blog Entries:

U.S. Marijuana Stock Tepid, Canada Marijuana Stock Spikes, Dec. 20, 2016, Cannabis Law Group