Law Offices of Bruce M. Margolin, Esq.

House leadership confirmed on Friday that a bipartisan marijuana banking bill will receive a floor vote next week. The Secure and Fair Enforcement (SAFE) Banking Act, which cleared the Financial Services Committee in March, will be voted on through a process known as suspension of the rules, requiring two-thirds of the chamber (290 members) to support it for passage. Majority Leader Steny Hoyer (D-MD) announced the scheduling of the vote in remarks on the House floor on Frida...y morning. We will consider several bills under suspension of the rules, including H.R. 1595, the SAFE Banking Act of 2019, as amended. IT WOULD BE SMART TO WRITE TO YOUR REPRESENTATIVE SUPPORTING THIS.

News broke in recent weeks the FBI was jumping into the cannabis industry in order to investigate improper terms and agreements in the legal cannabis area. This news was met with mixed results as the cannabis plant is still illegal under Federal law and the FBI is usually the one breaking down the door of marijuana growers. On the other hand, there was so much corruption being report in the cannabis space, especially in Massachusetts, that didn’t someone at the Federal level that upholds the law have to jump in, regardless of the subject matter being cannabis.

Thanks to high taxes and overregulation, California reportedly has three times as many illegal marijuana dispensaries as it does licensed shops. And that's probably an undercount. The numbers873 legal vs. 2,835 unlicensedcome from a marijuana dispensary trade association that made its calculations by looking at who is advertising on Weedmaps, a site helping pot users order marijuana from dispensaries online. There's probably more than a few unlicensed dispensaries out there who don't advertise on Weedmaps either.

According to the bill, SB 581 would not only put up the publicly available infractions and crimes applicants have done, but it would post them on either licensing authorities websites or through the California Cannabis Portal. Any and all documents having to do with actions taken against them would also be linked for anyone to view. The bill has received support, passing the Senate 35-0 in May. Those supporting the bill have pointed out that this is all public information, that the Department of Consumer Affairs and the Department of Alcohol Beverage Control have done the same thing for years, and that the ease of the system would lower the amount of requests that the current system of asking for applicant information receives.

Los Angeles Mayor Eric Garcetti said the city supports legal dispensaries, but businesses that operate without permits are endangering those that took the time to wait in line to operate legally. The city estimates there are at least 200 dispensaries operating illegally, with a high concentration in South Los Angeles. Illegal operations are getting in the way of opportunity, Garcetti said. They’re undercutting more than 300 local businesses that have temporary licenses to legally sell cannabis here in L.A.

We are seeing hemp cultivation dramatically expand in the U.S. in 2019, with over quadruple the number of acres licensed in hemp compared to last year and the addition of 13 more states with hemp programs, Vote Hemp President Eric Steenstra said in a press release. Now that we have lifted federal prohibition on hemp farming, it’s time build the infrastructure and expand hemp cultivation and the market for hemp products across the country so that all can reap the benefits of this versatile and sustainable crop. A total of 16,877 state licenses to cultivate hemp were issued to farmers and researchers this year, a 476 percent increase over 2018, the group found. Additionally there was a 483 percent annual jump in hemp processing licenses issued in 2019.

If we don’t stop the illegal operators, that opportunity goes away, so it’s important to us for the preservation of our neighborhoods, but also, for the well-being of our people. This enforcement action is part of a multi-faceted plan to close illegal cannabis shops. During the press conference, it was stated that cease and desist letters were delivered to 231 illegal businesses, and the property owners of those businesses. This is an issue of equity, not an assault on can...nabis users or sellers, said Harris-Dawson. City Council District 8 has far too many illegal dispensaries and we cannot allow this to mirror liquor stores in the 80’s, 90’s, and 2000’s. Illegal dispensaries poison our neighborhoods and their own customers by operating dangerous unregulated businesses. We have over seventy illegal dispensaries in our district and dozens are still listed on platforms like Weedmaps.

Currently, cannabis licensees may only sell CBD products that are extracted from cannabis rather than industrial hemp. Although CBD products are widely available in California, the California Department of Health issued a guidance in 2018 that prohibited the sale of CBD as an approved food, food ingredient, food additive, or dietary supplement until the US FDA determined that CBD products can be used as a food or California made the determination that CBD was safe. https://www.benzinga.com//california-legislature-fails-to-

Due to the Prop. 64 requirement mentioned above that a restaurant or business must have a retail cannabis license or microbusiness license, there are very few onsite cannabis consumption places available. A few dispensaries have obtained on-site consumption licenses and do have lounges but they are very few and far between. In addition Prop. 64 does not allow dispensaries to sell anything other than cannabis, so they cannot sell food or beverages. Many allow their customers t...o bring their own food and beverages and some provide them free. It would seem only fair though that if customers can bring their own food and beverages to an on-site cannabis consumption lounge, then customers should be able to bring their own cannabis to an on-site food consumption business like a restaurant. This glaring problem of practically nowhere to go to consume cannabis except home needs to be solved. An attempt to do this was undertaken in the 2019 State Legislature with the introduction of AB 1465. This bill would create a new license category known as a consumption cafe/lounge license. This license would allow the sale of cannabis products, but is different from a regular dispensary license as it would only allow sales of cannabis in amounts suitable for on-site consumption. It would also allow for food and beverage service. http://www.marijuananews.org/blog

HOLDING OUT AS LONG AS POSSIBLE... Both legal cannabis businesses and state regulators are pushing Weedmaps to start removing hundreds of illegal ads now. Until that happens, they say Weedmaps is continuing to boost illegal operators that undercut legal operators, stifle state tax revenue and, in some cases, make people sick. Time is of the essence, said Jerred Kiloh, president of the United Cannabis Business Association, an industry trade group that’s pushed legislation to... penalize promotion of unlicensed operators. It is crucial to establish a near-term deadline in order to truly protect Californians. Weedmaps CEO Chris Beals would only say in an emailed response that the company will have more to share in the weeks ahead, while spokesman Travis Rexroad said Tuesday that he’ll have more specifics in the near future.

The couple’s decision to drop their filing appears tied to a U.S. Justice Department crackdown on state-sanctioned marijuana firms seeking bankruptcy protection. Jim Perkins, a federal attorney with the U.S. Trustee Program, moved to dismiss Stratton and Chris Wright’s case in April, noting that they’d listed a 50% ownership in a family-run marijuana farm near Spangle among their assets that would need to be liquidated to cover debts totaling a little more than $1 million. The company is not only acting illegally, but the debtors, as the owners and managers of that entity, I think are very clearly violating federal law, Perkins told Judge Frederick Corbit of the U.S. Bankruptcy Court in Eastern Washington at a hearing in May seeking to dismiss the case.

The product is of particular interest to cannabis farmers, because OPs, when vaporized and inhaled, are exponentially more toxic than when ingested by mouth, according a a press release from New York University, where one of Brooklyn Bioscience’s principals is a professor of chemical and biomolecular engineering. [I]n states such as California and Colorado, which are introducing strict regulations governing the cultivation of cannabis, a much lower level of OPs is allowed than that considered acceptable in fruits and vegetables.

The final countdown is on for Round 1, Phase 3 retail licensing in Los Angeles. On September 3rd at 10 a.m., the L.A. Department of Cannabis Regulation (DCR) will open the flood gates to would-be Round 1 applicants. And in its own announcements on the subject, the DCR states that it has verified over 800 social equity applicants (out of 1800 applicants that appliedthough the City is continuing to process people) that will vie for the first 100 coveted Type 10 retail licenses (75 of which will go to Type 1 social equity applicants and 25 of which will go to Type 2 social equity applicants). Where Round 1 licensing is first come, first served with an online application via the City’s Accela licensing portal, it’s going to be fast and furious on September 3rd to get a license.