California has been hailed with potential to rein as the world’s largest regulated marijuana market on the planet, but currently trails in per-capita sales when compared with other recreational markets across the United States. Much of this can be attributed to California’s rampant illicit cannabis market, and further compounded by the state’s stringent regulation requirements for lawful cannabis businesses.
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.
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.
A marijuana business expo is now in its fifth year in L.A., with NBC-4 defining it as an event for cannabis growers, entrepreneurs, investors, doctors and users to gather, network and collaborate. As California is poised to become one of the biggest marijuana markets on earth, thanks to its recent legalization of adult recreational use of the drug. The expo is held until the end of the month, with booths making available a variety of businesses, services and products. Some keynote speakers have been identified as industry experts and trailblazers.
But as the market grows, our L.A. marijuana business attorneys cannot stress enough how important it is that whatever you niche, you need an attorney to help you navigate through the complex process of state law and local regulation. Failure to do so can end up costing you a substantial sum in the long run.
Although it seems everyone is finding a niche in the cannabis market, there are some main umbrellas under which most of these operations fall:
- Infused products
- Retail sales
Riverside County is empowering cultivators by teaming up with the state to provide training on pesticides, including proper use and regulations. The mid-September training is being provided by Riverside County’s Agricultural Commissioner’s Office and California Department of Pesticide Regulation, according to a release from the commissioner’s office. Commercial cultivation is banned in many parts of Riverside County, including the unincorporated areas, but the event is still open to anyone who wants to register.
Pesticides have become a hot-button issue in the marijuana industry, especially over the past few months. As of July 1, the transition period in which licensing authorities did not enforce certain regulatory provisions was no longer in effect. As our experienced attorneys can explain, mandatory laboratory testing was among those regulations that would be enforced. This has meant any cultivators not in compliance with pesticide use are now flagged during testing and their product is not able to make it to market. Even before July 1, pesticides were regularly in the news, with some unlicensed cultivators using toxic pesticides that have been killing off wildlife. Such behavior has had devastating effects on local ecosystems and given responsible cultivators a bad name. Continue reading
Riverside City Council has made its temporary moratorium on marijuana businesses official with a recent 4-3 vote that put a nail in the coffin for residents hoping to one day be able to legally purchase cannabis in their city. According to The Press-Enterprise, council’s decision effectively bans dispensaries, commercial cultivation, and any outdoor grow sites. Medical marijuana dispensaries were already banned by the city in 2007, and an intensive law enforcement strategy has kept illegal dispensaries at bay. Cannabis testing will, however, be permitted.
The tight vote is illustrative of how divided the city is over the issue. Riverside County was one that supported Proposition 64 by about 42,000 votes. Yet the county has banned cultivation, manufacturing, and retail, with individual cities also enforcing their own similar bans. When residents vote one way and their representatives vote in the opposite manner, it truly flies in the face of the will of the people. Try as they might, the city and county governments do not have the power to ban everything, though, no matter how many scare tactics they use to justify their agenda.
Some local governments have appeared hell-bent on banning or strangling the budding cannabis industry. It’s encouraging in this light to see some leaders embracing the change and making strides to make this a more cannabis-friendly community.
The Napa Planning Commission recently endorsed reducing the distance a cannabis business can set up shop to 600 feet from a school or place where children congregate, and even recommended easing up on that rule in instances where a natural barrier would prevent direct access, such as a waterway, according to Napa Valley Register.
For many people, change can be a very scary thing. Often, though, such fears are rooted in lack of education and the feeling of losing control. Once we see new ideas in action, we sometimes wonder why it took us so long to change in the first place, and realize we wouldn’t want things to go back. We see the effects of this sentiment throughout California. Since the passing of Proposition 64, there has been a great deal of caution on the part of cities to slow down change as much as possible. Prop 64 and the follow-up Medicinal and Adult-Use Cannabis Regulation and Safety Act very thoughtfully laid out guidelines that would allow marijuana businesses to begin sales of recreational cannabis, and, in the case of MAUCRSA, brought medical marijuana sales under the same umbrella of rules. These guidelines painstakingly established regulations that would encourage cannabis businesses to operate legally while easing fears of residents. Continue reading
Mendocino County is the latest to sign an agreement with the California Cannabis Authority in an effort to help local governments with regulatory compliance and assist in creating a rich pool of data about the cannabis industry. Our attorneys know one of the most difficult things about establishing any new industry is lack of concrete data. There can be a lot of growing pains as authorities and economic leaders gather a foundation of facts that help in making critical decisions about public safety, regulations, and taxation. This is particularly true when dealing with a controlled substance, like marijuana. Even though marijuana has been legal for medical purposes in California since the passing of the Compassionate Use Act of 1996, the switch to recreational legalization in the state as of Jan. 1 was a real game changer. MAUCRSA, Medicinal and Adult-Use Cannabis Regulations and Safety Act, was created to combine guidelines for medical marijuana with all the new stringent licensing rules for recreational cannabis, so all regulations lived under one umbrella.
The mission of the newly formed California Cannabis Authority is to “develop and manage a statewide data platform that will gather, collect, and analyze information from a myriad of data sources into one resource.” The more local governments that participate, the more compelling and significant the data will be for everyone who accesses it.
The group was created by the California State Association of Counties Finance Corp. The group started with San Luis Obispo, Humboldt, and Monterey Counties on board, with Mendocino following suit. According to a report by the Ukiah Daily Journal, the platform will make it easier to track tax payments, provide compliance information to county departments, and allow health officials to access product information. Continue reading
The County of Riverside remains a patchwork laws, with each city holding very different opinions on how to best move forward with regulating (or banning) marijuana businesses, growing operations, home cultivation, testing, sales, manufacturing and distribution. That same divide is reflected in the Riverside County Board of Supervisors in how to handle regulations in unincorporated parts of the county. But it looks like after a recent vote, the board will be moving forward on its own with those regulations, while also forgoing a tax ballot initiative in November, according to an article from The Press-Enterprise.
As our marijuana attorneys can explain, even though Proposition 64 passed in November 2016, and adult-use sales were permitted beginning Jan. 1, 2018, it did not mean an automatic free-for-all everywhere in California. The Medicinal and Adult-Use Cannabis Regulation and Safety Act was voted into place by state legislators in June 2017 to streamline the existing Compassionate Use Act of 1996 with the incoming recreational marijuana laws. MAUCRSA Section 18-26032(a)(2) outlines that the actions of marijuana businesses “are not unlawful under state law” so long as they are “permitted pursuant to local authorization, license, or permit issued by the local jurisdiction, if any.” Continue reading
Recently, U.S. Attorney General Jeff Sessions rescinded an Obama-era Department of Justice Directive that essentially urged federal prosecutors to ignore marijuana crimes so along as alleged violators were in compliance with state laws. This step gave states the space to figure out how they wanted to handle recreational and/or medical cannabis laws without interference from the federal government.
Sessions, however, has made it clear he intends to revive marijuana prosecutions based on the drug’s current Schedule I controlled substance designation under the Controlled Substances Act, 21 U.S.C. Section 812. By rescinding the 2013 order, Sessions has given federal officials the freedom to pursue charges against anyone for these violations – even if they follow state and local laws to the letter. Our marijuana attorneys in L.A. encourage all cannabis business owners in California to seek prompt legal counsel to best protect themselves and their livelihood.
Some don’t see this as an immediate threat, citing the lack of resources to go after so many operations. They also point to a lack of support among citizens to pursue such charges, meaning juries will be more reticent to convict. Others are less optimistic. Continue reading
On the same day many recreational marijuana dispensaries in California opened for business, one medical collective in Upland, Calif., was forced to shutter its doors for good.
For years, the owner of the collective in question pushed for Upland to lift its ban against medical marijuana. But the city has repeatedly fought back, working aggressively to close illegal dispensaries. Upland spent roughly $4.5 million on legal fees since 2014 and closed 24 illegal operations along the way, according to an article from the Daily Bulletin.
This particular owner, though, was characterized as a thorn in the city’s side throughout the process. He helped lead the charge in getting Measure U on the city’s November 2016 ballot, which was designed to ease up restrictions and pave the way for three medical dispensaries in Upland.
He assisted in collecting signatures and fighting tough legal battles to get the measure on the ballot. The California Cannabis Coalition took the matter all the way up to the California Supreme Court, which ruled the city must put Measure U up to vote in a special election. However despite all those efforts, the voters of Upland did not get on board, voting down the measure. Continue reading