Cannabis Law Prof Blog

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

Thursday, November 1, 2018

Crossing the Canada–United States Border: Business Travelers Might Need Training on What Not to Say

AaaBusiness travelers crossing the Canada–United States border should be mindful of what they say to immigration authorities. Canada legalized recreational marijuana use and cultivation this month.

Under the Cannabis Act, adults are allowed to possess, carry and share with other adults up to 30 grams of dried cannabis. They will also be permitted a maximum of four homegrown marijuana plants per household in most provinces. However, the substance is still illegal under federal law in the United States. If an immigration authority suspects someone at the border of illegal activity, which includes possession of marijuana in the United States, the authority may stop the person and refuse entry.

Stefanie Di Francesco, a Canadian employment attorney at McMillan LLP, reports that companies that require employees to regularly cross United States-Canada border would benefit from specific training for those employees regarding how to handle port of entry questioning with immigration authorities.

Both Canadian and American immigration authorities at the ports of entry , she notes, must assess whether a traveler is admissible for entry, which includes assessing whether a traveller is criminally inadmissible. According to Di Francesco:

“Generally, a traveller is considered to be criminally inadmissible to Canada if the person was convicted of an offence in Canada, or was convicted of an offense outside of Canada that is considered a crime in Canada, or committed an act outside of Canada that is considered a crime in the country where it occurred and would be punishable under Canadian law.

A traveller is considered to be criminally inadmissible to the United States if the person violated any law or regulation of any state, the federal government, or a foreign country relating to a controlled substance, which includes cannabis and cannabis related products. As in Canada, an actual conviction for a crime is not required for a traveller to be found inadmissible. Admitting to the essential elements of an American crime will render a person criminally inadmissible to the United States even if that conduct is legal in Canada.”

As with any law enforcement matter, a traveler’s experience may vary depending on the officer. It should be noted that immigration authorities employed by the United States government are required to enforce federal law, especially with respect to illegal drugs. However, according to Di Francesco, “[U]nless there is directive from the federal government, travelers’ experiences may vary significantly depending on the particular officer responsible for reviewing their status at the port of entry.” In the case of business travelers, it is best not to take chances. Not only is a business traveler likely a valuable member of a company’s team, they also represent the company and affect the company's reputation even outside of normal work parameters. For this reason, it is advisable that such business travelers know how to handle any situation that could arise at the border due to new cannabis laws.

For example, an immigration authority could simply ask, “Have you ever used marijuana either prior to or following its legalization in Canada?” Given the agent’s broad latitude for decision-making at the border, if the traveler answers yes, the admission could be used as a basis to determine that they are inadmissible. Not surprisingly, there are risks for those employed in Canada’s cannabis industry. Authorities can question a business traveler about the purpose of their proposed entry, their employer’s business, and whether the traveler has aided in the production or sale of cannabis as part of their employment. The answers given could be viewed by an officer as providing a basis for a finding of inadmissibility.

Di Stefano advises employers whose businesses rely on cross border travel to draft clear employment policies to address requirements around cannabis use for employees who travel internationally on business; ensure employees are adequately prepared for port of entry questioning, which may include conducting training on best practices; and include contractual provisions in employment agreements concerning termination where international travel is required and the employee is found inadmissible to the United States (or another country).

--Kindal Wetuski

November 1, 2018 in International Regulation, Law Enforcement, Recreational Marijuana, Travel | Permalink | Comments (0)

Wednesday, October 31, 2018

Q&A: The "Dopest" Lawyer in Town (Part 2 of 2)

This is a continuation of Q&A: The "Dopest" Lawyer in Town (Part 1 of 2).  

Every U.S. state that shares a border with Texas has passed legislation to legalize medical marijuana -- so what does that mean for the Lone Star State?

I recently had a chance to talk to one of the lawyers on the front lines of that issue, Daniel Mehler, of Dallas's Roper & Mehler. Here, the self-proclaimed "dopest lawyer in town" talks about his front-row seat to what's happening.

It is no secret that "canna-cations" (tourism for legal cannabis use) have become more popular as its become easier to access legal cannabis in other states. Pair the travel trend with the huge black market in Texas and it’s safe to say that a lot of employees have cannabis in their system. Mehler shared some information on the relationship between marijuana and employment law.

AG: Are you aware of any trends that Texas employers are creating to manage potential risks posed by employees obtaining and using “legal” pot out of state?

DM: As far as Texas-based companies, I haven't really seen any change. We have seen a change on the national level. A lot of national companies have started to exempt marijuana smoking from their pre-employment drug testing. In Colorado, most employers don't drug test, but the issue has been litigated and determined that employers can punish you up to and including dismissing you from employment for legal use, off the clock, of medical cannabis, never mind recreational cannabis. So it has become an employment minefield. You also see things like for car salesmen, because of insurance requirements, employers, even though it's legal, not allowing [off the clock use] at all. On the flip side of it, getting away from just the domestic market, Vancouver, British Columbia just announced that it's police officers will be allowed to smoke legal, Canadian cannabis once their market is live beginning October 17th, as long as they're off duty.

AG: It just seems like it's going to be so hard to police for the out of office conduct stuff because of the drug testing issues. How can an employer tell if someone engaged on vacation or right before their shift?

DM: No, that's just it, in Colorado, it doesn't matter. The employer can just fire you regardless of where it actually occurred. You don't actually have a right to consume cannabis, even though it is legal in the state.

Moving into family law, Mehler pointed out a few points of contention that will continue to grow as more people begin to access and use marijuana both medically and recreationally.

AG: Are you aware of any effect either the compassionate use act or the legalization of marijuana in nearby states on family law matters in Texas?

DM: Google Christy and Mark Zartler. They have a profoundly disabled daughter named Kira. She has autism and is extremely self-injurious. They started administering cannabis smoke and discovered that it relieved all of herself injurious symptoms. CPS tried to intervene. It went to court and this past year a Judge ruled that the State would not take custody of their daughter; that nothing that they had done was dangerous to their daughter. So, they actually beat CPS in court, despite having published a YouTube video that got several million views of them administering cannabis to their daughter. So yeah, the impact is there. You see that CPS removes children when parents consume cannabis, but then we've also seen a highly publicized case where a judge, an impartial arbiter, says no, no, no, CPS was out of line on this. So, we’ll see how that plays out as we go forward. Another problem with family laws circles back to the THC concentrate problem, where those people are getting charged with felonies [rather than simple possession]. As more time passes, you're going to see more of their kids in CPS investigations.

AG: What about in divorce or child custody matters? Are parents able to use examples of the other using cannabis in a legal state against one another?

DM: Absolutely. We see it all the time. I have buddies that do divorces, and obviously, some of our criminal defendant clients also have marital issues. We see “drug use” arise in those matters all the time, even if it's strictly cannabis. Parties take and use those facts as a hammer and just club each other with it.

Last, we moved in to talk more about Mehler’s other practice area. I was interested to know about the presence of and risks to Texans in out-of-state, legal cannabis business.

AG: Have you seen any changes in business law in Texas in response to marijuana legalization in the surrounding states?

DM: In Texas, we don't have a lot of business law on it because there's not new jurisprudence and, obviously, you can't contract to do things that are illegal. Originally in Colorado, there was no contract enforcement. Everything was basically done with handshake deals–an understanding that all of this is illegal and there was no contract enforcement because it's all in violation of federal law.  It took an act of the Colorado state legislature; they revised the statutes and specifically made cannabis contracts enforceable in state court. This built the foundation for the business to flourish because without contractual security it's very tough to draw in investors. Everybody wants security and defined rules. Eliminating the risks and making contracts enforceable in state court allowed the cannabis business very much to flourish in Colorado as a result.

AG: Should Texas residents seeking to invest in or open a cannabis business across state lines (but do not carry the product into Texas) be aware of any potential punishment in Texas for trafficking, money laundering, conspiracy, etc.?

DM: I don't think there are any problems with it at this point. We assist clients in moving money around the country in the legal markets and in trying to find the proper vehicles to do so. There is, theoretically, federal exposure to conspiracy charges, but I don't think it will become a problem as long as the cannabis is being produced and distributed in compliance with state laws where it's legal and no products are crossing state lines. I've never had any clients implicated in any sort of conspiracy like that. It doesn't happen from a functional standpoint. The feds have been up in the panhandle since the cannabis industry picked up and have started prosecuting cannabis being transferred across borders into Texas. The northern district hadn’t prosecuted this stuff for the previous 20 years. All of the charges went into state court. Now they (the feds) have decided to make that a priority. But, as far as legit business people just moving their funds in the legit markets, there's effectively no barriers at this point. The biggest investors from DFW to have money in California, Oregon, Washington, and Colorado at this point. 

AG: That’s interesting. This is sort of an inexperienced question, but how do these prosecutions end up in federal court? Aren’t these people being stopped by local police officers?

DM: So, generally it is your local police stopping and making an arrest. Unless it starts with a DEA investigation. That's one way, you know, the DEA does its own investigation. But in most of these, loads the weigh 30, 50, 100, 250 pounds, whatever it may be, it’s that the local police have busted some courier moving it around, and the arrest triggers a federal investigator. Usually, it’s a local cop that makes the stop and the arrest and then DEA will pick it up and then the U.S. Attorney will then prosecute it in federal courts plan. Generally, after that happens, State charges will get dropped. They’re not going to spend their time pursuing you once you land in the federal pen.

AG: So it's just a handover process. It's not like there are FBI or DEA agents driving around pulling people over…

DM: No. No. You never see that. You absolutely will never see a federal agent conducting a traffic stop. They form drug task forces and work with local law enforcement. So you'll see like a DEA agent and two sheriff's deputies working together as federally funded task forces. If the DEA wants to stop a vehicle, that's how they'll do. They will put a call into local law enforcement to stop them.

AG: Do you know of any other interesting or surprising effects that have happened in Texas or have any anecdotal stories to share?  

DM: I can't really tell you the specific stories because I'll be trampling on my client confidentiality. But I will say, Texas has always been the most business-friendly place in the country–has always had a lot of people that are interested in making a lot of money– but the state of Texas doesn't want to move towards legalization. There's a lot of Texans’ money that's out there chasing [cannabis] profit and, frankly, I think it's kind of a shame that it's chasing it outside of the state of Texas. You know, a lot of Texan money is making a lot of tax revenue for a lot of other states. That's both in the black market [buying the “legal” stuff and bringing it to Texas] and the legal market [investment and tourism outside the state]. It's kind of ridiculous. And it’s just going to get easier the more concentrated marijuana businesses are surrounding Texas. Once it gets to be a two-hour drive rather than a 12-hour drive from DFW… let's just keep the money at home.  Look at what they did in Colorado the first year it was legalized. The first 40 million in tax revenue every year goes straight to the public schools capital campaign. So they are able to start building schools, giving teachers raises, doing all of this without raising anybody's taxes. If that's not the most Texas shit in the world, I don't know what is. The reality is, the people are smoking pot [in Texas] whether you’re taxing them or not.

- Ashley Goldman

October 31, 2018 in Business, Commercial Law, Medical Marijuana, Travel, Workplace | Permalink | Comments (0)

Saturday, September 29, 2018

Nevada cannabis industry shatters revenue projections; state expects more growth to come

Nevada is the latest state to feel the economic boom of legalized cannabis, and so far it is smooth sailing for state regulators. The state fully legalized the drug beginning in January 2017 and total industry sales soared over $500 million, $425 million of which came from recreational sales alone. These numbers drastically outperformed both state projections, and first year sales of other states. The Las Vegas Review-Journal has the story

Vegas-weedIncluding recreational and medical marijuana as well as marijuana-related goods and accessories, Nevada stores
eclipsed a half-billion dollars in sales, just under $530 million, according to figures released Tuesday by the Nevada Department of Taxation.

 

Bill Anderson, executive director of the Tax Department, said that the industry “has not only exceeded revenue expectations, but proven to be a largely successful one from a regulatory standpoint.”

 

“We have not experienced any major hiccups or compliance issues,” he added. “As we move into fiscal year 2019, we expect to see continued growth in the industry by way of additional businesses opening up, and we expect revenues to continue to be strong.”

This stunning performance translated into $70 million in tax revenue for the state. To give some context to these metrics, state regulators projected $265 million in sales and $50 million in tax revenue, according to the Review-Journal. Furthermore, the states of Colorado, Washington, and Oregon–largely considered to be trailblazing states in the cannabis industry, and all with larger populations than Nevada by at least 1 million citizens–recorded first-year cannabis sales of $303 million, $259 million, and $241 million, respectively, putting them far behind Nevada's first year numbers. Perhaps most surprisingly, despite being home to Las Vegas, Nevada only collected $49 million in intoxicating beverage taxes from 2016-2017, signaling that marijuana may be a greater source of revenue for the state than alcohol moving forward.

Nevada's "sinful" tourist economy can likely be thanked for such astounding numbers, although the state's casinos have come out against marijuana use in their facilities, out of fear of losing their gaming licenses. Additionally, the state's marijuana law prohibits consumption anywhere but in private residences. State Senator Tick Segerblom told the Las Vegas Sun: “The numbers are kind of leveling off, and we need to reach the tourist market a little more. We need a venue where people can come and enjoy marijuana properly."

These results suggest a few things: first, that tourism economies can drive marijuana sales even in states with lower populations and where marijuana use is not widely supported by dominant businesses. Second, that as more states legalize cannabis they may take cues from states that have previously approved legalization in order to more efficiently bring the drug to market. Finally, that there is still much progress to be made with respect to laws surrounding marijuana consumption in states where it has been made legal. Perhaps as more states begin venturing into legalization, they will use Nevada as a model of how best to regulate, tax, and sell cannabis.

--John Robinson

September 29, 2018 in Business, Commercial Law, Decriminalization, Drug Policy, Legislation, Medical Marijuana, News, Politics, Recreational Marijuana, State Regulation, Taxation, Travel | Permalink | Comments (0)

Saturday, September 15, 2018

Canadian pot investors face potential US entry problems

AaaMarijuana will soon be legal in Canada, but is still illegal in the United States.  This means that those who are involved in cannabis businesses in the Great White North may find themselves running into trouble at the U.S. border as they attempt to enter the country.

Over at MarketWatch, reporter Jeremy C. Owens runs down some of the issues:

Todd Owen — a senior officer with U.S. Customs and Border Protection, or CBP, overseeing border operations — told Politico in an interview published Thursday that border agents would still seek to permanently ban any foreign visitor who admits to working or investing in the cannabis industry, or admits to have taken the drug, even after recreational marijuana use becomes legal in Canada on Oct. 17.

MarketWatch confirmed that stance in an email exchange with a CBP spokeswoman, who said investors could face a permanent ban from entering the U.S.

“Although medical and recreational marijuana may be legal in some U.S. states and Canada, the sale, possession, production and distribution of marijuana or the facilitation of the aforementioned remain illegal under U.S. federal law,” spokeswoman Stephanie Malin said in a statement.

In a follow-up exchange, Malin confirmed that investing in publicly traded marijuana companies, including those traded legally on U.S. exchanges, is considered “facilitation” of illicit drug trade under CBP policy.

“That’s the first [time] I’ve actually heard them say a Canadian-only enterprise is an illegal enterprise for U.S. entry purposes,” said Scott Railton, a lawyer at Cascadia Cross-Border Law in Bellingham, Wash.

. . .

Lawyers who spoke with MarketWatch said guards at the border have the freedom to ask any questions they deem fit.

”They have really absolute power, in a nutshell,” Preshaw said.

At least until the situation in the U.S. changes, those entering from Canada will have this issue.  But it would be incredibly dumb for such visitors to lie to U.S. border agents.  Investing in a marijuana business may prevent you from entering the U.S.  Lying about it will get you entry into the U.S., but as a resident of a federal corrections facility.

--Frank Snyder

 

September 15, 2018 in Federal Regulation, International Regulation, Law Enforcement, Recreational Marijuana, Travel | Permalink | Comments (0)

Sunday, September 9, 2018

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)

Friday, September 1, 2017

How Nevada's Gambling Regulators Plan to Separate from the Marijuana Industry

Las VegasIn Nevada, gambling regulators are refusing to collaborate with the marijuana industry.  Taking a harsh stand, the Nevada Gaming Commission disclaimed that there will be no place for marijuana in Nevada casinos as long as the federal government views its consumption and possession as a felony, according to a piece in the Insurance Journal

 

Commissioners said the reputation of the gaming industry is at stake and there needs to be clear separation.

 

“On one hand you have the gaming industry and on the other hand you have the marijuana industry … The two shall not meet,”

Commission Chairman Tony Alamo said.

 

Commissioners did, however, spend more than an hour discussing what Alamo said would be the least controversial aspects of potentially bringing marijuana into casino resorts – third-party and business associations between licensees and individuals and companies involved in the marijuana industry.

 

That aspect was shot down, though. No votes were taken, but commissioners unanimously concluded that licensees should be discouraged from hosting shows or conferences that promote the use, sale, cultivation or distribution of marijuana.

 

Licensees also shouldn’t maintain business relationships with marijuana companies, including landlord-tenant arrangements.

 

Commissioners also said licensees should not receive financing from or provide financing to an individual, entity or establishment that sells, cultivates or distributes marijuana.

 

September 1, 2017 in Business, Legislation, Medical Marijuana, News, Politics, State Regulation, Travel | Permalink | Comments (0)