Gov. Gavin Newsom has shown his support for the bill, as he now takes aim at updating California’s cannabis regulations.

Assembly Bill 1948, introduced by Assembly Members Rob Bonta, Ken Cooley, Reggie Jones-Sawyer, Tom Lackey, and co-authored by Assembly Member Mark Stone, seeks for three years to:

1. lower marijuana retail sales state tax from 15 percent to 11 percent; and
2. eliminate the cultivation tax altogether.

According to the state’s recent budget summary, these updates are intended to “simplify the system and to support a stronger, safer legal cannabis market.”

If you need legal assistance for your cannabis business, our Los Angeles marijuana lawyers can help.

What Took so Long? Over the last two years, similar proposed legislation updates have been pushed aside, with Gov. Newsom believing it too early to make legislative changes right after establishing legalized cannabis use.

Governor Now Ready to Update Laws The governor more recently, however, has hinted at now being more open to such an update. His new spending plan for the state not only includes a shuffle of agencies regulating the sale of marijuana, but also a streamlined approach for tax collection.

As it stands, the Department of Food and Agriculture currently licenses and regulates marijuana farms, while the state Bureau of Cannabis Control issues licenses and enforces the rules relating to retailers, distributors and delivery firms. Separately again, the state Department of Public Health oversees all marijuana manufacturers, including those who yield edible cannabis products.

Additionally, Gov. Newsom has also displayed a willingness to consider further measures intended to help strengthen the legal cannabis marketplace.

Pot Industry’s Stunted Growth Some industry insiders predicted that Proposition 64 would see a legal cannabis market in California generate $1 billion in state tax revenue each year. But last week’s budget estimate shared by the governor showed just $479 million is expected this fiscal year, followed by $550 million in the 2020-2021 budget year.

Contrary to expectations, the legal marijuana market has not grown as quickly as anticipated. Its slow growth is routinely attributed to high taxes, excessive bureaucracy, and market limitations resulting from three of out four Californian cities banning marijuana stores within their city limits.

Josh Drayton from the California Cannabis Industry Association (CCIA) has said changes like these proposed, are critical to the regulated marijuana industry’s survival. Furthermore, they’re necessary for licensed business operations to stand a chance at competing with the thriving illegal market, which “evades the financial obligations which drive up the cost of tested and regulated products.”

So when lawmakers re-introduce a bill of this nature, it demonstrates they understand the challenges legal cannabis business owners face, and the dire need for legislative assistance. The proposed bill seeks not only to simplify tax collection, but also to ease licensing and ultimately broaden access to the regulated marketplace.

Legal Implications These proposed tax cuts are vital to the survival of California’s legal cannabis industry. Measures such as these must be activated to give licensed operators a chance of competing with the illicit market, which shows little sign of retreating.

Setting up an independent department to oversee the many moving parts making up California’s regulated cannabis industry, will certainly help improve current conditions. Not only unifying the necessary regulatory functions, but also establishing a central contact point for cannabis licensees and local governments.

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: Assembly Bill 1948 Proposition 64

Fake THC Cartridges Are Flooding California Of all counterfeit cannabis products, refillable THC cartridges used inside vaping pens are currently most common. Surprisingly, states like California – where recreational cannabis use is legal – appear to be most flooded with counterfeit products. Big brands like Kingpen and Rove have tried to get ahead of counterfeits by repackaging their products, but counterfeits have shown they can keep pace, often reproducing new packaging almost as quickly as the legitimate brands.

And industry insiders unanimously agree, the fakes are getting better all the time. Many knockoff THC vape pens are comprised of illegally but locally grown cannabis, which producers then stuff into refillable cartridge pens, before attaching counterfeit labeling they’ve purchased online, and selling the finished counterfeit pens at discounted prices to illegal pop up shops. To most consumers and law enforcement officials alike, it’s very difficult to tell a real pen from a fake one.

The best way for brands and businesses to protect against counterfeits is to legally trademark cannabis products. Once cannabis companies have a trademark in place, Californian authorities then have jurisdiction to enforce against counterfeits. Without a trademark though, it’s very difficult to prosecute. If you need help trademarking your cannabis products, our marijuana business lawyers of Orange County can help.

A Budding Counterfeit Scene All across California, legitimate cannabis businesses are feeling the pinch. The problem is so wide spread that brazen bootleggers are even advertising counterfeit products on Instagram and Snapchat. An admin for DanksOfficial – a watchdog Instagram account cautioning marijuana users against buying THC cartridges on the black market – who prefers to remain anonymous, says unless consumers can test each cartridge, there’s no way to be sure a vaping cartridge is real or safe. Experts Warn of Health Risks Counterfeits Pose Just as vaping is increasing in popularity across the nation, associated long-term health risks are also becoming increasingly clear. The Center for Disease Control and Prevention (CDC) recently announced that 193 cases of severe lung illness, all possibly linked to vaping, have propped up across 22 states. While the CDC did not share exactly how many cases involved products containing THC, Dr. Illeana Arias, senior scientific advisor and acting deputy director for non-infectious diseases noted “in many cases” patients had confirmed using THC-containing products prior to feeling unwell.

Meanwhile, the California Department of Public Health (CDPH) recently stated as many as 28 cases of acute lung disease among people who recently vaped cannabis products, had been reported across the Golden State. Just this August, the CDPH issued a health alert in Kings County after a cluster of hospitalizations. Between July and August, seven healthy adults were admitted to county hospitals, all showing signs of severe pulmonary disease, after vaping THC products. Nancy Gerking, Kings County assistant director of public health, confirmed the products were all purchased from temporary, unlicensed pop-up shops in the local area.

At about the same time, we also saw the Bureau of Cannabis Control (BCC) launch a public awareness campaign warning consumers about the health risks associated with buying marijuana products from unlicensed dispensaries. That’s because knock off products are completely unregulated and avoid testing for pesticides or other contaminants, which can pose dangerous health risks.

Other industry insiders note, because licensed cannabis growers and businesses cannot distribute their goods to unlicensed stores without risk of suffering heavy fines from regulators, if big brand name products are showing up in unlicensed stores, then those products are almost always fake. Consumers can best protect themselves from subpar goods by buying all cannabis products from licensed, registered cannabis businesses. To check if a California cannabis dispensary is legitimate and meets the state’s high safely standards, enter their business name into the BCC online license search tool (www.CApotcheck.com). Be sure your retailer is listed there, before shopping.

Marked Down Knock Offs Bringing in Big Bucks The state’s registered marijuana operations are projected to make more than $3 billion combined this year. But that number is easily overshadowed by the $8.7 billion in revenue expected to be generated by the unregulated cannabis industry across California in the same time frame.

Legitimate cannabis business operators are at pains to compete. It is widely believed that counterfeits are boosting unlicensed dispensary sales, where business owners can afford to sell cannabis products at lower prices, because they’re skipping out on regulation costs and avoiding taxes.

Authority Clampdowns Showing Signs of Success The Los Angeles Police Department is making strides in limiting the rampant illegal cannabis trade. At the beginning of the year there were almost 300 illegal dispensaries operating in the Los Angeles area, compared to less than 200 today. With authorities primarily focused on closing unlicensed dispensaries, clamping down on counterfeit products is not yet a priority.

Rather than issuing search warrants that could lead to seizing knock off cannabis items, the LAPD is focused on first cutting water and power to properties hosting illegal cannabis activity. While this is a strong first step, some fear counterfeit products not seized when closing down illegal operations, can easily circulate somewhere else down the road.

Legal Implications The black market for cannabis activity is thriving, and counterfeits are boosting sales for unlicensed retailers across the United States. Without regulation, corners are being cut, product safety is in question and health risks are becoming a reality. Additionally, the sophisticated production of knock offs show little signs of slowing down.

In this climate, the best way for cannabis brands to protect the integrity of their products, their brand reputations and the well-being of their customers, is to secure product trademarks, invest in difficult to replicate product packaging, and aggressively pursue counterfeits.

Some industry stakeholders believe knock offs will abate as consumers become more informed over time, and others are frustrated that counterfeits are stoking unlicensed dispensaries, who are taking such a large portion of market share. Either way, legitimate cannabis outfits are working hard to stay licensed, and to keep their businesses running. It seems the longer it takes to clamp down on counterfeits, the harder it will become for legal businesses to continue trading. Let’s hope the ramped up authority crack downs continue to make inroads and pave a smoother path for legal cannabis business owners moving forward. About Cannabis Law Group The Los Angeles CANNABIS LAW Group represents growers dispensaries, ancillary companies, patients and those facing criminal marijuana charges. Call us at 949-375-4734. Additional Resources: The Center for Disease Prevention and Control California Department of Public Health Bureau for Cannabis Control California

To start, the idea of tracking marijuana traveling throughout the supply chain sounds simple enough. In theory, all cannabis products would be given unique identification numbers, noting from which ‘batch’ or ‘lot’ they were born. Products would then be sent to labs for testing. Next, approved products would be passed from producer to distributor, and finally to retailers for sale. At each step, the state should be able to track each piece of marijuana as it moves through the chain, making sure nothing is being redirected out of state, and ensuring everybody is paying their required taxes.

But in practice, a few hiccups quickly come to light. First up, only businesses holding ‘provisional’ or ‘annual’ licenses are required to subscribe to the track-and-trace system. And until last month, there were more than 600 marijuana businesses operating on ‘temporary licenses,’ who would not have had to track-and-trace. This means, there was no way regulators could comprehensively account for every legal product moving about the state.

While those 600 temporary cannabis business licenses all expired at the end of July, and many of those cannabis business owners await approvals on provisional or annual license applications (another story in and of itself), Lori Ajax, State Bureau of Cannabis Control (BCC) chief, recently said it’s a priority of the bureau to get all temporary licenses transitioned onto either provisional or annual licenses, as quickly as possible, so those businesses won’t have to halt their operations.

It’s true that when the provisional or annual licenses are approved, those marijuana business owners are immediately required to begin tracking-and-tracing. And as the CCTT is quite complicated, many companies already required to track-and-trace are hiring full-time employees to traverse the system.

Tagging Products Has Proven a Challenge One common complaint from marijuana retailers holding provisional or annual licenses, is that they must apply unique identification tags to all products. And because until very recently, many holders of temporary licenses weren’t held to those same standards, products would reach stores without said tags, leaving retailers having to sticker and tag products, at their own extra labor costs.

But the problem doesn’t stop there. Now with 600 odd businesses in line waiting for the state to approve their new license applications, and often a need to continue earning a living in the meantime, many are generating lots of paperwork for companies adhering to CCTT requirements while trading with businesses not yet in the system.

On the use of CCTT throughout the marketplace, Josh Drayton, communications director for the California Cannabis Industry Association (CCIA) says it’s a patchwork at present. “We’re not seeing it work it’s way all the way through the supply chain, which ultimately means it’s kind of a broken system at the moment,” he said.

Software Compatibility Also a Hurdle Another shared grievance is that CCTT is not properly set up to work smoothly with a common point-of-sale software system used by retailers. CCTT also does not account for businesses like growers or manufacturers awaiting provisional or annual licenses, who may have missing data. As a result, some retailers using that software are forced to simply ‘create’ information in order to move through to the next step within the CCTT platform.

So Was Track-and-Trace Just a Sweetener? One of the promises California’s 2016 Proposition 64 made, was that the state would always be able to locate every piece of marijuana sold, all the way ‘from seed to sale.’ Creating a tracking system then, was always going to be necessary to meet this promise.

Helping to prevent cannabis flowing out onto the black market was another reason. But so far, activity on the illicit market has shown little signs of slowing. One analyst estimates the underground cannabis market in California totals $3.7 billion per year, which outdoes the legal market fourfold.

Some believe the track-and-trace system was only offered up as a way of getting legalized marijuana over the line.

The Burden of Compliance Others believe that requiring compliance with an inventory control system places a needless burden on legal cannabis businesses committed to operating within the law. Amid the many opinions on the matter, one thing is certain, a slow transition to the new system has brought with it a whole lot of new red tape. And manufacturers and vendors may just have to prepare for further hiccups and delays as the industry presses ahead.

Legal Implications Thus Far Thankfully, marijuana businesses still getting up to speed with CCTT have been afforded some leeway. The BCC seems to understand this is a process, and hasn’t made an example of anyone as yet. But there are no assurances from the authorities that this is in fact the case. Most affected by this issue are businesses either moving to, or waiting on their, provisional and annual licenses following the expiration of their initial temporary licenses, as well as any new cannabis business operators coming into the fold. As a result, all industry stakeholders will watch carefully to see just how effective the CCTT system can be as it becomes more widely embraced in the coming months.

Need Legal Help Tracking and Tracing For Your Marijuana Business? Our California marijuana lawyers can help answer any questions you may have.

The Los Angeles CANNABIS LAW Group represents growers dispensaries, ancillary companies, patients and those facing criminal marijuana charges. Call us at 949-375-4734. Additional Resources: California’s Cannabis Track and Trace (CCTT) System Proposition 64

CBD is naturally found in cannabis plants, and is widely known for its relaxing properties. But CBD won’t produce a ‘high,’ as it lacks the psychoactive tetrohydrocanabidiol (THC), found in marijuana. CBD-derived products have quickly grown in popularity, thanks largely to a wide range of potential health benefits, including relieving pain, anxiety, seizures and brain injuries.

According to Michael Lux, partner at Crowe accounting firm, the next 6-12 months will involve strategic minority investments in the CBD space. He noted too that while the majority of CBD companies are of interest to investors, they are still less than five years old, so they’d likely need a little more time before preparing to engage in full exit strategies.

US Farm Bill Opened the Gates Over the last eight months, a slew of beauty, personal care, and pet brand products have quickly become available across a variety of retail stores. In part thanks to the US Farm Bill, which was passed in December last year. This bill essentially relaxed restrictions, allowing licensed cannabis growers to produce hemp on an industrial scale, without fear of prosecution. It also relaxed restrictions around selling hemp-derived products interstate. The passing of the US Farm Bill was a tipping point, enabling CBD-derived products to go mainstream.

A recent Forbes report even projected the combined U.S. CBD sales market would likely exceed $20 billion by 2024.

Too Early for Buyouts Meanwhile, one industry banker noted it will be some time before makers of CBD products start to see buyouts from traditional consumer packaged goods (CPG) companies, especially with regard to food and beverage products. Mostly because the Food and Drug Administration (FDA) is still working to outline its CBD regulatory framework, and that tweaking will likely be ongoing. Just last month the FDA announced it has prioritized efforts to establish clearer CBD guidelines, and plans to publish a report this fall.

Until then, companies selling personal care CBD products are particularly well poised to attract strategic investments. That’s because regulators are far more comfortable with non-ingestible products, which significantly minimizes an investor’s risk.

Regulators Pave the Way Once the FDA clarifies its regulations on CDB-derived products, we can expect strategic buyers to show interest in acquiring CBD brands across consumer, pharmaceutical, and food and beverage industries. In the meantime, there are five key regulatory concerns most investors are monitoring before investing in CBD businesses:

1. Drug Enforcement Administration regulation of CBD – marijuana is currently considered a Schedule 1 drug and is not approved for medical use in the U.S.; but hemp is defined as the plant, or any part of the plant containing a THC concentration of no more than 0.3 percent.
2. FDA regulation of CBD products – advertising or using CBD as a dietary supplement is currently prohibited.
3. Some state laws restrict CBD product sales – North Carolina, Maine and New York restrict CBD products, just to name a few, and could severely impact overall CBD product sales.
4. FDA limits advertising and label claims made on CBD products – the agency will diligently pursue companies making unsubstantiated marketing claims.
5. Regulation of CBD products will continue to evolve – a specific internal agency working group will continue to explore options for dietary supplements containing CBD to be marketed lawfully.

Legal Implications Thus Far While CBD businesses continue to blossom, investors will become increasingly active in the growing CBD sector. Investors, like so many other industry stakeholders will watch closely on how ongoing regulations will impact the marketplace. It is clear that no matter how the industry progresses, regulators and legislators will play a large role in defining just how products are developed, where they can be sold, and what can be touted in advertising and marketing efforts.

Need Legal Help Investing in or Acquiring a Commercial Cannabis Business? Our California Hemp & CBD attorneys can help answer any questions you may have.

The Los Angeles CANNABIS LAW Group represents growers dispensaries, ancillary companies, patients and those facing criminal marijuana charges. Call us at 949-375-4734. Additional Resources: 2018 US Farm Bill FDA Guidelines

Since recreational cannabis became legal in Nevada two years ago, our Los Angeles marijuana attorneys understand the state has released only trickles of information about the state criteria for the new market. TIME Magazine in a recent report flat-out stated, “No one knows for sure” how state officials are awarding new licenses, only that they are being awarded because dispensaries are opening without complaint from the state.

Several plaintiffs are seeking to learn more about how the state chose the companies it did in awarding 61 licenses out of 462 vendors to sell recreational marijuana to adults.

Las Vegas, aka Sin City, is a destination for people all over the U.S. and the world to come for indulgences, and it would be a gem of a location for any marijuana purveyor. Many are clamoring for information on the process and requirements needed to make that happen, but thus far, it’s been crickets (or as plaintiffs put it: “arbitrary and capricious (silence) that violates the constitution.”).

(Thus far, city officials in Las Vegas have not committed to allowing a dispensary on the strip, but TIME reported discussions are underway.)

An upcoming hearing will weigh whether the most recent crop of cannabis dispensary owners, which were given approval in December. Plaintiffs, 10 of those who were turned down for the chance to open a shop, assert the process for any “winners” who receive lucrative state licensing permission for cultivation, production, lab-testing and dispensing should be conducted with full transparency.

Why Transparency in Important in the Pot Industry

As our Los Angeles cannabis business attorneys know, Nevada isn’t known for its sunshine laws (statutes that require public business to be conducted publicly) but several have noted that to award these contracts behind closed doors not only undermines those provisions, but will foster the kind of environment voters wanted to avoid when they approved a legal market. Namely, they want to avoid drug kingpins and gang members from gaining a foothold with politicians – something much more likely to occur if all these deals are occurring in backdoor rooms with no public oversight.

Time did report that a state effort is underway to make public a list of all licensee and applicant names, wit the Nevada Department of Taxation overseeing that process.

Some are calling for a system that would mirror Nevada’s Gaming Control Board, responsible for regulating the licensing of casinos. An advisory panel for one Democratic state representative has a commission currently studying how such a framework could be tailored and implemented specifically for cannabis.

The stakes are especially high because by all accounts, marijuana sales are reportedly soaring in the south of Nevada. The very first year recreational cannabis hit the shelves, state officials reported $425 million in sales (divided among 61 dispensaries). Medical marijuana, meanwhile, is now topped at $150 million. All this amounted to an additional $43 million in adult sales taxes, which in turn means $28 million for Nevada schools. Then just in the last six months of last year, all Nevada dispensaries reportedly generated $884 million, handing the state nearly $72 million among more six dozen stores. 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: Nevada Is Under Pressure to Reveal How It Awards Its Marijuana Licenses, April 15, 2019, TIME Magazine/ Associated Press More Blog Entries: Criminal Charges for CBD? Confusion Copious Over State, Federal Laws, May 5, 2019, Los Angeles Cannabis Attorney Blog

Washington, where requirements for marijuana businesses are strict, yet muddled. What started as a residency restriction meant to control big outside mega corporations from putting local businesses at a disadvantage has led to corporations researching ways to exploit residency loopholes and limiting who longtime residents can bring on as partners. Now, due to unclear definition of what qualifies a person for residency, some are concerned how to prove their status.

You see, according to RCW 69.50.331(1)(b), one must be a resident of the state for six months to apply for a marijuana business license. Not only that, all members of the business, no matter how small the stake, must meet the same residency requirement. Further, a “partnership, employee cooperative, association, nonprofit corporation, or corporation” must be formed in Washington according to state laws and meet the above outlined residency requirements in order to be issued a license. Lastly, licensees must comply with residency requirements throughout the duration of the license. Without a firm definition on what constitutes residency, though, some businesses have been in the lurch.In 2016, the Washington State Liquor and Cannabis Board eased up the chokehold on businesses a bit by allowing for non-bank financing to come from out-of-state, but these investors still could not hold a stake in the company, as outlined in the Cannabis Law & Policy Project. This adjustment in regulations by the board also included the amendment that increased the residency requirement for all interested parties of the business from three months to the current six months. Both moves were an attempt to discourage out-of-state investors from setting up makeshift residency in the state and encouraging them instead to be a more passive investor.

Good news for some Californians, there are no such residency restrictions at the state level. Many cities and local governments, however, have their own residency requirements in an effort to favor in-state and local businesses, according to a report from Marijuana Business Daily. Some have only allowed pre-established businesses access to limited licensing, trying to give grassroots businesses who have been working in medical marijuana a fighting chance now that recreational cannabis has hit the scene. Others have rules designed to give preference to owners who come from neighborhoods most negatively impacted by biased drug enforcement policies of the past. Others, still, will welcome entrepreneurs from anywhere, primarily seeking the influx of tax revenue from new businesses.

Similar to Washington, these regulations can often raise more questions than they answer. How long does one need to reside in a certain area to be considered a resident? How much time do they need to be on the premises for it to be considered their home? What about neighborhoods affected most by the War on Drugs? Can someone new move in and take advantage of these special opportunities? If questioned, what proof must you show? Does everyone in the business need to be a resident? Luckily you do not have to be a scholar on local laws to break down these answers. Our skilled Los Angeles cannabis business attorneys are well-versed in residency rules and the distinct set of guidelines you will face in each city and county. A free consultation is your first step to making sure your business is fully in compliance.

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:

For Washington’s Pot Industry, Out-of-State Owners Could Supply a Lifeline — Or Invite Trouble, By Bob Young, Feb. 7. 2107, Seattle Times

More Blog Entries:

Strict Regulations Make Legal Marijuana Scarce in Washington, Oct. 11, 2014, Cannabis Law Group

equally important, but less discussed, element is security. Considering some security measures are actually built into the regulations for marijuana businesses, this is certainly not something to be taken lightly. Cannabis Business Times recently broke down security recommendations and requirements for marijuana cultivators, and our experienced legal team can expand on these tips and explain the rules other types of businesses must also understand.

It may seem basic, but one of the most important steps the report outlined was assessing risk. You don’t want to be reactive to your security needs, only putting measures in place after a problem presents itself. It’s important to be proactive, and identify all the risk areas, particularly any touch-points where product could be removed from your facility without your knowledge.

Video surveillance is one of the top methods of security in any type of marijuana business, but there are many aspects that must be taken into consideration before choosing the system that’s right for you. Is the video quality high resolution enough? CA Code of Regulations Div. 42, Ch. 1, Sec. 5044 states that minimum camera resolution must be 1280 x 720 pixels. The ability to identify any person recorded must be clear and certain. Your system cannot be in-house only; it must be accessible through the Internet.State guidelines also very specifically outline camera location protocol. The fixed and permanently mounted cameras need to have a view of 20 feet around all entry and exit points. Rules around storage of back logged surveillance are also very detailed because they must be readily available to view by the Bureau of Cannabis Control, the government oversight organization in charge of setting and enforcing these regulations. Beyond video surveillance in and around your facility, it is often recommended that recording devices be installed in your delivery vehicles to protect your product once it leaves your establishment, as well.

Next consideration is man power. Hiring trained security personnel might not only be a smart thing to do, but it could be required depending on the type of cannabis business you are running. More specifically, retailers must have trained security on staff or hire them as contractors. Beyond the type of personnel your business might be required to have, there are also guidelines about the records you must keep for your employees: lists of who is allowed on the premises and what level of access they have, backlogs of employees for at least seven years, and personnel and training records.

Surely any business owner would have already thought of locks and possibly alarm systems, but many are not aware there are even rules in place about these points. Commercial-grade, non-residential locks are required at all exits and entrances to your facility, but also all limited-access areas in the building. Alarms must be installed, maintained, and monitored by a licensed professional who will also respond when the alarms are activated.

It’s true all of these points could come up in discussions about opening a new business. But the cannabis industry must also be aware that such precautions could also be mandatory for them. That is why it is so important to contact our skilled Los Angeles cannabis business attorneys. We have deep knowledge of the numerous regulations you must consider when running your business, including those associated with security measures.

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:

7 Security Tips for Cannabis Cultivators, Aug. 27, 2018, Melissa Schiller, Cannabis Business Times

More Blog Entries:

Federal Banking Regulations Make Dispensaries Robbery Targets, Nov. 18, 2017, Cannabis Law Group

world’s largest marijuana market. California Growers Association, based in Northern California, is merging with Southern California Coalition out of Los Angeles to leverage their combined strength when voicing needs of the cannabis industry to political representatives, according to Los Angeles Business Journal. A headquarters location for the far-flung group has not yet been selected.

Anyone who is familiar with the cannabis industry knows there are major cultural differences across the board — from the numerous farmers working the fertile lands of the “Emerald Triangle” in Northern California to posh dispensaries in L.A, and all of the laboratory testers, drivers, and processors in between. Each faction of the industry has different priorities, which has often kept the groups and their interests separate. Many in the state, however, are learning that more can be accomplished when we work together. The new CalGrowers-SoCal Coalition Collaboration is now 1,600 members strong, making the group a force to be reckoned with.There is a lot on the line, of course, for this group, composed of roughly 1,000 growers and about 600 manufacturers, lab workers, delivery drivers, distributors, retailers, and other marijuana industry workers. They are tasked with protecting an industry estimated to be worth $3.7 billion by the end of 2018 and $5.1 billion in 2019, with forecasts only growing from there. One hiccup anywhere along the chain can have vast ripple effects across all areas, making it essential for everyone in the industry to have each others’ backs. If a regulation is hitting distributors especially hard, it could have disastrous economic effects in all directions. All parts of the industry have to work in perfect harmony, so when a risk arises for businesses, consumers, or patients, it is beneficial to all involved that it be addressed quickly and efficiently.

Those who have stood in opposition of marijuana have learned that nothing is more effective than the power of numbers to spread your message. The more people are unified behind the same message, the more it gets repeated and the more traction it gets. That is how we found ourselves in the midst of the anti-marijuana “War on Drugs” that has devastated so many lives in this country. A single idea — “marijuana is dangerous” — gets repeated often enough, in school, by law enforcement, and in public service announcements, and people stop questioning how and why they came to that conclusion. Now, we need to use these same methods to spread the truth about this beneficial drug.

Our trusted cannabis business attorneys in Los Angeles know first-hand the power of working in teams. It is the spirit of teamwork and togetherness that we bring to each of our clients that we serve in the marijuana industry. Our collective knowledge and experience can be an asset to you and the broad network of cannabis businesses we have helped over the years. We are proud to provide consulting services, business plan strategies, and compliance advice to marijuana businesses in Southern California as another key to the long-term growth and success of the cannabis industry in the state.

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:

Leading California Cannabis Industry Trade Associations Collaborate to Create Powerful Political Voice and Unify World’s Largest Cannabis Market, July 27, 2018, By Hezekiah Allen, California Growers Association

More Blog Entries:

Small Marijuana Farmers Take State Department to Court, Feb. 7, 2018, Cannabis Law Group

on a U.S. stock exchange by a marijuana producer. Ontario, Canada-based cannabis conglomerate Tilray went public on New York NASDAQ recently. The stock price spiked 30 percent in one day proving what we have been saying all along: cannabis is very, very good for business. According to a report from Quartz, investors rated the value of Tilray at time at $2.65 billion.

Tilray grows and processes cannabis to meet pharmaceutical standards. The company has really taken off in the wake of Canada voting to make marijuana legal nationwide, but the company’s products can be found in 10 countries, including a production facility in Portugal. Though located in Ontario, the company has its roots in a private equity firm in Seattle that has been investing in brands connected to the marijuana industry in hopes of positioning businesses to be on the forefront as prohibition is lifted worldwide. Canada is the second country to make adult use legal (Uruguay being the first). The U.S. has 30 states that have legalized at least medical marijuana, though they are still somewhat bound by the federal Controlled Substances Act, 21 U.S.C. Section 812. Many countries have partial allowances, such as the infamous cannabis cafes in the Netherlands. Despite the best efforts of backward thinking anti-marijuana propagandists, the writing is on the wall for cannabis legalization to continue to grow, and companies like Tilray are primed and ready.

Simply being in the cannabis industry is not enough to guarantee success, though. Other marijuana stocks and pharmaceutical stocks related to the marijuana industry have faltered or gone stagnant. Like anything related to business, it takes the right ingredients at the right time to appeal to investors. There’s also a very real fear for these marijuana companies who are paving the way that once the U.S. finally wakes up and makes marijuana legal nationwide, big name brands will jump into the market, sucking up investors on their name recognition alone.

These concerns are true not only of big-time players in the stock market, but also of the bold entrepreneurs who have faced adversity in order to bring cannabis products to the people of California and other states who have legalized this highly beneficial drug. It is exciting to be a business owner getting in on the ground floor of what is clearly going to be the next big thing. As we’ve already established, though, it takes the right ingredients at the right time. Our Los Angeles cannabis business attorneys have acted as consultants for numerous businesses, giving advice on compliance issues and how to best work in the parameters of local, state, and federal laws. A strong infrastructure is key to long-term success. If certain regulations are skipped or issues are ignored early on, they tend to snowball, causing bigger problems down the road. Establishing yourself as a business owner that can be trusted now will increase your chances of having a loyal customer base in tact as the industry continues to grow and evolve, and being in compliance now will make you more agile as more changes head your way.

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:

Tilray IPO: Five Things to Know About the First Pot Company to Go Public on Nasdaq, July 18, 2018, By Max A. Cherney, Market Watch

More Blog Entries:

Investors Eye Marijuana Stocks, Jan. 23, 2017, Cannabis Law Group

country in the world to legalize adult-use cannabis after Senate recently passed the long-awaited bill. Uruguay was the first country to pass legalization measures, with sales starting last year. Canada’s size and global standing, however, give it a unique opportunity to set the tone for what legal marijuana could look like for the rest of the world. It will still be a couple months of preparations, though, before legal sales can begin, according to Los Angeles Times.

Uruguay has had a complicated relationship with legalization, primarily because the motivation was to regulate out-of-control crime syndicates related to the black market marijuana industry. An micro-managed infrastructure has made for a rocky start getting the legal economy off the ground, but officials are still confident their plans will help eventually neutralize illegal sales.Our Los Angeles cannabis business attorneys know California has played an important role in setting an example for other states and countries. The state is the fifth largest economy in the world, so there has been a great deal of interest in how cannabis legalization would play out. California had an advantage in being the first state to legalize medical marijuana in 1996 with the Compassionate Use Act, so there was already a decent foundation in place when the state moved forward with recreational legalization at the beginning of this year. Still there are issues that exist simply because federal law labels cannabis as a Schedule I narcotic, which means all eyes are officially on Canada to see what comes next. Simply being able to legally trade between provinces opens up a whole new world currently unavailable to cannabis business owners in the U.S.

Indeed the move is already having influence. Britain is beginning to soften on its stodgy anti-marijuana stance by opening discussions about medical marijuana. Like in the U.S., the British government is having a difficult time continuing to deny the growing pile of evidence that cannabis can be a safe and effective treatment for a variety of medical ailments under the proper supervision. While the country is still staunchly opposed to the idea of recreational marijuana, it is no coincidence discussions of lifting its ban for medical purposes aligned with the timing of Canada passing their full legalization bill. Once the medical hurdle is cleared, a lot of haze about the dangers of marijuana is also cleared, and it is easier to have an adult conversation about the matter that isn’t steeped in propaganda.

Indeed it is an exciting moment in history to be at the forefront of what is surely to be the norm as time goes on. Our legal team is prepared to equip new business owners with the tools they need to be a part of this important and groundbreaking movement in a way that is flexible enough to adapt to changes as they occur. With a patchwork of local laws in California on top of state regulations and the federal ban, it is essential to seek the guidance of skilled counsel like ours. Cannabis is clearly the future, and our team will help put you on the right track to be a part of it.

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:

After Canada, will U.K. be next to legalize marijuana?, June 20, 2018, CBS News and Associated Press

More Blog Entries:

U.S. Marijuana Stock Tepid, Canada Marijuana Stock Spikes, Dec. 20, 2016, Cannabis Law Group

six months, businesses have enjoyed a grace period that allowed them to sell marijuana products that were not in total compliance so long as they included a label indicating any safety standards the product did not meet. As of July 1, owners must clear their shelves of all product that does not meet regulations, resulting in an influx of cannabis sales in the month of June and could lead to an impending shortage, according to the Orange County Register. When Proposition 64 went into effect Jan. 1, it brought with it new sets of rules in regards to recreational marijuana sales. Because marijuana products were already in production long before then, having served the medical marijuana market for almost 20 years, California imposed a grace period in which production and labeling regulations could catch up. This led to retailers bulking up on less expensive products that were not in total compliance at the end of 2017 to keep their stores well stocked in the first half of the year. Now they will need to clear their shelves of any remnants of that stock. Meanwhile, owners will be clamoring to replace that inventory with new products that meet regulations.

As our Los Angeles cannabis business attorneys can explain, the new rules entail several aspects of marijuana production. First of all, products must go through a licensed lab to be tested. These labs will test for pesticides and fungus. They will also ascertain levels of THC and CBD in the product. This rule in particular will be a challenge as the state has licensed only 28 labs, with many still not opened.

The tests will be used to determine if the products meet the legal threshold of THC, with only 100 milligrams allowed per package for edibles. For non-edibles, 1,000 milligrams are allowed for adult-use and 2,000 milligrams for medical marijuana patients. This resolves an ongoing issue where customers would purchase products that were either too weak or too strong with little way to tell what they were getting.

Labels have to be more thorough going forward, and must include test results, the date the product was made and regulatory symbols, warnings and ingredients and nutritional information for edibles. In addition to proper labeling, packages must be child resistant before they arrive in the stores. Before July 1, marijuana business owners could place products in child resistant packages at the point of sale. Owners could work around the other regulations with labels warning that new standards were not met. Now they will need to follow the rules to the letter, and the Bureau of Cannabis Control plans on dropping by businesses for check-ins.

This is a time where having an experienced cannabis business owner on your side can be extremely beneficial. Our team has the skill to ease your business into new guidelines while helping you keep an eye on your long-term goals and objectives. Trying to manage compliance issues and business plans on your own can be risky. Our know-how can give you the confidence to make smart decisions today that will build a smarter future for your business tomorrow.

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:

Stock Up Now, California. A Lot of Cannabis Is About to Disappear From Stores, June 12, 2018, By David Downs, Leafly

More Blog Resources:

Fresno Law Enforcement Doesn’t Kid Around With Marijuana, May 12, 2018, Cannabis Law Group

business owners. Some legislators agree, but others think the higher taxes should stand, at least for a while longer. For now, the current tax rate will remain, as an assembly bill addressing cannabis taxation failed to advance out of committee, according to an Associated Press report.

AB-3157 seeks to amend The Control, Regulate and Tax Adult Use of Marijuana Act, which currently sets the excise tax rate at 15 percent of the average market price. The new proposal would drop the excise tax rate to 11 percent and suspend the cultivation tax, with each expiring June 21, 2021. Right now, when excise and cultivation taxes are combined with sales tax, county, and city taxes the total tax rate can be almost 50 percent. Some fear this high of a tax rate is driving people to purchase marijuana on the black market, instead. There is some compelling evidence to back that claim.Our Los Angeles cannabis business lawyers understand one of the enticing promises of recreational marijuana legalization was the boon of taxes in government coffers. Extra money could be used to bolster infrastructure, city and state programs, and assist with cannabis education and drug abuse prevention programs. However, paying up to 50 percent in taxes is an astronomical hurdle for many businesses, particularly new ones trying to get off the ground. That could explain why tax revenue related to cannabis was much lower than projected in the first quarter of fiscal year 2018. Excise tax in the first three months came in at just under $34 million. At this pace, it is unlikely the state will bring in the original prediction of $175 million for the year.

Californians are certainly getting their marijuana from somewhere, though, and if not at the licensed retailers, then where? Assemblyperson Tom Lackey, co-author of the new bill, says its the black market and that the oppressive tax rate is to blame. By lowering the excise tax rate, marijuana businesses would have a more even playing field with unauthorized sellers, helping to boost already licensed businesses and encourage unlicensed businesses to come into the fold as well. The bill was stalled in committee by assembly members seeking more evidence of a connection between the tax rate and black market. Temporarily adjusting the excise tax, however, would be the most efficient way of testing the market, while also lending a hand to local businesses.

It can be overwhelming for new business owners to sort through all that is required of them to satisfy legislators, while also providing a solid experience for their customers. It takes skill and experience to know how to create a successful business plan that takes into account state and local taxes, additional fees related to testing and distribution, and still remains in compliance with regulations and laws. That’s exactly what our marijuana business attorneys in California have to offer: the skill and experience you need to put you on a path to success. Cutting corners or making poor decisions early on can be extremely costly for businesses down the road. Our legal team can make sure you make smart decisions early on to help keep your business strong down the road.

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 Gov. Jerry Brown’s New Budget Says Pot Revenue is ‘Slower than Anticipated,’ May 11, 2018, By Jeff Daniels and Chloe Aiello, CNBC

More Blog Entries:

Tax Bill Would Offer Relief to Cannabis Businesses and Consumers, March 21, 2018, Cannabis Law Group

cannabis. Oregon in particular is reporting an excess in cannabis production, which is driving down the price of marijuana at dispensaries across the state, according to Associated Press. As a result, growers are exploring more options, including hemp (a low-THC strain of cannabis used in industrial goods) and CBD oil (made from the non-psychoactive compound in marijuana, cannabidiol).

It’s hard not to recognize the irony in this latest advancement: while hemp is a benign, useful resource that makes excellent, durable fabric, paper products, and oils, it was marijuana that helped usher it back into the spotlight. Marijuana has now been legalized in 29 states and Washington, D.C., at least for medical use with a handful also allowing recreational. This is in defiance of federal regulations prohibiting the sale or use of marijuana. California was the first to allow medical use with the Compassionate Use Act of 1996. It wasn’t until 2014, however, that the Agricultural Act, Sec. 7606 allowed agricultural departments and higher learning institutions to start cultivating hemp for research. Senate Majority Leader Mitch McConnell (R-KY) recently spoke in favor of a bill that would give power over hemp regulation to the states.

Because hemp has more CBD and less THC than other strains of cannabis, it is ideal for producing CBD oil. This is also convenient since the Agricultural Act has made it possible to more easily produce this beneficial oil, used commonly for inflammation and anxiety, without the buzz of marijuana. CBD oil laws currently vary from state to state, despite the lack of side effects that make skeptics wary of marijuana.

At the founding of our country, we recognized cannabis as a valuable crop. In the early 1600s, Jamestown settlers grew and exported hemp plants in support of England. George Washington is said to have grown hemp. Hemp rope and fabric was a major part of the economy in the 1700s-1800s. Cannabis even appeared on $10 bills. Then the narrative shifted, with states labeling it as poison in the early 1900s, and the hysteria only mounting from there. Tensions culminated with marijuana officially becoming illegal nationwide with the creation of the Controlled Substances Act. in 1970. Until recently, this effectively killed not only forms of cannabis that caused a high sensation, but also the production of hemp and all of the beneficial products that come with it.

Our Los Angeles cannabis business lawyers know the resistance to marijuana legalization is antiquated and unfounded. It is even more perplexing, though, that products made with hemp were ever outlawed simply because hemp is a member of the cannabis family. The time we have lost being able to use hemp as an easy-to-farm renewable resource is an absolute tragedy. Likewise, CBD oil has proven to be an invaluable addition to the lives of Americans. We are glad to see more barriers coming down in regards to cannabis products and excited to see more get into the hemp and CBD oil market. If you are looking to diversify your products, our cannabis business attorneys can advise you on the best path for your company as well as help you remain in compliance with state and local laws.

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:

McConnell Backs Bill to Ease Up on Hemp Cultivation, March 26, 2018, Burgess Everett, Politico

More Blog Entries:

Industry Guidelines for Hemp Regulation, Labeling and Manufacturing Released, April 13, 2015, Cannabis Law Group

in common with the natural drug as a circle to a square. Lawmakers have long been chasing down these dangerous substances, to no avail. But the Illinois State Senate is taking steps to close loopholes that manufacturers have been manipulating once and for all, according to Chicago Tribune.

SB-2341 would expand the list of Schedule I controlled substances to include all synthetic cannabinoids not approved by the U.S. Food and Drug Administration. This is a departure from current methods to control the substance, which has largely involved outlawing by formula. As our cannabis business attorneys can attest, this has so far been a fruitless system of control because each time a formula or chemical is outlawed, manufacturers alter it enough that it qualifies as a new substance. Just like that, a new synthetic cannabinoid is back on the market, but not necessarily any safer. The new law, if passed, would put the onus of proof on the manufacturer that a synthetic cannabinoid is safe rather than government officials proving the substances to be dangerous after they have already hit the market. This change is long overdue. Just recently in Illinois alone, a formula mixed with rat poison has made the rounds leading to four deaths and more than 150 hospitalizations from coughing up blood or having blood in urine or in the nose. This doesn’t account for all the harm the synthetics have done over the past decade under all the other formulas, even without rat poison. Documented effects in the past have included brain bleeding, heart attacks, seizures, and strokes. Synthetic cannabinoids have also seen some popularity with military and allegedly sent several dozen soldier and Marines to the hospital earlier this year.

While key chemicals have been outlawed over the years, the manmade concoctions always try to replicate the high of cannabis by triggering the same receptors that are affected by THC, with far more hazardous results. Also on the banned list are synthetic cathinone (which you may know by its street name “bath salts”) and piperazine (which mimics the effects of ecstasy).

Our cannabis business attorneys in Los Angeles applaud all efforts to put a stop to so-called synthetic marijuana. Not only is it proven to be unsafe, but it also is giving a bad name to natural cannabis products and the upstanding business owners we represent. Manufacturers, often located in China, saw a demand for marijuana in the United States that could not be filled by the real deal due to the Controlled Substances Act, 21 U.S.C. Section 812. So they created compounds that could mimic the sensations and have been chasing the market ever since. The promise to deliver the same feeling was very appealing to people who appreciated marijuana but were concerned about breaking the law. Such a shame that our country’s unfounded fear of cannabis has sent law-abiding citizens right into the arms of a truly dangerous drug. It’s time to once and for all ban these unstable, manmade knockoffs and declassify good old fashion marijuana in all its natural glory.

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:

The Spice of Death: The Science behind Tainted “Synthetic Marijuana”, April , 17, 2018, By Devin Powell, Scientific American

More Blog Entries:

Feds Consider Marijuana to be Criminal, While Legal Knockoffs Hospitalize Users, April 12, 2018, Cannabis Law Group

In the early days of legalization, before marijuana reached the popularity it is enjoying today, the Internet was the best place for cannabis advocates, business owners, and medical practitioners to learn and to share information. YouTube has always played a big part in that. The highly visual platform was an ideal way to show growing methods and techniques to people on the other side of the country. Today, a bounty of resources exists, but these ground floor YouTube channels still have a wealth of experience to offer.Some say the decision could be related to ad revenue. Given that advertisements randomly appear before videos, advertisers sometimes protest when their ads appear in conjunction with content that does not align with their brand, as happened with some of the more alarming gun videos. However, given that medical cannabis and/or recreational marijuana are legal in 29 states and the District of Columbia (with several states on deck to legalize this year), it is clear the country is trending in a pro-cannabis direction. Therefore, it would be surprising that suddenly a rash of advertisers objected to the content after years of existence. YouTube also has the ability to demonetize a channel, meaning the channel can no longer reap the benefits of advertising. In fact, some of the channels that were shut down reported not being monetized in the first place, making their removal even more confounding. Further, most of the channels were educational in content. YouTube alleges such content is allowed so long as it does not promote or link to content that promotes the sale of illegal drugs (including cannabis, which still resides on the list of controlled substances as a Schedule I narcotic, according to Controlled Substances Act, 21 U.S.C. Section 812). Meanwhile, some banned channel operators have complained, channels that feature people smoking marijuana, dabbing, and other methods of getting high on-air, have largely remained untouched, giving little credence to claims that YouTube is concerned about promoting illegal activity.

Given the desperate attempts by some to stop the burgeoning cannabis industry, this sudden attack on cannabis advocacy videos with little-to-no explanation or communication seems highly suspicious. It is not uncommon for those in power to try to stop progress. That’s why our knowledgeable Los Angeles cannabis business attorneys are using our years of experience to fight alongside the marijuana industry and the residents of California who depend on it. We know the law and will use it to fight for your rights and push back on those who are trying to drag us back into the anti-marijuana dark ages.

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:

The Boring Narcs at YouTube are Banning Marijuana-Related Channels, May 4, 2018, By Mona Zhang, The Outline

More Blog Entries:

Google, Facebook Won’t Friend Cannabis Business Ads, April 14, 2018, Cannabis Law Group

advertisers that allow them to focus their audience in a way that would be extraordinarily beneficial for marijuana products and dispensaries. They would be able to narrow down the viewers to only include people in states where cannabis is legal. They would also be able to add age restrictions, ensuring as much as possible that minors would not be exposed to the ads. It’s really a win-win, except for one very annoying catch.

Marijuana businesses are prohibited from advertising on Google or Facebook.

A recent report from Washington Post examined the challenges marijuana businesses face advertising to their customers while pot remains illegal under federal Controlled Substances Act, 21 U.S.C. Section 812. The act outlines guidelines by which to classify certain drugs based on how dangerous a risk they pose, whether they have any medical benefits, and if they are addictive. Currently, marijuana is Schedule I, the most restricted classification on the list, despite no evidence it fits any of those qualifiers. That very same act (under Section 843) states “It shall be unlawful for any person to place in any newspaper, magazine, handbill, or other publications, any written advertisement knowing that it has the purpose of seeking or offering illegally to receive, buy, or distribute a Schedule I controlled substance.”

So how are there so many marijuana ads out there?

As our experienced Los Angeles cannabis business attorneys can explain, U.S. Code Title 21, Chapter 13, Section 863 (f1), does offer some wiggle room to advertisers. While the rest of this section describes in detail the illegality of drug paraphernalia and specifically cites that national and local advertising concerning drug use constitutes paraphernalia, it also says there is an exemption for those who “are authorized by local, State, or Federal law to manufacture, possess, or distribute such items.” This has given some leeway for advertising platforms whose reach is limited to within a state where marijuana use is legal. However, national media is still nervous about getting slapped by federal authorities.

Sometimes, according to the Post article, these outlets can be overly cautious, with some users reporting Facebook will even limit activity that does not explicitly talk about marijuana, such as an event where lobbyists were set to speak to politicians about legalization. This type of community building is the foundation of Facebook, and currently cannabis advocates are extremely limited in how they can take advantage of this resource.

Our trusted lawyers understand how important advertising is to a budding business venture. That’s why we include marketing strategy as part of our business consulting services. Our contacts within the marijuana business community have helped us to maximize operations and positively impact rate of return for clients. Our services include assisting with marketing ideas and advising on web design and strategy. In combination with our team’s public relations experience, training and education programs, compliance oversight, licensing assistance, and business plan building, an effective marketing plan can be the ticket to helping your cannabis business stand out among the many others in Los Angeles.

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:

The Legally Hazy World of Cannabis Marketing, March 23, 2017, By Erin Nelson, Contently

More Blog Entries:

Legal Concerns in California Cannabis Advertising, Sept. 21, 2017, Cannabis Law Group

• What? Proposition 64 was approved by voters and made legal adult-use marijuana.
• Who? Residents 21 years or older.
• When? As of Jan. 1, 2018.
• Where? Now, that’s a trickier matter.

Firstly, the state law did not automatically go into effect everywhere. From county to county, city to city, local governments have been making decisions about whether to maintain a ban on recreational cannabis or to legalize and set up regulations. Some of the big cities, like Los Angeles, San Francisco and San Diego have permitted recreational sales. Some areas, like Orange County, cultivation is allowed with restrictions, but manufacturing and retail are banned. Los Angeles took a different route, allowing retail but not cultivation or manufacturing. Other counties, like San Bernadino, don’t permit any recreational cannabis activity.

The confusion intensifies when you put a magnifying glass to one of those regions. Take Los Angeles for example, where the city is still ironing out where businesses are allowed to set up shop. Leaders have already agreed that marijuana retailers should not be within 700 feet of schools or public parks, also known as “sensitive use” locations. But the debate is still boiling as to what constitutes a “sensitive use” location, according to a report from KPCC, Southern California Public Radio.

Some council members have looked at areas where families and children congregate and have proposed adding extra restrictions to prevent marijuana businesses from opening nearby. While this in itself doesn’t seem unreasonable to most, the terms used to identify these regions can be too broad. In particular, city council added areas zoned as “open spaces” to the restricted locations, primarily with the intention of keeping cannabis retailers out of the LA River area. But in doing so, the council unwittingly also excluded streets with traffic medians, which all fall under open space zoning.

Advocates concede to having a buffer zone for the LA River, but point out that applying restrictions too broadly is unnecessary. One group has reached out requesting medians be removed from open space zoning. But while our law firm is pleased to see the city working so hard to cooperate with cannabis businesses and make room for them in the city, it does make it clear that council needs to be more considerate when making these rules. Especially with more restrictions possibly on the way. Council is currently considering creating buffers between parks in other cities that are near the Los Angeles border.

Our trusted cannabis business attorneys in Los Angeles know there are growing pains when introducing a new industry and all of its regulations into a city. We also know some of these regulations are a bit overly cautious, trying to ease the fears of those who are still hung up on myths about marijuana and marijuana users. Marijuana business owners want to comply with reasonable laws, but shouldn’t have to try to hit a moving target. If you’re setting up your marijuana retail shop in Los Angeles, our lawyers have the experience to help you establish yourself while navigating local and state restrictions.

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:

LA is Still Ironing Out Its Rules on Where Pot Shops Can Open, Feb. 16, 2018, By David Wagner, KPCC Southern California Public Radio

More Blog Entries:

Los Angeles Marijuana Businesses Miss Jan. 1 Rollout, Jan. 2, 2018, Cannabis Law Group

when they make a purchase. When Proposition 64 went into effect Jan. 1, adult-use marijuana became legal in the state, with local governments able to set up their own regulations or bans. But there are currently loopholes that threaten the privacy of customers.

Assembly Bill 2402 seeks to tighten those loopholes. Assemblyman Evan Low (D-Silicon Valley) introduced the bill, which would prevent cannabis retailers from selling customer information to third parties. It would also protect customer information from employers looking to investigate employee use, according to Capital Public Radio. It mirrors similar rules that are currently in place for medical marijuana users.

Because you must be 21 or older to purchase cannabis in California, dispensaries require a valid ID to prove your age. Though it is not mandatory, some dispensaries will keep a record of the information on file. Some use this information for marketing purposes. Many also keep such records in order to monitor how much someone is purchasing in a day, according to Politifact. This could be necessary if a business needed to prove they are in compliance with state law, which caps individual recreational marijuana sales to one ounce per day.For deliveries, personal information is kept on file as record that the person receiving the delivery is 21 or older. And dispensaries are required under licensing regulations to videotape each transaction.

This bill would tighten up what businesses are and are not allowed to do with private information. Our lawyers know this would be a victory for customers and recreational marijuana businesses alike. The more comfortable people are, the more they will feel good about purchasing marijuana, and the more the industry will thrive. While we believe there’s no reason for marijuana users to feel they need to hide, a stigma still exists, and people deserve to be able to enjoy this legal and safe activity while keeping their privacy intact.

However, the bill will not protect customers from federal officials. Because marijuana is still considered a Schedule I narcotic under Controlled Substances Act, 21 U.S.C. Section 812, federal authorities would still have the right to confiscate customer information. Most don’t believe the federal government has the interest or the resources to go after individual users, though. While we hope this is true, it really demonstrates the importance of reclassifying marijuana, which we know has no reason to be listed among the likes of dangerous drugs, like heroin.

If you are a cannabis business owner, it’s important you be aware of best practices for handling the private information of customer, while also keeping in compliance with state and local laws. Our trusted Los Angeles recreational marijuana attorneys have the experience and know-how to advise you through this sometimes confusing process.

We also are there to protect the interest of marijuana users. There are still those who are clinging to outdated ideas about cannabis who will use their power to try to stop progress. We have both criminal and civil attorneys prepared to stand up for you and your rights should you encounter trouble.

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:

Bill Would Boost Privacy For California Marijuana Customers, Feb. 19, 2018, Chris Nichols, Capital Public Radio

More Blog Entries:

California Now Accepting Recreational Marijuana Business License Applications, Dec. 12, 2017, Cannabis Law Group