marijuana business attorneys - Cannabis Law Group

One Year at California Recreational Marijuana: L.A. Cannabis Law Firm Looks Back

Cannabis Law Group — Sun, 30 Dec 2018 17:42:31 GMT

When California passed a measure permitting the sale of marijuana for recreation, there was a presumption that within short order, there would be cannabis farms cropping up all over the state, shops in almost every city and that adult consumers could score a stash with a stroll down the street or a quick dash across town. However, as our Los Angeles marijuana business owners have observed, the reality hasn’t quite measured up. In fact, while this is indeed the largest market in the U.S., it hasn’t performed at the same clip the state and business owners would have hoped.

As recently reported by The Los Angeles Times, factors at play include retail operations bridled by a host of regulations, oppressive taxes and decisions made in most cities to prohibit the retail stores. Cannabis law firms have also noted some shops have been dragged to city hall over neighbor’s complaints their presence is a nuisance. Police in several districts have expressed concern about crimes related to both the industry and illicit trade, which hasn’t completely disappeared, given the markup prices on legal marijuana.

Los Angeles marijuana attorneys see a wide range of legal cannabis challenges for the incoming governor, Gavin Newsome, who takes office in January. These include initiatives like:

Inability of California marijuana shops to access banking services.
Crippling tax burdens on pot shop retailers.
Illicit marijuana cultivation and sales, mostly stemming from high cannabis costs due to government taxation and regulation.
Problematic issues with sales of marijuana to minors.
Stifled growth of cannabis industry due to ongoing federal restriction on the drug.

One business owner likened the process of securing a license to operate a pot shop similar to “the Hunger Games,” a dystopian tale that involves fights to the death. State officials thought when Proposition 1 passed in 2016, there could be as many as 6,000 licensed cannabis shops in California by the end of 2018. Yet here we are, roughly 1,790 licensed shops in total, with the California Bureau of Cannabis Control issuing just 550 temporary and annual license a year. It is likely there are retail locations and delivery services flying under the radar.

Our Los Angeles marijuana lawyers know a fair number of clients who have expressed frustration at the lack of a crack down on these operations that siphon business by offering a cheaper product. Products sold on the street aren’t guaranteed safe, but they also don’t have to undergo the $500- to $1,000-a-batch testing that licensed shops do (another factor that drives up the price for legitimate shops). Unlicensed dealers can face some serious consequences, especially if they’re selling products to minors or anywhere practically within earshot of a school or daycare. Officials with the CBCC as well as local police say they have been working to address this, but more allocation of resources is necessary.

In total, state officials estimate they’ll receive roughly $471 million in revenue from cannabis shops in 2018, which isn’t chump change, but does fall short of the $630,000 the governor had promised in his budget prior to approval. State officials say that while they are willing and ready to process additional licenses, the reason they haven’t is because the system as established is predicated on the notion of dual licensing and local control.

What many local city councils don’t seem to understand is that they are not eliminating the sale of marijuana by barring cannabis shops from doing business there. They are already there. Our Los Angeles marijuana lawyers and others will continue to push back on and advocate for reversing these bans. The more places that can operate above board, the less people will turn to the black market.

We’re optimistic there will be positive headway made for legal marijuana businesses, and we’ll keep fighting right alongside you.

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

Additional Resources:

One year of legal pot sales and California doesn’t have the bustling industry it expected. Here’s why, Dec. 27, 2018, By Patrick McGreevy, The Los Angeles Times

More Blog Entries:

Why Small Marijuana Businesses Need a California Cannabis Attorney, Dec. 22, 2018, Los Angeles Marijuana Lawyer Blog

Los Angeles Logjam in Marijuana Business Licensing and Lawsuits

Cannabis Law Group — Sat, 10 Nov 2018 18:38:14 GMT

While the California marijuana market has scored some major wins in recent years, most notably with recreational legalization in 2016, there have been a number of significant growing pains along the way. A couple of the more significant issues our Los Angeles marijuana business attorneys see facing clients is problems with legal permitting for pot shops in L.A. and litigation over intellectual property, such as trademarks and propriety business information.

Poised to be the largest marijuana market in the world, the way in which Los Angeles tackles these issues is likely to be closely watched and highly influential (for better or worse). But, unfortunately, many hundreds of marijuana entrepreneurs have been left cooling their heels as the city works through the regulatory rollout of its commercial cannabis oversight.

Marijuana Business Licensing Headaches

Unfortunately, there is no guarantee that’s going to pay off because the significant snag is licensing. City officials gave the green light to nearly 170 marijuana retailers. Meanwhile, among farmers, producers/ edibles manufacturers, distributors, quality control test labs and others, the number of combined permits the city has issued is: Zero. Zip. None.

Data from the city’s Department of Cannabis Regulation revealed some 600 applications for business permits for round 2 of licensing, which was open for a window of just one month, closing in mid-September. That licensing included L.A. marijuana businesses qualifying under the city’s social equity program (intended to even the playing field among minorities and others disproportionately impacted by the decades-long failed War on Drugs). Of those 600, some 330 have paid their application fees and are currently being processed, while 11 testing labs were allowed “temporary approval.”

But as of this writing, the city has yet to issue any Phase 2 licenses. Here’s why our L.A. marijuana business attorneys know this is such a big problem:

Temporary marijuana licenses from California aren’t going to be given out to any new applicants until after the start of next year. Three different state agents are telling marijuana business hopefuls they might not be able to get a temporary license if they turn in their application after the first of December. They are warning about this because it’s very likely the state won’t have the time to process temporary licenses prior to the end-of-2018 deadline. You NEED to have local authorization if you have any hope of getting a state marijuana business license, which means any of those hoping for an L.A. marijuana business license who don’t have a permit to open before next year are going to apply for a full annual state permit rather than a temporary license from California. Some have compared the difference in these terms:

Temp license = ringing up a fast food order;
Annual license = applying for college (including the financial aid).

Plus, the city is still planning on Round 3 of licensing afterward for those who still lack a permit and aren’t qualified for the social equity type of licensing, although there is no clear indication of when that might start. What we can say with a fair amount of certainty is that landing one of those licenses is unlikely to be a breeze.

Marijuana Business Litigation Woes

In the meantime, California marijuana companies are warring with each other too. As the industry gets bigger and companies are becoming more competitive, there have been a spate of civil lawsuits centering on intellectual property and trademark law, with companies competing over brand names for edibles and other products. Our marijuana attorneys in L.A. think we’ll likely be seeing a fair amount more of these as time wears on. Bottom line: If you’re intent on launching a marijuana business in this region, you need a lawyer to help you steer your course.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734. Additional Resources: California Department of Public Health: Sunset of Temporary Licenses, Oct. 31, 2018, California Department of Public Health

More Blog Entries: California Cannabis Intellectual Property Licensing Just Got More Complicated, Oct. 31, 2018, Los Angeles Marijuana Business Lawyer Blog

Northern California County Rolls Back Marijuana Legalization

Cannabis Law Group — Mon, 29 Jan 2018 17:17:21 GMT

As of January 1, California rolled out Proposition 64, The Adult Use of Marijuana Act, making recreational marijuana legal in the state. However, the

new law did not automatically make cannabis legal everywhere in California. It is still up to local governments to regulate, restrict, and ban as they see fit or to open the floor to residential votes. Therefore, many Californians have been disappointed to discover their local laws are prohibitive to using, growing, or distributing marijuana.

Even more disappointing, though, is when the law changes in a region that initially legalized marijuana, especially for citizens who have already made significant investments in the cannabis industry.

This is the case in Calaveras County in Northern California, where the board of supervisors voted 3-2 to ban commercial marijuana. The board included four newly elected members who campaigned last year on promises of banning marijuana, according to an article from Associated Press. The decision will have broad-sweeping effects on some 200 cannabis farms that will now have only three months to shut down operations. The growers in Calaveras with permits have already announced an intent to sue the county. Aside from the substantial time and resources used to set up a growing operation, the farms had to each pay a permit cost of $5,000. On top of that, the county has collected a staggering amount of tax revenue from the farms since 2016, totaling more than $7 million to date.

This tax revenue was initially what prompted the county to open the doors to marijuana operations in the first place. The region endured a very harsh wildfire in 2015, which ruined hundreds of homes and businesses. The new income from cannabis was a much needed relief for the devastated county and its 44,000 residents.

It might be alarming to see a region profit so greatly from an industry, then just as quickly dismiss it without concern for the ramifications on those business owners. However, our Orange County marijuana legalization attorneys know these stories are all too common amid the growing pains of a continually evolving cannabis industry. That’s why our experienced lawyers are prepared to help marijuana business owners along every step of the way: from setting up collectives, to advising owners how to adjust to the changing legal landscape, and preparing for a lawsuit should such a need arise. Our team is prepared to fight when your business is being taken advantage of.

While some of the marijuana farming taxes was used for additional police and other staff members, the county was not prepared to fully manage the effects of legalization. According to the Associated Press report, Calaveras County is about the size of Rhode Island. It is estimated that on top of the 200 farms with permits, there are more than 1,000 illegal operations. Hundreds more were awaiting a response to permit applications. Obviously such a dramatic infiltration of cannabis farms into the region was alarming to residents, particularly when the vast majority were operating illegally. But the county’s inability to manage illegal operations does not warrant punishing the businesses that have been operating legally since the beginning, particularly when their hard work has so greatly benefited the region.

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:

Once Pot-Friendly Calaveras County Bans Marijuana, Jan. 17, 2018, By Paul Elias, Associated Press

More Blog Entries:

Orange County Moves Toward Banning Sale of Marijuana, Nov. 16, 2017, Orange County Marijuana Attorneys Blog

California Now Accepting Recreational Marijuana Business License Applications

Cannabis Law Group — Tue, 12 Dec 2017 13:12:27 GMT

Last week, the state of California started accepting applications from marijuana businesses and start-ups seeking to operate within the state’s legalized marijuana industry in 2018. This is a major milestone from this burgeoning market, and it’s being furthered by a new online system that will allow retailers, distributors and product testing services to obtain the licensing necessary to engage in business under newly unveiled state regulations.

Sales of recreational marijuana in California will begin Jan. 2nd. Although our state was the first to approve of medical marijuana with Proposition 215 in 1996, we have lagged when it comes to implementing recreational marijuana sales. Still, as the largest state to enact such a law, many other states following suit will be watching carefully. The state’s Bureau of Cannabis Control (the Bureau of Medical Cannabis Regulation prior to the passage of Proposition 64) announced that with applications beginning to be submitted, we’re one step closer to the issuance of the first commercial cannabis business approvals.

The launch of the online system appeared to be going well, with officials saying visitors were mostly just exploring the site as opposed to actually sending in full applications. Some got started on an application, submitting certain bits of information, and then saved it to finish later. Temporary licenses, which are effective for four months, won’t be effective until the beginning of the year, and businesses must first obtain a local permit before they can successfully apply for a state-issued license. These temporary licenses cost $1,000 per application fee. A background check requirement is to be waived.

Those who wish to cultivate marijuana need to apply for a license via the California Department of Food and Agriculture. That application process is slated to begin by the end of this month. Businesses looking to cash in on the manufacturing of marijuana products will need to apply for their licenses through the California Department of Health, which will launch the application process next month.

Our marijuana business lawyers in Los Angeles advise the best course of action is to consult with The Cannabis Law Group about how to best go about the process. As marijuana attorneys with many years of experience, we have been on the forefront of the state’s ever-evolving marijuana statutes and regulations. Our in-depth knowledge of these systems and city-by-city ordinances and operations gives our clients a unique advantage as they navigate this new process.

Although these are all exciting developments in the California marijuana industry, it is expected there may be some snags. Some economists are predicting record-breaking prices (thanks to heavy taxation of the product), shortages of product, difficulties with the supply chain and a host of other issues that may crop up as the boundaries of new regulations are tested. It’s unclear whether the pricing issue – by some estimates 40 percent to 60 percent higher costs for the plant – could mean a resurgence of black market pot.

Although previous barriers to industry entry were relatively low (most needed only to form a collective), now a state license is a requirement. Every person/ business in the supply chain has to be licensed, and the high cost of doing so may impose hardships that smaller cannabis businesses in California may find crippling. Having an attorney who can help point you away from the pitfalls and help you determine the best way to save costs and ensure you don’t make an expensive mistake.

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

Additional Resources:

California opens online system to license new pot industry, Dec. 8, 2017, Associated Press

More Blog Entries:

Expanding Cannabis Business Zones Means More City Regulations to Consider, Nov. 28, 2017, L.A. Marijuana Business Lawyer Blog

From Ghost Town to Green Town: Marijuana Business Buys Community for Cannabis Tourism

Cannabis Law Group — Wed, 23 Aug 2017 13:46:27 GMT

The town of Nipton, California is a small, unincorporated community in San Bernardino County bordering the Mojave National Preserve. An old cattle-loading and mining town, its population today fluctuates somewhere between 6 and 30. About three decades ago, a gold miner from Malibu purchased the ghost town. As The New York Times reported, the goal was to a community that could run on clean energy entirely of its own making. It was this foundation that recently attracted the business eye of a cannabis technology firm, which purchased the town for $5 million.

Now, owners of American Green Inc. say the goal is to turn the 80-acre community into an eco-tourism destination for conscious cannabis consumers. The fact that the city runs totally on a self-sufficient, off-the-grid energy system from a solar farm is likely to be attractive to many marijuana enthusiasts across the country. Already existing in the town is old western hotel, an RV park, a coffee shop and a handful of homes. American Green plans to expand the farm to manufacture and sell marijuana-infused water from the town’s aquifer. The company is also in talks with others in the marijuana industry business, in hopes of interesting them to relocate and bring more jobs to the tiny town.

As for whether it will be renamed, that’s not yet clear.

Such an undertaking is ambitious, to be sure. Since the passage of Proposition 64 last year, our Orange County marijuana lawyers have witnessed an influx of “ganjapreneurs” – entrepreneurs interested in getting in early to what is expected to be an explosive industry. While there is certainly money to be made on these ventures, it’s important that investors and business owners not get too far ahead of themselves. Consultation with an attorney experienced in marijuana business planning is essential – whether you’re buying an entire town or just a corner shop. There are still many legal pitfalls into which business owners could become ensnared.

Some of the common issues that must be addressed:

The federal government. Marijuana remains illegal under the Controlled Substances Act. Although the Obama administration eased its enforcement of these policies in states where the drug is illegal, the Trump administration – and U.S. Attorney General Jeff Sessions in particular – are planning to take a harder line. That could spell trouble for business owners – even those who operate within the confines of state law.

Banking. Although an increasing number of banks are willing to work with marijuana businesses, the potential threat of federal money laundering charges still looms. While there are some banking opportunities, less than 3 percent of the nation’s banks or credit unions serve cannabis clientele. Marijuana businesses that do establish a good banking relationship must have impeccable records and ensure their operations are totally in compliance with state laws and guidelines as laid forth by the Financial Crimes Enforcement Network.

Branding. This consideration is important for business, but also for legal purposes. You need to be extremely careful about how you brand and what you advertise. Failure to do so could result in unwanted attention from authorities.

If you are considering starting a marijuana business, our cannabis lawyers, with decades of experience, can help.

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

Additional Resources:

Marijuana company plans to turn town of Nipton, California into pot paradise, Aug. 4, 2017, Associated Press

More Blog Entries:

Influx of Indoor Marijuana Grows Increases California’s Power Needs, Aug. 10, 2017, California Marijuana Lawyer Blog