Business experts expect California’s cannabis industry to quickly become the largest marijuana market in the country once the provisions of Proposition 64 take effect. For reference: Washington and Colorado had over one billion dollars’ worth of marijuana sales in the first half of 2017. California, by comparison, had over two billion dollars in sales of just medical marijuana in 2016, before the bill had even passed, The Hill reported. Financial experts claim that few industries offer the growth potential of legal marijuana. Yet this profitable and exciting market is also young and untested, and its regulations change almost daily. Successful cannabis businesses must adapt their business models and prepare for the coming effects of Proposition 64.

Under Proposition 64, the State of California has until January 1, 2018 to begin issuing business licenses for the growth and distribution of recreational marijuana. No recreational cannabis may legally operate within the State of California without such a license. Unfortunately, the state has such a grandiose task in preparing for this mass licensing effort that licenses may be delayed, as The Desert Sun reported. Cannabis business owners should manage their capital, inventory and sales in a manner that prepares them for delays in licensing.

An ongoing challenge for the California cannabis industry is federal regulation of marijuana. Under federal law, marijuana is designated as a Schedule I drug – the same designation given to heroin, LSD, and peyote. There is no legal use of marijuana, and all funds derived from its sales are considered illegal money. This creates a host of challenges for cannabis business owners. Even the simple act of opening a business bank account can be a criminal activity. Furthermore, federal law enforcement policy is constantly changing, and different presidential and Department of Justice administrations take widely different approaches to enforcing federal law against businesses which are operating lawfully under state laws.

While no one can anticipate the policies and enforcement of federal law, cannabis business owners can nonetheless protect their business interests by preparing for contingencies of federal law enforcement. By consulting with a financial planner, business owners can explore options for the investment and security of sales revenue. A financial planner can also help prepare cannabis business owners to invest and plan for periods during which federal law enforcement prohibits business operations.

Getting legal advice from an attorney who specializes in cannabis law can help business owners prepare for and respond to various forms of legal liability. The Cannabis Law Group helps cannabis business owners identify and prepare for law enforcement issues before they occur. By ensuring compliance and preparing for contingencies, cannabis business owners can ensure their business is sustained through uncertain legal environments. Contact our office today to schedule your consultation with an experienced cannabis business law attorney in Los Angeles or Orange County.

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

Additional Resources:

A “massive undertaking” as California races to regulate marijuana so legal sales can begin Jan. 1, August 16, 2015, by Rosalie Murphy, the Desert Sun

More Blog Entries:

Marijuana Equipment Business is Booming, April 14, 2017, Cannabis Law Group

Current California case law allows employers wide discretion to create workplace drug policies for pre-employment drug testing and employee drug use. In 1997, the Superior Court of Los Angeles considered a constitutional challenge to the City of Glendale’s drug policy. (Loder v. City of Glendale,14 Cal.4th 846). Lorraine Loder alleged that the drug policy – which required drug tests of any applicant, and any current employee who applied for a promotion – violated the privacy guarantees of the state Constitution. In a somewhat surprising (and verbosely-dissented) opinion, the Court determined that pre-employment testing did not violate an applicant’s expectation of privacy, but promotional testing for current employees did. In general, the court disclaimed an employer’s right to conduct random drug screenings on employees without having particular reason to suspect drug use. The court left open an employer’s broader right to fashion wide-reaching drug policies, provided those policies did not otherwise infringe on state or federal law.

In 2008, the Supreme Court of California considered an employer’s drug policies in conjunction with an employee’s lawful use of medical marijuana (Ross v. RagingWire Telecommunication Inc., 174 P.3d 200). The Court – noting that the Compassionate Use Act contained no employment provisions – determined that there was no law or public policy which would require an employer to accommodate the medical use of marijuana, and affirmed RagingWire’s decision to fire Mr. Ross. This, too, created a broad right of employers to fire employees on the basis of marijuana use.

Unlike the Compassionate Use Act, the Adult Use of Marijuana act does include language specific to employment. The AUMA clearly states that it will not:

• Impair an employer’s ability to maintain a drug and alcohol free workplace, or
• Require employers to accommodate the use or possession of marijuana in the workplace, or
• Affect the ability of employers to have policies prohibiting the use of marijuana by employees and prospective employees, or
• Prevent employers from complying with state or federal law

This language very clearly protects an employer’s right to refuse to hire a prospective employee – or fire a current employee – based upon recreational marijuana use. This does not, however, give employers free reign to act with impunity. Employers are still subject to equal opportunity employment laws and federal disability protections under the Americans with Disabilities Act. Employers and employees with questions about complicated workplace drug policies or marijuana issues should seek the advice of an employment or cannabis law attorney.

The experienced lawyers at the Cannabis Law Group are highly skilled in protecting employee’s rights, and protecting employers from liability for wrongful termination. Call our office today to schedule a consultation with a Los Angeles marijuana lawyer.

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 use may be legal in California but it can still get you fired, November 17, 2016, by Brooke Edwards Staggs, Orange County Register

More Blog Entries:

The Uncertain Future of Recreational Marijuana, March 29, 2017, by Cannabis Law Group