Articles Tagged with California cannabis law

Several marijuana-related bills were signed into law by Gov. Gavin Newsom recently. Among them:

  • A measure to allow legal marijuana businesses to take advantage of more tax deductions – in a departure from IRS policy.
  • A measure to provide free medical marijuana to low-income patients – and exempting those products from state-level taxes.
  • A measure directing California regulators to provide the U.S. Department of Agriculture with a program plan for industrial hemp in accordance with the 2018 Farm Bill, which legalized the non-THC crop and its derivatives (which include CBD).California cannabis laws

In addition to passing these laws, the governor vetoed a bill that would have allowed medical marijuana to be used in hospitals and other health care facilities.

Our Los Angeles marijuana lawyers are committed to helping our clients navigate the ever-changing legal landscape of California cannabis law and regulation. With so much at stake, marijuana businesses cannot afford to ignore these changes.

Tax Law Changes

Federal tax law – specifically section 280E – prohibits those who grow, process and sell marijuana from being allowed to deduct taxes, due to the fact that the business profits from marijuana, which is illegal under federal law. Up until this point, California tax law closely matched U.S. tax law.

Now, AB 37 changes that, departing from Internal Revenue Service Policy under 280E. The measure will allow cannabis companies to take state-level deductions just like any other business – from Jan. 1, 2020 to Jan. 1, 2025. The bill takes effect immediately as a tax levy.

Greater Access for Low-Income Residents

Another measure gives greater access to medical marijuana for low-income patients. SB 34 changes the law with regard to “cannabis donations.” Existing administrative law bars licensed cannabis retailers from providing free cannabis to anyone at a licensed premises. There is a narrow exception for licensed medical marijuana retailers and those with micro-business licensees that are providing medical marijuana to patients who struggle to afford it.

SB 34 authorizes all licensed cannabis shops to offer free or reduced-cost marijuana or related products to medical marijuana patients who meet certain medical and income requirements. The bill further exempts marijuana businesses from being taxed on these “donations.”

No Cannabis in Hospitals

One measure that failed was SB 305, which would have required some health care facilities to allow medical marijuana access to terminally ill patients on site. In a veto message, the governor said he “begrudgingly” declined to make the measure law – for fear it would have jeopardized Medicaid and Medicare funding for those facilities. Those programs are subsidized by federal tax dollars, and using that money for an outlawed Schedule I narcotic could have cost the healthcare industry dearly.

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From grow operations to dispensaries to high end paraphernalia that works with smartphones, there is seemingly no end to the growth potential of the cannabis industry.  According to a recent news article by USA Today, a wealthy cannabis company has just purchased a remote California town to create what they are calling a “marijuana mecca” as part of the growing pot tourism industry.

cannabis business lawyersThe company purchased the real estate in this small town and has been working to renovate the businesses already in existence and also to add new landscaping and hardscaping features. They are currently constructing a pond and digging up the streets for underground utilities.  As more workers and interested residents come to the town the population is growing and there are already more than 25 people living in what was essentially a ghost town.  There is not marijuana for sale in the town yet as they have to way to til 2018, but they are working on residences, lodging, cafes, and many other business that will hopefully generate a lot of revenue as people flock to the resort.

The ultimate goal is to create a safe, self-sustaining place for people to smoke openly in outdoor lounges, restaurants, microbreweries, a medical academy and a wellness spa.

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As of November 2016, recreational marijuana use is legal within the state of California. As Californians have begun to enjoy the benefits of this law, they are learning a hard lesson: federal law enforcement can trump state law, even within state borders. cannabis defense attorneys

The conflict between state and federal law is apparent in many aspects of California life. Cannabis businesses cannot bank in federal institutions, because their finds are considered illegal drug money. Federal employment is usually unavailable to Californians who use marijuana (whether recreationally or medicinally). And in perhaps the most confusing of all restrictions, marijuana use is illegal on federal lands within state borders. Continue reading

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