Note: Delta-8-THC-O and Delta-9-THC-O are different than delta-8-THC and delta-9-THC. While the latter both exist naturally in the hemp plant, THC acetate (better known as THC-O) doesn’t. That’s the underlying basis for the DEA’s position.

THC acetate is most typically a component of products like edibles and vapor cartridges. As Los Angeles cannabis business lawyers, we want to ensure any companies that currently produce, transport, stock, and sell these products take immediate note. It’s not immediately clear how this will impact the market, so it’s a smart idea to immediately consult with a cannabis lawyer on how best to proceed and ensure you’re on the right side of the law.

How the Farm Bill Factors

The 2018 Farm Bill opened the door to a number of cannabinoid products that are known to also have intoxicating properties. This has drawn the attention and ire of some politicians and interest groups. The additional scrutiny has led to legal challenges that have wound up in court.

Last year, the U.S. Court of Appeals for the Ninth Circuit involved a copyright/trademark/patent protection case. The defendant didn’t even contest that it was selling counterfeit versions of the plaintiff’s delta-8 THC products. The appellate court affirmed the lower court’s grant of a preliminary injunction’s on the defendant’s sales, and held that the plaintiff was likely to prevail on their claims. What the defendant argued was that plaintiff couldn’t own a valid trademark for its products because of the illegality doctrine (which has been cited in other cannabis trademark infringement and patent infringement cases). Basically, products that are illegal under federal law aren’t entitled to federal protections – such as those for trademarks. Plaintiffs argued that delta-8 THC was legalized under the 2018 Farm Bill as a hemp-derived product. Defendants argued that was not the intention of the legislature to approve legalization of psychoactive substances – which delta-8 THC is. The appellate court sided with plaintiffs, finding the 2018 Farm Bill language was unambiguous, and the delta-8 products in question fit the requirement of containing less than 0.3 percent of THC.

But Delta-8-THC-O and Delta-9-THC-O are not the same thing.

DEA’s Novel Cannabinoid Stance

Essentially what the DEA’s Drug & Chemical Evaluation Section has concluded is that if a certain cannabinoid or compound is produced naturally by the hemp plant – then it’s legal (as long as it doesn’t have more than 0.3 percent THC). It’s not a controlled substance, no matter how it’s processed or manufactured into the final product. That’s important to note because delta-8 actually is synthetically-manufactured from CBD (which is hemp-derived). However, trace amounts of it also occur naturally in the plant.

While the Delta THCO products do contain THC that has a similar structure chemically and similar pharmacological outcomes compared to hemp plants, they aren’t the same – and they don’t naturally occur in the plant. They can only be produced through processes that are synthetic.

The DEA’s statement doesn’t clarify the rules for all novel cannabinoid derived from hemp, but it’s a start.

If you have questions about how to ensure your Southern California cannabis business is adhering to current laws and regulations, our marijuana business lawyers 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: DEA Classifies Novel Cannabinoids Delta-8 And -9 THCO As Controlled Substances, Even When Synthesized From Legal Hemp, Feb. 13, 2023, By Kyle Jaeger, Marijuana Moment More Blog Entries: California Pot Purveyor Pushes Back Against Product Potency Lawsuit, Dec. 6, 2022, Los Angeles Marijuana Lawyer Blog

Although our Los Angeles marijuana business lawyers know this news might cause wariness among those in the pot industry, it’s worth pointing out that such data is already gleaned from businesses in other industries, such as convenience stores, car dealers, liquor stores, and casinos. It may in fact by a sign that the federal government is starting (albeit at a snail’s pace) to recognize the state-legal cannabis market as legitimate.

The Treasury’s Office of the Comptroller of the Currency posted its notice in the Federal Register indicating that it plans to keep tabs on cannabis companies as part of its regular yearly filings required of banks. In addition to marijuana businesses, other markets of emerging interest to federal financial regulators are ATM operators and crypto asset traders. The Money Laundering Risk system used by the OCC boosts the ability of federal investigators and banks to flag and investigate potential money laundering risks.

Public comment on these proposed changes is open through early August.

We don’t know exactly how information gleaned from those bank-submitted Risk Summary Forms are analyzed, but the notice indicates the data is used to help authorities better pinpoint those that “may pose heightened risk” of money laundering activities.

As of last September, it was reported there were more than 750 banks and credit unions actively serving cannabis company clients. That was an uptick of 7 percent since the previous quarter.

Within the last year, the U.S. Census Bureau also began gathering information on state government revenues generated from state-legal marijuana. Also, the U.S. Economic Classification Policy Committee issued a recommendation to include marijuana companies as an official designation within the North American Industry Classification System. This system helps the government keep tabs on market and employment information on industries throughout all of North America.

Why Money Laundering is a Concern in the Marijuana Industry

Historically, marijuana has been not only illegal, but considered incredibly dangerous. Despite the fact that many states have passed laws making cultivation, sale, and possession of the drug legal for medicinal and/or recreational uses, it remains, per federal law, a Schedule I narcotic – the classification with the tightest restrictions, indicating a powerfully-addictive substance with no medicinal value. The 2018 Farm Bill removed the sale of hemp and hemp-derived CBD products from the federal law.

Still, banks and other financial institutions are in a tight spot when it comes to accepting marijuana business clients because they’re regulated by federal law. That means they must navigate federal anti-money laundering statutes – knowing full-well they’re engaging in financial transactions involving proceeds generated from the sale of cannabis.

The Financial Crimes Enforcement Network has released specific guidance for financial institutions regarding the provision of services to both hemp business customers and marijuana business customers, but these are still technically in conflict with federal law. The FinCEN guidance doesn’t legalize such activities, and it doesn’t expressly rule out law enforcement action by federal banking regulators or criminal law enforcement agencies.

Still, following the FinCEN’s guidance is important for marijuana-related businesses to ensure their compliance with the Cole Memorandum principles, as well as applicable state laws. As our Los Angeles marijuana business lawyers can explain, doing so is likely to substantially reduce the odds you’re going to run up against federal enforcement action.

Guidance issued in 2014 by the U.S. Department of Justice indicated that prosecution of a financial institution under federal money-laundering laws might be appropriate if it were discovered a business to whom the institution provided banking services was violating the Cole Memo provisions, such as selling cannabis across state lines. Willful blindness to violation of state marijuana laws might also be grounds for federal prosecution of a bank, per the DOJ guidance. The DOJ puts the burden on the banks to effectively identify the nature/scope of their marijuana company customers’ activities and to implement continual monitoring to ensure there are no Cole Memo violations.

Ensuring you are fully in compliance with all state laws, the Cole Memo, and other relevant provisions of law, contract with an experienced marijuana business attorney.

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 Banking: Proceed with Caution, February 6, 2020, By James J. Black, marc-Alain Galeazzi, American Bar Association

More Blog Entries:

Feds to Return $1.1 Million in Marijuana Fund Seizures, May 14, 2022, Los Angeles Marijuana Lawyer Blog

Recently, the Internal Revenue Service (IRS) issued tips for cannabis compliance. The federal agency noted that while it’s outside of the agency’s power to resolve many of the unique business predicaments that arise from federal prohibition, it wants to help support cannabis companies in becoming tax compliant. Even though marijuana continues to be classified as a Schedule I narcotic by federal authorities, these businesses are still required to shell out federal taxes.

In September, the agency released tips for tax compliance for cannabis businesses. Among those:

• Know your investors. Thousands of people are fighting to get into the industry, but working with investors may have some tax implications and repercussions for cannabis companies. Unregistered and “silent” financing and ownership arrangements, with investors sometimes being referred to as “beneficial owners,” get the benefits of ownership but avoid having the property title or activity in their name. That creates numerous challenges for the IRS, and it may result in issues for proper tax filing and accurate reporting of gross receipts. Also, cannabis business owners should be wary of nefarious investors who attempt to put their funds into a business like this, but jeopardize the entire operation with allegations of money laundering.
• Make sure you’re licensed. You can’t get federal licensing, but make sure you have proper state and local licensing for your operation.
• Timely file and pay your taxes. Even if your business operates with cash, you’re still responsible to file and pay your taxes on time. IRS code doesn’t parse out which income stems from legal vs. illegal sources. All income must be reported. Note that because you’re dealing with a Schedule I narcotic, you must abide by Section 280E – even if your business is 100 percent state legal. That section doesn’t bar you from reducing gross receipts by properly calculating the cost of goods sold to ascertain gross income, though you may not be able to deduct things like selling or advertising expenses. There aren’t any exemptions from employment tax. It may be beneficial to make quarterly payments. Late payments can result in interest and penalties. Non-filers are a priority enforcement for the IRS. So too are those who use cryptocurrency; it’s imperative to use a reputable exchanger.
• Report cash transactions. Your business may not use traditional banking, but you still need to report all cash transactions. Any company receiving $10,000 or more in cash (which is most California marijuana businesses) need to file Form 8300 within 15 days of receiving that payment. Failure to be diligent about this can cause major headaches for your business.
• Maintain good records. This is mission critical for a cannabis business. Keeping meticulous records – all receipts, canceled checks, any shred of documentation that can support income, deduction, or credit should be kept in some form. Keep these records even for expenses that aren’t legally deductible because it’s going to make it easier to prepare your returns and also answer a question quickly if one arises.

Despite the challenges, the IRS hopes to keep audits to a minimum by promoting voluntary compliance wherever possible, addressing unintentional non-compliance with proactive education. Companies that want to be proactive need to be working with an attorney and a qualified accountant.

Freeing up banks to work with state legal cannabis companies would obviously make working with the IRS (and so much more) a great deal easier. Federal regulators have repeatedly chastised Congress for failing to move forward on marijuana reform. The House of Representatives has five times now passed the Safe and Fair Enforcement (SAFE) Banking Act, but it’s been shot down each time by the Senate. Former U.S. Treasury Secretary Steve Mnuchin repeatedly pushed this issue, saying the existing policy has resulted in substantial problems for the IRS and financial regulators.

Some have gone so far as to call this a public safety issue, given the fact that marijuana businesses that deal almost solely in cash continue to be high-crime targets. Despite this, a recent defense bill that was passed failed to include cannabis banking protections – despite bicameral negotiations.

If you are a marijuana business in Southern California concerned about regulatory and tax compliance, our dedicated 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:

Providing Resources to Help Cannabis Business Owners Successfully Navigate Unique Tax Responsibilities, Sept. 27, 2021, IRS

Bloomberg Law reports that the owner of Kool menthol cigarette brand alleges in Los Angeles federal court that the logo used by the cannabis company Bloom Brands is far too similar to the interlocking “O” letters used by Kool. The marijuana business has reportedly applied for federal trademarks for the branding images that would cover its oral vaporizers and e-cigarettes. The company that owns Kool, however, sent the firm a cease-and-desist letter late last year.

Now, according to the lawsuit, the cannabis business is accused of trying to profit off the established branding of Kool in a “transparent rip-off.”

This claim is merely the latest in a long list of trademark disputes between those in the fledgling marijuana industry and larger, more established companies. Among others that have cropped up in recent years:

• Manufacturers of Nerds candy filed a lawsuit last year against the California-based producer of cannabis edibles alleging trademark infringement.
• Chocolate maker The Hershey Co. has filed numerous trademark infringement complaints against cannabis companies over the last several years.
• Ohio-based glue manufacturer, the Gorilla Glue Company, filed a lawsuit against a Nevada cannabis company, GG Strains, for its use of the trademarked name “Gorilla Glue” for one of its strains of cannabis. The two companies reached a settlement resulting in the cannabis company halting its use of all Gorilla Glue names, rebranding of its products and relinquishing its website URLs to the gluemaker.
• Hot sauce maker Tapatio Foods, LLC filed a federal trademark infringement lawsuit against a California company producing cannabis-infused hot sauce called Trapatio.

The crux of many of these lawsuits is that defendant companies are infringing on the plaintiff’s trademarks by using names, logos, designs, etc. in a way that is likely to cause consumer confusion about the products and potentially damage the reputation of the plaintiff, depriving them of profit.

Companies found to have infringed trademarks may be permanently banned from using those same marks or names, compelled to pay triple monetary damages, cover the cost of corrective advertising to clear the brand confusion, forfeit their profits and pay plaintiff’s attorney’s fees.

The hassle and expense of this type of litigation can usually be avoided with meticulous planning and research of proposed strain names and products. Our Los Angeles marijuana lawyers can help clients formulate strong business plans and review potential product lines for possible trademark issues.

As bigger brands break into the cannabis business, Bloomberg Law predicts such trademark infringement lawsuits are likely to become more common. Many companies want to capitalize on products with cutesy, catchy names and pop-culture references. But that can be lead to legal woes if the more mainstream company catches wind.

A common type of trademark infringement is dilution by tarnishment. This means that the company’s reputation can be harmed by the mark’s association with another company. Typically, there is a high bar to prevail with these kinds of claims because you usually have to prove the company infringing on the mark is somehow associated with something that is obscene, sexually explicit, drug-related or illegal. With cases involving marijuana companies, clearing that proof burden is less difficult.

It should be noted that unless and until marijuana becomes legal at the federal level, trademark protection is not available through the U.S. Patent and Trademark Office. There are still other ways cannabis companies can protect their brands, though, and our Los Angeles marijuana business lawyers are available to 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:

How Cannabis Companies Can Protect Their Trademarks, Oct. 29, 2020, Bloomberg Law

Schulman et. al., v. Kaplan et. al. was a $200 million case filed last year in the U.S. District Court for the Central District of California pitting one marijuana grower against another, citing the Racketeer Influenced and Corrupt Organizations Act (RICO).

The case was unique because the majority of RICO legal battles were filed by those trying to shut down cannabis grow operators, arguing the farms slashed the value of their property due to the pungent odor of the plant and concerns over security. This matter, on the other hand, was a dispute between two fellow farmers who had once worked together.

Plaintiff was a businesswoman from Santa Barbara County who asserted that the operators of an L.A.-based grow operation engaged in fraudulent business practices to cheat her out of her farming plot.

In dismissing the case, the court held that RICO laws weren’t designed to give justice to those who cheat each other while engaged in criminal activities. Although marijuana is legal for recreational cultivation, sales and possession in California, it remains illegal at the federal level. RICO is a federal law and this was a federal court.

Whether the case was valid on its merits isn’t for our Los Angeles marijuana business lawyers to say, but this outcome does highlight the unique complications that industry players face when doing business. Any contracts between cannabis companies, investors and others need to be carefully vetted by an experienced cannabis lawyer who can help you navigate these potential pitfalls.

Here, plaintiff asserted 25 counts of wrongdoing, which ranged from conspiracy to elder financial abuse. The action was largely in response to an earlier filing in a California superior court seeking to enforce a lease for cultivation on land the other owned. The judge in that case ordered the parties to enter arbitration.

Defendants in the RICO case released a statement saying the lawsuit centered on a “typical business dispute” that plaintiff was attempting to spin into something seemingly much more salacious than it was. Other RICO lawsuits filed over the years by opponents of cannabis grow operations have been met with varying degrees of success.

For example, last year, the U.S. District Court for the Northern District of California dismissed a civil RICO claim of Bokaie et al v. Green Earth Coffee LLC et al. In that case, a group of property owners argued that the smell, noise and activity of nearby cannabis farms had reduce their property values and reduced their ability to enjoy their own properties. The judge concluded that the case should be dismissed because the harvesting was over, removing the underlying property depreciation claim from the complaint.

Still, the judge in that case expressly stated that growing or dealing in cannabis was, by definition, a form of racketeering under 18 U.S.C. 1961(1).

The takeaway of these two cases is that:

1. Even in a state like California where recreational farming, production, sales and possession are legal under state law, businesses may be deemed liable by default. (And these claims are known for being especially arduous.)
2. If federal prohibition is at some point removed, that default RICO finding may no longer apply, but it may be possible for cannabis business partners to sue one another under the provisions of RICO.

Every California cannabis business should have an experienced marijuana business lawyer on retainer to review important policy and procedure as well as any marketing, contracts, licensure and other aspects.

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:

Francine Shulman et al v. Todd Kaplan et al, June 20, 2019, US District Court for the Central District of California

This point was underscored recently in the California Appellate Court decision in Metsch v. Heinowitz. In this case, the appellate court refused to enforce a contract to produce and distribute marijuana edibles. The contract had been drafted in 2014 – at a time when cannabis wasn’t legal for recreational use in California. This factored significantly in the court’s ability to enforce it.

Plaintiffs had pursued a case against defendant for breach of contract, breach of fiduciary duty and conversion that arose from this contract. Plaintiffs indicated they were general partners with defendant in a company called Chronic Catering, a business that held intellectual property (recipes) and property. A year after the contract was signed, plaintiffs allege that defendant consigned the assets of the company for his own use and for the benefit of his own company – without plaintiffs’ consent. Plaintiffs sought to make defendant pay general damages as well as a general declaration from the court that the intellectual property defendant was using as his own actually belonged to their joint venture.

The trial court, however, noted that at the time the contract was drafted, both defendant and the plaintiffs were operating unlicensed marijuana businesses that made and sold cannabis edibles. That meant they formed an agreement based on illegal conduct and transactions, and thus plaintiffs had no right to seek recovery or enforcement of said contract.

The appellate court affirmed this ruling. Justices highlighted the fact that in order for a contract to be enforceable, it has to be legal when it is made. That means that courts in California are going to look at what the laws were at the time both sides entered into the contract. If you had a marijuana business contract prior legalization, it may be difficult to enforce. Depending on your position, that might be a good thing. Or it might not, in which case, it’s time to have your cannabis lawyer review your position and help you draft a new one that is both up-to-date and enforceable.

All the defendant in this case had to do was probe that at the time the contract was signed by both parties, cannabis was considered a Schedule I narcotic (under federal laws), prohibited from possession, planting, harvesting, drying, processing, sale, transport, import or gift under marijuana law. Therefore, the contract wasn’t enforceable.

The decision isn’t published, which means it doesn’t set any binding precedent for others who may be embroiled in cannabis business contract disputes. Nonetheless, it can serve as a warning to those in the legal cannabis market that taking the time to review prior contracts and determine whether any should be revised, replaced or discarded is an imperative.

It should be noted that because cannabis is still considered a Schedule I drug under federal law, this argument pertaining to contracts might still crop up in a current dispute. It’s best to have your attorney review your contracts to make sure they are as airtight as possible.

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

Additional Resources:

Metsch v. Heinowitz, April 22, 2020, California Court of Appeals, Fourth District, Division One

More Blog Entries:

California Marijuana Delivery Lawsuit Slated for Next Month, June 12, 2020, Los Angeles Marijuana Business Lawyer Blog

Government agencies – from the federal level on down – are strapped for cash too. There is enormous pressure for politicians to get the economy back on track, and that has many looking for creative ways to stimulate fiscal growth, reduce the unemployment rates and offset lost tax revenues.

This hasn’t escaped local marijuana businesses looking to expand and entrepreneurs exploring a new launch.

There is good reason to presume the cannabis industry, by-and-large, will survive this. Cannabis companies were deemed “essential” during the lock down, and sales for many companies have remained steady relatively throughout as Californians hunkered down for months with not much else to do. Cities that previously had rejected cannabis sales are likely to start considering them as a means to boost job numbers and tax dollars. That could allow for significant expansion of the industry, given that two-thirds of the state doesn’t allow marijuana businesses to operate in their jurisdiction and state law requires local approval before anyone can legally set up shop.

In fact, news outlets in Anaheim and Milpitas reported city councils are already revisiting their local bans on pot shop prohibition. Marijuana Business Daily reports industry insiders are also closely watching for potential changes in Fresno, Concord and Chico, as well as in communities near L.A., like Oxnard, Corona and Pomona.

Los Angeles marijuana business lawyers speculate that not only will those city and county bans may be revisited, it’s possible communities will start looking at relaxing some of the crushing tax burdens these firms have been made to bear. Local leaders will want to attract more businesses, not make it harder to stay open.

Much of this may depend, though, on the full scope of the economic downturn. Given what we know this far about the impact, it’s likely more than a few leaders previously opposed to cannabis companies are rethinking that now. The budget season for cities and counties (May and June) is already underway, so it’s possible we’ll see some movement on this before the end of year, with varying outcomes from depending on the region.

Even so, it’s unlikely we’ll see new businesses opening within months because cities and counties that change direction will still have to craft and approve ordinances as well as a process for licensing. On-boarding that could take many months if not well over a year. We may see the most movement on this in suburbs of large urban hubs (like Los Angeles) where there is demand and possibly less resistance seeing the success of those operations and how it bolsters the local economy.

But that gives anyone considering opening a California marijuana company to start exploring their options, consulting with a corporate cannabis lawyer, conducting market research and lining up investors.

Our longtime Los Angeles cannabis lawyers work with cannabis startups to formulate business plans, draft and review legal contracts and secure local licensing.

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:

Could economic slide lead to more California cannabis industry opportunities? Some industry experts say yes, May 8, 2020, By John Schroyer, Marijuana Business Daily

This came as a surprise to some. Barry Brand had a reputation among county officials and industry investors as an honest businessman.

He was so well trusted by officials, that when a licensed cultivator property tour was given by the county to show reporters just how well cannabis regulations were going, Brand’s farm was chosen. Ironically, the tour intended, among other things, to demonstrate just how impossible it would be for a grower to siphon off crop to sell on the illicit market.

At Carpinteria’s Arroyo Verde, greenhouses spanning some 300,000 square feet are home to the sprawling rows of marijuana grown by Brand. After a county sheriff uncovered something that seemed amiss with this otherwise upstanding outfit, a search warrant was served. During the January 22 search of the farm, an extraction lab, a stash of cannabis oil concentrate weighing in excess of 100 gallons, and “off-book” sales evidence were discovered. All pointing to illegal business activity.

No Surprise for Locals Lionel Neff, who has been critical of the sudden rise in the area’s cannabis cultivation of late, said “no one was surprised” when Arroyo Verde farm was raided. Brand is one of a number of local cannabis growers blamed for injecting a stench into Carpinteria’s usually clean, fresh air.

“If they were good operators, they would have taken the community into account from the beginning.”

It seems Brand’s activity in the community may also have helped his business dealings. Since 2018, votes from county supervisors have allowed cannabis cultivators to grow crop with little if any vetting, in unlimited number and size. This ruling has seen the county’s identity quickly change, from one known for its scenic coastline and wine-tasting, to that of the Golden State’s new and unlikely hot spot for marijuana growing.

Together with other prominent growers in the area, Brand has been very involved in shaping cannabis policies, making political campaign donations, and hiring attorneys, lobbyists and communications agencies.

Resistance from Residents Clashes with residents from Santa Maria to the south coast arose, when an unregulated rush on planting in the area took hold. Local school children and neighbors from the seaside town complained to county officials of the plant’s smell filling the air. Others did contend the local economy would benefit a great deal from the newly generated tax revenue, but to date, much of those anticipated tax dollars are yet to eventuate.

An Investigation Ongoing The investigation of Brand continues. Initially, the sheriff’s office searched four parcels belonging to Brand under suspicion he was “growing and processing marijuana outside of the licensed parcel as well as possessing and selling cannabis crude (oil) without a license,” according to sheriff spokeswoman, Raquel Zick.

During the raid, detectives also found “off-book (black market) marijuana sales associated with the farm,” cannabis that was illegally stored and weighed approximately 20 pounds, a small and delicate extraction lab, and “1000 pounds of cannabis crude.” It’s estimated that quantity of cannabis crude would garner a street value anywhere between $1.1 and $1.6 million if sold on California’s regulated market, but industry insiders say it could fetch much more if sold interstate.

Our Orange County marijuana business lawyers assume that when Brand gave 100 members of the community a tour of his farm just prior to the sheriff’s office issuing the search warrant, he probably didn’t show them a delicate extraction lab on his property, which could potentially have exploded if not used with the utmost precision.

Implications Evidence found during the raid of Arroyo Verde farm demonstrates just how little county officials may actually know about the cannabis business operations they approve to receive state cannabis licensing. Given that county officials have looked only sparingly into the business dealings of farmers who are politically connected thus far, this investigation (albeit, ongoing) shows us it would be wise to look more closely in future.

Separately, any board voting to allow cannabis cultivators to have-at-it with minimal oversight, in a climate where illicit market activity is rife, also poses a potential red flag. A fine example of why an industry as young as California’s marijuana industry, needs checks and balances set in place and upheld, both for the good of the industry, and to keep business owners honest.

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: Carpinteria School Board Takes Marijuana Money – Los Angeles Times (Nov. 10, 2019)

As many industry insiders have echoed, anyone turning a profit in this new era, has to have at least one hand in unregulated dealings. Chris Coulombre, CEO of Pacific Expeditors in Sonoma, has said “I have to imagine that 60 percent of the market overall is probably playing in a parallel markets, but I don’t think they enjoy that. It’s truly a decision of necessity.”

Whispers of retailers selling counterfeit products are rife. Cultivators are known to sell unregulated product on the side. But how can we blame them? Suffering terribly at the hands of price undercutting from illegal competitors, these unregulated exchanges are all taking place in hopes of keeping doors open, and businesses afloat.

The Situation Overview

• State regulators and Californian law enforcement officers are yet to curb the state’s extensive black market activity;
• So much illicit activity exists that authorities simply cannot investigate it all;
• Illegal growers in sizable numbers continue to operate throughout the state; and
• More cannabis is produced than consumed in California, leading growers often to supply and export their surplus crop to illegal interstate markets.

An Industry Fragmented Our Los Angeles cannabis business attorneys know, one of the big problems plaguing the legal California cannabis industry and its growth, is that it arguably cannot get out of its own way. Given the size of the state and the diverse ideas within it, it is very hard to achieve any kind of political unification. And that is a sticking point, because for changes to be made, you need lawmaker support.

As an example, not all industry insider votes supported Proposition 64, and the numerous Californian trade organizations often share differing speaking points for regulators and elected officials. It’s that kind of fragmentation that is hurting. Without unification, how can the industry centralize funds for lobbying activities, legal proposals or ballot measures, let alone make any political progress?

“The divisiveness among the industry is a really difficult component and one that (the California Cannabis Industry Association) is absolutely committed to working on in 2020,” said Lindsay Robinson, CCIA executive director, back in January.

Implications Current conditions show us that incentive exists for illicit growers to obtain licenses. And the number of retailers operating legally in California is so small, they could never move all of the state’s cannabis crop alone. So, it should come as no surprise there is no way of telling when the legal market will exceed the illegal one.

Looking forward, we can expect to see a number of cannabis businesses continuing to keep one foot in each market, while the state works to help legal businesses lower their product prices. Only then will consumers be more attracted to the legal market, which will then help licensed businesses better compete with their illegal counterparts.

To address the fragmentation within the industry, stakeholders must align on their joint political goals, otherwise it will be a very long time before we see any serious systematic changes made.

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: Proposition 64 – The Control, Regulate and Tax of Adult Use Marijuana Act

The study analyzed numerous factors, including how easy it is for a new business owner to enter the market, what it costs to do so, how much you’ll pay in taxes, how many laws and regulations exist and the overall market opportunity.

Oregon wrestled the No. 1 spot, Colorado No. 2, Michigan No. 3 and Alaska No. 4.

The fact that we aren’t first – despite being the biggest legal marijuana market despite being the largest marijuana market – was attributed largely to our patchwork of laws and hefty taxes (15 percent excise and a sales tax for recreational product). There’s also a mid-range startup fee – $5,000 for business applications. Compare that to Oregon where the fee is a cheap $250 but then also to Illinois, where a cultivator licensing fee costs $200,000 – all but ensuring any prospective small business owners would be pushed out.

Still, California secured the most recreational marijuana revenue of any in 2018 – it’s very first year – at $2.75 billion. Yes, it’s true California has more people – but that’s to the advantage of a burgeoning bud-minded business. We have 39 million people – but that’s a lot of markets to tap.

Employees and contractors of California cannabis companies are are commanding a decent wage – nearly $59,000 median annual salary last year – though that does encompass a large range of professionals. There are those physically handling the product, such as farmers and trimmers. There are state-approved lab technicians in charge of mandated quality testing. And companies can’t overlook the necessity of Los Angeles marijuana business lawyers, accountants and even marketing experts. Cannabis companies cannot operate the same way as every other in the state. There are a host of local and state regulations, walking the fine line of federal law (which also has an impact on banking, real estate and taxes). That has meant most marijuana business start-ups in California are dealing mostly with cash, which means you’ll need to be meticulous with keeping records – including vetting customers.

Within California, Los Angeles was the No. 2 metro area in the nation for cannabis-related jobs (12 percent of the total nationally), compared to San Francisco, with 13 percent. Denver with 7 percent was third. Los Angeles cannabis business workers make an average of nearly 11 percent higher than the going national rate, which is a median of little less than $53,000.

Recently, one Los Angeles-based marijuana firm, MedMen, had its stocks listed on the Canadian Securities Exchange. While our northern neighbor legalized marijuana last year, the U.S. federal government has not – a complication that continues to hamper all marijuana entrepreneurs nationally. However, while a spokesman for the large L.A. marijuana venture noted the New York Stock Exchange is hesitant to invest anything until the market is fully legal, he noted that the industry as a whole is growing by 25 to 30 percent a year. Global sales for legal marijuana are expected to double in the next two years to $22 billion.

Growth won’t sustain that pace forever, though, which is why there is a green rush to get in on the ground now – and do their homework by meeting early on with an attorney to formulate a feasible business plan.

The Cannabis Law Group has been in Los Angeles for more than a decade – specifically in that time representing marijuana clients – medical marijuana patients, collectives, medical dispensaries, doctors and those accused of crimes. Today, we offer that and more. We can help you navigate the complex laws and regulatory framework of marijuana industry in Los Angeles California – because we’ve been here from the beginning.

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

Additional Resources:

Best States to Open a Cannabis Business in 2019, Jan. 28, 2019, By Kelly Main, FitSmallBusiness.com

More Blog Entries:

Confer With a Cannabis Lawyer: Capitalizing on the Los Angeles Marijuana Tourism Market, Feb. 1, 2109, Los Angeles Marijuana Business Lawyers Blog

Although it has become easier this year for cannabis companies to find insurance coverage than ever before, Los Angeles marijuana business attorneys recognize the industry is still very under-served.

Most cannabis insurance primarily focuses on product liability coverage, as explained in a recent article by Insurance Journal. However, there are a number of other potential liabilities too for which cannabis companies likely could use insurance coverage. That’s an opportunity for insurance companies, but of course many are keenly aware of the risk, given federal laws pertaining to money laundering when doing business with any enterprise that derives income from illegal sale of cannabis.

Insurers interested in entering the cannabis business market would do well to enter the various cannabis industry associations to get educated on the intricacies of the cannabis industry.

Cannabis Insurance Coverage Gaps

Cyber coverage for cannabis companies is one area that could use some additional coverage. That’s because cannabis companies store a significant amount of customer information in their databases. Substantial amounts of information are also stored in California’s track and trace system, which keeps tabs on marijuana inventory throughout the supply chain, from seed to sale. Potential for data loss is very real, but nonetheless, Los Angeles marijuana business lawyers recognize companies have a legal duty to protect that data. (Our cannabis attorneys in Southern California can help companies with their business plans for the best systems to protect this data and shield your firm from liability.)

Another potential liability – one few licensed cannabis companies likely have considered up to this point – is class action litigation. This is more likely to be an issue raised if cannabis is mislabeled or contaminated or in some way adulterated but not indicated. If cannabis firms are in some way (knowingly or not) violating state regulations, that could open the doors to class action too. This is especially more likely given that California cannabis rules are so onerous, and many operators find it difficult to be fully compliant (another reason for a qualified Los Angeles marijuana business attorney to be on board).

Doctors too may increasingly look for coverage for cannabis-related wrongful acts, risks or malpractice. Five years ago, physicians likely would not have needed separate coverage for this. Now, increasingly, it’s not a bad idea. Even physicians who aren’t commonly in the practice of recommending medical marijuana may still be seeing clients who are using marijuana medicinally (prescribed or self-treated). This has to be considered when prescribing any other medications. For instance, a condition called cannabis hyperemesis syndrome, wherein patients have high levels of THC or other cannabidinoids in their system that can make them sick. Doctors in California increasingly need to be educated on it – and insured in the event of a claim against them for failing to diagnose and treat it.

Whether you are a cannabis company or doctor or insurer considering the implications of marijuana insurance coverage – or the risks of going without it – our dedicated Los Angeles marijuana attorneys can often help advise you on your rights and responsibilities.

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

Additional Resources:

Expert Sees a ‘Strong Need’ for Insurance for Cannabis Industry, Dec. 3, 2018, By Don Jergler, Insurance Journal

More Blog Entries:

Credit Union Offering Marijuana Businesses Checking and Savings Accounts, Dec. 1, 2018, Los Angeles Marijuana Business Lawyer Blog

To be sure, the Emerald Triangle region of Northern California (comprised of Trinity, Mendocino and Humboldt Counties) grows the most marijuana by volume, hence the nod to greenery in its new moniker. However, if the pace of cannabis farming keeps up at the current clip, the Central Coast could soon surpass the northern neighbor region. And the region has a unique advantage over the Emerald Coast: No deep roots in the gray or black market.

Our Orange County marijuana business lawyers have been at the forefront of this industry, which has ballooned to an estimated $4 billion-a-year, and climbing. It’s been beneficial to the local tax base and also presents a new wave of opportunity for agricultural entrepreneurs seeking a legally sound yet lucrative opportunity. While the new law hasn’t entirely erased the stigma surrounding marijuana, the Central Coast lacks the cumbersome challenge of working to bring into compliance well-established underground growers transitioning into above-board – but heavily-regulated -operations. The risk of government raids is much lower (though not erased completely), but so are the profits, whittled by expensive new mandates and taxes. Operational, financial and legal concerns also persist as long as the drug remains illegal in the eyes of the federal government.

But while getting legal isn’t cheap, our California marijuana business attorneys serving the Central Coast emphasize its necessity in the long-game. Whereas only 200,000 medical marijuana patients were the primary legal market pool prior to the new state law, that now has expanded to the entirety of the state’s adult population – plus tourists. That huge opportunity means there is a market for growers, but smart entrepreneurs need to do it right. Long-time growers do have the advantage of equipment and experience, but staying competitive could mean relocation after careful jurisdiction shopping. Moving has its own set of logistical and financial burdens, but if one can find another location with an ideal climate, labor pool and transport routes AND lower cannabis crop taxes, it may well be worthwhile. Working with an experienced marijuana lawyer is key to ensuring all licensing and regulatory requirements are met.

At the lower end of the tax scale is Santa Barbara County, which has a current marijuana tax rate of 4 percent. Local leadership was strategic in this, hoping to regenerate some of the farming jobs lost to free trade economics. And still, only 330 acres of the county is devoted to growing cannabis, which is but a small fraction of what the vineyards own and operate. Those same vineyards are credited with replacement of dairy cattle and beef industry that fell by the wayside in the region. The county’s Board of Supervisors said their community is embracing the reality that marijuana is already in their communities, they won’t be successful in pretending it’s not – but they hope to keep the pace of growth reasonable, while also beneficial for the local tax base. Early estimates are that expected to be somewhere between $2 million and $3 million, most of which will go to enforcement, but there will be some left over for the benefit of unrelated public services.

The Orange County CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges from Los Angeles to Santa Barbara Counties along the Central Coast. Call us at 949-375-4734.

Additional Resources:

Marijuana is emerging among California’s vineyards, offering promise and concern, Oct. 14, 2018, By Scott Wilson, The Washington Post

More Blog Entries:

California Cannabis Growers Grapple with Regulation, Oct. 8, 2018, California Marijuana Business Attorney Blog

how they can interact with the cannabis industry. Wells Fargo, however, recently took those restrictions too far when the bank closed the account of a candidate in Florida who made cannabis legalization a tenant of her campaign platform. According to New York Times, Nikki Fried is running for Florida agricultural commissioner and said expansion of the state’s current program is her highest priority.

The candidate runs her campaign finances through Wells Fargo, who questioned her support of marijuana and whether or not she also was planning to take donations from marijuana businesses to fund her campaign. When her campaign workers confirmed she would take such donations, Wells Fargo made an unprecedented move in shutting down her account. Our skilled Los Angeles marijuana business attorneys know it is true under Controlled Substances Act, 21 U.S.C. Section 812 that the consumption and sales of marijuana in any form or for any purpose is still prohibited in the eyes of the federal government. Therefore, running a marijuana business would still, on paper, be considered illicit drug trafficking. Congress has intervened with the Rohrebacher-Blumenauer Amendment, which has freed cannabis businesses to function under the supervision of individual state laws without the interference of the U.S. Department of Justice, Banks, meanwhile, still largely have their hands tied, unable to allow those businesses to knowingly house money being used to commit a federal crime due to their own federal regulations with which they must comply. While it is unclear how much the Justice Department would target banks for such activity, most have opted to play it safe.

To say the least, this has been a massive inconvenience for the cannabis industry, whose businesses are often targeted for theft because criminals know the large amounts of cash owners are often forced to keep on the premises. It is a primary reason advocates are still fighting so fervently to have marijuana rescheduled federally to end some of this unnecessary chaos. The logic in these cases is sound at least. The law is clear, and all parties involved are doing their best to comply.

In the case of Fried, though, the logic is very shaky and it sends a rather muddled message to the country. It is not illegal to lobby to change a law, which is exactly what Fried is doing through her campaign platform. In fact, since medical marijuana has already been legalized in Florida, her platform to expand the program isn’t even that new or incendiary. Wells Fargo seems to be putting Fried under a level of scrutiny that other politicians and lobbyists have not had to endure.

As for Fried accepting money from marijuana businesses, where will banks draw the line? Are landlords who rent to cannabis businesses not allowed to put money in their own bank account? What about someone who works at a dispensary? Can they not have a personal bank account? What about all the companies that sell to those in the marijuana industry all of the items needed to run a business, such as shelves, cash registers, bags, grow lights, and testing equipment? The list goes on and shows just how preposterous this decision really was. Should you find yourself the target of an unfair attack due to your participation in California’s cannabis industry, our attorneys will get to the bottom of the issue and fight for your rights.

Additional Resources:

Candidate: Wells Fargo Closed Account Over Medical Marijuana Stance, Aug. 20, 2018, By Antonio Fins, Palm Beach Post

More Blog Entries:

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

marijuana after its city council voted overwhelmingly to regulate industry operations. The council passed a series of amendments that will set guidelines for cultivators, testing labs, distributors, and dispensaries in the city, according to an article from Press-Telegram. The 7-1 vote reflected a strong support from council, with the support of the mayor as well as the residents who voted for Proposition 64 in November 2016.

City staffers estimate the move could bring in about $750,000 in taxes from recreational sales next year and a whopping $4.5 million from medical marijuana taxes. City officials also hope to stimulate the economy with a clause that requires collective-bargaining agreements with United Food and Commercial Workers 324, the union that represents cannabis workers, raising the bar on the quality of jobs provided by local establishments. Long Beach also joins other California cities in creating social equity programs, designed to lift up communities most harmed in the past by reckless marijuana law enforcement policies. Those who qualify will have certain fees waived, have their applications fast-tracked for review, get access to special workshops, and qualify for tax deferrals. Restrictions for the program include meeting certain income requirements. More specifically, a person would need to have less than $250,000 net worth and fall below 80 percent of the local median income. They also would have to have an arrest, conviction, or citation spurred by a marijuana-related offense before recreational marijuana was passed in the state. In lieu of legal troubles, a person could also qualify if they lived in a census tract of Long Beach in which more than half the population lived below 80 percent of the median income.

The city also has a network of rules they are putting in place in regards to licensing, how many dispensaries are allowed to operate, and where all operations are allowed to set up shop. This is where the help of an experienced attorney can make a big difference in how you manage your business. If you’re thinking of opening a new shop, setting up a consultation with one of our skilled Los Angeles marijuana business lawyers is the first step toward success. Our legal team knows the ins and outs of state and local laws, keeping up with changes that occur day by day, and can help you stay in compliance with those laws. This service alone takes a huge weight off your shoulders so you can focus on running your business with confidence knowing you don’t have to look over your shoulder for compliance officers. We also help you with the licensing and application processes, which you might not even realize often require more than just paperwork. Depending on the city, you likely will also have to appear before city council and planning commission for application reviews, a process which is much more relaxed with a knowledgeable attorney by your side.

Smart business owners seek out these services upfront so their operations are built on a solid foundation. Otherwise you might be seeking our help down the road to undo costly mistakes made in the beginning that can cause damage to your reputation and your business’s bottom line.

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:

City Council Moves Forward With Recreational Marijuana Sales Regulations, June 20, 2018, By Chris Haire, The Grunion

More Blog Entries:

Long Beach Moves Forward with Recreational Marijuana Business Plans, Dec. 30, 2017, Cannabis Law Group

concrete relief from the oppressive federal law that continues to bind the hands of marijuana businesses despite state legalization. The STATES Act, Strengthening the Tenth Amendment Through Entrusting States, is a more formal way of declaring that state laws regarding cannabis usurp the federal government’s Schedule I classification under Controlled Substances Act, 21 U.S.C. Section 812.

According to a report from Leafly, the bill allows representatives who refuse to step into the 21st Century to support marijuana businesses without taking a stance on marijuana at all. It turns the matter purely into a states’ rights issue, which has become the great unifier in the cannabis debate. It also removes industrial hemp from the definition of “marijuana,” freeing many industries that create products unrelated to the psychoactive properties of cannabis.The bill would help marijuana businesses owners clear a key hurdle they face daily in running a proper business: lack of banking options. As our L.A. marijuana business lawyers can explain, banks are under federal jurisdiction, and therefore must be in compliance with federal rules. By housing funds for cannabis businesses, they would knowingly be engaging in criminal activity in the eyes of the federal government, regardless of the laws within the state. The STATES bill would establish a federal law that would act as a buffer, declaring that following state guidelines in regards to marijuana would not be considered trafficking, thus freeing the banks. The importance of this step cannot be stressed enough. Not only will it make it easier for businesses to function at a base level, but it also will make operations infinitely safer. No longer will owners have to haul massive amounts of cash down long stretches of highway trying to get funds to tax offices. Retail locations as well will not have safes with troubling amounts of cash on-site. These are legitimate businesses and it is about time they be allowed to operate as such.

The bill has garnered support from banks and business owners, as well as Democrats and Republicans. It was introduced by Sen. Elizabeth Warren (D-MA) and Sen. Corey Gardner (R-CO) and received backing from at least 12 governors petitioning for the bill to advance, including California Gov. Jerry Brown. Sponsors of the bill in the House of Representatives included Rep. Rep. Dave Joyce (R-OH), Rep. Carlos Curbelo (R-FL), Rep. Ken Buck (R-CO), Rep. Jared Polis (D-CO), Rep. Barbara Lee (D-CA), and Rep. Earl Blumenauer (D-OR). Blumenauer has long been a champion of states rights for cannabis, acting as one of the sponsors of the Rohrabacher-Blumenauer Amendment (originally Rohrabacher-Farr), the amendment that has passed each spending bill since 2014. It created a patch that forbid the Justice Department from using funds to go after medical marijuana operations and users in states where it was legal. If passed, the STATES Act would go much further by putting an official law on the books, rather than something that would need to be passed again and again. It also would give blessing to the state activities, rather than the current system which continues to position the activities as criminal and simply prevents punishment of those crimes.

Navigating the tangled web of local, state, and federal cannabis laws can be a challenge for business owners. Our skilled marijuana business attorneys are well-equipped to clear those challenges and help your operations meet compliance standards so you can focus on your business and your customers.

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:

How Marijuana is Going to Become Bipartisan, June 7, 2018, By Paul Waldman, Washington Post

More Blog Entries:

Federal Budget Protects State Medical Marijuana Businesses, For Now, Feb. 14, 2018, Cannabis Law Group

Michigan, where recently an anti-marijuana action committee has flipped its stance in an attempt to try to gain control of state regulations, according to a Detroit Free Press report. The group, The Committee to Keep Pot Out of Neighborhoods and Schools, has been fighting a ballot proposal to legalize recreational marijuana in the state. However, as it is becoming more clear the initiative has growing support, the group is trying a different tactic: encouraging state legislators to fully legalize marijuana by passing an adult-use bill.

As our attorneys can explain, those opposing recreational cannabis in the state see the writing on the wall. They know if they allow the issue to appear on the November ballot, it has a strong chance of passing. However if group members can convince the Legislature to take up the initiative and amend it with strict regulations akin to the current medical marijuana guidelines, they are hoping to get a law on the books that is more restrictive than what voters might pass. One of the key differences would be how licenses are issued. Medical marijuana establishments currently obtain licenses through a board put in place by the governor, as well as House and Senate leaders. The ballot initiative would instead put licensing in the hands of the Licensing and Regulatory Affairs Department. In previous years, in order to pass a marijuana ballot initiative, advocates often had to jump through many hoops. They had to submit to studies to research the effects of marijuana on communities. They had to gather data from other states with marijuana laws. They had to make concessions, often only allowing medical marijuana, and sometimes putting deep, nearly prohibitive restrictions in place.

Now, though, cannabis advocates have a lot more leverage. More than half the states have medical marijuana laws that are helping tens of thousands of Americans with aches, pain, nausea, glaucoma, PTSD, and anxiety, among other health issues. With aging Baby Boomers looking for relief without too many side affects, cannabis has become a very appealing alternative to other medications. In addition, eight states and Washington, D.C., have legalized recreational marijuana without the apocalyptic results some naysayers predicted. In fact, local economies are benefitting from the new marketplace, and responsible users are enjoying an alternative to other traditional social lubricants, like alcohol. The proof is clear, and too many people are seeing the positive effects of cannabis to buy into the tired old propaganda anymore.

It’s no wonder, then, that we would see anti-marijuana groups desperate to keep a grasp on the legal landscape. It’s the old “If you can’t beat them, join them,” adage in some respects. Conversely, some lawmakers are in favor of the idea because they would rather not see a large turnout of people who might not align with them politically showing up at the polls during an important election cycle.

At the end of the day, all of us value safety and responsibility. It’s just more apparent to our Los Angeles marijuana business lawyers and our clients that these values are not in opposition to cannabis legalization. Our attorneys work hard to help marijuana businesses stay in compliance with state and local laws to support strong businesses and healthy and safe communities.

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:

Michigan May Legalize Recreational Marijuana Before November Ballot, April 5, 2018, By Adam Drury, High Times

More Blog Entries:

More States Look to Legalize Marijuana in 2018, Jan. 21, 2018, Cannabis Law Group

down, largely due to a scare campaign that positioned the 10 pre-designated cultivators as a monopoly. In 2016, HB-523 was signed into law by Gov. John Kasich that set up a process for medical marijuana in the state. Since then, however, the initial phase has been a lumbering one. Advocates remain optimistic, though, pushing now for a state constitutional amendment to legalize recreational marijuana.

On the medical front, Ohio’s program is under scrutiny in court, as a judge in the Franklin County Court of Common Pleas is determining whether or not to delay licensing for cultivators, and potentially the launch of the program. According to Cleveland.com, one grower applied for a license and sued the Ohio Department of Commerce after it was denied, claiming there was no appeals process as promised. Reported errors in the scoring of applicants and complaints about officials not following their own rules in the selection process have led to other lawsuits. With only 12 initial promised licenses for large-scale cultivators, the spots are highly coveted.The state is already behind its goal of having the program fully functional by Sept. 8, 2018. Officials are still moving forward, however, with the state medical board selecting the first 36 medical practitioners who will be certified to recommend cannabis to patients. Those who are chosen must complete a free two-hour course on approved medical conditions, how to treat them with cannabis, and drug interactions, the Associated Press reported. Few snags are anticipated in this part of preparations.

In spite of, or perhaps because of, the floundering medical marijuana program, talk of recreational marijuana is back in the forefront in Ohio. Ohio Attorney General certified language for a petition for a measure that would amend the state constitution to make recreational cannabis legal. This amendment does not include a limit on grow sites like the measure that failed in 2015, but it does have provisions for personal plants in private spaces and no limits on how much can be grown or purchased. On the other hand, it also gives power to landlords and employers to have a say in whether you can grow or use. Next steps include a trip to the Ohio Ballot Board, seeking almost 306,000 signatures, and finally (we hope) inclusion on a ballot for voters to decide. Deadline to be on this November’s ballot is July 4, so advocates think the 2019 ballot is a more likely goal.

It’s easy to forget looking around California how rocky the path to marijuana legalization has been in other states. We have experienced our own growing pains, for sure, but the more than 20-year gap between medical marijuana legalization and the implementation of recreational cannabis laws has given us a long time to learn and grow. We still have some mountains to climb, but with a solid foundation, the will of the people, and the experience of trusted legal counsel like our Los Angeles marijuana regulations lawyers, we can overcome obstacles that arise along the 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:

Ohio Recreational Marijuana Measure Certified by Attorney General Mike DeWine, May 10, 2018, By Jackie Borchardt, Cleveland.com

More Blog Entries:

More States Look to Legalize Marijuana in 2018, Jan. 21, 2018, By Los Angeles Marijuana Lawyers Blog

cannabis-related activity is still banned: No recreational sales, no medical sales, no commercial growing, no testing, no distribution, no manufacturing. Residents can grow indoors for personal use or if they are a caretaker, but that’s it.

Still, officials know of more than 70 unlicensed sales operations in the city. Law enforcement agencies are stretched thin, however, so they have to prioritize their time and resources.

They recently focused their efforts on one specific dispensary, according to High Times, which was reported to be selling high-potency cannabis candy wrapped in packaging that was appealing to children. Agents seized 150 pounds of the candy and more than $200,000 after a two-month investigation of the dispensary. Six dispensary operators were given misdemeanor marijuana citations.

When it comes to sales of marijuana, which is still considered an illegal Schedule I narcotic under the federal Controlled Substances Act, 21 U.S.C. Section 812, it wouldn’t seem like packaging would be the top priority for law enforcement. However, keeping cannabis out of the hands of children has been a prevalent and important theme for everyone in the legalization process. No one on either side of the issue wants to see cannabis in the hands of children. Relevant restrictions have included keeping cannabis retailers a certain distance from parks, schools, and places where children regularly frequent, as well as making sure tax money is allocated for education and prevention programs geared at students. Further, regulations dictate that “packages and labels shall not be made to be attractive to children,” according to Medicinal and Adult-Use Cannabis Regulation and Safety Act Sec. 74. This is similar to cases involving cigarettes and branding that were deemed appealing to children, such as Joe Camel on Camel Cigarettes. The intent is to reduce the allure of cannabis to children or teens, or like it might be something they would enjoy. In the case of the cannabis candy, the packaging featured cartoon characters with silly names. Unlike cigarettes, candy is something children already consume, so there’s a real risk a child might eat the candy not knowing its true contents, which is something no one wants to see happen. Further, it was determined the candy was above the legal limit of THC for edibles.

If there’s one thing our Los Angeles marijuana business lawyers want our clients to know, it’s that you must, must, MUST run your business cleanly and in compliance with all laws. We understand this can be difficult to do with city laws constantly in flux and a sometimes complex combination of state and local regulations, but naiveté is not a viable defense. We also know marijuana has a playful air to it, so silly packaging might seem harmless or in line with your brand, but that doesn’t mean it’s allowed. Our lawyers stay on top of the law as it forms, and we have extensive knowledge of regulations. We can guide you through basic business decisions so you don’t make simple, but costly, mistakes. Remember, cutting corners on compliance early on can cost you big time 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:

Fresno Police Raid Marijuana Dispensary and Seize Candy on Concern Children Might Eat It, May 2, 2018, By Lewis Griswold, The Fresno Bee

More Blog Entries:

Los Angeles Medical Cannabis Candy Makers Speaks to Parents about Concerns, Oct. 12, 2016, Marijuana Business Lawyers Blog