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

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

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

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

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

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

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

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

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

Additional Resources:

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

But are sales of cannabis seeds legal? Some growers serve both the grey and legal market marijuana seeds.

As the legal cannabis market has expanded, selling cannabis seeds has become more commonplace, especially as consumers’ tastes become more refined. Still not all cannabis seed sales are lawful.

Genetic Seed Variations Can Be Protected Intellectual Property

Los Angeles marijuana lawyers recognize there is great diversity in seed genetics, and advise companies to seek counsel before arranging any kind of retail sale or transport.

Many marijuana growers pride themselves on their extensive knowledge of marijuana growth, which obviously begins with the seed. The three basic types of cannabis seeds are regular, autoflowering and female, with each containing broad subtypes, often referred to as “strains.” Many cannabis cultivators pride themselves on various elements of the strains they grow, as the effects can vary widely depending on seed properties. Certain strains are better for those seeking medicinal relief, while others are better for creating various degrees of intoxication and still others for a distinct taste. Growers are increasingly asserting intellectual property rights, something all cultivators should discuss with their cannabis business attorney.

Cannabis Seed Sales and California Law

Laws pertaining to sales of marijuana seeds or associated products vary a great deal in the U.S. and beyond, in part because there is a general lack of understanding on how they should be defined. Some consider seed sales ancillary to the cannabis market, but the reality is because these are part of the cannabis plant (or rather, its origins) these too are controlled.

Generally speaking, cannabis seeds can be lawfully purchased by adults states with legal adult recreational use (like California) either at a dispensary or online intrastate (meaning not purchased from another state – even one that has also legalized the drug). The reason for this restriction is that interstate sales fall under the purview of federal law, which still considers marijuana a dangerous narcotic.

Los Angeles marijuana dispensaries routinely sell pot seeds over-the-counter, and cost is roughly $12 for a pack of 10, though higher-end strains can run several hundred dollars. Dispensary options are limited compared to what one might find online at a California cannabis seed bank.

The California Cannabis Control Board in accordance with Prop. 64 caps the maximum number of cannabis plants that can be grown by an individual at any given time at six. That assumes you’re over 21 and aren’t doing so in a community that has a local ordinance banning or further restricting such cultivation.

Those selling cannabis seeds in California, either in-store or online, need to be certain procedures are in place to prevent sales to restricted buyers (mostly minors).

Buying, selling or transporting those seeds out-of-state though is where things can get dicey.

International Weed Seed Sales

Internationally, many countries don’t restrict or regulate cannabis seed sales, as the seeds have a myriad of benign uses. These can include production of clothing material, oils and food for animals/fishing bait.

However, other countries are much more strict about what can be imported and for what purpose. Los Angeles cannabis lawyers strongly advise anyone conducting international sales of any cannabis product to consult with an attorney. Failure to do so could affect your pocketbook (if customs in another country refuses to allow your shipment to reach its final destination). However, it can also draw the attention of U.S. law enforcement agents, with the possibility of criminal charges. 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 Introduction to the Big Business of Cannabis Seeds, March 2, 2019, Green Entrepreneur

More Blog Entries:

What Supreme Court’s Wayfair v. North Dakota Means for CA Pot Shops, April 14, 2019, Los Angeles Cannabis Seed Lawyer Blog

Although the impact of removing restrictions on hemp and hemp-derived products is likely to be significant, technically federal agricultural subsidies don’t rope in growers of vegetables and fruits – including grapes. Plus, even as the federal ban on marijuana lifted, many states – including California – still have laws on the books making it unlawful to infuse hemp in alcohol or food products. The Farm Bill expressly allows states to govern their own regulation of hemp production, the same as it does with alcohol.

Congress did direct states to both license and track any hemp produced from seed-to-sale, but gives state lawmakers the authority to impose tighter hemp regulations if they so choose. However, state rules can’t be any less strict than federal guidelines and those regulations do need to get the U.S. Secretary of Agriculture’s approval stamp.

Orange County marijuana business attorneys know that is likely to create complications for California vineyards hoping to hop into the hemp game. The good news is the farm bill does expressly allow commerce of hemp and hemp products across state lines, but that doesn’t mean trade will go on without a hitch. As it stands, numerous federal agencies have the right to interpret U.S. hemp laws however they see fit. That includes the DEA, the TTB, the FDA and the FTC. That leaves an awful lot of room for interpretation.

California Regulations: Wine and Weed Don’t Mix (Yet)

Although California is known globally for its production of wine and also for being the first state to allow legal marijuana for medicinal purposes (and now recreational), it’s still against the law to produce and sell both in the same place. If you do produce each, you must have an individual license for each.

The Farm Bill doesn’t make any note of this issue with regard to hemp, though it’s possible that an industry well-versed in grappling with government regulations to get a handle on hemp production – but only with the help of an experienced cannabis attorney to help navigate the tangle of regulation. Wineries are going to need to make sure whatever products they are producing are meeting state agricultural standards. Further that means exercising great caution when determining how hemp products are packaged and advertised.

It is expected that rule-making on hemp in California will begin next year, with licensing to follow shortly thereafter.

However, there is still one wildcard on the table: The White House. The 2018 Farm Bill was passed by both the Senate and the House of Representatives, but still requires the signature of the president. It’s unclear whether this issue is a priority for the current administration, given the many other situations with which its currently dealing.

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

Additional Resources:

Beverage Alcohol Lawyers Explain Hemp In The 2018 Farm Bill, December 2018, By Thomas Pellechia, Forbes

More Blog Entries:

U.S. Tax Court to California Cannabis Business: You’re Still Drug Trafficking, Nov. 30, 2018, Orange County Marijuana Business Attorney Blog

There are ways to smartly navigate your finances, and the experienced legal team at the Cannabis Law Group in Los Angeles can help you establish the right plan.

Recently in Oklahoma, a top banking regulator informed lawmakers there that banking with marijuana now is more riskier than it’s ever been, despite the fact that marijuana is now legal to some degree in 30 states and available for recreational use in nine of them. The problem remains the federal government’s classification of marijuana as a Schedule I controlled substance – placing it in a category that stipulates extreme danger of addiction and no medicinal purpose.

Oklahoma media reported the banker told state lawmakers establishing marijuana policy that until Congress acts to initiate clear laws that either outright legalize it or empower the states to take on regulation themselves, financial institutions are going to be extremely wary of extending partnerships to those within the new medical marijuana industry there.

Banking institutions recognize that the U.S. government’s current classifications imposes a wide range of restrictions on the drug, which include limitations on ways businesses regulated by the state can transfer money and avoid penalty under federal drug-trafficking statutes.

This is the primary reason so many banks still decline businesses with cannabis farmers, producers and dispensaries as well as other companies that service the medical marijuana industry in that state.

California SB-930, a banking bill that would have established a state-charged banking system that would have given marijuana merchants access to the traditional financial services most other legal businesses enjoy died in August in the Assembly Appropriations Committee. Meanwhile, projected sales in this state alone are expected to hit $26 billion by 2025.

Even in Colorado, where medical marijuana has been lawful for a full decade and where recently recreational marijuana is allowed, only roughly 10 percent of financial institutions will participate. In Arkansas, where medical marijuana became legal in 2017, no bank in the whole state will accept cash from those in the industry.

In total, about 400 banks nationally offer some services (many limited) to businesses engaging in marijuana operations. That’s out of some 6,000 that are insured federally – and despite the fact that this has become a multi-billion dollar industry.

The banking executive said he’s been unable to find a means by which to get around the federal law. Some banks do accept the liability that comes with a marijuana business partnership, but for the most part, cannabis firms are often left to largely conduct business solely as cash operations.

Our Los Angeles marijuana banking lawyers, like many other industry insiders, assumed that the federal government’s shift in policy in 2013 (which ended most of the crackdowns and raids that had pot shops closing left and right) would change things. It was that year that the Obama administration issued the Cole Memo, which directed federal prosecutors to back off marijuana businesses that were legal according to their own state laws, instead shifting focus of federal drug enforcement efforts to unlawful distribution – particularly where it involved organized criminal operations, interstate trafficking and children. Reticence, however, has taken hold once again with U.S. Attorney General Jeff Sessions’ very starkly anti-marijuana stance. Many financial institutions are being informed there is currently “no safe harbor.” The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

Bankers hesitant to work with marijuana industry, Oct. 11, 2018, OKNews

More Blog Entries:

Corporate Investment in Marijuana Follows Public Demand , Oct. 11, 2018, Los Angeles Marijuana Attorney Blog