Cannabis Opportunities in San Bernardino; or lack thereof

Marijuana Laws

For several years, cannabis businesses of any kind were banned in the City of San Bernardino.  In November 2016, the citizens of San Bernardino had three choices regarding the future of cannabis in their town.  Two of the choices were the result of the initiative process which requires the proponents to collect sufficient signatures from registered voters in the City before they could be placed on the ballot.  The third choice was a City-sponsored ballot measure.  With three options on the ballot, San Bernardino voters were faced with a difficult choice.

Measure “O” established a regulatory process for all cannabis businesses (medical and adult-use), including zoning restrictions related to specific parcel numbers, distance from residential zones, and taxation.  Measure “N” also established a regulatory process for medical cannabis businesses only, including zoning restrictions to permit businesses in commercial zones, established distance requirements, imposed a 5% taxation on all gross receipts, and mandated a minimum of twenty medical cannabis business licenses in the City.  Measure “P”, placed on the ballot by the City Council,  established a regulatory process for all cannabis businesses, including zoning restrictions, but no taxation.

The City-wide ballot measures were on the same ballot as Proposition 64 (Adult Use of Marijuana Act – AUMA) , the State-wide legalization of Adult Use of Cannabis.  Nearly 53% of the citizens of the County of San Bernardino voted for the legalization of the Adult Use of Cannabis.

Measure “O” was the successful measure with 54% of the votes cast (Measure “N” received 51.10%, and Measure “P” 48.45%).

The City was simultaneously sued to mandate the immediate implementation of Measure “O” and, alternatively, a challenge to the validity of Measure “O”.  The Court issued its Final Statement of Decision invalidating Measure “O” on February 9, 2018.  Read the Court Decision on San Bernardino Measure O.

It is anticipated that the proponents of Measure “O” will appeal the trial court decision and request a stay of the trial court decision.  It is further anticipated that the proponents of Measure “N” will file a lawsuit demanding that Measure “N” is immediately operative.  For more info, see this article from the San Bernardino Sun.

Meanwhile, on February 1, 2018, the City of San Bernardino extended a moratorium for ten months and fifteen days reinstating the previous ban of all cannabis businesses.  City staff presented proposed new regulations to the City Council on February 7, 2018.  The proposed new regulations will be forwarded to the Planning Commission for consideration.  Read more about Measure “O” and San Bernardino City Marijuana Regulations at the City website.

Between lawsuits and City Council consideration of new regulations,  it is unclear what the future of cannabis will be in the City of San Bernardino.

Protection Extended for State Medical Marijuana Programs

US Congress Protects State Marijuana

After a brief government shutdown, protection for state medical marijuana programs was extended again until March 23, 2018.  Congress and the President signed off on a six-week continuing resolution.

The budget resolution extends the Rohrabacher-Blumenauer Amendment which prohibits the use of federal funds to prevent states from implementing their own laws that allow for the use, cultivation, distribution, or possession of medical cannabis.  That language was initially passed by Congress in 2014 as the Rohrabacher-Farr Amendment and is now known as the Rohrabacher-Blumenauer Amendment.

This is the eighth time the amendment has been temporarily extended by a continuing resolution from Congress, which hasn’t passed a new federal budget since 2015.

The Rohrabacher-Blumenauer Amendment was supported by a bipartisan group letter to House and Senate leadership from 66 Congress members including Rep. Dana Rohrabacher, R-California, and Rep. Earl Blumenauer, D-Oregon.

Also in support of the Rohrabacher-Blumenauer Amendment was a letter from California State Treasurer John Chiang.

Los Angeles City Accepting Applications from Existing Medical Marijuana Dispensaries

Marijuana Laws

The Los Angeles City Department of Cannabis Regulation has begun accepting applications for Proposition M Priority Processing from Existing Medical Marijuana Dispensaries (EMMD).  Applications for Proposition M Priority Processing will not be accepted or processed after March 4, 2018.

See the Los Angeles City Cannabis Application Instructions for Proposition M.

Proposition M was adopted by the voters of the City of Los Angeles on March 7, 2017.  Pursuant to Measure M: The City’s designated licensing or permitting agency shall give priority in processing applications of EMMDS that can demonstrate that the EMMD has operated in compliance with the limited immunity and tax provisions of Proposition D.  To avail itself of the terms of this Section, including the priority processing, an EMMD must apply for a City permit or license within sixty calendar days of the first date that applications are made available for commercial cannabis activity.

EMMD Applicants may apply for a maximum of one: Microbusiness License (Type 12); a maximum combination of one Retailer License (Type 10); one delivery for Retailer License (Type 10); one Distributor License – Self Transport Only License (Type 11), one Manufacturer License (Type 6 Only) and one Cultivation, Indoor License (Type 1A, 1C, 2A, or 3A) for the one location identified in its original or amended BTRC and as demonstrated in previous Commercial Cannabis Activity as of March 7, 2017.

The determination by the Los Angeles City Department of Cannabis Regulation of whether an EMMD is eligible for Proposition M Priority Processing will be made with no hearing and will be final and effective if not timely appealed.

To read more about the City of Los Angeles Marijuana Regulations go to – Los Angeles City Cannabis Ordinances.

California Secretary of State Cannabis Business Portal

Start Cannabis Business California

California Secretary of State Alex Padilla has launched the cannabizfile, a new online portal with useful information about cannabis-related business filings with the Secretary of State’s office.  Entrepreneurs seeking to start a cannabis-related business in California need to register their business entity with the Secretary of State.

“The first stop when starting any business in California, including a commercial cannabis business starting in 2018, is the Secretary of State’s office,” said Secretary of State Alex Padilla.  “Our new cannabizfile portal makes the process for starting a cannabis business easier to navigate for entrepreneurs.  The new site also includes information about registering a business, trademark, or service mark.  Our new ‘Starting a Cannabis Business’ brochure can provide a starting point for new entrepreneurs seeking to quickly get their business up and running.”

See the ‘Starting a Cannabis Business’ brochure – 10 Easy Steps to Start a Cannabis Business Entity in California.

The Secretary of State is the filing agency for all business entity documents, including those relating to newly formed cannabis businesses.  Those seeking to obtain a license for cannabis business entities such as Corporations, Limited Liability Companies (LLC), Limited Partnerships (LP) or limited Liability Partnerships (LLP) are required to register with the Secretary of State before applying for any license(s) with other local and state agencies.

The Secretary of State even has a new Cannabizfile PSA video featuring actor Cheech Marin.

Tax Guide for Cannabis Businesses

Tax Guide for Cannabis Businesses

Confused about taxes for a California Cannabis Business?  The California Department of Tax and Fee Administration (CDTFA) (formerly BOE) has a good resource for you – Tax Guide for Cannabis Businesses.  Tax information is available for California marijuana distributors, retailers, cultivators, and manufacturers.

The guide is intended to provide general information regarding issues relating to the Sales and Use Tax Laws, Cannabis Tax Law, and other programs administered by the California Department of Tax and Fee Administration which may affect marijuana businesses.

Any business that sells cannabis or cannabis products, must register with the California Department of Tax and Fee Administration for a seller’s permit.  Cannabis cultivators, processors, manufacturers, retailers, microbusinesses, and distributors making sales are required to obtain and maintain a seller’s permit as a prerequisite for applying for a license with the California Department of Food and Agriculture, the California Department of Consumer Affairs, or the California Department of Public Health.

Distributors of cannabis and cannabis products must also register with the California Department of Tax and Fee Administration for a cannabis tax permit to report and pay the two new cannabis taxes to the CDTFA.  The cannabis tax permit is in addition to the seller’s permit.

California Emergency Licensing Regulations for Medicinal and Adult-Use Cannabis

Bureau Cannabis Control

California’s three state cannabis licensing authorities have proposed emergency licensing regulations for commercial medicinal and adult-use cannabis.  The Department of Consumer Affairs’ Bureau of Cannabis Control, the Department of Public Health’s Manufactured Cannabis Safety Branch, and the Department of Food and Agriculture’s CalCannabis Cultivation Licensing Division each developed the new regulations to reflect the law defined in California’s Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA).

The regulations and their summaries are provided here:

Bureau of Cannabis Control Emergency Regulations

CA Department of Food and Agriculture Emergency Regulations

CA Department of Public Health Emergency Regulations

On June 27, 2017, the California Governor signed MAUCRSA, which creates one regulatory system for both medicinal and adult-use cannabis.  Prior to that law’s passage, state licensing authorities had released proposed regulations to govern the implementation of the Medical Cannabis Regulation and Safety Act (MCRSA).  The public hearings and comments from a broad cross section of stakeholders that were informing that regulatory process have also been taken into consideration in the drafting of these proposed emergency regulations.

The licensing authorities expect the emergency regulations to be effective in December 2017.  The implementation date for the issuance of the state commercial cannabis licenses remains the same: January 1, 2018.  However, California will only be able to license those businesses that are in compliance will all local laws.

In addition, the Business, Consumer Services and Housing Agency will hold a workshop with state-chartered banks and credit unions next month to discuss regulatory and compliance issues, as well as potential approaches to banking cannabis-related businesses.

Legalization of Cannabis in Colorado Associated with Reductions in Opioid Deaths

Marijuana and Opioids

Researchers from the University of North Texas School of Public Health, the University of Florida, and Emory University published a study which found that legalization of cannabis in Colorado was associated with short-term reductions in opioid-related deaths.  The study was published in the American Journal of Public Health.

The researchers set out to examine the association between Colorado’s legalization of recreational cannabis use and opioid-related deaths.  They compared changes in opioid-related deaths before and after Colorado stores began selling recreational cannabis.

The study results showed that Colorado’s legalization of recreational cannabis sales and use resulted in a 0.7 deaths per month reduction in opioid-related deaths.  This reduction represented a reversal of the upward trend in opioid-related deaths in Colorado.

See the study – Recreational Cannabis Legalization and Opioid-Related Deaths in Colorado.

Public Support for Legalizing Marijuana at All Time High

Public Support Legalizing Marijuana

Gallup recently conducted a new poll which showed public support for legalizing marijuana at an all time high of 64%.

Interestingly, a majority of Republicans now support legalizing marijuana which was not the case in last year’s Gallup poll – 51% of Republicans now say marijuana should be legalized.  That number was at 42% last year indicating a substantial trending shift in Republican support for legalizing marijuana.

When Gallup first asked this question in 1969, 12% of Americans supported the legalization of marijuana use.  In the late 1970s, support rose to 28% but began to retreat in the 1980s during the era of the “Just Say No” to drugs campaign.  Support stayed in the 25% range through 1995, but increased to 31% in 2000 and has continued climbing since then.

In 2013, support for legalization reached a majority for the first time after Washington and Colorado became the first states to legalize the recreational use of marijuana.

Results for the Gallup poll were based on telephone interviews conducted October 5-11, 2017, with a random sample of 1,028 adults, aged 18 and older, living in all 50 US states and the District of Columbia.

Read more about the Marijuana Gallup Poll.

Lawmakers Call For Veterans Affairs Research Into Medical Marijuana

Veterans Affairs & Medical Marijuana

House Committee on Veterans’ Affairs Ranking Member Tim Walz (D-MN) and the nine other Democratic members of the committee sent a letter to the Department of Veterans Affairs (VA) Secretary Dr. David Shulkin urging the Veterans Health Administration Office of Research and Development to begin conducting and examining research into medical marijuana’s effects on veterans suffering from chronic pain and post-traumatic stress disorder (PTSD).

The letter notes that 13 percent of veterans prescribed opioids have formed an addiction to the drug.  As a response to the opioid epidemic, Congress passed The Comprehensive Addiction and Recovery Act (CARA) which directed VHA to continue its efforts to reduce VHA reliance on opioid medication for pain management.  The letter discussed concerns regarding veterans’ lack of access to alternatives to opioid-based treatments such as complementary and alternative medicine including medical marijuana and its cannabinoids.

“VA is uniquely situated to pursue research on the impact of medical marijuana on veterans suffering from chronic pain and PTSD…” reads the letter.  “VA’s pursuit of research into the impact of medical marijuana on the treatment of veterans diagnosed with PTSD who are also experiencing chronic pain is integral to the advancement of health care for veterans and the Nation.”

Read the full letter – Veterans Affairs Research Into Medical Marijuana.

California Draft Medical Cannabis Regulations Withdrawn

Bureau Cannabis Control

California’s three cannabis licensing authorities have announced the official withdrawal of the draft medical cannabis regulations and will develop emergency regulations based on new laws passed this year.

The Department of Consumer Affairs’ Bureau of Cannabis Control, the Department of Food and Agriculture, and the Department of Public Health released draft regulations for the Medical Cannabis Regulation and Safety Act of 2015.  These licensing authorities held several public hearings to accept verbal and written comments regarding the draft regulations.   The licensing authorities had planned to move forward with a separate draft regulatory package for the implementation of Proposition 64: The Adult Use of Marijuana Act of 2016.  However, in late June, the Legislature passed and the Governor signed into law the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA, also known as Senate Bill 94), which created one regulatory system for both medicinal and adult-use cannabis.  As a result, the licensing authorities will withdraw the proposed medical cannabis regulations noticed for public comment on April 28, 2017, and May 5, 2017.

The three cannabis licensing authorities are in the process of drafting emergency regulations based on the new law for the commercial medicinal and adult-use cannabis industries.  The licensing authorities will consider the public comments received on the draft medical cannabis regulations and use the feedback to inform the draft emergency regulations.  The emergency regulations are expected to be published in November 2017.