New York State Releases Report on Recreational Cannabis

Posted by Margolin & Lawrence on July 13, 2018

With a recent study, the state of New York signaled receptiveness to the possibility of legalizing cannabis for recreational use. Specifically, the report, commissioned by Governor Cuomo, recommends that adults be allowed to legally consume marijuana. While the study has yet to be finalized by the New York State Department of Health, its announcement indicates that New York is planning to embrace the marijuana industry to the same extent that states like California and Colorado have, switching from a relatively restrictive medical-only marijuana program to a system which legalizes the recreational use of cannabis. Given the size and influence of New York State’s population and economy, this shift would have major implications for the status of cannabis in the nation at large.

Currently, New York State’s regulations only allow marijuana to be legally used for medical purposes. Additionally, only 10 companies are licensed to operate as medical marijuana suppliers, a restriction with the potential to greatly limit patients’ access to marijuana and drive prices up. Further, patients aren’t even allowed to smoke marijuana – as of December 2017, the drug can only be legally taken in the form of cannabis extracts like oils, tinctures, and chewable tablets. According to the New York Times, these restrictions were initially put in place by Cuomo, out of concern that marijuana would become a “gateway” drug leading to use of other illicit substances. Therefore, this study, with its conclusion that marijuana (even when smoked) is not harmful for adult recreational use, indicates a major pivot on the governor’s part when it comes to legalization.

This shift may be due to the upcoming election for the governorship, where Cuomo’s most prominent challenger, Cynthia Nixon, has made marijuana legalization a central campaign issue. Nixon has positioned herself as even more pro-legalization than Cuomo, calling for a fully regulated and taxed recreational marijuana industry in New York as well as a statewide program to expunge past marijuana convictions. Therefore, whichever candidate wins the governorship, it seems likely that New York State will continue to liberalize its cannabis regulations. Together with New York City moving to limit marijuana arrests, this indicates that, while New York may not have a full recreational cannabis industry for some time, the region’s political climate has shifted significantly against the restrictive laws which are currently in place.

Update on Diversion for Mental Health Treatment

Posted by Tom McMahon on July 11, 2018

Governor Brown signed Assembly Bill 1810 [Insert link: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB1810]  this past week and it is immediately effective. SB 1810 is incorporated through Penal Code section 1001.36, which creates a discretionary pre-trial diversion procedure for any defendant that suffers from most mental disorders listed in the Diagnostic and Statistic Manual [Insert link: https://psychcentral.com/disorders/ ].  PC 1001.36 diversion is available where the mental disorder can be treated, and it played a significant role in commission of the crimes alleged. The diversion program is available only “pretrial,” so it is important to explore this option early. Diversion takes place for less than two years, and can be done either in a residential setting in the community or an outpatient program.

Don't Be Intimidated by LA's Social Equity Program - All are welcome to Apply

Posted by Margolin & Lawrence on July 9, 2018

Through the Social Equity Program, Drug War Victims Will Help Build LA’s Green Economy

LA Phase II – July 2nd Update

Posted by Margolin & Lawrence on July 2, 2018

As of July 2nd, here is the latest news on Phase 2 of cannabis licensing for the City of LA:

  • Phase 2 will open August 1st and will be open for 30 business days. This phase is for existing cannabis cultivators, manufacturers, and distributors who were operating in the City of LA before 2016 and were suppliers to an EMMD (a pre-ICO medical marijuana collective in compliance with Proposition D) before 2017.
  • Detailed instructions for Phase 2 applications will be released on July 18th, and the full Phase 2 application will be released on August 1st.
  • Proof of participation in social equity program, and passing a pre-licensing inspection, will not be required for the provisional approval for Phase 2.
  • The City will create a process where Phase 2 delinquent taxpayers can pay their taxes for past years at the same time as they are applying for licensing.

Among the other recent changes to the LA ordinance that take effect today and July 23rd:

  • Both Tier 1 and Tier 2 social equity applicants will now receive priority processing for new retail applications on a 2:1 ratio with all non-social equity applicants (i.e., 2 out of 3 new retail licenses will go to Tier 1 and Tier 2 social equity applicants).  Previously, only Tier 1 social equity applicants received this priority for new retail licenses.
  • Eligibility for Tier 1 of the Social Equity Program is expanded to include applicants with a prior California cannabis arrest, but not a conviction.  Previously, the ordinance appeared to require a conviction. The new definition makes anyone eligible for Tier 1 Social Equity who is both low income and has “an arrest or conviction in California for any crime under the laws of the State of California or the United States relating to the sale, possession, use, manufacture, or cultivation of Cannabis that occurred prior to November 8, 2016” (excluding arrests or convictions for violating Proposition D).
  • Social equity program “incubators,” which will include everyone applying in Phase 2 who is not a Tier 1 or Tier 2 social equity applicant, will now be given the option to pay into a fund instead of providing 10% of their space to a social equity partner.

[UPDATE] WHERE CAN I GET A DISTRIBUTION LICENSE IN CA?

Posted by Margolin & Lawrence on May 18, 2018

Back in September, we published a blog post titled “Where Can I Get a Distribution License in California.” Now that the ordinances for the majority of jurisdictions in California have been reviewed and somewhat solidified, Margolin and Lawrence presents an updated list on the viable locations for distribution licenses in California.

The History of Cannabis by Margolin & Lawrence

Posted by Margolin & Lawrence on April 20, 2018

News: Ninth Circuit Hears Medical Cannabis Case

Posted by Margolin & Lawrence on April 17, 2018

Just last week, on March 29th, a three-judge panel for the Ninth Circuit Court of Appeals held a special setting at the University of Idaho College of Law. Judges Richard Tallman, N. Randy Smith, and Morgan Christen considered the case of Michael Assenberg v. Whitman County (Case No. 15-35757). Assenberg was appealing the district court’s summary judgment in an action against Whitman County, the Sheriff’s Office, Sheriff Brett Myers, and the Quad Cities Drug Task Force. Assenberg alleged that the search of his Colfax home for marijuana and his subsequent arrest violated his rights under the Fourth Amendment of the U.S. Constitution.

In 2011, law enforcement conducted a raid on his home, where Assenberg was running a medical marijuana dispensary. According to Assenberg, the raid came about after a confidential informant posing as a medical marijuana patient visited his dispensary. The Whitman County sheriff and Quad Cities Task Force seized approximately one hundred marijuana plants and Assenberg was charged with four felonies. However, the charges were later dropped in Whitman County Superior Court after it became clear the marijuana was stored incorrectly by the county.

Cannabis Compliance: Operating Legally in California in 2018

Posted by Margolin & Lawrence on April 10, 2018

California’s transition into a regulated market has many operators wondering what the universe of compliance looks like and where they fit into the process. In order to operate legally in California after January 1, 2018, you need both a local authorization and a state license. Temporary licenses from the state of California are sufficient to continue operating, though you will eventually need to obtain an Annual License. To date, 954 cannabis businesses in California have received Cease and Desist letters from the Bureau of Cannabis Control. While some were in error, others were operating without the required licenses for California.

It’s important to understand that licensure is not the end-all-be-all of compliance -- in fact, it is the minimum requirement for your business to operate legally. In addition to having a state license (which requires local authorization), you will need to begin thinking about how to set up your business with compliance processes that facilitate and enable adherence to state regulations for your activities: cannabis microbusiness, retail, manufacturing, cultivation or testing. The below infographic is an overview of the entire licensing/compliance process.


Where does your business fit in?


Massachusetts opens recreational cannabis licensing

Posted by Margolin & Lawrence on April 5, 2018

 

On April 2nd, the Massachusetts Cannabis Commission opened its licensing application process for cannabis businesses, marking Massachusetts’ official entry into the legal cannabis industry. Despite the relatively strict criteria that applicants must meet in order to qualify for the first round of licensing, the Boston Globe reports that almost 200 prospective cannabis operators have started their applications within the first day of the system’s opening, a definite sign that interest is high.

For the time being, applications are only open for “Priority Applicants,” a group consisting of Registered Marijuana Dispensaries – existing retail businesses which already have a certificate of registration and are in good standing with the Massachusetts Department of Public Health – and Economic Empowerment Applicants. The latter category is analogous to the Social Equity Program in the Oakland and Los Angeles cannabis licensing processes: Granting priority to certain business operators is intended as a restorative measure to benefit communities, demographics, and individuals who have been disproportionately punished by cannabis laws in the past.

According to the Massachusetts regulations on the Adult Use of Marijuana, to qualify as an Economic Empowerment Applicant, a prospective cannabis operator must meet three or more of the following criteria:

  • A majority of ownership belongs to people who have lived for five of the preceding ten years in an area of disproportionate impact, as determined by the Commission;
  • A majority of ownership has held one or more previous positions where the primary population served were disproportionately impacted, or where primary responsibilities included economic education, resource provision or empowerment to disproportionately impacted individuals or communities;
  • At least 51% of current employees or subcontractors reside in areas of disproportionate impact and by the first day of business, the ratio will meet or exceed 75%;
  • At least 51% or employees or subcontractors have drug-related CORI and are otherwise legally employable in cannabis enterprises;
  • A majority of the ownership is made up of individuals from Black, African American, Hispanic or Latino descent;
  • Other significant articulable demonstration of past experience in or business practices that promote economic empowerment in areas of disproportionate impact.

If a cannabis operator is certified as a Priority Applicant, they’ll be eligible to submit a state licensing application for all activities on April 17th. Businesses that don’t receive this priority will have to wait: Open applications for Cultivation, Microbusiness, Craft Cooperatives, Independent Testing Labs, and Lab Agents are scheduled to begin on May 1st, while applications for Retail, Product Manufacturers, and Transport businesses won’t open until June 1st. Given that the state has slated retail sales to begin on July 1st, this means that, if Massachusetts sticks to the current deadlines, applications are likely to be a very competitive, time-sensitive process.

Even if they don’t qualify as priority applicants, prospective cannabis operators should study state and local regulations to ensure that their applications are in order – as Massachusetts is still in the early stages of the cannabis licensing process, many deadlines and regulations are still subject to change. For more information on Massachusetts’ cannabis regulations, follow this blog or contact us at info@margolinlawrence.com.

Current Status of San Francisco City Cannabis Licensing

Posted by Margolin & Lawrence on March 29, 2018

The City of San Francisco began its process of licensing retailers to sell adult-use cannabis on January 6, 2018. Any MCD (Medical Cannabis Dispensary) businesses that conducted delivery, cultivation, manufacturing, testing, or any other cannabis activity were required to register the activity with the Office of Cannabis between September 26, 2017 and November 30, 2017. Those that registered were then required to get their temporary permit(s) from the City. To continue each of these activities in 2018, temporary licensing must be obtained from the State. Any applicant who did not register as an existing business before November 30, 2017, must apply for a permit as a new cannabis business. The Transition Provisionof City Ordinance 230-17 declares that existing MCD applicants temporarily permitted to sell cannabis starting January 1, 2018 cannot cultivate cannabis without new licensing as of April 1, 2018.

Beginning in 2018, all applicants must apply to the Equity Program (see eligibility requirements) either as individuals or incubators before applying for cannabis licensing. Since San Francisco was consistently targeted by the War on Drugs, the City is determined to make amends through this initiative, and compliance is mandatory for all cannabis businesses.

All new businesses require a license from the San Francisco Office of Cannabis and the State of California in order to sell cannabis in San Francisco. To be eligible for a temporary permit in the City of San Francisco, applicants must comply with the Citys zoning codes. These can be found on the SF City Planning website - check out the zoning for cannabis retail businesses. The Land Use Regulations for the City are have also been outlined in a table by the San Francisco Office of Cannabis, which provides useful zoning requirements for all retail and non-retail cannabis businesses (including cultivation, manufacturing and distribution). Mobile cannabis dispensaries will not be permitted in San Francisco.

At this time all cannabis licensing is temporary, subject to review by each municipal zones governing body and the State before permanent licensing can be applied for through the Office of Cannabis. According to Section 1605 of Article 16 in San Francisco Citys Ordinance 230-17 Amending the Administrative, Business and Tax Regulations, Health, and Police Codes,all cannabis businesses awarded a temporary license must apply for permanent licensing within 30 days of the date when the Office of Cannabis makes such permits available. Once permanent licensing becomes available, temporary licensing will no longer be offered to new businesses.

In summary, whether you are looking to start a business in cultivation, manufacturing, retail, distribution, a combination of the above (microbusiness), or testing, you will need to obtain temporary licensing from the City of San Franciscos Office of Cannabis. The window for existing MCDs to register with the City has passed, but these businesses can still apply for new licensing along with all other new cannabis business applicants. The Office of Cannabis in San Francisco has not yet announced when permanent licensing will become available to businesses awarded temporary licenses by both the City and the State. More information about the application process and requirements can be found on the San Francisco Office of Cannabis website.

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This blog is not intended as legal advice and should not be taken as such. The possession, use, and/or sale of marijuana is illegal under federal law.