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A marijuana business out of Oregon is pursuing a federal case challenging the state’s ban on marijuana imports and exports, alleging the law violates the U.S. Constitution. interstate marijuana ban

As our Los Angeles marijuana business lawyers can explain, there have been other plaintiffs over the last couple years who have successfully challenged state residency requirements in place for marijuana licensing. They’ve done so by citing the Dormant Commerce Clause, or DCC. This is an implied doctrine in federal constitutional law that prohibits state governments from imposing unfair burdens on commerce between states. The underlying intention of DCC is to promote competition by blocking states from independently regulating interstate commerce. That’s Congress’s job.

Challenges to the residency requirements aren’t exactly the same as challenges to the import/export bans, but they’re pretty close. Constitutionally speaking at least, there appears to be little difference on state residency bans on local marijuana business ownership and bans on marijuana imports and exports.

Per the DCC, Oregon can’t prohibit the export of beef or potatoes or alcohol. Plaintiffs argue that very simply, marijuana should be treated like any of these other exportable goods – notwithstanding the U.S. Controlled Substances Act that categorizes marijuana as a Schedule I narcotic.

The current case challenges the Oregon’s ban on cannabis exports, arguing the law is unconstitutional and further that allowing interstate commerce is in the state’s best interests. Plaintiffs recognize that marijuana remains illegal under U.S. law, but argued the government of Oregon should be supporting the marijuana industry and business owners by stepping back from marijuana export bans. The ban, they say, not only harms the cannabis growers, processors, and wholesalers in Oregon, but also the out-of-state residents who cannot easily access the high-quality product grown and produced in the state without physically traveling there.

There is significant out-of-state demand for marijuana products (particularly in states with more stringent marijuana laws), but Oregon isn’t the only state with import/export cannabis bans.

As our Los Angeles marijuana business lawyers understand, these provisions of the law were largely intended to shield states from federal government action from agencies like the U.S. Department of Justice, which has indicated interstate marijuana trafficking to be a priority for prosecution. However, plaintiffs assert that appeasing perceived federal government enforcement priorities is not a constitutionally adequate reason for a law – particularly when it’s the express policy of the DOJ not to enforce state-legal marijuana activities. This triggers a constitutional separation of powers concern, as it should be Congress (the legislative branch) and not the DOJ (executive branch) authorizing and regulating interstate commerce. Continue reading

The decriminalization and legalization of recreational psychedelics in Colorado – the second state behind Oregon to do so – signals a shift our Los Angeles marijuana lawyers expect to see emerge in California as well. California legal mushrooms

Voters in Colorado recently passed a ballot initiative during the recent election that makes it lawful for adults to buy, possess, and use a number of psychedelic substances, including:

  • Dimethylryptamine (DMT). Sometimes called DMT, Dimitri, or Spirit Molecule, this naturally-occurring tryptamine that occurs in many plants and animals. It can also be reproduced in a laboratory. It’s used recreationally in the U.S. and the U.K., but has a long history of use by various cultures for ritual purposes. It’s a Schedule I narcotic under the U.S. Controlled Substances Act.

Marijuana made big gains in this year’s midterm elections (and a few losses), as two new states legalized recreational marijuana use for adults and voters in other states and cities agreed to decriminalize marijuana possession. marijuana legalization

To be blunt about it, Los Angeles marijuana lawyers would count the biggest victories as being the ballot measures in Missouri and Maryland. Legal marijuana for adult recreational use in those two locations brings the total number of states to 21 – ultimately expanding civil liberties and cannabis freedoms for some 7 million Americans.

In addition to this, voters in 10 Ohio and Texas cities (representing nearly half a million people in total) approved bills effectively eliminating penalties for adult marijuana possession.

These wins are most welcome, though not a huge surprise to legal weed advocates. According to a recent Pew Research Center Survey, the overwhelming majority of Americans (91 percent) favor decriminalization of marijuana AND legalization for adult recreational use. Prior to Nov. 8th, 2022, approximately 43 percent of U.S. adults lived in a jurisdiction with access to legal marijuana for those 21-and-over. Adult-use and medicinal marijuana sales soared to $25 billion last year. In the next 8 years, that figure could easily reach $100 billion.

Although Maryland was widely expected to pass the marijuana legalization measure (which it did 65.6% to 34.4%), Missouri was one of four other (more conservative) states with marijuana ballot measures where favorable outcomes were less likely. Legalization in Missouri with the passage of Amendment 3 (53.1 % to 46.9%) came as something of a surprise, but ballot measure failures in the three other states – Arkansas (56.3% to 43.7%), North Dakota (54.9% to 45.1%), South Dakota (52.9% to 47.1%) – were expected.

Details on the New Cannabis Legalization Laws

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As one president after another over the last two decades has shown little interest in closing the yawning gap between state and federal marijuana laws, the future of cannabis in California – and the rest of America – may rest in the hands of the nation’s courts.Orange County cannabis business lawyer

Over the last two decades, more 37 states have legalized medical marijuana and 19 allow adults to use recreationally. Yet sales across state borders are still aren’t happening, largely because the drug remains illegal at the federal level.

Cannabis has become a multibillion-dollar-a-year industry in California and across the U.S. But the federal government has pushed off regulation responsibility to the states – leaving a lot of open questions and hesitation on everything from security to labeling requirements to banking to insurance.

Ultimately, it may be the judicial branch of government that takes the reins on the issue. The problem with this is that the impact of the courts’ approach may be somewhat chaotic, potentially undermining efforts to protect public health and ensure industry diversity.

As our Orange County cannabis lawyers can explain, there are some states like California with cannabis programs that have been meticulously crafted to meet certain goals beyond merely legalization of adult recreational use. For instance, a top priority for some states has been ensuring that those awarded cannabis business licenses are either people of color and/or those who were somehow disproportionately affected by the failed war on drugs.

Now enter the courts. Those diversity programs typically require license recipients be state residents. But in a recent 2-1 federal opinion by the 1st Circuit Court of Appeals, justices ruled this was unconstitutional. That ruling likely means we’ll see some changes and shifts in state-level import and export bans. Some states are already positioning themselves to be able to hit the ground running with a national market for marijuana sales.

Recently, California’s governor, Gavin Newsom, signed into law a measure that imbues the state with the right to enter into agreements with other states regarding the regulation of cannabis imports and exports. A similar bill was passed a few years ago in Oregon, and New Jersey is considering something similar.

Still, the fact that court rulings could mean the whittling down of consumer protections and industry diversity efforts has many advocates calling for Congress to take charge and overhaul federal cannabis rules in a way that will realistically reflect what’s happening at the state level.

After all, the Commerce Clause portion of the U.S. Constitution entrusts Congress with the authority to regulate commerce at both the interstate and international levels. The flip side of that, the dormant Commerce Clause – the doctrine seized on the the 1st Circuit Court of Appeals – is that states aren’t allowed to discriminate against or burden interstate commerce. The case that gave rise to the appeal involved a medical marijuana law in Maine that required all officers or directors of a marijuana dispensary be residents of the state. One of those dispensaries with multi-state holdings sued over that residency provision. A coalition of smaller medical marijuana caregivers intervened, hoping to hang onto the 75 percent medical marijuana market share held by smaller operators. (Corporate domination in the market is an increasing concern.)

Meanwhile, other courts have ruled unfavorably against residency requirements as well. For instance, a federal trial court in Michigan ruled against a city government that was defending licensing rules that favored long-term residents. Also last year, a federal court in Missouri disavowed that state’s residency requirements for marijuana businesses. In both of those cases, the federal courts pointed to the dormant Commerce Clause.

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California employees are now protected from off-the-clock cannabis use, thanks to a new law recently signed by Governor Gavin Newsom. Assembly Bill 2188 makes California the 7th state in the U.S. that prohibits employers from discriminating against workers who consume cannabis legally when they’re not at work.cannabis employment protection

The statute formally goes into effect on Jan. 1, 2024. The law forbids employers from making decisions to hire, fire, or take any other adverse employment action on the basis of a drug test that detects “nonpsychoactive cannabis metabolites” in the test taker’s urine or hair. It’s worth noting that such a test is not an accurate indicator of current impairment (something employers still have control over). Cannabis-positive urine and hair follicle tests are only indicative of recent cannabis use – and “recent” can mean weeks prior.

Our Orange County marijuana lawyers – who also handle Southern California employment law cases – recognize that such tests are not only offensive, but a clear invasion of an employee’s personal privacy over their own body. Recreational marijuana use by adults – just like alcohol use – has been legal in California for years. We don’t penalize workers for after-hours cocktails or wine with dinner. Why should workers be punished for legal cannabis use off-the-clock?

Of course, workers can still be penalized for being under the influence of cannabis on-the-job. Companies are not obliged to continue employing individuals who come to work impaired. But determining impairment involving cannabis is a bit trickier than with alcohol. Alcohol cycles through the human body quickly. Therefore, a blood, breath, or urine test that shows traces of alcohol is decent proof that the consumption was fairly recent. Often the higher the amount of alcohol concentration, the more recent the consumption and/or greater the degree of inebriation. Continue reading

California cannabis businesses should steel themselves for the reality of an unannounced inspection by state Department of Cannabis Control (DCC) compliance officers – some of whom have been showing up armed at inspection sites. California cannabis company inspections

As our Los Angeles marijuana business lawyers can explain, it’s not the first time pot shops have been subject to inspections. It’s just that officials handling it in the past typically gave companies a heads-up – often several days of notice – before showing up. But according to recent reports, there has been a surge of drop-in, no-notice inspections. The 24-to-48-hour heads-up is no longer something your company can count on.

Given that even minor transgressions or oversights might compromise your ability to keep your doors open, it’s imperative that licensed California cannabis businesses be ready for a DCC inspection out of the clear blue sky.

Prime Targets of California DCC Inspections

If a company isn’t following state marijuana law and guidelines to the letter, DCC can issue citations, fines, and even license revocation. As this new aggressive inspection campaign is under way, it’s unclear how nit-picky inspectors are going to be, but we do know the agency has expressly stated there are a few major compliance rules on which they’ll be devoting a heavy focus. Those include: Continue reading

Few sectors in recent memory have been poised to grow as exponentially as the cannabis industry. By some estimates, we’ll be seeing $45 billion by 2025. And yet, until federal marijuana law aligns with the reality of state law, the status of marijuana as as a Schedule I narcotic under the Controlled Substances Act stands as a considerable barrier to the enforcement of any business contract involving a cannabis company.Los Angeles cannabis lawyer

As our Los Angeles cannabis business lawyers can explain, the illegality defense has been used (with varying success) to invalidate business contracts that would be strongly enforceable in any other industry.

The illegality defense essentially holds that any contract requiring one party to engage in illegal conduct is not enforceable. It’s been employed by cannabis companies, vendors, distributors, etc. to avoid being held to their prior agreement.

We saw an example of this just last year in Sensoria et al v. Kaweske et al, before the U.S. District Court for the District of Colorado. In this case, a group of plaintiffs wanted to recover their investment from a cannabis company it said engaged in breach of contract, breach of fiduciary duty, civil theft, and fraud. Plaintiffs say the invested hundreds of thousands of dollars in a cannabis enterprise, only for the company to essentially cut them off from communications and ultimately, shut down after opening up a rival firm. Investors not only were deprived of a return on investment – they didn’t receive back their initial investment.

The defense responded with the illegality-based defense as a bar to recovery. The federal court noted that the overarching issue was the cannabis company’s direct involvement in the growing and selling of marijuana – legal under Colorado law, but not under the federal SCA. The court held that the plaintiffs’ failure to explain how relief could be obtained without endorsing or requiring illegal activity or how it would be paid from an asset source independent of marijuana. Continue reading

For any industry that deals in consumer packaged goods marketing, product sampling is a go-to tactic. Give consumers a little nibble of your new cookie at the grocery store or a little folder with a sample of your latest perfume – it offers prospective customers the chance to try something new with no cost or risk. It can also be a means to lure prime retailers into providing a product prime shelf space. But as our Los Angeles cannabis lawyers can explain, this practice has always been legally problematic for pot shops.California cannabis samples legality

Some of the legal barriers to California cannabis samples:

  • Age restrictions
  • Public consumption bans
  • Legal licensing and distribution laws

These were exacerbated by the COVID-19 pandemic.

But there is good reason for manufacturers to keep trying because we know that free samples can boost sales of a product by as much as 2,000 percent. More than one-third of customers who sample a product end up buying a full-size version during that same shopping trip. If you offer in-store samples, you have the potential to increase sales by more than 100 percent, even nearly a half a year after the samples were offered.

With this kind of incentive, cannabis company entrepreneurs have had to get creative – starting with CBD.

We should point out that federal law does not allow hemp companies to put CBD into topicals or foods. However, enforcement on this has been incredibly lax. Some companies have taken advantage of that, even going so far as to have brand ambassadors offering up drink samples outside their brick-and-mortar stores. As a result, sales went up. Similar successes were noted for CBD tonics as well. Continue reading

A California church that distributes cannabis and psychedelic mushrooms as sacrament has filed a lawsuit against the local city government and police department over a drug raid in which authorities seized more than $200,000 of these substances. cannabis church

The civil rights litigation filed by the Zide Door Church of Entheogenic Plants explains that worshippers at the congregation gather and consume the mind-altering plants as a means of having a direct experience with God. The church is interfaith, non-denominational, and openly supports the safe access and use of all entheogenic plants, though its particular focus is on cannabis and so-called “magic mushrooms.”

Approximately 60,000 members of the church pay $5 each month, as well as give donations, in exchange for participation in the sacraments. The church grows its own cannabis and mushrooms. The founder of the church explained to Vice Magazine that consuming these substances allows parishioners to experience spiritual visions, interact with powerful spiritual entities with lessons to teach, and sometimes even engage in a direct experience with God.

But none of that seemed to matter to the Oakland Police when they launched a raid of the facility back in 2020, seizing hundreds of thousands of dollars worth of mushrooms and cannabis. No arrests were made and no charges were filed, but the substances were never returned and the church was not provided any compensation for its value.

As our Los Angeles cannabis lawyers can explain, the actions of police may run afoul of the federal Religious Freedom Restoration Act. This, along with the Religious Land Use and Institutionalized Persons Act, are federal laws that serve as a shield against improper government actions against certain church groups and religious services. It may well provide protections for churches who use religious services.

The RFRA of 1993 bars the federal government from applying/enforcing laws and rules that may burden a person’s exercise of religion – even if the burden results from laws/rules of general applicability. It requires strict scrutiny – the highest level of review – of any federal law that may burden the religious exercises of organizations/groups/individuals.

These laws extend beyond federal government intervention, and assert that local and state government agencies can’t discriminate against religious groups either in areas of zoning and land use restrictions.

It’s our belief at the Cannabis Law Group that churches that treat cannabis as a sacrament are improperly and illegally targeted by government agencies taking action against them for this reason. That said, the law on this front is still unsettled, so it may still be possible for cannabis churches to be shut down, cannabis seized, fines imposed, evictions upheld and criminal charges filed. For those fighting back and taking civil action, it’s imperative to work with a law firm with extensive experience in California cannabis law and a track record of success on behalf of cannabis churches and other organizations. Continue reading

As Los Angeles hemp lawyers, we fully recognize that California, despite being the first state in the country to legalize marijuana, has not historically been the friendliest to hemp producers, distributors, and retailers. We began seeing a real shift on this front last year with the passage of AB-45, which sought clear rules for the regulation of CBD manufactured goods and sales. A few months ago, the California Department of Public Health issued its proposed regulations under the new law. And now, it seems we have a clear set of approved hemp industry regulations in California, and the state is prepared to accept applications to become licensed operators.hemp manufacturing

The CDPH’s Food & Drug Branch issued notice earlier this month to industrial hemp product manufacturers and extractors that it would be accepting applications and fees for the production of in-state hemp products, as well as in-state and out-of-state extracts.

Permission to legally manufacture, pack, or hold industrial hemp products and extracts requires:

  • Authorization from the Industrial Hemp Enrollment and Oversight agency.
  • Registration with the department for the applicable food, cosmetic product, or processed pet food.

Those who are making inhalable hemp products are solely required to obtain authorization from the IHEO department.

As our Los Angeles hemp lawyers can explain, hemp growers, producers, distributors, and retailers need to know that their products are going to be subject to strict regulations governing production, testing, labeling, and warehousing to ensure the safety of the products. State law (specifically, HSC 110140) authorizes inspection of any industrial hemp facility or operation by the health department in order to ensure state law and regulation compliance.

Companies that are submitting their applications to the FDB may want to consider having their attorney do it for them, or at least review all materials before submission. You don’t want your application to be turned down on a technicality, but there are many technical considerations that apply. Businesses must submit not only their application and the appropriate fees to the correct authority, but also provide a wealth of supporting documentation. Continue reading

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