This is excellent news because one of the core points of opposition to legalization of recreational marijuana sales in California was the potential for rampant youth access. This analysis shows that California cannabis companies are doing more than paying lip service to the promise of avoiding this outcome. They are – both in policy and in practice – keeping minors away.

As our Los Angeles marijuana business lawyers can explain, being lax with policies and protocol intended to block those under 21 from accessing cannabis can result in major legal headaches for pot shops. Adults over 21 can purchase, possess, and use small amounts of marijuana legally in this state. But California Health & Safety Code 11361 prohibits adults from selling, giving, or offering marijuana to a minor, inducing a minor to use marijuana, or employing a minor to transport, sell, or give away marijuana. To do so is a felony punishable by between 3-5 years in prison. The exact penalty depends on the age of the minor, the circumstances of the case, and the criminal history of the person accused.

According to the report, the researchers sought to analyze the industry’s compliance with state-level personal identification requirements in California. So they chose 50 randomly-selected retail outlets to determine if one could get in without presenting ID. But 100 percent of the time, the shop required ID be shown, and refused entry to anyone without identification showing they were older than 21.

The consistency of this compliance was something researchers noted with surprise – but it’s not all that shocking to our marijuana business lawyers, considering the penalties lawful operations face if they break the law. Retailers face being shut down completely for illegal activity if they allow access to youth. Police are allowed (and have been known to) use underage decoys to test cannabis business compliance with these rules. That’s why most often, licensed shops require identification upfront, before a person is even allowed into the main portion of the store.

For this reason, teens are unlikely to obtain marijuana directly from dispensaries. Most likely, those who are obtaining the drug are asking an adult to get it for them. These individuals should know that anyone who provides cannabis to a person underage is going to be facing 6 months in jail and a $500 fine.

The study authors say the next step in assessing youth access to cannabis under state-legal laws should involve a closer look at how often youth are able to obtain marijuana using realistic-looking, fake IDs. It should be noted, however, that youth marijuana use reportedly “decreased significantly” last year. That’s according to the annual Monitoring the Future Survey, which has been tracking adolescent drug behavior since the mid-70s. Those researchers found it wasn’t just a decrease in marijuana use, but a decline of illicit substance abuse overall. This trend of declining teen marijuana use has been ongoing for years and is true across the board – including in the 19 states and the District of Columbia, which have legalized marijuana for recreational use since 2012.

This aligns with research from the National Survey on Drug Use and Health, a federally-funded survey released late last year, which revealed youth use of cannabis dropped substantially in 2020. Another analysis released by the U.S. Department of Education showed that from 2009 to 2019, there was no statistical difference in the percentage of high-schoolers who self-reported using marijuana at some point in the previous 30 days.

If you are a marijuana shop retailer in Southern California, working with an experienced marijuana law attorney can help you identify and patch potential weaknesses in your policy and protocol, ensuring you are compliant with state laws and local ordinances.

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 is the likelihood that underage youth can obtain marijuana from licensed recreational marijuana outlets in California, a state where recreational marijuana is legal? May 2022, Journal of Safety Research

More Blog Entries:

Off-the-Clock Cannabis Use Employment Bill Nears Passage in California ,June 8, 2022, Los Angeles Marijuana Lawyer Blog

The study solicitation encouraged study applicants to have a focus on the evolution of cannabis law and policy in the U.S., as well as globally, and the impact that has on public health. In particular, it’s looking for researchers who can help analyze the quality of various regulatory schemes for cannabis product sales, with a special focus on which elements or combos are concretely shown to minimize potential harm to public health.

It’s worth pointing out that this seems to indicate the agency is no longer fighting against an end to prohibition, but rather leaning in to the general consensus that is likely inevitable at some point. The agency outright conceded that cannabis product policies and legislation in the U.S. and around the world have outpaced the public health knowledge we have on the subject.

It doesn’t help that because of marijuana’s status as a Schedule I narcotic, the process for conducting studies on it is onerous. All researchers must comply with the standard 5 milligrams of THC per unit when conducting studies on human subjects. (That rule was put in place last year.)

Shifting Legalization Stances

Legalization of marijuana has been spreading incrementally since 1996. That is, of course, when California became the first state to legalize medicinal marijuana. Now, as of this writing, 18 states allow for recreational adult-use marijuana and 36 allow for medicinal use marijuana. The 2018 Farm Bill passed by Congress legalized hemp (including hemp-derived CBD) growth and sales.

In 2021 alone, we had New York, New Jersey, Virginia, Connecticut, and New Mexico all legalize adult-use marijuana. This is while 68 percent of Americans surveyed by Gallup believe marijuana should be legal for recreational use. What’s more, 18 percent of Americans freely admit to using it – up from 10 percent in 2005. There was also the House’s passage of the Safe Banking Act (which would have given marijuana businesses easier access to banking and axed the punitive tax rules currently applied to them). Even though it didn’t pass in the Senate, its progress was noteworthy. We also saw a proposed draft of a bill that would end federal prohibition – something our Los Angeles cannabis business lawyers and others have been waiting on for decades.

Legal cannabis sales in the U.S. last year crossed the $25 billion threshold – and it’s estimated to quadruple within the next 10 years.

The NIDA study is a strong indicator of what’s to come. But businesses may see some big changes before that. Political experts opine the SAFE Banking Act has a 50-50 chance of passing this year – noteworthy because its chances before this were always an uphill battle. Comprehensive reform at the federal level is unlikely to make progress until the SAFE Banking measure passes with bipartisan support, so our Southern California cannabis legal team will be watching it closely.

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:

Top Federal Drug Agency Funds Research On Differing Legal Marijuana Regulatory Models, Feb. 21, 2022, By Kyle Jaeger, Marijuana Moment

In recent months, there have been numerous reports of technology software companies servicing the cannabis industry facing financial consequences for that partnership. Firms have been dumped by payment processors, classified as “high risk” by credit card brands and banks (requiring higher fees to handle payments), and overall faced difficulty in the course of day-to-day businesses.

As the legalized cannabis market continues to mature, we’re seeing regulatory headaches continue for ancillary businesses like tech companies, particularly when it comes to handling banking and payment processing. This is true even for companies that never touch a single marijuana plant or product. Businesses working with cannabis growers, producers, and retailers at every leg of the supply chain have found themselves suddenly grappling with growing red tape.

The irony for some of these tech companies is that a primary part of the service they provide to the cannabis industry is the ability to more easily maintain and track regulatory compliance. Some of those who are working high up the compliance chain for these firms have literally helped to write the laws for cities across California. And even they are struggling to maintain operations and meet compliance standards.

Although there are many factors involved, it primarily comes down to one issue: The lack of decriminalization at the federal level. Marijuana remains a Schedule I narcotic per the U.S. government. As long as that is true, that puts every company in the cannabis supply chain in a legal bind, particularly in terms of finances. Banks and other financial institutions that work with cannabis companies could potentially be accused of breaking federal money laundering laws.

Last month, Senators blocked marijuana banking reform that was introduced as a part of a defense bill. The bill, Secure and Fair Enforcement (SAFE) Banking Act, divided some lawmakers and advocates. Although all share the goal of ending cannabis criminalization, there is some pressure to introduce truly bipartisan legislation in a way that’s more incremental. But in the meantime, that doesn’t help companies that are facing the very real – and expensive – consequences of little-to-no progress on this front.

They’re losing their banking and branded card relationships waiting for federal legality. It’s possible that cannabis or partnering tech companies may even be skating on thin ice where fraud laws are concerned if they’re running any type of branded credit card. It’s imperative to work with an experienced marijuana business lawyer who can review all company processes to ensure you’re taking all steps to meet the letter and spirit of the law as a legal cannabis company – or a firm that partners with one.

At the end of the day, every industry has its regulatory risks. For the cannabis industry and those whose work is ancillary to it, the question is what is the nature and degree of that risk relative to the potential opportunities and anticipated ROI. One can reduce the risk to the greatest extent possible by partnering with an experienced California cannabis business lawyer.

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 Companies in California Have Lost Millions Due To Poor Regulations. California’s New Bill Could Change That, Jan. 3, 2022, Keerthi Vedantam, dot.LA

More Blog Entries:

California Cannabis Tax Compliance, Banking Continue to be Challenges in 2022, Dec. 29, 2021, Los Angeles Cannabis Business Lawyer Blog

But are sales of cannabis seeds legal? Some growers serve both the grey and legal market marijuana seeds.

As the legal cannabis market has expanded, selling cannabis seeds has become more commonplace, especially as consumers’ tastes become more refined. Still not all cannabis seed sales are lawful.

Genetic Seed Variations Can Be Protected Intellectual Property

Los Angeles marijuana lawyers recognize there is great diversity in seed genetics, and advise companies to seek counsel before arranging any kind of retail sale or transport.

Many marijuana growers pride themselves on their extensive knowledge of marijuana growth, which obviously begins with the seed. The three basic types of cannabis seeds are regular, autoflowering and female, with each containing broad subtypes, often referred to as “strains.” Many cannabis cultivators pride themselves on various elements of the strains they grow, as the effects can vary widely depending on seed properties. Certain strains are better for those seeking medicinal relief, while others are better for creating various degrees of intoxication and still others for a distinct taste. Growers are increasingly asserting intellectual property rights, something all cultivators should discuss with their cannabis business attorney.

Cannabis Seed Sales and California Law

Laws pertaining to sales of marijuana seeds or associated products vary a great deal in the U.S. and beyond, in part because there is a general lack of understanding on how they should be defined. Some consider seed sales ancillary to the cannabis market, but the reality is because these are part of the cannabis plant (or rather, its origins) these too are controlled.

Generally speaking, cannabis seeds can be lawfully purchased by adults states with legal adult recreational use (like California) either at a dispensary or online intrastate (meaning not purchased from another state – even one that has also legalized the drug). The reason for this restriction is that interstate sales fall under the purview of federal law, which still considers marijuana a dangerous narcotic.

Los Angeles marijuana dispensaries routinely sell pot seeds over-the-counter, and cost is roughly $12 for a pack of 10, though higher-end strains can run several hundred dollars. Dispensary options are limited compared to what one might find online at a California cannabis seed bank.

The California Cannabis Control Board in accordance with Prop. 64 caps the maximum number of cannabis plants that can be grown by an individual at any given time at six. That assumes you’re over 21 and aren’t doing so in a community that has a local ordinance banning or further restricting such cultivation.

Those selling cannabis seeds in California, either in-store or online, need to be certain procedures are in place to prevent sales to restricted buyers (mostly minors).

Buying, selling or transporting those seeds out-of-state though is where things can get dicey.

International Weed Seed Sales

Internationally, many countries don’t restrict or regulate cannabis seed sales, as the seeds have a myriad of benign uses. These can include production of clothing material, oils and food for animals/fishing bait.

However, other countries are much more strict about what can be imported and for what purpose. Los Angeles cannabis lawyers strongly advise anyone conducting international sales of any cannabis product to consult with an attorney. Failure to do so could affect your pocketbook (if customs in another country refuses to allow your shipment to reach its final destination). However, it can also draw the attention of U.S. law enforcement agents, with the possibility of criminal charges. The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

An Introduction to the Big Business of Cannabis Seeds, March 2, 2019, Green Entrepreneur

More Blog Entries:

What Supreme Court’s Wayfair v. North Dakota Means for CA Pot Shops, April 14, 2019, Los Angeles Cannabis Seed Lawyer Blog