Dale Schafer Law News – 7/28/22

#californiacannabis – Sacramento County – “UPDATE: Sacramento County voters will see a cannabis tax measure on the November ballot after all, because officials on Tuesday approved a different proposal.

Two weeks after rejecting a general cannabis tax measure, the Board of Supervisors decided to ask voters to consider a special cannabis tax funding county homeless services….

The last proposal required at least a 4-1 vote and would have sent revenues to the general fund. The measure slated for the November election designates cannabis tax revenues for homeless services, including in the American River Parkway.”

https://www.capradio.org/articles/2022/07/27/sacramento-county-cannabis-tax-proposal-fails-heres-what-board-vote-means-for-dispensaries/

Dale Schafer Law News – 7/27/22

#californiacannabis – “Besides Caliva — Jay-Z is its parent company’s chief visionary officer — at least four more of the city’s 58 cannabis delivery services have closed operations in the last several months. A fifth is restructuring and ending general cannabis deliveries.

More Sacramento companies are expected to shut down because consumer demand for cannabis continues to drop, in part because of inflation eating away discretionary dollars. At least several hundred cannabis jobs have already been lost.

Caliva was advertising discounts of as much as 70% last week on marijuana web sites. Its own site Sunday night said cannabis delivery was no longer available in the Sacramento area.”

https://www.aol.com/news/closure-jay-z-affiliated-sacramento-182804060.html

Dale Schafer Law News – 7/25/22

#cannabisindustry – “First off, any halfway decent cannabis contract will have an amendments provision. These clauses only permit amendment or modification (1) in a written form (2) signed by both parties. Sometimes they’ll require only the signature of the affected party. But the bottom line is that it must be a signed, written document to be valid.

There can of course be exceptions to this rule. It’s common in litigation to see arguments made that a course of conduct or action after an oral amendment evidences an amendment. The law in many jurisdictions allows these kinds of arguments, though the party making the claim bears the burden of proving it. So even if it’s possible to argue that parties amended a contract, it’s must easier (and saves lots of time/money) to just do it in writing. Handshake deals are almost always bad and can be lead to some of the biggest mistakes out there.

Parties who go the written route usually do one of two things. If they want to amend only a few cannabis contract provisions, they’ll just prepare a short amendment agreement. The amendment lists the provisions that are amended or deleted, and contains the replacement language. The amendment also usually contains boilerplate incorporating defined terms from the original cannabis contract. They also almost always explain that they only modify the provisions at issue and nothing else.”

https://harrisbricken.com/cannalawblog/how-to-amend-cannabis-contracts/

#cannabisindustry – Scam – “In recent weeks, several European news media outlets reported an alleged scam involving Juicy Fields, a cannabis crowdfunding platform. According to the journalism investigations, the company allegedly scammed its investors for hundreds of millions of dollars.

Established in 2020, JuicyFields offered a service where investors or, as the company called them, e-growers, could participate in the cultivation, harvesting, and sale of cannabis plants promising monthly returns between 6% and 14%…..

However, JuicyFields suddenly stopped its operations in mid-July. It froze cash withdrawals, removed their profiles from social media networks, and disappeared without a trace. Therefore, its users could not log in to their accounts and withdraw money.

According to several publications that covered the story, the alleged scam was based on a Ponzi Scheme.”

https://www.forbes.com/sites/dariosabaghi/2022/07/25/juicyfields-may-be-the-biggest-scam-in-the-cannabis-industry/?sh=71cd08a06293

Dale Schafer Law News – 7/25/22

#cannabisindustry – “First off, any halfway decent cannabis contract will have an amendments provision. These clauses only permit amendment or modification (1) in a written form (2) signed by both parties. Sometimes they’ll require only the signature of the affected party. But the bottom line is that it must be a signed, written document to be valid.

There can of course be exceptions to this rule. It’s common in litigation to see arguments made that a course of conduct or action after an oral amendment evidences an amendment. The law in many jurisdictions allows these kinds of arguments, though the party making the claim bears the burden of proving it. So even if it’s possible to argue that parties amended a contract, it’s must easier (and saves lots of time/money) to just do it in writing. Handshake deals are almost always bad and can be lead to some of the biggest mistakes out there.

Parties who go the written route usually do one of two things. If they want to amend only a few cannabis contract provisions, they’ll just prepare a short amendment agreement. The amendment lists the provisions that are amended or deleted, and contains the replacement language. The amendment also usually contains boilerplate incorporating defined terms from the original cannabis contract. They also almost always explain that they only modify the provisions at issue and nothing else.”

https://harrisbricken.com/cannalawblog/how-to-amend-cannabis-contracts/

#cannabisindustry – Scam – “In recent weeks, several European news media outlets reported an alleged scam involving Juicy Fields, a cannabis crowdfunding platform. According to the journalism investigations, the company allegedly scammed its investors for hundreds of millions of dollars.

Established in 2020, JuicyFields offered a service where investors or, as the company called them, e-growers, could participate in the cultivation, harvesting, and sale of cannabis plants promising monthly returns between 6% and 14%…..

However, JuicyFields suddenly stopped its operations in mid-July. It froze cash withdrawals, removed their profiles from social media networks, and disappeared without a trace. Therefore, its users could not log in to their accounts and withdraw money.

According to several publications that covered the story, the alleged scam was based on a Ponzi Scheme.”

https://www.forbes.com/sites/dariosabaghi/2022/07/25/juicyfields-may-be-the-biggest-scam-in-the-cannabis-industry/?sh=71cd08a06293

Dale Schafer Law News – 7/22/22

#cannabispolitics – “More specifically, the bill aims to implement an excise tax on cannabis products, starting at 5% for small and mid-sized producers and gradually increasing to a maximum rate of 12.5% after five years from enactment. For larger cannabis businesses, the excise tax would begin at 10% and gradually increase to a maximum rate of 25%.”

https://www.cannabisbusinesstimes.com/article/cannabis-adminstration-opportunity-act-filed-congress/

Courtesy of MjBiz Daily

#californiacannabis – “Agricultural workers are generally exempt from overtime requirements under federal labor law.

However, the marijuana industry operates out of compliance with federal law, leaving employment regulations to state authorities. The Riverview case was brought and settled in California state court.”

https://mjbizdaily.com/ca-cannabis-grower-agrees-to-825k-class-action-wage-settlement/

Dale Schafer Law News – 7/22/22

#cannabispolitics – “More specifically, the bill aims to implement an excise tax on cannabis products, starting at 5% for small and mid-sized producers and gradually increasing to a maximum rate of 12.5% after five years from enactment. For larger cannabis businesses, the excise tax would begin at 10% and gradually increase to a maximum rate of 25%.”

https://www.cannabisbusinesstimes.com/article/cannabis-adminstration-opportunity-act-filed-congress/

Courtesy of MjBiz Daily

#californiacannabis – “Agricultural workers are generally exempt from overtime requirements under federal labor law.

However, the marijuana industry operates out of compliance with federal law, leaving employment regulations to state authorities. The Riverview case was brought and settled in California state court.”

https://mjbizdaily.com/ca-cannabis-grower-agrees-to-825k-class-action-wage-settlement/

Dale Schafer Law News – WFW

#californiacannabis – “The Weed for Warriors Project (“WFW”), a Veterans Advocacy Group located in California, today announced the debut of a billboard and social media campaign challenging California politicians who are denying medical patients legal access to cannabis….

“Over and over we’ve stated that what’s critically needed is more retail access and reduced tax and regulatory burdens. Despite our best efforts, politicians like State Senator Melissa Hurtado (D-14) continue taking positions that undermine the development of a functional legal cannabis industry. She represents an obstruction to rational legislation which could alleviate some of the pressure felt in our community and her actions have contributed to the destabilization of California’s already floundering cannabis industry,” said Weed For Warriors Executive Director, Sean Kiernan. “Casting votes which directly harm veterans, their families, neighbors, and the considerable agricultural interests she represents, is indefensible.”……

“The history of cannabis industry advocacy has been to treat politicians with kid gloves. Looks to me like veterans have taken those gloves off. This could be the bell that wakes the industry up from being a political victim,” said Jason Beck, the longest continuous retail operator of cannabis in the United States.

https://www.prnewswire.com/news-releases/veterans-advocacy-group-weed-for-warriors-launches-ad-campaign-holding-politicians-accountable-for-cannabis-industry-struggles-301591315.html

Dale Schafer Law News – 7/21/22

#californiacannabis – “The Huntington Beach City Council has asked voters to approve a general tax on cannabis sales in the city, but it stopped short of pushing through another ballot measure asking if the city should allow and regulate retail and nonretail cannabis businesses….

A simple majority of voters would need to approve the cannabis tax, which would be up to 1% for nonretailers and up to 6% for retailers. A majority of voters — 64.58% — voted to approve a special tax measure, Measure A, on last month’s primary ballot. But that measure required two-thirds voter support because it was a special tax, so it narrowly failed.

“We’re confident that the exact same ballot measure with a 50% threshold will pass, since 65% of the people voted for it in June,” Councilman Dan Kalmick said. “We’re going to continue to do outreach, and I suspect that we can move through this by the end of the year and have an ordinance done.”

https://www.latimes.com/socal/daily-pilot/news/story/2022-07-20/huntington-beach-still-weeding-out-details-puts-cannabis-tax-on-november-ballot

Courtesy of MjBiz Daily

#cannabisindustry – “As a possible recession looms in the United States, landlords overcharging cannabis companies for rent might be open to negotiations, said George Mancheril, CEO of Bespoke Financial, a Los Angeles commercial lender that works with cannabis companies.

“Do we play nice, or are you going to be looking for a new tenant in the middle of a recession?” Mancheril asked.

He added that landlords see marijuana businesses as both more lucrative and higher risk, which is why they tend to charge more. But larger macroeconomic factors also play a role.”

https://mjbizdaily.com/tips-for-cannabis-business-owners-facing-sky-high-real-estate-costs/?cn-reloaded=1

#californiacannabis – “Manhattan Beach will ask voters to maintain its ban on commercial cannabis.

The City Council this week voted to place a measure on the Nov. 8 general election ballot that would continue to prohibit marijuana sales, competing with a citizens initiative, the Cannabis Industry Measure, that seeks to repeal that ban and allow up to three dispensaries in town….

The City Council could have also chosen to submit to the ballot a measure to tax cannabis sales, if they’re legalized in November, and a measure that would establish city-ordered regulations such as requiring dispensaries outside of town that deliver to Manhattan Beach to track receipts going to the city and limiting dispensaries in the town to two.

Matt Lesenyie, assistant professor of political science at Cal State Long Beach, said previously that cities’ best options to avoid baffling voters would be to just let them decide on the Cannabis Industry Measure and tack on a tax measure to make the most out of any outcome.

But the council didn’t seem worried about potentially missing out on that tax revenue.”

https://www.dailybreeze.com/2022/07/20/manhattan-beach-will-ask-voters-to-say-no-to-marijuana-dispensaries/

Courtesy of Cannabis Industry Journal

#californiacannabis – “Bankruptcy reorganization is an option typically utilized by struggling businesses to shed or restructure debt. Cannabis businesses, however, cannot take advantage of bankruptcy remedies because bankruptcy is a product of federal law and federal law still prohibits the sale of cannabis.

As a result, stakeholders in legal California cannabis enterprises must consider alternatives to bankruptcy to collect what they can on their loans and investments in the event the enterprise becomes insolvent or requires restructuring. A well-established alternative to bankruptcy is a state court remedy – the appointment of a receiver over the assets of a business or over the entire business operations. Through the receivership process, stakeholders may obtain many of the same protections available to them through bankruptcy.”

https://cannabisindustryjournal.com/feature_article/cannabis-receiverships-a-viable-alternative-to-bankruptcy/

#cannabisresearch – “The Drug Enforcement Administration (DEA) is being sued over repeated delays to requests for records related to psychedelics and marijuana.

This comes amid a multitude of drug policy-focused legal challenges the agency has faced in recent years, including one that concerns DEA’s refusal to provide a doctor with access to psilocybin to treat terminally ill patients under “right to try” laws….

The legal challenge, filed in a federal district court in Texas on Tuesday, comes from a doctor who is part of a separate case contesting DEA’s interpretation of “right to try” laws as it concerns psilocybin, as well attorneys Matt Zorn and Kathryn Tucker, who both worked on that case.

Each of the plaintiffs have laid out the reasons why they are uniquely impacted by DEA’s recalcitrance on FOIA requests. The agency has “adopted an unlawful policy and pattern or practice” of designating requests as “complex,” regardless of the actual complexity of the documents sought, the lawsuit says.

In assigning the FOIA inquiries as “complex” because retrieving the documents in question might involve coordinating with outside offices, DEA has consistently said that the requests raise “unusual circumstances” that exempt them from the statutorily imposed timeline for responding.”

https://www.marijuanamoment.net/dea-sued-over-unlawful-delays-on-psychedelic-and-marijuana-public-records-requests-through-foia/

Dale Schafer Law News – 7/18/22

#cannabisindustry – ““There are, I think a couple different weaknesses or concerns that come up when looking at the policies that are being marketed and sold to cannabis related businesses,” Sampson said. “One is there still is not much variety in insurers who are willing to write the policies as perhaps you might see in other industries. Two is there still isn’t as much capacity or limits available. And then three, it really comes down to the terms, the conditions themselves, in particular, the policy exclusions.””

https://www.insurancejournal.com/news/west/2022/07/18/675572.htm

#californiacannabis – Sacramento – “The City of Sacramento Office of Cannabis Management (OCM) is offering rebates up to $4,000 per cannabis facility and premises.

According to the City of Sacramento, this allows for cannabis businesses to purchase new or upgrade existing security equipment to reinforce facilities and local compliance….

For more information on eligibility for rebates, the review process, and more you can visit the City of Sacramento’s website.”

https://fox40.com/news/local-news/cannabis-businesses-now-have-rebates-for-security-equipment/

Dale Schafer Law News – 7/16/22

#californiacannabis – “On July 8, California’s Department of Cannabis Control (“DCC”) issued draft regulations looking to standardize cannabis testing across the state. According to a statement, the DCC issued the proposed regulations in reaction to concerns about cannabis potency inflation and “laboratory shopping,” by cannabis businesses looking to secure THC levels that may be higher than what is actually contained in the cannabis flower or product. These new regulations would standardize the ways in which licensed cannabis labs in California can conduct their cannabinoid testing.

would require cannabis labs in California to use specific standard operating procedures and verify the test methods used prior to conducting a test. These new regulations would go into effect by July 1, 2023….

As California is working to unify standards within the state, the National Cannabis Laboratory Council (“NCLC”) is working to nationalize lab standards throughout the 38 states that are currently regulating cannabis for medical or adult use. The NCLC proposed a unified approach to testing based on both data from participating laboratories and scientifically recognized standards, and recently released a white paper entitled Standardizing Cannabis Lab Testing Nationally.”

https://www.jdsupra.com/legalnews/california-proposes-new-cannabis-lab-8962971/

#californiacannabis – “Both proposals call for the city to license one retail cannabis storefront and one delivery-only business. The plan by Austin and Pearson would allow another storefront and delivery service after two years. Both plans would require a business to donate at least $300,000 to community programs over five years, among other conditions.

Under the Otter plan, a license would require an “owner who resides in Sausalito and either owns 20% or more of the business or owns more than 1% and is directly involved in the business,” according to a city summary.

Under the plan by Austin and Pearson, a business would need to have “an owner with equity of 10% or more who was convicted or arrested for a cannabis crime prior to the legalization of marijuana in California, or who has a household income of less than 60% of the area median, or who lived for at least five years between 1980 and 2016 in an area disproportionately impacted by cannabis criminalization,” the city said.”

https://www.marinij.com/2022/07/15/sausalito-approves-2nd-cannabis-proposal-for-ballot/