In the midst of feverish work and complicated legal structures, the City of Los Angeles is garnering worldwide interest in the efficacy of its new cannabis regulations. Learn more about the system that could save taxpayers millions of dollars in regulatory costs and ensure a smooth transition into legal sales of recreational marijuana. The L.A. Plan According to Forbes, Los Angeles voters overwhelmingly passed Proposition M in March 2017. The legislation, which was carefully crafted with input and support from the cannabis industry, utilizes a four-pronged approach to create enforceable and stable regulations for the cannabis industry. First, it emphasizes sensible regulation which addresses the realities of the cannabis industry. This became a priority after advocates witnessed the “disaster” of the old Prop D, which ineffectively regulated medical marijuana without meeting the needs of the industry. Second, Prop M creates a licensing mechanism, enabling cannabis entrepreneurs to obtain physical business licenses for the operation and ownership of recreational cannabis businesses. Third, the legislation takes a pragmatic approach to the taxation of cannabis operations. Business taxes – currently the lowest in the nation at 1% to 2% – will be gradually raised to more sustainable rates. At the same time, taxes for marijuana collectives will be slightly lowered from 6% to 5%, in order to level the competitive playing field with marijuana cultivators and distributors. And finally, the fourth prong of Proposition M focuses on enforcement, which is made easier and more cost-effective by clear guidelines in the other provisions of Proposition M. Why Proposition M is Making a Splash The highly researched and developed legislation is getting attention worldwide, as other states and nations consider the best regulatory mechanisms for marijuana businesses. The Southern California Coalition reports that it has received inquiries from legislators across the United States and North America, and even Europe. In developing the mechanisms of Proposition M, enforcement was specifically designed as the last element and legislative priority. This is because effective enforcement can only be made after clear laws are in place. Federal, state, and local law enforcement agencies have spent billions of dollars in recent decades in an attempt to enforce marijuana laws. Unfortunately, because the laws are unclear, these resources are often wasted entirely. Cases are dismissed because of conflicts between state and federal law. Confusing technicalities make it difficult for officers to know whom to arrest and what evidence to seize. Prosecutors and defense attorneys argue over these legal technicalities in court, effectively wasting more taxpayers dollars on unclear regulations. All of these problems could be avoided by having clear guidelines to enforce without the need for excessive or wasted police raids or endless court battles. An experienced Los Angeles cannabis business licensing lawyer can help business owners ensure they are in compliance with all federal, state and local regulations. The Los Angeles Cannabis Law Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734. Additional Resources: A California Plan to Save Millions on Cannabis Regulation Is Getting Props Worldwide, June 7, 2017, by Janet Burns, Forbes More Blog Entries: Preparing the California Cannabis Industry for Recreational Use Regulations, July 9, 2017 by Cannabis Law Group

Strategic Logistics The Napa Valley Register reports that one Napa architect has created a niche for himself in the design of grow houses. In addition to meeting ADA and other code requirements, these designs also integrate ventilation and air filtration systems which help growers maintain healthy crops and profits. Sufficient power – and the use of LED lights to reduce the grow houses’ power demands – are also critical components of the designs which help business owners maintain profitable operations. City and county officials are scrutinizing plans for grow houses more carefully than other buildings, and it is therefore especially important for growers to ensure their plans are made carefully, strategically, and professionally. Locations for the cultivation, processing, distribution, and retail sale of marijuana is, of course, just one of many logistical concerns faced by cannabis business owners. New permits, licenses, and tax documents will be required for recreational marijuana sales. In the case of taxes, conflicts between state and federal law will require separate filings for federal, state, and local taxes. Regulatory requirements also apply to other businesses in the supply chain. Cultivators, for example, should ensure that their distributors and retailers are in compliance with all cannabis regulations. Failure to do so could cause costly interruptions in daily business operations. Strategic Business Plans Like any business owner, cannabis entrepreneurs must have plans in place to ensure both short and long-term profitability of their companies. There are many considerations unique to cannabis businesses. How will the business recoup costs unique to marijuana regulations? Will the company’s marketing plan be able to adapt to prohibitions on advertising? What about rapid regulatory changes which affect your business operations, or those of your suppliers or distributors? Banking and financial services are a particular concern for cannabis business owners. Despite the fact that a marijuana business is operating lawfully under California state law, marijuana is still classified as a Schedule I drug under federal law. This means that such businesses are generally unable to access banking services through traditional, federally-regulated financial institutions. When a lack of financial services forces cannabis businesses to operate in cash, security also becomes a very real concern and expense. The transportation of cash and cannabis exposes business owners to financial losses and violent crime. An experienced Orange County cannabis business planning lawyer can help entrepreneurs arrange logistics and develop a business plan that will build profitable operations from the ground up. By preparing now, cannabis businesses can be up and running as soon as business licenses are issued in January 2018. The Los Angeles Cannabis Law Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734. Additional Resources: Napa architect helps build grow houses, September 15, 2017, by Jennifer Huffman, Napa Valley Register More Blog Entries: California’s Recreational Marijuana Laws Can Expose Cannabis Businesses to New Operating Expenses, July 25, 2017 by the Cannabis Law Group