Our Los Angeles cannabis business lawyers also practice employment law, so this is doubly good news.

After Senate Bill 700 cleared the state senate, it passed the Labor and Employment Committee, and then also the Judiciary Committee by a margin of 8-2. Now, it goes to the Appropriations Committee. If it passes there, it can advance to the floor. If the Assembly approves the measure, it will then be sent to the governor’s office for consideration. If it does manage to pass, its effective date would be Jan. 1, 2024.

But why was such a bill even necessary?

Proponents explained that despite an increasing number of employers becoming more accepting of recreational cannabis use among employees, a fair number still follow zero tolerance policies with respect to cannabis use – even if that use occurred long ago and before they ever considered working for that company. A recent analysis by Quest Diagnostics, one of the biggest drug testing companies in the U.S., revealed recreational cannabis use among workers reached “historic” highs in 2021.

On the one hand, companies may be shooting themselves in the foot with such a practice because they’re likely going to get fewer qualified candidates even applying for the position in the first place – which is especially unwise in a tight labor market. They might also disqualify a qualified candidate who otherwise would be a stellar asset – and they’re probably going to be reducing team diversity. On top of that, it creates a situation wherein applicants may be tempted to be dishonest in order to get the gig. So employers may be turning away people who are honest and upfront, while welcoming those who may be less forthright – and for what?

But the issue really comes down to how this impacts workers. Adults who engage in legal recreational cannabis use shouldn’t be turned down for jobs they’re qualified to take, proponents say.

Revamping employment cannabis policies isn’t a trend unique to California. A number of other states and federal government agencies have been switching things up as well.

Among those:

• Michigan is looing to stop pre-employment drug testing for cannabis for most government job applications. At the same time, those already sanctioned for positive marijuana tests would be provided a means to have those penalties rescinded retroactively.
• Washington State now protects prospective workers from discrimination over lawful marijuana use.
• Nevada bars discrimination of job applicants who test positive for marijuana.
• New York law protects adult employees who use legal cannabis while not working.
• The U.S. Department of Transportation just finalized a rule altering its drug testing policy, easing restrictions on airline pilots, truck drivers, and U.S. transit workers who use marijuana recreationally on their off time.
• Those applying for jobs with the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosions are no longer automatically disqualified if they previously grew, manufactured, or sold marijuana in compliance with state law. However, those who did so in violation of state marijuana laws will still be denied employment.
• The U.S. Secret Service no longer automatically disqualifies prospective agents solely on the basis of prior marijuana use.

There are also rumbling among some federal lawmakers of putting together a bill that would shield federal employees from denial of security clearances over cannabis consumption. This aligns with the country’s largest federal employee union, which is actively advocating for the government to drop penalties against federal workers who legally consume marijuana during their time off.

According to one survey by the Intelligence and National Security Foundation (INSF), nearly one-third applicants 18-30 who have applied for federal jobs with security clearances had to withdraw their application due to strict security clearance requirements.

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:

Legal Weed Drives Companies to Relax Their Drug Testing Policies, July 14, 2023, By Khorri Atkinson, Bloomberg News

More Blog Entries:

California Workers Won’t Need to Worry About Weed Use Off-the-Clock, Oct. 6, 2022, Los Angeles Cannabis Employment Lawyer Blog

In Richmond Compassionate Care Collective v. 7 Stars Holistic Foundation, an independently-owned dispensary, RCCC, in Contra Costa County, sued the owners of the Richmond Patients’ Group (RPG) over allegations of conspiring to block RCCC from opening a new shop. Evidence presented at trial included evidence the defendant impeded access to the finite amount of commercial property zoned for medical marijuana distribution.

Plaintiffs argued the defendant, a potential competitor, intentionally thwarted their opportunities by submitting fraudulent letters of intent, leases, and purchase agreements to landlords of commercial properties, effectively tying up those spaces until RCCC’s permits became expired. (Local ordinance in Richmond, Calif. requires cannabis shop permit holders open up a shop within six months or lose their permit.) The defendants reportedly even went door-to-door, trying to persuade landlords to avoid leasing to RCCC. Defendants also made efforts to compel a change in city ordinance that would reduce the number of cannabis permits available (in this, they were successful). RPG was also accused of trying to influence city officials to deny RCCC’s licensing permit.

As our Los Angeles cannabis attorneys can explain, trying to compel a change in local ordinance or state law isn’t illegal. But the plaintiffs underscored it as evidence of the defendant’s purpose and intention with regard to the other actions.

RCCC alleged RPG’s efforts ensured they were closed off at every turn by RPG’s actions and eventually lost their permit – and millions of dollars in investments and potential profits. This, they allege, was in direct affront to the California Cartwright Act, the state’s antitrust law prohibiting efforts to block fair competition in the free market.

Why California Cannabis Company Antitrust Cases May be On the Rise

Antitrust cases are intended to ensure free and fair markets in our economy. Congress passed the first antitrust law in 1890, the Sherman Act. Two additional federal antitrust laws were passed in the years after, including the Federal Trade Commission Act, which established the FTC, and the Clayton Act. Although there have been some revisions over the years, these laws are still in effect today and remain the core of U.S. antitrust law.

The laws exist to prevent things like unfair competition, unlawful mergers, and illegal business practices that would deprive consumers and workers of the benefits of free market trade and opportunities. Ultimately, the idea is to ensure there are strong incentives for companies to operate efficiently, keep prices down, keep quality up, and play fairly.

The California Cartwright Act builds upon these principles, with specific prohibitions on things like market division schemes, exclusive dealings, price fixing, price discrimination, and group boycotting.

We’ll start seeing more antitrust cases in the California cannabis industry because the competition is getting increasingly fierce, particularly in regions where potential profit margins are high but permits and opportunities are limited. Cannabis as an industry is highly-regulated and inherently regional, which means it’s going to be inevitable that some firms are going to get squeezed. Whether that amounts to antitrust violations will depend on the specifics of the case.

If you believe your competitors have engaged in unlawful business practices or if your cannabis company has been accused of unfair practices, it’s important to consult with an experienced Los Angeles cannabis business lawyer as soon as possible.

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:

California Jury Awards Millions To Cannabis Company In Antitrust Case – Anti-trust/Competition Law, Oct. 6, 2021, 6Park News

Historically, cannabis business ventures have been small as federal law has hindered businesses from stretching across state lines. While the states control trade within their borders, the federal government has jurisdiction over interstate sales – and cannabis is still under federal law considered a Schedule I dangerous narcotic. But with the drug legalized in some form now by 33 states and available for recreational use in 10, legal in Canada and poised for legitimacy in Mexico, this is probably going to change (though it’s tough to say exactly when). State and local governments are embracing the tax revenue these companies rake in and they’re spending less on police resources to bust people for petty marijuana possession charges. A legal marijuana industry analyst with Forbes opined next year will see an explosion of cannabis mergers and acquisitions.

Still, expanding the tentacles of one’s marijuana business into other states is still very risky and could result in millions of dollars in losses if they overreach or fail to follow the stringent regulations set forth by each state. There are personnel issues, regulatory issues and sometimes just rotten luck. But even for smaller cannabis businesses in Southern California, staying competitive in this rapidly expanding and evolving market may require it. If you’re thinking about branching out – whether into the next county or across state borders, you can begin strategic business plan discussion with an experienced Los Angeles marijuana lawyer who can help you maximize your odds of success and minimize the liability risk.

How a Cannabis Law Firm Helps With Multi-State Marijuana Business Expansion

There are so many considerations that must be weighed when deciding to take this plunge. In speaking with a Los Angeles marijuana business attorney, you’ll learn a few of those include:

• State-by-state licensing. This is mission critical if you want to expand operations in another state. There is no federal law that regulates marijuana, so each state has its own specific regulations and licensing processes – and they can be widely varying. Your cannabis regulatory and compliance attorney can help you look at the residency and ownership requirements of each state so you can plan accordingly.
• Securing the property. More than likely, you’re going to need qualified real property on which to run your out-of-state operations. There are all kinds of zoning rules, regulatory restrictions and other challenges that can make this aspect a headache – and that’s before you even get to negotiating the lease or purchase of that property. The type of structure and where choose to locate your marijuana business is extremely important for both compliance and security reasons, as most cannabis businesses are still almost exclusively cash-based.
• Structuring your marijuana business. Because of the federal law that outlaws marijuana, it’s unlikely if not impossible that the limited liability company that’s based in and licensed by the State of Colorado will be qualified to do business in California. At minimum you’ll probably need at least two licenses, one for each state. You may need to establish separate entities for each section, which not only ensures you are properly licensed, but that your whole corporation doesn’t collapse if for some reason one section flounders. Having a cannabis business company with experience establishing business plans in multiple states (as our attorneys do) will be essential to your success.

The whole concept of inter-state expansion isn’t a far-off possibility for California marijuana entrepreneurs. The time to start planning is today.

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

Additional Resources:

Growing Ambition, Companies leverage capital, partnerships and diversification to expand beyond state lines, Nov./ Dec. 2018, By Omar Sacirbey, Marijuana Business Magazine

More Blog Entries:

California Marijuana Lawyers Talk Practical, Legal Hurdles for Hemp Food Manufacturers, Dec. 20, 2018, California Marijuana Lawyer Blog

When you’re working with a Los Angeles marijuana business lawyer to get your cannabis business plan, licensing, permits, insurance and quality compliance in order, inevitably, one issue that will arise is how you plan to manage your money. Cannabis companies can’t just open a business checking or savings account like any other because technically, selling marijuana is still against federal law, thus proceeds are “dirty money,” and any banker who works with these firms knowing what they do could be found guilty of money laundering. That would cost the financial firms their banking charters and effectively put them out of business.

Of course, it’s utterly ridiculous given that the plant is legal now in most states in some form or another. Los Angeles marijuana lawyers suspect U.S. law will eventually catch up to the science and times. For now, though, California pot shop owners slog through major logistical hurdles of operating almost exclusively in cash, leaving them vulnerable to robbery, thwarting growth and denying additional tax revenue to both the state and local governments.

Although there is clearly a need for some type of solution, the report’s findings align with conclusions reached by the state’s attorney general as well as state legislators, who voted down a bill to launch a public bank for pot shops earlier this year.

The report, titled, “State-backed Financial Institution (Public Bank) for the State of California Servicing the Cannabis Industry Feasibility Study 2018,” explains why such a move would pose potentially insurmountable challenges. Among the cited reasons our Los Angeles marijuana business lawyers found worthy of note:

• A state-funded public bank would necessitate roughly $1 billion in capital investments, which would likely take about six years to acquire. Further, it could be as many as three decades after its opening before the public bank started seeing dividends, meaning earliest possible date could be 2050.
• If the federal law changed at any point in the interim while the state bank was building up to that point, it would end the pressing need for a state-backed baking solution.
• Public banks, the group concluded, have historically had marginal or no success profit-wise. As it now stands, there are two – one in North Dakota and another in American Samoa. They aren’t exactly the best model to predict a forecast, though, since neither cater to cannabis companies.

Researchers recommended two likely more expedient solutions. One is placing pressure on the federal government to amend the Controlled Substances Act to remove marijuana as a listed Schedule I narcotic. This would eliminate the need a public bank altogether. In the meantime, policy analysts recommended the state establish an agency responsible to determine how the state processes marijuana business money and encourage private sector banks to work with California cannabis companies that are abiding state law.

Marijuana business lawyers in Los Angeles can provide consulting to entrepreneurs in the process of formulating or reworking financial strategy and business plans that will maximize security and success.

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

Additional Resources:

State-backed Financial Institution (Public Bank) for the State of California Servicing the Cannabis Industry Feasibility Study 2018, Dec. 6, 2018, Level 4 Ventures, Inc., on behalf of California Treasury Department

More Blog Entries:

California Marijuana Company Siphons Uber, Lyft Workers for Cannabis Deliveries, Dec. 10, 2018, Los Angeles Marijuana Lawyer Blog

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

The Mercury News spoke with state Cannabis Czar Lori Ajax to learn what Californians can expect to happen with recreational cannabis business licenses come January 2. Ajax acknowledges that not every business license will be issued on Day 1, but claims that applications will be accepted, and the online system will be up and running. Ajax also claims that temporary licenses may be issued in order to facilitate a timely start to sales of recreational marijuana. Furthermore, medical marijuana business licenses will continue to be valid until the state makes final determinations about the regulation of medical marijuana licensees. Holders of medical marijuana cards will, therefore, be able to obtain cannabis from local dispensaries, regardless of the state of recreational business licenses on January 2, 2018. Los Angeles Follows Suit Like the state, the City of Los Angeles has also prepared for recreational marijuana regulation with the appointment of a Cannabis Czar. The Los Angeles Daily News reports that Cat Packer was confirmed by a City Council vote of 13-0. Packer will serve as executive director of the new Department of Cannabis Regulation. She previously served as policy director for the Drug Policy Alliance – an organization which lobbies states for changes to marijuana laws. Packer has been critical of the disparate effects that marijuana prohibitions and law enforcement actions have had on the black community and other minorities. In her confirmation hearings, Packer told the City Council that the “War on Drugs” has affected communities of color. She also pledged to bring a scientific and data-driven approach to the industry. What This Means for Recreational Marijuana Businesses in Los Angeles Like the state, it is far from certain that the City of Los Angeles will be prepared to grant every applicant a cannabis business license on January 2, 2018. However: it is clear that the City is putting regulation, executive management, and staffing in place in order to prepare for the transition. Cannabis business owners can best prepare for these changes by staying abreast to changes in the law and administration. By following the news, business owners can obtain applications in advance, fill them out properly, prepare supporting documentation, and be ready to submit their application packages as soon as possible. New recreational marijuana laws can bring regulatory challenges for new business owners. A dedicated cannabis business lawyer can help cannabis entrepreneurs access capital, form strategic plans, and build a profitable business from the ground up. The Los Angeles Cannabis Law Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734. Additional Resources: LA leaders OK cannabis czar as ‘new era’ of recreational marijuana approaches, August 16, 2017 by Elizabeth Chou, Los Angeles Daily News More Blog Entries: Can California Cannabis Companies Combat Racial Inequality? August 27, 2017, by Cannabis Law Group

In 2014, the two defendants pleaded guilty to marijuana possession and cultivation on Humboldt County farm. Each were facing down the possibility of a three-year prison term, per federal sentencing guidelines. However, a U.S. District Judge has suspended any further proceedings in the case, stating prosecutors were prohibited by Congressional restrictions imposed three years ago – and has renewed every year thereafter.

The restrictions were implemented as part of an amendment that was sponsored by two California representatives – one a Republican, one a Democrat. The rule does not allow the U.S. Justice Department to spend money in a way that would interfere with any state’s medical marijuana laws. In 2016, the U.S. Court of Appeals for the Ninth Circuit ruled in U.S. v. McIntosh issued a ruling that prohibited any federal prosecution of individuals who are in compliance with medical marijuana law in a given state – even though federal statute prohibits use or possession of the drug, which it considers a Schedule I narcotic.

Evidence presented in the case revealed the two defendants were in strict compliance with all relevant provisions of California’s medical marijuana statute. Both defendants have been out on bail since they entered a plea, and it’s expected they will withdraw their plea.

Other defendants arrested for marijuana crimes have similarly tried to challenge their prosecution following the appellate panel’s ruling, but until now, had been unsuccessful. Further, the win could be temporary if Congress decides to allow the amendment to expire. That seems a real possibility, given that U.S. Attorney General Jeff Sessions has advocated for lifting the Congressional budget restrictions in the budget next fiscal year, which starts in October. At that point, prosecutors could re-open the case, as the statute of limitations has not yet expired.

However, the Congressional budget amendment does share bipartisan support in both houses of Congress, and it’s already passed its first subcommittee for next fiscal year. If it’s renewed, prosecutors wouldn’t be able to pursue their case until October 2018, at the earliest.

The two defendants were arrested back in 2012. State officers said they conducted a search warrant, finding nearly 330 marijuana plants, two loaded guns and more than $415,000 in cash. A number of searches over the following year uncovered a number of additional firearms and more cash, gold and silver.

Evidence presented by defendants showed they were growing the marijuana for nearby marijuana nonprofit collectives. They were simply reimbursed for their costs. Additionally, one of the defendants was a designated caregiver for his mother, who had a doctor’s recommendation to use the drug. Health and Safety Code 11362.5, California’s Compassionate Use Act, protects both users of medical marijuana and their primary caregivers from prosecution for possession and cultivation of marijuana and production of cannabis concentrates. Caregivers under the statute must be caring for a person legally entitled to use the drug for medicinal purposes and who meets the legal definition of a primary caregiver under the Compassionate Use Act.

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

Additional Resources:

Federal judge blocks prosecution of Northern California pot growers, Aug. 11, 2017, By Bob Egelko, San Francisco Chronicle

More Blog Entries:

What the State’s New Accela Software Means for Cannabis Business Licenses, Aug. 4, 2017, California Marijuana Lawyer Blog

Now, owners of American Green Inc. say the goal is to turn the 80-acre community into an eco-tourism destination for conscious cannabis consumers. The fact that the city runs totally on a self-sufficient, off-the-grid energy system from a solar farm is likely to be attractive to many marijuana enthusiasts across the country. Already existing in the town is old western hotel, an RV park, a coffee shop and a handful of homes. American Green plans to expand the farm to manufacture and sell marijuana-infused water from the town’s aquifer. The company is also in talks with others in the marijuana industry business, in hopes of interesting them to relocate and bring more jobs to the tiny town.

As for whether it will be renamed, that’s not yet clear.

Such an undertaking is ambitious, to be sure. Since the passage of Proposition 64 last year, our Orange County marijuana lawyers have witnessed an influx of “ganjapreneurs” – entrepreneurs interested in getting in early to what is expected to be an explosive industry. While there is certainly money to be made on these ventures, it’s important that investors and business owners not get too far ahead of themselves. Consultation with an attorney experienced in marijuana business planning is essential – whether you’re buying an entire town or just a corner shop. There are still many legal pitfalls into which business owners could become ensnared.

Some of the common issues that must be addressed:

The federal government. Marijuana remains illegal under the Controlled Substances Act. Although the Obama administration eased its enforcement of these policies in states where the drug is illegal, the Trump administration – and U.S. Attorney General Jeff Sessions in particular – are planning to take a harder line. That could spell trouble for business owners – even those who operate within the confines of state law.

Banking. Although an increasing number of banks are willing to work with marijuana businesses, the potential threat of federal money laundering charges still looms. While there are some banking opportunities, less than 3 percent of the nation’s banks or credit unions serve cannabis clientele. Marijuana businesses that do establish a good banking relationship must have impeccable records and ensure their operations are totally in compliance with state laws and guidelines as laid forth by the Financial Crimes Enforcement Network.

Branding. This consideration is important for business, but also for legal purposes. You need to be extremely careful about how you brand and what you advertise. Failure to do so could result in unwanted attention from authorities.

If you are considering starting a marijuana business, our cannabis lawyers, with decades of experience, can help.

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 company plans to turn town of Nipton, California into pot paradise, Aug. 4, 2017, Associated Press

More Blog Entries:

Influx of Indoor Marijuana Grows Increases California’s Power Needs, Aug. 10, 2017, California Marijuana Lawyer Blog

Measure M won over big in comparison to the votes garnered for another, Measure N, which was placed onto the ballot by a marijuana trade group that later swung its support behind the city’s proposal.

The bills were placed on the ballot in response to the November results in the state election that legalized marijuana for recreational purposes, beginning next year. Measure M gives the city the authority to repeal the current ban on medical marijuana dispensaries (Proposition D, passed in 2013), and replace it with updated rules that will regulate the varying kinds of marijuana businesses in Los Angeles. Additionally, the measure grants city leaders the power to enforce these rules, including imposition of fines, criminal penalties and loss of utilities like water and power for companies that flout city rules or try to operate unlicensed.

Measure M also allows the city to collect taxes on the gross receipts of cannabis companies – including those that sell medical marijuana, not just marijuana for general use. These taxes would apply not just to growers, but also to those responsible for production, delivery and sales.

City Council President Herb Wesson characterized the passage of Measure M as a “victory for common sense.”

Measure N, meanwhile, was a plan for granting priority permitting to 135 marijuana businesses to operate despite the Proposition D ban, and it also outlined taxes and permitting. However, supporters of Measure N agreed to drop their campaign for it once the city-proposed bill also contained a provision that prioritized those dispensaries allowed to operate under Prop D. Although they couldn’t remove Measure N from the ballot, supporters did lend their support to helping Measure M pass.

The group that launched Measure N and later backed Measure M, the Southern California Coalition, said it plans to now tout Measure M guidelines to county and then to state officials with the hope of launching a comprehensive model that can be supported statewide.

The vote was necessitated after Gov. Jerry Brown signed the Medical Cannabis Regulation and Safety Act, which mandates that all marijuana dispensaries in California have to obtain state and local licensing at the start of next year. However, L.A. doesn’t currently provide permits under Prop. D. That had to change. Measure M is the start of making the City of Los Angeles compliant with state law.

The measure will grant licenses to existing shops, and will also pave the way for recreational sales next year.

Another issue addressed in Measure M is marijuana delivery. Although there have been a number of online services that do provide marijuana delivery, our L.A. marijuana attorneys can explain those were operating illegally under Proposition D. Last year, the city attorney negotiated an agreement with the state’s largest marijuana delivery service, Speed Weed, to stop operating in Los Angeles.

Now, the new state laws say that marijuana delivery operations can only operate lawfully if attached to a brick-and-mortar shop, except if those shops are attached to a chain. However, those with NORML point out this part of the law is somewhat confusing as written. Measure M grants city council the authority specifically to regulate the transport of marijuana products in L.A.

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

Additional Resources:

L.A. Election Results: Marijuana-Licensing Measure M Won Big, March 7, 2017, By Dennis Romero, L.A. Weekly

More Blog Entries:

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

However, it seems that legalization may not be bringing in as much tax revenue as expected – and that’s because the increased availability has driven down costs. Vox.com reports new data from the Colorado Department of Revenue shows that the wholesale price of cannabis has fallen 22 percent since recreational sales first started three years ago. It’s now at about $1,470 from $1,880. That’s a stark change from what we saw immediately after legalization, when prices soared to $2,865 per pound when there was a short supply and high demand. Prior to legalization, the wholesale price of marijuana could reach as high as $5,000 per pound.

Speculation is that these prices aren’t done falling. Drug policy experts say once mass production really kicks into high gear, the price per pound could reach somewhere between $30 or $45. That’s because even in Colorado, there has to be some consideration of the fact that the drug is still illegal for recreational purposes in most other places in the country. This drives marijuana tourism in Colorado, which will likely drop off if and when the drug becomes more readily available in other states.

This price drop wasn’t exactly a surprise. Some have even argued that ultimately, marijuana shouldn’t cost anymore than a bag of tea because, after all, both are really just plants. Of course, for consumers, this would be great news. However, there are other reasons why there might be cause for concern about this.

Part of the issue is the concern about lower generation of tax revenue. The majority of states that have legalized did so by taxing marijuana a set percentage. So for instance, if the wholesale price is $1,400 as opposed to $1,800, states are going to be generating less revenue. The only way a state would be able to make up for that would be to impose additional taxes. Some policy wonks have suggested taxing marijuana with a single, flat price per ounce.

But it’s not all bad news. When more consumers are able to legally access the drug, the black market will begin to crumble. That has so many benefits – not just from a taxation standpoint (less tax dollars needed on criminal prosecutions), but it also bolsters public safety. Marijuana has long been a cash cow for drug cartels. Legalizing the drug pulls the rug out from underneath them. Some analysts believe exports of marijuana used to comprise about 30 percent of all drug export revenue. That means we could be reducing their profits by a third. These are the same organizations that not only exact violence among those within criminal gangs, but are also involved in human trafficking and other endeavors. These gangs probably won’t be wiped out completely with marijuana legalization, but they can it does serve to weaken their position.

The bottom line is there are pros and cons to the reduction of price of marijuana. Navigating these waters and balancing these interests will be a challenge for advocates and policymakers in 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’s marijuana legalization experiment is making pot a lot cheaper, Jan. 18, 2017, By German Lopez, Vox.com

More Blog Entries:

Medical Marijuana Access in Florida Limited, For Now, Jan. 19, 2017, L.A. Marijuana Lawyers

Specifically, California’s state Treasurer John Chiang formulated a group of 16 bankers, marijuana industry leaders and elected officials to define the problem as it relates to banking and work on hammering out some type of solution. Meanwhile, U.S. Senator Elizabeth Warren (D-MA) penned a correspondence with the Financial Crimes Enforcement Network, asking for rules and guidance for banks and dealing with cannabis businesses.

The majority of banks, financial institutions and credit unions won’t work with the cannabis industry – even those who work in businesses that are ancillary to the industry, such as product testers or product suppliers. Growers and distributors function almost entirely on cash-based models. Meanwhile, California’s first recreational marijuana businesses are slated to open sometime in 2018, per the recently-approved Proposition 64, which legalized marijuana use for and distribution to adults over the age of 21. The state now has one year to work out some kind of banking services model that is going to be workable in the legal framework. The big issue, of course, is the federal law that outlaws marijuana for any purpose. It doesn’t appear federal officials are likely to budge on this issue anytime soon, as the U.S. Drug Enforcement Administration has steadfastly refused to reclassify marijuana from its Schedule I status – maintaining it in the same danger class as heroin.

Because of this designation, banks, credit card companies and others won’t touch these ventures with a 100-foot pole, fearing they will be penalized for money laundering under federal statutes.

In 2013, the so-called “Cole Memo,” written by U.S. Deputy Attorney General James Cole, does give some insight into how financial institutions can work with marijuana businesses and still stay on the right side of the law. Still, that hasn’t resulted in large numbers of banks knocking down doors to work with providers of marijuana, despite the huge profits the industry is expected to rake in. It’s anticipated the industry will generate $8 billion during the first year it gets off the ground in 2018. That includes $7 million in profits, and the rest for state taxes.

All of this presents some safety and security concerns for new businesses. They are going to be dealing in a lot of cash, which is going to make them vulnerable to to the possibility of theft or robbery. It’s also possible that money laundering could become an issue at these companies, too, even those who want to do it the right way. Current laws will have them in some potentially tight legal spots. Our L.A. marijuana business attorneys recommend any individual or entity considering wading into the fray consult with an experienced lawyer first.

Although local officials are trying to get the federal government’s attention and movement on this, it’s unlikely we’ll see any major change or push in favor of marijuana businesses. Although marijuana is increasingly becoming a non-partisan issue, Republicans tend to view it less favorably than those on the left.

No federal officials attended Chiang’s most recent meeting, despite several being extended an invitation.

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 Looking For Ways To Store, Track Marijuana Cash, Jan. 4, 2017, By Drew Bollea, CBS Local Sacramento

More Blog Entries:

Report: Teens Now Find it Tougher Than Ever to Find Marijuana, Jan. 8, 2017, L.A. Marijuana Lawyer Blog

There are pros and cons to each, of course. Understanding what those are can help you make an informed decision.

Traditionally, cannabis has been produced on a small scale for purposes of flying under the radar of law enforcement. That means a lot of people have some knowledge of how to grow the plant. However, with a burgeoning legal market, people now (or will soon) have the option of choosing an array of products with specific chemical make-up and purpose – similar to what we would find in a grocery store produce aisle. And just like grocery stores, marijuana dispensaries are going to receive their supply cultivated from farmers who carefully produce the product and make it available for a reasonable price.

Still, some might find decide that it makes better financial sense to grow it themselves.

Leafly.com recently conducted a cost analysis of various marijuana strains and products.

The analysts start out by noting that the luxury of being able to step into a store and choose from an array of flavor, potency, effect and smell should not be taken for granted. A lot of these products require a high skill level and expensive equipment to produce. On the flip side, these marijuana products come at a premium price because they are subject to strict regulations and high taxes. They are also expensive to purchase.

In general, consumers are going to pay:

• $10-$20 per 1 gram of marijuana flower;
• $4-$10 for 10 mg of marijuana edibles;
• $30-$70 for 1 gram of marijuana concentrates.

Meanwhile, the costs for growing your own are estimated to be:

• $3.90 per gram of indoor-grown cannabis;
• $1.19 per gram of outdoor-grown cannabis.

That might make it seem like a no-brainer. Obviously, you should grow your own – right?

Not so fast. As our L.A. marijuana lawyers are well aware after many years representing the rights of clients in this industry, there are many more considerations to be made. For starters, that home-grown price-per-gram doesn’t include labor.

When labor is factored into the cost, it breaks down a bit differently:

• $7.82 per gram for indoor-grown marijuana;
• $2.59 per gram for outdoor-grown marijuana.

Most people spend at least an hour a day tending to their plants. Depending on the plot size, prices could be as high as $9.60 per gram.

One also has to consider whether their property is ideal for growing the plant. Unless you live on a large plot, you probably want to consider growing indoors for security purposes.

It also doesn’t factor some of the upfront costs that are going to be assumed.

For example, let’s say you are growing your plant outside. You’ll need to purchase:

• 5, 45-gallon pots – $140
• 12, 20-gallon soil bags – $300-$500
• Nutrients – $150-$500
• Watering tank – $500
• Mixing Tank – $100
• Water Pump – $200 – $600
• Hardware – $400
• Soil Amendments – $100 to $200

The average cost for all this is going to be somewhere in the neighborhood of $2,385, but could get as high as $3,000. Meanwhile, the average start-up costs for an indoor cannabis grow operation are about $1,950.

Of course, this equipment can be re-used, but it’s an upfront cost you’ll need to consider if you want to do it right.

On top of that, you may need to invest in resources to educate yourself about how to avoid a bad crop with mistakes stemming from mold, pests and other common diseases.

Ultimately, it comes down to how much time, money and knowledge you want to devote to growing a plant.

If you have concerns about the legality of growing your own or buying or selling the drug, our marijuana attorneys can help offer guidance.

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

Additional Resources:

Costs of Growing Cannabis at Home vs. Buying Bud at a Dispensary, Nov. 1, 2016, By Trevor Hennings, Leafly.com

More Blog Entries:

Report: Oregon Recreational Marijuana Sales Off to Strong Start, Oct. 27, 2016, L.A. Marijuana Lawyer Blog

We can take into account these same lessons with regard to our “War on Drugs” and specifically marijuana prohibition. Alcohol prohibition did initially result in a decline of alcohol consumption. But later, there was an uptick. The alcohol that was available was more dangerous. The crime became “organized” and gave rise to the power and wealth of mobsters. Otherwise ordinary citizens became criminals and our courts and prisons became overwhelmed. There were no marked gains in workplace productivity or reduction in absenteeism. It also removed a substantial tax revenue source, and led users in many cases to turn to more dangerous substances, such as cocaine, opium or prescription drugs.

Sound familiar?

As reported by the Cato Institute (among many other sources), it’s been 80 years since Congress enacted marijuana prohibition. It seems none of the lessons of alcohol prohibition were learned. We’ve spent hundreds of billions of dollars in law enforcement. Almost half of Americans admit to having used the drug at least once. Mexican drug cartels – vast and vicious organizations – have been made enormously wealthy by the illicit trade. It’s easier for young people to get marijuana than it is alcohol, which is regulated by the government. Millions of lives have been sidetracked or even derailed for drug crime convictions – mostly poor minorities who are disproportionately targeted and can’t afford a criminal defense.

And what benefit have we derived for this? Almost nothing. The International Centre for Science in Drug Policy analyzed two decades of federal data to reach the conclusion that marijuana prohibition failed to accomplish a single one of its goals.

From 1981 to 2002, the government increased its national drug control policy spending by 600 percent – to $18 billion. Marijuana-related arrests were up 400 percent from 1990 to 2006, while the estimated per-gram retail cost of the drug fell from $37 in 1990 to $15 in 2007.

What we have seen time and again – both with alcohol and more recently marijuana – is that the more effective solution is to legalize, tax and regulate.

Our L.A. marijuana lawyers know it’s the opposite of a free-for-all. The fact is, no teenager who really wants marijuana right now is going to have any trouble obtaining it. Legalization and regulation actually makes it harder. It dries up the black market sources. It makes the product more expensive, due to the taxes. It requires someone to check their ID before completing a purchase.

These considerations take into account that the government does have a legitimate, vested interest in keeping this drug away from children and people who will be driving. But consider that when alcohol prohibition was enacted, alcoholism was a serious problem in this country. As CBS News reported, the average American over the age of 15 in 1830 was consuming the equivalent of nearly 2 bottles of 80-proof liquor a week.

But prohibition was a one-sized-fits-all solution that didn’t actually solve anything. The same can be said today of marijuana. The hope is that with an increasing number of states legalizing, the federal government will soon change course too.

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

Additional Resources:

What We Know Today about Marijuana Proves Prohibition Is Wrong, Oct. 30, 2016, by Jeffrey A. Singer, CATO

More Blog Entries:

Report: Colorado Marijuana Potency Higher Than Most, Oct. 31, 2016, L.A. Marijuana Lawyer Blog

A new USC Dornsife/ Los Angeles Times poll reveals that California voter support for Proposition 64, the measure that would legalize recreational marijuana for personal use in this state, is at nearly 60 percent. What’s especially interesting is that support stretches across lines of race, gender, ethnicity and income. Even those from the two warring political parties generally agree on this issue.

The law would grant over-21 Californians the right to buy, keep and use a maximum of 1 ounce of cannabis for recreational purposes. It would also allow a person to grow up to six cannabis plants. The law would also require a 15 percent retail tax on the substance. Of the nearly 1,900 respondents, only a third said they outright would refuse to support the ballot measure if the election were today. Another 8 percent said they had no opinion one way or the other.

This marks a significant shift because if you’ll recall, just six years ago with Proposition 19, another measure that would have legalized pot for recreational purposes, almost 54 percent of voters said they would not support marijuana legalization in California.

That’s a dramatic and noteworthy change. As the director of the Unruh Institute of Politics at the University of Southern California said, those who oppose marijuana legalization in California are going to have to find a big funding source if they have any prayer of turning the tide on this issue in their favor come November. But of course, they may not be able to do enough to sway hearts and minds in the six weeks they have left, no matter how much money they spend.

Voters are seeing how these programs have unfolded in Washington, Colorado, Alaska and Oregon. They see the sky has not fallen. They see cost savings and even profits. Sure, there have been a few hiccups, but much of that has to do with the fact the drug is still illegal at the federal level. Many people believe that will change in the near future too.

The greatest support for Proposition 64 is with voters between the ages of 18 and 24. With that cohort, there is 67 percent support. The lowest amount of support comes from voters who are 65 and older – and even this group is torn straight down the middle about it. Although many baby boomers used the drug in the past, it was largely seen as taboo, and many still hold onto those beliefs.

Along racial lines, the measure is supported by the majority of whites, blacks and Latinos. The only group that did not show a majority support was Asian Americans, of whom only 47 percent back it. Gender disparities indicate men support it more than women, 62 percent to 55 percent. It was more greatly supported by those with incomes under $50,000 annually (63 percent) versus those who make more than $100,000 annually (57 percent).

As far as Democrats versus Republicans, the support is measured 68 percent to 56 percent, respectively.

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

Additional Resources:

Most California voters support legalizing recreational marijuana, poll finds, Sept. 13, 2016, By Patrick McGreevy, Los Angeles Times

More Blog Entries:

Report: California Arrested 500k People in 10 Years for Marijuana, Sept. 5, 2016, L.A. Marijuana Lawyer Blog

The measure had to garner a minimum of 600,000 valid voter signatures to qualify for consideration. A random sampling of those signatures by the state election’s office proved there were enough, numerous outlets reported.

A spokesperson for the initiative, the Adult Use of Marijuana Act, said the approval marks the start of a step away from the expensive, harmful and ultimately ineffective prohibition on the responsible, legal use of adult marijuana use.

Our California cannabis lawyers know the majority of residents in this state – including across party lines – agree that marijuana needs to be legal.

Of course, California was the first state to legalize the drug for medicinal purposes back in 1996. However, our state has been behind the curve on the recreational marijuana front. Already, Colorado, Washington State, Oregon, Alaska and Washington, D.C. have all approved the drug for recreational use. As it now stands, voters in Maine and Nevada are slated to consider similar initiatives in November. Arizona and Massachusetts too will probably be in the same boat, though those actions haven’t yet been formalized. Michigan too may join those ranks, though it faces an uphill battle.

Although any one of those states will be a victory for the marijuana industry, California has been titled, “The Big Enchilada.” We have 38 million people in this state. If recreational marijuana were approved here, it would more than double the market. This state represents more than 10 percent of the entire U.S. population. Already, marijuana is a multi-million dollar industry – and that’s just for medicinal marijuana available to those with a valid prescription. If recreational marijuana became a reality in California, it’s very likely the industry would balloon to a multi-billion dollar one.

The likelihood of it actually happening here? According to a number of polls: Very good.

The Public Policy Institute of California ascertained recently that overall public support for legal marijuana was about 55 percent. However, among likely voters, support was 60 percent.

Another study, but Probolsky Research poll reached a similar conclusion – 59.6 percent support for the measure.

The measure also has significant financial backing: The fundraising committee for the measure has raised some $4 million this year. That dwarfs the amount raised for the Coalition of Responsible Drug Policies, which was the initiative introduced by state and local law enforcement agencies.

It won’t be the first time the state has considered such a measure. Back in 2010, Proposition 19 asked voters to approve recreational marijuana, and they turned it down. But it’s not 2010 anymore. Not only have attitudes toward recreational marijuana evolved, but this is a presidential election year. That means voter turnout is likely to be much higher than it was six years ago.

If approved, the measure would allow:

• Adults 21-and-older to possess small and grow small amounts of marijuana for personal use;
• Introduce regulation of marijuana similar to the alcohol industry;
• Funnel revenues into teen drug prevention and treatment, law enforcement training and economic development in communities disproportionately impacted by marijuana prohibition.

Our California marijuana lawyers offer representation to individuals, businesses and caretakers.

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

Additional Resources:

It’s Official: California Will Vote on Marijuana in November, June 29, 2016, By Phillip Smith, StopTheDrugWar.org

More Blog Entries:

CDC: Increased Marijuana Access Linked to Lower Teen Use Rates, July 15, 2016, L.A. Marijuana Lawyer Blog

There were also various changes to the medical marijuana laws when Proposition D was passed into law in 2013, and this resulted in the closure of over 700 dispensaries within city limits, as well as the shutting down of two major mobile dispensary services in which medical marijuana patients could order marijuana on their smartphones and have it delivered to their homes or places of business.

The latest of these services to be closed has agreed to suspend all business in the city by the end of the month, but the owner feels he will be able to expand elsewhere in the state. The reason the city was against mobile delivery services is because of claims that they routinely violated the prohibitions of selling medical marijuana near schools, daycare centers, and other types of facilities on a restricted list.

While city prosecutors continue to enforce laws and close dispensaries, according to recent news feature from LA Weekly, it seems that some city council members, including the president, may be changing their tune and willing to ease the regulations on Los Angeles marijuana dispensaries so that more of these businesses can move into town.

The reason for this has to do with the Adult Use of Marijuana Act (AUMA) which is currently on the ballot in November’s election and, if passed, will legalize marijuana for recreational use in California much like it has been legalized in Colorado. This means that they will be taxing marijuana that is sold in the state, and local municipalities will be able to tax the sale of marijuana as well. As we have seen in other states like Colorado, this is big money in terms of taxes, and if the City of Los Angeles continues to fight against dispensaries within their jurisdiction, these businesses will end in Los Angeles County, and the city will lose out on a lot of money.

There are a lot of lobbyists on both sides of the issue trying to sway which way the council will vote. Those against the expansion of marijuana within the city of LA are generally those against marijuana in general and are relying on outdated studies, baseless claims, and trying to convince people that legalization will lead to more crime and violence and more students dropping out of school. However, as we have seen in places like Colorado that have already legalized marijuana for recreational purposes, this does not appear to be happening as of yet. Those in the medical cannabis industry predict that we will see another so-called green rush if marijuana is legalized for recreational purposes as we have seen in other 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:

L.A. Weighs an Expansion of the Lucrative Marijuana Business, May 21, 2016, LA Weekly, By Dennis Romero

More Blog Entries:

Pending Marijuana Ruling Could Limit Federal Prosecutions, May 6, 2016, California Marijuana Lawyer Blog

In the District of Columbia, recreational marijuana is legal to use and buy, but thanks to a congressional amendment to a recent budget measure, is illegal to sell. This was allowed to happen because Congress has much more control over the federal district than it does over a state despite a decades old decision to all for home rule in the city. As a result of it being illegal to sell marijuana, it is also illegal to hold what Congress calls a marijuana party or event. This makes things a bit complicated for those trying to get into the marijuana industry, but there are some ways around the prohibition.

For example, as discussed in this article, a local restaurant hosts marijuana cooking classes but uses oregano as a substitute for marijuana during the lessons and all demonstrations. However, all of the recipes and instructions are geared towards using actual marijuana rather than oregano.

In this cooking lesson series, the instructor was showing the students how to make cannabis butter and what to with it. One of the questions he was asked is how the infusion will last in the refrigerator. He told them that he never had it spoil because it never lasts long enough in his house. This made the audience laugh, but it was probably not far from the truth. As noted by the author of this article, many of the participants arrived to the demonstration high on marijuana, which is not unusual according to some of the attendees.

Of course, it is not only entrees that one could create using cannabis products and deserts are becoming popular was well. One of the recipes was for a chocolate mousse served in glass with mint flavored whipped cream on top that contained 25 mg of cannabis extract. This is only one example of many that professional chefs are currently developing.

If marijuana is legalized in California through the Adult Use of Marijuana Act (AUMA), which will be on the ballot this November, cannabis cooking school and even cannabis restaurants might eventually become mainstays in cities like Los Angeles. However, just as they are seeing in Washington, DC, there will be many gray areas with possibilities to get in trouble in California, as well, and you should speak with an experienced medical marijuana attorney in Orange County before going into business to make sure you are not going to run afoul of the law.

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

Additional Resources:

Artisanal marijuana crab cakes: Is this the future of getting high?, May 19, 2016, The Washington Post, by Maura Jenkins

More Blog Entries:

Medical Cannabis Employees in California Required to be Patients Themselves, April 17, 2016, L.A. Medical Marijuana Lawyer