Jun 13, 2017 | California Marijuana Laws
The background checks have tightened up and now apply to all ‘owners’ as defined. In a publicly traded company, this means anybody with more than 5% interest. In other entities, the breakpoint is 20%. If the investor is a business, then the CEO and directors are also ‘owners’. The same applies to a person managing the actual applicant.
Criminal Background Checks and Disclosures
These rules apply equally to growers, distributors, transporters, and retailers. Their ‘owners’ must furnish details of post-juvenile convictions, excluding traffic citations. In addition, ‘owners’ of manufacturing enterprises must admit to all convictions with a significant bearing on their activity.
Financial Background Checks on Owners
‘Owners’ of distributor, transporter, and retailer enterprises must declare all business funds in accounts with financial institutions, and their own investments in the business. Furthermore, the regulator wants to know about all gifts deployed in the enterprise.
Order of Priority for Granting California Cannabis Licenses
Priority applies to businesses already operating by January 1, 2016. They must back this up by providing business documentation and accounting records. Moreover, the business must be in ‘good standing’ as attested by a local jurisdiction. All operations in business before January 2, 2018 may continue until the regulator reaches a decision. If denied, they must cease trading immediately and disband. (more…)
May 30, 2017 | Marijuana Legalization
The California Tax Service Centre applies sales tax to tangible items including antiques, clothing, furniture, giftware, and toys. However, it exempts certain products with a ‘social welfare flavor’ for example:
- Food stamp purchases
- Specified food products
- Specified medical devices
- Prescription medicines
Therefore, the Board of Equalization’s special notice to exempt qualifying sales of medical marijuana from sales tax was an unsurprising, yet welcome decision. We thought it an appropriate time to review the November 2016 regulations, as California’s medical marijuana industry moves steadily in the direction of becoming formal business.
This sales-tax concession only applies to medical cannabis, medical cannabis concentrate, and edible and topical medical cannabis products as described in section BPC 19300.5 of the Medical Cannabis Regulation and Safety Act. The purchaser must furthermore tender their valid Medical Marijuana Identification Card at the point of sale. (more…)
May 10, 2017 | Marijuana Legalization
The California State Board of Equalization has the task of serving the public ‘through fair, effective, and efficient tax administration.’ Its goal is to obtain sufficient income to match state expenditure. Closer to home, this includes ensuring that income from marijuana covers the cost of administering the program.
Details of the Mass Communication Rollout
The Board has embarked on a mass communication drive as part of its cannabis implementation policy. In so doing, it is making extensive use of social media. It encourages what it calls ‘CalCannabis Cultivation Licensing Stakeholders’ to visit its pages on Facebook, Twitter, Instagram, You Tube, Linked In, RSS News Feed, and download its Mobile Apps.
The California State Board of Equalization confirmed its commitment to keep CalCannabis Cultivation Licensing Stakeholders up to date with latest information, in an email dated April 26, 2017. This addresses The Adult Use of Marijuana Act of 2016 (Prop 64) itself, and compliance with the several tax laws covering cannabis cultivation, and sales of cannabis and related products in California. (more…)
Apr 24, 2017 | Marijuana Legalization
California was once the ‘lettuce belt’ of the nation due to its moderate climate. Nowadays, thanks to tunnel farming it no longer enjoys the monopoly. Many dilapidated lettuce greenhouses litter the ‘salad bowl’. Some have turned to growing cut flowers, but it seems the residents of the Golden State consume even less of these.
Quite fortuitously, marijuana plants and lettuces both enjoy a warm moist environment. Consequently, marijuana growers are forsaking sheds in plots for marijuana tunnels according to New York Times. This has brought new hope for isolated communities. Their sons and daughters once tended carnations and raspberries in flowerpots. Now they are happily occupied trimming leaves away from freshly harvested pot in the making
“California is destined to do with cannabis what we’ve done with every other fruit and vegetable,” Steve DeAngelo of Harborside Farms believes. “And that’s to take half of the national market.” He had better be right. His company invested in a 40-acre farm sprinkled with greenhouses like mushrooms and adding a heady aroma to the air. (more…)
Apr 13, 2017 | Marijuana Legalization, MMJ News
We are delighted we finally appear to making progress with reconciling the 2015 Medical Marijuana Regulation Safety Act, and the 2016 AUMA Proposition 64. This time, Gov. Brown is drawing a clearer line between the two marijuana industries. We agree this is a counter to any future federal interference. In simplified form for sake of brevity, here are Gov. Jerry’s main thoughts.
- The Teamsters Union proposal is set aside in favor of multiple licensing
- Hence businesses can apply to grow, manufacture, distribute, and sell
- However testing facilities will not be considered for these other licenses
- And medical and marijuana businesses may not operate on same premises
While these are the main thrusts to the draft language, could the devil lie in the detail as contained in California Norml’s more comprehensive piece? It remains to be seen what consumers are going to make of this, and how powerfully business, political and union interests lobby for or against it. (more…)
Apr 4, 2017 | Marijuana Legalization
The chief of California’s Bureau of Medical Cannabis Regulation Lori Ajax was clearly in no mood to mince her words when she spoke at a business forum earlier. She does not have the time to. She has to have a working model in place for managing marijuana by the close of 2017. And the federal maneuvers in Washington are not helping either. Just like a California big dipper, we believe.
Fortunately for Lori, she has a strong enforcement background. She previously served in the California Department of Alcoholic Beverage Control as Deputy Division Chief, District Administrator and Supervising Investigator. She listed a number of challenges she faces when speaking to the business forum. We thought it would be helpful to summarize the lengthy San Diego Union Tribune report in bullet form. So the main challenges Lori Ajax faces are as follows: (more…)
Apr 1, 2017 | Marijuana Legalization
We need to ensure we measure out our marijuana honestly to clients. Scales do go out of adjustment occasionally, and we should check them for accuracy before we use them. It is just good sense to stick to promises made in business – if we don’t, our customers go their own way. It also makes sense to pay our taxes.
The Deal the Medical Marijuana Industry has with California
Legal marijuana has its fans, and its detractors. The majority of the people are as usual in the middle. The campaign for legal marijuana did not succeed because they suddenly became marijuana missionaries. It won because the proposal to legalize, and tax the product made economic sense in these ways:
- The police could focus on more pressing matters like fighting real crime
- Medical marijuana tax would cover the cost of administering the program
- There would be money left over for publicity about using marijuana wisely
(more…)
Mar 18, 2017 | California Marijuana Laws, Proposed MMJ Law Changes
In 1920, the U.S. Government banned the manufacture, import, transport, and sale of alcoholic beverages, to cure what it saw as the cause of the ills of society. During the period through to 1933, when it finally came to its senses, organized crime entered the supply chain in the form of the organization we now know as the Mafia.
Other unintended consequences included
- Consumption continued at 60% of the pre-prohibition rate, rising to 80% by the end of the failed experiment.
- Within one week, ‘grow your own’ stills were on sale throughout the country so people could make their own moonshine.
- In the first year, total crime increased by 23%, homicide by 12%, and drug addiction by a staggering 44%.
- Americans became accustomed to consuming stronger liquor because smugglers found it easier to conceal
- The exercise failed miserably in its primary goal of producing a generation believing in temperance.
The U.S. Government subsequently introduced a more rational program to regulate manufacture, import, transport, and sale of alcoholic beverages. It has however never managed to rein in the organized crime syndicates it inspired. (more…)
Mar 5, 2017 | California Marijuana Laws, Collective Operations, Proposed MMJ Law Changes
For as long as existing medical marijuana businesses are the only ‘legal’ source for pot in California, they will remain hot property. This is especially true as they stand to receive priority when licensing time arrives. If you own a share in one, you may be thinking of convincing your partners to off-load it. But there is only problem. You have no asset to sell. Take a cuppa of whatever relaxes you while we unpick the situation with input from Hilary Bricken.
The Term ‘Collective’ Does Not Appear in the Legal Lexicon
The situation dates back to 2008, when the California Attorney General stated that making profit from selling medical marijuana was illegal. Setting aside that quaint mind-set, this meant that medical marijuana dispensaries had to be non-profits. This left medical marijuana patients with only one legal workaround. They had to form collectives that barely covered costs.
California law treats these collectives as non-profit mutual benefit corporations, or NPMBC’s. By definition, these have no equity or stock to sell. Any intelligent buyer will run miles from that situation. This is because there is nothing to pay for. Except a quasi-right to a grow-your-own, in a situation that is, at best, somewhat fluid. The only workaround is transfer of rights and obligations of membership. (more…)
Feb 22, 2017 | Marijuana Legalization
Cannabis has been having an amazingly good run in America despite Washington lagging behind the will of the people. Consider the facts. Twenty-seven states have followed California’s 1996 lead and regulated medical marijuana. Eight states have agreed to legalize non-medical use, and counting.
During his Reno, Nevada campaign stop Donald Trump said, “Marijuana is such a big thing … I think medical should happen – right? Don’t we agree? I think so. And then I really believe we should leave it up to the states.” Thus far, the President has stayed faithful to his campaign promises.
And so he should, given public opinion in favor of national marijuana decriminalization. Consider the facts. In 1995, just 25% approved the idea. In 2016 that had grown to 60% which is the highest ever. More and more state governments are climbing on the tax bonanza.
According to the Motley Fool, Colorado scooped $135 million in 2015 in respect of licensing revenue and tax. This is relatively small, compared to the $1 billion California expects to make from recreational and medical sales, and this sure beats the goose that laid the golden eggs. (more…)
