Dale Schafer Law News – 4/29/22

#cannabispolitics – “The original inclusion of cannabis in the Single Convention was a historical error based on paternalism, colonialism and racism masquerading as science. Now, decades later, a growing number of countries are recognizing cannabis prohibition as a costly failure and shifting national policies toward legal regulation of Non-Medical (i.e., “recreational”) cannabis.
With two countries having already formally enacted legal regulation of Non-Medical cannabis domestically and several other countries in process, the question of how such policies relate to obligations under the Single Convention and other UN drug control treaties is a genuine one….
Because the Convention’s purpose and overriding goals are express and clear, Riboulet-Zemouli’s thesis is not only mistaken, but dangerous. At a time when international cooperation and demonstrating respect for international obligations are paramount, proponents of cannabis regulation should explore strategies that would allow cannabis reform countries to realign their new laws with their legal obligations, and with the understanding that cannabis regulation will create a situation of non-compliance with the Single Convention.”


#cannabisindustry – Insurance – ““So we know how tough it is outside of the cannabis space,” he said. “And then, D&O inside the cannabis space is coming into an even tougher segment. And it has to do with the amount of money that’s flowing in the space from an investor point of view, the M&A transactions, the other kinds of fundraising, companies trying to go public. So, there’s really a lot of activity right now in the cannabis space from a funding standpoint. And whether there’s funding activity, there’s definitely going to be exposure and potential losses that D&O can help protect against.”
Lawsuits, and claims as a result of those actions, aren’t making the space any easier…
Some good news for insureds: Zerones thinks D&O won’t always be so difficult for cannabis.
“I think the wonderful thing that’s happening in the management liability space is that more carriers are coming in,” he said. “So, there are going to be more solutions available today obviously than there were two years ago. And so, you’re going to see through competition what customers want and what is really necessary and what is going to support those customers as they grow and prevent them from having large losses. So I think the competition’s really going to help. And that is going to really dictate what’s going to survive and what’s not.””


Dale Schafer Law News – 4/28/22

#cannabispolitics – “Congressional leaders and members appointed to a bicameral conference committee are facing increased pressure to include marijuana banking reform in a large-scale manufacturing and innovation bill, with two key lawmakers sending a letter on Wednesday urging its inclusion in the final package that’s set to be discussed by bicameral negotiators.
Rep. Earl Blumenauer (D-OR), a longstanding champion for cannabis reform who was appointed to serve as a conferee on the America COMPETES Act, sent the letter to House and Senate leadership and conferees alongside Rep. Ed Perlmutter (D-CO), the lead sponsor of the marijuana banking legislation that’s cleared his chamber in some form six times now.
The congressmen said that “it is imperative that the final conference committee report of the America COMPETES Act include the Secure and Fair Enforcement (SAFE) Banking Act in its entirety.”
“As all levels of government continue to advance comprehensive cannabis reforms, addressing the irrational, unfair, and unsafe denial of banking services to state-legal cannabis businesses must be a top priority,” they wrote. “The SAFE Banking Act is crucial for small operators, especially those owned and staffed by people of color and those who have already been punished during the War on Drugs.””


#cannabisindustry – “The analysis of self-reported driving under the influence of cannabis (DUIC) found that people are less likely to drive within three hours of consuming marijuana in states that have legalized for medical or recreational use compared to non-legal states.
Researchers said that while there does appear to be an exception with respect to medical cannabis patients who report frequent use—whose behavior did not differ significantly from frequent users living in states without legal marijuana—the broader takeaway is that prohibition states are generally more likely to have impaired drivers on the roads.”


DaleSchaferLaw Chats – Episode 7 – Tectonic LLP

In this episode of DaleSchaferLaw Chats, we speak with Hannah Stitt and Paige Pembrook of Tectonic LLP.

Discussion Points:

California Cannabis Provisional Licenses

California Environmental Quality Act (CEQA)

Cannabis Brand Building And The Role Of Intellectual Property

Contract Disputes Within The Cannabis Industry

Cryptocurrency And It’s Role In The Cannabis Industry

Dale Schafer Law News – 4/26/22

#californiacannabis – “Senate Bill 1426 by Sen. Anna Caballero (D-Salinas) creates tougher criminal penalties for illegal cannabis-related environmental crimes. It was amended in the Senate Public Safety Committee to allow prosecutors to charge illegal cannabis cultivators growing over 50 marijuana plants with either a felony or misdemeanor for stealing water, polluting groundwater, or damaging the environment with hazardous chemicals and pesticides.
SB 1426 passed the Public Safety Committee on a 4-0 vote and will now move on to the Natural Resources Committee….
AB 2728 by Assemblyman Thurston “Smitty” Smith (R-Apple Valley) creates a graduated civil penalty structure in state law. It prescribes higher fines based on the number of cannabis plants that are illegally cultivated. Greater enforcement against illegal cannabis farming decreases the available cannabis supply in the state, helping to support the legal cannabis market.
AB 2728 passed the Assembly Business and Professions Committee on a 15-0 vote and will next be heard in the Judiciary Committee.”

Dale Schafer Law News – 4/25/22

#californiacannabis – “A proposal by Gov. Gavin Newsom would pay farmers to not plant crops, known as fallowing, this year as drought conditions worsen….
The area targeted is near two critical watersheds that emanate from the Sierra Nevada mountain range in Northern California.
The fallowing proposal aims to cut production of water-intensive crops such as rice, alfalfa and nuts.
Some advocates are upset cannabis hasn’t been placed on the list.
“It’s an unfortunate double standard that some farmers are deemed worthy of receiving this kind of support, but cannabis farmers, who are still fighting to have cultivating cannabis plants recognized as agriculture, are in a position where they have no ability to pause their operations and their tax burden without endangering their ability to remain in the licensed market,” said Michael Katz, executive director of the Mendocino Cannabis Alliance.”


Opinions? Let’s not point fingers but add thoughtful discussion around this topic……
#cannabisindustry – “Family farms argue that culture, legacy, environmental stewardship, and decades of sacrifice have earned them a lasting foothold in the industry. Corporate operators argue that scale, efficiency, and improved operations lead to economic growth and more affordable products. Ultimately it is consumers and the marketplace itself who will decide the fate of both groups.”


Dale Schafer Law News – 4/22/22

#cannabisindustry – ““They’re afraid of compliance in a rugged regulatory environment. They’re afraid of taxes, but aren’t we all? They’re afraid of California employment laws, and they’re afraid of competition. So you look at 800 cultivators, over 1000 retailers, and anywhere from 1300 to as many as 2000 brands out there. And sure it is tough,” he said.
Nevertheless, with 40 million people in the state, and some 20 million between 20 and 50 years, this is where you need to be, this is the  future of cannabis, he said.”


#californiacannabis – “Some cities are under pressure by citizens attempting local ballot initiatives to allow cannabusiness. In Huntington Beach, two residents have been cleared to get signatures to try to force the city to allow marijuana businesses. Voice of OC notes that the two citizens don’t actually appear to be gathering signatures, but nevertheless, Huntington Beach’s government is now going to go ahead and ask voters in a June election whether they want to tax potential marijuana businesses in advance of potentially allowing them to open shop there.
Huntington Beach City Council member Erik Peterson bluntly noted that “The handwriting is on the wall that cannabis is coming, legalization is coming, and that the best thing that the city council can do is get out in front of it.”….
Many cities across the state are mulling over similar changes—Anaheim, Riverside, Santee, and more than a dozen others, if media coverage from across the state is to be believed. Yes, on some level, they’re motivated by a desire for more revenue, but in some cases these leaders are also being responsive to the citizens and finally setting aside marijuana panics. And it has also helped that legal marijuana for the past five years has not caused the nightmares fearmongers’ insisted. If anything, the various problems California has been having with corruption and black markets for marijuana are the result of how restrictive the government has been in the first place.”


#cannabisindustry – “Struggling to enact policy that addresses this dichotomy, the Federal Government and its various agencies have played a game of ping-pong, deferring regulatory initiatives while the under-regulated hemp market flourishes. While the USDA was given primary regulatory authority over hemp, it only concerns itself with the plant and not the derivative products extracted from the plant. The FDA has repeatedly punted on offering specific regulatory pathways for cannabis consumption while making broad statements of its view that infusing CBD and THC into food and beverages violate the Food Drug and Cosmetic Act. Yet, the FDA has taken no material steps to enforce this view and consumable cannabis products with intoxicating hemp-derived cannabinoids are aggressively sold throughout the country.
Unfortunately, intoxicating hemp-derived cannabinoids are only the first point on the spear’s tip. The second point is the continued and unfettered illicit market for cannabis products….
The success of the U.S. cannabis industry demands greater regulatory normalization and consistent application of law because without it, the intoxicating hemp-derived cannabinoid market and illicit marijuana market that comprise the tip of the spear is destined to pierce through the legal industry. Lawmakers must learn and understand the Cannabis Sativa L. plant, its efficacies and its form factors. They also need to incorporate their learnings into more thoughtful and pragmatic regulations. How can we continue to allow Delta-9 THC gummies to be sold in unregulated retail stores simply because the cannabinoid was derived from hemp? Not only does this undercut legitimate licensed businesses but also exposes consumers to dangerous untested products.”


This is why it is SO important to know all of the provisions in the local ordinance for the jurisdiction you are applying for….
#californiacannabis – “Fresno’s complicated cannabis process has a key provision in Article 9, Section 3318 of the city’s municipal code, stating the following:
“At the time of filing, no Applicant or Owner shall initiate, engage in, or continue any communication to or with any elected official or Planning Commissioner, and no elected official or Planning Commissioner shall initiate, engage in, or continue any communication to or with any Applicant or Owner, concerning or touching upon any matter which is the subject of this Article. The application shall be rejected if prohibited communications take place.””


Dale Schafer Law News – 4/20/22

Just because it has become a tradition to tell this story on 4/20….
#californiacannabis – “One day, the Waldos met at 4:20 p.m. for a “safari” and smoked all the Panama Red and Acapulco Gold — marijuana strains popular at the time for their potency and energizing qualities — they could get their hands on. The mission of this particular safari was to find an abandoned patch of weed. The meeting time stuck, as did the weed choice and their constant soundtrack of New Riders of the Purple Sage, Grateful Dead and Santana. Eventually, “420” became a secret code for the Waldos whenever they wanted to smoke.”


#californiacannabis – ““Smoking cannabis was a coping mechanism”, said Culerton. “People were pretty stressed out and smoking weed made them feel better.”
In a classic supply-and-demand cycle, Koy said farmers grew more marijuana to meet increased demand, but ended up flooding the marketplace.
The piece per pound farmers receive for their cannabis for the week ending April 15 is down nearly 50 percent from the end of October 2020. That’s when rising prices hit their summit right before the fall harvest increased cannabis supply, shows data from Cannabis Benchmarks….
Cannabis Benchmarks said the price received by farmers for their cannabis not only hit the lowest levels since pot became legal in January 2018, but the lowest since 2015 when the firm began analyzing the pricing of the medical marijuana marketplace. The average $806 a pound California farmers received last week was down from $1,581 a pound at the end of October 2020. Outdoor growers, which predominate in places like Mendocino County and Humboldt County, known as the Emerald Triangle, did worse.”


Dale Schafer Law News – 4/18/22

#cannabisindustry – “To conduct the poll, 1,100 Americans aged 21 and older were questioned about their thoughts on cannabis, consumption habits and legalization. Nearly two-thirds of respondents stated that they believe cannabis has an overall positive impact on society, while 61.5% felt cannabis plays an important role in supporting U.S. economic growth. 62.6% also said “The cannabis industry is important for the local economy.”
67.6% of surveyed people also said, “Federal banking restrictions should be lifted so that American cannabis companies can have equal access to banking services.”….
The survey also found that three in four Americans feel that the Department of Veterans Affairs should update its rules to allow veterans access to medical cannabis with a doctor’s prescription.”


#cannabisindustry – “On multiple occasions in 2021, the San Bernardino sheriff’s department specifically and deliberately targeted Empyreal Logistics’ armored vehicles, knowing that the company often transported cash from licensed marijuana dispensaries throughout the region. Without charging any entity for criminal wrongdoing — including the drivers themselves, who didn’t even receive traffic violations — the deputies confiscated over $1 million from the back of the trucks over the course of multiple traffic stops using a procedure known as “civil asset forfeiture.”
Because California law specifically protects the proceeds of legal marijuana companies, the deputies did what police forces around the country have done when faced with similar restrictions on seizing people’s personal property: They turned the loot over to the federal government, hoping to keep up to 80 percent of the money through the Justice Department’s “equitable sharing” forfeiture program….
For most people, the process of defending one’s property is further frustrated by the fact that, unlike criminal proceedings, victims of civil asset forfeiture are not guaranteed legal representation nor the presumption of innocence — leaving many financially strained individuals with little recourse against a police practice that is specifically designed to circumvent the due-process protections guaranteed by the Constitution.
This quintessentially un-American policing practice is indicative of the way the “war on drugs” has undermined civil liberties and due process in the name of “getting tough” on crime. After all, words are powerful — and, as the saying goes, all’s fair in love and war. Just as the “war on terror” ostensibly justified the warrantless surveillance of American citizens and outright torture of suspected terrorists, so too has the “war on drugs” been used to give law enforcement the tools necessary to circumvent and ignore many of the constitutional protections otherwise guaranteed to individuals.”


Dale Schafer Law News – 4/14/22

#californiacannabis – “The U.S. Department of Justice said Wednesday it will return $1.1 million in licensed cannabis proceeds to a Pennsylvania armored car company whose vehicles were targeted by San Bernardino County sheriff’s deputies during a pair of roadside seizures last year.
As a result of the settlement, Empyreal Logistics has agreed to drop its federal lawsuit against the Department of Justice, the Federal Bureau of Investigation and the Drug Enforcement Administration alleging the confiscation of cash from its vehicles on Nov. 16 and Dec. 9 were illegal.”


#cannabispolitics – “Nearly a century ago, the federal government made a similar decision when it repealed the federal prohibition of alcohol. Much like today, politicians recognized that prohibition was a politically unpopular policy that was running afoul of a growing number of state laws.
Their solution? Respect the 10th Amendment of the U.S. Constitution and empower states — not the federal government — to be the primary arbiters of alcohol policy.
This path made sense in 1933. It makes equal sense today.”


Dale Schafer Law News – 4/13/22

This is EXACTLY why we partnered with a 30-year CEQA specialist and are offering services to help transition these licenses.
#californiacannabis – “In an attempt to transition to an annual licensure program, April 1st marked the beginning of the end for provisional cannabis licensure.  It also ushered in significant changes to renewal process for previously granted provisional licenses.  These modifications now require applicants seeking state cannabis licenses to comply with the California Environmental Quality Act (Pub. Res. Code §§ 21000 et seq.) (CEQA), a complex statewide policy of environmental protection fraught with potential traps for those unversed in the law.  This requirement alone carries the potential to create a much higher barrier to entrance into the cannabis market.”


#californiacannabis – “While CEQA compliance was always required in order for cannabis operators to obtain an annual license, the provisional license program allowed applicants to run operations while local governments and operators kicked the CEQA can down the road.  This oftentimes permitted operators to open their businesses without having to undergo confusing, pricey and time-consuming CEQA review.  With the sunsetting of the provisional license program, this luxury is eliminated.  There is no question that CEQA compliance will create much higher barriers of entrance into the cannabis market.  The Cannabis Trailer Bill also puts substantial pressure on local agencies to perform CEQA review and adopt/certify a CEQA-compliant environmental document in conjunction with its local cannabis ordinance.”