Dale Schafer Law News – 3/30/22

#cannabisindustry – Contracts – “A recent decision from the United States District Court for the District of Colorado underscores the problem.2 There, the parties formed a cannabis business pursuant to Colorado state law, which permits the legal sale of cannabis for both medicinal and adult-use purposes. But, because the federal Controlled Substances Act still prohibits such sales as a matter of federal law, the court refused to enforce the parties’ contracts under Colorado state law. This has happened in other states as well, regardless of whether the parties’ contracts divided equity interests in their cannabis business (the Polk case) or sold a cannabis distribution business (the Left Coast case).3 As the Sensoria court noted, “the Court may not vindicate equity in or award profits from a business that grows, processes, and sells marijuana” and “[r]elief may not be in a form that endorses violating the [federal Controlled Substances Act].”4….
Importantly, however, there is a potential way out of this mess through a common commercial term—arbitration. For example, in Williams v. Eaze Solutions, Inc., the United States District Court for the Northern District of California rejected an illegality challenge to a contract asserted by a California resident who downloaded a cannabis mobile application created by Eaze Solutions.5 The District Court’s reasoning was elegant in its simplicity: the parties’ contract expressly provided for arbitration of the parties’ disputes and, under the Federal Arbitration Act (FAA) and binding Supreme Court precedent, any issues of illegality were to be determined by the arbitrators, not the federal courts.6″

https://www.natlawreview.com/article/weeds-why-arbitration-may-be-key-to-preserving-enforcement-cannabis-ma-and-vc

Dale Schafer Law News – 3/24/22

https://www.oakdaleleader.com/news/cdtfa-continues-its-fight-against-illegal-cannabis-sales/

This is exactly why we have partnered with Piersante and Associates. Many jurisdictions have either passed the Authority to the state, requiring the operator to supply all documentation equivalent to the EIR, or produced inadequate EIR documents, putting some of the documents back onto the operator. Please get on top of this if you have a Provisional License!

#californiacannabis – “Recent legislation is now requiring that provisional license applications will only be issued until June 30, 2022, and after that a holder of a provisional license must show that efforts are being made to comply with CEQA but anyone seeking to obtain a new license beyond that date now must show full CEQA compliance before the license can be issued….

Under CEQA the governmental entity which is involved cannot grant the necessary permit without a required environmental-impact report (EIR)…..

If CEQA compliance is required, you should add the possible cost of compliance in your business plans and make sure, if you need to deal with CEQA, that you have appropriate consultants and counsel on board.”

https://www.jdsupra.com/legalnews/what-the-california-environmental-4367945/

Announcement

The Law Office of Dale Schafer is pleased to announce that it has partnered with Mark A. Piersante, of Piersante & Associates, to bring an additional resource for CEQA to the California cannabis industry.

Mark A. Piersante, Principal of Piersante & Associates LLC., has spent over 20 years as a highly successful environmental compliance manager and permitting consultant. Prior to that, he worked for Chevron for 21 years [as a Process Engineer (5 yrs); Environmental & Safety Manager (9 years); and executive staff Senior Environmental Specialist (7)].

Mark is an expert at managing projects requiring discretionary government agency approval and environmental analysis by government agencies, including environmental impact reports to comply with the California Environmental Quality Act (CEQA), procurement of conditional land use permits, air permits, wastewater discharge permits, dredge and fill permits, water quality certifications, negotiations with federal, state and local government agencies, and management of compliance with project mitigation measures implementation. Now, he is bringing his knowledge and expertise to the California cannabis industry. In collaboration with Attorney Dale Schafer, Mark is now available to assist operators in successfully transitioning their Provisional State Licenses over to Annual State Licenses. This includes complete management of the government agency and public approval processes.

To schedule a consultation, with Mr. Schafer and Mr. Piersante, please email daleschaferlaw@gmail.com or call for an appointment at (530) 320-4191.