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Immigrants Can Be Denied Citizenship for Working in Legal Marijuana Industry

The California Compassionate Care Network (CCCN) marijuana dispensary’s grow operation is one of the stops on the cannabis tour organized by L.A.-based Green Tours, January 24, 2019 in Los Angeles, California.  ROBYN BECK/Getty Images

The California Compassionate Care Network (CCCN) marijuana dispensary’s grow operation is one of the stops on the cannabis tour organized by L.A.-based Green Tours, January 24, 2019 in Los Angeles, California.

ROBYN BECK/Getty Images


 U.S. Citizenship and Immigration Services (USCIS) issued guidance a day before the unofficial marijuana holiday that makes clear working in the marijuana industry, or even just possessing cannabis could be grounds to reject a citizenship application—regardless of whether it is done in a state where it is legal.

Violations of federal marijuana laws “are generally a bar to establishing good moral character for naturalization, even where that conduct would not be an offense under state law,” according to the guidance issued Friday. Merely being “involved in certain marijuana-related activities” could be sign that an applicant for citizenship “may lack good moral character” regardless of whether “such activity has been decriminalized under applicable state laws,” according to the USCIS statement.

Immigration lawyers who work in states where marijuana is legal say they have been dealing with this issue for a while now, leading Denver Mayor Michael B. Hancock to send a letter to Attorney General William Barr asking for clarification about policies that have been affecting immigrants. This isn’t just a theoretical issue either. CNN reports that two immigrants who have lived in the United States for more than two decades were told they were not eligible for naturalization due to their work in the marijuana industry. “I work hard in an industry that offers opportunity and that’s unquestionably legal within the state. For the government to deny my citizenship application because I’m a bad person is devastating,” one affected immigrant tells CNN.

Advocates for legalization say the guidance is more a reflection of the government’s anti-immigrant attitude than about drugs. “I don’t think this is about marijuana at all,” said Michael Collins, national affairs director of the Drug Policy Alliance. “I think this is about them using the war on drugs to go after migrant community and that’s what they’ve been doing since Day 1.” A total of 33 states and the District of Columbia have legalized medical marijuana while 10 states and D.C. have legalized recreational marijuana.


$350,000 in cash? California marijuana taxes still make growers - and tax collectors - nervous

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On tax days, it’s not hard to spot marijuana growers waiting to exhale in downtown Eureka.
They haul cash in grocery bags and boxes, making their way to a state office where they can pay their taxes.

One grower “holds his breath as he walks into the building,” said Terra Carver, executive director of the Humboldt County Growers Alliance. The distance is “no more than 20 yards, but the fact that he was holding $350,000 (makes it) ... a public safety issue.”

California still doesn’t have a better way to collect taxes from its burgeoning, licensed marijuana industry three years after voters passed an initiative to legalize recreational cannabis and 23 years after they sanctioned medical marijuana.

That won’t change as long as marijuana is considered an illegal drug by federal authorities, which makes banks reluctant to do business with the cannabis industry.

But from Eureka to San Diego, the state is making some headway in easing obstacles that kept cannabis entrepreneurs from paying their state taxes and fees on time.

For starters, California finally has state tax collectors stationed in the heart of the so-called Emerald Triangle, which produces most of America’s marijuana. The tax collectors work out of a Humboldt County building with support from state and local law enforcement officers.

That’s a big change. Until last year, state-licensed marijuana companies from Humboldt, Mendocino and Trinity counties had to drive hundreds of miles with bags full of cash to pay their taxes at the nearest state offices in Sacramento or in San Francisco.

“It has been unacceptable that legal cannabis farmers have to drive up to five hours to pay their taxes or have a face-to face with their regulatory agencies,” said Sen. Mike McGuire, D-Healdsburg. “This isn’t safe for the farmer, it isn’t safe for the public and it definitely isn’t a good way to do business.”

On the opposite end of the state, California tax offices in San Diego County simply refused to accept money from cannabis companies in 2016 and 2017 after state workers worried their offices weren’t equipped for that kind of cash businesses.

Their fears persuaded elected representatives overseeing regional tax offices for what was the Board of Equalization to prohibit cannabis growers and retailers from making cash payments at state offices in their districts.

“You have to think about hostage situations,” former Board of Equalization member Diane Harkey said at a December 2016 meeting where she explained why she was reluctant to permit cannabis cash transactions at offices she oversaw without significant investments in security.

Her colleague former Board of Equalization member Jerome Horton at the same meeting suggested state workers should receive “combat pay” for working with hefty cash payments.

Russell Lowery, Harkey’s former chief of staff, said the Board of Equalization allowed alternate payment arrangements at the time, such as tax collectors meeting cannabis growers at banks and depositing funds directly into state accounts. Those visits were not promoted because of security fears, he said.

State Treasurer Fiona Ma, who was on the Board of Equalization at the time, said the state did not lose money because of the inconvenience.

“Everyone who was supposed to pay, paid,” she said. “They all knew they had to pay. They just had to hire more security or armored cars because they had to drive.”

The Board of Equalization no longer has power to allow varying tax collection policies around the state.

Its tax-collecting responsibilities have been handed to the California Department of Tax and Fee Administration, which reports to the governor instead of a board run by regional elected leaders.

Tax department Director Nicolas Maduors said cannabis companies now can make cash payments at 11 offices around the state. The department has invested security features at its offices and no one has been harmed.

“We recognized that cash acceptance is going to be a big challenge and there were certain places in the state where cash was not accepted,” he said. “We need to make sure that all taxpayers no matter where they live in the state have access to service.”

State workers are still nervous about the practice, and he asked that The Sacramento Bee not identify the locations that accept cash. Cannabis companies call ahead of time. Transactions take place in the presence of security officers.

“We’re doing all that we can with law enforcement, retrofitting facilities to make sure we can keep people safe,” he said.

Next month, several state departments plan to open a new “one stop shop” for the marijuana industry in Eureka. It’ll open in the Eureka Times Standard building with space for the Bureau of Cannabis Control, Department of Public Health and State Water Resources Control Board.

The tax department does not plan to move from its county-managed building with the other cannabis regulatory departments.

Gov. Gavin Newsom’s administration projects the state will collect more than $500 million in marijuana-related taxes next year. It doesn’t all come in cash.

Many marijuana businesses have found ways to work with credit unions and other alternative financial institutions to pay tax. Lawmakers are working to expand those opportunities. Last week, a bill that would encourage charter banks and credit unions to work with the cannabis industry cleared a Senate committee.

Carver of from the Humboldt County Growers Alliance said the state had done a “good job” working with her industry.

“The complication doesn’t necessarily come from the state. The complication still rests on the federal level because a lot of our businesses are still unable to bank,” she said.


Bill Allowing Locals to Ban All Cannabis Deliveries Defeated in Committee

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 A bill that would have allowed local jurisdictions to ban cannabis deliveries originating outside their jurisdictional borders, was defeated in its first committee hearing today after cannabis activists and industry representatives objected to the bill.

Cal NORML wrote to the committee and testified against the bill, and promulgated an Action Alert that generated hundreds of letters to lawmakers in opposition. Thanks to all of our members and supporters who took action!

In introducing the bill, Asm. Cooley noted that he has been involved in both cannabis and local control issues for many years, citing his success as mayor of Rancho Cordova in enacting a local tax on cannabis businesses (however, that tax is overly high and was objected to by Cal NORML). Several times he referred to locals getting past a "parade of horribles" and tried to argue that passing the bill would somehow encourage locals to license cannabis businesses. He conceded that Prop. 64 allowed locals to ban adult-use cannabis businesses, not medical ones.

Unsurprisingly, the League of Cities, Rural County Representatives of California (RCRC), and California Association of Counties (CSAC) expressed support for the bill, as did the City of Santa Monica.

Amy Jenkins of the California Cannabis Industry Association testified that the CCIA must "sadly and regrettably" oppose. She gave statistics on the abysmal failure of local jurisdictions to license an adequate number of cannabis retail outlets as the reason that delivery access must be permitted.

Ellen Komp of Cal NORML and Sabrina Fendrick of Berkeley Patients' Group challenged Asm. Cooley's assertion that patients who required access would be able to grow their own, citing restrictive local cultivation ordinances, the lack of renters' rights, and the inability for disabled patients to grow their own.

Also opposing the bill were representatives from Epilepsy CA, the CA Hispanic Chamber of Commerce, Weedmaps, and the city of St. Helena, as well as a score of veterans.

After the public testimony, Asm. Grayson (D-Concord) spoke first, saying that while he is in favor of local control, he wouldn't be able to support the bill because delivery is necessary for those who need cannabis. "No doubt that my mother would be alive today had she had access," he said. "I thought delivery allowed people to have access when locals banned storefronts."

Asm. Eggman (D-Stockton) then spoke up, saying, "I don’t think you can take something away from people after you have provided access." Noting she is also a veteran, she mentioned the opioid crisis as a consideration.

Asm. McCarty (D-Sacramento) then chimed in saying he could not vote for the bill, noting that while Sacramento was "killing it" bringing in tax revenue from licensed dispensaries, people were driving as much as 100 miles to those dispensaries, and many don’t have access to transportation. "By having more jurisdictions shut it down, it just means fewer tax dollars coming into California and perpetuates the illegal market," he said.

Committee chairman Evan Low (D-San Jose) announced that he would be voting in favor of the bill in order to keep the conversation going, but said he would vote against it in future if it was not amended.

The vote fell on bipartisan lines, with Republicans Bill Brough (Dana Point), Vince Fong (Bakersfield), and Jay Obernolte (Hesperia), and Democrats Jacqui Irwin (Oxnard), Jose Medina (Riverside) and Kevin Mullin (San Mateo) joining Low in voting Aye.

Voting No were Assembly members Bloom, Chen, Cunningham, Eggman, Gloria, McCarty, and Ting; Chiu, Dahle, Gipson, Grayson, Holden and Wood abstained. The final tally was 7 in favor and 7 against, with 6 members not voting.

In the meantime, 24 cities and the county of Santa Cruz have filed suit against the Bureau of Cannabis Control over its regulation allowing state-licensed delivery services to deliver cannabis statewide.

Employers May Lose Cases for Firing Medical Marijuana Users

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 Health-care worker Katelin Noffsinger told a potential employer that she took medical cannabis to deal with the effects of a car crash, but when a drug test came back positive, the nursing home rescinded her job offer anyway.

A federal judge ruled in September 2018 that the nursing home, which had cited federal laws against cannabis use, violated an anti-discrimination provision of Connecticut‘s medical marijuana law.

It was the latest in a series of clashes between U.S. and state laws around the country that came out in favor of medical cannabis users trying to keep or obtain jobs with drug-testing employers.

The Connecticut decision was the first ruling of its kind in a federal case and followed similar recent rulings against employers by state courts in Massachusetts and Rhode Island. Earlier rulings had gone against medical cannabis users in employment cases by state supreme courts, including those in California, Colorado, Oregon, and Washington, over the past few years.

Advocates hope new the new decisions are a signal of growing acceptance of cannabis’ medicinal value.

“This decision reflects the rapidly changing cultural and legal status of cannabis, and affirms that employers should not be able to discriminate against those who use marijuana responsibly while off the job, in compliance with the laws of their state,” said Paul Armentano, deputy director of the National Organization for the Reform of Marijuana Laws (NORML).

Medical marijuana, like the cannabis cuttings growing in a Sira Naturals cultivation facility in Milford Massachusetts, is reshaping employment law. A U.S. District judge in New Haven, Connecticut, ruled in favor of a woman who alleged a prospective employer discriminated against her when she sought a health-care job and informed the company she used medical marijuana to treat post-traumatic stress disorder (PTSD) resulting from a car crash. The judge found that the nursing home violated Connecticut’s anti-discrimination law protecting medical cannabis users despite marijuana remaining illegal at the federal level. (Associated Press File Photo/Steven Senne)

 

Noffsinger sued Bride Brook Health and Rehabilitation Center in Niantic in 2016. She had been offered, and accepted, a job as recreation therapy director at the nursing home, contingent on her passing a drug test.

She told the nursing home that she took synthetic marijuana pills — legally under state law and only at night — to treat the post-traumatic stress disorder (PTSD) she developed after the 2012 car accident. But the company rescinded the job offer after the drug test came back positive for THC, the chemical in marijuana that gets people high.

As a federal contractor, the nursing home worried that it could be cut off from that revenue if it employed somebody who tested positive for drugs.

On Sept. 5, 2018, U.S. District Judge Jeffrey Meyer in New Haven ruled Bride Brook discriminated against Noffsinger based solely on her medical cannabis use in violation of state law. He denied her request for punitive damages. The case is now heading to a trial on whether Noffsinger should receive compensatory damages for lost wages from not getting the job.

A lawyer for the nursing home, Thomas Blatchley, declined to comment.

Noffsinger’s attorney, Henry Murray, said his client would not comment on the lawsuit. He said Noffsinger has taken another job in the health-care industry that doesn’t pay as much as the Bride Brook job.

In his ruling, Meyer said the federal Drug Free Workplace Act, which many employers including federal contractors rely on for policies on drug testing, does not actually require drug testing and does not prohibit federal contractors from employing people who use medical cannabis outside the workplace in accordance with state law.

The decision will likely be used in arguments in similar cases elsewhere, said Fiona Ong, an employment attorney with the Baltimore firm of Shawe Rosenthal.

“This is a very significant case that throws the issue in doubt for many of these federal contractors,” Ong said. “It’s certainly interesting and may be indicative of where the courts are going with this.”

Thirty-one states, Washington, D.C., Puerto Rico, and Guam now allow medical marijuana, while 15 others have approved low-THC products for medical reasons in certain cases, according to the National Conference of State Legislatures. Nine states and Washington, D.C., have legalized recreational marijuana.

Only nine states including Connecticut, however, specifically ban employment discrimination against medical marijuana users, who could continue to face difficulties in obtaining or keeping jobs in the 41 other states, employment lawyers say.

In Massachusetts, the state’s highest court ruled in 2017 that a sales and marketing company wrongly fired a worker after her first day on the job after she tested positive for cannabis, which she used under the state’s medical marijuana law to treat her Crohn’s disease. Also in 2017, the Rhode Island state Supreme Court said a college student was wrongly denied an internship at a fabric company where officials refused to hire her after she acknowledged she could not pass a drug test because she used medical marijuana.

In both cases, the two women told the companies during the hiring process that they used medical marijuana, but would not consume it while on the job.

The American Bar Association called the Connecticut, Massachusetts, and Rhode Island cases “an emerging trend in employment litigation” and cautioned employers to consider state medical cannabis laws when analyzing their drug use and testing policies.

Several bills are pending before Congress that would undo marijuana’s Schedule I classification as a controlled substance with no medicinal value. But Armentano of NORML said it is unlikely they will go anywhere while Republicans control Congress.

Some employers, though, have dropped marijuana from the drug tests they require of employees, saying the testing excludes too many potential workers in a challenging hiring environment.

Marijuana in the Midterms

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Marijuana legalization is going to be a lead issue in the 2018 elections. Advocating for an end to our decades-long failed prohibition is not only good policy, but good politics. Regulating the adult use of marijuana is currently supported by a majority of Americans from all political persuasions, and any candidate for local, state or federal office would be wise to advocate for the will of the people and make ending prohibition a core plank in their election platform. Supporting sensible reform to our nation’s marijuana laws is not just overwhelmingly popular, it is the economic, scientific and moral thing to do.

  With nine states having passed adult-use marijuana regulations, and 30 states authorizing medical-marijuana access, issues surrounding cannabis policy have taken center stage in local, state and federal elections. Over 90 percent of Americans support medical-marijuana access, and 60 percent support legalizing and regulating marijuana in a manner like alcohol.

If you look back at just the past year, it is clear that if we want the implementation of marijuana-reform laws to succeed, we need to begin voting out officials who are permanently afflicted with reefer madness and replace them with forward-thinking individuals who will fight for rational marijuana policies at all levels of government.

 

With a majority of states now engaging in activities that are in conflict with federal prohibition, it is absurd that House Judiciary Chairman Bob Goodlatte (R-VA), House Rules Chairman Pete Sessions (R-TX) and Senate Judiciary Chairman Charles Grassley (R-IA) refuse to even hold a hearing on this issue.

However, it is not just members of Congress who deserve our attention. With ongoing efforts to delay the rollout of legalization and regulation of marijuana in Maine and Massachusetts, mostly at the behest of those states’ governors, we need to push 2018 gubernatorial candidates to take proactive and positive stances on marijuana policy. If you look to New Jersey as an example, which recently saw the exit of anti-drug zealot Chris Christie and the election of pro-legalization Phil Murphy, you can see the positive impact of having a reform-friendly governor on the tenor of the debate. Already, the state is moving to expand and reinforce its long-suffering medical-marijuana program, and Murphy’s election catapulted the topic of full legalization to the top of this year’s legislative-priorities list.

There are a number of races this year that are worth watching from a marijuana-reform perspective. In Texas, the opportunity to replace Senator Ted Cruz with pro-legalization Beto O’Rourke would add a new, outspoken supporter to the US Senate. In California, there is an outside chance that Democratic Senator Diane Feinstein, who long opposed our efforts despite the vast majority of her party now being in support of reform, could be ousted by current California Senate President Kevin de León, who has a far better record on cannabis issues. Also of incredible importance are the many gubernatorial elections being held, particularly in Maine, where the current governor (and ardent prohibitionist), Paul LePage, will be term-limited out of office. Governor LePage has spent every day since the 2016 election working to slow down or outright prevent the implementation of his state’s marijuana-legalization initiative. We need to ensure that whoever takes the position after him is progressive and aggressive in implementing legalization.

 

Even on the local level, these elections have a huge impact. In Easton, PA, an effort to decriminalize marijuana failed in the past month due to just one vote, and counties in states that have legalization are often empowered to “opt-out” of allowing retail marijuana outlets in their jurisdictions. Local politics, in many ways, matters just as much if not more than what is happening at the federal level, and reform supporters need to be just as diligent in lobbying their local officials and candidates as those at the top of the ballot.

With the clock ticking down to Election Day, get informed, be sure you are registered, and go out and “smoke the vote” this November.

Wall Street Analyst Estimates US Cannabis Market Will Reach $47 Billion

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For years, “$20 billion by 2020” was an oft-heard refrain from market analysts who saw a bright and prosperous future for the legal cannabis industry. Now, with that horizon fast-approaching, analysts are setting their sights on what the next decade has in store. And one analyst, RBC Capital Markets’ Nik Modi, is seeing green.

Analyst Says Concentrates and Edibles Could Propel Sales To $47 Billion Annually

RBC Capital Markets, an investment bank that’s part of Royal Bank of Canada, issued a memo to clients outlining the rapid growth of the U.S. marijuana sector. The memo, authored by Nik Modi, shows how cannabis sales in the U.S. are gaining ground on beer and wine sales.

Projecting a compound annual growth rate (CAGR) of 17 percent, Modi estimates that the legal cannabis category could reach $47 billion in sales annually in the United States within the next decade, according to Business Insider.

Yet the cannabis market in the U.S. faces uncertainties that Canada does not. Regulatory environments are constantly and rapidly shifting as states implement legalization and adopt different approaches to dealing with federal prohibition. Investing in the industry still carries risk.

 

But RBC Capital Markets analyst Nik Modi brushed off concerns about the unpredictability of legal cannabis in the U.S.. Instead, he drew clients’ attention to a shift in consumer trends that is already having a major impact on domestic retail markets.

Data from BDS Analytics, included in Modi’s memo, shows that the margin on cannabis flower has steadily declined since the beginning of recreational sales in Colorado in 2012. That’s indicative of a larger national move away from flower and toward cannabis edibles and concentrates.

In Colorado, flower made up 70 percent of legal sales when shops opened in 2014. By the end of Q4 2017, flower accounted for just 46 percent of total sales. Picking up the slack were edibles and concentrates. Both are surging in popularity everywhere, and Modi thinks those forms of cannabis can propel total sales beyond $47 billion a year by 2027.

 

Including Illegal Cannabis Sales Drastically Shifts Financial Forecasts

Another eye-catching aspect of Modi’s analysis is another BDS Analytics chart showing the estimated U.S cannabis market size. The chart compares cannabis sales to spirits, wine, cigarettes, and beer. From spirits at $58 billion to beer $117 billion, all four categories best cannabis at $50 billion. But interestingly, the chart includes total legal and illegal cannabis sales to arrive at the $50 billion figure. It’s unclear what proportion of that amount is made up by illegal sales.

Other cannabis market analysts say that illegal sales still account for the majority of total marijuana purchases in the U.S. But as legalization continues to channel consumers into the legal market, illegal sales are slowly declining.

While access to legal cannabis expands nationwide, the size of the illegal market remains difficult to measure. So does predicting how much of it will move aboveboard in the coming years.

 

RBC Capital Analyst Praises Big Investment in Canadian Cannabis

The letter RBC Capital Markets sent to clients also lauded Constellation Brands’ recent $4 billion investment in one of Canada’s largest medical cannabis producer Canopy Growth Corp. Constellation Brands is the firm behind the popular beverage companies Modelo, Corona and Svedka. The company has been moving incrementally into the Canadian cannabis market, upping its stake each time. Nik Modi says he’d like to see more companies make similar moves in the cannabis space.

Legal Weed: California Lawmakers Leave Many Marijuana Policies in Suspense

California lawmakers returned from summer recess to a busy week of committee hearings. Seventeen cannabis bills had hearings in Sacramento for the week ending Friday, August 10, 2018. We’ve broken down the status of each bill and what steps are to follow.

AB 1744 — After-school Programs (Placed in suspense file)

AB 1744 would allocate cannabis tax revenues to provide grants for the After-School Education and Safety Program. Qualifying after-school programs are required to provide youth development activities that promote healthful lifestyle choices and behaviors in order to receive funding. AB 1744  was placed in the suspense file with a vote of 7-0 by the Senate Appropriations Committee Monday, Aug. 6, 2018. The suspense file is a holding placing for any bill with an annual cost to the state greater than $150,000. Bills are held in the suspense file before the fiscal deadline to offer each legislative chamber time to allocate funds. Bills that are moved out of the suspense file go to the floor for a final reading and vote, while bills held in suspense die.

AB 1793 — Resentencing for Cannabis Convictions (Placed in Suspense File)

AB 1793 would require the California Department of Justice (DOJ) to review all convictions that could potentially be eligible for resentencing under the Adult Use of Marijuana Act of 2016 (AUMA), or Proposition 64, before July 1, 2019. The bill would allow prosecutors to challenge convictions that do not fully meet the eligibility requirements. AB 1793 was also placed in the suspense file Monday, Aug. 6, 2018, with a 7-0 vote by the Senate Appropriations Committee.

AB 1863 — Personal Income Tax Deductions (Passed Committee)

AB 1863 would allow California-licensed, state-compliant cannabis businesses to deduct business expenses under the Personal Income Tax Law. If passed, the bill would go into effect immediately. The Senate Governance and Finance Committee voted 6-0 to pass AB 1863 on Wednesday, Aug. 8, 2018. The bill will proceed to the Senate Appropriations Committee.

AB 1996 — California Cannabis Research Program (Placed in Suspense File)

AB 1996 would establish the California Cannabis Research Program to develop studies and conduct cannabis research. The bill proposes to allocate resources from the California Tax Fund to cultivate cannabis for research purposes. The Senate Appropriations Committee placed AB 1996 in the suspense file Monday, Aug. 6, 2018.

AB 2020 — Temporary Event Licenses for Onsite Sales (Placed in Suspense File proposes a state temporary cannabis event license to be issued to a licensee for events to be held at any venue zoned or approved by a local licensing authority for events. Additionally, the bill would authorize onsite cannabis sales and consumption for adults 21 and older, as long as all participants in the event are licensed under the Medicinal and Adult-use Cannabis Regulation and Safety Act (MAUCRSA). AB 2020 was placed in the suspense file following a Senate Appropriations Committee hearing on Monday, Aug. 6, 2018.

AB 2215 — Veterinary Cannabis Medicine Ban (Ordered for Third  Reading)

AB 2215 proposes to prohibit a veterinarian from recommending or administering cannabis to an animal patient. The bill would authorize the Veterinary Medical Board to revoke or suspend a license, or to assess a fine for violating a controlled substances law. AB 2215 was read a second time Monday, Aug. 6, 2018, before the Senate Appropriations Committee, which ordered a third reading.

AB 2255 — Transportation Limits (Ordered for Third Reading)

AB 2255 would prohibit licensed distributors from transporting cannabis that exceeds the amount stated on a shipping manifest. Violations would result in fines. Additionally, the bill would prevent law enforcement officers from seizing cannabis in transport without probable cause. AB 2255 was read a second time Monday, Aug. 6, 2018, before the Senate Appropriations Committee, which ordered a third reading.

AB 2402 — Personal Information Privacy (Ordered for Third  Reading)

AB 2402 prohibits a MAUCRSA licensee from sharing a consumer’s personal information to a third party without the consumer’s consent. The bill would also prevent a licensee from denying a consumer a product or service if they do not consent to sharing their information. AB 2402 was read a second time Monday, Aug. 6, 2018, before the Senate Appropriations Committee, which ordered a third reading.

AB 2555 — Legal Language of Cannabis (Ordered for Third Reading)

AB 2555 proposes to amend sections of the California Business and Professions code by adding definitions for the terms “immature cannabis plant,” “mature cannabis plant,” and “plant.” Additionally, instead of requiring a unique identifier to be issued for each cannabis plant, the bill would require a unique identifier for each mature cannabis plant. AB 2555 was read a second time Monday, Aug. 6, 2018, before the Senate Appropriations Committee, which ordered a third reading.

AB 2641 — Temporary Event Licenses for Sales (Ordered for Third Reading)

AB 2641 proposes for the Bureau of Cannabis Control (BCC) to issue a temporary cannabis retailer license to qualified licensees for the transportation and sale of any cannabis products at a licensed temporary cannabis event. The bill would require an application be sent to the BCC, including a list of all licensed participating business. AB 2641 was read a second time, and ordered to a third reading following a Senate Appropriations Committee hearing on Monday, Aug. 6, 2018.

AB 2899 — Cannabis Advertisement Restrictions (Ordered for Third Reading)

AB 2899 would prohibit a licensee from publishing advertisements or marketing materials for cannabis and cannabis products under a suspended license. The bill was read a second time Monday, Aug. 6, 2018, before the Senate Appropriations Committee, which ordered a third reading.

AB 2914 — Cannabis in Alcoholic Beverages (Ordered for Third Reading)

AB 2914 would prohibit a cannabis licensee from producing or selling cannabis products in alcoholic beverages. Additionally, this bill would prevent any alcoholic beverage licensee from selling, offering, or providing cannabis or cannabis products. AB 2914 would authorize the Department of Alcohol Beverage Control (ABC) to suspend or revoke a license if a violation is found. The bill was read a second time Monday, Aug. 6, 2018, before the Senate Appropriations Committee, which ordered to a third reading.

AB 2980 — Common Areas Shared by Cannabis Businesses (Ordered for Third Reading)

AB 2980 would require that sections of the MAUCRSA not be misinterpreted in a manner that would prevent two or more licensed premises from sharing common-use areas, as long as all licensees comply with the requirements of the act. The bill was read a second time Monday, Aug. 6 2018, before the Senate Appropriations Committee, which ordered to a third reading.

AB 924 — Commercial Cannabis Regulation on Native American Tribal Lands (Hearing Postponed by Committee)

AB 924 would establish the Cannabis Regulatory Enforcement Act for Tribal Entities (CREATE Act). Under the CREATE Act, participating tribes would be required to enter a tribal cannabis regulatory agreement with the governor for the purpose of establishing a tribal cannabis regulatory commission or agency. All tribal cannabis regulatory agreements and subsequent tribal commissions and agencies must be approved by the Legislature. A hearing for AB 924 was rescheduled for Monday, Aug.13, 2018, before the Senate Appropriations Committee.

SB 1459 — County Agricultural Commission Reporting (Passed Committee)

SB 1459 would require county agricultural commissioners to include cannabis among reports of the condition, acreage, production, and value of agricultural products submitted to the secretary of Food and Agriculture. SB 1459 passed the Assembly Appropriations Committee 13-4 and has been ordered for a third reading on the Senate floor.

SB 829 — Compassionate-care Licenses (Placed in Suspense File)

SB 829 proposes the BCC issue and regulate compassionate-care licenses, which are issued to donors of medicinal cannabis or marijuana products to qualified patients who possess a physician’s recommendation. SB 829 was placed in following an Assembly Appropriations Committee hearing Wednesday, Aug. 8, 2018.   

SB 930 — State-chartered Financial Institutions for Cannabis (Placed in Suspense File)

SB 930 would create a state charter for privately financed banks and credit unions for the purpose of offering banking services to licensed cannabis businesses. Administered by the Commissioner of Business Oversight and the Department of Business Oversight, the program would also create the Cannabis Limited Charter Bank and Credit Union Advisory Board to include the treasurer, the controller and the chief of the BCC as policy directors. SB 930 was placed in the suspense file Wednesday, Aug. 8, 2018, by the Assembly Appropriations Committee.

Commonwealth of the Northern Mariana Islands Votes to Legalize Marijuana

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5,871 miles of open Pacific Ocean waters separate the Commonwealth of the Northern Mariana Islands (CNMI) from the coast of California. But the 15-island chain that makes up the United States’ westernmost territory is poised to do something no U.S. state has ever done.

On Wednesday, 18 of CNMI’s 20 legislators voted to approve a bill to legalize cannabis for adult use. The bill would also legalize medical cannabis and industrial hemp. And if CNMI Governor Ralph Torres enacts the bill, the territory will make legalization history—twice.

CNMI Would Be First U.S. Jurisdiction to Go From Total Prohibition to Full Legalization

This isn’t the first time CNMI lawmakers attempted to legalize cannabis. As recently as May, the CNMI Senate approved a piece of legislation nearly identical to the House-approved bill. Procedural issues, however, stymied the bill’s progress.

After another false start in the Senate, the House opted to file its own bill. It took less than a week for the full chamber to vote to approve the proposal.

 

That act alone makes CNMI unique among the 9 U.S. states that have legalized adult-use marijuana. Vermont comes closest, having legalized marijuana through a legislative process rather than a ballot initiative. But unlike CNMI’s proposed legislation, Vermont’s law doesn’t establish a retail market. The Mariana Islands’ legislation would.

There’s a second way CNMI would make legalization history if the bill becomes law. Every U.S. state that has legalized adult-use marijuana did so only after establishing a medical cannabis program. But in CNMI, there is no medical marijuana. The territory would be the first U.S. jurisdiction to go from total prohibition to full legalization.

What’s Next for Legal Cannabis in U.S. Territories?

Despite the tremendous distance between the Commonwealth of the Northern Mariana Islands and the continental United States, the territory has been closely watching legal cannabis unfold there. Indeed, the overwhelming support for the proposal in the House is due to lawmakers’ recognizing the significant benefits of legal weed.

 

The full text of the legislation, SB 20-62, cites how states with regulated markets for marijuana “have observed real and significant benefits to public health, safety and quality of life for all residents,” and goes on to list medical benefits like treatments for pain, epilepsy and PTSD, social benefits like a reduction in overdose deaths and lowered crime and economic benefits like tax revenue and job growth.

But the bill still has a couple more hurdles to clear before it becomes law. The CNMI Cannabis Act of 2018 is currently on its way back to the Senate for approval. After that, it will head to the desk of Gov. Ralph Torres, a Republican who has expressed concerns about legalization.

In response to House passage of the bill, Torres stressed the importance of taking “a look at both sides of the coin.” Torres wondered about the crime statistics in states with legal weed and other public safety issues.

 

Whether those reservations would ultimately lead Gov. Torres to veto the legislative effort and oppose the will of CNMI residents, however, remains to be seen. Public hearings about the act had higher attendance than any hearings senators could remember. Initially, legislators had designed the bill as a voter referendum before adopting it in the Senate.

Surge in Illegal California Pot Shops Undercuts Legal Market

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In this March 15, 2018 photo, a Los Angeles County Sheriff's deputy keeps watch on a group of people apprehended at an illegal marijuana dispensary in Compton, Calif. The number of outlaw dispensaries in the county greatly outnumbers the about 150 licensed storefront retailers. (AP Photo/Jae C. Hong)The Associated Press

 

By MICHAEL BALSAMO, Associated Press

LOS ANGELES (AP) — A slight marijuana smell wafted out as a steady stream of customers walked into a warehouse, its doors and windows covered by bars.

Suddenly, police swooped in.

"Sheriff's department! Search warrant!" a Los Angeles County deputy shouted as the team thundered through the front door and began hauling out people in handcuffs.

The Compton 20 Cap Collective just south of Los Angeles that was raided earlier this spring is one of hundreds of illegal marijuana stores operating in LA County, where marijuana is legal for anyone 21 and over and retailers must be licensed to sell to them.

 

 

Broad marijuana legalization arrived in California at the start of the year. From the beginning, there was concern the legal market would be undercut by the massive black market that has existed for decades.

And that's what's happening. Nowhere is it a bigger problem than in the state's biggest legal local marijuana market: Los Angeles County.

The number of outlaw dispensaries in the county greatly outnumbers about 150 licensed storefront retailers.

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That reality is a buzzkill for those trying to play by the rules.

Legal pot shops are losing customers who can get products more cheaply at illegal outlets that don't charge or pay taxes, said Adam Spiker, executive director of the Southern California Coalition, a trade organization that represents cannabis growers, distributors and dispensary owners.

It's an "unfair competitive situation for licensed businesses," Spiker said.

"I think if you turn the tables and took cannabis out of the equation — if it was another industry that didn't have the stigmas — the government would do everything they could to give those licensed business paying taxes a level playing field."

One of the selling points for legalization was it would generate a tax windfall for state and local governments. However, during the first quarter, the state reported only $34 million from cultivation and excise taxes, putting it on pace to fall well below the $175 million forecast for the first six months.

In April, state regulators sent nearly 1,000 cease-and-desist letters to cannabis businesses they suspected were operating illegally. An analysis by the trade publication Marijuana Business Daily found about 64 percent of the businesses were in the Los Angeles metropolitan area.

Last month, the Los Angeles city attorney's office charged 142 people as part of a crackdown on illegal dispensaries. It also sent cease-and-desist letters but declined to say how many.

Los Angeles County boasts the nation's largest sheriff's department, but even it has nowhere near the manpower to take down all the illegal pot shops. A task force overseen by Lt. Frank Montez raids an average of one dispensary a week.

However, the voter-approved ballot measure legalizing cannabis in California included a provision that made possessing more than 28.5 grams only a misdemeanor. That means officers can seize businesses' cash and marijuana, but employees and owners rarely face jail, and illegal operations often quickly reopen.

"It's a money-lucrative business so there are people willing to take the risk," said Capt. Holly Francisco, who commands the sheriff's department's narcotics unit.

Montez sees his work as more than code enforcement. Marijuana sold illegally may be tainted with illegal pesticides and other harmful substances. And licensed marijuana shop owners who pay their taxes should have a fair playing field, he said.

"When you have an illegitimate, illegal dispensary operating, that not only hurts the industry as a whole but that really hurts the community," Montez said.

At the Compton store, a sign above a security window says customers must be at least 18 and have a physician's recommendation to buy medical marijuana and be 21 and have a valid photo ID for anything else. Like many others, the shop operated in plain sight and advertised online, including on WeedMaps, a go-to website for people looking to buy cannabis.

Inside, whiteboards on dirt-smudged walls advertised the prices for different types of cannabis and concentrates.

Cartridges for vapor pens and "Shatter," a honey-like oil containing cannabis extract, cost between $15 and $30. Large display cases held jars of branded marijuana strains — 28 grams of "Purple Dragon" sold for $160.

"People out here on the street are thinking it is a legitimate operation and are smoking this cannabis with all these dangerous pesticides, and they are really killing themselves," Montez said.

Some illegal pot shops look so legitimate that customers may not even realize they are illegal unless they figure out they aren't being charged tax. But like any shopper looking for the best deal, plenty know these places are illegal and go because it's cheaper.

While some illegal LA County pot shops grow their own plants, many are supplied by illegal grows in the hills of Northern California, long a major source of all U.S. pot.

Lake County, about 125 miles (201 kilometers) north of San Francisco, is home to many such grows because of its topography, which allows pot farmers to easily hide large operations. It has an abundance of federal and state forests and land where cartels set up operations.

Like the LA County Sheriff's Department, Lake County lacks the manpower to put much of a dent in illegal operations.

Deputies patrol on the ground and in helicopters, and last year they destroyed about 250,000 plants and arrested 46 people for illegal grows, Sheriff Brian Martin said.

He has no estimate for the number of illegal grows in the county but is confident the hundreds of thousands of plants deputies chop down each year are "just the tip of the iceberg."

Martin said his short-staffed department has assigned a single a detective full-time to marijuana eradication. He counts on help from state and federal agencies, but they too have their priorities.

"It's all about manpower," he said. "No one has enough of it."

Oklahoma Legalizes Medical Marijuana

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Marijuana is now legal in Oklahoma for medical purposes.

Voters approved State Question 788 in Tuesday’s primary, which makes it legal to grow, sell and use marijuana for medicinal purposes. The law provides no outlines on qualifying conditions, giving physicians broad latitude to determine why they recommend medical marijuana to patients. Under the law, adults with a medical marijuana license would be authorized to possess up to 8 ounces of marijuana, six flowering plants and various weight of edibles and marijuana concentrates derived from the plant.

“The passage of State Question 788 highlights the strength and diversity of public support for laws allowing the medical use of marijuana,” said Karen O’Keefe, director of state policies for the Marijuana Policy Project, a drug policy reform group. “Most Oklahomans agree that patients should be able to access medical marijuana safely and legally if their doctors recommend it. It is noteworthy that this measure passed in such a red state during a primary election, when voter turnout tends to be older and more conservative than during a general election.”

Oklahoma becomes the 30th state to legalize cannabis for medical use. Legal recreational marijuana has been approved in nine states and Washington, D.C., which continues to ban sales, unlike the state programs. Despite the states’ efforts to scale back on criminalizing the plant over the past few years, marijuana remains illegal under the federal Controlled Substances Act.  

Former President Barack Obama’s Justice Department allowed states to forge their own way on marijuana policy with guidanceurging federal prosecutors to refrain from targeting state-legal marijuana operations. But in January, Attorney General Jeff Sessions rescinded the Obama-era guidance, a move that has possibly paved the way for a federal crackdown on legal marijuana. But states that have legalized medical marijuana retain some protections from federal interference under a budget rider known as the Rohrabacher-Farr amendment, which must be renewed every time Congress passes a government-funding bill.

In order to more fully protect marijuana states from the policies of federal prohibition, Sens. Cory Gardner (R-Colo.) and Elizabeth Warren (D-Mass.) introduced a bill earlier this month that would allow businesses and individuals working in the burgeoning legal marijuana industry in states around the nation to operate without fear of Department of Justice prosecution. The bill would also protect banks that work with state-legal marijuana businesses. President Donald Trump has said he will “probably” support the bill.

Marijuana is the most commonly used illicit substance in the United States, and the trend of states bucking prohibition in favor of legal regulation of the plant reflects a broad cultural shift toward greater acceptance of marijuana. National support for the legalization of the drug has risen dramatically in recent years, reaching historic highsin multiple polls. And states like Colorado, the first to establish a regulated adult-use marijuana marketplace, have seen successes that have debunked some lawmakers’ and law enforcers’ predictions that such policies would reap disaster.