That’s the question being asked of marijuana industry insiders in the region. High Times reported the FBI has declined to confirm or deny the existence of such an investigation. Yet in an FBI podcast broadcast titled “Corruption Threat Emerges in Marijuana Industry” in mid-August, supervisory special agents indicated unequivocally they had noted an increasing threat of public corruption in the burgeoning marijuana market in Southern California. They explicitly sought tips that might help direct such investigatory efforts.

Another investigation by city officials in Sacramento is examining how one cannabis company owner and those associated with him were able to score eight marijuana dispensary licenses in the city – roughly one-third of the allowable number of sellers within city limits. The man reportedly donated handsome sums to numerous local politicians in the city while they were running for election and re-election.

One of the Ukrainian businessman’s purported associates has already been indicted by U.S. attorneys for alleged involvement in a conspiracy to funnel foreign money to the campaigns of certain politicians as well as lawful cannabis companies in Nevada and several other states. Two others implicated in that alleged scheme are also associated with President Trump’s personal attorney Rudy Guiliani. They were allegedly involved in a reported scheme to discredit Democratic presidential candidate Joe Biden.

Sacramento officials say they want to get to the bottom of how the Ukrainian businessman was able to secure so many marijuana licenses, even though city regulations were specifically designed to ward off this kind of ownership concentration within the industry. The concern is that the system is being exploited.

Regardless, authorities say it’s likely the cannabis business licensing process in Sacramento (and probably elsewhere in California) needs to be re-evaluated and additional safeguards put in place.

Marijuana industry advocates like NORML say the flaw lies in state law, which gives local government agencies an enormous amount of power over lucrative licensing deals, which makes it ripe for public corruption.

Our Los Angeles marijuana business attorneys have seen that local officials tend to be more susceptible to corruption because they are under less journalistic and regulatory scrutiny.

State officials may be working hard to streamline the licensing process, but the local interests at play may be hindering the process, in addition to making it inherently unfair.

As state and federal authorities continue to weed through the growing evidence of corruption between government officials and certain cannabis industry players, we expect incidents like this will continue. The ever-present threat of black market sales to legitimate businesses means local markets can be incredibly cutthroat and competitive. This incentivizes backdoor political deals for those trying to break into the market and gain a firm foothold.

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:

FBI Investigates Corruption in Sacramento Cannabis Industry, Oct. 21, 2019, By Addison Herron-Wheeler, Culture Magazine

Agriculture is working on a system of regulations for naming craft cannabis strains. According to a report from Ganjapreneur, this is similar to the way the system of naming works for wines, in which a wine must actually be from the Napa region in order to carry that moniker on its label. CalCannabis Cultivation Licensing, the arm of CDFA that controls marijuana growers, is planning workshops in September to gather feedback and provide more information to cultivators.

The area known as the Emerald Triangle in Northern California has earned its name due to its high rate of cannabis cultivation. In fact, it’s the largest marijuana-producing area in the country. Growers in the region would like to capitalize on their world-renowned status to help give their product recognition and increase its desirability. They pride themselves on creating interesting, high-quality strains and growing in top-notch environments, and they want to make sure that random grow operations from some other region can’t use their regional names on their own labels. As anyone in business knows, sometimes a remarkable product isn’t enough. When a market is saturated with a great deal of product that all appears to be the same, at least on the surface, branding becomes essential to help certain products stand out. Cannabis businesses are no different. This is especially true when you consider the average cannabis consumer is accustomed to just accepting whatever was available to them. In an era of recreational legalization, choices are far more plentiful, and it takes more to stand out among the crowd. Consumers need as much information as they can get about the type of cannabis they are purchasing, the strain, and what makes one product different than another. The right marketing can achieve just that.

Our cannabis business attorneys in Riverside are well-accustomed with the marketing considerations of marijuana businesses. We have experience guiding entrepreneurs and investors in how to best protect their market identity in a cutthroat business environment. Our legal team is well versed in trademark and copyright laws that will give you ownership over your unique brand and help customers distinguish you from the competition. Solid, distinctive branding helps customers establish recognition and trust for your product as they begin to connect your branding with quality experiences.

Many small farms and luxury manufacturers look to branding to help set them apart from mega-farms that have taken root in California, seeking to dominate the market. CDFA is taking a page out of the wine country playbook, looking to its regulatory agencies in how to create an “appellation of origin” system. CalCannabis has been tasked with establishing regulations for regional titles by Jan. 1, 2021. In the meantime, it is important to secure your branding copyrights and trademarks to protect your business immediately. Our skilled attorneys can help you with the necessary steps and considerations to protect your brand under the law. We also can help protect your company in the future from other businesses infringing on your protected branding or intentionally trying to cause customer confusion.

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

Additional Resources:

CDFA’s CalCannabis Appellations Program Survey, July 26, 2018, California Cannabis Portal

More Blog Entries:

Smaller Cannabis Business Operations Need More Support, March 9, 2018, Cannabis Law Group

The California Bureau of Cannabis Control recently sent warning letters to several hundred businesses suspected of operating without state marijuana business license, according to Leafly. The letters outline criminal and civil action planned if the businesses refused to either close or become compliant with regulations. Bureau leaders said they are pursing all delivery services and retailers who may not be operating legally.

Some of these businesses slipped into questionable business practice after legalization passed, but as officials ironed out the details of statewide regulation and oversight. In some cases, business owners have been trying to fly under the radar to avoid being taxed (practically out of existence). In many cases, however, these business owners were simply unaware of their obligations or haven’t filed the proper paperwork or gone through all the correct channels. This is where having a marijuana business attorney can be invaluable to protecting your investment.Our Los Angeles cannabis business attorneys know that in cities like Los Angeles and San Diego have taken decisive action. LA Police Department has raided eight businesses without licenses, leading to more than 35 arrests. The department said this is just the tip of the iceberg, estimating 100-200 illegal cannabis businesses are currently operating in Los Angeles alone.

Although shortcuts can be very tempting considering how cumbersome these regulations are, the reality is any illegal business practices – intentional or otherwise – can cost you big time in the long run. Note that just because a cannabis business has been able to evade detection or regulation until this point is no guarantee the status quo will continue. In fact, these letters and police raids illustrate how serious marijuana business owners and operators should be taking these issues.

According to the bureau’s letter, each violation can cost a business up to three times the license fee in civil penalties. This is beyond any criminal penalties – and a criminal record can often be more detrimental than monetary punishment.

If your business is currently operating without a license or you aren’t sure if you are in compliance with laws and regulations, our attorneys are here to help get you on the right track. With our experience and know-how, we can assist you with licensing and compliance issues. And with regulations and laws varying so greatly from city to city, it is essential you are working with someone knowledgeable in all of the laws that will affect you.

We also can work on a business plan that is best for you to get you set up on the road to success. The best way to succeed is to keep your business open, and the best way to do that is to follow the law.

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

Additional Resources:

California Sends “Several Hundred” Warning Letters to Unlicensed Cannabis Businesses, Feb. 16, 2018, By Ben Adlin, Leafly

More Blog Entries:

Licensed Pot Shops Take on Illegal Sellers for a Fair Market, March 10, 2017, Cannabis Law Group

The Conundrum of Marin County In the liberal cannabis climate of Northern California, Marin County is a conservative outlier on marijuana issues. Sonoma County has an estimated twelve thousand residents working in the cannabis industry. Nearby Humboldt, Trinity, and Mendocino Counties form an area quickly becoming known as the “Emerald Triangle” for its vast marijuana farms. In contrast, every city and town council in Marin County (other than Fairfax) has either taken public positions against marijuana dispensaries or banned them altogether. The San Francisco Chronicle reports that this lead Marin County officials to recently reject ten dispensary applications. The County also received two separate anti-dispensary petitions with hundreds of signatures. This is a confusing message from a county which approved the 2016 recreational use referendum by seventy percent. One dispensary owner in Marin County has become a target of federal efforts. Lynette Shaw – known as the “Godmother of Medical Marijuana” – made a name for herself in the cannabis industry in the 1980s by supplying Hollywood stars such as John Belushi. According to the Huffington Post, her dispensary was targeted by federal investigators and prosecutors, and eventually shut down in 2011. The assigned U.S. Attorney even made plans to foreclose on Shaw’s landlord. Despite the fact that Shaw was never convicted, her dispensary remained closed until 2017. And in perhaps the most aggressive statement of sentiment, the Marin County Board of Supervisors has banned non-medical cannabis business activities in unincorporated areas of Marin County. The North Bay Business Journal reports that the ban will preserve the County’s ability to control marijuana throughout the uncertainty of changing recreational use regulations. The County Administrator, Matthew Hymel, is also recommending that only medical marijuana delivery businesses should be licensed by Marin County. According to ABC7, Hymel is reacting to residents’ concerns about marijuana dispensaries being located near their houses, which were raised at public hearings on the non-medical business ban. Cannabis businesses face many hurdles in achieving financial success in Marin County. The simple matters of getting a business license and finding a legal shop location could be insurmountable obstacles for entrepreneurs. Moreover, public sentiment in Marin County is broadly against marijuana – recreational or medicinal. Overcoming hostility and finding successful marketing strategies will also be serious challenges for cannabis business owners in Marin County. Yet even in unfriendly business or political climates, marijuana growers and distributors can find financial success. With sound the business planning services of experienced cannabis lawyers, business owners can be prepared to thrive in California’s cannabis industry. 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 in Pot Phobic Marin County, California, June 26, 2017 by Jonah Raskin, The Huffington Post More Blog Entries: Marijuana Dispensary Owners File Lawsuit Against Police for Raid, February 25, 2015, by Cannabis Law Group

It’s happening at a new gym in San Francisco, founded by a former professional football star who has been a staunch advocate for marijuana use. Ricky Williams, a former running back who scored the Heisman Trophy in college and played in the National Football League for the Saints, Ravens and Dolphins, teamed up with snowboard company executive Jim McAlpine. The company, Power Plant Fitness, allows members to smoke marijuana before or after working out, and also has edibles and topical gels for those who want to avoid actual smoke. It will officially open in May.

Many users say marijuana helps them to focus during or relax after workout sessions. The goal, according to the company’s website, is to promote “optimal states of wellness and peak performance.” As Alpine told Outside magazine last year, cannabis brings you in the “eye of the tiger mode.”

Although founders said last year members would need a medical marijuana prescription to join, that’s no longer likely to be the case given that California became the fifth state to legalize recreational marijuana in November with Proposition 64.

Other states that now allow recreational marijuana include:

• Colorado
• Washington state
• Oregon
• Alaska
• Nevada
• Massachusetts
• Maine
• Washington, D.C.

Still, as our cannabis business lawyers know, it’s not as simple as opening up a company and welcoming users to imbibe on site. One must consider not only the legalities of state law, but also local permitting, particularly when allowing users to smoke or consume cannabis on site.

Plans are underway for this company to expand. Once the San Francisco site is up-and-running, there are plans in the works for locations in Los Angeles, San Jose, Seattle, Denver and Portland.

McAlpine noted this was not an opportunity for people to simply “get high and just screw around.” He said the focus of the gym is on the athleticism. He was a founder of the series 420 Games, which hosts a series of sporting and athletic events for those who use marijuana. Those events are not for the faint of heart – or lungs or legs. They include triathlons, obstacle courses, mountain bike races, golf courses and a 4.20-mile run. That event has been held annually in San Francisco since 2014.

Part of the gym’s purpose is to reverse the stereotypes about “lazy stoners” or those who are only gravely ill. In fact, people who are physically fit and prioritize optimal health routinely use the drug as part of their fitness routine. When cannabis is used as a tool for focus and recovery, it can help to bolster workout performance.

New members will begin with a cannabis performance assessment by staffers, who will help determine and supervise the best way for a person to consume marijuana while training.

This level of supervision may also lend itself to a degree of liability, and marijuana businesses like this need to take these factors seriously. Consider that marijuana use can be dehydrating and may also lead novices to symptoms ranging from mild dizziness to panic. Physical exercise could exacerbate these symptoms, so careful structuring of the monitoring process will be important.

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

Additional Resources:

A “cannabis gym” is opening in San Francisco, March 2, 2017, By William Hughes, A.V. Club

More Blog Entries:

Marijuana Legalization Should Be Accompanied by Justice System Reforms, March 23, 2017, L.A. Marijuana Lawyer Blog