California cannabis lawyer

July 14, 2023

California Cannabis Companies Risk License Loss After Joining Fake Labor Union

California cannabis business licenses are on the line – at least a dozen of them – after an investigation by state’s Agricultural Labor Relations Board (ALRB) decided the labor union they signed with isn’t a “bona fide” labor union. California cannabis labor union lawyer

As our Los Angeles cannabis business lawyers can explain, when the state rolled out regulations for cannabis license requirements, one of those was the mandate to sign a labor peace agreement with a a bona fide labor union.

For those who may not be familiar with labor peace agreements, they are contractual agreements between employers and labor unions. The union agrees it won’t picket, stop work, boycott, or interfere with employer operations, and in exchange, the employer promises not to try to interfere with the union’s ability to organize the workers. The purpose is to lay the foundation of a relationship of collaboration between workers and their employers, with the ultimate goal of boosting stability, safety, productivity, and company longevity. It can also help lower the potential for employee abuse and/or exploitation – which was a major concern of state regulators when they were drafting cannabis company rules.

So what happened here?

According to the ALRB panel findings, a number of California marijuana businesses signed off with an organization dubbed the Professional Technical Union Local 33, or ProTech for short. Problem was it appears to have been a “labor union” in name only. It had few members, made no intent to organize workers, and failed to respond to basic inquiries from the ALRB about its membership and organizational structure.

This is part of a pattern we’ve seen crop up in other regions of the country as well. But why would these companies take the risk of losing their license by signing off with a sketchy labor union? Regulators suspect the motivation for these companies was to sidestep worker protection laws and lower labor costs by signing off with a “labor union” that wasn’t actually a labor union. Continue reading

June 16, 2023

Los Angeles Cannabis B2B Companies Must Establish Clear Pay Default Policies

By Cannabis Law Group

Licensed cannabis B2B operations in California are faced with some pretty substantial challenges when it comes to getting off the ground. A rampant black market, heavy taxes, and tight regulations – all of these drain time, money, and professional resources, and make it tough to turn a profit in this industry. Many can also add to that list: Deadbeat customers. Los Angeles cannabis lawyer

As Los Angeles cannabis company lawyers, we know this has grown to become a significant problem for our clients. Put simply: Customers aren’t paying their bills. In response, more than half the state’s wholesale B2B cannabis market has invested in help from a Los Angeles non-profit credit association tasked with rating retailers and flagging repeat offenders – with the ultimate goal of halting the growth of hundreds of thousands of dollars in unpaid invoices. The operation, Credit Management Association, is reviewing accounts receivable and documentation from dozens of brand and distributors. Ultimately, it will release a “do not sell list” of two dozen+ cannabis retailers and delivery companies flagged for:

Failure to pay their bills in a timely manner (90+ days late on invoices).
Owing at least $25,000 for products.

As longtime Los Angeles marijuana lawyers, we recognize that the majority of cannabis retail and delivery companies don’t set out with the intention of becoming bad actors. They are subject to many of the same brutal market forces as suppliers. They fall a bit behind, and then it’s an uphill battle to fight their way out of debt.

Still, it’s a significant issue because pretty much every manufacturer, distributor, and brand has a non-inconsequential amount of unpaid invoices. That’s not a new problem, but it’s one that’s been exacerbated in the last year thanks to plummeting stocks and dwindling capital. Companies are having to take a hard line with some of their biggest clients – because they simply aren’t paying up.

Companies say they’ve been left with increasingly few choices, particularly because they aren’t backed by investors. If they utilize a debt resolution service, they’re going to take a 20 percent hair cut right off the top – even if they are paid. Most of these claims exceed the small claims avenue because the debts are primarily in excess of $5,000. Continue reading

March 8, 2023

Cannabis Companies to Open Doors in Riverside, California

By Cannabis Law Group

Recreational marijuana has been legal in California since 2016 – but Riverside is only just now on the cusp of allowing cannabis businesses for the first time ever. Riverside cannabis lawyer

As our Riverside cannabis lawyers can explain, city council voted 5-2 to green light 14 marijuana shop permits. The city has first passed a moratorium on cannabis companies in 2017 – with the exception of marijuana testing labs. This was despite the fact that Riverside voters supported Proposition 64 (which legalized recreational cannabis) by a 53 percent majority. A year later, the council agreed on an outright prohibition of commercial cannabis operations – except for labs.

Then two years ago, the city caught wind of a citizen-led effort to undercut the municipal ban on marijuana sales. Signatures to move the petition forward were never formally submitted, but the city did start weighing whether it should initiate its own permit program and regulatory framework. (Likely, they wanted to sidestep the reality that it was probably going be done whether they wanted it or not, and best to have some control over the final outcome.)

The city is actively studying how best to support permit seekers who have been disproportionately impacted by anti-cannabis legislation in the past. The initial outlay caps cannabis retailers at 14, but there’s no such limit for the number of labs, manufacturing companies, or distribution firms. Voters will need to consider whether they’re willing to accept taxation for the measure. A vote is expected in November 2024.

One councilmember against the initiative said he doesn’t believe marijuana sales in the city are an inevitability, worried over police and other public services burdening more duties, and lamented the fact that a gateway drug was going to be so easily accessible – particularly for young people. Just recently, the sheriff’s office arrested several older adult teens in Riverside for selling vape pens with concentrated cannabis to minors using a mobile delivery service.

But those who support legal cannabis say that a well-regulated market has proven to offset many of these concerns. Continue reading

January 5, 2023

California Cannabis Laws in 2023

By Cannabis Law Group

Cannabis has been legal in California (in some form or another) since 1996. But since then, the patchwork of city, county, and state laws (to say nothing of the slowly-evolving federal laws) has understandably led to some confusion about exactly what is legal where – and for whom. California cannabis lawyer Los Angeles

There has been some speculation about whether cannabis might finally be made legal at the federal level in 2023. While that seems unlikely, our legal team will be continuously monitoring any developments, as it could impact how issues pertinent to our cannabis business clients are approached at the state and local level as well.

Here, we’re outlining some of the common questions that arise from individuals, businesses, employers, property owners, etc.

September 20, 2022

California Cannabis Businesses Should Prepare for DCC Inspections

By Cannabis Law Group

California cannabis businesses should steel themselves for the reality of an unannounced inspection by state Department of Cannabis Control (DCC) compliance officers – some of whom have been showing up armed at inspection sites. California cannabis company inspections

As our Los Angeles marijuana business lawyers can explain, it’s not the first time pot shops have been subject to inspections. It’s just that officials handling it in the past typically gave companies a heads-up – often several days of notice – before showing up. But according to recent reports, there has been a surge of drop-in, no-notice inspections. The 24-to-48-hour heads-up is no longer something your company can count on.

Given that even minor transgressions or oversights might compromise your ability to keep your doors open, it’s imperative that licensed California cannabis businesses be ready for a DCC inspection out of the clear blue sky.

Prime Targets of California DCC Inspections

If a company isn’t following state marijuana law and guidelines to the letter, DCC can issue citations, fines, and even license revocation. As this new aggressive inspection campaign is under way, it’s unclear how nit-picky inspectors are going to be, but we do know the agency has expressly stated there are a few major compliance rules on which they’ll be devoting a heavy focus. Those include: Continue reading

March 15, 2022

Online Hemp Sales Could Invite Impending Federal Crackdown

By Cannabis Law Group

Online sales of hemp products – specifically delta-9 THC products that are derived from hemp – are likely to see a federal regulatory crackdown in the coming months. Los Angeles marijuana lawyer

Congress is currently mulling the 2023 Farm Bill, while state lawmakers across the country are slated to hold their yearly sessions. Many are expecting hemp extract sales and shipments – particularly those happening online and across state lines – are likely to get attention from both federal and state lawmakers.

As our Los Angeles marijuana business lawyers can explain, the concern with delta-9 products is that they possess intoxicated properties, yet aren’t being taxed, overseen by safety regulators, and are being shipped across state lines with little oversight.

For those who may be unfamiliar, delta-9 products are different than delta-8. Delta-8 THC products are manufactured in labs. Lawmakers have set limits on delta-8 products. So now, some hemp manufacturers have concentrated the delta-9 THC that already exists in hemp plants, allowing them to make tinctures, edibles, and vapes that are intoxicating – and then sell those online. Delta-9 is the THC compound created when raw hemp is heated, but in smaller amounts than what one might find in a cannabis extract. Continue reading

December 15, 2021

California Cannabis Companies Eye Tax Revolt

By Cannabis Law Group

It’s been more than two centuries since the New World colonists dumped their tea into the sea to protest unfair taxation. Now, legal proprietors of California’s retail cannabis industry say it may be well past time for a “Weed Party” in response to astronomical taxes imposed on them when they can’t compete with black market operators. cannabis business taxes

However, rather than toss their crops into the ocean, shop owners are floating the notion of not paying state taxes. If the idea where to gain traction statewide, that would amount to roughly $1.3 billion.

Whether the call will lead to real action is questionable, but Los Angeles marijuana business lawyers know there is no doubt retailers are treading water. Steep competition from illicit providers who don’t follow state rules – yet aren’t unequivocally shut down by the state – have cut into the survival odds for these firms. Some call it a clear case of “taxation without representation,” echoing the Revolutionary War grievances.

This is not a new problem. It’s a situation that has been ongoing for the last five years, ever since state voters approved recreational use cannabis for adults. The prospect of bolstered taxes was one that spurred many government leaders to climb aboard. The problem, business owners say, is that while those firms are happy to rake in the tax revenue, they aren’t doing enough to protect the industry from unfair competition.

Beginning first thing next year, taxes on cultivation of cannabis is increasing by 4.5 percent. This comes even as the state is staring down a budget surplus next year of $31 billion.

The “Weed Party” proposal is to put all taxes in an escrow account rather than handing to the state, in an effort to force their hand and bring them to the table. However, as marijuana business attorneys, we would tend to strongly advise against this, as it’s going to violate a myriad of regulations and tax laws and risk state license suspension. The hope is that there will be viable solutions proposed in the coming year.

Why California Marijuana Industry Tax Hikes Are Unique

Of course, no industry is a fan of tax increases, but there is also no other industry (save tobacco) that is taxed at the same sky-high rates as cannabis retailers. And unlike the tobacco industry, legal marijuana retailers are banned in most cities in the state. Plus, legal tobacco retailers aren’t threatened by a behemoth black market. Continue reading

December 8, 2021

Marijuana Sales Are Legal Everywhere in California… Right? (Not Exactly)

By Cannabis Law Group

California became the first state in the U.S. to approve marijuana for medicinal use back in 1996. It was also among the first to legalize recreational adult use marijuana in 2016. Los Angeles cannabis retail attorney

However, it would be erroneous to assert that marijuana sales are legal everywhere in the state. As our Los Angeles marijuana lawyers can explain, cannabis still remains widely unavailable in some of the largest cities in the Golden State.

Of the state’s 482 cities, only 174 of them allow some type of licensed, cannabis business to operate within their district. In a number of those jurisdictions, the only allowable businesses are those that are not classified as retail locations. That means that a key piece of the supply chain puzzle is missing. Ultimately, this leaves millions of people without immediate access to retail recreational cannabis.

The one exception is delivery. Having a state license from the California Department of Cannabis Control authorizing delivery allows that company to deliver in any jurisdiction in the state – something that has been affirmed in subsequent court rulings challenging this right. However, those companies might still be subject to local jurisdictional requirements. All cannabis company owners and operators should be working with an experienced marijuana business attorney to help ensure their operation rights are protected.

But the benefit of accessible cannabis for all communities goes beyond the shop owners. It benefits the industry as a whole, as well as citizens. Accessible legal cannabis constricts opportunities for those in the black market to gain a foothold.

So what’s the holdup? Continue reading

June 28, 2021

Cannabis for Canines? Proposed Law Could Make it Legal for Veterinarians to Prescribe.

By Cannabis Law Group

A bill that would allow veterinarians to recommend cannabis products for pet is being considered by California lawmakers. Assembly Bill 384 is a follow-up to a law passed three years ago allowing veterinarians to discuss marijuana with pet owners without facing penalties. Numerous product, such as CBD-infused treats, capsules and oils, are now available for pet owner purchase. Vets can legally talk about them, but they can’t recommend them. canine cannabis

The bill reportedly has unanimous, bipartisan support in the Assembly Business and Professions Committee, and is supported not only by organizations like NORML but also the California Veterinary Medical Association.

As our Los Angeles cannabis business attorneys understand that animal owners are essentially being left in the dark about how much or what type of cannabis they should be giving their animals for various ailments. Veterinarians cannot discuss the possible impact of a certain product on a specific animal or offer a suggestion for how much would be a safe yet effective dose. Absent this guidance, pet owners are essentially left to their own devices and research to guess or rely on a cannabis dispensary clerk’s take, even though these individuals know noting about the effects on animals. Continue reading

May 30, 2021

Licensed California Cannabis Shops are Successfully Blocking Sales to Minors, Study Shows

By Cannabis Law Group

Minors getting ahold of marijuana was a major sticking point in the lead up to the passage of Proposition 64, which legalized adult-use California cannabis. It’s also been cited as a reason to block cannabis business billboards on California highways. But as it turns out, licensed marijuana retailers are doing an excellent job keeping the substance out of the hands of youth. Los Angeles cannabis lawyers

You don’t need to take our Los Angeles marijuana business lawyers‘ word for it. This is according to a new study commissioned by the Insurance Institute for Highway Safety. Despite a few isolated incidents of state law violations (i.e., workers giving out free samples of edibles), the analysis revealed workers at cannabis retail locations are committed to following the rules, protecting minors and staying in business.

Study authors say the largest loophole through which minors obtain cannabis in California is through unlicensed vendors. Consider that black market bud sales are three times bigger than the legal market. They don’t have the regulations and taxes to contend with. They sell products that aren’t verified for safety or quality, but they can sell them cheaper – and they don’t always ensure the people to whom they’re selling are of legal age to do so.

The proliferation of the black market in this state has served as a lesson to other states preparing to oversee the unveiling of similar recreational cannabis industries. Continue reading