Dale Schafer Law News – 5/30/22

#cannabisindustry – “Several leading marijuana businesses and stakeholders are banding together to sue the federal government over what they believe to be unconstitutional policies impeding their operations, according to the CEO of one of the companies. And, he says, they’ve retained a prominent law firm led by an attorney who has been involved in numerous high-profile federal cases…..
Several leading marijuana businesses and stakeholders are banding together to sue the federal government over what they believe to be unconstitutional policies impeding their operations, according to the CEO of one of the companies. And, he says, they’ve retained a prominent law firm led by an attorney who has been involved in numerous high-profile federal cases.
One lawsuit will take aim at the federal ban on intrastate marijuana commerce and contest the constitutionality of the Controlled Substances Act (CSA) under a unique interpretation of the Commerce Clause of the Constitution. In part, the plaintiffs will make the case that prior court rulings on the federal government’s authority over intrastate commerce, particularly concerning fungibility, should not apply to marijuana companies in highly regulated state-legal markets…..
The second lawsuit that’s in the works will make similar arguments but focus on an Internal Revenue Service (IRS) code known as 280E, which precludes cannabis businesses from claiming federal tax deductions because, under the CSA, they are trafficking in a controlled substance.”

https://www.marijuanamoment.net/marijuana-companies-teaming-up-to-sue-federal-government-with-all-star-legal-firm-multi-state-operator-ceo-says/

Dale Schafer Law News – 5/27/22

#cannabispolitics – “This legislation will establish a carryforward cannabis tax credit that is 25% the amount of the following qualified business expenditures paid or incurred for in a taxable year and not to exceed $250,000: employee compensation — that is equal to or above 150% of minimum wage including benefits — for the employees of the business, safety-related equipment and services, and workforce development and safety training for employees. These credits will help relieve small businesses just getting by and guarantee a more robust legal market that provides better access and safety for consumers.
In the case where the credit allowed exceeds the net tax, the excess may be carried over to reduce the net tax in the following taxable year, and the seven succeeding years if necessary, until the credit is exhausted. This credit can be taken against applicable taxes until 2028. Additionally, the legislation disallows a business expense deduction or other tax credit for the same costs that generate the credit created by the bill.”

https://sd11.senate.ca.gov/news/20220526-senator-wiener%E2%80%99s-legislation-create-tax-credit-commercial-cannabis-retailers-passes

Dale Schafer Law News – 5/27/22

#cannabispolitics – “This legislation will establish a carryforward cannabis tax credit that is 25% the amount of the following qualified business expenditures paid or incurred for in a taxable year and not to exceed $250,000: employee compensation — that is equal to or above 150% of minimum wage including benefits — for the employees of the business, safety-related equipment and services, and workforce development and safety training for employees. These credits will help relieve small businesses just getting by and guarantee a more robust legal market that provides better access and safety for consumers.
In the case where the credit allowed exceeds the net tax, the excess may be carried over to reduce the net tax in the following taxable year, and the seven succeeding years if necessary, until the credit is exhausted. This credit can be taken against applicable taxes until 2028. Additionally, the legislation disallows a business expense deduction or other tax credit for the same costs that generate the credit created by the bill.”

https://sd11.senate.ca.gov/news/20220526-senator-wiener%E2%80%99s-legislation-create-tax-credit-commercial-cannabis-retailers-passes

Dale Schafer Law News – 5/26/22

#californiacannabis – “The Hermosa Beach City Council voted unanimously this week to proclaim it is officially opposed to the resident-led initiative on the Nov. 8 ballot that, if passed, would allow up to two commercial marijuana dispensaries in the city.
City officials said it was important to send a strong signal to its residents that it is not in favor or retail cannabis sales. And, unlike nearby cities where competing city-sponsored cannabis measures are being considered by councils, Hermosa Beach likely will not put a competing measure on the ballot.”

https://www.dailybreeze.com/2022/05/25/hermosa-beach-city-council-votes-to-oppose-cannabis-initiative-on-the-nov-8-ballot/

#hempproducts – “A three-judge panel of the United States Court of Appeals for the Ninth Circuit upheld the United States District Court for the Central District of California’s ruling in AK Futures LLC v. Boyd Street Distro, LLC, finding that the 2018 Agricultural Improvement Act (the “Farm Bill”) legalized delta-8 THC. Delta-8, one of the 100-plus cannabinoids produced in the cannabis plant, has recently garnered heightened interest and attention for its ability to deliver psychoactive effects similar to (but milder than) those delivered by delta-9 THC, and because it can be sold in several states outside of the regulated cannabis marketplace in retail outlets like CBD shops. While legal controversy has swirled around delta-8, the Ninth Circuit has now ruled that it is federally legal.”

https://www.jdsupra.com/legalnews/ninth-circuit-rules-delta-8-thc-is-legal-1780240/

#cannabisindustry – “On the surface, the fundamentals of the cannabis industry are relatively straightforward, which is one reason it appeals to both operators and investors. For example, participants at every stage of the cannabis business cycle – growing and harvesting, processing and packaging, shipping and distribution, and ultimately marketing and retailing – can readily apply well-established practices from their counterparts in more conventional product lines.
The major exception to this rule, of course, is the area of regulatory compliance, which is still shifting and likely will continue to do so for the foreseeable future. Outside of this obvious and significant exception, however, most other aspects of the industry are relatively predictable and manageable.”

https://cannabisindustryjournal.com/feature_article/cannabis-ma-take-care-of-the-due-diligence-essentials/

Dale Schafer Law News – 5/25/22

#cannabisindustry – “Ferrara alleges in its suit that Boca Raton, Florida-based Top Five Wholesale is using identical trademarks in its THC candy, Reuters reported.
Filed in West Palm Beach, Florida, the lawsuit also claims the marijuana company is selling counterfeit marijuana-infused Trolli gummy candies and Nerds Rope.
Ferrara is the distributor for Germany-based Trolli GmbH’s candies in the United States.
The suit is the latest among several cases filed by established candy companies against marijuana edibles producers across the U.S.”

https://mjbizdaily.com/nerds-candymaker-sues-cannabis-company-over-trademark-allegations/

Dale Schafer Law News – 5/25/22

#cannabisindustry – “Ferrara alleges in its suit that Boca Raton, Florida-based Top Five Wholesale is using identical trademarks in its THC candy, Reuters reported.
Filed in West Palm Beach, Florida, the lawsuit also claims the marijuana company is selling counterfeit marijuana-infused Trolli gummy candies and Nerds Rope.
Ferrara is the distributor for Germany-based Trolli GmbH’s candies in the United States.
The suit is the latest among several cases filed by established candy companies against marijuana edibles producers across the U.S.”

https://mjbizdaily.com/nerds-candymaker-sues-cannabis-company-over-trademark-allegations/

Dale Schafer Law News – 5/24/22

#cannabisindustry – “Cannabis tax revenue generated more than two billion dollars across legalized states in the last year alone and is expected to grow to nearly 12 billion dollars by 2030, exceeding tax revenues collected from the sale of alcohol, according to bond strategists at Barclays. For the states that do tax the sale of cannabis products, there have already been significant benefits that have helped further develop cities and smaller towns, making the streets safer, and increased funding for new municipal projects, local businesses, subsidies for low-income renters, improvements to public school systems, water and sewer line upgrades, and other significant infrastructure projects….
A study conducted in Illinois on the impacts of property values after the state made recreational cannabis legal showed that home prices actually went up. Because the tax revenues collected partially contributed to making streets safer, the demand for housing in certain areas began to outpace the available supply. The conclusion was that for every one million in additional tax revenue from marijuana sales, home values increased by almost $500. Even just the presence of dispensaries nearby positively correlated with an increase in home values as well. With each new dispensary that a city adds, property values increase by an additional $519. This is likely due to residents viewing dispensaries as premium commercial amenities, and those who partake in cannabis use enjoy having one nearby.”

https://www.archdaily.com/982339/how-cannabis-legalization-has-changed-cities-in-the-united-states

#californiacannabis – ““Many of these licensees made promises to the board to fix existing negative conditions on-site in exchange for their permits, and others are occupying valuable commercial space without producing value, while limiting the abilities of other potential applicants to come in and actually open their business.”
The supervisor said that nearly two dozen cannabis business permits have been authorized by the board since December 2019, but of those, “only two have actually opened.””

https://mynewsla.com/business/2022/05/23/process-for-revoking-cannabis-outlets-permits-on-boards-agenda/

californiacannabis – “In his plea agreement, Dayspring admitted paying Hill multiple bribes in cash and money orders totaling $32,000. But prosecutors report that the value of bribes was over $32,000. The sentencing recommendation disclosed that Dayspring is responsible for between $95,000 and $150,000 in bribes.
“His lofty ambitions drove him to bribe a SLO County supervisor with tens of thousands in cash to advance and protect his cannabis growing operations, offer to bribe a mayor for cannabis distribution permits, and conceal over $9 million in income on his tax returns,” according to prosecutors in their sentencing recommendation. “Defendant did this all with the intent to become the cannabis king of San Luis Obispo and Santa Barbara counties.”….
Federal agents confronted Dayspring after a multi-year investigation. Dayspring “accepted responsibility for his actions and assisted the government in its investigation,” prosecutors wrote.
“With these factors in mind, the government’s recommended sentence – 27 months in prison, followed by three years of supervised release – is sufficient, but not greater than necessary, to adequately punish and deter,” they said.”

https://calcoastnews.com/2022/05/prosecutors-recommend-cannabis-kingpin-spend-27-months-in-prison/

Dale Schafer Law News – 5/23/22

#californiacannabis – “The modifications will affect more than 2,500 existing marijuana businesses across L.A. and countless applicants and operators in the pipeline as well as expand the nation’s largest social equity program.
The biggest regulatory changes, according to industry experts and the DCR, include:
Mandating timelines for the DCR to process license applications and modifications.
Creating a pathway for applicants to refile applications deemed “abandoned” after Jan. 1, 2022.
Establishing a new window for social equity verification. The window will open May 26 for 60 days, and applicants will have new criteria to qualify for the designation.”

https://mjbizdaily.com/los-angeles-revamps-cannabis-rules-to-speed-permit-approvals-boost-social-equity/

#californiacannabis – “Melahat Rafiei, a longtime leader in Orange County’s Democratic Party, resigned Sunday night from her position as secretary of the California Democratic Party and state representative to the Democratic National Committee.
A host of Orange County lawmakers and party leaders increasingly called for her resignation this week after news came out that she was arrested by the FBI in 2019….
Rafiei’s resignation also came after multiple members of the Democratic party called on her to resign publicly, while multiple sources confirmed over a dozen other lawmakers privately reached out to Rafiei and asked her to step aside.”

https://voiceofoc.org/2022/05/a-top-california-democratic-party-official-resigns-after-fbi-arrest-becomes-public/

#hemp – “A panel of the U.S. Court of Appeals for the Ninth Circuit wrote in an opinion published Thursday that products containing delta-8 THC are generally legal because federal law defines hemp as “any part of” the cannabis plant, including “all derivatives, extracts, [and] cannabinoids,” that contains less than 0.3 percent delta-9 THC by weight.
The law, the court said in the 3-0 ruling, “is silent with regard to delta-8 THC.”….
The Ninth Circuit panel, for its part, noted that although delta-8 THC has “psychoactive and intoxicating effects,” it falls within federal law’s definition of hemp and is therefore legal.”

https://www.marijuanamoment.net/delta-8-thc-products-are-federally-legal-just-like-hemp-appeals-court-rules/

Dale Schafer Law News – 5/23/22

#californiacannabis – “The modifications will affect more than 2,500 existing marijuana businesses across L.A. and countless applicants and operators in the pipeline as well as expand the nation’s largest social equity program.
The biggest regulatory changes, according to industry experts and the DCR, include:
Mandating timelines for the DCR to process license applications and modifications.
Creating a pathway for applicants to refile applications deemed “abandoned” after Jan. 1, 2022.
Establishing a new window for social equity verification. The window will open May 26 for 60 days, and applicants will have new criteria to qualify for the designation.”

https://mjbizdaily.com/los-angeles-revamps-cannabis-rules-to-speed-permit-approvals-boost-social-equity/

#californiacannabis – “Melahat Rafiei, a longtime leader in Orange County’s Democratic Party, resigned Sunday night from her position as secretary of the California Democratic Party and state representative to the Democratic National Committee.
A host of Orange County lawmakers and party leaders increasingly called for her resignation this week after news came out that she was arrested by the FBI in 2019….
Rafiei’s resignation also came after multiple members of the Democratic party called on her to resign publicly, while multiple sources confirmed over a dozen other lawmakers privately reached out to Rafiei and asked her to step aside.”

https://voiceofoc.org/2022/05/a-top-california-democratic-party-official-resigns-after-fbi-arrest-becomes-public/

#hemp – “A panel of the U.S. Court of Appeals for the Ninth Circuit wrote in an opinion published Thursday that products containing delta-8 THC are generally legal because federal law defines hemp as “any part of” the cannabis plant, including “all derivatives, extracts, [and] cannabinoids,” that contains less than 0.3 percent delta-9 THC by weight.
The law, the court said in the 3-0 ruling, “is silent with regard to delta-8 THC.”….
The Ninth Circuit panel, for its part, noted that although delta-8 THC has “psychoactive and intoxicating effects,” it falls within federal law’s definition of hemp and is therefore legal.”

https://www.marijuanamoment.net/delta-8-thc-products-are-federally-legal-just-like-hemp-appeals-court-rules/

Dale Schafer Law News – 5/20/22

#californiacannabis – “Longtime Democratic leader and cannabis consultant Melahat Rafiei on Thursday confirmed she is the FBI’s prime cooperating witness in a corruption investigation that has focused on Anaheim Mayor Harry Sidhu, among others, and led to federal charges against Anaheim Chamber of Commerce CEO Todd Ament…..
Rafiei, who is a member of the Democratic National Committee and involved in campaigns for a number of prominent candidates, told the Register she’s been cooperating with the FBI in an investigation focused on corruption in Anaheim since 2019. She was arrested then on charges of “theft or bribery” involving federal funds related to a cannabis scheme — allegations she denies and that subsequently have been dismissed without prejudice, which means they could be filed again later….
As a cooperating witness Rafiei used recording devices from the FBI to tape evidence that is now key to the charges brought against Ament. And Ament’s eventual cooperation has led to evidence that the FBI says indicates Sidhu shared confidential information with Angels Baseball, during a time when the city was negotiating the stadium deal, in the hope that he would receive campaign contributions in return. Court records also allege that Sidhu concealed and possibly destroyed evidence, tampered with a witness and committed fraud to avoid paying taxes on a helicopter he purchased….
The affidavit also links key events in Anaheim to the cannabis industry.
Documents lay out a plan where the Chamber, under Ament, had created a “cannabis task force” to explore allowing cannabis businesses to come to Anaheim. But federal authorities allege in court documents that the task force was just a way for Ament, with help from an unnamed political consultant, to get money from cannabis businesses under the false pretense of using the funds to advocate for the industry. Instead, the investigation says the political consultant helped Ament “defraud” a cannabis company and “embezzle” those funds for his personal use.”

https://www.ocregister.com/2022/05/19/democratic-leader-cannabis-consultant-melahat-rafiei-key-to-fbis-anaheim-corruption-investigation/?__vfz=medium%3Dstandalone_content_recirculation_with_ads