Marijuana Law, Policy & Reform

Editor: Douglas A. Berman
Moritz College of Law

Monday, October 16, 2017

Examining taxation issues and economic development surrounding the marijuana industry

I am excited to realize and report that, after spending the first half the current semester preparing various presentations for the students in my Marijuana Law, Policy & Reform seminar, this week begins the part of the class in which students are to begin making presentations to each other. The first of the student presentation planned for this this coming week is exploring "tax liability."  Here are the links the presenting student has assembled in preparation for his presentation this coming week:

Relevant Internal Revenue Code Provisions:

26 U.S. Code § 280E - Expenditures in connection with the illegal sale of drugs

26 U.S. Code § 162 - Trade or business expenses

26 U.S. Code § 62 - Adjusted gross income defined

Three Short Articles on the Economic Impact of Marijuana

"What If Marijuana Were Legal? Possible Outcomes"

"Dose of Reality: The Effect of State Marijuana Legalizations"

"The Economic Impact of Marijuana Tax and Regulation in Colorado"

October 16, 2017 in Assembled readings on specific topics, Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, Taxation information and issues | Permalink | Comments (0)

Thursday, October 12, 2017

Thanks to Prez Trump(?!?), marijuana sales hit new milestone in Colorado

As reported in this local piece, headlined "Colorado’s 2017 marijuana sales reach $1 billion in just eight months," sales of recreational marijuana hit a new benchmark in Colorado. Here are the details:

Legal marijuana is a bona fide billion-dollar industry in Colorado. And it’s hitting the mark faster than ever. In 2017, Colorado eclipsed $1 billion in marijuana sales in eight months; in 2016, it took 10 months.

Colorado’s marijuana retailers logged upward of $1.02 billion in collective medical and recreational sales through August, according to The Cannabist’s extrapolations of state tax data released Wednesday. Year-to-date sales are up 21 percent from the first eight months of 2016, when recreational and medical marijuana sales totaled $846.5 million.

This year’s cumulative sales equate to more than $162 million in taxes and fees for Colorado coffers.

During the month of August, sales of flower, edibles, concentrates and accessories were nearly $137 million — $100.3 million from recreational cannabis sales and $36.5 million from medical marijuana — according to The Cannabist’s calculations....

The special sales tax rate for recreational marijuana increased to 15 percent from 10 percent in July, as the result of a new law that also exempted recreational marijuana products from the 2.9 percent standard state sales tax. Medical marijuana and accessories are still subject to that 2.9 percent sales tax rate. The Cannabist’s calculations for July and August 2017 recreational sales are based on revenue reported for the new 15 percent sales tax.

Economists and state officials have projected that the annual growth rates for Colorado’s cannabis sales will eventually moderate as the local market matures and other states adopt recreational cannabis measures.

Here’s a look at Colorado’s previous cumulative yearly sales totals:

2014: $699,198,805

2015: $996,184,788

2016: $1,313,156,545

As the title of this post suggests, I think the marijuana industry in Colorado can and should in some sense thanks Prez Trump for the ever increasing sales. The Trump Administration has not yet decided to crack down legally on the industry, but it also has hinted in various ways that a crackdown might be coming. That combination likely contributes to a view among consumers that they ought to be sure to purchase marijuana through "legal" channels while they still can.

October 12, 2017 in Business laws and regulatory issues, Recreational Marijuana Data and Research, Recreational Marijuana State Laws and Reforms | Permalink | Comments (0)

Sunday, October 8, 2017

Reviewing the newest recreational marijuana markets to be coming on-line

CNN Money has this new article focused on the three states about to have their recreational marijuana markets up and running in the wake of 2016 legalization votes.  The piece is headlined "Retail marijuana is spreading to California, Massachusetts and Maine," and here is how it gets started:

The mainstreaming of marijuana is about to get huge boost. Recreational marijuana sales will launch in three states next year, including the biggest one of all: California.

It's already for sale in five states, but the addition of a legal retail marijuana market in California, with its massive economy and population, will dramatically change the landscape. California is aiming to open retail marijuana stores by January 1, Massachusetts and Maine plan to open stores next summer.

"We obviously still have a lot to do, but yes, we're going to be ready to go on January 1," said Alex Traverso, spokesman for the Bureau of Cannabis Control in California. "We will be issuing new regulations in November, so we're hard at work on those at the present time."

Among the checklist of expected regulations is new oversight on water usage -- like drip irrigation and reusing waste water -- that could prove expensive for marijuana businesses. Other rules will require licensing and background checks for distributors and safety and education training for consumers.

Dispensaries like Green Alternative, which has 10,000 patients in San Diego, are getting ready to add non-medical customers to their clientele. "We are in the process of stockpiling cannabis in order to fulfill the market needs," said Zach Lazarus, COO of the Green Alternative. "We believe there will be a huge rush. We go through two to four pounds [per day] on average, and we anticipate going through three to four times as much when we open the doors for recreational." This requires not only stockpiling pot, but negotiating hurdles on the state and local level, for licensing, zoning, taxation and other issues.

Erik Altieri, executive director of the pro-legalization group NORML, said it might take longer than January "to set up the regulation process and to work out how the new recreational market will exist alongside its already quite large medical market."

The Bureau of Cannabis Control in California put its proposed regulations up for public review and began holding community workshop meetings in Long Beach, Fresno and Sacramento in September.

Massachusetts will implement retail marijuana sales on July 1, once state officials finalize whether certain localities will be able to maintain a marijuana ban in their respective towns, said Altieri. "We are committed to make that deadline," said Steven Hoffman, chairman of the Cannabis Control Commission in Boston, which held its first meeting on September 12 on developing and implementing regulations.

Maine would have the smallest market, and it's unclear when they'll get it off the ground. Dan Tartakoff, clerk for the Marijuana Legalization Implementation Committee of state lawmakers, said draft regulations were released in September proposing a 20% tax rate.

October 8, 2017 in Business laws and regulatory issues, Recreational Marijuana Commentary and Debate, Recreational Marijuana State Laws and Reforms | Permalink | Comments (1)

Thursday, October 5, 2017

"Cannabis Industry Struggles With Hiring People With Past Pot Convictions"

The title of this post is the headline of this notable new Forbes article, which includes these passages:

As the cannabis industry continues to grow, a debate is brewing over whether those with drug convictions should be allowed in the industry. Marijuana businesses are in a position of uncertainty amid U.S. Attorney General Jeff Sessions' anti-drug rhetoric. Meanwhile, the fast-growing, multi-billion-dollar industry is drawing investors and entrepreneurs.

Indeed, there is a hypocrisy evident in some corners of the newly legal marijuana market. Earlier this year, Massachusetts medical marijuana provider Patriot Care drew controversy after it opposed a proposal to remove the ban on felony drug convictions from the state's medical cannabis program. "Permitting those who have demonstrated the interest and willingness to ignore state and federal drug laws sends the wrong signals to those who would participate in the legal, regulated industry," wrote Robert Mayerson, CEO of Patriot Care, in a letter to the Massachusetts Public Health Council.  While companies like Patriot Care operate legally under state law, all state-legal cannabis companies are violating federal drug laws.

Many states have marijuana laws that bar drug offenders from entering the cannabis industry in an effort to legitimize the trade and help prevent out-of-state diversion. In practice, the ban does not prevent trafficking.  But it does shut out individuals with marijuana-related convictions, who are disproportionately black and Latino. And in a twist of absurdity, many of these felony bans apply only to drug-related crimes.

“You can go to a cannabis investment conference and no one is talking about the fact that just down the road there are people who are incarcerated for smoking or dealing or growing this very same product,” said Ryan Anslin, who has been investing in the industry for nearly four years.  “To entirely leave that out of an investment conversation is fundamentally wrong.” Anslin believes that those in the industry are obligated to put resources towards changing drug laws. "There's a level of complacency that has emerged in the early industry," he said.  While that may be the case for many investors and operators, other players are working towards creating an equitable industry.

Derek Peterson, the CEO of Terra Tech, thinks it's a "disaster" that there are executives in the marijuana space who oppose social justice reforms. Terra Tech is a publicly traded cannabis company that operates in California and Nevada, and has a cultivation facility in Oakland, Calif. with minority interest.  Peterson says the company supports equity programs like that in Oakland, and it is working with lobbyists to insert criminal justice-reform language into legalization legislation in New Jersey. "We don't feel very comfortable about the opening up of markets and economic development [while] watching people sit in prison," he said. "There needs to be allowances in new legislation that allows for people who have been incarcerated for drug crimes to [enter] this industry."

Barring those with experience in the illicit market could also shut out people with relevant expertise. "[It's] doing a disservice to some of the best knowledge base in the cannabis industry. These are the guys who paved the way," said Rob Hunt, principal of the consulting firm ConsultCanna who was formerly a founding partner of the cannabis private equity firm Tuatara....

For Anslin, the key to crafting reforms is focusing on record expungement. "As an employer in the space… I would always be really careful to hire people who have knowingly done things against the letter of the law," he said. But when it comes to certain marijuana offenses, "they shouldn't have been convicted of anything to begin with."

October 5, 2017 in Business laws and regulatory issues, Criminal justice developments and reforms, Employment and labor law issues, Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Wednesday, October 4, 2017

"Out-of-state companies making a run for Ohio’s medical marijuana licenses"

Medical-marijuana-ohioThe title of this post is the headline of this notable new Marijuana Business Daily article that might be of special interest to my Ohio-based students and really to anyone thinking about how the laboratories of democracy in the marijuana reform space still have inter-state elements despite the persistence of national prohibition. Here are excerpts from the article:

Out-of-state medical cannabis companies are jumping into the nascent Ohio market because the state lacks a residency requirement for business owners. While a majority of the applicants are listed as Ohio-based companies, at least a dozen either have an out-of-state business address or are connected to companies based elsewhere.

That’s according to the business information of 185 applications for 24 available cultivation licenses recently released by the Ohio Medical Marijuana Control Program....

Regulators decided against a residency requirement when they drafted the law. Tom Haren, a Cleveland cannabis attorney, said the state went back and forth on the residency issue. “This was the subject of a lot of debate as the rulemaking process moved forward,” he said. “Ultimately what the regulators decided was to err on the side of experience operating in other regulated markets.”...

 While there isn’t a strict residency provision, regulators scoring applications can take into account whether a company’s principal place of business is in Ohio. “What we’ve seen is a lot of the out-of-state investment was done in partnership with Ohio residents,” Haren said.  According to Haren, a majority of applicants were Ohio citizens who partnered with out-of-state groups to help strengthen the experience section of their applications. “It’s hard to have experience in a market that’s been illegal here for the last 70 years,” he added.

October 4, 2017 in Business laws and regulatory issues, Medical Marijuana State Laws and Reforms | Permalink | Comments (0)

Monday, October 2, 2017

"Government jobs sprout as California legal pot looms"

The title of this post is the headline of this notable recent AP article, which starts this way:

Scientists. Tax collectors. Typists. Analysts. Lawyers. And more scientists.

Recreational marijuana sales become legal in California in 2018, and one of the things to blossom in the emerging industry isn't green and leafy.  It's government jobs.

The state is on a hiring binge to fill what eventually will be hundreds of new government positions by 2019 intended to bring order to the legal pot economy, from keeping watch on what's seeping into streams near cannabis grows to running background checks on storefront sellers who want government licenses.  Thousands of additional jobs are expected to be added by local governments.

The swiftly expanding bureaucracy represents just one aspect of the complex challenge faced by California: Come January, the state will unite its longstanding medical cannabis industry with the newly legalized recreational one, creating what will be the United States' largest legal pot economy.

Last January, just 11 full-time workers were part of what's now known as the Bureau of Cannabis Control, the state's chief regulatory agency overseeing the pot market. Now, it's more than doubled, and by February the agency expects to have more than 100 staffers.  The agency is moving into new offices later this year, having outgrown its original quarters.  It's expected new satellite offices will eventually spread around the state.

There also will be scores of jobs added to issue licenses for sellers, growers, truck drivers, manufacturers and others working in the projected $7 billion industry.  The state has taken to Facebook to lure applicants.  The bureau is using a video snippet of actor Jim Carrey, hammering his fingers into a computer keyboard, to catch the eye of prospective applicants online. "Get those applications in ... before this guy beats you to it," it reads. "New job just ahead," reads another post. "We're hiring."

This year's state budget contained about $100 million to fund regulatory programs for marijuana, which includes personnel to review and issue licenses, watch over environmental conditions and carry out enforcement.

Planned hiring into 2018 covers a range of state agencies: Fifty people are bound for the Public Health Department, 65 are slated to join the Water Resources Control Board, and 60 new employees are expected at the Food and Agriculture Department, which will oversee licensing for cultivators.

Some of the work is highly specialized. Environmental scientists will be responsible for developing standards for pot grows near streams, to make sure fertilizer or pesticides do not taint the water or harm fish. An engineer will monitor groundwater and water being diverted to nourish plants. Lawyers are needed to help sort out complex issues involving the state's maze of environmental laws.

Pay varies with position but can be attractive, with some scientist posts paying over $100,000 annually. Special investigators with the Consumer Affairs Department could earn in the $80,000 range.

Though not mentioned in this article, most states have funding government jobs in the marijuana arena through the fees and taxes that the marijuana industry produces for state coffers.  In a black marketplace, of course, there are no fees and taxes going to the government, though taxpayers are still paying for the costs of trying to enforce prohibition -- which, ironically, largely serves to drive up the tax-free profits that black market participants can secure.  With legalization and regulation, the monies paid by marijuana consumers gets channeled to fund state regulatory jobs that should help ensure the consumer gets a safer product at a lower cost.  From an economic perspective, it should be a win-win if all goes well (though all does not always go well, and there are other obvious concerns such as public health).

October 2, 2017 in Business laws and regulatory issues, Employment and labor law issues, Recreational Marijuana Commentary and Debate, Recreational Marijuana State Laws and Reforms, Taxation information and issues , Who decides | Permalink | Comments (1)

Sunday, October 1, 2017

Making the case for marijuana as a "driving engine of the American economy"

1Paul Armentano, the deputy director of NORML, has this new commentary detailing positive elements of economic development that can be linked to marijuana reforms.  The full headline of the piece serves as a kind of summary: "Making the case for Marijuana Is Now a Driving Engine of the American Economy: From increased tax revenue to rising home prices, legalization is stimulating economic growth." And here are excerpts, highlighting more what has not to been previously highlighting on this blog:

The legalization of cannabis for medical and recreational purposes is having a positive impact on states’ economies in ways that go well beyond tax revenue. From job creation to increased tourism, marijuana legalization is driving economic markets. Here’s how.

TAX REVENUE...

JOB CREATION

The legal cannabis industry is responsible for the creation of nearly 150,000 new full-time jobs, according to data compiled by the online content provider Leafly.com. Their September 12 analysis identified 149,304 jobs in the marijuana sector – a 22 percent increase over the number of jobs that existed one year ago. States reporting the largest number of cannabis-related jobs were California (47,711) Colorado (26,891), and Washington (26,556).

TOURISM

The state of Colorado has experienced an unprecedented increase in tourism following the passage of marijuana legalization. According to data released last year by the Colorado Tourism Office, a record-setting 77.7 million people visited the state in 2015, spending over $19 billion. It is the fifth year in a row that tourism has set records in the state, which is experiencing a rapid growth in tourism that is nearly double the national average. And while not all of Colorado’s visitors are coming there for legal weed, many of them are. Among vacationers surveyed by the state’s Tourism Office in 2016, 49 percent responded that marijuana’s legal status positively influenced their decision to visit the state, and 22 percent of Colorado vacationers said that marijuana’s legal status was “extremely influential” in shaping their decision.

WORKPLACE PARTICIPATION AND WAGES

Lifting cannabis criminalization is linked with greater participation in the workforce and an increase in weekly income. A 2016 University of California at Irvine study reported that ending marijuana possession arrests is associated with an increased probability of employment, particularly among young African American males, and an average increase of 4.5 percent in weekly earnings. According to separate data published last year in the journal Health Economics, medical cannabis regulatory laws are associated with fewer workplace absences. Data published by the National Bureau of Economic research similarly reports that medicalization is associated with a "9.4 percent increase in the probability of employment and a 4.6 percent to 4.9 percent increase in hours worked per week” among those over 50 years of age. “Medical marijuana law implementation leads to increases in labor supply among older adult men and women,” researchers concluded.

HOME VALUES

The growth in the number of cannabis retail facilities is associated with an increase in nearby home values. That’s according to a just published economic analysis by researchers at the University of Georgia at Athens, the University of Wisconsin – Madison, and California State University Sacramento. They reported that single family residences within 0.1 miles of a retail marijuana establishment saw an increase in value of approximately 8.4 percent compared to those located slightly further – between 0.1 miles and 0.25 miles – from the site. That increase in property value was estimated to be almost $27,000 for an average house in the area.

October 1, 2017 in Business laws and regulatory issues, Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research | Permalink | Comments (0)

Thursday, September 28, 2017

Examining the distinctive marijuana market in the distinctive District of Coulmbia

The_Naked_Truth__District_of_Cannabis__TThe District of Columbia — which, if anyone cares, is where I was born a long, long time ago — has long been a distinct part of the United States as a matter of law and practice.  For that reason and others, it should come as no surprise that marijuana reform takes on distinctive dynamic in our nation's capital.   This new AP piece, headlined "Giving the gift of green in the ‘District of Cannabis’," provides a profile of this interesting story, and here are excerpts:

A 2014 ballot initiative to legalize recreational use passed overwhelmingly. But unlike the eight states that have legalized recreational use, the Washington initiative also maintained it was still illegal to buy or sell the drug.

So instead of the straightforward marijuana storefronts common in Colorado or Nevada, Washington has developed a thriving “gift economy” marijuana industry. These businesses — many offering delivery — sell everything from coffee cups to artwork — all overpriced and all coming with a little something extra.

It’s a curious legal and semantic tightrope, and one the District’s politicians and police seem determined to keep walking. “It’s definitely unique,” said Morgan Fox of the pro-legalization Marijuana Policy Project. “The DC city council and the city government don’t want to be busting people for weed. They want this to work and work smoothly.”

Washington’s local government didn’t choose to make the District a real-time sociology lab for alternative legalization. The roots of this strange legal middle ground lie in the District’s tortured relationship with the federal government. “We would have regular stores if we had the normal rights of a U.S. state,” said Nikolas Schiller, co-founder of DCMJ, a pro-legalization group that helped draft the initiative’s text.

All District laws are subject to review by a congressional committee, which can veto them or alter them by attaching riders to federal appropriations bills. After the initiative passed, Rep. Andy Harris, a Republican from neighboring Maryland, introduced a rider prohibiting the District government from spending any funds or resources on developing a regulatory or taxation system for marijuana sales.

Harris, an anesthesiologist and member of the conservative Freedom Caucus, remains a staunch opponent of recreational marijuana use and has no regrets about complicating the District’s legalization model. “I think the District of Columbia made a bad decision,” Harris said in an interview. “I would hope the District comes to its senses and realizes the dangers.”

According to marijuana merchants, the change has resulted in spiraling supply and demand. The relative ease of availability without risking arrest or having to maintain a relationship with a dealer has brought a wave of consumers of all ages and demographics. And that wave of demand has brought a wave of new suppliers. In addition to the dozens of different businesses working through the gift loophole, there are now hundreds of marijuana-themed public events taking place across the city — most openly advertised on social media. “Seven days a week, you can find an event going on,” said Gregory Moorer, whose Laid Back Lords company offers marijuana gifts to accompany $50 baseball caps and $80 sweatshirts.

One such event, known as Cannemania, happens weekly at a closed Ethiopian restaurant. Inside isn’t so much a stoner party as a fairly businesslike trade show. On a recent night, about 150 people crowded in to peruse about 25 different vendors’ tables offering large jars of buds and a huge variety of edibles, from brownies to marijuana-infused gummi bears. There were also marijuana vape pens and “concentrates” — a substance that looks like candle wax and requires a waterpipe and a blowtorch to consume.

Vendors hawked their wares like THC sommeliers and offered free hits of concentrates. But there was, according to the rules, no smoking of marijuana buds. For the most part everyone kept to the necessary gift loophole script: your money technically bought you a raffle ticket, some expensive rolling paper or, in one case, the baseball card of former Cleveland Indians shortstop Julio Franco.

Despite the ubiquity of the drug, it would be inaccurate to describe the District as some sort of marijuana free-for-all. Mayor Muriel Bowser’s government has worked hard to establish clear lines on what is and is not permitted. It remains illegal to smoke in public. Arrests for public consumption have actually spiked since the legalization initiative came into effect. Bowser also personally lobbied the city council to defeat a proposal to permit pot smoking in bars or restaurants — fearing it would lead to private cannabis clubs.

The police have also pounced on entrepreneurs who push things too far. In late 2015 they arrested Nicholas “Kush God” Cunningham, who had deployed a fleet of cars covered in marijuana-leaf decals that would hand out pot edibles in exchange for “donations.”...

Police maintain that the gift loophole isn’t fooling anyone. “In our estimation, that’s still illegal,” said Lt. Andrew Struhar of the Narcotics and Special Operations division of Washington’s Metropolitan Police Department. But Struhar also admitted that police aren’t “actively out hunting” for marijuana violators as long as everything stays low-key and the neighbors don’t complain.

“We serve the citizens and if they say there’s a problem on this or that block, we’re going to do something about it,” he said. “If you’re going to flaunt it and you’re going to stick it in our face and force us to take action against it, then we’re going to take action.”

For now the model seems to be staggering along, but it’s debatable how long this can continue. Legalization activists say that a quasi-legal grey area was never their goal. Members of the District’s government are even less enthusiastic; they complain about the intrusiveness of the congressional oversight and point to a study which estimated $130 million in potential annual revenue from taxing marijuana sales. “I don’t think it’s sustainable,” said City Council Chairman Phil Mendelson. “We have legal marijuana but we can’t regulate it. It’s stupid, it’s just stupid.”

September 28, 2017 in Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, Initiative reforms in states, Recreational Marijuana Commentary and Debate, Recreational Marijuana State Laws and Reforms | Permalink | Comments (0)

Friday, September 22, 2017

Interesting look at women of color in the marijuana industry

This new Pacific Standard piece, with the sub-headline "Women across the country are working to build economic empowerment in the fledgling legal marijuana industry for people of color," covers topics I consider quite important for those who are deeply interested in the social justice aspects of marijuana reform. Here are snippets:

The legal marijuana industry made $6.7 billion in revenue in 2016, according to a January report in Business Insider. This is up from $5.4 billion in 2015, and $4.6 billion in 2014, as reported by CNBC. And while marijuana is slowly but surely becoming a legal industry in America, the wait for federal legality hasn't stopped the creation of culture surrounding the drug. But largely neglected in the stories about the thriving marijuana industry and its corresponding culture are the women of color who are doing the difficult work of advocacy, accurate reporting, and community creation for users of a long-maligned substance....

It's the racial disparities in sentencing and the war on drugs that brought Shaleen Title, an Indian-American woman, to the cannabis industry. While an undergraduate at the University of Illinois, Title met a representative from the ACLU who taught her about the starkly different incarceration rates between white and black men for marijuana charges. After that, she got involved with Students for Sensible Drug Policy.

These days, Title is a lawyer who co-founded the THC Staffing Group, a recruitment firm for jobs within the cannabis industry. Title considers herself, first and foremost, an activist. Her arena for change is figuring out how to build economic empowerment in the fledgling legal marijuana industry for people of color. "As important as it is to work on policy, it felt more direct [for me] to help people get into the industry because it was such a rare opportunity to see an industry start from scratch," Title says....

That idea of a ground floor was also stuck in the minds of Brooklyn residents Tahirah Hairston and Ashley Brooke. The 27-year-old friends both enjoyed smoking marijuana, but never saw themselves, or anyone who looked remotely like them, represented in weed culture. They hoped to find communities for liked-minded young professional women, but didn't find anything appealing to them. "There were very few," Brooke says. "And there were absolutely none for black women."

The pair realized the Google chats they had been sending, wishing for an online community for women of color who smoke, still hadn't materialized. So this year they launched The High Ends to create, as their website says, "a community of like-minded women who like to roll-up. We want to hear our stories told with nuance and wit from our perspectives." The High Ends is explicitly for and by women of color. The launch included a series of short videos of women of color explaining why they smoked—for physical or mental health, for focus, for creativity. Bringing the stories of very disparate women together was critical. "There's Moms Who Smoke and Nuns Who Smoke, which is amazing, but I'm 27 and want a community the same way I can go and find out a skincare routine," Hairston explains.

The High Ends is geared toward women with regular jobs, who don't want to hide the fact that they smoke weed. Brooke and Hairston want to reach women who don't see themselves represented in mainstream coverage of cannabis or in popular culture. Hairston puts it best: "It's about passing the L, and also passing knowledge."

September 22, 2017 in Business laws and regulatory issues, Race, Gender and Class Issues, Who decides | Permalink | Comments (0)

Monday, September 18, 2017

Fear of feds and prohibition prompt University of Maryland to cancel plans for medical marijuana instruction

In this post from July, I reported on plans by the University of Maryland School of Pharmacy to begin offering training to prepare prospective workers for the medical marijuana industry.  But this new Baltimore Sun article report that now, "citing legal concerns, the University of Maryland’s School of Pharmacy has canceled plans to offer training for those who work in the medical marijuana industry." Here is more:

After consulting with the Maryland attorney general’s office, the university asked pharmacy school officials to cancel the classes, a university spokesman said.... “If there’s any question of the law, they are often consulted,” said Alex Likowski, a spokesman for the University of Maryland, Baltimore. “Regarding medical cannabis, even though Maryland and many other states have approved it, it’s still illegal under U.S. law.”

Katherine Bainbridge, chief counsel of the education affairs division in the attorney general's office, confirmed that she gave advice to the university about the medical marijuana law specific to the courses the pharmacy school planned to offer, but she declined to disclose what the advice was. While the school said it has suspended the program indefinitely, prospective students seeking to enroll through a university-associated website still see a note that enrollments were “suspended temporarily while the business agreements are being finalized by the university.”

The classes, initially scheduled to start in August, offered basic and advanced certifications in areas including cultivation, manufacturing, dispensing, laboratory standards and assessment. It’s unclear whether the courses might be offered in the future. Pharmacy school officials did not respond to requests for comment....

Doctors in Maryland are not required to gain any special certification to recommend medical marijuana, but state law requires workers employed by growers, processors, dispensaries and laboratories to have training in their areas. Patrick Jameson, executive director of the Maryland Cannabis Commission, said workers must obtain training. “The commission expects the most highly trained and knowledgeable people will participate in the program,” he said. It’s unknown where those who want to work in the industry might turn for needed instruction. The state commission does not endorse any particular certification program.

Maryland’s pharmacy school would have joined only a small number of established colleges and universities to lend credibility for training of workers. The pharmacy school had adopted a curriculum developed by the advocacy group Americans for Safe Access, which has been offering training directly since 2002. University officials said suspension of the courses was a not a reflection on that content. The group did not respond to request for comment.

There are other online options for training available — directly through Americans for Safe Access and through the likes of such little-known organizations as Cannabis Training Institute, THC University and Green Cultured. Some state medical societies also offer training, but MedChi does not in Maryland.

Perhaps the only mainstream medical school offering training is the University of Vermont’s Larner College of Medicine, which began offering courses in the spring of 2016. There is a course available to medical and other university students that focuses on clinical trial data, in addition to certification and continuing education courses available to the community. Karen M. Lounsbury, a professor of pharmacology and co-director of Vermont’s medical cannabis course, said officials there had no legal concerns, though they were careful to comply with university policies.

“The biggest concern was that when presenting the clinical trial data for medical cannabis, we could be construed as supporting the use of medical cannabis that is legal in many states, including Vermont, but still illegal at the federal level,” she said. “We confirmed with the university lawyers that as long as we stated a clear disclaimer for each instructor, we would not be violating any university policy.” The disclaimer says: “The content of this lecture material represents the opinions of the instructor based on their research and experience and does not necessarily represent the opinions of the University of Vermont.” She said the program has an “evidence-based” approach and the classes are popular.

Medical marijuana advocates lamented that more well-respected universities were not offering medical courses for doctors or certifications courses for industry workers. Paul Armentano, deputy director of the advocacy group NORML, said such institutions were needed to establish training standards and to directly educate workers and doctors, very few of whom have had any instruction on the subject.

Prior related (and now dated) post:

September 18, 2017 in Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, Medical Marijuana Commentary and Debate, Medical Marijuana State Laws and Reforms | Permalink | Comments (0)

Another notable new medical marijuana state accepting applications and receiving plenty

33810141423_746482ddf4_bThis AP article, headlined "High Number of Applicants for Arkansas Medical Marijuana," reports on the last-minute rush to file applications to be a part of a green rush in the Natural State (which is also know as the Land of Opportunity). Here are some details:

Would-be growers and distributors of Arkansas' initial medical marijuana crop flooded a state office building Monday, turning in thousands of pages of paperwork and handing over thousands of dollars in application fees.  Applicants faced a three-hour wait ahead of Monday afternoon's deadline, as their number greatly exceeded the clerks available to review paperwork to ensure it was complete.  Those hoping to grow medical marijuana had to pay a $15,000 application fee, while potential distributors paid $7,500. Unsuccessful applicants will have half their money refunded.

Department of Finance and Administration spokesman Scott Hardin said about 300 firms or individuals had submitted applications by the close of business Monday. Clerks were staying late to handle applications from those in the office by the deadline.  About 100 people or firms sought to grow marijuana, with the others hoping to distribute it.

Arkansas voters last year approved marijuana use by people with certain medical conditions.  The new state Medical Marijuana Commission will review applications after the names of companies and individuals have been redacted and then select up to five growers and 32 distributors.  The Arkansas Health Department has approved 1,200 people for a medical marijuana registry, making them eligible to obtain the drug.

Applications from the potential growers and distributors were about 1,000 pages long, on average.  Several who dropped off applications elected not to identify themselves publicly, while others spoke openly about why they considered their applications worthy.  "If you can beat us at our game, I give you all the credit in the world," said Chris Stone, who operates two dispensaries in Illinois.  He has teamed with a pair of Arkansas pharmacists and wants to grow marijuana in the rich, agricultural lands near Brinkley and distribute marijuana at a dispensary on the east side of Jonesboro.

He said his firm failed in a previous attempt to win a grower's permit in Illinois, but took the feedback from that loss to fashion a pair of 1,800-page applications in Arkansas. "Those with successes in other states probably have a leg up on those who are putting together an application for a first time," he said.

September 18, 2017 in Business laws and regulatory issues, Initiative reforms in states, Medical Marijuana State Laws and Reforms | Permalink | Comments (0)

Thursday, September 14, 2017

Hawaii poised to be first state with cashless marijuana payment system

Safe-Harbor-Canpay-600x460As reported in this Forbes article, headlined "Hawaii Was Slow To Roll Out Medical Marijuana, But Fast To Go Cashless," the 50th state is about to be a first when it comes to the marijuana industry. Here are the details:

Hawaii has decided to turn its medical marijuana program into a cashless payment system in the hopes of avoiding the problems that other states and businesses have faced when dealing large sums of cash. The goal is that by October 1, all of Hawaii’s licensed dispensaries will no longer use cash, but instead ask their customers to pay with a debit payment app.

Governor David Ige said at a press conference on Tuesday, “Cannabis is illegal at the federal level, still a schedule one controlled substance. Because of this, all financial institutions in Hawaii have decided against providing banking services to the dispensaries. This solution allows the dispensaries to be able to write checks, to do all of the normal financial transactions that most businesses would do.” Hawaii legalized medical marijuana in 2000, but only recently implemented its program.

Banking has been tremendously difficult for cannabis companies. The major banks refuse to work with these businesses because marijuana is still federally illegal. The major credit card companies have also turned their backs on customers wanting to use their bank cards to engage in such transactions. This has caused inconvenience for the customers who are forced to pay with cash and the dispensaries that end up with stacks of cash that needs to be processed....

The debit app called CanPay steps in to provide an alternative to cash-only transactions. It is partnered with Safe Harbor Private Banking, a Denver-based division of partner Colorado Credit Union, which is a leading compliant banking program that specializes in working with cannabis companies.  “Removing cash from the equation leads to a more transparent and legitimate way to do business that’s both convenient and secure for all involved,” said Dustin Eide, CEO of CanPay. “Through the lengthy collaboration between ourselves, Safe Harbor, and the tremendous individuals in Hawaii’s legal cannabis market, these dispensaries are now able to operate as closely as possible to businesses in any other industry.”

While the cash has been a problem for some customers and businesses, there are many who prefer to keep these transactions in cash. Concerns over government intrusion and general privacy have kept these consumers wary of a system that can track all cannabis purchases. Dispensaries will still be able to accept cash transactions, although they will encourage customers to use the cashless system. Patients that don’t have a smart phone to use the CanPay system can set up an account with their email and log into a computer at the dispensary to complete a transaction....

Also, while Hawaii may have solved the problem of armored trucks and extra security personnel to oversee stacks of cash, it is also exposing itself to hacking. By depending on one system, the state could leave itself open to hackers who could take the system down and potentially keep patients from buying medicine. However, since cash will still be allowed, hackers wouldn’t completely freeze the industry.

"Hawaii’s adoption of a cashless payment system for cannabis sales is a clever and legitimate workaround occasioned by the unfortunate reality of the banking challenges in the industry," said Bryan Meltzer, a partner at legal firm Feuerstein Kulick. "We have said for a long time that this has created a dangerous situation ripe for robberies and related criminal activity. Hawaii should be applauded for its out-of-the-box thinking."

September 14, 2017 in Business laws and regulatory issues, Medical Marijuana State Laws and Reforms | Permalink | Comments (0)

Tuesday, September 12, 2017

Highlighting the challenges legal marijuana companies can have trying to give away money as charity

Download (6)This new Forbes article, headlined "Charities Just Say No To Cannabis Contributions," reports on the notable difficulties some in the marijuana industry can have trying to give away its money. Here are excerpts:

Charity organizations are reluctant to take donations from cannabis companies, even if the state has legalized the industry. Organa Brands learned this the hard way. The company was flush with success and wanted to give back to the community, but charities just said no.

“It felt like a slap in the face,” said Organa Brands President Chris Driessen. “Because the message was essentially you’re a drug dealer.” Organa Brands is the parent company of O.penVAPE, one of the largest cannabis vape companies in the country.  Organa is also home to cannabis brands Bakked, District Edibles, Magic Buzz and Organa Labs.  Driessen said that if a charity was willing to take the money, it wanted it to be anonymous.  “The optics were more important than helping the people,” he said.  Some of the charities that turned down Organa included Wounded Warriors, American Cancer Society, Children’s Hospital Foundation....

One group that was willing to work with Organa was the Denver Rescue Mission that works with the homeless. Not only did they happily and publicly take Organa’s charity, but the group also volunteered man hours. “We had 29 people at 5 am the day before Thanksgiving. Certainly not the image of stoners that people expected.” Another charity that has been working with Organa is Grow for Vets. Driessen said that Organa was hosting a golf tournament on September 11 to raise money for the charity that helps veterans that need cannabis to treat pain and PTSD.  Again, golf tournaments break the stereotype of what one may think of a cannabis company.

“We turn down probably 25 companies that want to work with us,” said Roger Martin, Executive Director of Grow For Vets.  As far of the other charities that turned down Organa’s help, “They have a snooty, up in the air attitude,” said Martin.  Grow For Vets is an organization that helps a veteran get medical marijuana for free. Martin noted that veterans get opioids for free through their medical benefits to treat pain and PTSD, but while these prescription drugs were free the cost was high in the terms of overdoses and suicides.  “They had to pay for marijuana, but not opioids,” he said.  

Martin said the money raised at the golf tournament will be used to help expand his program into all 50 states. While some states haven’t legalized marijuana, Martin said he can get these vets hemp-based CBD, which is more easily obtained. “Cannabis is the only thing that has helped me with PTSD,” he said. “Cannabis money isn’t dirty money.”

Organa also established its own foundation called Open Heart as another way to facilitate charitable donations. However, the actual management of running a foundation proved overwhelming, so the group partnered with Growing Hope foundation run by one of their banking partners.

September 12, 2017 in Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices | Permalink | Comments (0)

Thursday, September 7, 2017

"How Extensive is Inter-State Diversion of Recreational Marijuana?"

The title of this post is the title of this timely new paper available via SSRN (for a price) and authored by Benjamin Hansen, Keaton Miller and Caroline Weber.  Here is the abstract:

Despite federal prohibition, recreational marijuana is available to 21% of the United States population.  A chief concern among policy makers across multiple levels of government and political parties is inter-state diversion of marijuana from states with legal markets to others.  We measure this diversion with a natural experiment. Oregon opened a recreational market on October 1, 2015 next to an existing market in Washington, which opened on July 8, 2014.

Using comprehensive administrative data on the universe of Washington sales, we find Washington retailers along the Oregon border experienced a 41% decline in sales immediately following Oregon's market opening. Retailers along Washington's borders with Idaho and Canada experienced no such decline.  The decline occurred equally across weekdays and weekends, and was largest among the largest transaction sizes, suggesting diversion, not drug tourism, was to blame.  Our estimates suggest that 11.9% of the marijuana sold in Washington was diverted out of the state before Oregon legalized and 7.5% remains diverted today.

September 7, 2017 in Business laws and regulatory issues, Recreational Marijuana Data and Research, Recreational Marijuana State Laws and Reforms | Permalink | Comments (0)

Tuesday, September 5, 2017

"How legalization caused the price of marijuana to collapse: Pot has never been so cheap."

The title of this post is the headline of this new Wonkblog analysis authored by Keith Humphreys at The Washington Post.  Here is how it starts and ends:

All the diverse effects of legalizing recreational marijuana may not be clear for a number of years, but one consequence has become evident almost immediately: Pot has never been so cheap.  Steven Davenport of the Pardee Rand Graduate School has analyzed marijuana retail prices in Washington state since legal recreational markets opened in July 2014.  Remarkably, prices have fallen every single quarter since....

The ongoing decline in marijuana’s price after legalization has an important implication for drug policy more generally.  The experience of Washington and other marijuana legalization states demonstrates how enormously effective prohibition of production and sale is at raising drug prices.  For example heroin’s price took a decade to fall by 16 percent, which the legalization of marijuana accomplished in just eight months.  Notably, even high taxes on legal marijuana don’t keep the legal price anywhere near what it was when the drug was more broadly illegal.

Prohibition imposes huge costs on drug producing industries that are passed on to consumers in the form of higher prices.  These higher prices are one of the principal reasons (the others being stigma and fear of punishment) that illegal drugs are used so much less frequently than legal drugs such as alcohol and tobacco.  Marijuana is a rare example where we can see the impact of legalizing a drug in real time, which shows that were the production and sale of heroin, cocaine and methamphetamine also legalized, those drugs would also become dramatically cheaper to consume.

September 5, 2017 in Business laws and regulatory issues, Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research | Permalink | Comments (0)

Sunday, September 3, 2017

"Unforeseen Land Uses: The Effect of Marijuana Legalization on Land Conservation Programs"

The title of this post is the title of this new paper authored by Jessica Owley now available via SSRN. Here is the abstract:

This Article explores the tension between land conservation and marijuana cultivation in the context of legalization.  The legalization of marijuana has shifted the locations of marijuana cultivation and with that shift comes environmental and land-use implications.  Investigating commercial-scale marijuana cultivation, this Article details how, in some ways, legalization can reduce environmental impacts of marijuana cultivation while also examining tricky issues regarding tensions between protected lands and marijuana cultivation.

Legalization of marijuana has brought its production out of the federal forests and individuals’ basements and closets and into large-scale agricultural production.  In some ways, the legitimation of the process makes it less likely to be environmentally destructive. If we treat cultivation of marijuana the same as we treat cultivation of other agricultural crops, we gain stricter regulation of the growing process, including limits on pesticide usage, water pollution, wetland conversion, air pollution, and local land-use laws.  Thus, it appears that legalization of marijuana yields an environmental benefit. And yet the story is, of course, more complicated than that.  The strange status of marijuana as both a federally impermissible use and a stigmatized crop suggest that it will not fall under the same legal regimes as other agricultural products.

The Article reaches two main conclusions.  First, in the absence of federal regulations, subnational governments must create and implement environmental and land use regulations governing the cultivation of marijuana to ensure the legal grows do not continue the harmful practices involved with black market marijuana.  Second, land trusts and agricultural protection organizations should not become involved with marijuana cultivation in any form while it remains illegal at the federal level.  To do so puts both the land and their operations at risk.

September 3, 2017 in Business laws and regulatory issues, Recreational Marijuana Commentary and Debate, Who decides | Permalink | Comments (0)

Thursday, August 31, 2017

"Buzz Kill for Pot Farmers: Lower Prices"

BF-AT618_POTFAR_16U_20170830162105The title of this post is the headline of this Wall Street Journal article reporting on the modern economic realities of the marijuana marketplace moving from black to gray. Here are excerpts:

From Washington to Colorado, wholesale cannabis prices have tumbled as dozens of states legalized the drug for recreational and medicinal uses, seeding a boom in marijuana production. The market is still tiny compared with the U.S. tobacco industry’s $119 billion in annual retail sales, but the nascent cannabis business has grown to more than $6 billion a year at retail, according to data from Euromonitor International Ltd. and Cowen & Co..

For marijuana smokers, the price drop is sweet news. Recreational users and those prescribed cannabis for health reasons have seen prices decline as wholesale prices have fallen, though some retailers have pocketed part of the difference, according to New Leaf Data Services LLC, which researches the U.S. cannabis market....

But for growers—ranging from high-tech warehouse operations to back-country pot farmers gone legit—the price drop has been painful. Since peaking in September 2015 at about $2,133 a pound, average U.S. wholesale cannabis prices fell to $1,614 in July, according to New Leaf. That is the sort of market decline that hit Midwestern corn and soybean growers in recent years after a string of record-breaking crops. “There is an increasing recognition, on the part of the industry and those that grow and dispense, that this market is a commodity,” said Jonathan Rubin, New Leaf’s chief executive.

In response, some producers are taking a page from the food industry, where farmers and food companies increasingly appeal to health- and environment-conscious consumers. Growth in organic food products for years has outpaced conventional grocery sales, and products made without genetically modified crops, gluten and artificial flavorings can command premium pricing and shelf space....

Because cannabis remains illegal under federal law, growers can’t get their crops certified as organic, a label that can only be bestowed by the U.S. Department of Agriculture. Cannabis farmers instead have turned to alternative labels such as SunGrown Certified, which requires that growers use sunlight and water-conservation practices. They hope such labels will entice smokers and secure shelf space in the 29 states where marijuana is legal in some form....

That push to differentiate is splitting pot farmers into rival camps. Indoor-grown cannabis, where climate controls and high-powered lights allow several crops per year, typically is of a more consistent quality, industry officials say. Its dense, often bright-green buds catch consumers’ eyes, often fetch a higher price and can be costlier to produce.

Proponents of marijuana grown outdoors and in greenhouses say indoor facilities rely on synthetic fertilizers and heavily consume electricity. They point to a 2012 paper by University of California Senior Scientist Evan Mills, which estimated that indoor cannabis production accounted for 1% of national electricity use, though some growers have been adopting LED lights, which consume less electricity.

Jeremy Moberg, owner of Riverside, Wash.-based CannaSol Farms and head of the Washington Sungrowers Industry Association, says marijuana smokers will come to care about the environmental cost of their high. “The socially conscious, premium customer is going to want us because we’re sustainable,” he said. “It only takes me 30 seconds to convert somebody wearing Patagonia and driving a Prius that they should never smoke indoor weed again.”

At Hashtag Cannabis in Seattle, Ms. Pillert said customers occasionally ask for pesticide-free or sun-grown varieties. Smokers’ main fixation, she said, is the potency rating for the key active ingredient, tetrahydrocannabinol, or THC: “They want to make sure they are getting the biggest bang for their buck.”

Many in the emergent industry expect marijuana to eventually resemble the beer business, where pricier craft brews have built followings in the shadow of cheaper mass-market beers like Budweiser and Busch. While high-quality strains and specialty brands may secure premium prices, more low-quality marijuana will be processed into oil used in vaporizer cartridges or adult-oriented baked goods like brownies and cookies, growers and retailers said.

August 31, 2017 in Business laws and regulatory issues, Race, Gender and Class Issues, Recreational Marijuana Data and Research | Permalink | Comments (0)

Wednesday, August 30, 2017

"Marijuana Legalization and Nosy Neighbor States"

The title of this post is the title of this notable new paper authored by Alex Kreit now available via SSRN. Here is the abstract:

As more states proceed with marijuana legalization laws, questions have arisen about how to accommodate those states that wish to retain prohibition.  For instance, in 2014, Oklahoma and Nebraska unsuccessfully sued Colorado based on the spillover effects that Colorado’s marijuana legalization law had on its neighboring states.  This article asserts that there are several reasons why state marijuana legalization laws are unlikely to have a large effect on neighboring states.

First, marijuana is not a previously unobtainable good being introduced into the stream of commerce, as it is already available through the black market inexpensively. Second, legalization laws have a number of restrictions that make it very difficult for sellers to profit from exporting legally produced marijuana across state lines. Prohibition states may have reason to worry, however, that illegal marijuana growers will be better able to hide their operations in legalization states that allow residents to grow small amounts of marijuana for personal use, which in turn may increase illegal marijuana exports to neighboring prohibition states.  Prohibition states can minimize this risk of increased marijuana flow by lobbying the federal government to establish rules that protect their interests.

August 30, 2017 in Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, Recreational Marijuana Commentary and Debate, Recreational Marijuana State Laws and Reforms | Permalink | Comments (0)

Tuesday, August 22, 2017

"Regulating Marijuana Advertising and Marketing to Promote Public Health: Navigating the Constitutional Minefield"

The title of this post is the title of this notable new article authored by Leslie Gielow Jacobs that is available via SSRN. Here is the abstract:

   Marijuana legalization, at least to some extent, is now a reality in half of the United States.  This shift reflects the good reasons to decriminalize marijuana use and to legalize and regularize its cultivation, distribution and retail sale.  Legalization also introduces substantial public health dangers and injects the potent tool of advertising and marketing to promote marijuana into the struggle for persuasive influence between sellers aimed at increasing profits and regulators trying to minimize the damages to public health.  But limits on advertising and marketing to reduce adverse public health consequences are difficult to impose because of the increasingly aggressive interpretations of the protections for advertising articulated by the Supreme Court.  Regulators must understand the types of regulations that will provoke constitutional challenges, and how a court’s analysis of each type of regulation will proceed.

   This Article is the first to provide detailed analysis and concrete, step-by-step guidance for regulators seeking to balance the electoral mandate to provide access to marijuana products with their ongoing and urgent responsibilities to protect public health.  It provides regulators with the knowledge they need to understand the constitutional implications of a wide range of options, and to make choices that implement their public health objectives without provoking expensive legal challenges.

August 22, 2017 in Business laws and regulatory issues, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Monday, August 21, 2017

Notable review of major Philly firms now happy to talk up their marijuana practices

SdaOnly a couple of years ago, it seemed relatively rare to find lawyers in big firms with significant marijuana practices and rarer still to hear those lawyers actively discussing their marijuana work.  Against that backdrop, this new Philadelphia Inquirer article provides another example of the changing marijuana times.  The piece is headlined "Philly-area law firms bullish on cannabis despite grave legal risks," and here are excerpts:

Lawyers going into the marijuana business face potential arrest, disbarment, and even imprisonment. But they’re gambling that the smoke will clear, and the federal government will eventually legalize cannabis.  Many of Philadelphia’s biggest firms — Duane Morris, Fox Rothschild, and Cozen O’Connor among them — have set up practices recently to serve cannabis growers, dispensaries, and related entrepreneurs as the state aggressively gears up to make medical marijuana available to patients by early 2018.  Last month, Pepper Hamilton “formalized” its marijuana industry group.

“We saw it as a growth opportunity,” said Joseph C. Bedwick, partner at Cozen O’Connor. But the continuing disconnect between state and federal laws, and the Trump administration’s antipathy toward marijuana, has created what Bedwick calls “a big ball of uncertainty.”

“At any moment, theoretically, they can say, ‘We’re going to crack down on this,’ ” Bedwick said. And with so many attorneys getting into the cannabis game, some doubt there will be enough work to sustain those practices....

“You have a hatchet over your head with the federal government,” said Andrew B. Sacks, chairman of the medical marijuana and hemp department at Sacks Weston Diamond, which was among the first to represent marijuana-related businesses.

Joshua Horn, co-chair of the cannabis practice at Fox Rothschild, is optimistic.  He said it’s unlikely the feds would shut down state-legal medical marijuana operations, given the current status of the law, guidance from the DOJ, and budgetary constraints.  “They don’t have the manpower, they don’t have the budget, and popular will is strongly against it,” Horn said.  “More than 90 percent of the people in the commonwealth support the medical marijuana program, and Pennsylvania isn’t the most liberal state.”

Few attorneys have been prosecuted under federal or local laws. However, California attorney Jessica McElfresh — who has represented cannabis clients for more than seven years — was arrested at gunpoint in May.  The San Diego district attorney charged McElfresh on multiple felony counts, alleging she helped hide evidence of a hash oil manufacturing facility.  It seized her client files and issued a warrant for all of McElfresh’s cellphone location data for three years, along with her calendar, address book contacts, and internet searches.  “There have been attorneys that have been charged, but they participated more directly in the businesses,” McElfresh said last week. “There’s never been one like mine.”

Philadelphia attorney Steven Schain of the Hoban Law Group said he considers the San Diego case chilling.  “It represents a landmine in all our paths,” Schain said.  “Sizzle aside, marijuana remains 100 percent illegal under federal law.  Any real cannabis lawyer is exposed to massive federal and civil prosecution.  But we’re willing to take the risk.”

Boutique firms were the the first to represent aspiring cannabis clients in the state, said Sacks.  As trailblazers, they wrestled early on with the dilemmas created by the tension between the conflicting state and federal statutes....   Though the boutiques ... were the first to have a toehold in the state, large national firms soon appeared.  

Of the 12 companies chosen by the state Department of Health to grow cannabis, six were represented by out-of-state firms.  That hasn’t dampened the enthusiasm of attorneys wanting to get into the cannabis game. More than 145 lawyers have signed on to serve on marijuana committees run by the Pennsylvania and Philadelphia Bar Associations, said Sacks, who chairs those committees.

Hoban’s Schain doubts there’s enough work to warrant so many players.  “Legalized marijuana is suffused with irrational exuberance,” Schain said.  “Everyone is convinced that somebody is making loads of money and trying to get a piece of the action.  But if you’ve been in the industry more than 10 minutes, you know the reality is quite different.”

But Bedwick, of Cozen O’Connor, said that his firm was in for the long game and that many clients are related tangentially to the cannabis industry.  They’re real estate owners, investors, lighting manufacturers, builders, and security companies.  Those entrepreneurs are looking for advice on issues that include banking, taxation, intellectual property, and labor law.

August 21, 2017 in Business laws and regulatory issues, Medical Marijuana Commentary and Debate, Who decides | Permalink | Comments (1)