Since its passing in 2016, Prop 64 has earmarked its entire cannabis industry tax revenue, minus regulatory costs, to supporting public health, repairing the environment, and bettering public safety.

New parks, healthier children, broader educational opportunities, forest clean ups, drugged drivers removed from the roads, and criminal records cleared are just some of the areas already seeing big improvements thanks to Prop 64 tax revenue contributions.

And this is just the beginning. In mid January this year, Gov. Gavin Newsom proclaimed another $332.8 million in cannabis tax revenue would be allocated to social services for the 2020-2021 fiscal year.

The holistic Prop 64 picture is vast (its impact data spans more than a dozen state agencies, and countless local counterparts) and challenging to appreciate in its entirety. So with this article, our business cannabis lawyers aim to highlight some of the key initiatives already benefiting a great deal.

Recapping California’s Cannabis Tax Rates

• A 15% state retail sales excise tax
• A cultivation tax of $9.65 (raised from an initial $9.25)
• A state sales tax of 7.25% on retail cannabis sales, plus up to 1% local sales tax
• Local cannabis business taxes, ranging from 0% up to 15% (San Francisco has no local cannabis excise tax, whereas Oakland is 10%.)

Marijuana Tax Revenue Expenditures in California (Fiscal Year 2019-2020)

Once research and regulatory costs have been addressed, the remainder of funds are dispersed as follows:

• 60 percent to youth-focused anti-drug programs;
• 20 percent to environmental conservation; and
• 20 percent to public safety initiatives.

In year one alone (2019-2020), those disbursals totaled approximately $200 million. Given the cannabis tax increase introduced in 2019, fiscal year 2020-2021 allocations have also increased, now reaching $332.8 million.

$140.8 Million Covered Childcare for 11,000 Low-Income Children

The National Conference of State Legislatures states that for each dollar spent on child care and early education, society receives $17 in benefits.

In 2019-2020, 8,700 children in low income families received child care vouchers, allowing their parents to continue going to work. The 2019-2020 budget notes that this kind of initiative is so important because it helps keep kids engaged and occupied in a safe place, while mitigating the likelihood of their becoming involved with drugs.

Since the Great Recession, this program has suffered severe budget cuts on three separate occasions. With the help of Prop 64 funding, only now is the program returning to levels it maintained as far back as 2008.

A Quick List of Benefits Californians Enjoy Thanks to Prop 64 A snapshot of other sizable takeaways to note when recapping the impact Prop 64 tax revenue has already made, include:

• The scope of childcare assistance will increase in the 2020-2021 fiscal year, with Prop 64 providing $140 million to cover childcare for 11,000 children from low-moderate income families
• Cities that allow dispensaries will receive $44.8 million in grants to support public health and safety initiatives
• $39.9 million will be allocated to help combat illegal cannabis grows and to restore damaged wildlands
• In 2019 alone, Tulare County received $25.3 million to help facilitate the removal of meth, guns, herbicides and trash
• The DHCS is committed to countering health impacts for growing up a low-income minority. One program idea currently under consideration could see legal marijuana tax revenue used to employ released prisoners to help deter juvenile offenders.
• Social workers could see $30 million reinvested into their local communities
• $21.8 million has been earmarked to help establish safer roads
• Prop 64 asked the legal marijuana industry to pay its own costs, and it has. This year Prop 64 taxes paid for three state agencies. $57.8 million has been allocated to continue licensing and regulating the industry in fiscal year 2020-2021.
• $15 million has been carved out for science and policy research
• Through the 1 to 15 percent local cannabis business tax, legal cannabis taxes are also quietly paying for cop cars, new parks and ambulances throughout California. $100 million has been allocated to continue doing so in 2020-2021.

Legal Implications Its clear that many different sectors throughout the state of California have benefited greatly from the tax revenue generated by legalized marijuana.

It is important that the legal cannabis industry continues to receive support from legislators in making up ground on the illicit market. And the better the legal market does, the farther tax dollars generated can reach back to help improve day to day life for tens of thousands of people in local communities across the state.

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

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

Let’s start with the fact that recently, the California Bureau of Cannabis Control, California Department of Food and Agriculture and the California Department of Health just dropped a heap of proposed regulatory modifications on the industry. (Written comments must be in by Nov. 5 to be considered – which you should definitely do if you have a cannabis intellectual property licensing agreement or manufacturing deal you’d like to keep going because those could be directly affected.)

Specifically, the state’s proposed action would seemingly effectively ban all IP licensee agreements where the licensor (seller) isn’t licensed by the state. That could put a major crimp in existing deals involving:

• Separate IP-holding companies established by licensed operators to hold and license intellectual property back to the owner;
• Cannabis companies out-of-state looking to license their existing brand to manufacturers here, but don’t want to directly be involved in the manufacturing process in this state;
• Third-parties who aren’t licensed by have created some sort of tech to make a certain brand or marijuana product and want to license the rights to that IP to a licensed California marijuana firm.

Why Are Cannabis Industry Intellectual Property Licensing Agreements so Common?

Intellect property licensing agreements involve a contract to license all or some of their patents, trade secrets, proprietary information, registered designs, copyrights, trademarks, etc. to another company.

Many cannabis companies forge intellectual property licensing agreements, and it can be beneficial for both the licensor (seller) and licensee (buyer). Let’s say for example you create a unique marijuana cultivation method. You could choose to keep it exclusive to your operation, but you may also have the option of selling the rights to use that same method to cannabis farmers on the other end of the state. Another example would be if your business plans chance (so much is in flux in the California marijuana industry) and you end up with a major surplus of crops or products. You can extend your IP licensing to a third party to help you sell the overstock.

Cannabis companies hat clear state compliance hurdles may have an existing brand that’s strong (or choose to create a whole new one for a fresh start). Either way, they’ve got to be certain they have a valid claim to it. Problems can arise when other cannabis firms have the same name or if your former business partner or ex-spouse is claiming it is actually THEY who own the intellectual property rights. (That’s why all this should be carefully mapped in the early stages of the business licensing process or as soon as possible after you create a new unique system or alter your branding.)

This crops up a lot for a few reasons:

• The sheer size of the Los Angeles marijuana market (and beyond), with millions of clients, more than 10,000 workers and hundreds of legal stores (plus an estimated 1,700 locations still selling on the black market with no license). You’re bound to come across another gangapreneur whose had a similar stroke of creative genius. (Also, there are only so many ways to make a play on the same rotation of marijuana nicknames plus catchy parings of the “smoke,” green” “high” variety.)
• The previously tight-knit, communal feel many in the cannabis industry had prior to recreational legalization. Folks pretty freely shared their industry jargon, growing techniques and specific strain names. Some of those places ended up in generally the same region, now competitors, while others may have moved on to more far-flung areas.
• Legalization has meant cannabis business intellectual property become more closely guarded and legally protected. You need to make certain you aren’t going to be trampling on anyone’s trademark toes, and be certain no one will mistake you for someone else. If you have long sold a product or had a name that is almost an exact match to another, your cannabis business intellectual property attorney in L.A. can pursue a request for an IP licensing agreement so you won’t have to give it up.

The one other major complication is that pesky problem of the federal Controlled Substances Act that outlaws marijuana as a dangerous, Schedule I narcotic. The agency that oversees patents and trademarks – the U.S. Patent and Trademark Office – is federal. That means it’s not going to issue any trademark registrations for marks that are cannabis related.

But until this proposed measure, there was nothing in state law that would stop third-party cannabis companies from engaging in IP licensing deals. In fact, this practice is pretty widespread throughout the marijuana market and is a significant detour from established rules in other legalized recreational marijuana states.

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

Additional Resources:

BUREAU OF CANNABIS CONTROL, PROPOSED TEXT OF REGULATIONS, CALIFORNIA CODE OF REGULATIONS, TITLE 16,DIVISION 42. BUREAU OF CANNABIS CONTROL, October 2018, California Bureau of Cannabis Control

More Blog Entries:

California Marijuana Business Lawyers See Cultivation Take Root on Central Coast, Oct. 22, 2018, Los Angeles Marijuana Intellectual Property Licensing Agreement Attorney Blog

Of course, with the majority of states now allowing marijuana (California being the first with medical marijuana legalization in 1996), this is not an invalid concern – nor a new one. It’s true there is conflict when bordering states have different marijuana laws. Issues arise when people travel – for work or school or leisure – and what is perfectly legal in one state is criminalized in the next.

The biggest problem is that marijuana is forbidden under federal law, still considered a Schedule I narcotic, highly addictive and with no legitimate medicinal purpose. Of course, that’s laughable in reality, but U.S. drug policy hasn’t historically been closely aligned with medicine or science or smart public policy. And yet, it has lower schedule classifications for opioids and amphetamines, which are unequivocally more addictive and dangerous.

Meanwhile, states that outlaw the drug completely or have extremely strict medicinal marijuana laws worry they’ll soon have no other choice but to follow suit. For marijuana advocates though, the question is, “Why wouldn’t you want laws that make the most sense for the people you serve?”

The legal marijuana market thrives in places like California, Colorado and Nevada, while the U.S. government continues to classify it alongside substances like heroin and LSD. Although the Obama administration eased enforcement of federal marijuana laws with the Cole Memo, deferring marijuana criminal offenses to state and local prosecutors, Trump reversed this earlier this year. That means once again, any state-level effort to further the legalization of marijuana for recreation or medicine is going to face even more obstacles.

Nonetheless, legalization efforts are pressing ahead. New Jersey, for instance, is largely expected to make marijuana legal for adult use by close of 2018. Lawmakers in New York, Connecticut and Pennsylvania have initiated efforts to adopt recreational use laws. Even those in uber-conservative states like Kentucky are starting to shift their views. One House of Representatives officials said his position shifted earlier this year after meeting with a number of constituents, particularly in hearing the benefits of medical cannabis in communities grappling with the opioid crisis. He went on to sponsor a medical marijuana bill that later failed, but believes a new measure could still pass this year or possibly next. He still maintains he doesn’t want to see his state become “the Wild West,” but reasonable allowances should be made.

National support for medical marijuana is now at 90 percent. Backing of recreational laws is less strong, with some saying there should be a bright line between recreational and medicinal, and that states should not bow to pressure from large companies seeking to capitalize on this new market. They say it’s not about helping patients with cancer or epilepsy, but about ushering in de facto legalization of recreational use.

Even those who back legalization efforts don’t flat-out disagree, but say the “Reefer Madness” days are long gone, along with the stigma. L.A. marijuana lawyers would note that as this has become more accepted, as people see these above-board local businesses in their neighborhoods and reap the tax revenue, employment and economic benefits, they become less skeptical and fearful.

California served as the blueprint for medical marijuana, as well as for moving from that system to one allowing recreational marijuana, which became legal in January. California cannabis as an industry is expected to reach some $5 billion this year, and up to $25 billion by 2026. This isn’t something that’s gone unnoticed by industries of all kinds.

The truth of the matter is, far too many people are invested in legalization for us to go back now.

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

Additional Resources:

Marijuana skeptics fear ‘de facto legalization’ in states, Oct. 6, 2018, By Sam Sutton, Politico

More Blog Entries:

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

benefits, many parents and teachers are facing their next challenge: How do I talk to kids about marijuana? California has been tasked with establishing new education programs to effectively prevent children from consuming cannabis, while making them aware of the choices they will have to make as an adult in a post-legalization world. As such, we are seeing the classic “Just Say No” campaigns shift to a new message: “Delay.” According to an article from Brit + Co, the new strategies focus on lifelong health and good decision making.

Marijuana legalization has had major effects on the lives of adults across the country, with 30 states and the District of Columbia allowing for medical marijuana, and about a third of those states permitting recreational use. Many of the results of this legalization have been expected, including relief for debilitating medical conditions, such as chronic pain, epilepsy, and PTSD. Cannabis also has become an alternative to alcohol in social situations, without the same negative long-term health effects as alcohol. Also expected has been the boost for government coffers with an influx of marijuana tax revenue. The way legalization would come to effect the way we educate children was a bit unexpected. It makes a lot of sense, though, considering the way marijuana functions in our lives is entirely different than it was even 10 years ago.As our Riverside marijuana attorneys can explain, the “War on Drugs” shaped the way everyone spoke about cannabis. The propaganda being fed to adults trickled down into hardcore anti-marijuana education campaigns for children, as well. It’s true cannabis should not be consumed by kids, considering early research indicates it can stunt cognitive development in children. The answer, however, is far more complicated than outright prohibition. For example, the first cannabis derived drug approved by the FDA is Epidiolex, which is a liquid CBD formula specifically designed for children with severe seizures.

Furthermore, there have been no recorded deaths caused by marijuana overdose, so it is necessary to teach children about the drug in a similar way to alcohol. Instead of teaching solely about the dangers, the focus is on the proper time and place for consumption by equipping students with the facts. If we continue to try to convince children and teens that cannabis is evil and dangerous, they only need to look at the world around them to know they are being lied to. It is essential that they know why early consumption could be harmful to them specifically and how to make good decisions that will sustain them through adulthood. In other words: safety over scare tactics. As tax money continues to flood states and local governments from the sale of marijuana, funds will be flagged for more comprehensive drug education programs in schools. In the meantime, teachings are a bit inconsistent and unclear during this transitional time period.

Our legal team is supportive of all measures of education that expand understanding of marijuana while still keeping everyone safe. We have tried to demonize this beneficial plant for far too long. It is time for a common sense approach based on facts so that we can all move forward into a healthier future.

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:

Just Saying No to ‘Just Say No’: Drug Education is Evolving as Marijuana Becomes Legal, July 16, 2018, Marijuana.com

More Blog Entries:

Students Who Need Medical Marijuana Deserve Easier Access, Feb. 28. 2018, Cannabis Law Group

employers could (or should) enforce zero-tolerance drug policies against employees with medical cannabis prescriptions.

These debates culminated in the 2008 California Supreme Court decision stating that Proposition 251, known as the Compassionate Use Act of 1996, did not protect employees who have been tested positive for marijuana in their system, even with a prescription. Some legislators have tried to implement protections for employees since then, but for the most part, employers have final say.

But with the tides turning on perception of cannabis use and Proposition 64 going into effect statewide Jan. 1, 2018, making recreational marijuana legal in California, it is time once again for employers to re-evaluate their stances.

According to a report from the Society for Human Resource Management, many companies are revisiting and softening their zero-tolerance policies to take into consideration employees who safely consume marijuana during their private time.

Among the primary reasons for re-opening this dialogue is the fact that unemployment rates are low and use of cannabis is increasing across the board. This means qualified workers are in high demand. It has become increasingly difficult for employers to find and maintain a qualified pool of employees who fit the necessary criteria while also maintaining their zero tolerance policies.

Safety is of course still a top propriety, and jobs that must adhere to federal drug-free regulations (such as truck drivers and pilots) will not see any leniency anytime soon. However, there is a lot of room for discussion in low-risk career fields.

The SHRM report went on to talk about the flexibility that can exist with a more relaxed drug policy. Employers can still test prospective employees and take a firm approach when needed, but tailor their enforcement to match the demands of the job in question.

In addition to widening the pool of potential job candidates, a more relaxed drug policy in the workplace can help maintain the current base of talent. Many establishments have chosen to treat marijuana use in a similar fashion to alcohol. It should not be used on the work site, nor should it be used in a manner that it impairs job performance. Otherwise it is not an issue.

Easing up on cannabis policies would not protect an employee who is impaired on the job and cannot perform their duties. If an incident occurs at work and drug use is suspected, an employer can require a drug test and carry out a punishment, even if their marijuana policy is lax. Not dealing with such violations opens the business up to liability issues and workers’ compensation claims.

Our Orange County marijuana lawyers are eager to see more employers embrace a policy that can co-exist with statewide marijuana legalization and work more closely with employees who desire to use cannabis, both medical and recreational, in a safe and responsible manner. We know that cooperation among businesses, legislators, and citizens alike is the key to marijuana legalization in California being successful, accessible, and safe for all.

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

Additional Resources:

Rethinking Zero Tolerance on Drugs in the Workplace, Dec. 5, 2017, by Steve Bates, Society for Human Resource Management

More Blog Entries:

Workplace Prohibitions on Marijuana Still in Effect Despite Legalization, Nov. 23, 2016, Cannabis Law Group

A group of researchers from the University of Colorado Boulder are teaming up with a researcher from Colorado State University to explore this highly potent method of using marijuana. CSU notes this study is a “first-of-its-kind,” and the hope is to eventually prevent instances of driving under the influence that endangers lives.

Our L.A. marijuana defense attorneys recognize that our state, like Colorado, has a vested interest in enforcing anti-impairment laws for motorists. After all, we know marijuana has the ability to impair one’s driving abilities and we know impaired drivers have slower reaction times and lowered inhibitions that can endanger passengers and other motorists. However, the problem specifically when it comes to marijuana impairment behind the wheel is that the determination is subjective.

California Vehicle Code 23152(f) holds that it is unlawful for anyone who is “under the influence” of any drug (including marijuana) to drive a vehicle. Unlike other jurisdictions, California does not set a per se limit on how much marijuana one can have in their blood before being deemed above the legal limitation. Proposition 64, which legalized marijuana even for recreational use, did not alter this statute, which can result in a maximum 6 months in county jail, among other penalties, for a first-time offense.

There are a number of marijuana DUI defenses our attorneys can help you raise, including:

• You weren’t driving the vehicle;
• You didn’t use marijuana;
• You used marijuana but were not under the influence when you drove;
• Lacking evidence that your mental and physical abilities were significantly impaired.

The exact defense raised will depend on the facts of your case.

The Colorado study looks specifically at the practice of dabbing. This is when a user inhales cannabis concentrates (70 to 90 percent comprised of THC) that are vaporized, providing an immediate rush that users describe as very strong. The study authors assert this type of research is necessary because while the practice of dabbing has expanded significantly in recent years, the research on it has been scant.

For three years with $840,000 in funding provided by the state health department, researchers are seeking existing dabbers; the team did not provide or administer the drug, as this was an observational and not a clinical study. Researchers sought to identify the effect of dabbing on motor function and reaction time. They looked at individuals’ ability to maintain balance or rapidly move their arms, fingers or legs, using information collected via an app on an iPod Touch that was affixed to the individual’s body (noting the $200 iPod device was as accurate as the $1,000 accelerometer in university labs).

Participants are being asked to complete a series of 10 tests in order to glean an accurate read of participants’ overall cognition and motor abilities.

There is little question that “dabbing and driving” is likely to be extremely dangerous, but there are still many factors that could play into whether someone is indeed “under the influence.” That would include the potency of the product consumed, the tolerance level of the user and how much time passed after use.

Previous research on the effects of THC on drivers have largely been inconclusive, and most indicate the need for additional study.

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

Additional Resources:

An iPod in a van may uncover how dabbing cannabis can impair driving ability, Nov. 29, 2017, By Lena Ham, Colorado State University

More Blog Entries:

Tax Rate Fears Worry Some in Cannabis Industry, Nov. 22, 2017, L.A. Marijuana Lawyer Blog

New regulation are going to be issued in November. These regulations will include oversight on usage of water (reduction of waste water, drip irrigation, etc.). Licensing and background checks of owners and operators, as well as education and safety training for consumers is also in the works.

For the most part, recreational sales will be a welcome extension to marijuana dispensaries that have existed for years, some since California’s Proposition 215, which legalized the drug for medicinal uses with the Compassionate Use Act of 1996.

Getting Ready for Recreational Pot Marijuana business lawyers in L.A. know that many existing cannabis dispensaries have been doing all they can to stockpile marijuana in preparation for the new year rush, but navigating legal challenges at both the local and state level have been troubling. Many find the process to be much smoother with the help of a marijuana attorney. Just some of the issues dispensaries and new businesses are grappling with include:

• Taxation
• Zoning
• Licensing
• Health and safety codes

Many marijuana business owners have concerns it will take much longer than January to get it all sorted. That may well be true, but business owners need to make sure they’re doing it right. These ventures require substantial time and capital investment, and setbacks for rushing sloppily through the process without the oversight of a legal advocate could be costly.

Retail vendors in other states are going to be facing similar issues. Last election year, voters in Maine and Massachusetts joined those in California to approve legalization of recreational marijuana sales. In most cases, it takes about one year for officials at the state level to establish industry regulations.

Massachusetts will begin allowing recreational marijuana sales starting July 1st. That state’s cannabis control commission began meetings last month to set and begin implementation of a host of marijuana regulations.

Other States May Follow

Many think it’s rather ambitious for California – the biggest marijuana industry to date – to begin in just over a year. It’s anticipated the state’s impact on the national market will be huge – driving marijuana sales from $6.6 billion in 2016 to $24.1 billion in 2025. As it stands, sales for medicinal marijuana in California are at about $2.76 billion. Of course, that’s considering that only those who have a prescription are allowed to possess it and purchase it. Dispensaries are regulated with a patchwork of state and local standards.

The entire industry remains at odds with federal law, which still considers marijuana to be a dangerous narcotic under the Controlled Substances Act. In fact, it is still equated to heroin in terms of danger and addictive qualities. That’s unlikely to stop more states from jumping on the bandwagon, particularly when they take note of how profitable it is.

Meanwhile, Canada is also expected to legalize recreational marijuana nationally in 2018.

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

Additional Resources:

Retail marijuana is spreading to California, Massachusetts and Maine, Oct. 7, 2017, By Aaron Smith, CNN

More Blog Entries:

New Regulations Require Cannabis Delivery Services to Rethink Their Business Models, Oct. 9, 2017, L.A. Marijuana Business Lawyer Blog

Recently, the Los Angeles Times reported a new venue for advertising recently opened, though it’s not heavily-utilized at this point, and it’s unclear whether it will amount to a sizable business opportunity. U.S.-based air carrier Allegiant Air, headquartered in Las Vegas, NV, has become the first to agree to allow advertising from a marijuana dispensary.

It’s found on the airline’s in-flight magazine, Sunseeker, which ran an advertisement for a marijuana dispensary that produces THC-laden cookies and candies, sold just a few blocks from the strip in Las Vegas. A full view of the kitchen is displayed in bright, colorful pictures on the in-flight magazine.

The advertisement lets passengers know that marijuana is legal for recreational use in Nevada for adults over the age of 21, and has been since last year.

But this doesn’t mean advertising is going to be a simple matter, and those considering running marijuana advertisements – whether you are a dispensary, publication, billboard owner, etc. – should seek experienced legal counsel to make sure you understand your rights and responsibilities, given that marijuana is still a Schedule I narcotic outlawed by the federal government.

Recently, California lawmakers introduced SB-162 specifically aimed at addressing marijuana marketing. The measure, if passed, would ban marijuana dispensaries and producers from using promotional products to advertise their businesses. That would mean companies would be forbidden from using branded merchandise that would be sold on hats, clothing, bookbags or other gear that would display the name, logo or product. The bill passed in the U.S. Senate last month by a vote of 40-0. It’s now being considered by a state Assembly committee.

California law currently allows branded merchandise to be sold and distributed at certain events, but only where attendees are at least 21-years-old. Anyone who has ever attended a cannabis-related event knows it’s common for those in attendance to leave with a grip of bumper stickers, tote bags, t-shirts and more with marijuana business insignia. However, the passage of SB 162 would outlaw all of that.

If cannabis crews were unable to market themselves or capitalize on this secondary industry, that could curtail a significant revenue source. Promotional products industry leaders are taking a firm stance against this, arguing that such limitations could amount to First Amendment violations.

Still, the measure has plenty of supporters. For example, the American Academy of Pediatrics, California argues the bill would protect children from an onslaught of pro-marijuana advertisements, shielding them from skewed messages that might promote marijuana in a way that could be dangerous for young people.

But it’s not as if there aren’t already advertising restrictions on marijuana in California. As our marijuana business attorneys in Orange County can explain, the state already bars any signs or advertisements of the drug in any broadcast, print or digital medium where less than 72 percent of the audience is likely to be 21 or older (or conversely, where 28 percent or more is likely to be under 21). The law also does not allow any advertiser or marijuana business to run promotions that allow for a giveaway of marijuana products or accessories as part of a promotional campaign.

Lack of information on the purity and potency of marijuana products distributed to U.S. consumers is of major concern, according to the U.S. Senate Appropriations Committee. That’s why its members are asking that federal agencies work together to develop a standard, national testing program for Schedule I products made from marijuana.

The appropriations committee’s recent report instructed qualified scientists at the National Institute on Drug Abuse as well as those working with the U.S. Drug Enforcement Administration to start work on samples of marijuana in order to give the federal government better data that could be used to provide better policy solutions to help protect consumers.

Up until three years ago, the NIDA provided funds for a program that tested samples of cannabis law enforcement seized. However, the federal agency has never formally researched marijuana products legally sold to consumers under an increasing number of state legalization laws.

The Senate committee reported that if research on illegal marijuana could be used alongside research on legal products, it could bolster efforts to prevent abuse and ensure products being sold legally to customers conform to certain safety standards. It could ultimately inform public health and law enforcement policy, the agency said.

Still, our marijuana research attorneys not clear how the program would be carried out. Historically, research on marijuana products has either been forbidden or severely restricted by the federal government, which under the Controlled Substances Act considers cannabis to be a dangerous Schedule I narcotic with no medicinal value. This was noted in the appropriations’ committee’s report, citing concern the CSA would inhibit valuable research on Schedule I drugs – marijuana in particular. The committee opined it was important for federal researchers to glean as much information as possible about these substances, particularly marijuana, its derivatives and its synthetics.

Senators asked the NIDA to provide some type of an update on the types of barriers that exist to researching Schedule I narcotics and compounds. The Schedule I classification, given to those drugs deemed to have a high value for potential abuse, are the most severely restricted in terms of research. The scientific community has long griped about the fact that this classification makes it particularly difficult to study drugs that warrant more study – not less.

The committee also noted that marijuana and its derivatives could help in the fight against the growing opioid addiction crisis. There is already some evidence to support this theory, but more research is needed. Lowered addiction and overdose rates among those who use marijuana and its derivatives grabbed lawmakers’ attention.

This is the same panel that previously gave the green light to a measure that would protect state medical cannabis laws from interference from the federal government and also allow members of the U.S. military to receive medical marijuana recommendation via the U.S. Department of Veterans Affairs.

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

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However, his hands are currently tied in prosecuting those who grow, distribute, dispense, and possess for personal use any medical marijuana. The reason his hands are tied is because the Rohrabacher-Farr amendment was passed with bipartisan support in Congress and prohibits the U.S. Department of Justice (DOJ) from spending taxpayer dollars to prosecute medical marijuana in states where medical marijuana is legal. The reason it was fashioned as a limitation on spending is because the amendment was added to a budget reconciliation bill. This was done for various reasons, including the fact that many who would normally be opposed to legalization of marijuana see it as a states’ rights issue. As our Orange County medical marijuana attorneys can explain, many also realize that it is a billion-dollar industry, and a lot of money and jobs would be lost if medical marijuana was targeted as it was when California first legalized medical marijuana back in 1996.

According to a recent news article from Newsweek, Sessions has made it clear he is not happy with this amendment and is now asking Congress to repeal that amendment so that he can send Drug Enforcement Administration (DEA) agents to crack down on medical marijuana dispensaries and grow operations in areas where they are legal such as Orange County.

One of the reason he cites for making such a request is because of the opioid crisis in the nation and what he calls a growing crime rate. With respect to the opioid crisis, while there is no question that this is a major problem in the U.S., but Session’s claims are not supported by the data we have.

There is, however, evidence that medical cannabis could be a valid alternative to opioid medications, and, in states where medical marijuana is legal, we have seen as much as 15 percent reduction in opioid use.

In addition to his claim that marijuana use as a medicine can somehow lead to opioid abuse (going back to the disproved gateway drug theory), Sessions also claims that using marijuana can cause an “increased risk of psychiatric disorders and psychosis.” While there is absolutely no evidence that this is true, it is an argument extended by the National Institute of Drug Abuse (NIDA), yet the same agency recognizes that in areas where medical marijuana is legal, there has been a reduction in opioid abuse.

There are now efforts across the nation to allow medical marijuana to be prescribed to treat opioid addiction. This goes above and beyond the use of marijuana to treat pain instead of narcotic painkillers. Here we are seeing an effort to use medical marijuana in place of methadone. While methadone has been used for many years to treat people who are addicted to heroin and now narcotic painkillers, it is very addictive and has many of the same side effects of the actual narcotics.

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

Additional Resources:

Jeff Sessions Targeting Medical Marijuana Users, Cites ‘Historic Drug Epidemic’, June 6, 2017, By Janice Williams, Newsweek

More Blog Entries: Report: Colorado Marijuana Laws May Not be Safe, Feb. 5, 2017, L.A. Marijuana Lawyer Blog

When the measure passed by voters in November, it amounted to a tax of between 2.5 percent and 10 percent on the gross receipts of cannabis cultivators. It also imposed on all other marijuana businesses a flat-rate tax of $2,500 annually.

An advisory that was attached to this measure indicated that voters wished to have this money spent on county services. Specifically, this would include not just code enforcement on marijuana businesses, but also emergency medical services, fire and police services, repairs of roads and mental health services. This was a non-binding agreement, though, and county leaders technically can spend the funds on whatever they wish.

A marijuana attorney for the plaintiffs argues that although the description of the measure does include most county services, it’s far too specific to be a “general tax.” That means it should have been considered as a special tax, which would have required 66 percent of the vote. However, the measure only received 64 percent of the vote.

It’s the exact same argument being used in a similar lawsuit against the city of Ukiah, which also approved a sales tax on marijuana. In that instance, the measure was accompanied by an advisory indicating taxpayers wanted the money to be spent mostly on road and traffic improvements.

Plaintiff attorneys argue these kinds of “double measures” are a sneaky way for local governments to side step the more stringent voting requirements of special taxes.

Beyond this argument, plaintiffs say the law is fundamentally unfair. In essence, what it does is require those in the industry who follow the law to the letter to foot the bill for those who flout it.

However, the Mendocino county supervisor is standing by the vote. He told the Press Democrat that other challenges had been raised regarding the “special tax” rules in the past, and all of those failed. What’s more, he argues plaintiffs simply aren’t happy with the fact that they skated by without paying taxes for decades and now that’s about to change.

Los Angeles County voters had been slated to consider a tax initiative on the November ballot last year. However, county supervisors pulled an initiative they had previously approved, which would have resulted in a 10 percent tax on gross receipts of marijuana businesses, which would specifically direct money to housing and other services for the homeless. Analysts for the county had opined the marijuana tax would have eventually drummed up somewhere between $78 million and $130 million annually (though collection wouldn’t have begun until 2018). However, the county later pulled it back – not because of any opposition to do with a special tax requirement, but because some homeless service and drug treatment providers feared the county would be viewed as promoting the legalization of marijuana.

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 advocates challenge Mendocino County cannabis tax, Feb. 7, 2017, By Glenda Anderson, The Press Democrat

More Blog Entries:

Medical Marijuana in Schools? Washington is Weighing It., Feb. 9, 2017, L.A. Marijuana Lawyer Blog

A total of eight states plus the District of Columbia have legalized recreational use of marijuana among adults. What this means is currently 1 in 5 Americans adults can lawfully smoke, drink, eat or vape cannabis under state laws. More than half the population lives in a state where the drug is legal for medicinal purposes. This has given rise to a $6 billion industry that is projected to grow to $50 billion by 2026. But all of that could be in jeopardy.

Many in the marijuana industry have expressed surprise at this about-face, especially given that the Trump administration has seemingly prioritized states’ rights on a myriad of other issues, from education to use of bathrooms by people who are transgender. The statement by Spicer was also surprising given the fact that U.S. Attorney General Jeff Sessions is a major proponent of states’ rights. However, Sessions has also for many years vehemently opposed cannabis use. During his confirmation hearing in January, Sessions refused to say he wouldn’t enforce federal law on the issue, and further indicated that if Congressional leaders believed the drug should no longer be illegal, they should pass a law.

Spicer’s comments had an almost immediate effect on the market, with the Global Cannabis Index falling by nearly 4 percent right after the White House briefing in which he made the comments.

To reinstate a policy of federal crackdowns on the marijuana industry would be a stark reversal to the current federal policy enacted by the Obama administration – and it would be staunchly against public opinion. After years of federal raids, civil forfeiture and investigation, the Obama administration agreed to mostly defer to states on the issue, choosing instead to focus the energy of federal prosecutors on targeting distribution of the drug to underage users, sales across state lines and gang activity.

Recent polls show the vast majority of Americans believe the federal government shouldn’t enforce existing marijuana laws in states where the drug has been legalized for recreational or medicinal use. It should be noted that Republicans as a whole oppose widespread legalization, though most do still support medicinal access.

If the Trump administration does move ahead as Spicer has indicated, that would indicate a clear contradiction of the administration’s clear positions not just on states’ rights but also on the creation of jobs and betterment of the economy. It’s estimated the cannabis industry – if allowed to continue the status quo – would generate some 283,000 within three years – many of those in California.

Still, there are some in the industry who aren’t worrying just yet. Top Republican leaders in states like Colorado and Washington who have met with Sessions say the take-away they got from those conversations was there would be no drastic alteration to the current federal policy on medical marijuana and recreational marijuana.

Given that these statements are coming from the highest executive office, they shouldn’t be totally overlooked. Those who own or are looking to start a cannabis business should consult an experienced marijuana attorney for advice on how to protect your investment.

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

Additional Resources:

White House: Feds will step up marijuana law enforcement, Feb. 24, 2017, By Kevin Liptak, CNN

More Blog Entries:

Report: Most Banks Still Reticent About Reefer, Feb. 26, 2017, California Marijuana Attorney Blog

Unfortunately, no.

Although recreational use of the drug is now legal, the new law specifically holds that companies have the right to keep a drug- and alcohol-free workplace. They reserve the right to hang onto policies that disallow the use of marijuana by workers or prospective workers. Many employers in contact with cannabis advocacy group California NORML say they intend to keep their current drug screening policies, many of which do not allow the use of marijuana.

Companies say it’s not just that they are trying to be a stick in the mud. Those in human resources explain there are some legal concerns, first as far as federal law goes. Although California law now allows recreational and medicinal use, the federal government does not. The second concern stems from liability. A worker who is required to operate heavy machinery or be on high alert cannot be under the influence of any substance, including marijuana.

But drug testing for marijuana poses a lot of challenges that simply don’t exist for alcohol. What’s tricky about marijuana, as opposed to alcohol, is that one can drink alcohol on his or her off-time and not have it show up on any kind of drug test. However, marijuana remains in the bloodstream longer, which means a worker may be flagged for being a user of marijuana, even if he or she always comes to work completely sober. You can conduct an accurate roadside test for alcohol intoxication. The same is just not true for marijuana.

As noted by The Los Angeles Times, drug testing by employers really first gained steam in the 1980s during the Ronald Reagan era. That’s when federal workers were required to be screened as part of the president’s (now failed) War on Drugs. Other employers soon followed suit.

Today, even medicinal marijuana isn’t exempt under company drug testing policies. The California Supreme Court ruled on this very issue in 1996, holding that medical marijuana users won’t get an exemption so long as the drug remains illegal under federal law. That means employers are under no obligation to accommodate medical marijuana use by employees – even if that use occurs after hours.

Cannabis advocacy groups have been pressing for legislation that would change that fact, but employees need to know what their company’s drug policy is – and assume that hasn’t changed just because recreational marijuana is now legal in California.

Companies whose primary focus is safety (i.e., transportation, construction, etc.) are probably the least likely to alter their policies anytime soon. Employment attorneys are generally advising corporations to update their company handbooks to make it clear that marijuana screening can and will still be taking place.

Some company administrators say screening for marijuana has always been problematic, but the issue has become more acute now that the drug is becoming increasingly legal.

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

Additional Resources:

Marijuana is now legal in California, but it can still keep you from getting a job, Dec. 9, 2016, By Samantha Masunaga, The Los Angeles Times

More Blog Entries:

Why Marijuana Sobriety Tests are So Unreliable, Dec. 12, 2016, L.A. Marijuana Lawyer Blog

Prop. 64, which legalized recreational marijuana, was always intended to raise substantial tax revenue for the state. However, it was intended to do so with a 15 percent excise tax on both medicinal and recreational marijuana. The law also imposes a 7.5 percent sales tax on top of that for recreational marijuana, but repealed it for medical marijuana. Medical marijuana buyers have been paying that sales tax since the drug first became available as medicine. The idea was that medicinal users of the drug would get a tax break relative to recreational users once recreational sales start in January 2018. However, there was one problem: The 62-page initiative did not include the January 2018 target date relative to the repeal of the medical marijuana sales tax.

That means the repeal of medical marijuana sales tax in California became effective immediately. It also means that medical marijuana may be obtained tax-free in California until next January, when it will be under that 15 percent tax.

Tax-free sales of medical marijuana are going to leave the state facing a much lower marijuana tax revenue benefit. Those who drafted the law have said publicly it was not their intention to effectively create a tax-free holiday for marijuana. The state’s Board of Equalization has disagreed with this.

If recreational users do become regular customers in the tax-free medical marijuana market, in which they would have an incentive to stay, tax revenues even for 2018 could end up falling far short of what those who wrote the law anticipated. The notion is that if someone has access to medical marijuana, there is no incentive to start instead obtaining it through the recreational market, where they would have to likely find a new dispensary and preferred types of marijuana, only to pay higher taxes.

This was a big part of the reason Washington state shut down its medical marijuana program after the drug became legal for recreational purposes. The medical marijuana market was so loosely regulated and lightly taxed that Washington had no choice but to shut it down if there was any hope of a sustainable recreational marijuana system.

However in California, that’s not an option – at least not right away. That’s because both the recreational and medical systems were both created by the very same ballot initiative.

Under the law, users of medical marijuana have to present a state-issued patient ID card in order to buy marijuana that is tax-free. State officials are looking at this requirement – which costs $100 plus time to weave through the administrative red tape – to stop the state from losing tens of millions of dollars in taxes. That could mean we’ll be cracking down on dispensaries to make sure medical customers have a state-issued ID.

So far, it’s not clear that will work. A recent Board of Equalization analysis found that two out of three dispensaries haven’t been totally compliant with sales tax requirements up to this point.

Dispensaries should consider consulting with an experienced marijuana lawyer in L.A. to ensure they are compliant with all state regulations.

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 marijuana-initiative blunder that could cost California millions of dollars, Nov. 16, 2016, By Keith Humphreys, The Washington Post

More Blog Entries:

California Cannabis Could Be What Autos Are to Detroit, Nov. 2, 2016, California Marijuana Lawyer Blog