While COVID-19 has left the economy in a state of uncertainty, The Los Angeles Times reported the demand for cannabis actually surged in the immediate wake of state closures, with some . Gov. Gavin Newsom deemed cannabis businesses essential, and sales rose again.

Some theorize the uptick in sales has to do with people largely being stuck at home with not much else to do. Mounting anxiety likely also plays a role.

Whatever the reason, if you’re considering buying a cannabis farm, know that location is key (the last thing you want is a site that won’t be practical or productive) but there are ways you can mitigate your risk.

It’s important to discuss the specifics of your situation with a California cannabis farm lawyer. These are a few general guidelines to consider:

• Know the local rules. California gives cities and counties the authority to draw up local ordinances that are more stringent than state laws. You need to know the zoning laws of the site you’re considering because some cities and counties won’t allow you to operate within a certain distance of schools or parks. You’ll want to know if you can incorporate vertical integration, whether you have to process the plants offsite and whether you’ll need to factor logistics and transportation costs into your business model. If the community in which you’re looking to set roots has a cap on how much cannabis can be grown in a specific region, it will be important to find out how many cannabis farms there are now and roughly how many are waiting to have their application processed. Assess too how close the site is to residents and other businesses, which could increase the chances that you might face some local friction.
• Have an attorney verify all representations by the seller. Many have good intentions, but they may not understand the all the laws that apply. It’s not uncommon to come across sites that advertisements indicating the property has been approved by local and state agencies for a commercial cannabis business – when in fact, it is not. That might not be a deal-breaker, but it could cost you extra time to make the required improvements (lighting, fencing, screening, etc.) and secure permitting before you can break ground.
• Educate yourself on the water regulations. You cannot presume that that water supply regulations will be a simple matter. Access to water is mission critical to cannabis farms, but it’s too often overlooked when site scouting. You need to consider not just the local ordinance but California regulatory rules, input from hydrologists and the local politics.
• Investigate the quality of available soil. Cannabis crops are meticulously tested for pesticides and other contaminants before they can be sold. Prospective cannabis farmers must protect their investment by ensuring there are no potential contaminants in the water or soil – and no threat of them from the overs spray of nearby farms. Addressing the problem after the fact can be very expensive.

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:

Boom times for cannabis businesses as Californians, in a pandemic fog, isolate indoors, April 18, 2020, By Susanne Rust, The Los Angeles Times

The California Bureau of Cannabis Control requires not only that edible cannabis products be tested for the presence of pesticides and other contaminants, but also that their THC content be tested and accurately labeled on the project. Single-serving edibles sold in California can contain no more than 10 milligrams of THC, per the BCC. Packages can contain no more than 100 milligrams of the psychoactive ingredient.

But if your edible product contains chocolate, the labels on your marijuana products may not be accurate. Chocolates labeled as containing 10 milligrams of THC may in fact contain far more, which is a possible public health concern, as well as a liability for marijuana edible manufacturers and retailers.

The newest research on how chocolate interferes with the pot potency tests was recently presented at a conference in San Diego, representing just one of the ways in which chemistry is increasingly a factor in marijuana product manufacturing and sales.

Chemists have learned that the more chocolate is in a particular item, the less reliable the results on THC potency.

Cannabis Chemists File for Scores of Patents

Chemists are reportedly trying to determine how to glean a more accurate THC test result when chocolate is involved, as well as determine how to extend the shelf life of marijuana edibles. They also are looking at ways to make these products safer and how to retain the plants unique smell (by way of preserving the chemicals called terpenes that lend its pungent, telltale scent). Terpenes can get lost when making extracts from the plant, but many users say they want it.

Los Angeles marijuana lawyers understand some of the chemists working on these issues are taking action to legally protect their methods and other intellectual property, so they can be purchased by cannabis companies in the future. Cannabis-related invention patents are on the rise. Some industry insiders refer to some of the patented ideas more marketing than progress, but amid that, there is real advance happening on this front, with ideas that are likely to be deemed significantly valuable.

For example, some chemists are working on trying to determine how to ensure THC and CBD oils mixed into drinks and food won’t separate into layers while sitting for extended periods of time the shelf. These oils don’t just dissolve in water, which poses some issues for cannabis businesses looking to create new drinks that will sit on shelves for extended periods of time.

In a sense, chemists are working overtime because there has been so little study of the drug under the last eight decades of federal prohibition. As a Schedule I narcotic, it was considered to have no useful medicinal purpose and thus was barred from most human and animal studies.

Ultimately, more testing will lead to better standards for testing and, hopefully, better, safer marijuana products.

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 much marijuana in that pot brownie? Candy bar? Chocolate can throw off potency tests, Sept. 18, 2019, By Carla K. Johnson, Associated Press

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