Articles Posted in California marijuana business lawyers

The California-based cannabis list site, Weedmaps, has held true to its promise to drop unlicensed cannabis advertising listings from its platform by January 1, but the work is ongoing.

Industry insiders say the very nature of Weedmaps – a self-published platform that fails to vet ads prior to posting them – continues to afford illegal businesses a means of maintaining a small presence on its promotional site.

Cannabis business attorneyBackground
In late 2019, the licensed California cannabis industry pressed Weedmaps to cease posting ads for illegal marijuana businesses. The site then set itself a deadline of January 1, 2020. By which time, the platform said it would require current state license number submissions for all California advertisers on its site, before ads could go live.

And as that January 1 deadline has arrived, the industry has been taking note. A Weedmaps statement earlier this week indicated the site had received state issued license numbers from “hundreds of retail clients.” But the statement failed to share the number of ads rejected, and also neglected to detail how many Californian companies currently advertise on the platform.
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With 2020 being the third year Californians enjoy the legal use and sale of recreational cannabis, stakeholders expect new laws kicking in, big court cases taking place, and major reforms to criminal justice, all to make this a big year for the cannabis industry.

While 2019 was a challenging year for many cannabis business operators, industry insiders say changes being ushered in bring with them hope, that situations will improve for business owners as the industry presses on.

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After two years of licensed cannabis stores selling legalized marijuana across California, the industry has encountered numerous teething problems. Crippling regulation and licensing costs, rising local and state taxes, local city usage bans, and a strong illicit market that shows little sign of waning, have all proved to hinder industry growth. At this point, it is safe to say the Golden State’s legal marijuana industry is in need of a little prod, to help it move forward.

Calling for a Return to the Ballot
With lawmakers seemingly finding it difficult to pass any changes as quickly as the cannabis industry needs them, Cody Bass has floated another idea.
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Californian payment provider, Linx Card, has fielded a spate of lawsuits from cannabis businesses in recent months, who claim the primary provider of debit merchant services to marijuana retail stores, owes them millions.

Linx offers customers a platform where they can purchase Linx gift cards, or pre-paid debit cards, that can then be used to make in-store cannabis product purchases using those cards. Terminals within select retail stores sell the Linx gift cards, as does the Linx website.

marijuana bankingCourt Filing Woes
Court filings made across the country allege that Linx owes at least four marijuana businesses money. Those sums include:

  • $40,092 to Universal Herbal Center and Pineapple Express (who operate marijuana stores in California);
  • $114,962 to Colorado retailer, Silver Stem Fine Cannabis;
  • $939,010 to Las Vegas superstore retailer, Planet 13; and
  • $1.5 million to Arizona and Nevada Reef Dispensaries.

In a statement, Linx CEO Patrick Hammond, acknowledged the company is working to resolve these issues and plans to ensure retailers are paid in full.

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The nationwide vape crisis, driven by high-profile health scares that included an outbreak of lung injuries has led to California cannabis vape companies’ sales taking a steep dive along with consumer confidence. Although much of the problem appears to have been tracked to illegal manufacturers – some not even in the U.S. – consumers are still wary of wading back into the vape world. Los Angeles cannabis vape company lawyer

To combat the problem and assure the public that their products are safe, a growing number of cannabis vape businesses are unveiling various technologies that create a more transparent supply chain.

Our Los Angeles cannabis vape company attorneys understand some of these solutions involve smartphone apps that show buyers:

  • Certificates of analysis that show the product has been through a battery of quality testing;
  • QR codes that give consumers information about the usage and dosing of each particular vape product;
  • Encryption cartridges so consumers can be sure that what they’re buying is a safe, state-legal product;
  • Proof the manufacturer has adopted quality testing methods that go above and beyond what the state requires.

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The City of Pasadena sued itself over a controversial cannabis ballot initiative – and won. The result is a judge has ordered the county to remove the proposed measure from the city ballot in the upcoming March election. Had the initiative passed, it would have legalized some 18 cannabis businesses operating without in the city without permits.Los Angeles marijuana business lawyer

Not only would those stores have been legalized, but they wouldn’t be subjected to the same set of stringent rules laid forth in the city’s permitting process. The rules for pot shop permitting in Pasadena are so strict, in fact, that it only allows four-to-six retailers to operate in the city at a given time.

The measure had been signed by more than 9,000 residents, so the city clerk had no choice but to add it to the ballot. The city didn’t blame the clerk or other city employees for the proposed measure; they did what the law compelled them to do. But in order to remove it from the ballot, an attorney for the city explained there was no choice but to sue its own clerk as well as the county’s registrar of voters. Neither the clerk nor the city were defending the initiative; that was left to another lawyer who represented the interests of those backing it. Only a judge could determine whether a ballot initiative is unlawful in advance of such a vote. The city sought an expedient ruling, as a decision was needed by Christmas Eve in order to ensure the measure could be removed from the spring ballot. Continue reading

In a recent statement on a large-scale federal funding bill that President Donald Trump signed into law, he released a statement indicating he reserves the right to essentially ignore any provision of law approved by Congress that seeks to shield medical marijuana laws from federal interference. Los Angeles marijuana lawyer

The statement notes that Division B, section 531 of the Act disallows the U.S. Department of Justice from using funds made available under the act to prevent medical marijuana cultivation and distribution by the various states and territories where it’s allowed. The Trump administration, the statement said, would treat this provision in a manner consistent with the president’s constitutional duty to execute federal laws in good faith. As it stands, marijuana is still classified as a Schedule I narcotic under the Controlled Substances Act.

Our Los Angeles marijuana lawyers don’t necessarily take this to mean the president will ignore the Congressional block on DOJ funds or that we’ll start seeing any enforcement crackdown efforts again soon as we did a few years ago under the Obama administration. In fact, it might not mean much considering presidents often will sign statements like these while flagging certain aspects they believe might be an impediment to executive branch authority.

Ambiguous though the statement was, it still warrants some degree of concern. The effect of it is that the executive branch has expressly declared that it can broadly enforce U.S. drug laws against people or marijuana businesses, even if they’re in total compliance with state marijuana laws and even though Congress has instructed the executive branch to use a hands-off approach. Continue reading

The cannabis industry in California is struggling, despite being larger than ever. Los Angeles marijuana lawyers know that is thanks in large part to the tight regulations and steep taxes imposed on cultivators, producers, labs, retailers and consumers. Now, some legal analysts are proposing a plan that would base tax level on how potent a product is. Los Angeles marijuana tax lawyer

In other words, the higher the concentration of a product’s THC content, the more it would be taxed. The proposal comes as state-legal businesses have been begging lawmakers for some relief from local and state government taxes. The high tax rates (a combined 50 percent for some businesses) are driving up the costs of marijuana products, which in turn are being passed onto consumers, a growing number of whom find it preferable to frequent the plentiful (and much cheaper) black market vendors.

The plan proposed by the state’s Legislative Analyst’s Office would:

  • Eliminate existing marijuana business taxes (including the 15 percent across-the-board tax paid by customers when they buy).
  • Replace this with a tiered tax system wherein taxes would range on the basis of the potency or the type of product itself.

This would effective address a few different issues, they say. First, it would help reduce the potential for consumers to get their hands on dangerous, high-potency pot products. Secondly, it would ease the tax burdens of retailers primarily selling low-to-moderate THC potency products. Once companies aren’t so squeezed financially, they’ll be better able to compete with the unregulated black market. Continue reading

An Oakland cannabis company’s tax fight with the Internal Revenue Service is being closely watched by industry insiders throughout California. Although it’s been two years since recreational cannabis sales became legal in California, marijuana businesses are still – at least in the eyes of the IRS – sizable drug traffickers. Los Angeles marijuana tax lawyers

Our Los Angeles marijuana tax lawyers know that taxes are a major sore point for many pot shops throughout the Golden State – starting with the fact that local and state government taxes have sapped many businesses of the ability to fairly compete with the cheaper, thriving black market.

Taxation by the federal government is a whole different beats entirely. The U.S. Controlled Substances Act still categorizes marijuana as a dangerous Schedule I narcotic, criminalizing marijuana possession, sale and cultivation. This is true regardless of state law, though federal officials have struck a tenuous peace with state-legal operations with annual federal spending bills that stipulate the U.S. Department of Justice isn’t to use taxpayer funds to go after operations in compliance with state cannabis laws. But that doesn’t provide any relief where the IRS is concerned. Continue reading

cannabis chemist lawyerMonthly lab-testing numbers for California’s legal cannabis products show signs of bouncing back, after lulls midyear. Even in late November, indicators pointed to a cultivating season that will continue well into the year’s end.

News of this rise in legal cannabis product quantities moving through the state’s supply chain has been met with spliff, or rather split, industry opinions. That’s largely because California’s unsteady marijuana market is still trying to find its stride.

Some insiders see the rise as a positive sign, showing that California’s licensed marijuana operations are enjoying an uptick. Meanwhile, others see the latest statistics as further evidence of a black market that continues to outpace the regulated industry.
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