The U.S. cannabis industry employed roughly 165,000 workers as of last summer. By 2020 that number is expected to jump to 250,000 employees, which is more jobs than the expected jobs from manufacturing, utilities or governments sectors. It is no wonder that we have seen a significant uptick in cannabis industry employment claims over the past year or so in our Washington and Oregon offices. These claims can be very difficult to deal with for a business without basic employment safeguards, like a handbook and conscientious employment practices.
We have written two previous posts in this series on how to protect your marijuana business from the bad acts of your employees. You can find them here (negligent hiring and retention) and here (hostile work environment / harassment). Today, we expand on the latter topic, providing some advice on how to investigate harassment claims.
Ideally, sexual harassment would not occur in any business or professional seeing. Unfortunately, it does, and it is important your cannabis business is ready to properly investigate a sexual harassment claim when it arises. As previously discussed, a proper complaint procedure and investigation is important not only for legal protection against sexual harassment claims, but also to enhance your company’s credibility.
Properly managing marijuana supply is the single most challenging aspect of state-level marijuana regulation. In an op-ed published January 12th in the Oregonian, Billy Williams, U.S. Attorney for the federal district that encompasses Oregon wrote about what he calls Oregon’s “massive overproduction problem.” According to Williams, postal agents in Oregon seized 2,644 pounds of marijuana in outbound parcels in 2017 alone. Decreasing wholesale prices in Washington and Colorado indicate oversupply as well based on the inverse correlation between supply and price. We hear anecdotes in Washington all the time from marijuana producers that are finding it more and more challenging to survive with the current market prices.
If this were any other market, data points indicating falling prices and oversupply would be wholly unremarkable. Free markets tend to find an equilibrium point between supply and demand that support relatively stable wholesale and retail prices. Free markets also tend to self-correct, if given the opportunity to do so. If businesses in a market are all extremely profitable, new firms are induced to enter the market. The entry of those new firms tends to increase competition and decrease profits across the board, signaling to other would-be market participants not to enter. Similarly, if things are not going well and competitors exit the market, surviving businesses are given a little bit …
Jeff Sessions’ decision to rescind Obama-era guidance on the Department of Justice’s approach to marijuana enforcement was troubling for the cannabis industry. The “Sessions Memo” withdrew earlier marijuana-specific guidance memoranda and directed US attorneys to decide which marijuana activities to prosecute “with the Department’s finite resources,” based on well-established principles that govern all federal prosecutions including, “the seriousness of the crime, the deterrent effect of criminal prosecution, and the cumulative impact of particular crimes on the community.”
The Sessions Memo does not provide much additional insight as to what prosecutors should look for in determining what marijuana crimes to target. In lieu of such guidelines, it is important that stakeholders in the cannabis industry familiarize themselves with the US Attorney in their district. This post is focused on Annette Hayes, the US Attorney for the Western District of Washington.
On January 4, Hayes issued the following statement regarding the Sessions Memo:
Today the Attorney General reiterated his confidence in the basic principles that guide the discretion of all U.S. Attorneys around the country, and directed that those principles shepherd enforcement of federal law regarding marijuana. He also emphasized his belief that U.S. Attorneys are in the best position to address public safety in their districts, and address the crime control problems that are
This week, the Bureau of Cannabis Control (the “BCC”) announced that as of January 9, 2019, Section 11362.775 of the Health and Safety Code (the “Code”) will no longer be in effect. The BCC notice ends the popular collective and cooperative models of cannabis cultivation, manufacturing and distribution in California. These models were promulgated through the use of “creative” legal advice in order to take advantage of the Compassionate Use Act’s multiple loopholes and ambiguities, and usually involved patients joining a “closed loop” membership system (sometimes a formal corporate entity and sometimes not) to receive medical cannabis from other patients in the collective who grow or process it for them.
California’s transition into a regulated commercial cannabis system left many operators, particularly those with non-profit mutual benefit corporations structured as collectives or cooperatives, uncertain as to just how much time they have left to operate. We’ve encountered some operators who, for a variety of reasons including the time and expense of the process, or their inability to comply with local zoning requirements at their current location, are reluctant to abandon the collective model in favor of receiving a state license under MAUCRSA.
Unfortunately, these operators will have no choice but to join the regulated system, and there are a laundry list …
When the City of Los Angeles passed its ordinances allowing commercial cannabis businesses, the City placed limits on the total amount of licenses available in each community for each license category, based on “undue concentration.” The City made it easy to understand the “soft caps” for most of the licensing categories. For each neighborhood’s retailers (Type 10), microbusinesses (Type 12), and manufactures (Type 7) –the ratio is one license per 10,000, 7,500, and 7,500 residents, respectively. The City has even provided the exact number of licenses available on its Commercial Cannabis License Capacity Chart (“License Capacity Chart”), here.
However, the cultivation license limits are more difficult to understand. Here is how the city defines cultivation limits for Undue Concentration:
a ratio of 1 square foot of cultivated area for every 350 square feet of land zoned M1, M2, M3, MR1, and MR2 with a maximum aggregate of 100,000 square feet of cultivated area and a maximum aggregate number of 15 Licenses at a ratio of one License for every 2,500 square feet of allowable cultivated area for Cultivation (Types 1A, 1C, 2A, 3A, 4 and 5A).
After careful examination of this definition, here’s what we think the City means to do with undue concentration and …
Once you decide that medical cannabis is the right choice for your medical treatment, you then have the challenging task of finding the right medical marijuana clinic. There are many different clinics out there, and not all of them are reputable or a good choice.
Just to get one important thing out of the way first of all – we’re not doctors. And nor are we health professionals in any sense of the word. Which in turn means that none of the following information should be interpreted as official medical advice, or even recommendations on our part! It’s all simply […]
In the two previous entries in this series (here and here), we discussed the packet of rules amendments recently adopted by the Oregon Liquor Control Commission (“OLCC”) to implement the many cannabis bills passed by Oregon last year. Specifically, we discussed a new rule allowing Marijuana Promotional Events, and a small amendment to the definition of “financial interest” that will have a big impact. Today we want to talk about some important changes to canopy sizes.
Before discussing the specific changes, it is important to note that these rules amendments were adopted in an uncertain time in Oregon’s recreational market. As we have noted before, prices for outdoor flower appear to be falling quickly and many producers have contacted our office about the possibility of pushing the OLCC to limit producer licenses, or enact a moratorium on new licenses. (Note: As of January 8, there were 896 active producer licensees in Oregon, with about 1,000 more in the queue). The reality is that the OLCC does not have statutory authority to either limit licenses or enact a moratorium. Only the legislature can make this kind of change, and we think that it is unlikely that it will be considered in the upcoming …
California has 58 counties and 482 incorporated cities across the state, each with the option to create its own rules or ban marijuana altogether. In this California Cannabis Countdown series, we cover who is banning cannabis, who is embracing cannabis (and how), and everyone in between. For each city and county, we’ll discuss its location, history with cannabis, current law, and proposed law to give you a clearer picture of where to locate your California cannabis business, how to keep it legal, and what you will and won’t be allowed to do.
In this post we’ll tell you how to properly assemble and install all the necessary devices in your grow tent to start your indoor grow. This step-by-step guide basically explains how to install your air extraction fan and activated carbon filter, how to mount your grow light and how to program your timers. Let’s get started then!
Indoor grow tent
First thing to do is assembling the grow tent by following the manufacturer instructions. Then, connect the activated carbon filter to the extractor fan with some duct tape. Once it is properly sealed (you can also use metal duct clips) you can make the necessary electrical connections (two wires).
Next, you must hang up the carbon filter and the extractor fan with the strips included in your grow box (see pics below). Then, connect the air duct to the air fan and pass it through one of the holes designed for such use. The ideal would be to remove the air inside the grow tent to another room or directly to the outside. Also, keep in mind that it’s always better to place the carbon filter on top of the interior space, since hot air rises.
If necessary, you can leave one of the bottom holes open as …
For our international readers, Martin Luther King, Jr. Day is an American federal holiday marking the birthday of its eponymous civil rights hero. Dr. King was the chief spokesperson for nonviolent activism in the Civil Rights Movement, which successfully protested racial discrimination in federal and state law. Dr. King was assassinated in 1968, four years after the passage of one of the great U.S. laws of the 20th century, the Civil Rights Act of 1964. His death also came two years prior to one of the 20th century’s most controversial and insidious laws, the Federal Controlled Substances Act of 1970 (CSA).
As cannabis business lawyers, we write about cannabis law topics every day of the year on this blog, but we seldom address pure social issues. When it comes to cannabis, however, it is sometimes difficult to separate law and policy. This is because the federal prohibition of marijuana in the United States has had a racially disparate impact on non-white individuals, especially black and Latino Americans. That should come as no surprise to anyone: It is well documented that former president Richard Nixon wanted to link marijuana use and its negative effects to African Americans and hippies, who he perceived to be his …
Super Lemon Haze has collected more awards over the years than we’ve time to get into right now. Suffice to say, two of these were no less than two Cannabis Cup trophies in a row, back in 2008 and 2009. Having started out as something of an unknown, this incredible Sativa hybrid quickly gained traction […]
It was big news for California cannabis business owners when the California Secretary of State’s office announced that it would be accepting applications for cannabis-related trademarks under limited circumstances. Until January 1st, one of the biggest hurdles for California cannabis brand owners had been the inability to secure California state trademark registrations for their marks. But we are still receiving a lot of questions from clients regarding whether they are actually eligible for those registrations, particularly when they have not yet received their temporary or full license from the state, or even when they are not yet operating.
As we’ve discussed before, one of the key requirements for obtaining a California state trademark registration (or a federal trademark registration, for that matter) is that you must be making lawful use of the mark in commerce at the time of your application. For any state trademark application, this means you must be making lawful use of your mark in commerce within that state. This requirement has created a good deal of difficulty for those seeking to enter into cross-state brand licensing deals, but it’s also creating some confusion here in California, where it isn’t always clear what “legal use” of a mark entails.
The California Secretary of State’s office has indicated that …
For any marijuana business not fortunate enough to own its land outright, there are few documents more important than the lease. Not only is the lease the only transactional document reviewed by the Oregon Liquor Control Commission (OLCC) prior to licensure, but it sets fundamental operating parameters than can determine the success –and even life cycle — of the business. Problematic lease arrangements can sink a ship fast.
In Oregon, there are four main varieties of leasehold: the residential lease, the commercial lease, the ground lease and the agricultural lease. We steer most of our pot industry clients toward commercial and agricultural leases, depending on the circumstance. That said, we have had people walk in with just about everything.
Below is a brief summary on each type of lease, what to look for, and when to use them.
Do not use a residential lease for a commercial cannabis operation under any circumstances. Even if you think you can revise the lease form to suit your purposes, do not be tempted; and if your landlord insists on this form of lease, say no. We are currently aware of two pieces of landlord-tenant litigation in which the parties used a residential lease for a commercial cannabis grow: those leases were upside down on everything, including …
If your New Year’s resolution was to stop paying attention to the news you may have missed that last Thursday U.S. Attorney General Jeff Sessions formally rescinded the Cole Memo – which we covered here and here. By rescinding the Cole Memo, Sessions, whose outdated and prohibitionist stance on cannabis is well documented, has sown uncertainty in the states that have legalized cannabis use. This is especially true for the states that have legalized and are regulating adult-use cannabis businesses and individual rights.
To some extent, cannabis businesses are already feeling the effect of this new and uncertain landscape. But in following up on his antiquated stance on cannabis, did Sessions overplay his hand? Will this be a Pyrrhic victory for the prohibitionist crowd? With recent polls showing that 64% of Americans support legalizing cannabis (even 51% of Republicans support legalization) Sessions might have done cannabis proponents a favor by bringing the federal government’s stance into the national spotlight. So the next question everyone’s got to be asking themselves is “what do we do now?”
The most pressing thing that we can do is get Congress to extend the Rohrabacher-Blumenauer Amendment (“RBA”) and include adult-use cannabis into its provisions. We covered the RBA a couple of weeks ago but in case you missed it, here’s the Cliffs …
It can be challenging to talk to your doctor about medical cannabis. Even though medical marijuana is a valid treatment option, many doctors are uncomfortable authorizing it or don’t feel like they know enough about it to authorize it.
Among the myriad of marijuana strains available on the market nowadays, some of them stand out for certain traits which have been fixed during the breeding process and that will determine the main characteristics of each genetics. The most desirable and sought-after traits are normally fast flowering, certain size or flavour or very high yield.
In this article we’ll focus on those cannabis varieties that stand out for their abundant production of buds, without a doubt one of the most desirable traits for growers. Indeed, you may know people looking for different flavours, or certain growth pattern, or a specified bloom period…but all of them love their plants to produce abundant harvests!
Yields of some strains are considerably higher than others
Highly productive cannabis strains
Among our category of productive cannabis strains we can find genetics sharing some the aforementioned traits, but all of them offer excellent production of flowers, which is normally above 500g/m2 (if growing conditions are optimal). Let’s take a look now at some of the most interesting ones, especially if traits like easy cultivation, quality and a relatively short bloom period are also to be considered.
Lemon OG Candy by Philosopher Seeds
Lemon OG Candy is one of the latest additions to Philosopher Seeds catalogue of feminised seeds. She comes …
When it comes to ending federal prohibition, some public officials are do-ers, and other are talkers. Here in Oregon, we are lucky enough to have Congressman Earl Blumenauer, who is a relentless advocate for ending prohibition. Blumenauer helped found the Congressional Cannabis Caucus, and appended his name to the Rohrabacher-Blumenauer Amendment (RBA), which prohibits the U.S. Department of Justice (DOJ) from spending money to interfere with state medical cannabis laws. We are also fortunate to have the likes of Ron Wyden and Jeff Merkley in the Senate, who introduced a marijuana banking bill as far back as 2015, and Governor Kate Brown, who has always been stellar on cannabis.
Those four individuals are Democrats, of course, but there are plenty of vocal Republican advocates for ending prohibition as well. Dana Rohrabacher (of RBA) gets an A+ rating from NORML, and Corey Gardner, the Republican Senator from Colorado, was one of the most strident critics of Jeff Sessions’ recent move to rescind the Cole Memo, pledging to block DOJ nominees until Sessions relents. All of this makes sense, given the status of the plant in these individuals’ respective states, but also the fact that a majority of Republican voters now support marijuana legalization nationwide.
At this point, you would think that every politician in a cannabis-legal …
There’s a serious stigma when it comes to using marijuana for medical purposes. Society considers it an illegal drug, rather than a valuable health care option. It’s this stigma that prevents many people from seeking and using medical marijuana when it could really help them.
It’s 2018! That means your Oregon marijuana business will be subject to increased minimum wage requirements this summer. The new federal Tax Act has everyone considering money, so now is a great time to think about how the increase in state minimum wage will affect your business expenses.
In 2015 the Oregon legislature established a progressive series of annual minimum wage rate increases. The rate increases began on July 1, 2016 and continue through July 1, 2022. On July 1, 2023 the minimum wage rate will be indexed to inflation based on the consumer price index, which is a figure published by the United States Bureau of Labor Statistics.
The location of your Oregon cannabis business will dictate the amount of increase of the minimum wage for your non-exempt employees this July. (“Non-exempt employees” are employees who must be paid minimum wage and overtime, for any hours worked beyond 40 in a given week.)
Be honest – what’s the first thing that comes to mind when you hear the word ‘Rastafarianism’? Dreadlocks? Jamaica? Bob Marley with a gigantic blunt in his mouth? Unless you’re in the fractional minority with a more developed understanding of the religion, the answer will not doubt be…yes. And with good reason too, but there’s […]
The end of one year and the beginning of another presents a good opportunity to look ahead at the long-term goals of the marijuana legalization movement. In the near term (next year or two), nationwide legalization or even decriminalization of marijuana is unthinkable. The current Congress and President Trump have not shown any inclination toward effecting that type of change. At some point though, sooner or later, the United States will legalize marijuana nationwide — not just move it to Schedule 2 or 3 of the Controlled Substances Act, but fully deschedule it. It’s not too early to think about what nationwide legalization would look like and how it would affect cannabis businesses that are open today.
There are three main routes that legalization could take. First, there is total unregulated legalization — treat marijuana like apples. That option is so unrealistic that it’s not worth discussing. Next, there is the alcohol model, with a mixture of federal and state regulations. Products can be distributed and sold across state lines, and states can regulate however they choose, but they can’t show preference to local actors. Finally, we could build on the current cannabis legalization model. Every state creates its own market with its own licensing system and regulatory scheme. Product cannot move …
Medical cannabis therapy is gaining traction in North America as a legitimate medical treatment option. There are many misconceptions around medical cannabis, but people are starting to learn just how great an option it can be, especially when they had given up all hope.
Lester Black has a good article up at FiveThirtyEight about the Washington marijuana market. Washington’s mandatory data transparency presents a fantastic opportunity for the kind of market analysis that is challenging in other industries that don’t have access to that type of data. In this context, the data reflects what a lot of Washington marijuana producers already know: The market out there is incredibly tough. Even though Washington’s window for marijuana licensing was only open for a month in late 2013, there is still enough product cultivated and sold in Washington that wholesale prices continue to drop, over four years later. This makes it hard for small businesses to compete.
Washington’s legislative and regulatory systems try to prop up small, local businesses a few different ways. The mandate that all business owners reside in Washington is a big one, of course. But we also have consolidation limits. An individual cannot have in ownership interest in more than three licensed producers and/or three licensed processors. On the retail side, no one is allowed to own more than five retail stores.
Those anti-trust pot market provisions have worked to some extent in providing initial market entry to a lot of different people. Entering a market and surviving a market, however, are very different. When …
One of the most common questions our California cannabis attorneys get asked is “where can I start or expand my cannabis business?” It can be a tough question: as we often say on this blog, every one of California’s 58 counties and 482 incorporated cities can decide whether or not they’ll authorize commercial cannabis activities in their jurisdictions. This means that California’s local jurisdictions are constantly discussing whether to regulate, amend, or prohibit commercial cannabis activities. Jurisdictions that had previously authorized medical cannabis businesses to operate are now considering how to regulate adult-use cannabis activities. This leads me to the recent (and positive) developments in Santa Rosa.
As part of our California Cannabis Countdown series we covered the city of Santa Rosa back in May. Shortly after our post, Santa Rosa residents overwhelmingly voted in favor of Measure D, which was a ballot measure setting tax rates for cannabis businesses. Santa Rosa takes its cannabis policy seriously, as the city has held over twenty (20!) meetings to discuss cannabis policy over the last two years. Many of the meetings were held by the city’s Medical Cannabis Policy Subcommittee (“Committee”).
Since inception, the Committee has solicited feedback from the community and interested stakeholders and provided guidance to the City Council. To its credit, the City Council and Planning Commission …
On December 22, 2017, the Tax Cuts and Jobs Act (“The Act”) otherwise known as PL-115-97,
was signed into law. The Act is the most significant overhaul of the U.S. Tax Code since 1986 and is effective beginning in 2018. Accordingly, cannabis businesses need to understand now how the new tax law affects their business. Below are the most significant issues impacting a cannabis business, as well as, some ancillary cannabis business.
The Act did not repeal IRC 280E.
The number one tax issue in the cannabis business is the impact of IRC 280E. We have discussed how IRC 280E impacts the industry many times, including here, here, here, and here. Prior to the enactment of the new tax law, GOP political advocates such as Grover Norquist called for the repeal of IRC 280E, much to the delight of the cannabis industry. However, IRC 280E was not repealed. One prevailing reason for this was that a repeal did not fit into Congress’ budget: repeal would have been budgeted as a tax cut, which would have forced Congress to replace that lost revenue. So, IRC 280E lives on (at least for now).
One bright spot is that cannabis business will pay less federal income tax beginning in 2018. The decrease in …
Marijuana has been in the news much more often over the past year because of the soon-to-come legalization. Marijuana will be legal on July 1, 2018, if all goes according to the Government of Canada’s plan. But, while marijuana itself isn’t legal currently, it is legal for medical use.
Big Bud is the kind of strain that makes a heavy promise and more than delivers on it. Famed all over the world for producing spectacularly large, sticky and dense buds, Big Bud is also known for delivering a very big high. Its origins are said to date back to the mid-80s, when the genetics […]
Not to be defeatist, but there’s probably a pretty good chance you’ve already broken your new year’s resolutions. That is, unless you have made the kind of half-assed resolution that doesn’t really mean anything…cutting down on canned lima beans, for example. The way we see it though, there’s a far better approach to new year’s […]
Without a doubt, the USA have been a point of reference in the development of new and amazing cannabis strains ever since the decade of the 70’s, which normally take only a few years to become popular in Europe. Thus, and if we want to know which strains will be increasingly demanded in the near future in the Old Continent, we must definitely take a look at the current scene in the US.
Moreover, the legalisation in some States has led to a much more bearable situation for breeders and growers, who can now focus on developing new varieties without the worry of being caught by the Authorities. In this way, massive selections and large-scale breeding projects are being done today in the USA, which will doubtless led to a new generation of top grade marihuana genetics.
Cannabis dispensary in the USA
The first hybrids ever developed in the USA and exported into Europe were normally kept in Holland, where they were bred and crossed to develop both seed versions of the American clones and new hybrids. European growers should wait for a few years in order to grow these new and exciting genetics from the USA, which were actually being reproduced in Europe.
But today things have changed a lot. Communication between …
There are many reasons why medical marijuana may be a great treatment for you. Cannabis has successfully been used to help patients manage pain, as well as control seizures, reduce inflammation, and even help with treatment of muscle spasms arising from multiple sclerosis. The list goes on, but regardless of what you need marijuana to treat, the question becomes: How do I get started?
Beginning January 1, California employers with five or more employees will be prohibited from asking about an applicant’s conviction history and cannot consider an applicant’s criminal history until after a conditional job offer has been made. A conditional job offer is an offer made contingent on the completion of a background check. Only after the conditional job offer is made, can an employer inquire about conviction history.
This all holds true for cannabis businesses as well. Do not ask a potential employee about criminal history until after the conditional job offer has been made.
If criminal history turns up after the conditional job offer is made, the employer can rescind the job offer, but only after performing an individualized assessment. An individualized assessment requires the employer to consider:
the nature and gravity of the offense and conduct;
the time that has passed since the offense or conduct and completion of the sentence; and
the nature of the job held or sought.
If, after individualized assessment the employer decides the conviction history disqualifies the applicant from the position, the employer must provide written notice of its preliminary decision to withdraw the job offer.
And what is required in the “preliminary notice,” you may ask? That notice must name the disqualifying conviction or convictions, …