The Importance of Lobbying in the Commercial Cannabis Industry

Posted by Margolin & Lawrence on August 27, 2019

 

Lobbying
 
Lobbying government officials has become increasingly popular in the cannabis industry on local, state, and federal levels as legislation is created for the new industry. The right to petition the government is a fundamental component of democracy.

In fact, the First Amendment to the US Constitution expressly protects not only freedom of speech and free exercise of religion, but also the right to “petition the Government for a redress of grievances” (i.e., the right to lobby). Via this constitutional right, cannabis entrepreneurs and companies have the opportunity to work with local, state, and federal governments to pass progressive legislation and establish community support for the industry.

Lobbying activities are regulated by California state law. Lobbyists who advocate on behalf of another party or individual are required to register with each government agency they intend to lobby and must report all lobbying hours on a regular basis. State laws governing the lobbying process provide protection against extortion and predatory practices. Individuals are also able to lobby for themselves, requesting face-to-face meetings with officials with the aim of persuading them to vote a certain way or take a specific stand on legislation or policy. These individual lobbying efforts remain unregulated by the state as long as they stay below a required minimum.

Our firm is active in lobbying throughout California and other states in the U.S. Our attorneys have lobbied several local governments and have advocated for a diverse range of interests pertaining to commercial hemp and cannabis. Our intimacy with legal compliance and our first-hand knowledge of our clients’ most pressing needs provides us an upper hand at maneuvering through government and legal areas.

After completing years of formal education, lawyers are required to comply with professional rules of conduct at the risk of losing their law license and must pass a rigorous California State Bar exam and background check before practicing. These and other consumer protections protect individuals and businesses from predatory practices. Examples of predatory practices have made headlines this year in Los Angeles, here and here, with the FBI raiding offices of local council members and the LA planning director being ordered to pay a high fine for ethical violations. Within the current cannabis landscape, some common scenarios are arising.

Importance of Lobbying in Commercial Cannabis Legalization

In California, over 70% of counties still prohibit the sale of recreational cannabis. As cities consider and implement legalization, they are doing so at a slow pace. For example, Morgan Hill, a city in Santa Clara County, passed a cannabis tax ordinance but has yet to establish a cannabis business ordinance allowing anyone to apply for a license. So while we know the city is deliberating to allow cannabis businesses, we don’t know when or how such businesses will be permitted. The future of the cannabis industry is undecided in Morgan Hill, and now is a crucial pivoting moment where lobbyists can help influence and advocate for their clients. Another example is El Dorado County, which has established an ordinance for cannabis cultivation, but has yet to establish a process for receiving and accepting applications.

Undue Concentration and Numerical Caps

The City of Los Angeles allows cannabis retail storefronts but has Undue Concentration laws placing a “soft” cap on the number of retail storefronts that can exist within a community district. In order to bypass this cap, organizations are hiring lobbyists to lobby City Council members to approve additional licenses in their areas. Other localities initially placed strict limits on the number of licenses available for cannabis businesses, but agreed to increase the number of available licenses after lobbying efforts.

Vertical Expansion for Businesses

Cannabis businesses looking to expand into other cannabis industries, such as cultivation or manufacturing, are also affected by Undue Concentration or other numerical caps. For instance, the City of Los Angeles has reached its cap on cultivation licenses in many areas. Retailers, distributors, and manufacturers seeking to expand their business and cultivate their own products are imploring lobbying efforts to obtain a cultivation license - which is currently prohibited per the numerical cap.

Margolin & Lawrence's Lobbying Efforts

Margolin and Lawrence has obtained over 200 local and state cannabis licenses throughout California and one in Massachusetts. We are currently pursuing a hemp license for a client in rural Georgia as well. Prior to starting their licensing and compliance practice in 2017, our partners Allison and Raza litigated cannabis cases across the state and federal courts of the United States. They have appeared in California, Hawaii, Utah, Nebraska, and Nevada courts.

Our firm currently represents approximately 30% of existing cannabis cultivators, manufacturers, and distributors in the City of Los Angeles. We are also handing over 30 applicants in the next round of applications for retail storefront in Los Angeles - and are providing these clients with contractual, transactional, trademark, and corporate services. With a passion for drug legalization and criminal justice reform founded in the harm principle, Allison Margolin and Raza Lawrence established their 501c4 registered lobbying firm, Advocates for Healing America, in order to provide support to political candidates with a like-minded agenda. Before working with Allison in 2009, Raza previously worked at the CATO Institute, the ACLU, the Center for Individual Rights. He was also a federal clerk for the 9th Circuit Court of appeals and spent five years as an associate at Munger Tolls and Olson. Allison began her drug law reform efforts at age 12 when she discovered the insanity of the drug war while doing her sixth grade DARE paper on Colombia.

 

If you are interested in our lobbying services, contact a member of our team today!

 

 

 

 

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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.