Articles Posted in California marijuana business lawyers

Almost all California businesses know they’ll need to secure some type of insurance. Unfortunately, as our Los Angeles marijuana business attorneys know full well, companies that deal in cannabis face a host of major hurdles for this essential service. Although the California Insurance Commissioner has approved a handful of insurance carriers to offer insurance coverage to the cannabis industry this year, giving growers and distributors at least some options, there is a good argument to be made that cannabis companies need an insurer tailored to meet the unique needs of the industry – just like they require an attorney who specializes in marijuana law. Los Angeles marijuana lawyers

Although it has become easier this year for cannabis companies to find insurance coverage than ever before, Los Angeles marijuana business attorneys recognize the industry is still very under-served.

Most cannabis insurance primarily focuses on product liability coverage, as explained in a recent article by Insurance Journal. However, there are a number of other potential liabilities too for which cannabis companies likely could use insurance coverage. That’s an opportunity for insurance companies, but of course many are keenly aware of the risk, given federal laws pertaining to money laundering when doing business with any enterprise that derives income from illegal sale of cannabis.  Continue reading

Legalization of marijuana has brought a number of enterprises and employees from the shadows of the black market. One of those includes the work of so-called “bud trimmers.” Los Angeles marijuana employment attorneys know that because so many of these workers are from other places, flocking in heavy numbers during harvest seasons, they are sometimes referred to as “trimmigrants.” These workers were historically subject to an outsized risk of the same sort of abuses many migrant workers face – unfair wages or wage theft, discrimination and sexual harassment.Los Angeles marijuana employment attorney

An article published two years ago in “Broadly” was written by a woman who worked for years during harvest season on illegal marijuana farms in rural California. The isolation of the site made it all the more dangerous for young female workers – not only because they risked jail time and felony charges for unregulated, untaxed income, but because they are frequently (especially on the black market) targeted for sexual harassment. One investigation by the Center for Investigative Reporting’s Reveal found in 2016 that the number of sexual assaults suffered by female trimmers was far underestimated.

Ideally, legalizing the drug would have brought these sort of elements of the industry to light, making workers safer. Perhaps to some degree, that is true. However, as Los Angeles marijuana attorneys with practice areas both in the budding cannabis law as well as California employment law, we recognize these workers may still be vulnerable, especially if the operation is still illegal (as a fair number still are, given the high taxation and testing requirements on legal marijuana and the limited number of cultivators and distributors allowed, which varies by jurisdiction. Trimmers are an inherent part of cannabis cultivation process, though the hours are long and the work tedious.  Continue reading

Hundreds of batches of marijuana products may need to be recalled and retested after a California cannabis testing lab surrendered its license following a state inspection reportedly revealed falsification of product testing results over the last four months. Los Angeles marijuana business lawyers recognize this could have substantial impact on statewide supply and industry operations heading into the new year. That’s because come Jan. 1, 2019, a host of additional marijuana testing requirements go into effect, and cannabis oils, flowers and edibles are required to undergo more rigorous testing for certain toxins like heavy metals. This is bad news because bottlenecks at state-authorized testing labs were already beginning to form, slowing the process of getting these products from seed to sale.Los Angeles marijuana business lawyers

The lab in question, Sequoia Analytical Labs in Sacramento, was undergoing a routine inspection late last month when state investigators with the California Bureau of Cannabis Control noted that in testing for 66 pesticides required by law, tests for 22 of those were not correct, thanks to a “faulty instrument.” Furthermore, the bureau reported the lab director was aware the results were erroneous, and not only failed to intervene and take corrective action, but instead falsified lab results to indicate the products were safe when in fact they may not have been.

Safety Concerns for Faulty Testing Prompt Marijuana Business License Forfeiture Continue reading

Banking for marijuana businesses has been fraught with legal perils. As Los Angeles marijuana business attorneys can explain, this stems primarily from the fact that no matter how many states allow marijuana, the Department of Justice continues to consider the drug unlawful according to federal law, which puts banks in the legal cross-hairs, thanks to money laundering statutes. That’s why despite being a multi-billion dollar industry, only 30 percent of cannabis businesses have access to banking.cannabis attorney blog

That may be changing, though the pace will truly depend on how aggressively the federal government pursues violators pursuant to federal law. The Anchorage Daily News reported a credit union plans to launch a pilot program intended to extend banking and checking services to marijuana-related businesses that otherwise operate largely in cash. As noted by the credit union’s CEO, the lack of financial services for cannabis companies has resulted in essentially a cash crisis for marijuana businesses as well as a safety issue for local communities, as these locations may be targeted for strong arm robberies.

Alaska, like California, allows marijuana cultivation, sale and possession for recreational purposes, and has done so since 2014. Yet as retailers have cropped up throughout the state, they face problems similar to those in this state, which is they must operate in cash and owners have even had their personal bank accounts abruptly closed. The credit union says it hopes to address this market need and also improve community safety by giving cannabis companies another option besides cash-only operation. Just in Alaska alone, the industry is handling some $1.5 million monthly – all in cash, according to local media. Continue reading

Although California cannabis business attorneys know significant strides have been made with regard to legitimization of California’s marijuana industry, a ruling by the U.S. Tax Court underscored once again that until there are significant changes at the federal level, marijuana businesses are still illegal drug-smugglers under the eyes of the law. Orange County marijuana lawyer

In Harborside Health Center v. Commissioner of Internal Revenue, what is admittedly one of the largest marijuana dispensaries in California – and possibly the U.S. – requested the usual tax deductions that any legitimate business owner might seek. It also sought to be treated just like any other corporation because it abides the law in California, as our California cannabis business lawyers know many such distributors in the state do, and federal prosecutors opted not to take any type of civil forfeiture action against the firm.

The IRS, however, sees it much differently. In the eyes of federal law, as long as the U.S. Controlled Substances Act remains in place (designating marijuana as a Schedule I narcotic), the IRS sees Harborside (and presumably others like it) nothing more than a large drug trafficking ring, not entitled to those deductions or even allowed to capitalize indirect costs into its inventory, and further subject to potentially millions of dollars in penalties for taking several contrary positions on tax returns from 2007 through 2012.  Continue reading

Many retailers extend promotional offers to drum up new business or garner awareness of a new product. However, just as with almost every other aspect of operation and sales, California cannabis companies must be especially careful about how they market and promote their product. Otherwise, as our California cannabis lawyers can explain, distributors may find their green business deep in the red – and themselves in handcuffs. marijuana lawyer

Recently, The Olympian reported recently that a pot shop owner in a Washington state suburb drew the attention and ire of state regulators for allegedly passing out free samples in violation of the state’s recreational marijuana laws. An undercover investigation was launched after officials received an anonymous tip about an alleged illegal marijuana club on site. Social media advertisements indicated free samples to the product were provided upstairs. Undercover officers began investigating the pot shop, and were offered free samples by an employee, who told them they could try it in another section of the building that wasn’t licensed. The officers reported that when they got to this portion of the building, they saw several individuals smoking marijuana.

The problem is marijuana retailers cannot, as Los Angeles cannabis business lawyers can explain, offer a ‘try it before you buy it” sort of deal for marijuana customers. This is largely owing to the fact marijuana business licensees in California, just as in Washington, are required to keep track of their product from seed to sale. By diverting products to be distributed as free samples, they are in violation of the law.  Continue reading

Los Angeles marijuana attorneys know the cannabis industry has worked diligently since Proposition 64 was passed to shed its past image of lawlessness. An alleged plot in San Diego isn’t helping, though the case has helped bring to light certain marijuana businsess regulatory loopholes that state lawmakers are now working to address. Los Angeles marijuana lawyers

Local news media is reporting a prominent property owner and marijuana owner, along with two associates, is accused of cooking up a plan to kidnap and murder a business partner while in Mexico. He has been arrested on charges of criminal conspiracy, leaving the Southern California cannabis community stunned. Many trade industry groups have refused to discuss this case, and while our Los Angeles marijuana attorneys will point out that the accused is innocent until proven guilty, it is important to point out that even if proven, this conduct is not reflective on the rest of the cannabis business community – despite the way in which staunch prohibitionists in many communities will undoubtedly attempt to twist it.

The truth of the matter is concerns regarding public safety that were raised time and again by die-hard cannabis prohibitionists haven’t been realized. The truth of the matter is in San Diego, where these individuals reportedly worked, has not reported any noticeable uptick in violence among operators of the city’s lawful marijuana dispensaries. Of those violent incidents that have been reported, almost all involved illegal, unregulated cannabis dispensaries. Legalization and regulation is a form of protection not only for owners and operators of the business itself, as well as neighbors, customers and connected industries.  Continue reading

Although cannabis has been legal in California for recreational use since the start of this year, Los Angeles marijuana lawyers know there continues to be much confusion as to what is allowable and what isn’t in the course of conducting business. One legal woe cropping up of late involves marijuana shipping and transport. Shipping out-of-state (or sometimes even in-state) is fraught with legal pitfalls. If you are not careful, you and/ or your associates could wind up facing serious criminal charges, not to mention hefty fines.Los Angeles marijuana business lawyer

Because the federal government considers marijuana to be a dangerous narcotic, it is a federal felony offense to transport it interstate. Because of the Supremacy Clause in the U.S. Constitution, the federal government can prosecute you for federal crimes, even if your actions are legal under state law. In-state transfers can be done lawfully, but it depends on the circumstances.

California’s Bureau of Cannabis Control lays the groundwork for the state’s digital track-and-trace system and is responsible for licensing every vehicle used to transport marijuana across the state. Continue reading

When California voters approved Proposition 64, it included a provision that give wide discretion to individual communities regarding how much of a berth they wanted to give cannabis companies and customers. In San Bernardino County, Fontana marijuana lawyers soon understood that in this community, authorities were eager to take a hard line stance – particularly on home grow operations. Fontana marijuana lawyer blog

Now, Fontana’s de facto ban on home cannabis grow operations has been nixed in a San Bernardino Superior Court ruling, finding the city’s rule’s to be “excessive,” paving the way for individuals to grow and possess amounts of the drug that are more in line with state provisions, which are far more lax.

This is likely to prompt other municipalities to look carefully at their own policies if they are tighter than provisions of state law.  Continue reading

For as long as the people of California have sought marijuana, the black market has existed. Even when the state legalized medicinal use in 1996 and then paved the way for lawful recreational use with a ballot measure last year, Los Angeles marijuana lawyers know the reality is illicit pot shops and sales have always outpaced the legal market. The hope was we’d see a shift, a significant tapering off of demand for illegal marijuana now that with recreational pot now available. But as of right now, they have retained a larger hold than facilities operating according to the stringent regulatory guidelines set forth by state and local officials.Los Angeles marijuana lawyers

Los Angeles marijuana lawyers had seen many long-time operators on the California cannabis scene try to work their way into the newly-forged legal market to finally be legitimate, only to end up continuing to work the riskier – bit more lucrative – illicit market. This includes unlawful medical marijuana collectives, cannabis delivery services and cultivation farms that haven’t been properly vetted according to stringent state law.

Some of these individuals are focused on pursuing “OT” money, generated from “out-of-towners.” Of course, such sales are especially risky because, as our Los Angeles marijuana lawyers know, rules can vary from city to city and certainly from state-to-state and country-to country. Black market sales are playing with fire given the uncertainty of how federal authorities are going to handle future sales. Despite the Jan. 1st legalization of recreational use and sales in the Golden State, cannabis is considered an illegal crop from the top-down under the Controlled Substances Act, and as a Schedule I narcotic, it’s one of the most most heavily regulated – despite being one of the most commonly-cultivated and sold. And it’s going to be extremely difficult to move away from that given its history with illicit sales and use.  Continue reading