Selling cultivation land, storage or processing facilities, even retail storefronts, to marijuana-focused real estate investment trusts (REITs) is providing many business owners with cash upfront. Those cannabis companies then sign long-term leases with their new landlords. And by doing so, business owners become tenants withing the properties that once belonged to them.

In recent months, a slew of cannabis companies have taken advantage of sale-leaseback deals, including: Cresco Labs, Columbia Care, Green Thumb Industries, Acreage Holdings, and Grassroots Cannabis, to name a few. Together, sales from these multi-state companies brought in well over $200 million when selling properties then leasing those back from the new owners.

If you are considering a lease-buyback deal to help inject your cannabis company with some cash, our Orange County marijuana business attorneys are here to help.

Cannabis Investment Tightens Up As many cannabis business owners know all too well, banks are unwilling to lend to marijuana-based businesses, so cannabis venture capital from wealthy individuals, venture funding and family offices, have long been the most solid bets for capital. Only now those sources are fast drying up too.

Mike Regan, equity analyst at Marijuana Business Daily, explained, “Both private and public equity funding has become scarce as the publicly traded stocks dropped about 50 percent in the second half of 2019.”

That positions real estate buy-back deals as strong options, and much needed finance alternates, for business owners right throughout the cannabis industry.

Californian Company Leading the Pack Californian-based companies like Innovative Industrial Properties (IIP), have started gaining momentum and are now becoming big players in the cannabis real-estate game. IPP is easily the largest marijuana-focused REIT, and has been for some time, starting back with it became the first cannabis-focused company to trade on the New York Stock Exchange in 2016.

By January of this year, IIP’s portfolio encompassed 46 cannabis properties across California, New York, Illinois, Michigan, Florida, Minnesota, Pennsylvania, Nevada, Arizona, Ohio, Colorado, and Maryland. Combined, the footprint of their facilities reaches in excess of 3.1 million square feet. For context, that is approximately the same size as your local Walmart Supercenter, seventeen times over.

Old School Finance Tool Sale-leaseback arrangements are not uncommon outside of the cannabis industry. This same tactic is widely used by companies selling and then leasing back office buildings, warehouses, shopping centers, apartments, hospitals and casinos.

As the federal government continues to view cannabis as a Schedule 1 drug, which has limited funding pools available to business owners right across the industry, sale-leaseback deals have emerged as very attractive finance options.

Due Diligence Before proceeding with a sale-leaseback deal, businesses should consider the following:

• Only a small group of real estate investment trusts (REITs) specialize in cannabis sale-leaseback deals.
• Be sure to understand the terms of changing a deal, as well as the financial viability of your investor (usually a REIT).
• Plan how to invest funds generated by a sale to help you expand your business.
• Always avoid growing emotionally attached to any piece of real estate, especially in business. Instead, remember real estate is an asset that can be liquidated if necessary.

Implications The illegality of cannabis at a federal level certainly does not help the funding woes rippling throughout the marijuana industry. But improvising can help companies to grown and thrive in constraining times. Even as sources of capital typically available to cannabis-based businesses begin to dry up, sale-leaseback deals remain strong sources of alternative funding worth considering.

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 Sources: Schedule 1 – Drug Enforcement Administration

To add to the conundrum, president of the LA City Council has requested a do-over on issuing all new cannabis store licenses. This is likely to slow the city’s aim of getting more businesses operating legally, down even more so.

If you need help with business licensing and permits for your cannabis business, our LA cannabis business lawyers are here for you.

Red Tape Clogging the Way Industry insiders believe the very bureaucracy associated with applying for, and then receiving, an approved cannabis business license may allow for as few as 15 or so new marijuana stores to open in Los Angeles, by the beginning of 2020. They also estimate that only up to 300 stores total will be legally operational by the beginning of 2021.

Comparatively, a city like Denver, population 620,000, already boasts 518 legitimate cannabis stores, despite the fact that it serves a considerably smaller consumer set.

A Call to Re-Do Cannabis Licensing A letter sent from Herb Wesson, City Council President, to the Department of Cannabis Regulation (DCR), called for an audit and a do-over of its “Phase 3 Retail Round 1 Social Equality Program” licensing.

In that letter, Wesson claimed the license application and review process was unfair. He charged that some applicants were able to access an online application form earlier than others, giving a selection of hopeful applicants an upper hand in compiling the necessary licensing requirements, ahead of others. This DCR denied this claim in a report it recently submitted to the City Council.

A representative for the DCR has said The Department is committed to establishing a process that is as fair and as transparent as possible.

“We’ll be meeting with the Council President’s Office soon to discuss their recommendations,” the spokesperson added.

While other Californian cities have issued complete annual licenses to compliant cannabis stores, Los Angeles officials are yet to do so. Instead, legal marijuana stores in Los Angeles trade under temporary licenses, which may eventually be upgraded to annual licenses, but will first require a significant upgrade in paperwork.

Los Angeles Playing Regulatory Catch-Up Ever since the passing of Proposition 215 back in 1996, Los Angeles officials have struggled to establish regulations that work.

After a long list of incidents, the most recent examples include the January 1, 2108 statewide kick off of licensed adult-use cannabis sales, everywhere but Los Angeles. The DCR was left dreadfully underprepared, allocating just three staff members to handle the rollout, while most other Golden state cities managed to staff their regulatory agencies accordingly.

Then with the official expiry of the “medical cannabis collective” defense on January 1, 2019, the legal sale of marijuana at traditional collectives was no more. But hundreds, maybe even thousands of dispensaries, still exist in LA.

And on September 3 of this year, when the application doors opened at 10 a.m., in excess of 800 applicants vied for 100 applications in a three minute period, all because the City process was set up to review applications for new cannabis business licenses on a first-come, first-served basis. It is anticipated that those unsuccessful will sue for some kind of disadvantage. Legal Implications At this time, it remains unclear whether the Wesson’s request to re-do store licensing will eventuate. Something else that could certainly help the current state of LA’s cannabis industry, would involve increasing the legal marijuana store cap from 500 to around 2,000, to better serve the population. In each case, the City Council would need to vote to bring about any change. About Cannabis Law Group The Los Angeles CANNABIS LAW Group represents growers dispensaries, ancillary companies, patients and those facing criminal marijuana charges. Call us at 949-375-4734. Additional Resources: California Proposition 215 – The Medical Marijuana Initiative 1996 City of Los Angeles Department of Cannabis Regulation

• Breach of Contract;
• Fraud;
• Breach of Fiduciary Duty;
• Conspiracy to Commit Breach of Fiduciary Duty
• Dissolution of Partnership and Corporations;
• Turnover of Corporate Books and Records; and
• Injunctive Relief.

If you need counsel settling cannabis related business disputes, our Los Angeles marijuana business lawyers can help.

Trouble for Taft This particular suit against Taft, Burtin and Holocomb, was filed by two investment companies in the Orange County Superior Court of California. Among other claims, it alleges that Taft ran an unlicensed cannabis outfit in Sonoma County.

The lawsuit further paints a dismal portrait of the defendants, claiming they committed frequent and ongoing “dishonest, corrupt and fraudulent activity.” It also calls Taft a “mercurial and volatile leader,” known for bragging to employees about his big ideas. It calls into question Taft’s ability to lead, while outlining a number of his deliberate fraudulent schemes, and even notes Taft’s invitations to employees to smoke weed with him during business hours.

Smoking Pot on the Job According to the National Safety Council, “workers with substance use disorders miss almost 50 percent more work days than their peers – up to six weeks each year,” and not surprisingly, “absenteeism leads to losses in productivity.” The Council outlines a number of ways in which employers can help to ease this situation, like enacting strong company drug policies, or treating substance abuse as a disease. Smoking pot with employees during work hours is noticeably absent from this list.

This lawsuit also states that 420 Companies entered into a “death spiral” under Taft’s direction, losing revenue and clients at a staggering rate.

Keeping Investors in the Dark Further allegations within the suit claim the defendants failed to seek input from company investors before rejecting a $75 million buyout offer from Acreage Holdings, another operator within the cannabis industry, conducting activity across a number of states. The complaint notes that the defendants believed the company to be worth much more than the offer on the table, so they turned it down.

Having tired of these kinds of claimed business circumstances, the plaintiffs now seek:

• A minimum of $11 million in damages;
• Dissolution of 420 Companies;
• A preliminary injunction against the defendants; and
• A court appointed receiver to oversee management of 420 Companies.

Implications The success of a company often reflects the actions of its leaders, and if the charges outlined in this complaint are found to be correct, it is not surprising that investors are seeking damages and the dissolution of partnerships. One point that is intriguing, is the willingness of a company leader (Taft) to partake in drug use with employees whilst on the clock. Not only does this kind of behavior send an inconsistent message to employees on what is expected of them (i.e. to remain sober and able to operate on full cylinders at all times) but it also calls into question whether or not Taft has his own drug use under control. And if not, is that good for business? At the end of the day, whether one is working in an industry that revolves around drugs or not, employees should be expected to conduct themselves professionally during working hours, and those in leadership positions must lead by example. About Cannabis Law Group The Los Angeles CANNABIS LAW Group represents growers dispensaries, ancillary companies, patients and those facing criminal marijuana charges. Call us at 949-375-4734. Additional Resources: National Safety Council – Drugs at Work

To start, the idea of tracking marijuana traveling throughout the supply chain sounds simple enough. In theory, all cannabis products would be given unique identification numbers, noting from which ‘batch’ or ‘lot’ they were born. Products would then be sent to labs for testing. Next, approved products would be passed from producer to distributor, and finally to retailers for sale. At each step, the state should be able to track each piece of marijuana as it moves through the chain, making sure nothing is being redirected out of state, and ensuring everybody is paying their required taxes.

But in practice, a few hiccups quickly come to light. First up, only businesses holding ‘provisional’ or ‘annual’ licenses are required to subscribe to the track-and-trace system. And until last month, there were more than 600 marijuana businesses operating on ‘temporary licenses,’ who would not have had to track-and-trace. This means, there was no way regulators could comprehensively account for every legal product moving about the state.

While those 600 temporary cannabis business licenses all expired at the end of July, and many of those cannabis business owners await approvals on provisional or annual license applications (another story in and of itself), Lori Ajax, State Bureau of Cannabis Control (BCC) chief, recently said it’s a priority of the bureau to get all temporary licenses transitioned onto either provisional or annual licenses, as quickly as possible, so those businesses won’t have to halt their operations.

It’s true that when the provisional or annual licenses are approved, those marijuana business owners are immediately required to begin tracking-and-tracing. And as the CCTT is quite complicated, many companies already required to track-and-trace are hiring full-time employees to traverse the system.

Tagging Products Has Proven a Challenge One common complaint from marijuana retailers holding provisional or annual licenses, is that they must apply unique identification tags to all products. And because until very recently, many holders of temporary licenses weren’t held to those same standards, products would reach stores without said tags, leaving retailers having to sticker and tag products, at their own extra labor costs.

But the problem doesn’t stop there. Now with 600 odd businesses in line waiting for the state to approve their new license applications, and often a need to continue earning a living in the meantime, many are generating lots of paperwork for companies adhering to CCTT requirements while trading with businesses not yet in the system.

On the use of CCTT throughout the marketplace, Josh Drayton, communications director for the California Cannabis Industry Association (CCIA) says it’s a patchwork at present. “We’re not seeing it work it’s way all the way through the supply chain, which ultimately means it’s kind of a broken system at the moment,” he said.

Software Compatibility Also a Hurdle Another shared grievance is that CCTT is not properly set up to work smoothly with a common point-of-sale software system used by retailers. CCTT also does not account for businesses like growers or manufacturers awaiting provisional or annual licenses, who may have missing data. As a result, some retailers using that software are forced to simply ‘create’ information in order to move through to the next step within the CCTT platform.

So Was Track-and-Trace Just a Sweetener? One of the promises California’s 2016 Proposition 64 made, was that the state would always be able to locate every piece of marijuana sold, all the way ‘from seed to sale.’ Creating a tracking system then, was always going to be necessary to meet this promise.

Helping to prevent cannabis flowing out onto the black market was another reason. But so far, activity on the illicit market has shown little signs of slowing. One analyst estimates the underground cannabis market in California totals $3.7 billion per year, which outdoes the legal market fourfold.

Some believe the track-and-trace system was only offered up as a way of getting legalized marijuana over the line.

The Burden of Compliance Others believe that requiring compliance with an inventory control system places a needless burden on legal cannabis businesses committed to operating within the law. Amid the many opinions on the matter, one thing is certain, a slow transition to the new system has brought with it a whole lot of new red tape. And manufacturers and vendors may just have to prepare for further hiccups and delays as the industry presses ahead.

Legal Implications Thus Far Thankfully, marijuana businesses still getting up to speed with CCTT have been afforded some leeway. The BCC seems to understand this is a process, and hasn’t made an example of anyone as yet. But there are no assurances from the authorities that this is in fact the case. Most affected by this issue are businesses either moving to, or waiting on their, provisional and annual licenses following the expiration of their initial temporary licenses, as well as any new cannabis business operators coming into the fold. As a result, all industry stakeholders will watch carefully to see just how effective the CCTT system can be as it becomes more widely embraced in the coming months.

Need Legal Help Tracking and Tracing For Your Marijuana Business? Our California marijuana lawyers can help answer any questions you may have.

The Los Angeles CANNABIS LAW Group represents growers dispensaries, ancillary companies, patients and those facing criminal marijuana charges. Call us at 949-375-4734. Additional Resources: California’s Cannabis Track and Trace (CCTT) System Proposition 64

For context, in 2018 local law enforcement worked in conjunction with the state Bureau of Cannabis Control, and together they served six unlicensed cannabis businesses with search warrants. These raids resulted in the seizure of more than 1,500 pounds of marijuana, said to carry a street value of $13.5 million.

Comparatively, according to data release in July, within the first half of 2019 alone, the bureau had already served 19 search warrants to unlicensed sellers. Those raids were successful, and saw more than $16.5 million worth, or about 2,500 pounds of illicit marijuana, confiscated. Just shy of $220,000 cash was also seized from cannabis businesses operating illegally during this time.

Proposition 64, which came into effect in November 2016 and permits adult possession (up to an ounce) of marijuana for personal use, was intended to curb the illegal pot market. But so far, this has not been the case. Research firm New Frontier Data estimated the marijuana black market in California was worth $3.7 billion last year alone, which was four times higher than the lawful market.

To help tackle the issue of illegal pot retailers, Governor Gavin Newsom recently threw extra support behind current law enforcement crackdowns. In July, the Governor approved $30,000-a-day fines for cannabis growers, sellers and distributors, who operate throughout California without a license.

Despite this emphatic deterrent, Lindsay Robinson, the California Cannabis Industry Association executive director, says unlicensed retailers, who number in the thousands, continue to operate illegally throughout the state, and many even feel comfortable enough to advertise their businesses.

State officials have conceded they’ve run into problems while working to issue new licenses in the cannabis market. Obstacles such as cities refusing to permit marijuana sales, as well as local and state taxes raising the price of legal marijuana by approximately 45%, have both contributed to an unexpected thwarting of the legal market.

Another challenge for the bureau appears to be staffing. The state’s Department of Finance recently conducted a recent audit which found, the bureau is not properly resourced to handle all the activity it endeavors to fulfill. California has had a year to establish a new bureau that drafts regulations and procedures relating to the legal cannabis market. But auditors reported that only 15 of the Enforcement Unit’s 68 authorized positions had been filled.

Given the Enforcement Unit’s current staffing configuration, “the Bureau’s ability to process complaints, perform inspections and investigations, and review and inspect testing laboratories is severely impacted,” the audit said.

Trade groups in particular have voiced their disappointment, following the unveiling of the new state budget recently signed by Newsom. As it stands, the budget fails to include an industry proposal suggesting an addition of $10 million. That allocation would fund a clamp down on retailers operating without a license, and assign sworn peace officers to follow up by enforcing the law.

Legal Implications Thus Far It remains to be seen whether continued crack down efforts by law enforcement will ultimately deter illegal marijuana businesses. Industry stakeholders will be pulling for law abiding cannabis outfits to benefit from running above board businesses, by way of increased market share.

Need Legal Help Obtaining or Renewing a Commercial Cannabis Business License? Our Los Angeles cannabis business licensing lawyers can help answer any questions you may have.

The Los Angeles CANNABIS LAW Group represents growers dispensaries, ancillary companies, patients and those facing criminal marijuana charges. Call us at 949-375-4734. Additional Resources: Proposition 64 California Bureau of Cannabis Control California Cannabis Industry Association

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

California cannabis users while stirring up the same old fear-based tropes from the anti-marijuana camp. The California Bureau of Cannabis Control is reviewing a set of proposed regulations that would allow licensed marijuana businesses to deliver cannabis products to any California private address, according to a report from Associated Press. The new regulation would cover even cities and local jurisdictions where sales have been banned.

According to the proposed amendment, CA Code of Regulations, Title 16, Div. 42, Ch. 3, Sec. 5146 (d), “A delivery employee may deliver to any jurisdiction within the State of California.” This is a slightly more clear direction than previous verbiage which stated that deliveries could be made using any public roads, which could be (and was) interpreted to mean that drivers could pass through, but not necessarily stop and make a delivery in a jurisdiction in which a sales ban was in place.It’s clear to our legal team that this proposal is an effective way to bridge the deep divide between Californians who support cannabis and their inadequate access to medical and recreational products. Residents 21 and older in all jurisdictions have been permitted to consume cannabis in a private residence since the implementation of Proposition 64 earlier this year. Deliveries simply give all Californians, even those in cities with sales bans, an option. Instead of picking up marijuana at a dispensary and driving it back to their home, someone else would do the transporting. It seems rather simple, and yet some local officials and law enforcement are portraying this as complete meltdown of law and order.

Based on the ridiculous theatrics of critics in regards to this proposal, it is obvious their local bans never had anything to do with the alleged negative effects of allowing marijuana retailers and cultivators to locate in their city. It was their way of making it as difficult as possible for law-abiding citizens to have access to products that, when consumed properly, are perfectly safe for both medical and recreational use.

There’s a reason California did not allow cities to ban personal use or growing a limited number of plants in their private residences. The state, and the citizens who voted in favor of Proposition 64, believe consuming cannabis should not be a crime. It seemed right, though, for local governments to have autonomy in how to regulate businesses in their own city limits. They have abused this freedom, though, to the point that about 40 percent of Californians have an hour or more drive to even find a legal dispensary. Cities know this ludicrous burden could be lifted by allowing businesses licensed by the state to deliver to homes. The fact is, though, for many cities, the burden is intended to be a makeshift prohibition on the drug entirely.

Our Orange County marijuana delivery business attorneys know even living in a state with some of the best cannabis laws in the country does not make us immune from attacks on the industry. Some will do anything to undermine what liberties have been achieved. Our experienced lawyers are here to help delivery companies and other marijuana businesses navigate the gray areas of the law and help protect you from unnecessary attacks.

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:

Santa Clarita Marijuana Delivery Services In ‘Legal Limbo’ As California Regulates Weed, By Devon Miller, Sept. 6, 2018, KHTS Santa Clarita

More Blog Entries:

New Regulations Require Cannabis Delivery Services to Rethink Their Business Models, Oct. 9, 2017, Cannabis Law Group

going to Canopy Growth. Canopy Growth, a Canadian company, was already considered one of the giants of the cannabis industry, and this investment will only further their global footprint, according to a report from Esquire. Meanwhile, Constellation is diversifying its portfolio, which currently consists of major alcohol brands, such as Modelo and Corona.

The relationship between Constellation and Canopy Growth is not a new one. Last year, Constellation made an investment in the company of $191 million to develop a drink infused with cannabis. Now, with Canada passing full legalization of marijuana, Constellation executives are getting on board one of most anticipated industries in the world in a more substantial way; they now hold a 38 percent stake in Canopy Growth. The most recent investment won’t just go to beverage research, but also into edibles, new medical marijuana advancements, and worldwide growth.Canada’s nationwide legalization of marijuana will be effective starting in October, but Canopy Growth has its eye on a much bigger prize. According to company representatives, there are about 30 countries they have identified as being on the verge of legalizing medical marijuana federally. They will be focusing a portion of the new investment specifically on these regions in anticipation for the wave of change that is certain to take over the globe, hoping to already be established in these locations when the countries flip. It begs the question of which came first, the investments or the move to legalize cannabis. Our marijuana attorneys in Orange County recognize that such investments are made possible by countries loosening their cannabis laws. We also know large-scale investments like this legitimize the marijuana industry, which helps to grease the wheels among government representatives who are considering marijuana legalization.

This could also mean good news for smaller marijuana businesses. After all, a great deal of trouble has come from Controlled Substances Act, 21 U.S.C. Section 812 and its Schedule I classification of cannabis. Corporations have traditionally used their impressive resources to sway people of power. If money can be made from marijuana, you can bet many businesses will be using their influence to remove the federal ban. Not only would this help the big businesses lobbying for change, but also the smaller operations who have been struggling under prohibition for too long, unable to use banks or buy insurance or export product to other states.

Some fear the day when the industry is overrun by major corporations. We’d all love a $4 billion investment, but the fact is most business owners in the marijuana economy are part of grassroots operations. Big corporations are able to dip into vast resources to establish new businesses and pay for massive fees and taxes associated with the cannabis industry. This has given those businesses an advantage so far in snapping up licenses and carrying the expensive burden of state and local regulations. As our attorneys know from experience, though, it’s not necessarily about bigger business — it’s about smarter business. Do you have questions about how your cannabis business can thrive in an ever-changing and expanding marketplace? Give our skilled lawyers a call to set up your free consultation today.

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:

Cannabis Producer Gets $4 Billion Investment From Beer Company, Aug. 16, 2018, By Vanessa Romo, NPR

More Blog Entries:

Recreational Marijuana Creates New Opportunities for Business Partnerships, Sept. 23, 2017, Cannabis Law Group

advantageous. Politicians across the country at all levels are stepping forward with pro-marijuana campaign platforms, and it’s paying off. Even here in California, where both medical and recreational marijuana are legal, it is clear voters want candidates who will continue to protect those laws, according to a report from Civilized. Sen. Dianne Feinstein (D-Calif.) recently switched her stance to pro-marijuana and won her primary bid for re-election. It’s no surprise her change of heart came after her Democratic challenger Kevin de Leon came out swinging with strong support for cannabis last year. Because of California’s “top-two” primary system, both candidates will be on the ballot in November, even though they are from the same party.

These sudden “evolutions” in thinking about marijuana are springing up among political figures all over the country. Senate Minority Leader Chuck Schumer recently had a similar change in thinking, and former Republican Speaker of the House John Boehner flipped on his previously staunch anti-marijuana views to join the board of directors of a cannabis company.In Orange County, despite being mired in controversy, Rep. Dana Rohrabacher (R-CA 48) handily won the most votes in his primary run defending his seat in the U.S. House of Representatives. He is famous for his strong stance in favor of medical marijuana and is one half of the namesake of the Rohrabacher-Blumenauer Amendment, the federal budget add-on that prevents the Justice Department from using funds to go after medical marijuana operations that are in compliance with their state’s laws. A Republican and Democrat both hopeful to take Rohrabacher down were left clamoring for the second spot on the ballot. Neither of the candidates made cannabis a talking point in their election bids, one of them even mocking Rohrabacher’s strong support as not being enough to qualify someone as a good representative. Voters apparently disagreed.

Lt. Governor Gavin Newsom had no problem securing the votes during the primary in the race for governor of California. Newsom has been a longtime supporter of marijuana legalization. He was a prominent advocate leading up to the passing of Proposition 64, all the while becoming one of the rising stars of the Democratic party in the state. The pattern continued from these top seats all the way down the ticket in the primary elections, with pro-marijuana candidates leading races for controller, treasurer, attorney general, and secretary of state.

Our Orange County marijuana business lawyers know strong support from top political figures will only help in the fight to remove marijuana’s federal classification as a Schedule I narcotic. Our legal team helps clients in Southern California successfully open businesses in compliance with state and local laws, but federal prohibition has prevented companies from reaching their full potential. Opinions on marijuana are rapidly shifting across the country, but with key players in the Department of Justice and Drug Enforcement Administration still staunchly against cannabis or seemingly oblivious to its benefits, the battle is far from won. The time for wishy-washy opinions is past. Taking a bold stance in favor of cannabis is necessary for politicians to overcome the next hurdles in marijuana legalization, and to curry favor among their constituents who already have seen the light.

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 References:

Pro-Cannabis Candidates Clean Up In California Primary Election 2018, June 5, 2018, By David Downs, Leafly

More Blog Entries:

Federal Budget Protects State Medical Marijuana Businesses, For Now, Orange County Medical Marijuana Lawyers Blog

While legalized possession and use of recreational marijuana throughout the state, it left a great deal of power to the local governments to dictate regulations and sales. As our marijuana business attorneys can explain, this meant even though citizens were allowed to carry and use cannabis, cities and counties had the right to ban various aspects of commercial cannabis activity, including sales.

While 57 percent of voters approved Prop. 64, local laws have made it so 75 percent of consumers cannot easily access marijuana, according to an article from SFGate. While it is important for local governments to maintain control over their jurisdictions, this disparity does not reflect the will of the people. A vast majority of Californians understand the benefits of cannabis. Many have seen its positive effects through medical use, which has been legal in California since 1996 through the Compassionate Use Act. Others have come to learn that it can be an alternative to alcohol in social situations, without many of the long-term health effects of drinking, particularly when it is consumed in ways other than smoking, such as edibles and vaping. This positive perception of the drug has led to big advancements in legislation. However some of the stigma of the past still lingers, causing local leaders to overly restrict out of fear and misunderstanding.SB-1302 seeks to keep in place the rights of local jurisdictions, but hopes to clear up some confusing language in the Medicinal and Adult-Use Cannabis Regulations and Safety Act that has prevented delivery businesses from operating freely. According to MAUCRSA Sec. 63, the “A local jurisdiction shall not prevent delivery of cannabis or cannabis products on public roads by a licensee acting in compliance with this division and local law as adopted under Section 26200.” While some thought this permitted cannabis deliveries to any location, many have interpreted this to mean that public roads can be used to deliver marijuana … elsewhere. The actual delivery of the product can still be restricted in a city if the local officials so choose; they just can’t stop delivery services from driving through a city to their end destination.

The new bill would allow local governments to continue to ban businesses from setting up shop within their borders, but would prevent the passage of any ordinances that would prohibit deliveries to residents.

Our Orange County marijuana business lawyers recognize this as a commonsense compromise allowing citizens to access a drug that is totally legal to them while allowing cities to retain control over their own lands and zoning laws.

Local marijuana company owners and operators often find it difficult to navigate this complex array of state and local provisions. There are many potential legal and regulation snags companies can hit, and there is a significant risk of investment loss on the line – even if you’re held up for “only” a few weeks or days. Having a marijuana attorney on retainer can help ensure you are meeting all your obligations (and that all your rights are respected) is an imperative.

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:

Will Cannabis Delivery Survive in California’s Legal Market?, Feb. 6, 2018, By Peter Hecht, Leafly

More Blog Entries:

New Regulations Require Cannabis Delivery Services to Rethink Their Business Models, Oct. 8, 2017, Cannabis Law Group

continue to disrupt that industry for the foreseeable future.

An investment firm industry analyst, who specializes in beverages, tobacco, and adult-use marijuana, recently shared data with CNBC, and she established a clear correlation between increased use of marijuana and decreased use of alcohol. She said in states where recreational marijuana use is legal, binge drinking rates have dropped “significantly.” She identified both as “social lubricants.” In other words, both are used by adults in social situations to help unwind, de-stress, have a good time, and feel relaxed with new people or in new environments.

In terms of stocks, the numbers are clear, as well. Her firm primarily valuates the Canadian market, with Canada on track to legalize adult-use marijuana nationwide by the end of summer. Several Canadian medical marijuana companies are seeing shares grow by up to 240 percent in the past year in anticipation. She said estimates from her firm put the U.S. cannabis industry as being worth $75 billion by 2030, assuming marijuana is removed as a Schedule I narcotic from the Controlled Substances Act, 21 U.S.C. Section 812.Our experienced Orange County marijuana business lawyers know that, for quite some time, there have been numbers to support the story of the benefits of medical marijuana. Thousands upon thousands of patients have found relief from cancer treatment symptoms, anxiety, post-traumatic stress symptoms, migraines, and more. This evidence has been compelling to many, but momentum on legalization has been slow. It’s been more than 20 years since California led the way in medical marijuana legalization with the Compassionate Use Act of 1996, and it’s just now we’re seeing the country really lean in favor of legalization. There are now 29 states (plus Washington, D.C.) that have legalized medical use.

The obvious health benefits, supported by the anecdotal evidence of a couple decades worth of patients, should have been enough to declassify cannabis a long time ago. Its Schedule I status indicates that the drug has no medical benefits, which is laughable when witnessing all those who have found relief under the supervision of their physicians. As we all know, though, money talks. Therefore, it’s no wonder that the numbers attached to dollar signs are the ones driving the most momentum in the cannabis legalization narrative today. The good news is, the potential for financial gain is plentiful for both medical and recreational, which means we could see more states supporting adult-use.

Even recreational use could have its health benefits if the analyst’s predictions are true. If people continue to choose cannabis over alcohol (where such a choice is legal) we could see fewer alcohol-related deaths. Because cannabis can be ingested in a variety of ways, there are choices that can limit exposure to health risks, unlike alcohol. According to data from the Centers for Disease Control and Prevention, 30,722 people died from causes induced by alcohol in 2014. This number only includes direct ways that alcohol affects the body and does not include accidents or homicides that took place while under the influence. While the comparison to cannabis is not precise, given the easy, long-term access to alcohol versus the abundant restrictions on marijuana nationwide, it’s still highly telling that there were zero marijuana-induced deaths that same year.

The benefits across the board are blatant, but if a strong bottom line is what it takes for the rest of the country to get on board with marijuana legalization, then so be it. No matter what the future holds, our team of attorneys will be here to protect your rights and assist you with all of your marijuana-related legal needs.

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:

We Took a Scientific Look at Whether Weed or Alcohol is Worse for You – And There Appears to Be a Winner, Feb. 20, 2018, By Erin Brodwin, Business Insider

More Blog Entries:

Cautious Optimism Surrounds Marijuana Business Stocks, Jan. 8, 2018, Orange County Marijuana Business Lawyers Blog

marijuana stance of U.S. Attorney General Jeff Sessions. That uncertainty remains, but there is some evidence we could be seeing some positive shifts on the horizon.

Well-known marijuana advocate Sen. Cory Gardner (R-Colorado) recently had a conversation in which President Trump agreed to support Congressional protections of states with legalized cannabis, according to The Washington Post. This comes after Sen. Gardner had been taking advantage of the narrow party margin in the U.S. Senate to block nominees for the Justice Department. The senator agreed to start approving nominees in exchange for the president’s support.But before anyone starts busting out the party bongs in celebration, our trusted Orange County marijuana business lawyers must remind Californians that this is not the first time Trump has said he would hold back interference with states that had pro-marijuana laws on the books. In fact, it was something he touted during his campaign, something that made states hopeful that provisions put in place during the Obama administration would remain regardless of the outcome of the election. This is why it was so confounding that Trump would appoint someone to the position of attorney general who not only disapproved of marijuana, but who had extreme, very public views on the issue and made promises to use his power to drag the country back into total prohibition.

Since his time as attorney general, Jeff Sessions has used his platform to perpetuate propaganda about cannabis, hiding behind the guise of upholding the law. Marijuana is a Schedule I narcotic under the Controlled Substances Act, 21 U.S.C. Section 812. Schedule I is the classification given to drugs that have no medical benefits, are addictive, and considered unsafe even with medical supervision. Because there is absolutely no evidence that any of these metrics apply to marijuana, Sessions hides behind the law itself as proof that cannabis is bad. Because of the power of this classification, federal organizations are not allowed to run official tests that would prove what we already know: that marijuana is not addictive, it’s medically beneficial, and safe under the proper regulations.

Sessions also took a more concrete stance against pot by rescinding a memorandum known as the Cole Memo, a guidance issued during the Obama administration which directed federal enforcement officials to not use limited resources on marijuana-related activity that was legal within a given state. Their efforts instead should remain focused on the most serious issues that remained illegal even within pro-pot states, such as distribution to minors, drugged driving, gun violence in the industry, and transporting to states where cannabis use is not protected.

However, Congress was able to pass a spending bill which renewed protections that prevented the Justice Department from using federal funds to go after activity related to medical marijuana use in states where it is legal. The president signed this spending bill, a small bit of evidence that his promise to Gardner might be more than just talk.

This, along with recent news that John Boehner, a republican and former speaker of the house, has joined a marijuana company advisory board, could mean that politicians are waking up to the fact that cannabis is not a partisan issue. It’s support is broad and spans across political parties. It’s time for those in power to finally represent their constituents on this matter.

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:

Boehner and Trump and Cannabis, Oh My! Big Changes Coming to Legal Marijuana, April 13, 2018, By Julie Weed, Forbes

More Blog Entries:

Sessions Intends to Crackdown on Medical Marijuana Where It Is Legal, Dec. 10, 2017, Cannabis Law Group

stemming primarily from the introduction of legal cannabis Jan. 1st and the barrage of regulations that came with it. Marijuana businesses have varied reports on supply issues thus far, with some experiencing few supply chain problems, and others reporting major lapses. Many of these issues are typical growing pains associated with a budding new industry. These problems could become major snags this summer, though, when tourist season his, and we’re flooded with curious new customers.

In San Diego, for example, about 8 million tourists visit during the summer months, according to a recent report discussing the potential impending shortage from San Diego Union-Tribune. Lines are already out the door at stores in this city, so there is worry businesses may not be able to keep pace. The issue is not necessarily that overall supply can’t keep pace with demand, but more that businesses are grappling with supply bottlenecks due to erratic regulation across jurisdictions throughout California.As our trusted Orange County marijuana business lawyers can explain, cannabis growers have been registered as cultivators for dispensary collectives in California for years, in accordance with the Compassionate Use Act of 1996 and the medical market guidelines that followed. The addition of recreational marijuana has rocked the scene, however, with the ushering in of Prop 64 and the establishment of Medicinal and Adult-Use Cannabis Regulation and Safety Act, which sought to streamline regulations for both the medical and recreational markets. While this system is far more efficient than maintaining separate oversight for each sector, the lagging issuance of licenses at the state level has caused long-time cultivators to stand in line to participate in the very economies they helped found. Right now, there are no cultivators specifically serving San Diego, which means product must be imported.

Other business owners are reporting issues finding distributors who are state-certified, and the distributors who are active are often asking higher prices due to the additional fees and taxes they must pay.

Meanwhile, more bottlenecking is occurring at the point-of-purchase. San Diego has only issued 13 of the agreed upon 36 licenses for storefronts to sell marijuana. It is clear that zoning issues are the root of this problem, preventing businesses from setting up shop in several districts. This issue is further complicated by the fact that not all of those are licensed for adult-use sales, limiting the locations tourists can visit even more.

If this sounds like a lot for cannabis business owners to sort out on their own, you are right. That is why it is essential to have someone on your side who will advocate for your rights and look out for your best interest as a business owner. Our team of skilled marijuana business attorneys have the experience and know-how to help your business remain in compliance while meeting the demands of a growing customer base to optimize your potential for success.

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:

With Growers in the Shadows, California Faces Cannabis Shortage, March 26, 2018, By Pete Hecht, Leafly

More Blog Entries:

California Now Accepting Recreational Marijuana Business License Applications, Dec. 12, 2017, Marijuana Business Lawyers Blog

The latest example comes out of Colorado, where the state is looking to get rid of residency requirements for marijuana businesses. House Bill 18-1011 would allow non-Colorado residents and publicly traded companies own a stake in state-licensed businesses as well as make investments. Right now ownership for non-residents is limited to 15 people. A bi-partisan group of legislators is leading the charge on the bill, which they said will not only attract more investments in the state, but also allow local businesses to be publicly traded, according to The Cannabist.

Officials said Colorado law is causing the state to fall behind roughly a dozen other states that no longer have such limitations. Indeed, California already rid itself of residency restrictions with the creation of Medicinal and Adult-Use Cannabis Regulation and Safety Act in June 2017. The act combined the Adult Use of Marijuana Act and the Medical Cannabis Regulation and Safety Act in an effort to consolidate regulations and laws governing medical and recreational marijuana. Many regulations carried over from the two previous acts, but one notable change was the removal of a rule in AUMA to prohibit licenses from being issued to non-California residents until Dec. 31, 2019.

While residency restrictions can help protect small in-state businesses, our experienced Orange County marijuana business lawyers also know they can stifle investments and growth. With proper protections and rules that favor small business development, both small and large businesses can live in harmony. Plus in-state businesses that are doing well have the opportunity to get a boost by becoming publicly traded. Many local businesses lamented how much money they see being invested outside of Colorado and saw this bill as an opportunity to redirect cash flow back into the state.

Others are worried the state is pushing its luck. With marijuana still firmly planted as a Schedule I narcotic according to Controlled Substances Act, 21 U.S.C. Section 812, some industry leaders already feel like they are walking around with a target on their backs. They worry opening up interstate channels of business is poking the bear. However, as the cannabis industry continues to grow, creating more jobs, garnering more tax revenue, increasing awareness, and expanding access to hundreds of thousands of Americans, public opinion will continue to shift. And public outcry will continue to grow to the point that the federal government can no longer ignore the voice of the people. Measures like this in Colorado are another step in the right direction.

Even though we all have a cautious eye on Attorney General Jeff Sessions and the Justice Department, it’s still an exciting time to be a marijuana business owner. Our skilled attorneys can help California entrepreneurs set up their businesses to be in compliance with state and local laws while keeping an eye on movement at the federal level. We remain vigilant, staying up to date on the day-to-day movement in marijuana law from your local city council to Washington, D.C. and everywhere in between so you can focus on running your business.

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:

Colorado Cannabis Firms Could Get Publicly Traded, Out-of-State Investors Under Proposed Bill, Feb. 28, 2018, By Alicia Wallace, The Cannabist

More Blog Entries:

A Look at the California Cannabis Industry MAUCRSA Bill, July 13, 2017, Orange County Marijuana Business Attorney Blog