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

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

But why was such a bill even necessary?

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

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

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

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

Among those:

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the same time, those already sanctioned for positive marijuana tests would be provided a means to have those penalties rescinded retroactively.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

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

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

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

Additional Resources:

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

More Blog Entries:

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

As Los Angeles cannabis company lawyers, we know this has grown to become a significant problem for our clients. Put simply: Customers aren’t paying their bills. In response, more than half the state’s wholesale B2B cannabis market has invested in help from a Los Angeles non-profit credit association tasked with rating retailers and flagging repeat offenders – with the ultimate goal of halting the growth of hundreds of thousands of dollars in unpaid invoices. The operation, Credit Management Association, is reviewing accounts receivable and documentation from dozens of brand and distributors. Ultimately, it will release a “do not sell list” of two dozen+ cannabis retailers and delivery companies flagged for:

• Failure to pay their bills in a timely manner (90+ days late on invoices).
• Owing at least $25,000 for products.

As longtime Los Angeles marijuana lawyers, we recognize that the majority of cannabis retail and delivery companies don’t set out with the intention of becoming bad actors. They are subject to many of the same brutal market forces as suppliers. They fall a bit behind, and then it’s an uphill battle to fight their way out of debt.

Still, it’s a significant issue because pretty much every manufacturer, distributor, and brand has a non-inconsequential amount of unpaid invoices. That’s not a new problem, but it’s one that’s been exacerbated in the last year thanks to plummeting stocks and dwindling capital. Companies are having to take a hard line with some of their biggest clients – because they simply aren’t paying up.

Companies say they’ve been left with increasingly few choices, particularly because they aren’t backed by investors. If they utilize a debt resolution service, they’re going to take a 20 percent hair cut right off the top – even if they are paid. Most of these claims exceed the small claims avenue because the debts are primarily in excess of $5,000.

Some cannabis firms are making it regular practice to run credit reports on the companies with which they intend to do business. That probably seems obvious, as it’s standard practice in mature industries like government, lending, and banking. But it’s new for the marijuana market.

Lawmakers are starting to be wade into the foray as well. Assembly Bill 766, for instance, would require:

• Cannabis business licensees receiving goods or services of at $5,000 or more to pay their invoices no later than 15 days beyond the due date. Failure to pay would trigger a state regulatory warning notice and potential state disciplinary action.
• Licensees with outstanding invoices in excess of $5,000 to refrain from using credit to purchase any new goods or services from other operators until the outstanding invoices are paid off.
• Invoice due dates to be set at no later than 30 days from the time the goods or services are sold.

Our Los Angeles cannabis business lawyers will be carefully monitoring the progression of this bill. But in the meantime, marijuana businesses extending credit to other companies might consider protecting themselves by taking some of the following steps:

• Have a credit manager either on staff or via contract to help oversee the process by which you’re granting credit. This will help ensure consistent application of your credit policy, as well as management of accounts, collections on accounts receivable, and oversight of the dispute resolution process. A person in this role could also help review the credit status of current customers.
• Develop a credit application and approval process. If you extend credit to all your B2B customers, chances are at some point, you’re going to get burned – possibly big time – especially if you don’t properly vet these operations. Even if your customers are on a COD arrangement, they should still have a credit application on file. Such documentation won’t necessarily guarantee you’ll get paid, but it can be a key document if you ever do need to pursue collections.
• Have a collection strategy already in place. The ideal time to develop a collections action plan is before your customers are in default on their payments. In general, if a B2B cannabis retailer is more than 30 days late on their payment, they should be considered delinquent on that payment. That should trigger an escalating action plan – starting with maybe an email, then five days later a phone call, five days later a phone call and an email, 5 days after that another phone call and another email, a week after that, another email. Once the customer crosses the 60- or 90-day mark without paying, they’re seriously delinquent – and you should have a plan in place for how you’re going to initiate collections on the debt they owe. That may include issuing a final demand letter. If there’s still no response, the bill should go to a collections agency.
• Let go of nonpaying customers. Relatively speaking, the cannabis industry has a very low recovery rate once an overdue invoice goes to collections. Many find that by the time their firm is ready to take serious action, the customer in question has already closed up shop (or is uncooperative). In that case, you can sue, but that might not even be worth your time and money. (It depends on the situation.) But it’s better if you can minimize the problem before it becomes serious by letting go of non-paying customers earlier in the process. Don’t continue to sell products and services to companies that aren’t current on their bills. You can avoid this by having a clear plan in place to put a hold on any account that’s more than a month overdue on invoices.

Making sure you have strong processes and good people in place to manage your credit system and invoicing can make a big difference in the success of your cannabis company.

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

Additional Resources: California’s cannabis firms band together to address credit woes, May 16, 2023, Reuters More Blog Entries: Los Angeles Cannabis Businesses Must be Audit-Ready, May 20, 2023, Los Angeles Cannabis Lawyer Blog

Of course, as our Los Angeles cannabis DUI lawyers can explain, a big part of the reason for that is because it’s none so simple to establish marijuana intoxication simply based on the levels of psychoactive THC in one’s body. Unlike alcohol, which cycles through the body very quickly, THC remains traceable for weeks after consumption. A 0.08 percent blood-alcohol level would likely indicate recent excess alcohol consumption. But the same isn’t true for THC. Person A might have higher levels of THC in their bloodstream than Person B, but still be less intoxicated. The level of THC in one’s system simply doesn’t tell the whole story, particularly if one is a regular cannabis consumer.

Despite this, 18 other states have imposed some sort of limit on the amount of THC drivers can have in their bloodstream before they’re considered “under the influence” of cannabis. (THC, of course, is short for tetrahydrocannabinol, the element contained in marijuana that creates the “high.”)

There are some safe driving advocates trying to change that. One of those is the family of a 25-year-old who died tragically in a California car accident in 2020 – a passenger in a truck driven by her boyfriend. He would later say he saw an animal, jerked the steering wheel, and crashed into another vehicle – totaling his truck and killing his girlfriend instantly. The woman’s father believes the boyfriend was stoned, and he’d even spoken to his daughter about not getting into the car with her boyfriend when he’d been consuming cannabis. Her mother said she’d spoken directly to the boyfriend about what they recognized as a serious safety issue.

The boyfriend, according to a local news outlet, reportedly conceded that he’d consumed marijuana the day of the crash – but he was a habitual user of cannabis and his consumption had been earlier in the day. He insisted he was not impaired.

Authorities didn’t buy his story initially, and charged him with felony DUI. However, with no legal limits on THC, prosecutors had a weaker case. He ultimately pleaded guilty to vehicular manslaughter and served one year in jail. It was reportedly the second time a passenger of his died in a crash; the first time was in 2010.

Investigators say his blood-THC level was 18 nanograms. The THC legal limit for drivers in other states is 5 nanograms. But again, as our Los Angeles DUI cannabis lawyers can explain, that doesn’t necessarily mean the driver was impaired. And there’s bipartisan agreement on this from legislators. Numerous studies have been conducted that conclude if you’re trying to ascertain the level of impairment, a sole reliance on the amount of THC in one’s system would be inconclusive. A person’s impairment might last several hours after consuming cannabis, but the THC in one’s system is going to persist in one’s system for much longer than that.

So while the cases like the one mentioned in this article are undoubtedly tragic and devastating for families, broadening California’s marijuana DUI laws would likely have the consequence of prosecuting people for impaired driving when they weren’t truly impaired – and that is not justice.

It’s worth noting that the State of California has set aside $2 million for research this year on the impacts of THC on drivers to determine whether some sort of a fair standard for intoxication can be identified.

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:

Marijuana and driving: California lacks legal THC limit, March 6, 2023, By David Goldstein, CBS News Los Angeles

As our Riverside cannabis lawyers can explain, city council voted 5-2 to green light 14 marijuana shop permits. The city has first passed a moratorium on cannabis companies in 2017 – with the exception of marijuana testing labs. This was despite the fact that Riverside voters supported Proposition 64 (which legalized recreational cannabis) by a 53 percent majority. A year later, the council agreed on an outright prohibition of commercial cannabis operations – except for labs.

Then two years ago, the city caught wind of a citizen-led effort to undercut the municipal ban on marijuana sales. Signatures to move the petition forward were never formally submitted, but the city did start weighing whether it should initiate its own permit program and regulatory framework. (Likely, they wanted to sidestep the reality that it was probably going be done whether they wanted it or not, and best to have some control over the final outcome.)

The city is actively studying how best to support permit seekers who have been disproportionately impacted by anti-cannabis legislation in the past. The initial outlay caps cannabis retailers at 14, but there’s no such limit for the number of labs, manufacturing companies, or distribution firms. Voters will need to consider whether they’re willing to accept taxation for the measure. A vote is expected in November 2024.

One councilmember against the initiative said he doesn’t believe marijuana sales in the city are an inevitability, worried over police and other public services burdening more duties, and lamented the fact that a gateway drug was going to be so easily accessible – particularly for young people. Just recently, the sheriff’s office arrested several older adult teens in Riverside for selling vape pens with concentrated cannabis to minors using a mobile delivery service.

But those who support legal cannabis say that a well-regulated market has proven to offset many of these concerns.

It should be noted that this determination about Riverside City is separate from the rules of Riverside County. (Municipalities may have more stringent requirements than counties, and counties may have more stringent requirements than the state – provided they aren’t infringing on people’s rights.)

In Riverside County, cultivation of cannabis is legal if grown for personal use – indoors and within a single, private residence, obstructed from public view and for non-commercial use by someone over 21 for non-commercial use. Where it’s grown outside of a building, the building must be secured by an opaque fence that’s a minimum 6-feet-high. Commercial cannabis activities are allowed so long as the company has a permit from the county’s planning department (which does incur fees). Storefront retailers may be open to the public, provided they operate within authorized zones. Commercial growing operations can’t have plants that are visible from outside the facility. Cannabis delivery is also legal in Riverside County, so long as it’s done in accordance with California Business and Professions Code – but is not permitted in unincorporated areas of Riverside County.

The legalization of medicinal and recreational cannabis has been an economic boon to Riverside County, resulting in total taxable sales exceeding $100 million in 2019 and $265 million in 2020, according to CaliforniaCannabis.org.

If you are considering seeking a permit to operate a cannabis business in Riverside, our longtime marijuana lawyers can help.

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:

Cannabis businesses in Riverside are on the way, March 1, 2023 by Sarah Hofman, The Press-Enterprise

More Blog Entries:

Can California Cannabis Patents Survive Illegality Doctrine? Feb. 20, 2023, Los Angeles Cannabis Lawyer Blog

Over the last two decades, more 37 states have legalized medical marijuana and 19 allow adults to use recreationally. Yet sales across state borders are still aren’t happening, largely because the drug remains illegal at the federal level.

Cannabis has become a multibillion-dollar-a-year industry in California and across the U.S. But the federal government has pushed off regulation responsibility to the states – leaving a lot of open questions and hesitation on everything from security to labeling requirements to banking to insurance.

Ultimately, it may be the judicial branch of government that takes the reins on the issue. The problem with this is that the impact of the courts’ approach may be somewhat chaotic, potentially undermining efforts to protect public health and ensure industry diversity.

As our Orange County cannabis lawyers can explain, there are some states like California with cannabis programs that have been meticulously crafted to meet certain goals beyond merely legalization of adult recreational use. For instance, a top priority for some states has been ensuring that those awarded cannabis business licenses are either people of color and/or those who were somehow disproportionately affected by the failed war on drugs.

Now enter the courts. Those diversity programs typically require license recipients be state residents. But in a recent 2-1 federal opinion by the 1st Circuit Court of Appeals, justices ruled this was unconstitutional. That ruling likely means we’ll see some changes and shifts in state-level import and export bans. Some states are already positioning themselves to be able to hit the ground running with a national market for marijuana sales.

Recently, California’s governor, Gavin Newsom, signed into law a measure that imbues the state with the right to enter into agreements with other states regarding the regulation of cannabis imports and exports. A similar bill was passed a few years ago in Oregon, and New Jersey is considering something similar.

Still, the fact that court rulings could mean the whittling down of consumer protections and industry diversity efforts has many advocates calling for Congress to take charge and overhaul federal cannabis rules in a way that will realistically reflect what’s happening at the state level.

After all, the Commerce Clause portion of the U.S. Constitution entrusts Congress with the authority to regulate commerce at both the interstate and international levels. The flip side of that, the dormant Commerce Clause – the doctrine seized on the the 1st Circuit Court of Appeals – is that states aren’t allowed to discriminate against or burden interstate commerce. The case that gave rise to the appeal involved a medical marijuana law in Maine that required all officers or directors of a marijuana dispensary be residents of the state. One of those dispensaries with multi-state holdings sued over that residency provision. A coalition of smaller medical marijuana caregivers intervened, hoping to hang onto the 75 percent medical marijuana market share held by smaller operators. (Corporate domination in the market is an increasing concern.)

Meanwhile, other courts have ruled unfavorably against residency requirements as well. For instance, a federal trial court in Michigan ruled against a city government that was defending licensing rules that favored long-term residents. Also last year, a federal court in Missouri disavowed that state’s residency requirements for marijuana businesses. In both of those cases, the federal courts pointed to the dormant Commerce Clause.

While many marijuana legalization issues have put voters front and center, it appears the courts are taking a more prominent role in national marijuana policy. If the trend of federal courts continuing to weaken state power to dictate rules regarding import/export of cannabis over state lines, it won’t be long before companies are testing state power on issues like packaging and labeling. There’s concern that if the national market opens up without sufficient regulation that we’ll see cannabis purveyors setting up shop in less tightly-regulated states while selling across state lines.

Congress could intervene and ensure that a national market is enacted while still respecting state rules on things like product testing standards and diversity in licensing. The question of a national cannabis market in the U.S. demands not so much a “yes” or “no” answer, but a clear plan for interstate sales.

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:

Courts could throw state marijuana markets into disarray, Oct. 2, 2022, By Mona Zhang, Politico.com

As our Los Angeles marijuana business lawyers can explain, it’s not the first time pot shops have been subject to inspections. It’s just that officials handling it in the past typically gave companies a heads-up – often several days of notice – before showing up. But according to recent reports, there has been a surge of drop-in, no-notice inspections. The 24-to-48-hour heads-up is no longer something your company can count on.

Given that even minor transgressions or oversights might compromise your ability to keep your doors open, it’s imperative that licensed California cannabis businesses be ready for a DCC inspection out of the clear blue sky.

Prime Targets of California DCC Inspections

If a company isn’t following state marijuana law and guidelines to the letter, DCC can issue citations, fines, and even license revocation. As this new aggressive inspection campaign is under way, it’s unclear how nit-picky inspectors are going to be, but we do know the agency has expressly stated there are a few major compliance rules on which they’ll be devoting a heavy focus. Those include:

• Compliance with Track & Trace. Companies need to be fastidious about maintaining their METRC compliance records. That requires plants/batches to be correctly tagged, placed in storage, and submitted into the track-and-trace system. Our L.A. marijuana lawyers know it’s a tedious process about which many clients grumble. However, slip up on this front and it’s likely to cause problems during an inspection. Even seemingly inconsequential requirements like ensuring all tags are clearly visible to anyone within a certain radius of the plant can result in a track and trace violation.
• Property modifications. If you intend to change or update the physical facilities out of which you operate, you must obtain the DCC’s prior approval. This could be anything from knocking out walls to simply moving a certain part of your business operations to a separate side of the building. This is likely going to present the biggest headaches for growers, given that their government fees and size caps are based on their canopy square footage. Manufacturers, meanwhile, will want to make sure they aren’t overstepping the bounds of license by producing products that haven’t been previously disclosed/approved by the state DCC.
• Property access. Your premises needs to be secure. Retail facilities obviously allow patrons to enter off-the-street, but supplies should be adequately secured and there should be numerous protections in place for off-hours. Meanwhile, access to cultivation farms, manufacturing facilities, and lab sites should generally be limited solely to authorized personnel. Businesses should have proper gating, locks, cameras, and alarms.
• Workplace safety. If there are potential on-the-job hazards, they need to be addressed immediately – because of unannounced inspections but also just for the safety and well-being of your staff and customers. No doubt this is a unique industry with special considerations, but state Cal/OSHA workplace safety requirements still apply.
• Records. California cannabis companies can be compelled at really any point to turn over records they are required to keep – from certified lab test results to METRC records to auto insurance records to employee contracts to surveillance videos (which they must keep for a full 90 days). Businesses also need to have their license properly displayed on site.
• Transparent cultivation processes. Cannabis farmers are held to a high standard of accountability when it comes to providing DCC with detailed plans on practices ranging from light and energy consumption to managing pests. If your current operations deviate even in the slightest from the blueprints and plans that DCC has, the inspector is going to catch it. Make sure if you make changes to run it by your cannabis business attorney to see whether you need to submit a review request before pushing full steam ahead.

In a recent DCC informational pamphlet entitled, “What to Expect When You’re Inspected,” the agency conceded that establishing a cannabis company in California is complicated and often very challenging. The agency vowed to work with businesses that may not be compliant to make corrections within a certain time frame. Usually, you’ll have 30 days to respond to any citations. If you don’t already have an attorney on retainer at this point, it’s a smart move to get one before responding to a DCC citation. Ideally, if you work closely with a cannabis lawyer on a regular basis, you can avoid running into most of these issues in the first place.

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:

“What to Expect When You’re Inspected,”Canna Connect, DCC Inspection Checklist

As our Los Angeles cannabis business lawyers can explain, the illegality defense has been used (with varying success) to invalidate business contracts that would be strongly enforceable in any other industry.

The illegality defense essentially holds that any contract requiring one party to engage in illegal conduct is not enforceable. It’s been employed by cannabis companies, vendors, distributors, etc. to avoid being held to their prior agreement.

We saw an example of this just last year in Sensoria et al v. Kaweske et al, before the U.S. District Court for the District of Colorado. In this case, a group of plaintiffs wanted to recover their investment from a cannabis company it said engaged in breach of contract, breach of fiduciary duty, civil theft, and fraud. Plaintiffs say the invested hundreds of thousands of dollars in a cannabis enterprise, only for the company to essentially cut them off from communications and ultimately, shut down after opening up a rival firm. Investors not only were deprived of a return on investment – they didn’t receive back their initial investment.

The defense responded with the illegality-based defense as a bar to recovery. The federal court noted that the overarching issue was the cannabis company’s direct involvement in the growing and selling of marijuana – legal under Colorado law, but not under the federal SCA. The court held that the plaintiffs’ failure to explain how relief could be obtained without endorsing or requiring illegal activity or how it would be paid from an asset source independent of marijuana.

Plaintiffs returned to court three times, rewriting the complaint each time in an effort to sidestep the illegality defense. Plaintiffs argued they were passive investors with intent to invest in the lawful side of the business – namely CBD and hemp, which are not in violation of federal drug laws. However, the court responded that even if the intention was to engage in lawful business, that didn’t render the illegality issue null and void. Trying simply to reframe the relationship wasn’t adequate. The court explained that material aspects of the litigation centered on activities that are either actual, ongoing violations of the Controlled Substances Act by the defendants or the plaintiff’s attempts to recover investments in an enterprise whose activities implicate the Controlled Substances Act. The role of cannabis in the case was not an indirect aspect of the dispute, and the court declined to issue any decision on the fairness of any business contract stemming from the growth, processing, or sale of the substance. The remedy, if plaintiffs were to win their case, would be limited to the return of investments paid from non-marijuana assets, which is not an option. Since marijuana is at the heart of the claims and the drug is illegal at the federal level, the federal court cannot award any damages from it.

Citing this illegality defense, the defendants have moved for summary judgment as a matter of law in their favor. That motion is likely to be granted.

In addition to allowing us an opportunity to examine the illegality defense, this case also underscores the importance of avoiding a federal forum when it comes to any case involving marijuana businesses. Until federal law changes to permit the broader legality of marijuana, courts at that level are going to be limited in terms of the resolution and remedy they can provide – no matter how skillfully the case is presented.

If you have questions about the best way to pursue a marijuana business or contract dispute in California, our Los Angeles cannabis business lawyers can help.

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:

Sensoria, LLC et al v. Kaweske et al, April 3, 2020, U.S. District Court for the District of Colorado

The civil rights litigation filed by the Zide Door Church of Entheogenic Plants explains that worshippers at the congregation gather and consume the mind-altering plants as a means of having a direct experience with God. The church is interfaith, non-denominational, and openly supports the safe access and use of all entheogenic plants, though its particular focus is on cannabis and so-called “magic mushrooms.”

Approximately 60,000 members of the church pay $5 each month, as well as give donations, in exchange for participation in the sacraments. The church grows its own cannabis and mushrooms. The founder of the church explained to Vice Magazine that consuming these substances allows parishioners to experience spiritual visions, interact with powerful spiritual entities with lessons to teach, and sometimes even engage in a direct experience with God.

But none of that seemed to matter to the Oakland Police when they launched a raid of the facility back in 2020, seizing hundreds of thousands of dollars worth of mushrooms and cannabis. No arrests were made and no charges were filed, but the substances were never returned and the church was not provided any compensation for its value.

As our Los Angeles cannabis lawyers can explain, the actions of police may run afoul of the federal Religious Freedom Restoration Act. This, along with the Religious Land Use and Institutionalized Persons Act, are federal laws that serve as a shield against improper government actions against certain church groups and religious services. It may well provide protections for churches who use religious services.

The RFRA of 1993 bars the federal government from applying/enforcing laws and rules that may burden a person’s exercise of religion – even if the burden results from laws/rules of general applicability. It requires strict scrutiny – the highest level of review – of any federal law that may burden the religious exercises of organizations/groups/individuals.

These laws extend beyond federal government intervention, and assert that local and state government agencies can’t discriminate against religious groups either in areas of zoning and land use restrictions.

It’s our belief at the Cannabis Law Group that churches that treat cannabis as a sacrament are improperly and illegally targeted by government agencies taking action against them for this reason. That said, the law on this front is still unsettled, so it may still be possible for cannabis churches to be shut down, cannabis seized, fines imposed, evictions upheld and criminal charges filed. For those fighting back and taking civil action, it’s imperative to work with a law firm with extensive experience in California cannabis law and a track record of success on behalf of cannabis churches and other organizations.

In the present case, the lawsuit stems from an August 2020 raid, which the police characterized as a crackdown on an illegal dispensary. The church had been listed as one on Weedmaps, an open-source site. There had also been anonymous complaints about the church, alleging it was serving as a de-facto marijuana dispensary.

The church now says that when police raided, the 1st and 14th amendment rights of the church and its congregants were violated. Plaintiffs also say the city’s land use code barring any religious ceremonies and sacraments using cannabis or psychedelics is unconstitutional.

Church leaders note that it does not advertise itself as a dispensary. Its address is not publicly listed on the site, and the specifics of its religious practices aren’t detailed there either. The only way people can learn more about the church’s practices – or even where it is – is through word-of-mouth. They allege an Oakland officer used fraudulent information to apply for church membership, putting forth a fake name and presenting a phony driver’s license. The officer also reportedly signed a membership agreement acknowledging that the church wasn’t operating as a dispensary. When church members purchase small amounts of substances, they are meant to be consumed on-site – not taken off church property for consumption off-site. (The exception is for mushrooms, which are meant to be taken in a place where members would not be driving for at least eight hours after they’ve been consumed.) The church explicitly rejects non-religious use of drugs and alcohol.

The lawsuit also made reference to Resolution 87721, passed by the local city council in 2019, and bars the city (including the police department) from using taxpayer money to enforce laws that criminalize the possession and use of entheogenic plants.

Any church or other religious organization that uses plants or other substances with psychedelic properties should be working closely with a local cannabis attorney to ensure they have all the

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:

Church where cannabis and magic mushrooms are ‘sacrament’ claims discrimination in permit fight, Aug. 25, 2022, By Jenna Greene, Reuters

In California, despite having some of the most liberal cannabis laws in the country, delta-8 is still regulated and restricted. State law regulates using, possessing, selling, distributing, or producing hemp and marijuana-derived delta-8 products – similar to the way it regulates high-THC marijuana. Unlicensed distributors (either online or with brick-and-mortar stores) aren’t allowed to sell any hemp-derived products (including Delta-8) with more than 0.3 percent THC. Licensed dispensaries, on the other hand, can. They can also sell delta-8 that is derived from marijuana. State law also regulates and restricts delta-10, THC-O and HHC products that contain more than 0.3% THC.

That said, back in may a federal appellate court in California held that delta-8 THC and other hemp-derived substances are legal under the 2018 Farm Bill. The U.S. Court of Appeals for the Ninth Circuit ruled this was true even if the products contained properties that were psychoactive.

The three justices unanimously held that goods made with delta-8 THC are legal under U.S. law. The Farm Bill establishes hemp as any part of the cannabis plant – including all cannibinoids, extracts, and derivatives – that contain less than 0.3 percent delta-9 THC by weight. However, the federal law says nothing about delta-8. The court said that while the wisdom of legalizing delta-8 products could be up for debate, it would not substitute its own policy judgment for that of the United States Congress.

As our Los Angeles cannabis lawyers can explain, delta-8 THC has psychoactive properties, though typically not as intense as what one might get from marijuana. But that is what draws a lot of people to it. One of its main selling points is that it can get a user high without the same sort of anxiety that some users feel when they consume delta-9 and other high-THC products. It’s these psychoactive properties, however, that have made delta-8 the subject of great controversy concerning the drug’s safety. At a recent federal hemp roundtable, the former federal attorney for the Western District of Kentucky (also former legal counsel and advisor to Sen. Mitch McConnell), stated that the sale of hemp-derived products with marked psychoactive properties (like delta-8, specifically) isn’t consistent with the intent of Congress when it passed the 2018 Farm Bill. He argued that not only did products like delta-8 potentially put kids at risk, but they undermined legal hemp industry integrity. He said that the legalization of hemp to begin with was only possible with a broad coalition of stakeholders who based their argument on the idea that non-intoxicating hemp was a prime agricultural opportunity. The 9th Circuit’s ruling stemmed from a trademark lawsuit filed by an e-cigarette/vaping manufacturer alleging that a Los Angeles company was selling counterfeit versions of its delta-8 products. The defendant, however, says that the trademark infringement claim doesn’t hold weight because delta-8 isn’t legal under federal law. The effect of the 9th Circuit’s ruling is that a lower court’s injunction against the accused counterfeiter was upheld. In its opinion, the 9th Circuit ruled that delta-8 products are legal under the Farm Bill. Therefore, companies that make those products have a right to trademark protection. Justices held that if it wasn’t the intention of Congress to give a legal pass to delta-8 and other psychoactive cannabinoids in the Farm Bill, then the impetus is on Congress to correct – not the courts. But will Congress step in to do anything about it? That’s unclear.Some say that the American people would be better served if Congress went ahead and simply imparted full federal legalization of cannabis – with regulation. It clearly wasn’t the intention of federal lawmakers to legalize intoxicating marijuana consumer products when it decided to legalize hemp. But they tasked the U.S. Food & Drug Administration with completing the product regulation aspect of that law. The FDA has not stepped in to do that, which has allowed hemp businesses the freedom to innovate novel cannibinoid products – some of which have arguably been very beneficial to consumers. Some of those include hemp-derived cannabinoids with psychoactive properties. In effect, the argument stands, the government has already de facto legalized marijuana. If they want to truly get a handle on this, the argument goes, Congress should step in and legalize and regulate all types of cannabis, rather than piecemeal an ongoing degree of prohibition.

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:

Federal Appeals Court Rules That Delta-8 THC Is Legal, May 23, 2022, By A.J. Herrington, Forbes.com

More Blog Entries:

California Cannabis “Laboratory Shopping” Target of Proposed State Law, July 15, 2022, Los Angeles Cannabis Lawyer Blog

Congress is currently mulling the 2023 Farm Bill, while state lawmakers across the country are slated to hold their yearly sessions. Many are expecting hemp extract sales and shipments – particularly those happening online and across state lines – are likely to get attention from both federal and state lawmakers.

As our Los Angeles marijuana business lawyers can explain, the concern with delta-9 products is that they possess intoxicated properties, yet aren’t being taxed, overseen by safety regulators, and are being shipped across state lines with little oversight.

For those who may be unfamiliar, delta-9 products are different than delta-8. Delta-8 THC products are manufactured in labs. Lawmakers have set limits on delta-8 products. So now, some hemp manufacturers have concentrated the delta-9 THC that already exists in hemp plants, allowing them to make tinctures, edibles, and vapes that are intoxicating – and then sell those online. Delta-9 is the THC compound created when raw hemp is heated, but in smaller amounts than what one might find in a cannabis extract.

Some manufacturers doing this have gone on record to say that doing this allows them to operate in currently-underserved markets. Some marijuana businesses contend that purveyors of this practice are cutting corners unfairly by using hemp – which is legal at the federal level – to make THC – which is not. The intoxicating properties of THC are what led to prohibition of it in the first place, and what continues to be a sticking point for overturning stringent federal laws against marijuana sales.

The sudden popularity of hemp-derived delta-8 over the last few years was largely unanticipated. Hemp farm operators and retailers saw a sudden new potential in a part of the plant few had previously paid attention to.

Still, many hemp operators have been careful to remove any trace of intoxicating THC from their CBD products, for two main reasons:

• To avoid unwanted attention and oversight from federal authorities.
• To attract consumers who don’t want to be intoxicated/who may be drug tested.

Delta-9 has somewhat confused matters. A fair number of marijuana business advocates assailed D-8 products because they were made in a lab through a chemical conversion process that lacked health and safety oversight. It was those criticisms that largely fueled the delta-9 hemp extract market. Technically, a 5-gram gummy can contain more than 15-milligrams of delta-9 THC and still comply with federal regulations because it still comes in under 0.3 percent THC by dry weight. Being able to market it as both natural and legal was a compelling point for some hemp growers, manufacturers, and retailers. However, many California marijuana businesses have viewed this as unwelcome competition. Many had seen a bright-line partition between hemp and cannabis. Of course, hemp is cannabis – and always was (just like marijuana). But delta-8 and delta-9 products blur the lines between marijuana-derived products and hemp-derived products.

Those in the hemp industry may be enjoying something of a free ride for the moment, but that’s because they aren’t operating under the same crushing weight of taxes, regulation, and black market competition those in marijuana growth and sales.

Hemp industry insiders, however, insist they aren’t in competition with marijuana companies. Rather than respond to concerns by quickly imposing the same taxes on hemp-derived products, they urge an easing to the marijuana business taxes.

Those on all sides of the table will closely be following the discussions regarding the Farm Bill, as this will be the first time it’s been revised since it opened the doors to hemp and CBD in 2018.

It should be noted that even if the THC content meets the federal definition of hemp, states still have the authority to oversee the safety of ingestible products sold within their borders. Some have noted that if you change the composition of hemp, it may no longer be considered legal in certain states.

Those that are selling d-9 products should do so with great care, particularly if they’re doing so through online sales/the mail. Consult with an experienced cannabis law attorney to ensure you are in compliance.

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:

As hemp THC sales boom online and by mail, cannabis industry braces for crackdown, Feb. 9, 2022, By Kristen Nichols, Marijuana Business Daily

It’s called the Cannabis Administration and Opportunity Act. It’s similar to a bill passed by the House in December. The House’s approval of such a measure isn’t surprising, given its political makeup. The Senate, however, is much more conservative and a different story. How good of a chance does a measure like this actually have of becoming reality?

A poll conducted last year by the Pew Research Center reveals 6 in 10 Americans favor legalizing pot for both medicinal and recreational use. However, the majority party in the Senate has a lot on its plate, with presidential priorities being immigration, policing and infrastructure. Cannabis isn’t on that list, but that doesn’t necessarily mean it won’t have forward momentum.

Marijuana is Legal in Many States – Why Does Federal Legalization Matter?

Federal legalization matters a great deal, despite the fact that 18 states allow recreational use for adults and 37 allow medicinal marijuana. (California was the first to legalize medical marijuana in 1996 and recreational use in 2016).

The problem is that with cannabis designated as a Schedule I narcotic under the U.S. Controlled Substances Act, possession and sale for any reason remains a federal crime – and federal law supersedes state law. Although the federal government has largely stopped prosecuting violators of these laws so long as they are in compliance with state laws, the federal restrictions still throw a huge wrench in the logistics of things like banking, transport of goods and taxes – even in places like California, where it’s legal.

What Would New Federal Marijuana Bill Do?

Congress members of both the House and Senate (including now-Vice President Kamala Harris) have previously introduced legislation that would remove cannabis from its Schedule I classification and expunge the criminal records of those previously convicted for marijuana-related crimes. So far, those have failed.

The most recent effort to do this was last year. This new bill is partially based on that. It remove federal penalties for cannabis, expunge criminal records of non-violent offenders who broke U.S. marijuana laws, establish funding for restorative justice programs, set federal tax rates for cannabis products and allow individual states to decide whether they want to legalize cannabis or not.

So if marijuana is still illegal in one state, it will remain so unless the state government opts to change that. However, in places where the drug is legal, removal of federal prohibition will help resolve transport, banking and tax issues. If the drug isn’t outlawed at the federal level, states would not be allowed to halt interstate transport of the drug. So if a state like, say, Nebraska chooses not to legalize, possession and sales could remain unlawful there, but they could not prohibit the drug from being transported within its borders on the interstate between two states where it is legal.

What the regulation would not do is stop all regulation of the drug. The FDA and ATTTB would be responsible for regulation of the production, distribution and sale of cannabis at the federal level.

Most advocates support the bill, though some do recommend adding certain restrictions on potency, flavoring of products that could appeal to kids and certain types of ads. A few are raising questions about the potential for more DUIs and how that should be handled. If the drug was legalized, research on both the benefits and harms of the drug would be much more easily facilitated. As it now stands, most scientists can’t study the drug because they can’t gain access to it – or funding.

Does it Have a Shot?

As it stands, the bill remains in draft form, which means it could change quite a bit before it’s actually voted on. That said, most political analysts believe that as it’s currently written, it’s unlikely to pass – though it will obviously kickstart conversations.

Then again, last year’s bill surprised many by passing in the House in the middle of a pandemic – even if it ultimately died in the Senate. Schumer himself said at this point, he doesn’t have the votes that would be needed to overcome a filibuster.

President Joe Biden has expressed support for decriminalization of cannabis, but not full-scale legalization. If the bill did pass, it’s not clear whether Biden would sign off on it.

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:

Senate moves to legalize pot at federal level. What are the chances? Aug. 2, 2021, Los Angeles Times/Portland Press Herald

The bill reportedly has unanimous, bipartisan support in the Assembly Business and Professions Committee, and is supported not only by organizations like NORML but also the California Veterinary Medical Association.

As our Los Angeles cannabis business attorneys understand that animal owners are essentially being left in the dark about how much or what type of cannabis they should be giving their animals for various ailments. Veterinarians cannot discuss the possible impact of a certain product on a specific animal or offer a suggestion for how much would be a safe yet effective dose. Absent this guidance, pet owners are essentially left to their own devices and research to guess or rely on a cannabis dispensary clerk’s take, even though these individuals know noting about the effects on animals.

U.S. law bars veterinarians from possessing, administering, prescribing or dispensing cannabis or any related products. State law in California recognizes that cannabis can be used legally by adults over the age of 21 and medical doctors can prescribe cannabis for humans who are patients, state law still doesn’t permit veterinarians to prescribe it for animals. A veterinarian who prescribes cannabis to an animal would be in violation of the state law.

AB 384 would change that, but would that be safe? Unfortunately, due to the drug’s status as a Schedule I narcotic, there isn’t a great deal of research on the safety or effectiveness of cannabis for pets. There also aren’t any quality control measures that are specific to animals or specific breeds. That’s not to say cannabis does not have benefits for animals, only that more research may be required to establish regulatory guidelines. As veterinarians likely know, animals like dogs and cats can be more sensitive to the impact of certain drugs, cannabis included. There can also be side effects if an animal is already taking another medication or supplement. That’s why it’s important for vets to be able to discuss matters like dosage with owners.

This bill would require the California Veterinary Medical Board to set forth guidelines for vets who recommend the use of cannabis on animal patients. It would also amend Prop. 64 on adult-use recreational marijuana to encompass products intended for animals too.

The measure does have its opponents. For instance, the Veterinary Cannabis Society is concerned that the bill, as it is worded, might open the doors for unscrupulous manufacturers, operators and advertisers to target a sensitive market, without paying adequate heed to the potential consequences.

Animals who are suffering from cannabis toxicosis may experience:

• Disorientation.
• Lack of coordination and balance.
• Reduced heart rate.
• Dilated pupils.
• Dribbling urine.
• Sensitivity to light and sound.
• Vomiting.
• Lethargy.
• Excessive drooling.
• Seizures.

Although cannabis itself is unlikely to kill a dog or cat, what can happen is the animal becomes so sedated they choke on their own vomit.

Pet owners and veterinarians in Los Angeles can report cases of cannabis toxicity to the Veterinary Public Health program, which is designed to allow the pet owner and reporter to be anonymous so the agency can collect information on which products are causing potential harm to pets – and also to gain information about which potential dosages might be dangerous.

Vets or makers of cannabis animal products should consult with a cannabis lawyer if they have any questions or concerns.

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:

Cannabis and Pets, County of Los Angeles

Recently, the California Water Boards sent out some 270 letters to marijuana farmers operating in the Emerald Triangle, warning them to comply with state regulations or else face potential fines – or even loss of their licenses to grow the crop.

The compliance letters were sent to cultivation operations in Mendocino, Humboldt and Trinity counties, informing them of their lack of appropriate permitting for all their cannabis business operations.

The warnings were sent to landowners whose properties appear to be using their space for purposes of growing the crop, yet have no enrollment in the state waterboard’s cultivation program. As Los Angeles cannabis farmer attorneys can explain, proper permission from the local water board is required to legally grow marijuana in California.

Last year, some 2,300 marijuana cultivation licenses were issued among those three counties.

Cannabis Farming and Water Board Regulations

The rules imposed by the state water resources board is in place because cultivating cannabis has the potential to impact watercourses such as lakes, rivers, creaks or streams. The majority of the regulations are applicable to so-called “sun-grown cannabis,” which is legal in some form or another in a dozen counties. Licenses are issued through the state’s Cultivation Licensing Program.

Among the regulations required by state water boards:

• Development of farmlands for cannabis cultivation, erosion should be controlled and hillsides avoided. There are very specific rules for growing marijuana on land that is undisturbed. Additionally, there are a host of limits imposed when development on any sensitive areas or earth-moving activities. No one can grow marijuana on hills with a slope of 50 percent or more. The rules also prohibit heavy equipment and vehicles in riparian zones.
• Farmers of marijuana should avoid growing the crop in or near any surface water body, such as lakes, streams or rivers. Any grading of land requires consultation with an experienced biologist who can identify any sensitive fauna or flora.
• In dry season, cannabis farmers are not allowed to use surface water. Any use of surface water supplies in the state of California must have a proper permit or license from the state water board. No surface water can be diverted during the dry season. During grow/wet season (April through October) there are tight restrictions.

• Regulation of groundwater, less stringent than surface water, still requires avoiding using wells or drilling near bodies of water. Cannabis growers also cannot rely on onstream storage reservoirs, except without permit.

Los Angeles marijuana cultivation attorneys know that state water board licensing and regulation is incredibly complex. Investors, landowners and entrepreneurs should work closely with an experienced attorney to ensure they are in compliance, to avoid costly fines and other penalties that might jeopardize their profits or ability to operate.

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:

DIRECTIVE NOTICE TO OBTAIN REGULATORY COVERAGE FOR CANNABIS CULTIVATION OR ASSOCIATED ACTIVITIES, Sept. 20, 2019, State Water Resources Control Board

As Los Angeles cannabis lawyers can explain, the cost of non-compliance is likely to be considerably more. Those producing marijuana products need to get a move on fast – by the end of this month. Retailers will have a bit longer.

The symbol in question is a triangle that borders a bud leaf with a bold exclamation point and the letters “CA” (the widely-recognized abbreviation for California) below.

New Regulation Supersedes “Emergency” Cannabis Labeling Rules

The new regulation was set by the California Department of Public Health, which notes that product labeling compliant under the previous “emergency” rules but not with newer rules needs to be shipped to a distributor who is licensed by June 30th. Those retailers are required to clear those items from store shelves no later than Dec. 31, 2019. By Jan. 1, 2020, it will be unlawful in California to sell any product with packaging absent this labeling.

Per health department recommendations, marijuana manufacturers may consider using a sticker as an easy fix to existing packages, or else they can repackage the products they have with materials that are compliant.

As cannabis attorneys in Los Angeles, we’re aware of correspondence with others on the legal front taking the DOH to task for requiring that vape cartridges be flagged when the actual cannabis concentrate that is sold already notes that it contains the drug. Mandating that the containers be labeled in such a manner – without stipulating that it’s only the container – is non sequitur.

The state’s only response was to refer to the new rule.

Cannabis Product Labeling Liability

Cannabis product labeling cannot be overlooked by California product manufacturers and dispensaries. It’s not uncommon that these retailers will rely on multiple providers of cannabis. Both they and product manufacturers need to be sure their providers are vetted and state-legal, or else risk a potential product liability claim stemming from improper labeling or inadequate warning.

Although some marijuana businesses have been successful in securing numerous risks to individuals, it doesn’t necessarily cover them all. It will be difficult to mount a successful defense against the state for selling cannabis vapor cartridges without the mandated labels beyond the prescribed dates.

It’s not just vape cartridges. Most consumer product liability claims pertaining to packaging and labeling deal with inadequate warnings about the potency and individual serving size.

Beyond this, California marijuana is subject to the Safe Drinking Water and Toxic Enforcement Act, which requires the publication of listed chemicals known to cause cancer, birth defects and other types of listed harm (via the Office of Environmental Health Hazard Assessment. That list currently contains more than 1,000 chemicals -including marijuana smoke per an amendment in 2009 (specifically for the risk of cancer).

Although this pertain specifically to the cannabis flower which potentially produces the “smoke,” it’s also relevant for those who sell oil and wax – and especially vapes. Thus far, the warning has not been required beyond anything beyond the cannabis flower sold in California, but there is talk that this could expand. Some suggest elements of cannabis could even cause reproductive harm.

Whether this comes to fruition or not, all those in the cannabis distribution chain should make themselves aware of local, state and federal labeling compliance. A Los Angeles cannabis lawyer can help.

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

Additional Resources:

California cannabis vape cartridges required to include universal symbol, June 25, 2019, By Bart Schaneman, Marijuana Business Daily