When medical marijuana dispensaries and collectives first started cropping up around California in 1997, they had to heavily guard their assets – both product and cash. Banks, cowed by federal law that might ensnare them on criminal money-laundering charges, denied accounts to almost everyone who profited from cannabis, a Schedule I narcotic. Being state-legal didn’t matter.

More than 20 years later, although California was late to join the recreational sales party, our Los Angles cannabis lawyers have seen so much of the legal landscape change. Profits are not only allowed, but encouraged. Collectives and co-ops were outlawed as of last month. Businesses are licensed and heavily regulated and taxed. Everything from seed-to-sale is tracked and tested by outside labs.

And yet: Most Southern California marijuana businesses still can’t convince banks to do business. That means in a world where e-commerce is booming, retail stores are shuttering and most people pay with plastic, marijuana businesses can’t move money electronically. So every time cash must be moved – to pay a vendor or file taxes – it’s almost always coordinated with teams of gun-strapped security officers (many ex-military) and armored cars, equipped with bullet-proof glass and high-end GPS tracking.

Los Angeles marijuana business asset protection lawyers know that beyond just being inconvenient and unnecessarily expensive and inefficient – physically moving cash is still very dangerous. It’s an issue many of our clients in Southern California frequently lament. They want to bank like every other business, and wish the federal law that still subjects their firms to outdated accounting methods would catch up to the 21st century.

Collectively, California marijuana companies carried out some $5 billion last year in transactions. All of it was in physical cash – except at five locations, all credit unions, the only ones willing to take the risk. (Credit unions have a bit more flexibility as non-profits.) All California credit unions servicing cannabis companies are at capacity – mile-long wait lists or flat-out not accepting new clients. As The Daily Democrat learned, none of them are keen to even acknowledge those accounts publicly.

It’s not just the extra security they need both inside and outside the building or anytime they move product or cash. It’s not the heavy steel bars and alarms and cameras that cover the property. It’s counting money once, twice – four times, just to be sure there hasn’t been an error that will result in significant losses. It means no official electronic confirmation receipt from an FDIC-backed institution. It means losses on interest their money might otherwise collect were it stowed in a bank, rather than stashed in a vault.

The entire expanse of the supply chain and extending through taxes – all of it, cash-only. No credit or debit cards. Internal ATMS are located inside for customer convenience. Growers, producers, suppliers, distributors, laboratories, state governments, ancillary businesses, employees – almost all always paid in cash.

The good news is nationally, some 375 banks and more than 100 credit unions DO accept deposits from marijuana-related companies, which is nearly triple the number who took on the risk five years ago, per the U.S. Department of Treasury’s Financial Crimes Enforcement Network. Most will only work with cannabis businesses that are physically located in the same community. They still risk money laundering charges – a big concern in the early days of the Trump presidency when U.S. Attorney General Jeff Sessions announced revocation of the “Cole Memo.” The internal policy directive put an end to the constant spate of state-legal cannabis businesses in California by announcing a halt on expending U.S. Department of Justice funds to state-compliant operations. As of this moment, it doesn’t appear to be a top priority for the administration.

Los Angeles marijuana lawyers know that could change at any time unless/until Congress declares marijuana is no longer a Schedule I narcotic under federal law. In the meantime, our attorneys work diligently to ensure your assets are protected. That means helping to ensure your operation is compliant with all state and local regulations (extensive and varying by region), your accounting processes are as above-board as they can be and your employment practices comply with state and federal laws.

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

Additional Resources:

Pot sellers in search of a vault, Feb. 11, 2019, By Lisa Krieger, Daily Democrat

More Blog Entries:

Report: California Banking for Bud Businesses is a Bust, Dec. 22, 2019, Los Angeles Marijuana Business Asset Protection Attorney Blog

involving First Church of Cannabis. The church had put in a bid attempting to allow smoking of marijuana as a religious sacrament in Indiana. The group sued the state, attorney general, and then Gov. Mike Pence in 2015. But a judge out of Marion County Superior Court recently ruled against the church, according to RTV6.

Indiana currently has extremely limited medical marijuana provisions and relatively strict laws against recreational use. Attempts to decriminalize small amounts of marijuana were thwarted in 2013, and instead an amendment to IC 35-48-4-11 was added to HB 1006 to increase penalties of certain types of possession to felonies rather than misdemeanors. Some attempts to legalize medical marijuana also failed a few years ago, but last year the legislature was able to push through a bill allowing CBD oil specifically for seizures. Considering all of the people nationwide who have found relief from cannabis for a wide variety of ailments, this seems to be the absolute least they could do.First Church of Cannabis was attempting to appeal to the state’s Religious Freedom Restoration Act, which is intended to protect religious groups from government interference. The act stirred up controversy from people concerned the law could lead to discrimination against certain residents, particularly LGBTQ individuals, with business owners citing religion as a shield for their discrimination. It is clear, though, given the reaction to the First Church of Cannabis that the law was never intended to protect all religions. When it comes to discrimination under the guise of religion, state leaders shrug. When a church suggests cannabis be used, however, suddenly there is much concern over churches abusing the law and using the cover of religion for illegal practices.

On the surface, the concern of state officials is not invalid. If marijuana were to be considered a dangerous drug, allowing this church to use it in religious practices would be unfathomable. It could set a precedent for drug rings to use religions as a front for illicit sales and smuggling. Our Orange County cannabis lawyers must ask, though, why is it considered a dangerous drug at all? Marijuana is legal in 30 states for medical use, nine of those states also allowing recreational use. By pushing against this issue so fervently, state leaders have actually exposed a nerve. If marijuana is not allowed to be used in religious ceremonies because it could pave the way for harder drugs to do the same, we must have the conversation about why it is lumped in with other Schedule I narcotics, like heroin or LSD, at all.

The state of Indiana made it clear where its priorities are: to further outdated propaganda about marijuana, and protect its anti-cannabis agenda even above religious liberties. We’ve come a long way in the fight for cannabis rights, but this goes to show there is much work to still be done on the national stage. Considering Pence, now vice president of the United States, had a large part to play in both the religious liberties law and the harsh marijuana punishments in Indiana, it’s no wonder there is still such confused messaging from our top leaders in regards to marijuana.

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:

Judge Dismisses Cannabis Church Case Defending Weed as Religious Sacrament, July 8, 2018, By Morgan Gstalter, The Hil

More Blog Entries:

International Church of Cannabis Draws Mixed Feelings, April 17, 2018, Cannabis Law Group

One of the reasons they argue it is dangerous is because it has been labeled a so-called gateway drug. The many times disproven theory is that if someone uses marijuana, even though many do not see it as harmful, that a person is far more likely to try “harder” drugs such as cocaine and heroin. In other words, marijuana is a gateway to the dangers of all sorts of illicit drug use. If we take this argument another step, some with claim these marijuana users are not only addicted to marijuana at this point, and have moved no to cocaine and heroin, but they are also engaging in all sorts of street crime to fund their pricey habit.

As our Los Angeles medical marijuana attorneys can explain, though this theory sounds laughable to many, it is the basis for much of the opposition to the legalization of medical marijuana and the recreational use of marijuana. In addition to the gateway theory, many also argue that marijuana itself has all kinds of negative health consequences. Even though there is hardly any evidence to support any of these claims, they will sight to the fact that not many studies have been done, and they intend on keeping it that way. According to a recent news article from NPR, there has been links alleged between marijuana and a very rare vomiting illness. One patient interviewed as part of this article, said she had been using marijuana for nearly 20 years as it is the only thing that can effectively treat her anxiety and depression. However, while it does work for that purpose, she began to experience serious stomach discomfort that caused her to be extremely nauseous as well as wretch and vomit frequently. She even lost her job because they believed her to be an alcoholic when that was not the case. The only thing would help when of these episodes would come on was going into a hot shower and staying there for as many as four hours.

She went to the hospital many times and doctors could not find anything that was causing this illness. They ultimately determined that she suffered from a newly theorized medical condition that can cause vomiting after years of marijuana use in a very small portion of the population who use marijuana frequently. This patient has been trying to stop smoking marijuana but has discovered difficulty with increasing symptoms associated with her anxiety and depression.

Whether this condition is ever fully accepted by the medical community, it will surely be used as a weapon by those who oppose the legal use of marijuana. However, it should be noted that if a medicine was outlawed because there were side effects that could affect a very small percentage of users, there would be no drugs on the market. We have all seen commercials where someone in a soothing voice tells us about all of the horrible sounding side effects sometimes including death.

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

Additional Resources:

Rare And Mysterious Vomiting Illness Linked To Heavy Marijuana Use, November 30, 2017, By Pauline Bartolone, NPR

More Blog Entries:

Marijuana Industry Revives a Solar Ghost Town, September 13, 2017, by Cannabis Law Group

An Unusual Partnership The Denver Business Journal reports that Front Range Biosciences – an agricultural biotechnology company based in Lafayette, Colorado which specializes in marijuana – has partnered with the University of California-Davis to study marijuana. The deal began with a $150,000 gift – one of several installments – provided to the University of California by the company, which says it is designed to advance understanding of the medicinal and nutraceutical uses of cannabis. In turn, a professor in the UC-Davis Department of Viticulture and Enology says the college is excited to have the opportunity to study and decode the hemp genome, which will enable new insights into the genetic bases of complex pathways of secondary metabolism in plants. The company also seeks to reduce pesticide residues and excessive application of fertilizers in compounds with medicinal benefits. Vast Potential for Cannabis Entrepreneurs Partnerships such as this have significant potential for all cannabis business owners – not just those funding this particular research. A better understanding of the hemp genome will allow all farmers and grow operations to yield better crops more efficiently. Decreased power and water demands are not only beneficial for profitable operations, but also for conservation of California’s valuable natural resources. Medical marijuana, in particular, can benefit from scientific research which enables a better understanding of its chemical and neurological effects on the body. Such research can provide a firmer basis for legal protection of medical marijuana rights – both for patients and dispensary owners. Reduction in the use of pesticides and fertilizers can ensure that the medical benefits of marijuana are accessed without unpleasant side effects or unnecessary toxins entering users’ bodies. Now, perhaps more than ever, it is important for the private sector to support academic and scientific research into medical marijuana. Popular Science reports that federal law makes it highly difficult for researchers to obtain marijuana for scientific studies. In addition to holding a DEA license and gaining FDA approval for a study, researchers must obtain research-grade marijuana from the National Institute on Drug Abuse (NIDA). In the current frosty political climate – in which federal law recognizes no medical benefit to marijuana whatsoever – such federal approvals and inventory can be difficult to come by. NIDA was established with a Congressional mandate to research the harmful effect of drug use. It can therefore be difficult (if not impossible) to obtain approval for a study demonstrating the therapeutic effects of marijuana. Yet scientific inquiry cannot be limited to certain policies, beliefs, or political administration. Private industry and research must continue to pursue research to better understand the world around us. A medical marijuana collective lawyer can help your business integrate scientific solutions with effective business strategies to prepare your cannabis business for profitable operations for years to come. The Los Angeles Cannabis Law Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734. Additional Resources: Colorado marijuana biotech partners with California college to study hemp, October 26, 2017, by Ben Miller, Denver Business Journal More Blog Entries: Rescheduling Marijuana Could Help Researchers, April 22, 2016, by Cannabis Law Group

Why the Number is So High Interestingly, the 2016 number was more than double the number of indoor plants seized by the D.E.A. in California in 2012. So why have indoor grows increased so quickly in California? According to a D.E.A. report, indoor production has two key advantages: it does not rely on outdoor climate conditions or growing seasons, and it is more difficult for law enforcement officers to discover that open outdoor grows. Outgrow grows can cause other legal complications, too: many outdoor grows in California have been conducted on federal lands. Marijuana is entirely prohibited on federal lands. No state permit, license, or compliance can protect a defendant from being prosecuted under federal law if he or she grows marijuana on federal lands within state borders. What About the Lawful Grows? Of course, there are many growers in California who are operating lawfully. State law allows for the operation of cooperatives and collectives which grow medicinal marijuana. Both the existing compassionate use law and new recreational use law allow for individuals to cultivate a small number of plants for personal use. So long as this growth is conducted in accordance with county, city or other local regulations, it is considered lawful. This does not, of course, mean that legal growth will not be the target of law enforcement investigations. Many of these investigations can be resolved simply by providing proof of permits, licenses, and compliance with other applicable regulations. Unfortunately, others are drawn out for months. These can result in many hours and thousands of dollars spent trying to resolve criminal charges. Worse, it can result in the seizure of not only marijuana, but cash and other assets, as well. Many prosecutors’ offices are dilatory in releasing this property upon the close of an investigation. In many cases, the defendant must file a separate civil lawsuit simply to reclaim the property. If you have been the subject of a criminal investigation or seizure of assets, contact an experienced Los Angeles marijuana criminal defense attorney as soon as possible. You have constitutional rights which must be protected in the criminal justice system. You also have the right to seek the return of seized assets through the civil courts. The Los Angeles Cannabis Law Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734. Additional Resources: California marijuana grow houses account for 75 percent of U.S. indoor plants seized, October 4, 2017 by Brad Branan, Sacramento Bee More Blog Entries: New Bill: Police Must Return Seized Marijuana or Pay Compensation, May 15, 2014, by Cannabis Law Group

This is not unlike the British phenomenon of “TV pickup”. There, utility administrators must respond to predictable surges in electricity use. Geek.com reports that these surges are a well-documented correlate of the widespread use of electric tea kettles immediately after popular TV programs end. The British National Grid allots an electricity reserve to manage these surges, and can even access reserves in France when needed. If there is a lesson to be learnt from British utility services, it is that careful planning around reliable data can be used to prevent interruptions in service and other problems as a result of increased electricity demand.

California Utility Companies Prepare for – and Respond to – Energy Demands of Growing Operations According to CBS Sacramento, the Sacramento Municipal Utility District is working with growers who have submitted applications for indoor cultivation to identify and meet their power needs. These cultivation businesses are restricted to commercial and industrial zones per Sacramento city ordinance. The Utility District has the ability to meet the needs of current applicants, but will continue to examine its infrastructure to ensure it can handle the increasing needs of new applicants. This may involve ungrading or expanding transformers for the affected areas. Interestingly, the ability to meet the needs of marijuana growers has proved to be a disappointment for some utility companies looking to profit from the increased energy demands of indoor growing. The Denver Post reports that the city of Tacoma, Washington prepared for a surge of energy demand that turned out to be much smaller than expected. This was after Pugent Sound Energy of Bellevue, Washington supplied over seventy marijuana growers with energy-efficient LED bulbs for their growing operation. This and similar technologies have allowed growing operations to mitigate their energy demands – demands which can be as much as five times higher than those of the average industrial user. And despite the fact that it prohibits the growth of marijuana indoors, Colorado experienced a one to two percent increase in statewide energy demands after legalized recreational marijuana. It is still too early to know exactly how California’s energy demands will respond to the legalization of marijuana. Business licenses for the sale of marijuana will not be issued until January 1, 2018, and it will be sometime after that before a reliable body of sufficient research can be used to identify energy consumption trends. Moreover, while California will allow indoor marijuana grows, its growers are likely to use the natural light which is less available to growers in Washington and Colorado. This, too, will impact the overall energy consumption of the California cannabis industry. Regulation of the cannabis industry in California is going through an unprecedented level of change. Everything from business licenses to availability of resources can pose problems for cannabis business owners who are unprepared to meet these challenges. An experienced marijuana lawyer will help devise strategies to ensure continued business operation throughout the dynamic regulatory climate. The Los Angeles Cannabis Law Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734. Additional Resources: Indoor Marijuana Grows May Increase Power Needs in California, July 12, 2017 by Drew Bollea, CBS Sacramento More Blog Entries: Marijuana Energy Consumption Increasingly Becoming an Issue, November 20, 2015, by Cannabis Law Group

Additional Resources:

Sonoma County challenges for pot supremacy as others turn away, July 17, 2017, By Peter Fimrite, The San Francisco Chronicle

More Blog Entries:

How the Retroactive Penalty Provisions of Proposition 64 Apply to Marijuana Convictions, July 27, 2017, California Marijuana Lawyer Blog