Oregon Cannabis 2020: Legislative Forecast and Report

Last week, Oregon kicked off the 2020 legislative session. Because we are in an even-numbered year, this will be a 35-day session. In short sessions, we tend to see fewer pieces of introduced legislation. The prospects for a productive session may also be lower than usual in 2020, given that House and Senate Republicans are threatening to flee the Capitol again (just like in 2019, to stop a carbon cap-and-trade bill). With respect to cannabis in particular, there may be some general fatigue in Salem on both sides of the aisle.

Still, there are a handful of cannabis bills in the hopper and we expect to see at least one omnibus bill wend its way through between now and March 8. Below, I’ve summarized each bill that is or appears to be substantially related to cannabis on the Oregon legislature’s website. I’ve also conferred a bit with our generous contacts in the legislature, informing some of this commentary.

Senate Bills

Senate Bill 1566.  This bill authorizes the Oregon Liquor Control Commission (OLCC) to create data and analysis “regarding commercial sales and commercial industries.” By and through something called the OLCC Information Technology Infrastructure Fund, the agency presumably would extrapolate and package data on both the liquor and cannabis sides. Sales of this data would be made to industry, or governmental bodies may be interested. The challenge here would be adopting standards to establish exemptions from disclosure of public records, along with the tricky interplay between “proprietary” data and public records law.

Senate Bill 1559.  This bill would prohibit “distributing, selling or allowing to be sold flavored inhalant delivery system products.” It’s a vape ban bill. If passed, SB 1559 would take effect “91 days following adjournment sine die”, which by my calculation is June 7, 2020. This bill will be met with opposition by both the tobacco and cannabis industry, who successfully have litigated (at least, so far) an attempted executive ban on sales of both tobacco and cannabis flavored vaping products.

Senate Bill 1577.  This bill is virtually identical to SB 1559 and also would take effect on or around June 7, 2020. Unlike 1559, it was filed pre-session. But both bills have been assigned to the Senate Committee on Health Care and it’s likely that just one would make it out alive. Should be fun to watch.

Senate Bill 1561. This bill requires the Oregon Department of Agriculture (ODA) to develop an Oregon hemp plan for commercial production and sale. It’s an omnibus bill sponsored in part by Floyd Prozansky, known for crafting much of Oregon’s cannabis legislation over the past several years. SB 1561 also:

  • Directs an “Oregon Cannabis Commission” to determine a framework for future governance of the Oregon Medical Marijuana Program
  • Directs the OLCC to adopt rules for registration of medical marijuana grow sites (an attempt to deal with diversion) and establishes plant production limits (same)
  • Specifies health care providers who may recommend medical marijuana use
  • Merges determinations of guilt for certain offenses related to marijuana into a single conviction, and allows the possession of certain items (this looks like clean-up related to 2017’s sprawling SB 302)

This bill is currently in the Senate Judiciary Committee and will see action this week. If there is one bill that I could single out as most likely to go somewhere, it would be SB 1561, and probably in some gut-and-stuff form. Of all its current ornaments, the hemp plan is likely to remain. And if that happens, Oregon will likely have something to submit to the US Department of Agriculture for certification this year.

House Bills

House Bill 4034. This one mirrors a small component of SB 1561: it directs the OLCC to adopt rules for registration of medical marijuana grow sites and it establishes plant production limits. This bill seems likely to die in the Senate, if it ever gets there.

House Bill 4035. This bill directs OLCC, ODA, the Oregon Health Authority (OHA) and the Governor’s office to “develop a plan to address issues related to regulatory authority over marijuana.” The bill would take effect immediately and sunset in 2021. Like HB 4034, this one is probably going nowhere.

House Bill 4051. This lengthy submission establishes an Oregon Hemp Commission, similar to other commodities commissions around the state. The Commission would be responsible for developing, maintaining and expanding state, national and international markets for Oregon hemp. This bill is a wild card. Maybe it passes on its own, maybe it dies, or maybe it gets rolled into an omnibus bill. But it seems like a great idea.

House Bill 4072. This industry-supported bill is somewhat similar to HB 4051, although it amends existing statutes rather than cutting from whole cloth. HB 4072 directs ODA to administer an Oregon Hemp State Program for “studying growth, cultivation and marketing of hemp.” It also requires ODA to “conduct criminal records checks of applications for licensure related to hemp.” It’s possible that some of this leaches into HB 4051, but it would be surprising if the bills both went the distance, especially given that each creates a “fiscal impact” which triggers budget review.

HB 4078. This bill is similar to SB 1559. It prohibits “remote sales of inhalant delivery systems” which the bill also defines carefully at Section 1(5)(a). This bill was requested pre-session by Governor Brown herself and has been moving along briskly, already receiving a third reading and “do pass” recommendation. This bill contains an emergency clause and would take effect immediately.

HB 4088 – This bill directs OLCC to establish a Cannabis Social Equity Program to provide discounted licensure fees and other support to program participants. This bill seems to be moving a bit with a work session scheduled today, February 12. Beyond that it is hard to know what will happen, but a serious discussion around this issue at the statewide level is a long time coming.

HB 4156. This skeletal bill directs ODA to advance the design of a cannabis business certification program. The idea is to promote market-based approaches to incentivize low-carbon cultivation techniques that use water and energy efficiently. Seems like a good idea! A grant of $300,000 would come from the OLCC’s Marijuana Control and Regulation Fund and the bill would take effect July 1, 2020.

HB 4158.  In some respects similar to bills covered above, this one directs ODA to develop an Oregon Hemp Plan for commercial production and sale. It also requires OLCC to track commercial cannabis shipments (of all types) through an electronic tracking system and make that information readily available to law enforcement. This is an omnibus bill at present and includes clean-up of criminal offenses sprinkled throughout SB 302. HB 4158 is currently in the House Committee on Agriculture and Land Use. It saw some early action, but nothing appears to be scheduled going forward.

All in all, the next month should be eventful. Interested parties can reasonably expect Salem to produce one or two impactful pieces of legislation related to Oregon cannabis, chiefly on the hemp side. We will check back in after March 8. And if there are any major developments between now and then, we will cover those too.

A Guide to Legalizing Weed in New York

According to a 2018 NBC News story, more than 77 tons of weed is consumed in New York City per year, making New York City and the Greater New York area among the biggest cannabis markets in the world — this is despite not having legal retail outlets. 

While New Yorkers seem to largely support adult-use legalization and the state government wants in on the potential profits, the effort to legalize stalled out in June 2019 over disagreements on how revenue would be allocated and is currently fixed on social equity. Since, citizens, advocates, lobbyists, and legislators have been trying earnestly to come to an agreement. 

Currently, only 55 thousand New York patients who qualify for the existing medical program can use cannabis, and the qualifications are very restrictive. Many thought New York would see legalization by June 2019, but the ground dropped out when the democratic majority legislature did not pass either of the two legalization bills on the table. Some speculated that a last minute push from law enforcement lobbies and concerned parents were to blame, while others mark the lack of actionable social equity blueprints as why it didn’t get enough support. Either way, millions of dollars worth of sales happen just outside New York’s legal doors. 

Weed in New York, a brief history in under 200 words 

In 1934, New York Mayor Fiorello LaGuardia commissioned the first in-depth study into the effects of smoking cannabis in the United States. Released in 1944 and called The LaGuardia Report, the study found that cannabis use was not dangerous as prohibitionists claimed it was.  

Despite this, the legacy of cannabis in New York is one of severe injustice — in 2018, nearly 90% of arrestees were Black or Latinx despite total cannabis arrests decreasing by 42% from the previous year. 

In New York, cannabis was legalized for medical use in 2014 and possessing less than 25 grams of flower was decriminalized to a $100 fine in 1977, the rest of the state expanded decriminalization in 2019. But as far as adult use without medical permission goes, weed is still illegal. Regardless of the law’s directive to fine citizens rather than arrest them, law enforcement hasn’t completely stopped detaining people for cannabis possession, smoking, or sale, even when many District Attorneys stop pursuing cases.

We asked some voters what they think

Although the efforts to legalize adult use cannabis is happening at the legislative level, the wants and opinions of New York voters matters. We asked some NYC voters their thoughts on legalization. 

  • Marcy Ayres, senior photo editor at The Culture Trip thinks: “[What’s wrong with cannabis legalization in New York is] it still is not fully legalized. Decriminalization is a great start but we need to also remedy all of the incarcerated people from low level drug offenses, and then legalize recreational use and have the tax revenue from this go to help infrastructure within cities and towns all over New York state … As much as I want legalization, I want it to be fair and just. Look at the lives that have been forever changed by broken policing — release those who have been imprisoned for the same thing we are fighting for.” 
  • Denzel Thompson, artist says: I want to see less people of color being locked up. I want to be able to grow my own plants. Make licenses easy for people of color to obtain and help neighborhoods in the city that need it the most. Allocate tax money to those negatively impacted on the war on drugs!

Current state of play

Advocates march at the annual NYC Cannabis Parade in New York, NY – May 6, 2017

The hope of the state’s policy makers and advocates is that a bill will pass this spring to not only finally fully legalize but also address the harm done to the more than 800 thousand people who, according to the Drug Policy Alliance, dealt with the criminal justice system for possessing, selling, or consuming cannabis in the last 20 years.

This hope rests in one of two bills: the Cannabis Regulation and Taxation Act (CRTA), and Marijuana Regulation and Taxation Act (MRTA), both of which aim to achieve key measures:

  • Create a regulated cannabis market in the state 
  • Change the criminal code regarding cannabis use, possession, or sale
  • Resentence and reclassify incarcerated people with cannabis charges

While they share similarities, the differences are complicated. New York politics tend to be painfully slow moving and details are revised during negotiations between policy makers. The simplest way to view the differences: the CRTA is Governor Cuomo’s proposal that is viewed as tightly regulated and the MRTA comes from state senators Liz Krueger and Andrea Stewart-Cousins and believed to have more direct language about the distribution of cannabis tax revenue to social equity programs. Amendments are expected to be made over the coming weeks and months.    

Who are the major players? 

Andrew Cuomo, Governor of New York. Photo: Shutterstock. Illustration: David Lozada/Weedmaps

How to take action 

What can you, the New York voter, do to help the cause? Here are some easy ways to help legalization: 

  • Get in contact with state officials. Phone calls and emails to legislators are crucial — staffers tally opinions for review all the time, and by using direct communication, you can speak your mind. Find your assembly member here and find your senator here
  • Join lobby days and legislative link ups. To get more hands on, attend organized by groups like Women Of Color in Cannabis, Minorities 4 Medical Marijuana, and Women Grow — many bring signs or come with statements ready, like a town hall-meets-protest. 
    • Feb. 12: SMART NY is organizing a lobby day in Albany with free transportation from NYC, Buffalo, Rochester, and Syracuse
  • Try using social media. Whether you’re flexing your opinion or sharing your story, a tipping point can only occur when indifference and opposition is converted to support. Tell everyone you follow know that you back the bud. Let your voice be heard from everyone from the ancient acquaintances to new colleagues.

Take it from some activists

Humble Bloom co founders Solonje Burnett and Danniel Swatosh, are two legalization luminaries who are setting cannabis intentions in New York with regular educational and community building events and programming. Answers have been edited for clarity and length.

Solonje Burnett. Photo: Michael Yeshion. Illustration: David Lozada/Weedmaps

WM News: Why did you become an activist for cannabis legalization? 

Solonje Burnett: “I’ve always been a humanist, generally concerned about the welfare of all people and working toward equal treatment, respect and justice for each individual no matter what economic, gender, racial, ethnic, religious or immigration circumstance you were born into. Cannabis is a part of that activism for [the] human equity equation. As a black woman who is privileged enough to never have been entangled in our so-called criminal justice system, I believe it is my duty to advocate for those who look like me, as well as the voiceless, and disenfranchised.”

WM News: What would a typical day for an activist look like? 

Danniel Swatosh. Photo: Michael Yeshion. Illustration: David Lozada/Weedmaps

Danniel Swatosh: “Every day is different. My activism isn’t centered around cannabis, it’s centered around humanity. At Humble Bloom we use cannabis as a conduit for larger conversations around the environment, racism, sexuality, stigma, systematic oppression, conscious consumerism, vulnerability and so on. So whether I’m marching for human rights and a vital planet — or simply informing myself, spreading the word, holding events and sparking difficult conversations — I’m always thinking of ways to push this world into regenerative, fair and equitable direction. Currently, it’s comparing and contrasting Cuomo’s CRTA bill and the Kreuger and Peoples-Stokes MRTA bill, then disseminating that information to my community and beyond  through strategic partnerships and calls to action. Also, I’m a mother so teaching my children how to be happier, healthier and more human is of the utmost importance.”

WM News: Any advice for New Yorkers?

Burnett: “Get educated, involved, and active. From medicinal to recreational, CBD to THC, luxury and beauty, to everyday necessity, the time is now to make a change in how the legal cannabis landscape will affect you, your loved ones, and the New York economic ecosystem.”

Swatosh: “I want New Yorkers to use the momentum of the cannabis movement to educate and empower themselves. There’s always going to be a new leader and new order. It’s time for people to use their voice, to show up in Albany, to write letters and to make those phone calls. We are all connected and part of a sensitive ecosystem that is not sustainable unless everyone is included. Privilege will not protect forever.”

This guide is a collaboration between Weedmaps News and WM Policy, the advocacy and government relations arm of Weedmaps. WM Policy staff, armed with decades of legislative, regulatory and public policy experience, works with lawmakers, advocates, industry groups and others to forge safe, fair and accessible cannabis policy across the country and around the world.  Weedmaps News is an editorial product that provides the most useful information and tips to navigate the cannabis commerce landscape. 

The post A Guide to Legalizing Weed in New York appeared first on Weedmaps News.

The International Cannabis Trade: FREE Webinar March 4!

In the past year or so, we have seen a remarkable uptick in requests for advice and legal services related to the international cannabis trade. Our business and international trade attorneys continue to blaze trails with clients from all over the world on import/export agreements, foreign direct investment, compliance, customs issues and everything in between. Things are evolving very fast.

This webinar will be hosted by Harris Bricken attorneys Adams Lee (Seattle), Griffen Thorne (Los Angeles), Nathalie Bougenies (Portland) and Vince Sliwoski (Portland). The format of the webinar will cover:

  • The treatment of cannabis (both marijuana and hemp) under international law;
  • Import and export of medical marijuana, including customs issues;
  • Import and export of hemp and CBD products, including customs issues;
  • Considerations around foreign direct investment in U.S. cannabis businesses; and
  • Your questions.

Register here to join us on Wednesday, March 4 at 12pm PST.

If you cannot attend, feel free to register anyway and submit questions prior to the event. Adams, Griffen, Nathalie and Vince will do their best to field them, and we will post a recording afterward here on the blog.

We hope to see you March 4! In the meantime, check out our extensive series of international cannabis blog posts, which can be found here.

Monday, February 10, 2020 Headlines | Marijuana Today Daily News

Marijuana Today Daily Headlines
Monday, February 10, 2020 | Curated by host Shea Gunther

No news today- back tomorrow. In the meantime, we’re running an episode of the Green Rush podcast featuring our friend Troy Dayton.

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Marijuana Today— Our flagship title, a weekly podcast examining the world of marijuana business and activism with some of the smartest people in the industry and movement.
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Photo: Troy Dayton/Arcview Group

Hemp CBD Across State Lines: North Dakota

The Agriculture Improvement Act of 2018 (“2018 Farm Bill”) legalized hemp by removing the crop and its derivatives from the definition of marijuana under the Controlled Substances Act (“CSA”) and by providing a detailed framework for the cultivation of hemp. The 2018 Farm Bill gives the US Department of Agriculture (“USDA”) regulatory authority over hemp cultivation at the federal level. In turn, states have the option to maintain primary regulatory authority over the crop cultivated within their borders by submitting a plan to the USDA.

This federal and state interplay has resulted in many legislative and regulatory changes at the state level. Indeed, most states have introduced (and adopted) bills that would authorize the commercial production of hemp within their borders. A smaller but growing number of states also regulate the sale of products derived from hemp.

In light of these legislative changes, we are presenting a 50-state series analyzing how each jurisdiction treats hemp-derived cannabidiol (“Hemp CBD”). Today we turn to North Dakota.

In 2019, North Dakota legalized the cultivation of hemp under the 2014 Farm Bill. However, the new law (HB 1349) does not address the regulation of Hemp-CBD products.

According to guidelines released by the Attorney General (AG), the state seems to defer to FDA guidance when regulating Hemp-CBD products. In addition, even following the enactment of HB 1349, which excludes the term “hemp” from marijuana, law enforcement remained hostile to Hemp-CBD making the sale of these products in the state risky.

Given that the state has decided not to submit a plan under the 2018 Farm Bill and instead continues operating under the 2014 Farm Bill until it expires on October 30, 2020, it seems unlikely that North Dakota will change its position on the sale of these products. So for the time being, CBD companies should refrain from selling their products in this not-so-hemp-friendly state.

For previous coverage in this series, check out the links below:

February 14th in Las Vegas: Harris Bricken Presents at the USA CBD Expo

Harris Bricken cananbis attorneys Nathalie Bougenies and Griffen Thorne will present at the “Nation’s Largest CBD Event” in Las Vegas on February 14th. This Main Stage panel begins at 12pm, and will examine the complex and ever-evolving regulatory framework of hemp CBD.

Nathalie, who has written extensively on market regulations and trends, will address ongoing marketing and labeling requirements. Griffen, who regularly writes about the California CBD industry, will speak to standard legal practices, as well as pitfalls our CBD attorneys often encounter in that state and elsewhere. Rounding out the panel will be Jesse Bader and Jason Drangel from the law firm of Epstein Drangel, and Julian Garcia with USC Gould School of Law,

If you are joining the hundreds of industry professionals descending on Las Vegas next weekend for the USA CBD Expo, this panel will be a great chance to hear from some of the most prominent legal voices in the market.

For more information:

  • The Las Vegas USA CBD Expo is running from February 13th through February 15th. The full schedule can be found here.
  • Industry Buyer and Professional tickets are still available for purchase here.

Friday, February 7, 2020 Headlines | Marijuana Today Daily News

Marijuana Today Daily Headlines
Friday, February 7, 2020 | Curated by host Shea Gunther

// Aurora announces CEO Booth’s departure, layoffs and up to CA$1 billion in writedowns (Marijuana Business Daily)

// Top Connecticut Lawmakers File Marijuana Legalization Bill On Behalf Of Governor (Marijuana Moment)

// Washington state lifts ban on cannabis vape products (Marijuana Business Daily)

These headlines are brought to you by Green Worx Consults, a company specializing in project management, workflow mapping and design, and Lean & 6 Sigma process. If you could use help making your business better at business, get in touch with Green Worx Consults.

// USDA Announces Two More Hemp Insurance Programs (Marijuana Moment)

// Maine enlists Metrc as state’s marijuana traceability provider (Marijuana Business Daily)

// Pure Oasis becomes first Boston retail marijuana shop and economic empowerment applicant to receive final license hopes to open later this month (Mass Live)

// New Hampshire Senate Approves SB 420 To Let Medical Marijuana Patients Grow Their Own (Marijuana Moment)

// Planet 13 Cafe Is Paying Off As Sales Stay Strong (Green Market Report)

// KushCo Holdings Raises $16 million with Unit Sale at $1.60 (New Cannabis Ventures)

// Psychedelic Clinic Company Field Trip Raises $8.5 Million (Green Market Report)

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Marijuana Today— Our flagship title, a weekly podcast examining the world of marijuana business and activism with some of the smartest people in the industry and movement.
Marijuana Media Connect— A service that connects industry insiders in the legal marijuana industry with journalists, bloggers, and writers in need of expert sources for their stories.

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Photo: Lenny K Photography/Flickr

Will QR Codes End California’s Illicit Cannabis Market? No, But They Are a Start

Last year, the California cannabis agencies started to ramp up enforcement activities against unlicensed operators. Still, if you ask any licensed cannabis business, enforcement against unlicensed competition is far from where it needs to be. It was widely reported last year, for example, that there were 3,000 illegal cannabis businesses in California. My best guess is that there are many, many more today, in spite of the agencies’ enforcement efforts.

While the agencies continue on the enforcement front, they are coming up with new, creative ways to combat the unceasing torrent of unlawful cannabis activity in the Golden State. For example, last week, one of my colleagues reported on the California Bureau of Cannabis Control’s (BCC) announcement concerning proposed emergency regulations that would require licensed retailers to post unique quick response codes (QR codes) in storefront windows and to carry it with them while delivering cannabis, and would require licensed distributors to carry copies of the QR code certificates while transporting cannabis goods. As explained by the BCC:

Smartphone users are able to use their smartphone camera to scan the displayed QR Code, which automatically links to the Bureau’s Online License Search and confirms the cannabis retailer’s license status. The system also displays the retailer’s address and license location to ensure that the information is not counterfeit.

“The proposed regulations will help consumers avoid purchasing cannabis goods from unlicensed businesses by providing a simple way to confirm licensure immediately before entering the premises or receiving a delivery,” said Bureau Chief Lori Ajax. “These requirements will also assist law enforcement in distinguishing between legal and illegal transportation of cannabis goods.”

Are QR codes really a good idea? Will they have any effect against unlicensed operators? Here are my thoughts: First, it almost goes without saying that the codes are meaningless unless consumers actually use them. Unfortunately, I do not think that many consumers are familiar with QR codes or will use them, even if they are clearly posted as required by the rules. For one thing, members of the public may not be aware of licensing requirements. They might reasonably assume that the existence of a brick-and-mortar location means that those stores are authorized by the government.

And who would blame someone for assuming that? It’s pretty reasonable from a consumer’s standpoint to assume that a business that openly and notoriously sells cannabis is authorized by the city/state, and that illegal businesses wouldn’t do the same thing (after all, you don’t really see a whole lot of people selling cocaine blatantly in commercial establishments). Unless citizens are more thoroughly educated on the differences between legal and illegal cannabis, they aren’t likely to use the codes, or even care if a business is licensed.

Second, along those lines, even if people use the codes, they are also meaningless if people continue to patronize unlicensed businesses. There are consumers who just do not care. I have spoken to many people who say “what’s the difference?” or “why should I care if the business  has a license?” or “at least I don’t have to pay taxes.” Why would a person who is dead-set on getting a delivery at 1 AM (hours after all licensed businesses are legally forced to shut down) not make the purchase because the delivery company didn’t have a license? These consumers will not be swayed by a QR code.

Third, and also along those lines, if a consumer is not aware of the QR code requirement, and steps into an unlicensed business that has no QR code on the wall, there will be no effect. In other words, will a consumer say to themselves “I don’t see a QR code on the wall, so I won’t shop here” if they are not aware of the QR code requirement? Of course not.

Fourth, unlicensed businesses can fake QR codes. The BCC’s QR code is supposed to link to the BCC’s license lookup tool and show the licensed business and its address. How hard would it be for an unlicensed company to get a fake website that looks just like the BCC’s and link to it with its own fake QR code? Probably not very hard. For businesses that are already ignoring the law, this wouldn’t be a stretch.

Finally, the most likely outcome here is that licensed cannabis companies are hurt by this rule. Without a doubt, many licensed businesses will violate this rule, and some will be fined or face other penalties for doing so. While the QR codes are certainly well intended, it’s easy to see how licensees can feel like they are being punished for someone else’s crime.

All of this is not to say that I think QR codes are a bad idea. They are definitely a step in the right direction. But for agencies that have been reported to be intensely understaffed, there are certainly a lot of other areas where licensed businesses would like to see (and can see) improvement. I gave my thoughts on some of these ways last summer, and those thoughts have not changed. For a summary, I think the agencies need to, at least:

  1. Allow more licenses. Last year, there was a push to pass AB-1356, which would have required local jurisdictions to allow certain local retail permitting if local voters voted in favor of the Control, Regulate and Tax Adult Use of Marijuana Act of 2016. As we all know, most California cities are not exactly welcoming cannabis businesses with open arms (though ironically, refusing to allow licensed businesses ensures that the unlicensed market thrives). AB-1356 was ordered into the California Assembly’s inactive file in May 2019, but in January 2020 it was pulled back out and now has a second chance at being passed. The law will face some uphill legal battles, which we are sure to write about in the near future, but the fact that it is getting a second chance could be huge news.
  2. Allow more deliveries.  The BCC actually made an effort to expand deliveries by enacting a rule that allows deliveries across the state. However, dozens of cities have sued the BCC over the rule and a private company is suing Santa Cruz for implementing rules that would restrict deliveries in contravention of the BCC rule. We expect some resolution on these cases later this year, but if the BCC rule is struck down, it will be a devastating blow to the legal cannabis industry and a huge gain to the illicit market.
  3. Speed up the licensing process. This has admittedly gotten better since I posted back in 2019. That said, the licensing process is still long and complicated, and any progress the agencies could make in getting people licensed will have an immediate impact on the illicit market.
  4. Broaden the hours of operation. For reasons I have never clearly understood, retailers are only allowed to sell cannabis until 10 PM. Retailers have no way to compete with unlicensed vendors who will sell cannabis at all hours of the night. It makes no sense that cannabis retailers have more restrictive hours of operation than alcohol retailers. It’s time for a change.
  5. Lower taxes. Unfortunately, the state didn’t get the memo, and in spite of pretty furious backlash, decided it was a good idea to increase taxes on licensed and compliant cannabis operators. While Governor Newsom said that he would simplify and maybe reduce cannabis taxes, we still don’t know whether that will officially happen, or when. But it goes without saying that higher taxes = higher prices and take out businesses who have to compete with non-taxpaying operators.
  6. Ramp up enforcement. As noted above, this is already happening. But it needs to happen more. Much more.

I will add a seventh point to this list: educate the public. As I pointed out above, QR codes are useless if people don’t know what they are. To be fair to the BCC, it has posted about this on social media and I even saw a billboard referring to the QR codes. But that’s just a drop in the bucket and the education needs to continue statewide. This is unquestionably an area that we will be writing on frequently over the next few years. Please stay tuned to the Canna Law Blog for more updates on the battle between licensed and unlicensed operators.

Thursday, February 6, 2020 Headlines | Marijuana Today Daily News

Marijuana Today Daily Headlines
Thursday, February 6, 2020 | Curated by host Shea Gunther

// Mass. House passes bill to increase oversight of host community agreements between marijuana businesses and municipalities (Mass Live)

// Another Vermont House Committee OKs Bill To Legalize Marijuana Sales (Marijuana Moment)

// In reversal, R.I. lawmakers abandon attempt to regulate medical marijuana outlets (Providence Journal)

These headlines are brought to you by Green Worx Consults, a company specializing in project management, workflow mapping and design, and Lean & 6 Sigma process. If you could use help making your business better at business, get in touch with Green Worx Consults.

// Michigan recreational marijuana sales near $18 million in two months (Michigan Live)

// Maine abandons plan to double per-acre fees on hemp farmers (Portland Press Herald)

// Legalize marijuana? A majority of Kentuckians now say yes – and for any use, poll shows (Cincinnati Enquirer)

// Connecticut Governor Renews Marijuana Legalization Pledge In Budget Proposal And Speech (Marijuana Moment)

// It Will Take Years for Mass to Kill Its Weed Black Market, Researcher Predicts (Merry Jane)

// WINE TO WEED: Wine grape growers lose labor to cannabis farms (Sun Gazette)

// Virginia Lawmakers Approve Another Marijuana Decriminalization Bill (Marijuana Moment)

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Marijuana Today— Our flagship title, a weekly podcast examining the world of marijuana business and activism with some of the smartest people in the industry and movement.
Marijuana Media Connect— A service that connects industry insiders in the legal marijuana industry with journalists, bloggers, and writers in need of expert sources for their stories.

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Photo: Massachusetts Office of Tourism/Flickr

California Cannabis Claims: Fraud

Welcome back to our litigation series on California cannabis claims. Fraud is one of those claims that clients believe will be easy to pursue, but it actually requires a lot of factual development and proof, even just to assert it in a complaint.  Below is a primer.


A fraud claim requires six elements: (1) a misrepresentation, (2) knowledge of that representation’s falsity, (3) an intent to induce reliance, (4) reliance, (5) causation, and (6) resulting damages. Even in a complaint, fraud must be pleaded specifically – a plaintiff must plead facts that show the how, when, where, to whom, and by what means the misrepresentations were made. This level of detail is not typically required of a plaintiff’s first filing, which is why we commonly see fraud claims challenged early via a demurrer, which is a defendant’s first chance to challenge a plaintiff’s claim as legally insufficient on its face.

Statute of Limitations

The statute of limitations for fraud is three years. The clock starts ticking when a plaintiff discovers the facts constituting the misrepresentation. So if you wait three years and a day after discovery of facts leading to a fraud claim, your claim will likely be barred.

Elements of a Breach of Fiduciary Duty Claim
  1. The misrepresentation. While it’s clear a false representation would qualify, note that a failure to disclose facts or a promise made with no intent to perform also qualify as misrepresentations. Most opinions, puffery (“seller’s talk”), and statements about the future on the other hand, do not qualify. One really important thing to note: the failure to perform a promise is not enough to constitute a misrepresentation in itself. While we understand it’s completely frustrating, we often have clients ask to “throw in” a fraud claim because something they were promised doesn’t end up happening. We need more facts (for example, maybe evidence of the defendant’s behavior after making the promise) that tend to prove the defendant never intended to perform.
  2. Knowledge of that representation’s falsity. Also known as “scienter,” the defendant must know that the statement is false or act with “reckless disregard” of its truth or falsity when making the representation.
  3. Intent to induce reliance. The defendant must also intend to induce the plaintiff to act in reliance on the misrepresentation. This is different from an intent to deceive the plaintiff, or an intent to cause some particular harm. The standard is much lower.
  4. Justifiable reliance. Logically, the next thing a plaintiff must prove is that he/she did, in fact, justifiably rely on the misrepresentation in taking some action. The misrepresentation doesn’t need to be the sole motivating factor. It doesn’t even need to be the predominant factor. As long as the plaintiff truly believed the representation and decided to do (or not do) something, this element is satisfied.
  5. Causation. As with most tort claims, the plaintiff must demonstrate that the defendant’s fraud proximately caused the plaintiff’s damages.
  6. Damages.  Finally, the plaintiff must prove his/her damages that were proximately caused by defendant’s fraud.

Like I wrote above, fraud is hard to plead and prove. If done successfully though, it opens doors to more remedies than most causes of action because it’s considered a more egregious, malicious harm.

  • Compensatory damages. Again, this remedy attempts to compensate the plaintiff for all his/her harm caused by the fraud. How this is measured depends on the relationship of the parties and the transaction itself. Perhaps most commonly, we see damages measured by the “out of pocket” rule – the plaintiff will receive the difference in value between what he/she gave to the defendant and what he/she received (in an attempt to restore the plaintiff to the position just before the fraud occurred). Sometimes, damages are measured by the “benefit of the bargain” rule – the plaintiff will receive the value of what he/she was promised.
  • Punitive damages. If the plaintiff is able to show that the defendant is guilty of malice, oppression, or fraud, punitive damages are also awarded.
  • Damages for physical harm or emotional distress. The contexts in which these types of damages are limited (for example, they’re not recoverable in property transactions) but these should also be considered in every case.
  • Statutory damages. Similarly, there are limited situations in which a fraud claim also opens the door to additional remedies provided by statute. For example, if the defendant receives stolen property due to the fraud, Penal Code s. 496 also allows recovery of treble damages (tripling of your damages), costs of suit, and reasonable attorneys’ fees.

Hope this helps clarify this commonly sought claim! We also covered breach of contract here and breach of fiduciary duty here. As always, if there’s a specific claim you have questions about or would like to see covered, don’t hesitate to reach out!