Dale Schafer Law News – 10/5/22

Courtesy of MJ Biz Daily

#cannabispolitics – ““I’m really worried about the Senate,” said Justin Strekal, founder of the Better Organizing to Win Legalization Political Action Committee (BOWL PAC) and a former lobbyist for NORML.

“If you look at the upcoming (redistricting) map for 2024, if the Dems lose the Senate this year, it’s very, very unlikely they’ll be able to pick up any seats the following cycle.”

Strekal said such a development would almost certainly derail marijuana legalization or other major changes to federal cannabis laws until 2026, when Democrats would have a decent shot at retaking the Senate majority.”

https://mjbizdaily.com/key-congressional-races-the-marijuana-industry-should-watch/?utm_medium=email&utm_source=newsletter&utm_campaign=MJD_20221005_NEWS_Daily

#cannabispolicy – “With AB 2188 going into effect on January 1, 2024, employers must take the following steps to ensure compliance with AB 2188:

Evaluate any policies and procedures regarding drugs and alcohol in the workplace with experienced legal counsel to ensure drug screenings are administered properly; and

Review how drug screenings are administered to ensure any drug tests take into consideration psychoactive cannabis metabolites to guarantee employees are not punished for off-duty marijuana consumption.”

https://www.jdsupra.com/legalnews/ab-2188-leaves-california-employer-s-6685403/

Courtesy of California City News

#californiacannabis – San Bruno – “The City Council reversed years of prohibition last week, approving a total of three storefronts and a distribution center in specific parts of the city. A ban on cultivation, manufacturing, on-site consumption, processing, lab testing and wholesale will remain.

The vote was 3-2 with Tom Hamilton, Linda Mason and Marty Medina in favor. Mayor Rico Medina and Councilmember Michael Salazar voted no.

“I am pleased to see the council is finally moving forward with this proposal to bring welcomed revenue to fund city services and infrastructures improvements,” said Sarnecky, noting that a majority of residents approved a 10% tax on cannabis products two years ago. “I respect the fact that we must consider the sensibilities of our residents and address their concerns, but we cannot ignore the clear directive of the people any longer.””

https://www.californiacitynews.org/2022/10/san-bruno-opens-its-doors-commercial-pot.html

#californiapolitics – Employment – “Though attorneys who work in the state say this past legislative session in California may have been roughly average in the number of labor and employment laws passed and signed by Gov. Gavin Newsom (D), they said the content of these particular measures means outsized new compliance expectations for employers.

“They’re scary signposts for what’s in California’s future,” said Adam Abrahms, a Los Angeles-based attorney with Epstein Becker Green PC. “Most employers are usually sitting around every September wondering if this is the year they need to call a bankruptcy lawyer or business relocator.”

The new laws drew praise from worker advocates for their role in promoting pay equity, combating wage theft, and advancing the concept of sectoral bargaining. But business and industry groups say California employers can’t bear more legal uncertainty while they’re still recovering from the fallout of Covid-19.

Small businesses in particular “are attempting a slow crawl out of the Covid hole that they have been in for the last two years,” said John Kabateck, California state director for the National Federation of Independent Business, which represents small employers. “Uncertainty continues to rule the day on main street.””

https://news.bloomberglaw.com/daily-labor-report/californias-new-anti-bias-laws-put-companies-on-alert-for-suits

#psychedelic – “The psychedelic drugs LSD and psilocybin activate serotonin receptors on brain cells in a way that reduces the energy needed for the brain to switch between different activity states, according to a study led by Weill Cornell Medicine researchers.

The study, which appears Oct. 3 in Nature Communications, offers insight into the mechanism of these drugs’ effects—effects that many hope can someday be harnessed therapeutically. The research also represents a new approach to the evaluation of drugs that act on the brain.

“If we want someday to use psychedelic drugs clinically, we should understand not only how they’re impacting brain cells, but also how they’re impacting the wider dynamics of brain activity,” said study lead author Parker Singleton.”

https://news.weill.cornell.edu/news/2022/10/psychedelic-drugs-flatten-the-brain%E2%80%99s-dynamic-landscape

Dale Schafer Law News – 10/4/22

Courtesy of Financial Regulation News

#cannabisindustry – “Auxier said there are four primary types of cannabis taxes that states and local governments deploy — and each has its plusses and minuses.

One is percentage-of-price taxes, which work like a general sales tax. This is the most popular, wrote Auxier, as 11 states use it while five others use it in addition to another tax.
While it is the easiest to administer, if the tax rate is not increased, revenue will slow or even drop as the retail price of cannabis falls.

The second is weight-based taxes, which are employed by five states. Cultivators generally weigh their product, set a tax rate, and remit the tax to the government. The author said this type of tax is generally not impacted by price, but they can be onerous for sellers.

The third is potency-based taxes, based on the level of tetrahydrocannabinol (THC), in the cannabis. So, products with a higher-TCH level would be taxed higher.

Finally, there is a general sales tax, which is used in 15 states. As Auxier points out, this is not a cannabis tax but is affected by the purchase price.”

https://financialregnews.com/tax-policy-center-examines-states-tax-systems-on-cannabis-sales/

#cannabislaw – “A California cannabis company tricked an investor into an $800,000 deal by making misrepresentations about cultivation and distribution licensing, a facility and land, a lawsuit filed in state court contends.

Seyed Milad Torabi of Fresno alleges in the Los Angeles County Superior Court suit that the cannabis company, Kavry Management LLC, and defendant Babak Arab “had no present or future intention” to make Torabi an official part of the company as promised under a 2021 investment agreement.

“Had Plaintiff Torabi known that the representations and warranties as herein alleged were false or that Defendant Arab had securitized the assets of Kavry for debts of a related entity that he alone owned or that he was using the facilities for Kavry for said entity, Plaintiff Torabi would never have purchased the Member Interest in Kavry or paid any money to Defendant Arab,” the complaint says…..

Torabi’s complaint targets Arab and Kavry with allegations of fraud, promissory fraud, rescission and breach of contract. He seeks damages of at least $800,000 plus interest.”

https://www.law360.com/california/articles/1536029/investor-says-cannabis-co-swindled-800k-with-false-claims?nl_pk=87a814fe-acbd-41b5-9dff-8f51227935f5&utm_source=newsletter&utm_medium=email&utm_campaign=california&utm_content=2022-10-04

Dale Schafer Law News – 10/3/22

#californiacannabis – “New reporting from CapRadio has uncovered further details about how the city has operated its controversial enforcement system:

A review of more than 40 search warrant affidavits from 2018 and 2019 shows how the Sacramento Municipal Utility District (SMUD) routinely sent the Sacramento Police Department lists of customers who used unusually high amounts of electricity, which can indicate an illegal cannabis grow.

Police launched investigations into individual addresses based on the lists, which were broken down by zip code. Police often conducted minimal in-person surveillance into the suspected grow homes, underscoring the importance of the bulk data handed over by SMUD.

SMUD readily provided police with detailed electrical information on customers who lived next to suspected marijuana grow houses but were not under investigation. Police used this data to compare with homes under investigation and included the information in publicly-available search warrant applications.

In court documents, police disclosed sensitive information — such as Social Security and passport numbers — of people associated with suspected grow houses, including property owners who claimed innocence and later had penalties cleared. SMUD provided police with at least some of this personal information about its customers…..”

https://www.capradio.org/articles/2022/10/03/sacramento-revamps-cannabis-enforcement-system-after-facing-dozens-of-lawsuits-racism-allegations/

#cannabislaw – “A freight broker has for now escaped claims that it is part of an alleged multimillion-dollar “counterfeit network” producing knockoff Cake brand Delta-8 THC vaping products after a California federal judge ruled that the accusations are simply conclusory at this point.

U.S. District Court Judge James V. Selna, who has proceeded over a number of Cake-related intellectual property cases, said on Wednesday that AK Futures LLC, the California company behind the Cake products, missed the mark when it claimed that transport middleman Mothership Technologies Inc. directly participated in all the same copyright infringement actions as the other companies accused in the lawsuit.

“AK Futures concedes that Mothership ‘does not do the transporting itself,'” Judge Selna said in his order. “Instead, [AK Futures] complains that much like Uber, Mothership ’causes contraband to be transported’ by ‘matching transportation companies to shipments needed on a regular basis to distribute contraband to ‘distros.’ These factual assertions do not support a claim for direct copyright infringement.””

https://www.law360.com/articles/1535120?e_id=93db23a8-20d2-4875-a326-e27c6c65e25a&utm_source=engagement-alerts&utm_medium=email&utm_campaign=case_updates