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…)
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 19, 2017 | California Marijuana Laws, Proposed MMJ Law Changes
The California Legislative Analyst’s Office is the state’s nonpartisan fiscal and policy adviser. It issued a paper on Tuesday, February 14, 2017 expressing doubt whether implementation of Proposition 64 will be self-funding in the early stages, or turn out a drain on the treasury.
What follows is a summary of the most relevant points, including opinions expressed by Los Angeles Times and our own thoughts. Here is a link to the official document if you would like to study the long and detailed report.
- We currently have two official approaches towards regulating marijuana in California. These are (a) the Medical Cannabis Regulation and Safety Act of 2015, and (b) Proposition 64 of 2016 for Legalized Nonmedical Cannabis.
- Few doubt the eventual logic of combining the legislation as Gov. Jerry Brown suggests. However many are beginning to question whether there is time to do so before Proposition 64’s deadline of December 30, 2017 runs out.
- The State Legislative Analyst’s Office is urging cash flow restraint. While it agrees with Gov. Jerry Brown, is believes there is ‘significant uncertainty regarding the resource needs for departments to regulate and tax medical and nonmedical cannabis.’ (more…)
Feb 12, 2017 | California Marijuana Laws, Marijuana Legalization, Proposed MMJ Law Changes
It is time we leapfrogged over the indecision. And got on with the business of earning tax on $2.7 billion annual sales of marijuana for the State of California. It is not the industry’s fault legislators framed Proposition 64 less than optimally. If our ancestors took as long to frame the founding statements, they could still be debating the niceties too.
And what about the mom-and-pop businesses that rely on the income? They need certainty big business with corporate advantage is not going to lever them out. Behind the scenes, recreational marijuana is selling well as it always seems to have done in the Golden State. We are trying legalize a reality not embargo it in perpetuity.
One might have thought that with two decades of regulated medical marijuana under our belt we would have at least learned something. Although granted there is still some confusion regarding what is legitimate at city and country level. The holdup is an apparent obsession with tidying these details up at the same time. For the life of me, I can’t see the problem with having two different systems for a while. Surely, this is what the population envisaged?
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Feb 5, 2017 | California Marijuana Laws, Marijuana Legalization, Proposed MMJ Law Changes
Frankly, we are less than surprised about the program slippage. In fact we have been warning for a while that implementation of Proposition 64 will not come in on target. Unlike marijuana entrepreneurs that have been preparing for years, our lawmakers are following a strictly linear process.
It is a shame really. California has a great dealt to benefit in terms of taxes. Yet our lawmakers insist on following a single-level approach. First, they draft a proposition that was bound to get through. Then they hold a ballot the result of which was virtually certain. Then and only then do they put administrative structures in place. These are currently drafting regulations that should have started years ago.
This is no way to begin a profitable business, as I am confident Patrick McGreevy writing in Los Angeles Times will agree. He confirms a stir at the California Capitol on Monday, when lawmakers challenged the ability of state agencies to come in on time.
The Smoking Pot Bomb California Faces
To recap, Proposition 64 wants licenses in place by January 1, 2018. The regulations and system may yet be. However, there will still be numerous license applications in the pipeline. To avoid prejudice and unfair practice there are going to have to be numerous provisional licenses at first.
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