Business
What’s next in the City of Angels: Q&A with L.A. marijuana regulator Michelle Garakian
Shortly after Michelle Garakian replaced Cat Packer in March to become the Los Angeles marijuana czar, the city invoked mandatory timelines to process and approve cannabis business applications and licenses.
Unclogging that bottleneck is among Garakian’s top priorities.
In particular, she aims to remove bureaucratic red tape as well as better communicate with and help operators and applicants in one of the world’s largest regulated marijuana markets.
Garakian, a longtime insider at the L.A. Department of Cannabis Regulation (DCR) and former aide to Mayor Eric Garcetti, spoke with MJBizDaily for a wide-ranging discussion on marijuana policy, new department initiatives and the push to transfer thousands of temporary permits into annual licenses.
What are your overarching goals for the DCR moving forward?
To get back to the mission of the department, which is licensing.
We’re really focused on business development and customer service.
That has been a core tenet guiding me, in addition to centering social equity in every single one of those tenets.
What should stakeholders know about the new social equity verification process?
The verification rules have changed.
The council made a concerted decision to narrow the criteria because they wanted to ensure the folks getting into this process were the folks that were really dealing with the impacts of the war on drugs.
You have to have a cannabis conviction or arrest and either live in a disproportionately impacted area or prove (you’re) low income.
If (you’re) low income, we’re not using not using zip codes anymore; we’re using police reporting districts.
This is really narrowing it down to where the most cannabis convictions or cannabis arrests have taken place.
Since this process opened May 26, we’ve received 300 to 350 applications.
Once the verification window closes July 25, the department has at least 90 days to process those requests.
What’s behind the push to allow social equity licensees to relocate? The council has yet to take this issue up, but it’s gaining traction.
We really need to be able to allow them to move outside of their community plan.
I think the council is warming up to it. We’re going to continue to advocate for that.
It’s going to be a game changer and a life saver for a lot of people.
Have you started ramping up staff to meet new application deadlines?
We were allocated 21 new positions. Our department is doing interviews multiple times a week.
I was sitting on a panel of interviews, and we interviewed almost 17 people on two different days.
We are trying to onboard people as much as possible.
There was a hiring freeze for two years, and when that was lifted, all these big departments started hiring and everybody has vacancies. So it’s mega-competitive.
(There will be) a lot of positions in the licensing sector. That’s where we need the capacity.
A few positions in the social equity group. A few positions for our communications and policy staff.
And we’re bringing in more high-level management, so a lot of the policy work isn’t so concentrated at executive level.
What other new initiatives are on the way from DCR?
We’re trying to manage our email accounts better. We instituted a new process so people are getting a 48- to 72-hour turnaround on their emails.
We’ve implemented a system where phone calls are being picked up faster and we’re tracking how many calls we’re getting.
Trying to focus our department to run more like a business.
I’m trying to track these benchmarks because I want to see if things are improving quarter to quarter.
When I first (was promoted) in March, I asked my assistant to set up 25 different stakeholder meetings and just talk with a variety of stakeholders: ‘What are your challenges? What are your issues? Send me three top things you’d like to see get done.’
Some of those things we’ve actually done. I’m listening, and I’m trying to be as receptive as possible.
What will you do about the underground market and bringing unlicensed operators into the regulated market?
There’s a lot of urgency around this issue.
DCR has no authority under local law to enforce against unlicensed activity. … Nor do we have any authority to directly influence how other city agencies prioritize their resources to address this issue.
Folks are using the complaint portal in the department to make complaints about illegal businesses and legal businesses.
If it’s an illegal business, it will go to (the police). They can go in … and disconnect the water and power.
Then Department of Building and Safety comes in with a civil enforcement activity to padlock and board the premises.
But as we know, this is a “Whac-a-Mole” game.
We even asked for $10 million (from the city council) to create a fund this year that different agencies would draw from for various activities related to enforcement.
That wasn’t a request that was honored. You’re definitely going to see more robust enforcement activity.
What’s your plan to assist social equity applicants and license holders?
We’ve developed an online learning-management system that offers over 90 hours of educational cannabis business content.
In April, we were doing two business, licensing and compliance webinars a week on topics ranging from inventory to security to hiring to how to fill out insurance forms.
We’re also developing a capital case workers pilot for 20 people.
The program is designed for applicants who have passed through the pre-application review stage.
We’re pairing them with coaching consultants who will help assist them with financial literacy, credit repair, access to capital and assistance locating compliant properties.
We just got another $5.7 million from the state, and that’s going toward a rental-assistance program.
We had a really successful career fair in March. We now have a board up so people can post jobs, and job-seekers can find jobs.
This interview has been edited for length and clarity.
Source: https://mjbizdaily.com/qa-with-l-a-marijuana-regulator-michelle-garakian/
New Mexico regulators fined a cannabis operator nearly $300,000 and revoked its license after the company allegedly created fake reports in the state’s traceability software.
The New Mexico Cannabis Control Division (CCD) accused marijuana manufacturer and retailer Golden Roots of 11 violations, according to Albuquerque Business First.
Golden Roots operates the The Cannabis Revolution Dispensary.
The majority of the violations are related to the Albuquerque company’s improper use of BioTrack, which has been New Mexico’s track-and-trace vendor since 2015.
The CCD alleges Golden Roots reported marijuana production only two months after it had received its vertically integrated license, according to Albuquerque Business First.
Because cannabis takes longer than two months to be cultivated, the CCD was suspicious of the report.
After inspecting the company’s premises, the CCD alleged Golden Roots reported cultivation, transportation and sales in BioTrack but wasn’t able to provide officers who inspected the site evidence that the operator was cultivating cannabis.
In April, the CCD revoked Golden Roots’ license and issued a $10,000 fine, according to the news outlet.
The company requested a hearing, which the regulator scheduled for Sept. 1.
At the hearing, the CCD testified that the company’s dried-cannabis weights in BioTrack were suspicious because they didn’t seem to accurately reflect how much weight marijuana loses as it dries.
Company employees also poorly accounted for why they were making adjustments in the system of up to 24 pounds of cannabis, making comments such as “bad” or “mistake” in the software, Albuquerque Business First reported.
Golden Roots was fined $298,972.05 – the amount regulators allege the company made selling products that weren’t properly accounted for in BioTrack.
The CCD has been cracking down on cannabis operators accused of selling products procured from out-of-state or not grown legally:
- Regulators alleged in August that Albuquerque dispensary Sawmill Sweet Leaf sold out-of-state products and didn’t have a license for extraction.
- Paradise Exotics Distro lost its license in July after regulators alleged the company sold products made in California.
Golden Roots was the first alleged rulebreaker in New Mexico to be asked to pay a large fine.
Source: https://mjbizdaily.com/new-mexico-cannabis-operator-fined-loses-license-for-alleged-biotrack-fraud/
Four marijuana companies, including a multistate operator, have filed a lawsuit against U.S. Attorney General Merrick Garland in which they allege the federal MJ prohibition under the Controlled Substances Act is no longer constitutional.
According to the complaint, filed Thursday in U.S. District Court in Massachusetts, retailer Canna Provisions, Treevit delivery service CEO Gyasi Sellers, cultivator Wiseacre Farm and MSO Verano Holdings Corp. are all harmed by “the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana.”
Verano is headquartered in Chicago but has operations in Massachusetts; the other three operators are based in Massachusetts.
The lawsuit seeks a ruling that the “Controlled Substances Act is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law.”
The companies want the case to go before the U.S. Supreme Court.
They hired prominent law firm Boies Schiller Flexner to represent them.
The New York-based firm’s principal is David Boies, whose former clients include Microsoft, former presidential candidate Al Gore and Elizabeth Holmes’ disgraced startup Theranos.
Similar challenges to the federal Controlled Substances Act (CSA) have failed.
One such challenge led to a landmark Supreme Court decision in 2005.
In Gonzalez vs. Raich, the highest court in the United States ruled in a 6-3 decision that the commerce clause of the U.S. Constitution gave Congress the power to outlaw marijuana federally, even though state laws allow the cultivation and sale of cannabis.
In the 18 years since that ruling, 23 states and the District of Columbia have legalized adult-use marijuana and the federal government has allowed a multibillion-dollar cannabis industry to thrive.
Since both Congress and the U.S. Department of Justice, currently headed by Garland, have declined to intervene in state-licensed marijuana markets, the key facts that led to the Supreme Court’s 2005 ruling “no longer apply,” Boies said in a statement Thursday.
“The Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce,” Boies said.
“Moreover, the facts on which those precedents are based are no longer true.”
Verano President Darren Weiss said in a statement the company is “prepared to bring this case all the way to the Supreme Court in order to align federal law with how Congress has acted for years.”
While the Biden administration’s push to reschedule marijuana would help solve marijuana operators’ federal tax woes, neither rescheduling nor modest Congressional reforms such as the SAFER Banking Act “solve the fundamental issue,” Weiss added.
“The application of the CSA to lawful state-run cannabis business is an unconstitutional overreach on state sovereignty that has led to decades of harm, failed businesses, lost jobs, and unsafe working conditions.”
Alabama regulators are targeting Dec. 1 to award the first batch of medical cannabis business licenses after the agency’s first two attempts were scrapped because of scoring errors and litigation.
The first licenses will be awarded to individual cultivators, delivery providers, processors, dispensaries and state testing labs, according to the Alabama Medical Cannabis Commission (AMCC).
Then, on Dec. 12, the AMCC will award licenses for vertically integrated operations, a designation set primarily for multistate operators.
Licenses are expected to be handed out 28 days after they have been awarded, so MMJ production could begin in early January, according to the Alabama Daily News.
That means MMJ products could be available for patients around early March, an AMCC spokesperson told the media outlet.
Regulators initially awarded 21 business licenses in June, only to void them after applicants alleged inconsistencies with how the applications were scored.
Then, in August, the state awarded 24 different licenses – 19 went to June recipients – only to reverse themselves again and scratch those licenses after spurned applicants filed lawsuits.
A state judge dismissed a lawsuit filed by Chicago-based MSO Verano Holdings Corp., but another lawsuit is pending.
Source: https://mjbizdaily.com/alabama-plans-to-award-medical-cannabis-licenses-dec-1/
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