Articles Posted in California Marijuana

California’s cannabis tourism may look a little different in 2020. That’s because the Golden state’s lawmakers recently closed a loophole with Assembly Bill 1810, to prevent passengers from smoking or vaping cannabis products while inside moving vehicles.

For some time, state legislators had been pushing for a bill that protects limousine and party bus drivers from the effects of second-hand cannabis smoke. Senate Bill 625 was first introduced by Californian Senator Jerry Hill (D-San Mateo).

marijuana legalizationSenate Bill 625
SB 625 bill stated passengers were permitted to consume cannabis within a limousine, pedicab, camper, houseboat, bus or taxi. But it also required drivers were to be separated from passenger compartments, and provided with ventilation systems separate from those smoking pot. These measures were intended to protect drivers from inhaling second-hand smoke and unintentionally becoming high while driving. A measure drivers welcomed, because if consuming pot at the wheel, not only could they pose a risk on the roads, but if testing positive they could also lose their jobs, and their commercial driving licenses.
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medical marijuanaThe Californian cannabis industry watched with the nation, as 47 patients across 25 states lost their lives to possible ­­vaping associated pulmonary illness this summer. And as the epidemic dragged on, news reports covered a notable dip in vape sales, understandably as consumers took a slight step back from vaping until safety could be assured.

When the Centers for Disease Control and Prevention (CDC) confirmed there was a vaping crisis sweeping the nation, media reports surrounding the deaths believed to be linked to vaping also covered news of the crisis hurting cannabis vape sales. At the time, vaping was the cannabis industry’s fastest growing segment. It appeared that California bore the brunt of the fallout, and Marijuana Business Daily reported the state’s vaping shares for the recreational cannabis market dropped for four weeks straight, “from 30.5% the week of August 19 to 24.3% by the week of September 16.”

Since then, data has shown that vaping cannabis sales have stabilized, and even increased market share in a number of states. Tom Adams, BDS Analytics’ Managing Director of Industry Intelligence explains that’s because people enjoy vaping, they see it as a healthy substitute for smoking cigarettes and cannabis, and find vaping far more convenient and discrete than burning dried plant matter. So unless we see a total government ban imposed, a slowdown is unlikely.
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Los Angeles cannabis business lawyerFollowing a slew of vaping related lung disease cases, a Los Angeles City Council member calls for a year-long ban on all vaping sales.

The proposed ban has many in the industry rushing to cut the motion off before it becomes law. The major concern is that such a ban could mean the end for countless vaping companies who are solely in business to sell vape pens and cartridges. Continue reading

The black market for marijuana in California is three times the size of the legal market, a recent audit has shown. The findings, made public in September, highlight the state’s ongoing battle to curb its illegal cannabis trade.marijuana dispensaries

Approximately 2,835 unlicensed dispensaries were listed as trading across California, according to the audit conducted by the United Cannabis Business Association (UCBA), a trade association representing a wide variety of licensed marijuana businesses. Interestingly, the Bureau of Cannabis Control has only licensed 873 cannabis merchants to operate lawfully within the Golden State.

These comparative statistics reflect the continued hiccups California has faced since rolling out updated legal regulations beginning in 2018, which were intended to level the cannabis market’s playing field. Continue reading

Magic MushroomsWith the 2020 ballot fast approaching, California activists are keenly working towards securing a measure that would decriminalize psilocybin, also commonly known as ‘magic mushrooms.’

Together with the required $2,000 fee, an advocacy group by the name of Decriminalize California submitted ballot language to the state attorney general’s office in September. Now the activist group awaits approval from the attorney general on both the official measure title and summary it submitted. Such a response is typically granted within 65 days, and if approved, the measure will be green lit to begin seeking signatures.

At that point, within 180 days of receiving the attorney general’s approval of title and summary, the Decriminalize California group must collect 623,212 valid signatures before the measure qualifies for the California ballot. Continue reading

marijuana dispensariesAs California’s legal marijuana industry continues to bloom, so too does a well-stocked black market, comprised of unlicensed, locally grown cannabis, and a plethora of counterfeit cannabis products.

Fake THC Cartridges Are Flooding California
Of all counterfeit cannabis products, refillable THC cartridges used inside vaping pens are currently most common. Surprisingly, states like California – where recreational cannabis use is legal – appear to be most flooded with counterfeit products. Big brands like Kingpen and Rove have tried to get ahead of counterfeits by repackaging their products, but counterfeits have shown they can keep pace, often reproducing new packaging almost as quickly as the legitimate brands.

And industry insiders unanimously agree, the fakes are getting better all the time. Many knockoff THC vape pens are comprised of illegally but locally grown cannabis, which producers then stuff into refillable cartridge pens, before attaching counterfeit labeling they’ve purchased online, and selling the finished counterfeit pens at discounted prices to illegal pop up shops. To most consumers and law enforcement officials alike, it’s very difficult to tell a real pen from a fake one.
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In January, the state of California kicked off an online rollout of its marijuana inventory tracking system. At a glance, marijuana businesses across the Golden State appear to be successfully reporting product inventory each day, via the California Cannabis Track-and-Trace (CCTT) system. But not without some growing pains.

To start, the idea of tracking marijuana traveling throughout the supply chain sounds simple enough. In theory, all cannabis products would be given unique identification numbers, noting from which ‘batch’ or ‘lot’ they were born. Products would then be sent to labs for testing. Next, approved products would be passed from producer to distributor, and finally to retailers for sale. At each step, the state should be able to track each piece of marijuana as it moves through the chain, making sure nothing is being redirected out of state, and ensuring everybody is paying their required taxes.

California Cannabis Lawyers

But in practice, a few hiccups quickly come to light. First up, only businesses holding ‘provisional’ or ‘annual’ licenses are required to subscribe to the track-and-trace system. And until last month, there were more than 600 marijuana businesses operating on ‘temporary licenses,’ who would not have had to track-and-trace. This means, there was no way regulators could comprehensively account for every legal product moving about the state.

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California marijuana farmers are facing a crisis. Currently, all 9,464 state issued temporary cannabis cultivation licenses, have expired. Meant to be replacing those, for businesses continuing to meet the required regulations, are either provisional or permanent annual cannabis business licenses.

The catch though, the California Department of Food and Agriculture (CDFA) is yet to show its ability to approve those provisional or permanent licenses, at the same pace applications are being lodged.

California Cannabis License Attorney

The backlog on approvals may be due to the complexity of the licensing application process itself. Tellingly, by mid July 2019, only 2,053 provisional licenses and 230 permanent licenses had been granted. As it stands, when applying for prospective licenses, cannabis farmers are expected to demonstrate compliance with the stringent California Environmental Quality Act (CEQA), as well as submit:

  • Background checks;
  • Surety bonds;
  • Real property documents;
  • Detailed site plans;
  • Farm management practices;
  • Waste management protocols;
  • Security procedures; and
  • Pesticide measures.

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As the black market for pot sales shows little sign of slowing, Californian authorities have notably increased enforcement action against illegal cannabis traders. Over the last 12 months, raids by law enforcement on black market pot businesses have increased threefold, when compared with similar activity conducted in the year prior. As a result, unlicensed pot growers and sellers have seen a total of $30 million worth of cannabis products seized. But even amid this additional ramp up, cannabis industry insiders say even more activity is needed to curb illegal pot sales across the Golden State.

For context, in 2018 local law enforcement worked in conjunction with the state Bureau of Cannabis Control, and together they served six unlicensed cannabis businesses with search warrants. These raids resulted in the seizure of more than 1,500 pounds of marijuana, said to carry a street value of $13.5 million.

Calilfornia Cannabis Business Licensing Lawyers

Comparatively, according to data release in July, within the first half of 2019 alone, the bureau had already served 19 search warrants to unlicensed sellers. Those raids were successful, and saw more than $16.5 million worth, or about 2,500 pounds of illicit marijuana, confiscated. Just shy of $220,000 cash was also seized from cannabis businesses operating illegally during this time.

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California cannabidiol (CBD) products are on the map, and investors are taking notice. But given that CBD-infused products are still relatively new to market, regulators continue to closely review the category. For this reason, acquisition strategies may be a ways off yet, but industry insiders predict consumer companies will see high minority investment interest in the short term.

CBD is naturally found in cannabis plants, and is widely known for its relaxing properties. But CBD won’t produce a ‘high,’ as it lacks the psychoactive tetrohydrocanabidiol (THC), found in marijuana.  CBD-derived products have quickly grown in popularity, thanks largely to a wide range of potential health benefits, including relieving pain, anxiety, seizures and brain injuries.

California Cannabis Investors

According to Michael Lux, partner at Crowe accounting firm, the next 6-12 months will involve strategic minority investments in the CBD space. He noted too that while the majority of CBD companies are of interest to investors, they are still less than five years old, so they’d likely need a little more time before preparing to engage in full exit strategies.

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