Cannabis Law Prof Blog

Editor: Franklin G. Snyder
Texas A&M University
School of Law

Saturday, September 22, 2018

Massachusetts Cannabis Cash Finds a Home at Federal Credit Union

It's no secret that recreational marijuana is a cash cow, but until recently, retailers have had no piggy bank in which to deposit all their earnings. However, thanks to the efforts of Gardner Federal Credit Union, marijuana dispensaries in Massachusetts may have found a home for their earnings. The Boston Business Journal has the story:

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The bank said Friday afternoon that it would begin banking for the industry, working with Safe Harbor Services, a
wholly-owned affiliate of Partner Colorado Credit Union that is the leader in compliance-based cannabis banking services.

 

“As a credit union committed to helping people and serving the underserved, we found in Safe Harbor a partner who offered a viable and proven compliant-based cannabis banking option and a way to keep our communities safe. Our board of directors recognizes the need to provide banking services for the safety of our citizens in reducing the ‘cash on the streets’ and I applaud them for their vision and commitment to providing public safety," said GFA Federal Credit Union’s CEO, Tina Sbrega.

Banking has long been a thorn in the side of recreational marijuana retailers. Because marijuana is still illegal at the federal level, if a bank were to accept funds derived from marijuana sales, that would constitute money laundering. The resulting friction between state legalization and federal drug policy has created an business ecosystem where cash is king. Colorado marijuana entrepreneur Babak Behzadzadeh told The New York Times: "If we had bank accounts, it'd be much easier."

Safe Harbor Services began helping local banks and credit unions in Colorado accept marijuana money in 2014, serving a vital–and very profitable–role in the cannabis industry. The company has expanded its reach outside of Colorado, now offering its services to credit unions like Gardner Credit Union in Massachusetts. The company is able to help its customers deposit their cannabis profits "legally" by ensuring that none of the money is derived from activities specifically prohibited by the Cole memorandum, and that the banks who accepted cannabis cash were careful about what they did with it–specifically ensuring that it did not migrate outside of states in which marijuana was legal. However, with the recent rescission of the Cole memorandum by Attorney General Jeff Sessions, it is not clear that Safe Harbor will be able to continue offering their services to financial institutions. 

Polls show that the majority of Americans favor legalization of marijuana, and 30 states have legalized the drug in some form. With this increasing momentum in favor of legalization, states have expressed an interest in allowing banks to accept money derived from marijuana sales in order to quell threats of violence and robbery to marijuana businesses, who generally carry large amounts of cash on hand. Whether the current administration will crack down on organizations like Safe Harbor and their partners like Gardner Credit Union in Massachusetts remains to be seen, but something will have to be done with all of the cash currently being generated by the marijuana industry.

 -John Robinson

September 22, 2018 in Banking, Business, Commercial Law, Decriminalization, Drug Policy, Federal Regulation, Finance, Law Enforcement, Local Regulation, Medical Marijuana, News, Recreational Marijuana, State Regulation | Permalink | Comments (0)

Utah may soon legalize medical marijuana

Utah FlagA public event supporting legal medical marijuana organized by the Utah Patient Coalition has attracted hundreds of supporters. The bill being considered, Proposition 2, would allow patients with doctor recommendations to legally obtain medical marijuana from privately owned dispensaries. 

According to an article by Kathy Stephenson of the Salt Lake Tribune, the event included music, food trucks, bounce houses, T-shirts and lawn signs. 

Not all Utahns are in favor of the bill in its current form, though. The article explains that despite empathy for suffering children, some groups don't support Proposition 2 due to a perceived lack of sufficient procedural safeguards. 

A Dan Jones and Associates poll, conducted for UtahPolicy.com, found 64 percent of likely voters to be “somewhat” or “strongly” in support of the measure.

However, several groups, including the The Church of Jesus Christ of Latter-day Saints and the Drug Safe Utah Coalition — made up of medical experts, clergy, law enforcement, educators and business leaders — are opposed and say the initiative as written lacks procedural safeguards.

“We are aware of many in our neighborhoods who seek relief from pain and suffering and are moved with empathy by stories of children who endure debilitating seizures and other medical conditions," said Marty Stephens, the church’s director of community and government relations. “The church supports medicinal use of marijuana, so long as proper controls and safeguards are in place.

“In the spirit of compromise,” he added, "we urge a timely, safe and compassionate approach to providing medical marijuana for those in need without the harmful effects that will come if Proposition 2 becomes law.”

The upcoming elections in November will show whether events like this are enough to sway the voters of Utah to become the 32nd state to legalize medical marijuana. 

--Alex Bennett

September 22, 2018 in Decriminalization, Law Enforcement, Medical Marijuana, News, Politics, State Regulation | Permalink | Comments (0)

Friday, September 21, 2018

Wine and Weed?

Shutterstock_366620825A recent lawsuit illustrates that perhaps wine does not pair well with weed. Earlier this month, M. Shanken Communications, Inc., the publisher of Wine Spectator e-magazine, filed a complaint alleging trademark infringement against  Modern Wellness, Inc., the operators of the Weed Spectator website.

Reuters reporter, Jonathan Stempel has details of the lawsuit:

M. Shanken Communications Inc, the publisher of Wine Spectator magazine, has filed a lawsuit accusing the northern California-based operators of Weed Spectator of infringing its trademarks, and copying its familiar 100-point rating scale for wine to rate cannabis.

In a complaint filed on Tuesday (September 4, 2018), M. Shanken said Sacramento-based Modern Wellness Inc, “in a classic case of ‘passing off,’” created a website and social media pages for Weed Spectator that bear “striking similarities” to Wine Spectator’s own website and e-magazine.

“M. Shanken has no interest in associating Wine Spectator and the Wine Spectator marks with cannabis, a largely illegal drug,” the complaint said. “Any association of this type is likely to tarnish the reputation and goodwill that has been built up in the Wine Spectator marks and business for decades, resulting in dilution of the brand.”

The lawsuit comes at a time when the unusual relationship between the wine and cannabis industries is becoming apparent due to the legality of marijuana in more jurisdictions.

Dave McIntyre's article for the Washington Post entitled Could Marijuana Give Wine a Run for its Money? states that the lawsuit "reflects the wine industry's unease about the legalization of marijuana." McIntyre's article discusses the threats that the rise of marijuana present to the wine industry, including the stigma of alcohol as a drug, labor and employment issues, and the "limited amount of 'inebriation dollars' in the economy."

The article also includes insights from industry experts:

Tom Wark — the Napa-based author of the Fermentation wine blog, as well as publicist and advocate for wineries — stated that he believes there will be a number of people who will switch from wine to cannabis as a result of the limited "inebriation dollars" and the legalization of a new way to become inebriated, namely marijuana. 

The migration of spending from wine to cannabis may explain why some prominent companies in the alcohol industry have begun to invest in cannabis. Earlier this month Breakthru Beverage, one of the largest U.S. distributors of alcoholic beverages, signed an agreement to be the exclusive distributor for CannTrust, a Canadian marijuana producer. On a similar note, Constellation Brands, a leading alcoholic beverage producer, has invested more than $4 billion in Canopy Growth, a Canadian firm that plans to disrupt the marijuana market by producing weed-infused beverages for the Canadian market. 

As legalization becomes more widespread in the United States, perhaps the proactivity of U.S. alcoholic beverage companies in the Canadian marijuana market will allow for a more seamless transition into the domestic cannabis market. Ideally, their international position will facilitate the development of a unified channel for licensing and regulation, allowing the U.S. alcohol and cannabis industries to coexist. 

--Gianna Redeemer

September 21, 2018 in Business, Commercial Law, News | Permalink | Comments (2)

tudies suggest that marijuana users have better sex more often

Tcrstock-couple-smokeAccording to an article on Forbes.com, two studies reveal that Marijuana consumption is correlated with increased sexual frequency and an enhanced sexual experience.

The first study had a stated goal of “elucidat[ing] whether a relation between marijuana use and sexual frequency exists using a nationally representative sample of reproductive-age men and women.”

To get a representative sample for the study, researchers Dr. Michael Eisenberg and Dr. Andrew Sun of Stanford University studied the responses of 8,176 women and 22,943 men nationwide via a Center for Disease Control questionnaire. The study demonstrates that “marijuana is independently associated with increased sexual frequency.” The study further finds that daily smokers across all demographic groups report having 20% more sexual encounters than those who do no smoke marijuana.

 A second study sought to  “determine if marijuana use before sex affects the sexual experience, by how much, and which domains of sexual function are affected.” The study polled 289 adult women who reported using marijuana prior to intercourse. Among the 289 women, “65% [reported] it enhanced their sexual experience, 23% said it did not matter one way or the other, 9% had no significant feedback and 3% said it sabotaged their sexual experience.”

 The two studies offer scientific backing to a common claim from the marijuana community of the drug’s effects on sexual experiences. For researchers like Dr. Eisenberg, the study results demonstrate that “doing more research in this area is important.”

--Ashleigh Williams (Morgan)

September 21, 2018 in News, Recreational Marijuana, Research | Permalink | Comments (0)

Canadian Cannabis Industry: Now Hiring

AaaCanada’s budding cannabis industry is poised to create over 150,000 jobs over the next several years. However, the newly legalized industry has found a shortage of skilled workers, leaving companies there scrambling for help, according to a story in Newsweek  magazine.

Max Simon, the founder and CEO of Green Flower, told Newsweek that marijuana legalization of marijuana in Canada has ushered in a new industry and with the new industry, jobs. Specifically, legalization has seen a boom in retail and procurement positions such as “retail needs managers, products specialists, purchasing managers, etc.” 

But, with the jobs available, Simon continued, “finding skilled people in cannabis is an enormous problem for the industry right now, and it's affecting every sector.”

One of the biggest issues causing the shortage in skilled workers is the lack of knowledge regarding the industry. “Most people don't really know what actually happens in a legal cannabis business because it's all so new,” Simon told Newsweek. Adding an additional wrinkle is the fact that cannabis industry workers must also be knowledgeable about the many regulations that govern the business. 

Companies are desperately looking to fill vacancies, but cannot find the right talent. In order to become the type of worker this industry is looking for Simon told Newsweek he recommends people  “learn about the plant, the science, the products, the license types, and how people actually use cannabis today,” he said. “It sounds simple, yet most people don't actually have this fundamental knowledge.”

--Colin Heinrich

 

September 21, 2018 in Decriminalization, Medical Marijuana, News, Recreational Marijuana, Workplace | Permalink | Comments (1)

College in Canada now offering marijuana program

With the legalization of recreational use marijuana around the corner, Niagara College in southern Ontario is now offering a one-year certificate in commercial cannabis production. CBC News interviewed Professor Bill MacDonald, head of this new marijuana program, who outlines what students should expect:Weed college

Some of the classes take place in a facility MacDonald says is nicknamed "the cannabunker": a series of shipping containers linked together to form a high-tech, high-security production lab for growing marijuana.

Students will get intensive hands-on training in growing pot with classes that focus on topics like plant nutrition, climate control, pest control and plant selection.

There are also courses about the regulations governing cannabis in Canada. The program ends with a field placement for students at a cannabis producer in the region.

The CBC article goes on to describe the growing need for more workers in marijuana industry:

In the Niagara region of Ontario alone, there are currently more than 1.8 million square feet (nearly 550,000 square metres) of greenhouse space dedicated to producing marijuana. As that number grows, more and more skilled greenhouse workers will be needed.

"Every week, it's a new head count," says Michael Ravensdale, the vice president of quality and production at CannTrust, a local medical marijuana producer. "The last update I had, we had over 200 people in Niagara. We think we will be about 350 by the end of the year and that's just the second phase of expansion."

CannTrust has a perpetual harvest facility in Niagara, meaning plants are always in bloom and workers are always busy. The company has jobs in cultivation, processing, manufacturing, quality control and other areas, including product development and research. Ravensdale says the pot economy is evolving at a rapid pace.

CBC stated that the program only accepted 24 of their over 300 applicants, but with the rising need for skilled workers, this program is likely to expand.

--Wyatt Hinson

September 21, 2018 in Business, Legal Education, News, Recreational Marijuana, Research | Permalink | Comments (0)

U.S. House Committee Approves the Medical Cannabis Research Act

image from goo.glA U.S. House committee approved a bill last week that would require the Department of Justice to issue licenses to marijuana growers for research purposes. Cannabis Business Times reports that while the bill has not yet been scheduled for a vote before the full House, the committee action is nonetheless a significant step in the legislative process.

The Medical Cannabis Research Act of 2018 would open the door to a more robust federal licensing process that would allow medical-grade cannabis to be grown for state-funded research. Since 1968 and up to the present day, only the University of Mississippi has held such a license.

If the bill were to pass, U.S. Attorney General Jeff Sessions would be required to license two research facilities for cannabis cultivation within one year. For each year after that, he (or the successive attorneys general) would be required to license an additional three research facilities. 

While there have been a slew of cannabis-related bills written on Capitol Hill, Thursday's approval of the Medical Cannabis Research Act by the House Judiciary Committee places the bill ahead of most others.  Here's a video of the hearing:

 

-- Jason Carr

September 21, 2018 in Legislation, News, Politics, Research | Permalink | Comments (0)

Monday, September 17, 2018

Coca-Cola eyeing cannabis beverages

AaaThey took out alcohol in 1886 and cocaine in 1929, but the makers of Coca-Cola--America's "Real Thing"--are now looking at adding cannabis to their beverages.  Bloomberg is reporting:

Coca-Cola says it’s monitoring the nascent industry and is interested in drinks infused with CBD -- the non-psychoactive ingredient in marijuana that treats pain but doesn’t get you high. The Atlanta-based soft drinks maker is in talks with Canadian marijuana producer Aurora Cannabis to develop the beverages, according to a report from BNN Bloomberg Television.

 

“We are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world,” Coca-Cola spokesman Kent Landers said in an emailed statement to Bloomberg News. “The space is evolving quickly. No decisions have been made at this time.” Landers declined to comment on Aurora.

 

. . .

 

Coke’s possible foray into the marijuana sector comes as beverage makers are trying to add cannabis as a trendy ingredient while their traditional businesses slow. Last month, Corona beer brewer Constellation Brands Inc. announced it will spend $3.8 billion to increase its stake in Canopy Growth Corp., the Canadian marijuana producer with a value that exceeds C$13 billion ($10 billion).

 

Molson Coors Brewing Co. is starting a joint venture with Quebec’s Hexo’s Corp., formerly known as Hydropothecary Corp., to develop cannabis drinks in Canada. Diageo PLC, maker of Guinness beer, is holding discussions with at least three Canadian cannabis producers about a possible deal, BNN Bloomberg reported last month. Heineken NV’s Lagunitas craft-brewing label has launched a brand specializing in non-alcoholic drinks infused with THC, marijuana’s active ingredient.

Soda pop sales in the U.S. have declined for a dozen years in a row.  This might just get them back on track. 

--Frank Snyder

September 17, 2018 in Business, Edibles, News | Permalink | Comments (0)

Saturday, September 15, 2018

Sorry, Merle, they're smoking pot in Muskogee these days . . .

Only 49 years after Merle Haggard & the Strangers sang that Okies don't smoke marijuana there, Muskogee, Oklahoma is getting is first medical cannabis dispensary.  

Still great music, even if times have changed. Enjoy.

 

--Frank Snyder 

September 15, 2018 in Medical Marijuana, News, State Regulation | Permalink | Comments (0)

Friday, September 14, 2018

Crackdowns of black market operations in legalized territory are amping up

AaaOperating a dispensary without a license? Beware! Los Angeles and several other California cities are increasing efforts to stop cannabis operations that continue to operate without a license.

Officials initially issued warnings to the many perpetrators, but after many months of noncompliance, LA is now filing criminal charges against various retailers, growers, and delivery services. 

The Los Angeles Daily News reports that earlier this month, prosecutors there have charged 515 people for helping to run 105 illegal marijuana operations: 

“Our message is clear: If you are operating an illegal cannabis business you will be held accountable,” Los Angeles City Attorney Mike Feuer said.

It’s widely believed that Los Angeles has the world’s biggest marijuana market, and businesses have thrived for years under the state’s loose medical marijuana laws. But since the start of the year, new California laws have required all cannabis businesses to have both a state and city license to operate — licenses that can add costs to operations in the form of fees, testing requirements and hefty taxes.

The new laws also let cities regulate the marijuana industry, and many cities so far have opted against allowing such operations. Los Angeles, however, began licensing retail outlets in late January and most other types of marijuana businesses on Aug. 1. As of Friday, the city said 163 businesses have been given temporary licenses to operate.

But that represents just a fraction of the overall marijuana market, and for the past eight months, the City Attorney’s office coordinated with the Los Angeles Police Department to identify and investigate businesses that were operating without licenses. Most are retail shops, the City Attorney’s office said, but action also was also taken against marijuana growers, extraction labs and delivery services.

California and other legalized states, like Washington, and Colorado, continue to struggle with black market operations well after legalization has taken effect. In an effort to level the playing field, Los Angeles and other cannabis officials say they will take all measures necessary to crackdown on illegal operations. The 120 criminal cases recently filed in LA are intended as a loud and clear signal to all cannabis operators that they must follow the licensing regulations, or face the consequences. 

--Manda Mosley Maier

 

September 14, 2018 in Business, Commercial Law, Drug Policy, Law Enforcement, Local Regulation, News, State Regulation | Permalink | Comments (0)

Tuesday, September 11, 2018

Federally Approved Marijuana Research Lacking Despite Apparent Support from Attorney General Sessions

Sessions

Despite apparent support of federally approved medical marijuana research from Attorney General Jeff Sessions, the Wall Street Journal reports that none of the  26 applications for approval to grow marijuana for research has moved towards approval in the two years since the Justice Department began accepting the applications.   

Currently the only federally approved marijuana grow operation for research lies with the University of Mississippi which has been conducting research on marijuana since 1968.

According to the Journal, both Democrats and Republicans have penned letters urging Sessions to begin moving the applications through approval, but to no avail.  The Justice Department's failure to take any action on the 26 applications, it reports, has left both applicants and those hoping to benefit from research on the drug in a realm of uncertainty.  "'The federal government allows for multiple entities to produce controlled substances for scientific research all the time. Why should marijuana be any different?' said George Hodgin, a former Navy SEAL who started his own business, Biopharmaceutical Research Company, to conduct such research."

For now, researchers will have to wait patiently while the politics are sorted out. 

--Andrew Goodwyn

September 11, 2018 in Drug Policy, Federal Regulation, Law Enforcement, Medical Marijuana, News, Research | Permalink | Comments (0)

Sunday, September 9, 2018

Canadian Department of National Defense to regulate military members' cannabis use

AaaThe Canadian military is planning ahead for the October 17 legalization of cannabis to take effect, by beginning to draft rules to regulate soldiers' cannabis use. For example, some would be banned from using cannabis at least 24 hours before they handle loaded firearms, among other things. 

Global News reports

According to an internal draft of the military’s cannabis policy, members will be banned from consuming marijuana eight hours before duty, once it’s legalized.

In some situations, both consumption and possession of cannabis would be banned, including when a military member is deployed to an international operation, except for a period of authorized leave.

Cannabis would also be banned in any vessel, vehicle and aircraft under the military’s authority.

Developing policy for military members' use of cannabis gives one more insight into the many regulations that must take shape to successfully integrate a country into a cannabis-legal era. 

--Manda Mosley Maier 

September 9, 2018 in International Regulation, News | Permalink | Comments (0)

Smartphone app lets users know they are too high to drive

AaaA Massachusetts psychology professor has come up with an app he says can inform users when they are too impaired to drive.  Dr. Michael Milburn of UMass-Boston has come up with the DRUID ("Driving Under the Influence of Drugs") cellphone app which users, he says, can use to see if they can drive.  The Georgia Straight reports how the app works:

The five-minute test is accessible from a phone or tablet and requires users to complete four tasks to determine a level of impairment.

The app has three modes: “practice”, “baseline”, and “test”. Although the software mimics a simple, but tough, video game, users can’t technically fail the levels, but do need to set a baseline sober score, first. Users are encouraged to play around with the practice mode a few times before taking a stab at a sober score, which is calculated from the most recent ten scores achieved on baseline mode.

Once a sober score has been calculated, users can whip out their phone post-blaze and test their stoned results against their standard baseline.

Sound simple enough? Not quite. Druid measures every move, from the shake and wobble of the device during a balancing level to the user’s ability to follow complicated instructions—all of which are meant to emulate the demands of operating a motor vehicle.

Until the driver scores within approximately five percent of their sober baseline, the app urges users to find another mode of transportation.

Also note that this app will cost you a few dollars and its test scores do not establish a legal defense to driving impaired.

--Wyatt Hinson

September 9, 2018 in Business, News, Recreational Marijuana, Research, Travel | Permalink | Comments (2)

Thursday, September 6, 2018

New Jersey: Employer not required to waive drug test for MMJ patient

New Jersey FlagEmployers in the Garden State are not required to waive drug tests for employees who use medical marijuana under a state-legal system.  In a recent case, Cotto v. Ardagh Glass Packing, Inc. (D.N.J. Aug. 10, 2018), the plaintiff was a forklift operator who was injured on the job and was prescribed marijuana and other painkillers.  The employer required him to pass a drug test before returning to work. 

The employee sued, arguing that he could not pass a drug test with medical marijuana in his system, and argued that the employer was required to accommodate his disability under the state's Compassional Use Medical Marijuana Act.

The federal district court refused to do so.  Attorney Mark Saloman of NYC's FordHarrison LLP offers a nice and succinct rundown of the case:

Disability vs. Treatment: The court accepted Cotto's argument he was qualified to perform his work as a forklift operator and that he suffered from a known disability (i.e., neck/back pain). The key distinction here is that Cotto did not claim Ardagh discriminated against him based on his disability; rather, he claimed to be the victim of discrimination because Ardagh refused to accommodate his use of medical marijuana by waiving a drug test.

This required analysis of whether "treatment" of the disability can be distinguished from the "disability" itself. The court gave the cogent example that discrimination against wheelchair use (i.e., the treatment) is inseparable from discrimination against the disability. That was absent here because Ardagh had no objection to Cotto's disability but only "with a consequence of his treatment." This follows the LAD, which prevents discrimination premised upon the disability, not upon conduct resulting from the disability. Because the dispute was based upon conduct resulting from treatment (passing a drug screen), Cotto's disability itself was not an issue. Cotto's possession of a medical marijuana card and a note from his doctor stating that he could operate machinery while taking prescription drugs were equally unpersuasive.

What about CUMMA? The court held nothing within CUMMA supports or invalidates Cotto's claims or requires an employer to permit the use of medical marijuana in the workplace. Likewise, CUMMA does not waive an employer's obligations under the LAD. Citing precedent from jurisdictions where recreational marijuana already is legal, the court confirmed decriminalization of marijuana does not shield employees from adverse employment actions.

Besides dismissing the discrimination claim, the court also rejected Cotto's failure to accommodate claim under the LAD because neither CUMMA nor the LAD require Ardagh to waive its drug test as a condition for continued employment. Likewise, his retaliation claim failed because refusing to take a drug test is not a protected activity under New Jersey law.

Bottom Line: The federal court predicts the state judiciary will reach the "similarly obvious conclusion" that the LAD does not require accommodation of an employee's use of medical marijuana with a drug test waiver. This follows New Jersey courts' general acceptance of drug testing in private employment. It would not, however, be surprising if the competing bills pending in our legislature to legalize adult-use recreational marijuana carve out further protections for New Jersey employees.

--Frank Snyder

September 6, 2018 in Medical Marijuana, News, State Regulation, Workplace | Permalink | Comments (0)

Wednesday, September 5, 2018

THC Breathalyzer Could Help Ensure Road Safety

AaaWith recreational marijuana use being legal in nine states and the District of Columbia, companies are now creating technology to aid in removing drivers impaired by THC from the roads. A California-based company, Hound Labs Inc., has designed a marijuana-breathalyzer capable of detecting THC potentially present on a driver's breath. USA Today has the full story:

When an individual blows into the breathalyzer, it can determine within a couple minutes whether there is alcohol, THC or both in the person's system. Since THC is only present in someone's breath during that peak two-hour window, the driver is considered impaired when it's detected.

The breathalyzer would then display "Warning" if THC is detected and "Pass" if it is not. 

The device "will help ensure safety on our roads and in the workplace while also promoting fairness to people who use marijuana legally and responsibly," said Louisa Ashord, marketing manager for Hound Labs in a statement. 

Implementation of these devices would provide officers with an objective standard to test drivers and detect recent marijuana use that may lead to impairment. 

--Gabrielle Rennie

 

September 5, 2018 in Business, Law Enforcement, News, Recreational Marijuana | Permalink | Comments (0)

Tuesday, September 4, 2018

A quick look at California's cannabis pesticide rules

California FlagThere was a time, not so long ago, when there were no regulations relating to marijuana cultivation except "thou shalt not."  But with the rise of cannabis as semi-normal agricultural crop, the same kinds of rules that have applied to ordinary crops are being applied to cannabis--and then some.

Take pesticides, for example.  Lawyers Nicole Aaronson and Ian Stewart of L.A.'s Wilson Elser Moskowitz Edelman & Dicker LLP offer their take on the Golden State's new lab testing regime for pesticide use,  Compliance with California's Cannabis Pesticide Regulations (free registration required):

Effective July 1, 2018, all cannabis and cannabis products will be subject to laboratory testing under the California cannabis regulations to ensure appropriate pesticide use. These standards, developed by the California Department of Pesticide Regulation (CDPR), impose heightened restrictions on cannabis crops compared with other agricultural products. If a cannabis product sample fails residual pesticide testing, the entire batch from which the sample was collected fails and cannot be sold by a retailer. See California Code of Regulations (CCR) § 5719. Impermissible pesticide violations may result in contamination of an entire crop and substantial lost profits to any cultivator lax on compliance.

But, note the authors, losing the crop and the profits is only part of the risk.  

 

Failing to take steps to comply with the CDPR's standards puts a cannabis company at risk of litigation and jeopardizes business contracts with other downstream cannabis operators whose manufactured products are rendered unsalable due to crop contamination. Business practices that run afoul of pesticide standards may call for civil or criminal penalties under California's Food and Agricultural Code (FAC), or warrant a serious infraction charge from CalCannabis Cultivation Licensing authorities, a division of the California Department of Food and Agriculture (CDFA), subjecting operators to fines of $1,001 to $5,000 per violation. Civil penalties may also impede state or local license renewal. Moreover, the CDPR standards provide fodder for prospective plaintiffs' attorneys to bring Unfair Competition lawsuits under California's Business and Professions Code, section 17200, et seq. for, among other things, unlawful business practices and deceptive or fraudulent advertising based on alleged contamination or adulteration of the product. These lawsuits give rise to costly litigation, damages awards, statutory penalties and possible injunctions that prevent business operations. See Wilson Elser's article "Cannabis Consumer Class Actions Are Being Filed."

By law, pesticide users must follow the statements on pesticide product labels, which include precautionary statements for protecting human and environmental health, storage and disposal instructions, product warnings and directions for use. Improperly labeled pesticides should not be used. In addition, pesticide application must be at a rate no greater than the rate listed on the product label and done in a manner consistent with the provided agricultural use requirements. Directions may include use of personal protective equipment, varying methods of application and pre-harvest restricted entry intervals. Cultivation licensees also are charged with preventing offsite pesticide drift through application only when there is no pollinator presence and spraying when the wind is blowing away from surface water bodies. See CCR § 8307.

--Frank Snyder

September 4, 2018 in News, State Regulation | Permalink | Comments (0)

Monday, September 3, 2018

Massachusetts indicts teen for drugged driving homicide

AaaA teen driver who was under the influence of marijuana when his car hit an obstruction and became airborne is facing multiple felony counts related to the deaths of four passengers in the vehicle.  The Boston Herald reports:

The driver of the car that crashed — 18-year-old Naiquan D. Hamilton of Stoughton — has been indicted for “driving recklessly and under the influence of marijuana,” Plymouth District Attorney Timothy J. Cruz announced yesterday.

The teen faces four counts each of motor vehicle homicide by operating under the influence and motor vehicle homicide by reckless driving. He also faces four counts of motor vehicle manslaughter.

Hamilton, who was 17 at the time of the crash, lost control of the car and slammed into a tree just after 4 p.m. on Route 106, the DA said.

All four passengers died. . . .

. . .

“This indictment should be a lesson for others,” said [a cousin of one of the victims].  “The more we can prevent this the better our world will be. We need stricter laws, and have them enforced, for driving while high.”

Arlington Police Chief Frederick Ryan told the Herald yesterday the Cannabis Control Commission and the state police chiefs association are “strategizing best practices” for when weed is sold legally.

“We’re training up police officers to be drug recognition experts,” Ryan said. “This will be a challenge for law enforcement.”

But the veteran chief said winning in court would be nice, but getting stoned drivers off the road is a priority.

The article goes on to note statistics that marijuana-related traffic accidents have risen sharply in Washington state in recent years.

--Frank Snyder

  

September 3, 2018 in Law Enforcement, News | Permalink | Comments (0)

Sunday, September 2, 2018

Fort Lauderdale to Limit Number of Marijuana Dispensaries in Opposition to State Law

image from goo.glSeveral medical marijuana dispensaries that have applied to open operations in Fort Lauderdale, FL face denial of their applications as officials have decided to enforce an ordinance that limits the number of medical marijuana dispensaries allowed to open in the city. According to a Sun Sentinel report, the actions by city officials seemingly violate state law:

[S]tate law prohibits cities from limiting the number of dispensaries. A city is allowed to ban them outright, but if a city chooses to allow the marijuana treatment centers, they must be treated like any ordinary pharmacy.


Fort Lauderdale says that's a problem, because its law prohibits more than one dispensary in each of its four districts. City officials plan to reject three of the dispensaries that applied.

City officials have acknowledged that a dispensary wishing to challenge its law can do so in court. And while officials recognize they will likely lose if such a challenge is brought, they are unwilling to forego enforcement of the city ordinance based solely on a potential courtroom battle. 

--Jason Carr

September 2, 2018 in Business, Local Regulation, News, Politics, State Regulation | Permalink | Comments (0)

Friday, August 31, 2018

Nursing Mothers Beware?

AaaA study in California finds THC and cannabidiol in nursing mothers' breast milk a week after marijuana use.  Fox News reports that researchers at the University of California, San Diego analyzed the breast milk of 50 nursing mothers who were also using marijuana.

Lab testing of the breast milk found trace amounts of THC in 34 of the 54 samples even 6 days after they were provided. Additionally, researchers also found non-psychoactive cannabidiol in five samples. The researchers conclude that "it is reasonable to speculate" that exposing children to THC or cannabidiol "could influence normal brain development," especially when infants are in the early stages of their brain development. The complete study can be found here

With the continued legalization and decriminalization of marijuana across the United States, "its use is increasing along with the 'false impression' that it is safe", the Academy of Pediatrics reports. Although pediatricians generally encourage breastfeeding due to its health benefits for infants, most pediatricians are stuck between a rock and a hard place when confronted with nursing mothers who also use marijuana. Dr. Seth Ammerman, a Stanford University pediatrics professor, echoed that dilemma, stating "we still support women breastfeeding even if using marijuana but would encourage them to cut down and quit."

With such a small sample size and no specific studies conclusively showing the health effects of THC or cannabidiol on infants, the Academy of Pediatricians admits that more research is needed before a final conclusion is reached. However, both the researchers and the Academy of Pediatricians are unanimous in their belief that the best course of action for nursing mothers who use marijuana is education and caution. Pediatricians should "educate patients about the potential risks and benefits," Ammerman said, to ensure "a healthy outcome for themselves and their baby."

--Colin Heinrich 

 

August 31, 2018 in Medical Marijuana, News, Research | Permalink | Comments (2)

Wells Fargo, politicians, and cannabis banking

AaaBanking giant Wells Fargo caught flak last week for its decision to terminate the account of one Nikki Fried, a hitherto unknown Florida politician who told the bank that she took campaign contributions from medical marijuana businesses.  Critics have claimed that the bank was somehow violating her “constitutional right to freedom of speech, that this was an “abhorrent” “attempt to restrain speech,” and even that it’s some kind of conspiracy between Big Pharma, the Republican Party, and the Florida state legislature to defeat Fried,  who sis running for state agriculture commissioner.

All this is nonsense.  Yes, Wells Fargo has probably gone a little overboard--most banks are probably not as paranoid as WF (which has been hit by billions of dollars in fines in the last few years) about violating regulatory restrictions.  And yes,m the fact that cannabis businesses cannot get reasonable access to banking services is a major problem that I’ve noted frequently. 

But what happened to Fried has nothing to do with her political speech.  It has to do with the fact that under federal law Nikki Fried is guilty of the federal crime of laundering drug money.  And any bank that takes that money, knowing that it comes from an illegal source and mingling it with other money, is also guilty.   

This is not not criticism of Fried, hyperbole, or sensationalism.  It's a plain fact.  As people in the industry know, anybody who accepts money derived from marijuana sales and puts it into a bank is by definition guilty and is facing big fines and a substantial prison sentence that can reach 20 years.  Under federal law (and the laws of a whole lot of other nations), taking money from Uncle Bob's Holistic Healthful Medical Cannabis Company is no different than getting it from the Medellin Drug Cartel.  

Fried is different and noteworthy only in that she is the first politician who is facing the consequences everybody else in the business has faced for years.

You may, of course, think it outrageous that simply providing banking services for a state-legal business should result in criminal liability.  I agree entirely.  But that bridge has already been crossed  During the Obama Administration the Justice Department weaponized bank enforcement.  Its notorious Operation Chokepoint tried, with some success, to coerce banks to drop accounts for perfectly legal businesses like firearms dealers, tobacco sellers, payday lenders, dating services, that sold lawful goods and services such as firearms, ammunition, tobacco, payday lenders, dating services, debt-collection services, pawn shops, gold and silver dealers, and others.  And more recently states like New York have tried to put lawful enterprises out of business by pressuring their banks.

And unlike marijuana production and distribution, those businesses are, in fact, perfectly legal.  Despite a lot of wishful thinking, marijuana is still a Schedule I controlled substance and is still completely, totally, unmistakably illegal everywhere in the United  States.

In my opinion, the chance that Wells Fargo and its employees could be penalized for taking money from Nikki Fried are very small.  That's why other banks seem to have stepped up to take her accounts.  But the risk isn't zero, and were I the bank's lawyer I would be compelled to point that out to them and let them decide whether the possible gain is worth the risk.

As I noted before, the bright side of this is that once politicians start having trouble putting political donations into a bank, they are likely to start taking action to resolve the problem.  There is, in fact, no good reason not to allow marijuana deposits in banks.  Allowing businesses to take credit cards, pay vendors by check, and deposit cash should make it much easier to track illegal payments than does the current system involving wheelbarrows full of currency,

--Frank Snyder

August 31, 2018 in Banking, Federal Regulation, News, Politics | Permalink | Comments (1)