Business
Numerous California Cities Approve Cannabis Retail Measures
Voters in California (Santa Monica, San Diego, Laguna Woods, and McFarland, among others) approved 12 cannabis-related ballot initiatives last week.
A majority of the cannabis-related initiatives that were approved were located in Los Angeles and San Diego counties, green lighting the possibility of 70 additional cannabis retail licenses. In California, Los Angeles leads as the most populated county, followed by San Diego County, Orange County, Riverside County, and San Bernardino County.
Los Angeles County voters approved 25 retail licenses with Measure C by 59.88%, which enacts taxes in unincorporated areas of the county. This includes $10 per square foot for cultivators, 6% tax on gross retail receipts (as well as a gross receipts tax, including 2% tax for testing facilities, 3% tax on distribution, and 4% for “manufacturing and other marijuana business facilities.”) Additionally, Santa Monica voters approved Measure HMP with a 66.79% “yes” vote to implement taxes for non-medical cannabis retailers, medical retailers, and all other licensed cannabis businesses (the city currently only has two licensed retailers). Cannabis-related measures in Claremont, Cudahy, Lynwood, and South El Monte also passed. However, there were numerous cities that chose not to embrace cannabis such as Hermosa Beach, Manhattan Beach, and El Segundo all chose to maintain bans on commercial cannabis businesses.
San Diego County, which has only approved five cannabis businesses so far, saw the approval of a cannabis tax through Measure A with 57.28%. This implements a 6% tax on retail businesses, 2% on testing, 3% on cultivation (or $10 per canopy square foot, which is an adjustment for inflation) and 4% for all other businesses. County officials estimate that these taxes could generate up to $5.5 million annually in the general fund, and could lead to 20 new cannabis business licenses. According to George Sadler, CEO of the San Diego-based cannabis brand Gelato, any news is good news. “Access has always been an issue,” said Sadler. “Any progress is a big plus.”
Currently, most of Orange County doesn’t allow for cannabis businesses with the exclusion of the city of Santa Ana. However, last week Huntington Beach voters approved Measure O with a yes vote of 54.69%, to approve an ordinance that will implement a 6% tax on gross receipts for retailers, and 1% of gross receipts for other cannabis businesses (estimated to generate $300,000-$600,000 annually). This could lead to up to 10 retail cannabis licenses. In Laguna Woods, voters also approved a cannabis tax that would go toward general city services with Measure T with 62% of the vote.
In Northern California, Sacramento County voters were presented with a cannabis tax measure called Measure B but it failed. Although 53.49% of voters approved of this initiative, it required a 2/3 vote (or 66%+) to pass. Neighboring cities such as Monterey and Pacific Grove approved tax measures. In Sonoma County, Healdsburg voters approved Measure M.
In San Bernardino County, voters approved a tax initiative in Montclair with Measure R. Central Californians in Kings County, Avenal approved a tax initiative as well with Measure C, as well as voters in McFarland, which is located in Kern County.
While local cities and counties in California delivered on cannabis initiatives, the state has also been implementing other changes recently.
California state voters also chose to keep Gavin Newsom as governor for another term. Earlier in October, Newsom signed a bill called the “Alternate Plea Act” that will help defendants who have been charged with drug-related offenses. According to the Drug Policy Alliance, the “public nuisance plea will carry the same criminal penalty as the drug offense charged but without triggering the collateral consequences.”
“With this plea option, individuals will be able to resume their life after incarceration and not be blocked from securing housing and employment,” the organization explained.
In September, Newsom also signed a bill to protect employees who choose to consume cannabis off-the-clock. “For too many Californians, the promise of cannabis legalization remains out of reach,” Newsom said in a press release. “These measures build on the important strides our state has made toward this goal, but much work remains to build an equitable, safe and sustainable legal cannabis industry. I look forward to partnering with the Legislature and policymakers to fully realize cannabis legalization in communities across California.”
Source: https://hightimes.com/news/numerous-california-cities-approve-cannabis-retail-measures/
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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