California marijuana business lawyers

December 26, 2017

Marijuana Regulations Could Hinder Profits for California Businesses

The passing of Proposition 64 in 2016 legalizes recreational marijuana in California as of January 1, 2018. This will increase the opportunity for marijuana businesses to grow throughout the state. Marijuana regulations

According to an article from Forbes, California cannabis business owners are projected to make $5.2 billion in revenue in 2018, with about $1 billion in tax revenue lining state coffers.

But for every new road that is paved on the way to full legalization, there are numerous bumps along the road. California business owners expect plenty of marijuana regulations, with local governments in the state being given a great deal of jurisdiction over whether or not to allow commercial marijuana production and sales. Continue reading

December 21, 2017

The Good and Bad of California’s New Cannabis Regulations

By Cannabis Law Group

Cultivation and sales of marijuana to recreational users will soon be legal in California, and ahead of that schedule, the Bureau of Cannabis Control (previously the Bureau of Medical Cannabis Regulation) has issued a regulatory framework that covers everything from concentration of edibles to zoning rules. Excitement in palpable as legal sales are expected to grow by 26 percent over the next five years (thanks in large part to Proposition 64), which would mean the establishment of a $22 billion industry. marijuana lawyer

Although there are many regulations that are fairly standard, such as outlines for growing and testing, the crop-size limitations are the two that have raised the most ire.

Many are concerned about the scope of these regulations and what they will mean for cannabis businesses – particularly smaller ones. It was largely expected that crop size limits would occur to some degree, but the final regulation only limits medium-sized growers’ licenses. That could potentially open the door for smaller and larger marijuana grow farms, but because large companies have deep pockets, the concern is that smaller businesses (which will have a tougher time landing loans) will be pushed out too. Business Insider refers to this as a potential oligopoly. Mass production by these larger players could drive down marijuana prices in the short-term, but eventually, absent sharp competition, these prices would rise. Speculation is that the state will even more heavily tax the product by as much as 45 percent, a cost that will ultimately be passed onto consumers.

On the flip side, investors in marijuana businesses could see handsome profits. Investors in the legal marijuana trade have always been taking a huge risk, largely because the plant is illegal at the federal level, and therefore assets and profits are vulnerable to government seizure. Beyond that, though, the marijuana industry has long been heavily fragmented. Regulations vary from city-to-city, and the majority of the market at this juncture is comprised of mom-and-pop operations. If that shifted to become a smaller number of larger businesses, that could give investors incentive and a clear path to profits. Continue reading

December 19, 2017

Marijuana Business Perils of Cash-Only Commerce

By Cannabis Law Group

While legal sales of recreational marijuana in California will be a reality in a matter of weeks, it’s also true that marijuana businesses face some major logistical hurdles. One of the most difficult among those challenges is being forced to do cash-only commerce. cannabis lawyer

Because marijuana is still illegal at the federal level (a fact that seems unlikely to change under the current administration), federally-backed banking institutions are vulnerable to potential seizure of funds by the FDIC if they accept money derived from criminal activity. Essentially, these financial firms can be prosecuted for money laundering. The result is that the majority of marijuana businesses – about 70 percent – don’t have a bank account. There are only a few banks that will accept marijuana business clients, and they rarely advertise it.

As an article in The Economist recently noted, this fact put some cannabis farmers in Northern California in serious financial jeopardy when the wildfires consumed not only their crops, but their cash. In one instance, a cannabis genetics consulting firm lost $250,000 that had been stashed in a cabinet. Another cannabis cooperative in Medicino County reported the loss of hundreds of thousands of dollars by some 20 members who buried their cash and gold stashes – only one of which was buried deep enough to survive destruction.

Although Proposition 64 broadened the legalized use and sale of marijuana in California, it did nothing to ease the federal banking regulations that have financial institutions reticent to take work with cannabis companies. The reality is unless there is some action on this front at the federal level, these kinds of issues will continue to occur. Continue reading

December 15, 2017

DOJ: Marijuana Businesses Will Not Receive Bankruptcy Aid

By Cannabis Law Group

Marijuana business owners have many reasons to carefully manage their assets. Now, a recently-published article by the U.S. Department of Justice’s Executive Office for U.S. Trustees gives another: Marijuana businesses cannot expect help with liquidation or restructuring in the event of bankruptcy. The executive office for trustees is the watchdog agency over bankruptcy proceedings. marijuana business lawyer

Like so many complex legal issues for cannabis business owners, this comes down to the conflict between state and federal law. Although California voters approved the legalization of recreational marijuana with Proposition 64 last year (and medical marijuana more than 20 years prior), it is still an illegal Schedule I substance under 21 U.S.C. Section 811, the Controlled Substances Act.

Per the recent article Justice Department officials published in the ABI Journal, the bankruptcy system cannot be used by cannabis businesses because:

Bankruptcy cannot be used as an instrument in the ongoing commission of a crime, and thus reorganization plans that allow or require the continuation of illegal activity can’t be confirmed;
Bankruptcy trustees and other fiduciaries of estates cannot be made to administer asserts if the act of doing so would necessitate violation of federal criminal law.

December 12, 2017

California Now Accepting Recreational Marijuana Business License Applications

By Cannabis Law Group

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. marijuana business lawyer

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. Continue reading

December 10, 2017

Jeff Sessions Intends to Crackdown on Medical Marijuana Where it is Legal

By Cannabis Law Group

As everyone knows, medical marijuana is illegal under federal law because it is listed as a Schedule I drug. While a majority of states and the District the Columbia have legalized medical marijuana, the federal government could theoretically (though not practically) crack down on these states and their residents at any time because of the Supremacy Clause of the U.S. Constitution.

LA Medical Cannabis Lawyer The Supremacy Clause of the U.S. Constitution essentially states that if Congress creates a law under the enumerated or implied powers afforded to it by the Constitution, that law is supreme to any state or local law. Whether congress has the power to act on in certain area has been subject to much debate and judicial decisions, but for the purposes of this blog post, we understand that congress has the power to regulate the licensing of drugs sold in the U.S. Continue reading

December 8, 2017

Marijuana Sales are Reducing Alcohol Sales

By Cannabis Law Group

Many comparisons have been made to recreational marijuana and alcohol, particularly in how advocates have recommended regulation. Although there are similarities, we know that recreational alcohol use, dependence and abuse has caused far more issues than marijuana, and evidence suggests that trend may continue, even as marijuana legalization spreads. In fact, new research indicates that legalizing marijuana may have the added benefit of reducing the impact of alcohol-related societal woes.

During alcohol prohibition, there were some major arrests made, but organized crime benefited more than anyone else from what history shows. Alcohol is a potentially dangerous and addictive drug. However, because it is generally considered socially acceptable, anyone over 21 can purchase as much alcohol as they want. This is not the case for marijuana under the laws in what is constantly becoming a smaller minority of states and the federal law.

cannabis business lawyers While many people drink socially, many others drink to cope with the stress of daily life, various mental health conditions, including anxiety and depression, and other forms of trauma. Even though most studies show that dependence on alcohol only makes those medical conditions worse, alcohol is often used as a form of self-medication even when it results in abuse. Alcohol also is well-known to cause liver poisoning, organ failure, and now it is suspected of causing cancer, according to a recent study that was popularized via a Netflix documentary on the same subject. Continue reading

December 7, 2017

L.A. Slated to Become the Largest U.S. City With Legalized Recreational Marijuana

By Cannabis Law Group

With the approval of regulations for recreational marijuana, the L.A. City Council has paved the way for the city to become the biggest city in the U.S. to allow legal marijuana growth, sales and use. l.a. marijuana lawyer

The council’s decision followed many months of political wrangling and bitter disputes. But now, the city has clear rules that will kick off the beginning of commercial cannabis sales.

Although new cannabis businesses in Los Angeles could be open as early as January 1st, there is some skepticism about whether the floodgates will truly be open by then, given the fact that the new year is only a few weeks away and the holidays tend to be an extremely busy time, with lots of government office closures that could slow the process. There is plenty of motivation, however, given the fact that there are throngs of eager buyers in this city of 4 million people.

Marijuana has been legal in California for the last 20 years, but recreational marijuana was only approved by voters last year. While the state has its own regulations, individual cities are also scrambling to decide what additional rules and restrictions they want to impose, if any. Continue reading

December 6, 2017

Marijuana as a Replacement to Opioids

By Cannabis Law Group

There is no question that we are in the midst of a major opioid abuse epidemic in the U.S. While it has gotten a lot of attention in the media lately, the solutions proposed by those in power have generally been limited to cracking down on the smuggling of illegal narcotics across U.S. border, spending small amounts of money on public health programs to fight addiction, and threatening to rollback efforts to lessen prison sentences for those arrested for non-violent drug offenses.

Many have been advocating for medical marijuana as a possible alternative to prescription painkillers that are very addictive and prone to abuse, but these efforts have so far only resulted in a lot of push back.

marijuana attorney The reason these conventional efforts are not making an impact is because most who abuse prescription opioids started out with a work-related injury or some type of trauma such as from a serious car accident, and then were prescribed narcotic painkillers. At some point, the insurance companies wanted to avoid paying for more of the drugs, or the doctors became concerned the patient was becoming addicted, and the prescriptions were simply cut off. This led to typical drug seeking behavior and the problem just gets worse where some find themselves addicted to illicit street drugs. Even though these drugs are clearly more addictive than medical cannabis, and a whole lot more dangerous, the U.S. Attorney General has just said he is looking at how to crack down on marijuana even in states where it is legal.

November 24, 2017

Marijuana Firm Bought a Town to Create Resort

By Cannabis Law Group

From grow operations to dispensaries to high end paraphernalia that works with smartphones, there is seemingly no end to the growth potential of the cannabis industry. According to a recent news article by USA Today, a wealthy cannabis company has just purchased a remote California town to create what they are calling a “marijuana mecca” as part of the growing pot tourism industry.

cannabis business lawyers The company purchased the real estate in this small town and has been working to renovate the businesses already in existence and also to add new landscaping and hardscaping features. They are currently constructing a pond and digging up the streets for underground utilities. As more workers and interested residents come to the town the population is growing and there are already more than 25 people living in what was essentially a ghost town. There is not marijuana for sale in the town yet as they have to way to til 2018, but they are working on residences, lodging, cafes, and many other business that will hopefully generate a lot of revenue as people flock to the resort.

The ultimate goal is to create a safe, self-sustaining place for people to smoke openly in outdoor lounges, restaurants, microbreweries, a medical academy and a wellness spa.