It is well known that between New York’s enactment of the Marihuana Regulation & Taxation Act (commonly known as the Cannabis Law) on March 31, 2021 and the slower than anticipated adoption of regulations for adult-use cannabis retailers and implementation of the Act there have been few (and in some geographic areas of the state, no) licensed retail dispensaries opened for the sale of adult-use of cannabis and cannabis related products. As a result, there has been a proliferation of unlicensed retailers (often referred to as “sticker shops” because the sale of stickers comes with the “gift” of cannabis products) selling…
Continue Reading New York Landlords May Get Stuck with the Bill for Unlicensed Cannabis Sticker Shops

Last summer, the Washington D.C. Council unanimously passed a bill that prohibits employers from refusing to hire, terminating, suspending, failing to promote, demote, or otherwise penalizing any employee who uses marijuana, even if they fail a drug test. In October 2022, the bill, referred to as the D.C. Marijuana Protections Amendment Act of 2022, was signed by Mayor Bowser. The law goes into effect on or after July 13, 2023.[1] …
Continue Reading On the Horizon: Broad Employment Protections for Marijuana Users in the District of Columbia

Companies should regularly assess their Prop 65 compliance. Products, packaging, business relationships, and the rules for compliance are constantly changing. Start 2023 off right with a review of your compliance practices to avoid costly private enforcement actions.
Continue Reading Get Your Prop 65 House in Order for the New Year

On November 10, 2022, in the matter Variscite NY One, Inc. v. State of New York, et al., the U.S. District Court for the Northern District of New York granted the plaintiff’s a motion for a preliminary injunction against the State of New York (“NYS”), the New York State Office of Cannabis Management (“OCM”), and the Executive Officer of the OCM, Christopher Alexander issuing any cannabis licenses under NYS’s conditional adult-use retail dispensary (“CAURD”) application program in 5 of the state’s 14 geographic regions.
Continue Reading Federal Judge in NY Issues Preliminary Injunction to Block Retail Cannabis Licenses on Constitutional Grounds

This article was originally published in the November/December issue of ELFA’s Equipment Leasing & Finance magazine.

In mid-July 2022, the United States House of Representatives passed provisions that would allow legitimate cannabis-related businesses to access federally regulated financial services. This marks the seventh time the House has approved a version of the Secure and Fair Enforcement (SAFE) Banking Act. The original version of federal cannabis banking reform was introduced nine years ago by Rep. Ed Perlmutter (D-Colo). The passage of the SAFE Banking Act, either as stand-alone legislation or as amendments attached to must-pass bills, would prohibit federal banking regulators from…
Continue Reading Federal Cannabis Banking Reform: What Happened?

California Safe Drinking Water and Toxic Enforcement Act of 1986 (Health & Safety Code § 25249.5 et seq.) (“Prop 65”) is a California law that prohibits any person in the course of doing business from “knowingly and intentionally expos[ing]” individuals to listed carcinogens and reproductive toxins without adequate warning. Recently, in Environmental Health Advocates, Inc. v. Sream, Inc., 83 Cal. App. 5th 721 (2022), the First District Court of Appeal had the opportunity to interpret the word “expose” as used in Health & Safety Code § 25249.6, concluding that possible indirect contact with a listed Prop 65 chemical, depending on…
Continue Reading Up In Smoke – CA Court of Appeal Dismisses Prop 65 Case Against Water Pipe Manufacturer Narrowly Construing The Term “Expose”

In a historic move, today, President Joe Biden announced a three-step program to bring broad changes to federal cannabis policy. As an initial step towards reform, President Biden will pardon all federal offenders convicted of simple marijuana possession. According to administration officials, the pardons will be issued through an administration process overseen by the Department of Justice. Those eligible for the pardons will receive documentation showing they were officially forgiven for their crime.
Continue Reading BREAKING NEWS: Biden to Pardon Federal Marijuana Possession Convictions

Acting in one fell swoop, on September 18, 2022, California Governor Gavin Newsom signed 10 cannabis-related legislative bills into law. These bills, which touch on issues that run the gamut of the cannabis industry, are intended to “strengthen California’s cannabis laws, expand the legal cannabis market and redress the harms of cannabis prohibition.” Senate Bill 1326 is the most widely recognized bill of the group, and authorizes the Governor the power to sign cannabis trade agreements with other states where cannabis is legal. Other bills address employment protection, labelling, use of cannabis in veterinary medicine and taxation. In his press release,…
Continue Reading In One Day, California Governor Signs Into Law Ten Cannabis Bills, Including Authorization for Interstate Commerce

Virtually all California employers with five or more employees are covered by the Fair Employment and Housing Act (FEHA), the state’s most noteworthy civil rights law. FEHA protects and safeguards the right and opportunity of all persons to seek, obtain, and hold employment free from discrimination by establishing a comprehensive scheme to combat employment discrimination.
Continue Reading California Expands FEHA to Include Off The Job Cannabis Use

The Illinois Cannabis Regulation and Tax Act (“CRTA”), which was enacted in 2019, legalized recreational adult use cannabis in Illinois. The CRTA also created a Social Equity Program intended to offer disadvantaged people, communities of color, and those disproportionately impacted by the war on drugs an opportunity to benefit from the cannabis industry. Pursuant to the Social Equity Program, the Illinois Department of Agriculture (“IDOA”) awards points to applicants for cannabis licenses based on factors such as residing in an area disproportionately impacted by prior laws criminalizing cannabis and veteran status.[1] The program was widely praised and seen by…
Continue Reading New Litigation Continues to Challenge the Social Equity and Scoring Process of the Illinois Cannabis Regulation And Tax Act

Help for California’s fledgling cannabis industry finally appears to be on the way. For years, the industry has shouldered heavy taxes – a 15% state-wide excise tax, sales and use taxes up to 10.75%, and local business licenses taxes up to 15% in some jurisdictions. And, to top it off, California imposed a cultivation tax on cannabis flowers of $161.28 per dry-weight pound. While growers could sustain this tax burden when business was good, wholesale prices plummeted in the fall of 2021 and left growers unable to turn a profit.
Continue Reading California Governor Signs into Law Cannabis Tax Relief Bill

Recreational cannabis is now legal in 19 states and Washington D.C., driving the growth of legal cannabis sales estimated at $33 billion this year—up 32% from 2021—and expected to reach $52 billion by 2026.[1] This movement signals that financial investment in cannabis is not abating but accelerating notwithstanding the impact of the lingering COVID-19 pandemic. This growth in the cannabis industry, of course, also means that operators and their investment partners face commercial risk, including insolvency.
Continue Reading The Cannabis Conundrum: Can Cannabis Companies File Chapter 15?

Residents of California often complain about high taxes, but no one pays higher taxes than the cannabis industry.  In addition to the Federal 280E penalties, the cannabis industry in California is subject to a 15% state-wide excise tax, sales and use taxes that can reach up to 10.75%, and local business licenses taxes which are as high as 15% in some jurisdictions.  On top of these excise taxes, which combined can approach 40%, there is a state cultivation tax currently imposed on cannabis flowers at a rate of $161.28/dry-weight pound (and some local jurisdictions impose additional cultivation taxes).
Continue Reading California Cannabis Farmers May Finally Get Some Relief