California Lawmakers Pass Bill to Overturn Pre-Legalization Marijuana Convictions

California lawmakers have passed a bill directing prosecutors throughout the state to overturn convictions for acts that are no longer illegal under the state’s Prop 64 cannabis legalization initiative. The bill would also reduce many felony convictions for marijuana-related crimes to misdemeanors.

The measure, Assembly Bill 1793, was passed by the California Senate Wednesday with a bipartisan vote of 22-8 after being approved by the California State Assembly on May 31 by a vote of 43-28.

If the bill is signed into law by Gov. Jerry Brown, it will direct the state Department of Justice to identify cases from between 1975 and 2016 that are eligible to be overturned or reduced by July 31, 2019, and notify the appropriate district attorney for action. Prosecutors will then have until July 1, 2020 to decide if they want to challenge the reduction or elimination of any of those convictions.

Prop 64, passed by voters in 2016, legalized the recreational use and sale of cannabis and eliminated many marijuana-related crimes. That decriminalization also applied retroactively, making many eligible for a reduction or elimination of past cannabis convictions. Those with convictions for non-violent felonies including possession or distribution of less than one ounce of cannabis are eligible for reduction to misdemeanors. Prosecutors have the right to challenge relief based on the criminal history of affected individuals.

Thousands of Cases Eligible For Relief

The justice department estimates that 220,000 convictions qualify to be reduced or eliminated.  Prosecutors in San Diego and San Francisco have begun to proactively reduce or eliminate convictions, but many other district attorneys in the state have said that they do not have the resources to follow suit. That puts the burden of relief on those with the convictions, many of whom may not be aware that they are eligible. Some with convictions that qualify for a reduction or elimination have taken it upon themselves to petition the court for relief, but only a small minority of those who are eligible have done so.

Sen. Scott Wiener, a Democrat from San Francisco who voted for the measure, said it “creates a simpler pathway for Californians to turn the page,” according to an Associated Press report.

State Sen. Joel Anderson, a Republican from San Diego County, said that reducing felony convictions to misdemeanors will allow people to regain lost civil rights, including gun ownership.

“This bill will take those people off the prohibited list, save us time and money,” Anderson said.

AB 1793 was introduced by Democratic Assembly Rob Bonta of Oakland. He said that “the role of government should be to ease burdens and expedite the operation of law — not create unneeded obstacles, barriers, and delay.”

Although AB 1793 received broad bipartisan support, not all lawmakers agreed with the elimination of past convictions. Republican Sen. Jim Nielsen of Gerber argued against passage of the measure by his colleagues in the Senate.

“This directs us to forget any prior behavior that was illegal,” Nielsen said. “They should not be given a pass.”

With the approval of AB 1793 by both houses of the California legislature, the bill now heads to Gov. Jerry Brown for his approval.

Oklahoma Legalizes Medical Marijuana

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.

Weed YouTubers Speak Out After Having Their Channels Deleted

YouTube has been systematically shutting down marijuana-centric channels on its video-sharing site with little-to-no explanation since at least early 2018. Cannabis YouTubers—or WeedTubers—have been dealt channel strikes, suspensions, and restrictions on the same platform that seemingly used to embrace them. In addition to receiving little information about the purge, creators have been left confused by YouTube’s inconsistent enforcement of standards and policies concerning cannabis content.

“As soon as they decided to close all of our channels down, it’s just been radio silence for every single one of us,” said Josh Young, creator of the channel Strain Central.

Young had been a WeedTuber since 2014, even getting a tattoo of YouTube’s iconic red, “play” button logo on his wrist when he hit 100,000 subscribers about two years ago. He had cultivated a following of nearly 500,000 subscribers with educational cannabis content until his channel was shut down in late April. Young still sees the tattoo as a reminder of how he found both his passion and voice in his YouTube videos but is disappointed to see his channel disappear without a clear explanation.

“I think the weirdest part for me is that for a long time, I had been [regularly] in contact with YouTube,” he said. “I wasn’t doing a lot of the big consumption challenges or anything like that, so I felt like they were a little more open with me… It almost seems like once they made that decision, it was an executive decision for everyone.”

Preparing for the ‘Adpocalypse’

Setting the scene for the creation of YouTube’s vague content policies, the platform has undergone a wide variety of changes dating back to March of 2017, an era dubbed the ‘Adpocalypse.’

Huge brands including Pepsi, Walmart, and Verizon—in addition to institutions like the U.K. government—pulled their ads after finding that their spots were featured alongside problematic videos touting political extremist views and hate speech. AT&T issued a statement: “Until Google can ensure this won’t happen again, we are removing our ads from Google’s non-search platforms.”  A resounding message heard not only by employees at YouTube, but the creators who relied on the platform for their livelihood.

According to ArsTechnica, YouTube’s response was to place an age restriction on anything that might be objectionable, which demonetized those videos—essentially meaning they were not eligible for ads, and therefore, would generate no revenue for their creators. Brands were also allowed to opt out of advertising on videos based on broad criteria, including “tragedy and conflict” or “sensitive social issues.”

As over 400 hours of video are uploaded to YouTube every minute, scouring that content is a huge task—one predominantly carried out by algorithms. Though creators may submit appeals, the process can take several days to complete. This lag upset several creators, who began jumping ship to other platforms, such as Twitch, or soliciting donations via Patreon or PayPal to continue their channels.

The crackdown on content didn’t save YouTube from its next controversy. In December of 2017, YouTuber Logan Paul posted a video depicting a suicide victim in Japan’s Aokigahara forest. Though YouTube condemned the video, Paul, who has 17.5 million subscribers, was not permanently booted from the platform.

Yet the most shocking turn of events came on April 3, when a 38-year-old vlogger shot and wounded three people at YouTube’s San Bruno, CA headquarters before taking her own life. Her videos, whose videos were largely focused on fitness, veganism, and animal rights, had expressed frustration over YouTube’s policies, claiming that many of her videos were demonetized.

All of this sets the scene for what cannabis content creators claim is now happening with their channels, over a year from when this so-called “Adpocalypse” hit.

What’s Happening to Cannabis Channels?

WeedTubers’ channel restrictions and deletions seem to follow a similar pattern. First, content creators first receive a strike. According to YouTube’s guidelines, strikes can be issues for a variety of issues, including copyright violations; harmful, dangerous, or hateful content; scams, or “misleading metadata.” One strike can stop the channel from live streaming, while two within a three-month period prevents the posting of any new content for two weeks. Strikes are not permanent, can be appealed, and will expire in three months’ time. However, if a channel receives three strikes in three months, that account will be terminated. It’s this strike-to-deletion pathway that seems common among cannabis channels, regardless of the type of content posted.

Matthias Gast said he racked up three strikes on his channel, Matthias710WRX in February. He typically posted reviews of dabbing products and videos in which he took “massive dabs” for his some 100,000 subscribers.

“It was kind of like a Jackass of weed thing, just trying to make people laugh and show them that cannabis isn’t dangerous,” he said. “You can smoke a whole ton of it, and I’m still standing here just fine.”

The first strike was on one such CBD review, in which Gast took a half-gram dab and gave his thoughts on how he felt.

He admits the second video strike, which featured the inclusion of a psychedelic mushroom, made more sense to remove. Yet his third came minutes after posting a video about a trip to Hawaii containing footage of him taking dabs and smoking, and his account was terminated within the span of a week. Gast said he was sent a generic email which indicated he was not following the platform’s terms and conditions.

Similarly, Joel Hradecky’s channel boasting 1.5 million subscribers, CustomGrow420, was deleted earlier this year, only to have it reinstated on June 6 without notice. Like Gast, he said he received generic emails from YouTube without specific answers. In one such email, of which he posted a screenshot to his Instagram account, YouTube writes they do not allow content that “encourages or promotes violent or dangerous acts that have an inherent risk of serious physical harm or death.” Examples included drug abuse, bomb making, and underage drinking or smoking.

“They have lots of alcohol stuff on there” Hradecky pointed out. “It’s just weird because everybody could post [cannabis content] for a long time, and then all of a sudden, everything changed.”

Clark Campbell and Alice Addison, a Los Angeles-based couple who posted cannabis and lifestyle content to their channel, That High Couple, had their channel suspended in April. Campbell works as a digital community manager for a Multi-Channel Network, which means his day job is to work with influencers and content creators on growth strategies. In his experience operating under YouTube’s policies, he sees the rise in strikes and flags as the likely result of an algorithm, not a human monitor.

“Across the board, we’re seeing cannabis tags and cannabis-related titles and topics [being removed]; those are the ones that at least the algorithm, on its basic level, is picking up, flagging, and removing,” Campbell said.

Courtesy of That High Couple

The High Couple received their first strike on April 19 on a video explaining how to roll a joint, followed by a channel suspension. When their channel was reinstated, it came back with two strikes; the second strike was on a 360 tour of a dispensary in Vegas. The couple is now afraid to post any new content, for fear of a third and damning strike. So, they intend to move their cannabis content elsewhere and only post lifestyle and travel content to YouTube.

“It hasn’t been anything we, as content creators, have done differently, it’s just that the platform is changing this year,” Campbell said. “It’s a shame because it’s one of the biggest, most radical changes since I’ve started working with YouTubers, and it’s something that they’re just not communicating enough over what it is they’re flagging.”

While some cannabis YouTubers have had their presence wiped out with no clear path to return, Matt Lamb, who posts educational and how-to content to his Ruffhouse Studios channel, has had his channel reinstated, though not without much back and forth.

Lamb found YouTube supportive when he first started his channel in 2011. He enjoyed repeated invitations to YouTube’s space in Los Angeles, where he both produced content and used their equipment. Another time, said he was introduced to various brands like Chipotle and SweeTarts at a party; he was one of about 15 to 20 other creators and the only cannabis creator present at the time.

Yet about a year ago, he began experiencing demonetization, followed by the complete deletion of his channel. When he reached out to YouTube to ask why, he was told he was using spiders or bots that would artificially inflate view counts, generating fake traffic. Lamb denies this, and said YouTube provided no evidence of what he had supposedly done. On May 29, Lamb’s channel was reinstated and he was sent an email indicating the channel did not violate the platform’s policies. Browse his channel today, and you’ll find his over 400,000 subscribers and video content in tact. Lamb still, however, doesn’t know what went wrong in the first place.

Why the Purging of Cannabis Content?

Given the range of reasons provided in YouTube’s vague emails and the absence of personalized communication, many WeedTubers are left wondering why — and, especially, why now. High Times reached out to YouTube for a statement, and have not received a response at the time of this writing.

Without a clear answer, theories abound. One might argue that cannabis is a stigmatized drug that remains federally illegal, but it’s also considered a medicine in 29 states and legal in 9, as well as D.C. Although this would seem to go against the trend of YouTube not only allowing cannabis content, but seemingly encouraging it for quite some time with invites to film in the YouTube Space with studios and equipment or partner managers assigned to WeedTuber accounts prior to the wave of deletions.

Some hypothesize that YouTube is attempting to become more brand-friendly and more appealing to TV advertisers. Lamb notes that some bigger content creators who cover cannabis but already have ties to TV, like Snoop Dogg and VICE, have been permitted to stay on the site.

Others believe the platform is simply still trying to clean up its content after the Logan Paul outrage by bumping off smaller creators. While cannabis seems to be the common denominators among the WeedTubers we spoke with—whose subscriber counts and content styles vary—it’s not the only genre of channels that’s been experiencing strikes, suspensions, and deletions. Following the Parkland shooting, conspiracy theory and firearm channels began complaining of similar treatment. In 2017, LGBTQ creators found their videos were being placed in restricted mode.

It seems the algorithm, blindly flagging and restricting videos containing anything that might be construed controversial in the slightest, is at the core of the confusion leading creators to criticize the lack of transparency at YouTube. And if YouTube is unable to clarify what, exactly, is acceptable on its platform, they could stand to lose a fair amount of creators—which may not matter to them if they’re still getting those advertiser dollars. For creators, it may mean seeking out new, more accepting platforms, or finding niche platforms centered around the communities they love.

Marijuana Sales: Strong in Nevada, Disappointing in California

© ThinkstockLegal sales of marijuana for recreational use began last July in Nevada and in January in California. Although California sells a lot more legal weed than Nevada, California sales are much lower than projected while Nevada's are much higher.

First the good news. From July 2017 through March 2018 (the first nine months of Nevada's fiscal year), combined taxable sales of marijuana totaled $386 million, of which nearly $305 million represents sales for recreational use. Sales in March posted a record total of just over $41 million. Through March, the state has collected almost $49 million in taxes, about 97% of its estimated full-year take of $50.32 million.

The less-good news about recreational pot sales comes from California, where the latest projections based on sales to date estimate sales will be about half the original estimates.

According cannabis industry analyst firm New Frontier Data, sales in California this year will total $1.9 billion, exactly half the original estimate of $3.8 billion. Giadha Aguirre De Carcer, CEO of New Frontier, told the Los Angeles Times that strict rules on growers, distributors, and retailers combined with low governmental authorization in California cities are to blame.

Only about 30% of California's 540 cities have have so far permitted commercial cannabis activity. The effect has been to send consumers to the black market where they pay no taxes and illegal sellers easily undercut legal prices.

In February the Los Angeles Police Department shut down 8 illegal pot stores but the deputy chief told the Los Angeles times that another 200 to 300 illegal stores were still operating in the city.

Marijuana tax collections in California totaled $33.6 million in the first quarter of 2018, virtually guaranteeing that the state would not reach its estimated 6-month total of $175 million in tax collections.

California's estimated legal and illegal marijuana market totals around $7.8 billion. About $2.3 billion comes from sales of medical marijuana. If the legal market is only taking about $1.9 billion of the total, the rest ($3.6 billion) is going to the illegal market.

And that illegal market is only for sales inside the state. California also exports (illegally, of course) tons of marijuana. State residents consumed about 2.5 million pounds of marijuana (most of it illegally) in 2016 and produced about 13.5 million pounds. Those 11 million pounds are sold, illegally, to out-of-state buyers.

NYPD Sergeants Union Criticizes Mayor’s Orders Against Cannabis Arrests

New York City has been relatively slow to change when it comes to cannabis laws, but recent activity from the mayor’s office could be shaking things up. Last week, Mayor Bill de Blasio promised to make potentially significant alterations to how the city enforces weed laws — and, unsurprisingly, not everyone is happy about it. In particular, the NYPD Sergeants Union is criticizing the mayor’s orders against cannabis arrests.

NYPD Pushes Back Against Mayor

The back-and-forth between de Blasio and NYPD leaders arises out of recent developments in NYC’s gradually-evolving approach to cannabis laws.

Last week, Mayor de Blasio announced that the city will create a new task force to prepare it for legalization. According to NY Daily News, the task force will have 30 days to review the NYC’s current practices regarding cannabis law enforcement. It will then make recommendations for ways to improve those practices.

But that’s not all. Mayor de Blasio went a step further. He directed the NYPD to stop arresting people caught smoking weed in public.

This change is the one that seems to be generating the most controversy. So far, the most outspoken critic is Ed Mullins, President of the NYPD Sergeants Benevolent Association.

Yesterday, he told the Wall Street Journal that the new change could put officers “in positions of conflict.” Mullins argued that such conflicts could arise if residents called cops to crack down on public weed-smoking, but then were not allowed to arrest offenders.

“You can’t just circumvent the law,” Mullins said. “If you want to not have enforcement of arrests, then you need to change the law.”

This isn’t the first time Mayor de Blasio has tried to change New York City’s approach to cannabis law. In previous years, he instructed NYPD to stop arresting people caught with small amounts of marijuana. In response, officers began writing simple summonses instead of issuing arrests.

Since going into effect, that change has led to a 40 percent drop in marijuana arrests. But data from recent years reveal ongoing problems. In particular, the city has seen persistent racial disparities in the marijuana-related arrests that are still being made. NYPD reportedly arrested 17,500 people for marijuana last year. A full 86 percent of those arrested were black and Latinx.

“The racial disparities have not changed one bit, and arrests are still too common in communities of color,” Councilman Donovan Richards said earlier this year. “If the administration is serious about changing this disparity, we’re not seeing it.”

Now, it seems that Mayor de Blasio may be taking Richards up on his challenge. The mayor’s office indicated that his latest order to stop arresting people for smoking weed is in large part intended to address these racial disparities.

Additionally, de Blasio has indicated that the change is part of a larger effort to prepare the city for legalization. Although de Blasio has voiced opposition to legalization, he now believes it will happen sooner or later.

In any case, the newest change will not go into effect until the end of the summer. It remains to be seen if the tensions between de Blasio and NYPD leaders like Mullins will intensify in the meantime.

NFL Forbids Injured Player’s Request for Medical Marijuana

Although the NFL remains one of the most physical, injury-laden league in professional sports, it still hasn’t given any leeway in terms of medicinal marijuana use by its players. The league, as a whole, remains stringent on marijuana use, and unfortunately, that doesn’t look like it will be changing anytime soon. While there are loopholes in the NFL’s drug policy, for therapeutic medicinal cannabis use, the outlet has yet to be successfully exercised, as once again, the NFL forbids injured player’s request for medical marijuana.

Mike James’ Request Denied

Mike James, a current NFL free agent and former Tampa Bay Buccaneers and Detroit Lions running back, has made NFL history, in his own right. Last month, the former sixth-round pick became the first player in league history to file for a therapeutic use exemption for medical marijuana.

But last Thursday, his request was denied by league officials.

James had been reliant upon opioid painkillers since a Monday night football game against the Miami Dolphins after the running back broke his ankle on a goalline plunder. In an interview with CNN’s Chief Medical Correspondent, Dr. Sanjay Gupta the running back reveals he was addicted to the cocktail of pills he was prescribed in just a matter of weeks.

According to James, the pills caused him to lose a part of himself.

“I never had something where I could be coherent and still have pain relief,” James revealed.

However, the ex-Buc vowed to get clean for his sons. Growing up, his father was in and out of prison on various drug stints, and he didn’t want to set the same example for his children. That’s why, at first, medical marijuana seemed like such a far-fetched idea.

“I thought, ‘Weed? No, that’s a street drug,” James said in the interview. ” I didn’t even want to hear what it had to offer.”

However, after succumbing to the inevitable physical addictions of his prescribed opioids, James decided to give it a go. And in February of 2014, he tried medicinal cannabis for the first time. And he had an epiphany.

“I felt like I was beginning a new life,” James said.

But despite his attempts to change, James has failed several drug tests for marijuana, and his exemption has been denied by league officials. Instead of supporting his effort to get clean, the NFL has admonished it.

“Our job is to find the best medical science to support your therapeutic use exemption,” said DeMaurice Smith, the executive director of the NFL Players Association.

While plenty of that information has been made available, the NFL still remains behind the curve— and James’ career now hangs in the balance.

“My career is at great risk,” the running back admitted to Gupta.

The NFL Won’t Budge on Medical Cannabis

While the NFL may still classify the plant as a “controlled substance,” many within the league—and outside of it, believe athletes should be allowed to use medicinal marijuana.

According to a Yahoo News/Marist Poll published last year, 69% of Americans approve of a professional athlete using marijuana for pain, and 67% of pollers believing prescribed opioids are far worse that prescribed marijuana.

Additionally, many ex-players have championed the use of the plant for pain-management and concussion treatment. Ex-Jaguars offensive lineman Eben Britton believes marijuana could be a big part of the league’s medical program going forward and could be an important tool to help preserve players’ careers.

While the NFL remains behind the eightball on medical pot, despite being one of the most injury-plagued sports in America, other sporting leagues are starting to come around. The UFC essentially allows their athletes to use cannabis for recovery, and even the NBA has said it will consider removing the plant from its banned substance list.

Now, it’s time for the NFL to get off the opioid train, and hop onto the medical pot express. If not, the league could become, effectively extinct.

Police Officer Caught Selling Drugs To Undercover Federal Informant

It wasn’t a happy 420 for a police officer caught selling drugs to an undercover federal informant in New Jersey last week. FBI agents arrested Ruben McAusland, 26, on Friday, April 20 for selling drugs including cannabis, crack, heroin, and powder cocaine. McAusland is a patrol officer with the Paterson Police Department.

US Attorney Craig Carpenito announced that agents had taken McAusland into custody in a press release last week. Carpenito’s spokesperson Will Skaggs told the New York Post that the arrest is unusual.

“It’s a surprising case — that an officer, who is supposed to be preventing the sale of drugs, did just the opposite,” he said.

Officer Faces Multiple Allegations

According to a complaint filed by federal prosecutors, McAusland sold drugs to the informant several times beginning in October 2017. At that time he sold the individual approximately 35 grams of marijuana, 48 grams of heroin, 31 grams of cocaine, and 31 grams of crack cocaine for only $50.

McAusland then allegedly sold the informant a pound of weed on two different occasions. The first time he charged $2,500, the second pound cost $2,400.

In February of this year, McAusland offered to sell a kilo of cocaine to the Feds’ snitch. The same month and on several subsequent occasions, the police officer sold counterfeit Percocet pills. McAusland charged $7 each for the tablets, which actually contained heroin.

Also in February, while in his patrol car, he met the buyer in a supermarket parking lot near Paterson PD headquarters. McAusland delivered sample heroin pills to the informant at that time. He then sold heroin pills to the informant several times. One transaction in April was for more than 1,000 of the pills.

McAusland appeared in federal court on Friday and was released after posting a $100,000 bail bond. He faces up to 40 years in federal prison and a $5 million fine if he is convicted.

Final Hit: Police Officer Caught Selling Drugs To Undercover Federal Informant

McAusland is the third Paterson PD officers busted in the last two weeks. Federal agents arrested Jonathan Bustios, 28, and Eudy Ramos, 31, on April 11. They face charges of conspiring to deprive individuals of their civil rights under color of law.

Bustios and Ramos allegedly stopped drivers on the road while on patrol. After detaining the drivers, the cops conducted unjustified searches of vehicles. The corrupt officers also stole cash from those they stopped on at least one occasion.

Authorities have also charged Bustios with extortion. In that case, he allegedly offered not to arrest a man he had detained if the man in custody helped Bustios obtain a gun. The officer also said he would return cash he had seized in exchange for the firearm.

“I ain’t gonna charge you with resisting, and I’m letting you keep your money, bro. If you don’t wanna make the deal, you don’t have to make the deal,” Bustios told the man, according to local media.

Bustios and Ramos could serve up to ten years in prison for the civil rights violations charges. Additionally, Bustios faces twenty more years behind bars for the extortion case.

Marijuana growers, manufacturers have yet to get the green light from L.A.

Months after California legalized the marijuana business, pot growers and manufacturers lament that they are still locked out of the legal industry in Los Angeles.

More than 100 shops have already gotten city approval in Los Angeles, but not the companies that have historically furnished them with cannabis, which were supposed to be second in line under a complex set of city regulations passed in December.

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L.A. had originally planned to finish processing their applications by April but has not even started accepting that paperwork. As 4/20 rolled around Friday — the informal holiday for pot enthusiasts — there was no official word on when that would happen.

That has aggravated marijuana growers, manufacturers and other cannabis companies seeking to do business legally in Los Angeles. Under California law, they cannot get state licenses if they do not have local authorization. And if they don't have a state license, it is illegal for newly licensed shops to buy their products.

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"If people don't get their licenses in the very near future, their businesses are tenuous," said Aaron Herzberg, founding partner of Puzzle Group, a law firm specializing in cannabis licensing and real estate. "Maybe those businesses are driven into the black market entirely."

Marijuana companies that had lined up business locations are being "bled dry" as they hang on to costly leases, said Adam Spiker, executive director of the Southern California Coalition, a cannabis industry group. Ryan Jennemann, manager of the cannabis cultivation company THC Design, said his firm has cut dozens of employees in recent months.

"It's an unsettling feeling," Jennemann said. "We're in a state where cannabis is legal. The 4/20 holiday used to be an underground thing — now they're talking about it on MSNBC. And we don't have permits."

The delay has also prevented any new operators, including shops, growers and other marijuana enterprises, from getting into the legal industry in L.A.

Under the regulations, they would get a shot at city approval in a third phase of applications, after L.A. grants approval to marijuana growers and manufacturers that had been supplying existing shops.

City officials have chalked up some of the delay to short staffing as the newly formed Department of Cannabis Regulation started poring over business applications. The department currently has only four staffers and has relied on workers loaned to it from other city agencies. Council members voted to hire more employees in February, but those positions have yet to be filled.

“The shift from cannabis prohibition to regulation — in the largest cannabis market in the world — is complex,” said Cat Packer, who heads L.A.’s Department of Cannabis Regulation. "Getting it right will take time." (Al Seib / Los Angeles Times)

As of Friday, the department had granted approval to 139 pot shops that had been operating in line with an earlier set of city rules — the group of businesses that were first in line for approval. But before other marijuana businesses can apply, the city has been trying to work out remaining details for its "social equity" program, which is intended to help people and communities hit hardest by the war on drugs.

To be eligible for the second phase of licensing, longtime growers and manufacturers that supplied the existing shops must also qualify for that program. If not, they would have to seek licenses in the third phase along with all other kinds of applicants.

Eligible social equity entrepreneurs include poor applicants who either have been convicted of some marijuana crimes or have lived in areas disproportionately affected by pot arrests, as well as firms providing space or other assistance to disadvantaged applicants.

But city officials say they are still figuring out how to proceed.

This year, council members asked to reexamine whether additional communities in the San Fernando Valley, Boyle Heights and parts of downtown might have been disproportionately affected by the war on drugs, potentially allowing people who had lived in those areas to qualify for the program.

L.A. also needs to fund and set up the outreach and assistance programs that are supposed to be provided under the program — or decide whether to press ahead with licensing social equity applicants before the city can offer such benefits, city officials said. That decision would be made by council members.

A spokeswoman for City Council President Herb Wesson did not provide comment Friday.

"The shift from cannabis prohibition to regulation — in the largest cannabis market in the world — is complex, and involves a broad range of stakeholders," Cat Packer, who heads L.A.'s Department of Cannabis Regulation, said in a written statement Friday. "Getting it right will take time."

California Minority Alliance Chairman Donnie Anderson, whose group advocated for the social equity program, said that "we definitely wanted the city to be farther along, but I understand that the city has to make sure things are right." He added that the city needs to ensure businesses don't find ways to "scam the system" meant to benefit poor and marginalized applicants.

The proposed budget released last week by Mayor Eric Garcetti includes $3.7 million for the cannabis department next budget year, more than four times as much as this year, and provides for 28 staffers.

In his budget, Garcetti also estimated that the city would get $30 million from taxing the marijuana industry, a crucial infusion that will help bankroll city services. The delay in marijuana licensing has already cost the city this year: It had been anticipating $16 million from taxing cannabis businesses this budget year, but is now expecting to pull in only $4.4 million, according to the mayor's office.

Marijuana's margin, like alcohol, is going to be captured in the end product, investor says

• When looking to the future of cannabis, Navy Capital founder Sean Stiefel says the marijuana industry will look a lot more like the alcohol industry, than big tobacco.
• Insofar as the alcohol industry has distinctive branding, different product lines and end product-based margins, the marijuana industry could be quite similar.
• In the short-term, Steifel anticipates Canada's impending nationwide legalization will drive marijuana prices way up.

There's going to be a massive undersupply of pot: Marijuana investor  5 Hours Ago | 04:23

Navy Capital founder Sean Stiefel says for the burgeoning marijuana industry, the profit isn't in the plant — it's in the end product.

"We're talking about vapes, oils, edibles, topicals, sprays -- all of that stuff is coming, and as science catches up to marijuana, you'll see more and more of those end products," Stiefel said on CNBC's "Closing Bell."

Stiefel founded New York-based investment firm Navy Capital in 2014. In 2017, the firm launched Navy Capital Green Fund, which invests in public equities in the global legal cannabis industry.

In Denver, where recreational marijuana has been legal since 2014, Stiefel said sales of the cannabis plant don't dominate the market, so much as products derived from the plant. And that's where the big money is.

"Look on the other side of it, the cosmetics and some of the more luxury items -- you can't keep them on the shelves," he said.

As for the future of the burgeoning industry, Stiefel thinks marijuana will look a lot more like the alcohol industry than big tobacco, but will likely share traits with both.

Insofar as the alcohol industry has distinctive branding, different product lines and product-based margins, the marijuana industry could be quite similar. And while Steifel does not consider cannabis purely a commodity, like tobacco, he does hope the cost of the actual plant will decline considerably.

"We actually would like for the price of raw marijuana to come down, because we are believers that the margin, like alcohol, is going to be captured in the end product," Steifel said. "You don't necessarily know the price of grain or potatoes going in the vodka or beer, but you know the price of the beer, and there's tremendous margins to be captured when you make products for the end user."

In the short-term, however, Steifel anticipates Canada's impending nationwide legalization will drive marijuana prices way up.

Medical Marijuana Bill Moves Forward in South Carolina

After action by a legislative committee, the medical marijuana bill moves forward in South Carolina. Members of the House Medical, Military, Public and Municipal Affairs (3M) Committee voted 14-3 to send the South Carolina Compassionate Care Act to the full House for consideration. The bill would allow seriously ill patients with a doctor’s recommendation to use medical marijuana to treat their conditions.

Janel Ralph is the executive director of the advocacy group Compassionate South Carolina. Her eight-year-old daughter has a rare seizure disorder. She said the that the committee’s vote is a step in the right direction.

“The diligent work of patients, advocates, and supportive lawmakers is paying off, and South Carolinians are closer to finding relief with medical cannabis than ever before,” Ralph said.

“This issue needs to stay at the forefront of the legislature’s attention, and we will continue working to educate them about the need for a compassionate medical cannabis program in our state. Patients will continue to suffer until this bill is passed and implemented.”

“We commend lawmakers for allowing the Compassionate Care Act to progress this far, and urge them not to delay taking it up when the next legislative session begins,” she added.

Democrat Leon Howard represents Columbia in the House and is the chair of the 3M committee. He told local media that the South Carolina Compassionate Care Act would be a positive measure for the state.

“I believe we did the right thing by approving this bill,” Howard said. “Our intent is to help the thousands of patients who can benefit from this medical treatment, including retired military personnel and children who suffer from debilitating illnesses.”

But, he said, those patients will probably have to continue to wait.

“I want supporters of the bill to understand that it is highly unlikely that this bill or any other medical cannabis bill becomes law during this legislative session. That makes it all the more important to contact your elected officials and urging them to support this bill.”

Senate Passed Version Last Month

The Senate Medical Affairs Committee passed a similar measure in March by a vote of 8-6. Under the proposals, patients with “debilitating” conditions would be allowed to use medical marijuana and cannabis products.

The law defines an “allowable amount of medical cannabis” as up to two ounces. The law makes patients with cancer, HIV, PTSD and conditions causing severe pain, nausea or seizures eligible to use medical marijuana. They would have to receive a card from the Department of Health and Environmental Control in order to participate.

A 2014 law allows South Carolina epilepsy patients limited access to medicinal cannabis. But they can use only CBD, and only in approved clinical trials.

Final Hit: Medical Marijuana Bill Moves Forward in South Carolina

Legislative procedures will prevent the Compassionate Care Act from being made law this session because a key deadline has already passed. But activists believe the committee votes in the House and Senate will lead to passage of the bill next year.

A 2016 poll by Winthrop found that 78 percent of South Carolinians support legalizing medical marijuana.