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Video 1 KTLA Channel 5 News Story June 18, 2010: Lake Forest Medical Marijuana Dispensary Appealing Injunction Order Video 2 KTTV Channel 11 News Story June 4, 2010: Los Angeles Medical Marijuana Dispensary Challenges LA's Ordinance Video 3 Cannabis Law Group's Attorney Damian Nassiri Sues the City of Los Angeles To Block It's Ban on Medical Marijuana as Featured on PBS's So Cal Insider - Part 1

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It’s been more than two centuries since the New World colonists dumped their tea into the sea to protest unfair taxation. Now, legal proprietors of California’s retail cannabis industry say it may be well past time for a “Weed Party” in response to astronomical taxes imposed on them when they can’t compete with black market operators.cannabis business taxes

However, rather than toss their crops into the ocean, shop owners are floating the notion of not paying state taxes. If the idea where to gain traction statewide, that would amount to roughly $1.3 billion.

Whether the call will lead to real action is questionable, but Los Angeles marijuana business lawyers know there is no doubt retailers are treading water. Steep competition from illicit providers who don’t follow state rules – yet aren’t unequivocally shut down by the state – have cut into the survival odds for these firms. Some call it a clear case of “taxation without representation,” echoing the Revolutionary War grievances.

This is not a new problem. It’s a situation that has been ongoing for the last five years, ever since state voters approved recreational use cannabis for adults. The prospect of bolstered taxes was one that spurred many government leaders to climb aboard. The problem, business owners say, is that while those firms are happy to rake in the tax revenue, they aren’t doing enough to protect the industry from unfair competition.

Beginning first thing next year, taxes on cultivation of cannabis is increasing by 4.5 percent. This comes even as the state is staring down a budget surplus next year of $31 billion.

The “Weed Party” proposal is to put all taxes in an escrow account rather than handing to the state, in an effort to force their hand and bring them to the table. However, as marijuana business attorneys, we would tend to strongly advise against this, as it’s going to violate a myriad of regulations and tax laws and risk state license suspension. The hope is that there will be viable solutions proposed in the coming year.

Why California Marijuana Industry Tax Hikes Are Unique

Of course, no industry is a fan of tax increases, but there is also no other industry (save tobacco) that is taxed at the same sky-high rates as cannabis retailers. And unlike the tobacco industry, legal marijuana retailers are banned in most cities in the state. Plus, legal tobacco retailers aren’t threatened by a behemoth black market. Continue reading

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California became the first state in the U.S. to approve marijuana for medicinal use back in 1996. It was also among the first to legalize recreational adult use marijuana in 2016. Los Angeles cannabis retail attorney

However, it would be erroneous to assert that marijuana sales are legal everywhere in the state. As our Los Angeles marijuana lawyers can explain, cannabis still remains widely unavailable in some of the largest cities in the Golden State.

Of the state’s 482 cities, only 174 of them allow some type of licensed, cannabis business to operate within their district. In a number of those jurisdictions, the only allowable businesses are those that are not classified as retail locations. That means that a key piece of the supply chain puzzle is missing. Ultimately, this leaves millions of people without immediate access to retail recreational cannabis.

The one exception is delivery. Having a state license from the California Department of Cannabis Control authorizing delivery allows that company to deliver in any jurisdiction in the state – something that has been affirmed in subsequent court rulings challenging this right. However, those companies might still be subject to local jurisdictional requirements. All cannabis company owners and operators should be working with an experienced marijuana business attorney to help ensure their operation rights are protected.

But the benefit of accessible cannabis for all communities goes beyond the shop owners. It benefits the industry as a whole, as well as citizens. Accessible legal cannabis constricts opportunities for those in the black market to gain a foothold.

So what’s the holdup? Continue reading

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Revocation of a cannabis license can prove fatal to a marijuana business, unless one takes swift and decisive legal action. All legal remedies should be discussed with an experienced and highly qualified L.A. cannabis business lawyer. Los Angeles marijuana business lawyer

Recently, it was announced that a marijuana dispensary has filed a lawsuit against the city of South Lake Tahoe after the city council of the California community on the Nevada border revoked its business license for failure to open on time. The delay, according to the plaintiff, was directly related to the COVID-19 pandemic, something entirely outside the firm’s control.

According to the Associated Press, the company had been awarded two microbusiness marijuana licenses two years ago. Part of the deal was the firm would open up shop within one year. However, the pandemic created an unforeseen situation that prevented the company from meeting the deadline. The agreement became effective in February 2020, but the world effectively turned upside down with the pandemic, with both business and construction coming to an abrupt halt the following month. When construction picked up again, the demand for construction materials and workers was such that the business couldn’t keep up. Continue reading

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Allegations of candy company trademark violations by cannabis companies are leaving sweets makers bitter. Manufacturers of confections are imploring producers of cannabis edibles to avoid creating labels that may closely mirror popular snack and treat products. Los Angeles cannabis trademark lawyers

One of the major concerns, companies say, is that kids might mistake certain cannabis edibles for well-known and loved snacks like Oreos, Sour Patch Kids or Doritos. Numerous law enforcement agencies and even some state attorneys general had issued warnings prior to Halloween warning of similarities of cannabis products that could closely mirror treats.

Concerns about mistakes might be fair where cannabis companies post deceptive packaging on products that contain high levels of THC, the psychoactive ingredient in marijuana. According to the American Association of Poison Control Centers, there were 2,050 kids under the age of 12 who allegedly ingested cannabis edibles at home, compared to about 130 in 2016.

There were no reported issues with trick-or-treat (it’s highly unlikely anyone is going to intentionally pass out edible marijuana products to kids, as it’s not only dangerous, but such products can be quite expensive), but there is a legitimate concern for accidental ingestion of products that look like snacks. Symptoms of overdose can range from mild to severe, in the most extreme cases resulting in seizures or even a coma. Although there have been no reported deaths, the risks for kids are always heightened compared to adults. Continue reading

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An agricultural research and commercial hemp company is attempting to bankroll a civil lawsuit against the state of California through crowdfunding, asking investors to purchase cryptocurrency. The lawsuit alleges state officials unlawfully destroyed more than $1 billion of the hemp crop belonging to Apothio LLC in 2019.Los Angeles marijuana business lawyer

As reported by Reuters, this approach breaks some ground on numerous fronts. Small investors, for the first time, can put up as little as $100 or as much as $500,000 to buy a stake in the outcome of the civil litigation. Although the U.S. Securities and Exchange Commission has long allowed individuals to invest in litigation finance deals, those individuals had to meet SEC accreditation criteria. This approach of sidestepping those rigorous requirements is allowed under an SEC provision that permits up to $5 million in litigation financing through crowdfunding. Furthermore, to the best of our Los Angeles cannabis attorneys’ knowledge, this is a first for tokenizing litigation funding through blockchain. What that means is if the firm ends up winning the case and getting paid, investors will be paid their share of the verdict in tokens from the company.

Within a day of the request going live, the company had raised more than $156,000 from 85 investors – more than 60 percent of the target minimum of $250,000.

This is an interesting approach that we imagine many California marijuana business lawyers are going to be watching closely, as it may allow a greater number of plaintiffs of all sizes to pursue civil litigation for unfair regulatory action, such as destroying crops or license revocation. Continue reading

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A licensed California cannabis company owner has filed a civil lawsuit against the state’s Department of Cannabis Control alleging that outrageously high taxes on lawful distributors and lack of enforcement against illegal operations has made the industry untenable for those trying to do it by-the-book. cannabis business lawyer Los Angeles

As it stands, the state’s excise tax on cannabis is 15 percent. Municipalities can also set their own rates. Plaintiff, Catalyst Cannabis Company, alleges these tax rates are effectively smothering the legal cannabis industry in California. Operators of pot shops throughout the state are “treated as second class” members of the business community, while they burden an unfair share of taxes and receive little protection against the unfair competition of illegal operators.

In a press release, plaintiff told state media outlets the goal of the litigation was partly to glean information about what state regulators know regarding illegal distributors and partly to compel them to participate in reasonable cannabis industry tax reform that would allow legal operators to survive. As our Los Angeles marijuana business lawyers have been made aware, eking out a profit has become increasingly difficult for California pot shops because of high-taxes and the relentless (and growing) underground market. Legalization of marijuana for recreational use has been a positive in many respects, but it’s also reduced penalties for unlawful marijuana sales, allowing black market cannabis outfits to thrive. Continue reading

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The cannabis industry’s first anti-trust case to reach trial was decided in favor of pot shop owners who alleged they’d been illegally edged out of the market by a would-be competitor’s unfair business practices. Jurors awarded $5 million (tripled to $15 million under the Cartwright Act) plus attorney’s fees. Los Angeles cannabis business lawyer

In Richmond Compassionate Care Collective v. 7 Stars Holistic Foundation, an independently-owned dispensary, RCCC, in Contra Costa County, sued the owners of the Richmond Patients’ Group (RPG) over allegations of conspiring to block RCCC from opening a new shop. Evidence presented at trial included evidence the defendant impeded access to the finite amount of commercial property zoned for medical marijuana distribution.

Plaintiffs argued the defendant, a potential competitor, intentionally thwarted their opportunities by submitting fraudulent letters of intent, leases, and purchase agreements to landlords of commercial properties, effectively tying up those spaces until RCCC’s permits became expired. (Local ordinance in Richmond, Calif. requires cannabis shop permit holders open up a shop within six months or lose their permit.)  The defendants reportedly even went door-to-door, trying to persuade landlords to avoid leasing to RCCC. Defendants also made efforts to compel a change in city ordinance that would reduce the number of cannabis permits available (in this, they were successful). RPG was also accused of trying to influence city officials to deny RCCC’s licensing permit.

As our Los Angeles cannabis attorneys can explain, trying to compel a change in local ordinance or state law isn’t illegal. But the plaintiffs underscored it as evidence of the defendant’s purpose and intention with regard to the other actions.

RCCC alleged RPG’s efforts ensured they were closed off at every turn by RPG’s actions and eventually lost their permit – and millions of dollars in investments and potential profits. This, they allege, was in direct affront to the California Cartwright Act, the state’s antitrust law prohibiting efforts to block fair competition in the free market. Continue reading

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California hospital facilities will be allowed to use medical cannabis for terminally ill patients. Gov. Gavin Newsom signed into law the Compassionate Access to Medical Cannabis Act, or Ryan’s Law – remarkable for the fact that he vetoed a similar measure in 2019 due to conflict with federal law. At the time, Newsom said he supported the measure but couldn’t sign into law because of the conflict with federal and state law. Now, he says federal officials have indicated that they aren’t taking a strong stance against the use of medical cannabis in hospitals. medical marijuana attorney

Cannabis remains illegal at the federal level, continuing to be one of the greatest sticking points for California marijuana companies. It is one our Los Angeles cannabis business attorneys expect to see changed sometime in the next few years.

As it stands, 36 states plus the District of Columbia have legalized marijuana for medical and recreational uses. Industry researchers report that last year, sales of legal cannabis climbed 45 percent. It’s estimated they’ll reach $41 billion in the next five years. Yet those who might most benefit from its use in the twilight of their lives have been denied due to the federal law that criminalizes marijuana and casts it in the same category of methamphetamine and heroin – highly addictive narcotics with no recognized medical purpose.

Clearly, that definition is outdated. Medical cannabis has been legal in California since 1996. Recreational use was approved by voters in 2016. Now, Senate Bill 311 is one step closer to turning the tide entirely. Continue reading

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Our California cannabis business attorneys know this is a field that this is an area of law that is constantly evolving. Case-in-point, two bills that could have a significant impact were advanced. One involves a bill now on the governor’s desk that allows for sales of hemp-derived CBD and ending prohibition on sales of smokable hemp products. The second, a measure to mandate hospitals allow medical marijuana use by certain patients, has advanced in the state legislature. marijuana laws California

Our dedicated cannabis lawyers in Los Angeles are committed to assisting marijuana and hemp farmers, producers, retailers, and ancillary firms navigate the changing legal landscape.

Hemp Regulations

The first, Assembly Bill 45, passed easily in both the state House and Senate. The measure is the result of years of advocacy to update the laws for hemp companies in California. Continue reading

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California law prohibits children (under 21) from possessing, using, or buying cannabis. Marketing for marijuana must be tailored in a such a way that it’s less likely to reach them. Proposition 64 (California’s recreational marijuana law) requires a default buffer to keep dispensaries at least 600 feet away from schools, day cares, and youth centers; local ordinances be even more stringent in their requirements. Yet pot shops apparently aren’t doing a great job of keeping cannabis away from kids, according to new research.Los Angeles cannabis lawyer

A new study published in the journal JAMA Pediatrics took a look at how well state regulations intended to keep marijuana out of the hands of minors have been working. The analysis examined the practices of 700 licensed marijuana dispensaries in the state. Researchers discovered that kids can be exposed to both marketing and products, in spite of the restrictions on both.

Dispensaries are required by law to screen out customers who are underage. Many do this with blatant signage, having a checkpoint with mandatory ID (inside or outside), and tailoring marketing efforts where ads are unlikely to reach those under 21.

For this study, researchers close to the legal age cutoff (between the ages of 21 and 23) went into hundreds of dispensaries throughout California to document their screening process. Of the shops they entered, 97 percent were compliant with ID checks. However, only 12 percent verified customers’ ages outside the shop, and nearly 70 percent did not comply in having signs indicating age limits. For the most part, dispensaries were only requiring proof of age once the person was already inside, where both products and marketing materials were in plain view. Continue reading

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