Our SoCal Cannabis Investment Forum is TONIGHT

TOMORROW: SoCal Cannabis Investment Forum

Don’t miss tomorrow night’s Southern California Cannabis Investment Forum, a discussion on investing in Southern California’s newly regulated cannabis industry. Hosted by Harris Bricken’s from our Los Angeles office, the Southern California Cannabis Investment Forum will connect top investors and leading companies in Southern California’s cannabis and ancillary industries.

The Forum will begin at 6:30 p.m. on Thursday with a keynote from Hilary Bricken that addresses the many recent changes to California’s medical and adult use cannabis laws under MAUCRSA. From 6:45 to 8 p.m., I will moderate a panel comprised of Alex Fang, Founder of Sublime CO2; Paul Henderson, CEO of Grupo Flor; Stephen Kaye, COO of Big Rock; Kenneth Berke, President of PayQwick; and Carlton Willey, our own San Francisco-based securities and equity financing attorney.

Panelists will cover:

• Cannabis industry investing and fundraising and the outlook for the future
• Deal structures (i.e., investment rounds, debt versus equity deals, hybrid structures forced by volatile regulations, and reverse mergers)
• Business and financing concerns tied to investing in cannabis
• Investor red flags in Southern California’s cannabis industry

Audience questions will be taken throughout the presentation. A cocktail networking session will follow the panel and last until 9:30 pm. Food and drink will be provided.

The Southern California Cannabis Investment Forum will be held at Wanderlust Hollywood. Doors open at 5:30 pm. We’ll have a few tickets at the door, but we expect this event to sell out just as we did a similar event in San Francisco so it’s best to register in advance!

source https://www.cannalawblog.com/tomorrow-socal-cannabis-investment-forum/

Cannabis Home Delivery Matures in Oregon

Wage and Hour Laws for Cannabis Businesses Because it Really Matters

Emergency MAUCRSA Regulations: Manufacturing in California

We wrote last week about the California Bureau of Cannabis Control’s (BCC) issuance of their much-anticipated emergency rules to fully implement the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) in California. These emergency regulations, including those issued by the Departments of Public Health and Food and Agriculture, can be found here, here, and here.

The emergency rules are similar to the withdrawn rules under the Medical Cannabis Regulation and Safety Act (MCRSA), but there are some important additions and gap-fillers with which applicants need to familiarize themselves. In the coming weeks, we’ll be summarizing some of the key rules with respect to each category of license, beginning with manufacturing. We will be discussing these regulations a bit at our Southern California Cannabis Investment Forum on November 30 in Los Angeles and it would also behoove you to stay tuned for an announcement setting the date for our next webinar, which will delve into the new regulations in detail.

The California Department of Public Health (CDPH) regulates cannabis manufacturing through its Manufactured Cannabis Safety Branch. The CDPH will issue temporary licenses allowing manufacturers to engage in commercial cannabis activity, effective January 1^st. These temporary licenses will be valid for 120 days and may be extended for additional periods of 90 days if the business has submitted an annual license application.

For manufacturers, there are two license categories and four license types, a departure from the categories specified in SB 94. The two license categories are the A-License for the adult-use market and the M-License for the medicinal market. A single business may hold both an M- and an A- license at the same premises, so long as they submit separate applications for each.

The four license types are as follows:

• Type 7: Extraction using volatile solvents (i.e. butane, hexane, pentane).
• Type 6: Extraction using non-volatile solvents or mechanical methods (i.e. food-grade butter, oil, water, carbon dioxide). The rules also clarified the definition of “volatile” by expressly excluding ethanol, which is now deemed “non-volatile.”
• Type N: Infusions (i.e. using pre-extracted oils to create edibles, beverages, capsules, vape cartridges, tinctures or topicals).
• Type P: Packaging and labeling only

*Note that both the Type N and Type P licenses had been eliminated in SB 94, but have been reintroduced.

Each licensee will need to have written SOPs for inventory control, quality control, transportation, security, and cannabis waste disposal and must submit these SOPs with their license application. Extractions using CO2 or any volatile solvent must be conducted with a closed-loop system that has been certified by a California-licensed engineer, and volatile, hydrocarbon-based solvents must have at least 99% purity. Certification by the local fire code official will be required for volatile solvent, CO2, and ethanol extractions.

Many of the product standards from the repealed MCRSA rules have also made their way into the new MAUCRSA regulations. For example, products cannot be infused with nicotine or alcohol, or have added caffeine. Edibles cannot be shaped like a human, animal, insect, or fruit, and potentially hazardous foods like meat, seafood and other products requiring refrigeration are prohibited.

The potency requirements have changed slightly, although edibles are still limited to a maximum of 10 mg of THC per serving and 100 mg of THC per package. Other cannabis products, including tinctures, capsules, and topicals, may contain up to 1,000 mg of THC per package for adult-use products and 2,000 mg per package for medicinal-use products.

The MAUCRSA packaging and labeling regulations will require a significant departure from current practices for many existing manufacturers. Cannabis product packaging cannot resemble traditionally available food packages, and all edibles packaging must be opaque. Cannabis products and their packaging cannot be attractive to children, and packaging must be tamper-evident and child-resistant. Labels must include an ingredient list, nutritional facts, and the CDPH-issued universal symbol. Products cannot be referred to as “candy,” and must include mandated warning statements and the THC content.

Perhaps most promising to many small-scale manufacturers is CDPH’s statement that it is currently developing an additional license type, Type S, which would allow businesses to share facility space. Currently, the rules require a separate and distinct premises for each license, with the exception being that a licensee can hold both an M- and A- license of the same type on one premises. The Type S license would open the door to co-sharing of manufacturing facilities and possibly equipment, which would greatly reduce the barriers to entry for many small companies struggling to secure and build out their own manufacturing facility.

In the coming days, we’ll be delving into the new regulations for cultivation, retail, and distribution as well, so stay tuned.

 

 

 

source https://www.cannalawblog.com/emergency-maucrsa-regulations-manufacturing-in-california/

California Commercial Cannabis Real Estate and the New MAUCRSA Rules

California just released nearly 300 pages of new regulations for medicinal and adult-use commercial cannabis businesses. These long-awaited rules follow months of public comment, a substantial environmental impact report on cultivation, and a report from the state Water Resources Control Board on diversion and discharge relating to cannabis cultivation. Though the new regulations do not include wholly unanticipated changes, it does include the following that will impact cannabis businesses when it comes to real estate and land use:

1. Cultivation aggregate size limits. Though there remains a 5-year prohibition on large (type 5) cultivation licenses for grows of more than 1 acre, and a 5-year limit of one medium grow license (10,001-22,000 sq ft) per person, there is no 1-acre aggregate limit on cultivation, which had been recommended in the environmental report. In other words, there is effectively no limit, other than a company’s monetary resources for license fees, that would prevent a large cultivator from converting an existing mega-farm into a cannabis farm by simply aggregating an unlimited amount of specialty (0-5,000 sq ft) and/or small grow (5,001-10,000 sq ft) licenses. This is a troubling development for small and medium-sized operators, as they had lobbied hard for an aggregate grow limit of one acre.
2. Premises boundary demarcation. MAUCRSA allows for a person to apply for and obtain more than one cannabis license, provided the licensed premises are “separate and distinct.” We had hoped to get more guidance on this term through the regulations (e.g. does it require a wall? Nominal boundary demarcations? Something in between?), but no explanation appears in the new regulations. This means what does and does not qualify as “separate and distinct” may have to be determined through the licensing process on a case-by-case basis, since applicants all need to submit a premises plan laying out the details of their proposed operation. This could mean many indoor operators in open warehouse spaces may end up having to build extra walls and entrances.
3. Subletting and Storage. Though we already knew from MAURCSA that California would require each “premises” to be contiguous and occupied by only one licensee, the new rules go slightly further by forbidding a licensee from subletting any portion of its licensed premises and by requiring each location where cannabis goods are stored be separately licensed. This means any licensee subletting a portion of their space must plan out a proper demarcation of their premises and think carefully about using that old garage next door to store product without an additional license.
4. Concurrent adult-use and medicinal operations. Under the new rules, one licensee can concurrently operate under both an “M” license and an “A” license on the same premises, if certain conditions are met—mainly that there is one licensee that conducts a single type of operation on the premises but keeps labeling and records separate for medicinal and adult-use. Though this seems like a common-sense regulation (why would someone need two licenses to make the same product in the same place?), it was not clear until issuance of the new rules how adult-use and medicinal licenses would interact, and whether they would be treated as truly separate licenses requiring separate premises.
5. Renewable energy requirements. The prior proposed MCRSA (medicinal) regulations had required 42% of the energy used by indoor or mixed-light grow licensees come from renewable sources. The new cultivation rules require only that the licensee meets the “average electricity greenhouse gas emissions intensity required of their local utility provider” under California’s existing Renewables Portfolio Standard Program. This means that rather than having indoor grows become leaders in renewable energy standards, licensees now only need to fit in with existing requirements, and even if they don’t, they can purchase allowances and offsets under California’s cap-and-trade programs. There had even been talk of increasing the percentage requirement for renewable energy, but that seems to have fizzled out.

Though the new cannabis rules contain some business-friendly updates, some disfavor small operators. It remains to be seen what effect the licensing process and the state’s enforcement of the new rules will have on the market for cannabis and cannabis real estate. We will be discussing these new regulations a bit at our Southern California Cannabis Investment Forum on November 30 in Los Angeles and it would also behoove you to stay tuned for an announcement setting the date for our next webinar, which will delve into the new regulations in detail.

source https://www.cannalawblog.com/california-commercial-cannabis-real-estate-and-the-new-maucrsa-rules/

The Cannabis Laws of Los Angeles County: The San Gabriel Valley

Our Los Angeles cannabis lawyers (of which I am one) are constantly being asked about the cannabis laws of various of the 88 incorporated cities in Los Angeles County.

Because it is both important and difficult to decipher each individual city’s local laws, we thought it would be helpful to provide you with charts to help. We divided the county into 4 regions and we will over the next few weeks trickle out the charts for each of these regions to keep you updated on each of the cities and their current laws. Part 1 was The Cannabis Laws of Los Angeles County: The 24 Cities in the Westside/South Bay Region (310).

This week’s post highlights the cities located in and around the San Gabriel Valley. Here is the chart showing the laws pertaining to cultivation, dispensing, distribution, and manufacturing in San Gabriel Valley Cities.

Before you can receive a California cannabis license you must have proof of local approval. Our charts in this series are intended to help you figure out whether such local approval is possible and, if so, what it takes to get it. Look for additional blog posts on remaining LA incorporated cities over the next few weeks.

 

source https://www.cannalawblog.com/the-cannabis-laws-of-los-angeles-county-the-san-gabriel-valley/

Cannabis Litigation, Part 6: Dispositive Motions

Don’t Miss: Black Friday Deal for the SoCal Cannabis Investment Forum!

 

On Thursday, November 30th, Harris Bricken will host a discussion on investing in Southern California’s newly regulated cannabis industry. Hosted by our Los Angeles office, the Southern California Cannabis Investment Forum will connect top investors and leading companies in Southern California’s cannabis and ancillary industries.

The Forum will begin at 6:30 p.m. with a keynote from Hilary Bricken that addresses the many recent changes to California’s medical and adult use cannabis laws under MAUCRSA. From 6:45 to 8 p.m., I will moderate a panel comprised of the following:

• Alex Fang, Founder of Sublime CO2
• Paul Henderson, CEO of Grupo Flor
• Stephen Kaye, COO of Big Rock
• Kenneth Berke, President of PayQwick
• Carlton Willey, our own San Francisco-based securities and equity financing attorney

Panelists will cover:

• Cannabis industry investing and fundraising and the outlook for the future
• Deal structures (i.e., investment rounds, debt versus equity deals, hybrid structures forced by volatile regulations, and reverse mergers)
• Business and financing concerns tied to investing in cannabis
• Investor red flags in Southern California’s cannabis industry

Audience questions will be taken throughout the presentation. A cocktail networking session will follow the panel and last until 9:30 pm. Food and drink will be provided and are included in the price of the ticket.

The Southern California Cannabis Investment Forum will be held at Wanderlust Hollywood. Doors open at 5:30 pm. If you act now, you can get $10 off a single ticket (SOCALCIF10), $25 off of two tickets (SOCALCIF25), and $45 off of three tickets (SOCALCIF45). These coupon codes end at midnight on Cyber Monday. We plan to sell out this event as we did in San Francisco, so don’t hesitate!

source https://www.cannalawblog.com/dont-miss-black-friday-deal-for-the-socal-cannabis-investment-forum/

BREAKING NEWS on San Francisco Cannabis

A couple of months ago we covered San Francisco in our Cannabis Countdown series. All up and down the state of California, local jurisdictions are constantly updating or amending their cannabis regulations and San Francisco is no different. There was also an enormous update on the state level as California’s Bureau of Cannabis Control, along with the state’s other cannabis licensing agencies (the Departments of Public Health and Food and Agriculture), just released their emergency regulations.

There’s a lot to digest in these 278 pages of regulations, but don’t fret as you know you can count on the Canna Law Blog to update you regularly on here with posts from our San Francisco and Los Angeles lawyers  and with our upcoming Los Angeles Cannabis Investment Forum on November 30 (go here to get your tickets for that before it sells out) and with a new webinar specifically on the new rules coming soon.

What hasn’t changed since California promulgated their rules (now withdrawn) under the Medical Cannabis Regulation and Safety Act is that local jurisdictions still control the types of cannabis licenses they are willing to permit inside their boundaries. Local jurisdictions still rule the roost and staying atop of the jurisdiction in which you want to operate your cannabis business is paramount. Just last week as I was meeting with clients at the MJBizCon conference in Las Vegas, the San Francisco Board of Supervisors (“Board”) released a draft of its new cannabis ordinance, which has significant implications for cannabis businesses looking to operate in San Francisco. The Board proposed amendments to San Francisco’s Planning Code (you can find them here) and the Administrative, Business and Tax Regulations, Health, and Police codes (here you go).

And if those are not enough to keep you busy, if you operate a cannabis cultivation, manufacturing, or distribution business in San Francisco you have until November 30^th to register your business with San Francisco’s Office of Cannabis. In other words, if your cannabis business is eligible, you need to STOP researching Thanksgiving recipes and REGISTER with the Office of Cannabis here. To say that the phone lines in our San Francisco office have been ringing off the hook since this November date was announced would be both a cliché and the truth. Our cannabis lawyers have been representing companies in California, Washington, and Oregon since 2010 and we cannot remember any governmental body providing for such a short deadline!

The below are some of the more important changes to the Board’s proposed amendments:

• It creates an equity program that grants priority permit processing for equity applicants and defines an equity applicant as someone who a) lived in San Francisco for at least five years during the time period of 1971-2009; b) lived in a census tract where at least seventeen percent of the households had incomes at or below the federal poverty level; and c) at the time of application, has assets  (excluding non-liquid assets and retirement accounts) that do not exceed asset limits established by the Director (of the Office of Cannabis). For the entire list of criteria that defines an equity applicant look to Section 1604(b).
• It establishes priority processing for equity incubators. An equity incubator is an applicant that does not qualify as an equity applicant, but that submits with its cannabis business permit application a cannabis equity incubator agreement in which it commits to comply with certain operating requirements (see section 1604(c)) during its first three years in operation as a cannabis business.
• It creates a process to issue temporary cannabis business permits for all permit categories other than storefront retailers.
• It allows storefront retailers to operate a compassion program that provides medicinal cannabis and/or medicinal cannabis products at no or nominal cost to low-income individuals qualified under California Health and Safety Code sections 11362.7 et seq. to use medicinal cannabis.
• It allows for onsite cannabis consumption at dispensaries and microbusinesses so long as they have a valid cannabis consumption permit.
• It prohibits delivery of cannabis products by businesses outside San Francisco. Only retailers and delivery-only retailers with a license from the Office of Cannabis can deliver cannabis within the city limits of San Francisco.
• And of utmost importance, it provides that only those who fit into one of the following categories  can receive a permit from the Office of Cannabis in 2018:
• 1. You are an equity applicant or an equity incubator.
  2. You possess a valid permit to operate a medical cannabis dispensary.
  3. You were issued a temporary permit.
  4. You can show you operate in compliance the Compassionate Use Act of 1996 and you were forced to discontinue operations as a result of federal prosecution or the threat of federal prosecution.
  5. You applied for a medical cannabis dispensary permit prior to September 26, 2017, that required referral to and approval by the planning commission.
  6. You registered with the Office of Cannabis as a pre-existing non-conforming operator, as set forth in subsection (k) of section 1605.

We previously covered the importance of reaching out to your local legislator when it comes to the implementation of cannabis policy and that holds true whether you live in a small town or a big international city like San Francisco. If you have issues with the Board’s amendments now is the time to speak up as they are expected to vote on them on November 28^th, so call your district supervisor now!

source https://www.cannalawblog.com/breaking-news-on-san-francisco-cannabis/

California Commercial Cannabis Land Purchases: Due Diligence, Due Diligence, Due Diligence

Keeping the FDA Off Your Back: Don’t Make Health Claims for Cannabis Products

In Cannabis Edibles and the FDA, I discussed the basics of FDA regulation of cannabis edibles. On November 1, 2017, the FDA provided further specific examples of prohibited health claims made for cannabis products, in this case, cannabidiol (CBD):

The FDA has grown increasingly concerned at the proliferation of products claiming to treat or cure serious diseases like cancer. In this case, the illegally sold products allegedly contain cannabidiol (CBD), a component of the marijuana plant that is not FDA approved in any drug product for any indication.

FDA Commissioner Scott Gottlieb followed up:

Substances that contain components of marijuana will be treated like any other products that make unproven claims to shrink cancer tumors. We don’t let companies market products that deliberately prey on sick people with baseless claims that their substance can shrink or cure cancer and we’re not going to look the other way on enforcing these principles when it comes to marijuana-containing products.

The FDA issued warning letters, usually its first step in enforcement proceedings, to four companies. The prohibited health claims made by these companies included:

• “Combats tumor and cancer cells;”
• “CBD makes cancer cells commit ‘suicide’ without killing other cells;”
• “CBD … [has] anti-proliferative properties that inhibit cell division and growth in certain types of cancer, not allowing the tumor to grow;” and
• “Non-psychoactive cannabinoids like CBD (cannabidiol) may be effective in treating tumors from cancer – including breast cancer.”

Recall from our earlier post that the FDA will treat products as drugs if their own labeling suggests they are “intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease.” Phrases like “combats tumor cells” and “[has] anti-proliferative properties that inhibit cell division and growth in certain types of cancer” clearly suggest that the CDB product can cure, mitigate, treat or prevent cancer, and is thus a drug.

As shown by the last bullet point, it doesn’t matter if you say “may treat” cancer, instead of “treats cancer.” Any suggestion that a product might have a role in treating or diagnosing disease, or that it is intended to affect the structure or any function of the human body of humans or other animals, is a health claim that subjects the product to drug regulations (unless it falls within the narrow confines of the Dietary Supplement Health & Education Act.)

Most importantly, the FDA press release says – again – that “unlike drugs approved by the FDA, the manufacture of these products has not been subject to FDA review as part of the drug approval process….” Only the FDA can determine whether a drug can be labelled as safe and effective for a particular disease. Preventing health claims based on anecdotal evidence has been one of the FDA’s core functions since 1906.

This isn’t the first time the 800-pound gorilla has visited CBD makers. FDA issued warning letters based on similar CBD health claims in February 2015 and again in February 2016. If you want to keep this monkey off your back, don’t make health claims.

For related posts about the FDA, CBDs and health claims, check the:

• Cannabis Edibles and the FDA:  An Update
• Cannabis and the Federal Government: The FDA is on The CBD Warpath, Again
• Cannabis Beverages and the FDA
• U.S. Government Warns CBD Companies: The Bigger Compliance Picture

source https://www.cannalawblog.com/keeping-the-fda-off-your-back-dont-make-health-claims-for-cannabis-products/

California Cannabis Banking: An Update

The lack of reliable banking services has always been a problem for the cannabis industry. We’ve seen the dearth of banking options pose problems for fundraisers, advocacy groups, and state-chartered financial institutions.

Though 29 states and the District of Columbia have broadly legalized medical use of cannabis (eight of those states have also legalized adult-use), cannabis is still illegal under federal law and most financial institutions refuse to bank cannabis businesses. It is against this backdrop that  California State Treasurer John Chiang last week released a report (“Report”) outlining California’s approach to this problem. The Treasurer estimates California adult-use cannabis sales will exceed $7 billion by 2020 and will bring in approximately $1 billion a year in state tax revenues. The Report affirms that the status quo on cannabis banking is untenable for an economy the size of California’s.

The Report lists the following four areas as those on which the State of California must act:

1) Cash Handling for Collection of Taxes and Fees. The state cannot force financial institutions to bank cannabis businesses but it can implement strategies for an easier, safer, and more efficient way for cannabis businesses to remit their taxes and fees. In furtherance of this goal, the Report suggested the following:

• State taxing agencies, the Treasurer’s office, and financial institutions should contract with an armored courier service to collect state tax and licensing payments.
• The State of California should install smart safes and kiosks at government agencies and cannabis businesses.
• California cannabis businesses should be allowed to use money services businesses for smaller tax payments.
• California cannabis businesses should be allowed to use third-party payment services to make electronic payments (think PayPal or Venmo).

2) Expanding Cannabis Industry Access to Banking Services Under Current Law. California is not the first state to legalize cannabis for adult-use and the Report looked at Washington and Colorado where some credit unions are openly banking cannabis businesses. These Washington and Colorado credit unions are following guidelines promulgated by the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”). The FinCEN guidance on cannabis provided information for financial institutions to bank cannabis businesses while still complying with the Bank Secrecy Act and the USA Patriot Act. The Report suggests creating an online portal to assist financial institutions to comply with FinCEN rules. The online portal would gather information from all 11 California state agencies with cannabis regulation or data collection responsibilities.

3) A State-Backed Financial Institution. The Report also looked at the feasibility of creating a state-owned or state-backed financial institution with either a broad mission to expand banking services to underserved groups or to narrowly focus on the cannabis industry. The prospects of a state-owned bank look dim because of the inability to obtain deposit insurance, the possibility of federal asset forfeiture, and the high (pun not intended) start-up costs. The Report also looked into the feasibility of a “bankers’ bank”: a private institution whose customers are other banks. Under this model, the bankers’ bank would help financial institutions comply with the Cole Memorandum and FinCEN guidelines. The biggest roadblock to the bankers’ bank is that it would do little to nothing to reduce financial institution fear of federal enforcement.

4) Full Access to Banking Services: The Federal Solution. In its final option, the Report relies on lobbying with the goal of bringing the federal government to its senses. One piece of legislation worth calling your representative about is the Secure and Fair Enforcement Banking Act (“SAFE Banking Act”), which aims to provide a safe harbor for banks that service cannabis businesses. Another focus is achieving the holy grail of the cannabis industry: removing cannabis from the federal government’s list of Schedule 1 controlled substances.

The report does a good job highlighting the unnecessary difficulties imposed on cannabis businesses by the federal government’s listing cannabis as Schedule 1 drug. As more states continue to legalize, regulate, and receive tax revenue from cannabis businesses there is reason for optimism. With staunch conservatives such as Utah Senator Orrin Hatch starting to see the light, it is fair to say that the federal legalization option is increasingly becoming less far-fetched – especially if we continue seeing the sort of election results we saw last Tuesday.

Now is not the time to rest on our precarious laurels. We all need to keep up the intensity, educate our local legislators, and most importantly, vote!

source https://www.cannalawblog.com/california-cannabis-banking-an-update/

Oregon Sick Leave Laws for Your Cannabis Business: Clear as Mud

If you’re an Oregon cannabis business owner, you likely employ hourly employees entitled to either paid or unpaid sick leave. Oregon passed comprehensive sick leave legislation in 2015. To put it mildly, the legislation was confusing and employers were unsure how to properly implement its requirements. In July 2017, the legislature amended the act to clear up some of the confusion. This post is aimed to give you some understanding of how the Oregon sick leave laws apply to cannabis businesses that employ a variety of employees.

The Oregon sick leave law requires almost all Oregon employers to provide 40 hours of sick leave per year. Employers that employ at least 10 employees in Oregon (six employees if the employer has operations in Portland) must provide 40 hours of protected paid sick leave. Employers that employ less than 10 (six in Portland) must provide 40 hours of protected unpaid sick leave. Protected sick leave means the employee is permitted to be absent from work without disciplinary consequences or a reduction in benefits. If the sick leave is paid, the employee must be compensated at the employee’s regular rate of pay.

Employees are allowed to use sick time for any of the following purposes:

• For the employee’s own or an employee’s family member’s mental or physical illness, injury or health condition, need for medical diagnosis, care, or treatment of a mental or physical illness, injury, or health condition, or need for preventive medical care;
• To care for an infant or newly adopted child or newly placed foster child within 12 months after the birth or placement of the child;
• Absences associated with the death of a family member;
• Absences related to domestic violence, harassment, sexual assault or stalking;
• To donate accrued sick time to another employee.

Although an employee can use the sick time for the above reasons, employers cannot ask for verification unless the employee takes more than three consecutively scheduled work days of sick time. The employer must pay for any costs associated with obtaining verification of the use of sick time.

There are two ways employers can award the 40 hours of sick time. Employers can either “front-load” the 40 hours at the beginning of the year by giving its employees all of the hours at once or they can require employees accrue the leave as they work. If an employer chooses the accrual method, an employee must accrue one hour of sick time for every 30 hours worked or 1-1/3 hours for every 40 hours worked. Employers can cap accrual at 40 hours or allow the employees to continue to accrue after the 40-hour milestone has been reached. Employers have to allow employees to accrue from the first day they begin working but may require an employee to have worked 90 days before using accrued sick time. Employees can carry over up to 40 hours of unused leave from one year to the next.  An employee may have up to 80 hours of sick leave in one year. An employer can limit actual time used to 40 hours per year.

Employers are required to maintain records of the hours worked, the paid sick time accrued and used by each employee, and provide quarterly written notification to each employee of the amount of accrued and unused paid sick time available for use.

As you can tell, there are a lot of moving parts involved with Oregon’s sick leave laws. For ease of accounting, it may be best to front-load your employees with 40 hours of sick leave at the beginning of the year (a year can be an annual period and does not have to be at the beginning of the calendar year). If you go with the accrual method you will need to track each of your employee’s hours and provide them with one hour of sick time for every 30 hours they work. For many of our Oregon cannabis clients — most of whom employ a variety of hourly and salaried employees — this is just too much work. Regardless of the method you choose for awarding sick time, you must at least quarterly give each of your employees with a written statement of sick time accrued and unused sick time available for use at least quarterly.

source https://www.cannalawblog.com/oregon-sick-leave-laws-for-your-cannabis-business-clear-as-mud/

Cannabis Litigation, Part 5: The Waiting is the Hardest Part

California Cannabis Licensing and The Collective Model: How Long Will That be Going On?

BREAKING: California Releases Its Emergency MAUCRSA Regulations

Today, the Bureau of Cannabis Control (along with the Departments of Public Health and Food and Agriculture) dropped their much anticipated emergency rules (see here, here, and here) to fully implement the Medicinal and Adult-Use Cannabis Regulation and Safety Act in California. The agencies kept a lot of what we saw from the withdrawn rules under the Medical Cannabis Regulation and Safety Act (MCRSA). (see here, here, here, and here), but there are also some new, notable additions and some interesting gap-fillers that now give us the foundation for operational standards across license types. While we can’t cover every single change or topic from these rules in one post (and because we’ll be covering the license types and application details in other posts in the coming days and weeks), here are some of the highlights of the emergency rules:

1. We now have a revised definition of “canopy,” which is “the designated area(s) at a licensed premise that will contain mature plants at any point in time.” In addition, Canopy shall be calculated in square feet and measured using clearly identifiable boundaries of all area(s) that will contain mature plants at any point in time, including all of the space(s) within the boundaries; Canopy may be noncontiguous but each unique area included in the total canopy calculation shall be separated by an identifiable boundary which include, but are not limited to: interior walls, shelves, greenhouse walls, hoop house walls, garden benches, hedgerows, fencing, garden beds, or garden plots; and
   1. If mature plants are being cultivated using a shelving system, the surface area of each level shall be included in the total canopy calculation.
   2. “Nonvolatile solvent” has been further defined to mean “any solvent used in the extraction process that is not a volatile solvent,” which “includes carbon dioxide (CO2) used for extraction and ethanol used for extraction or post-extraction processing.”
2. Temporary licensing has now been fully detailed to include online applications, the personal information for each owner that must be disclosed, contact information for the applicant’s designated point of contact, physical address of the premises, evidence that the applicant has the legal right to occupy the premises for the desired license type, proof of local approval, and the fact that the temporary license (which is good for 120 days) may be renewed and extended by the state for additional 90 day periods so long as a “complete application for an annual license” has been submitted to the state. No temporary license will become effective until January 1, 2018.
3. For the full blown “annual license,” the application requirements are pretty much the same as under the MCRSA rules except that now you have to disclose whether you’re applying for an “M License” or an “A License” and you have to list out all of your financing and financiers which include: “A list of funds belonging to the applicant held  in savings, checking, or other accounts maintained by a financial institution, a list of loans (with all attendant loan information and documentation, including the list of security provided for the loan), all investment funds and names of the investors, a list of all gifts, and a list with certain identifying information of anyone with a “financial interest” in the business. “Financial interest” means “an investment into a commercial cannabis business, a loan provided to a commercial cannabis business, or any other equity interest in a commercial cannabis business.” The only exempt “financial interests” are bank or financial institution lenders, individuals whose only financial interest is through an interest in a diversified mutual fund, blind trust, or “similar instrument”, and those shareholders in a publicly traded company who hold less than 5% of the total shares.
4. As part of your application, among other requirements, you’ll still need to submit a premises diagram drawn to scale along with all of your security procedures and inventory procedures (and pretty much all corresponding operational SOPs), and a $5,000 bond is still required for all licensees (as well as mandatory insurance). And all owners will still need to submit their felony conviction criminal histories as specifically enumerated in the regulations and that are substantially related to running the business as well as rehabilitation statements.
5. Several new licenses have been created (and/or brought back from dead from the MCRSA): the cannabis event organizer license (to enable people to take advantage of the temporary cannabis event license), the distribution transporter only license (which allows this licensee to only move product between licensees, but not to retailers unless what’s being transported are  immature plants or seeds from a Type 4 nursery), the processor license (a cultivation site that conducts only trimming, drying, curing, grading, packaging, or labeling of cannabis and nonmanufactured cannabis products), the Type N and P manufacturing licenses are back, and there’s now a Type 9 delivery only Non-Storefront Retailer license.
6. We also now have the non-refundable licensing fee schedules per license that vary from license type to license type and they’re mostly nominal though some increase with increased gross receipts, and small and medium sized growers will have to pay pretty robust fees.
7. If you want any changes after-the-fact to your premises or ownership structure, you have to ask the state first and get its approval.
8. All growers are again limited to 1 Type 3 medium cultivation license each, whether it’s an M License or an A License.
9. A retailer can sell non-cannabis goods on the premises so long as their city or county allows it (this excludes alcohol, tobacco, and tobacco products). Retailers can  also sell  non-flowering, immature plants (no more than 6 in  a single day to a single customer). M-licensed retailers and microbusinesses an also give cannabis away free of charge to qualified patients or  their caregivers.
10. Notably, until July 1, 2018, licensees may conduct commercial cannabis activities with any other licensee, regardless of the A or M designation of the license.
11. The renewable energy requirements for cultivators have been re-vamped hopefully to the content of growers.
12. Again, the licenses are NOT transferable, so we’re looking at folks only being able to purchase the bsuinesses that hold them.
13. Distributors will be able to re-package and re-label only flower, but not infused cannabis products unless they hold a manufacturing license. Distributors also cannot store any non-cannabis goods at their premises. The state has also laid out what must take place during a distributor’s quality assurance review and the chain of custody protocol with third party labs for testing.
14. We have a detailed list of all permissible extraction types, including that any CO2 extractions must be done within a closed loop system.
15. The prohibited products list is pretty much the same as it was under the  MCRSA rules (so, no nicotine or caffeine infused cannabis products).
16. In regards to “premises,” the Bureau’s regulations mandate that a licensee may have up to two licenses at a given premises that are for the same license type so long as they’re owned by the same company and one is an A-license and  the other is an  M-license.
17. In addition to other relatively onerous advertising requirements, licensees must “Prior to any advertising or marketing from the licensee involving direct, individualized communication or dialog, the licensee shall use age affirmation to verify that the recipient is 21 years of age or older.” Direct, individualized communication or dialog, may occur through any form of communication including: in person, telephone, physical mail, or electronic. And a method of age verification is not necessary for a communication if the licensee can verify that “the licensee has previously had the intended recipient undergo a method of age affirmation and the licensee is reasonably certain that the communication will only be received by the intended recipient.”
18. Retailers and microbusinesses are now required to hire third party security to protect and watch the premises.
19. In order to hold a microbusiness license, a licensee must engage in at least three (3) of the following commercial cannabis activities: cultivation, manufacturing, distribution, and retail sale. There are also now a slew of regulations surrounding each activity a microbusiness can undertake.
20. Live entertainment is now allowed at a licensed premises so long as it follows the bevy of regulations regarding content and presentation.

Overall, we have a close-ish copy of the withdrawn MCRSA rules that will lead us into 2018. Be sure to read the rules again and again before pursuit of a license—applicants will have their work cut out for them on both the state and local levels.

 

source https://www.cannalawblog.com/breaking-california-releases-its-emergency-maucrsa-regulations/

Trump on Cannabis: The First Year

 

On November 8, 2016, Donald Trump defeated Hillary Clinton in the US Presidential election. That same day, voters in California, Nevada, Massachusetts, and Maine legalized marijuana for recreational use, and voters in Florida, Arkansas, North Dakota, and Montana approved medical marijuana initiatives. For supporters of marijuana, Election Day was bittersweet; the overall success of marijuana ballot initiatives was undercut by a potentially hostile new administration.

Now that we have a year’s worth of Trump administration comments and action on cannabis, it’s a good time for us to access where things are with this administration.

1. Donald Trump changed his tune on drug policy before becoming President. Donald Trump has been a wildcard on marijuana, having made statements on every side of the issue. In 1990, Trump told the Sarasota Herald-Tribune that US drug enforcement efforts were “a joke” and advocated for legalizing all drugs to “take the profit away from these drug czars.” During his campaign, Trump responded to a question about Colorado cannabis legalization as follows:

I say it’s bad. Medical marijuana is another thing, but I think [recreational marijuana] it’s bad. And I feel strongly about that. If they vote for it, they vote for it. But they’ve got a lot of problems going on right now, in Colorado. Some big problems. But I think medical marijuana, 100 percent.

2. President Trump has barely discussed cannabis since becoming President. Trump appears to have publicly commented on cannabis but once since he became president when sports journalist Jim Gray asked him whether NFL players should be allowed to use medical cannabis and Trump replied by saying he had “no opinion on it. They’re going to have to take a look at that. They’re going to talk with the league, they’re going to be talking to, obviously, government officials wherever it may be.” This Trump statement is hardly illuminating regarding his current position on cannabis.

3.  Jeff Sessions hates cannabis.  Trump appointed Jeff Sessions as Attorney General. Sessions has a long history of being vehemently anti-marijuana. As a Senator, Sessions often criticised President Obama’s “hands-off” approach to marijuana and once stated that “we need grown-ups in charge in Washington to say marijuana is not the kind of thing that ought to be legalized, it ought not to be minimized, that it’s in fact a very real danger.” He also went so far as to say that “good people don’t smoke marijuana.” Sessions’ hatred for cannabis has not cooled since taking over as Attorney General and he made the following statement earlier this year:

I reject the idea that America will be a better place if marijuana is sold in every corner store. And I am astonished to hear people suggest that we can solve our heroin crisis by legalizing marijuana—so people can trade one life-wrecking dependency for another that’s only slightly less awful. Our nation needs to say clearly once again that using drugs will destroy your life.

4. Sean Spicer warned of a crackdown on recreational cannabis that hasn’t happened. In February, then Press Secretary Sean Spicer made comments that sent tremors through the legal cannabis industry when he predicted “greater enforcement” of the Controlled Substances Act in recreational states. Spicer stated, “[t]he president understands the pain and suffering that many people go through who are facing, especially terminal diseases, and the comfort that some of these drugs, including medical marijuana, can bring to them,” Spicer went on to tell reporters that states’ allowance of marijuana for recreational purposes “ is something the Department of Justice, I think, will be further looking into.” Fortunately, this prediction has not come true.

5. Sessions is evaluating the Cole Memo. At his confirmation hearing, Attorney General Sessions said that he intended to consider the viability of the Cole Memo:

The Department of Justice under Lynch and Holder set forth some policies that they thought were appropriate to define what cases should be prosecuted in states that have legalized, at least in some fashion marijuana, some parts of marijuana…. But, fundamentally the criticism I think was legitimate is that [the policies] may not have been followed. Using good judgment about how to handle these cases will be a responsibility of mine.

Sessions was critical of the Cole Memo during his confirmation but he has not yet rescinded the memo or its underlying policies. In March, Sessions reportedly reassured some GOP senators that he will not be moving away from the Cole Memo and the Obama-era deference to state-legal cannabis programs. But the Huffington Post uncovered a July 24, 2017, letter Sessions sent to Washington State Governor Jay Inslee that was harshly (and inaccurately) critical of Washington State’s marijuana regulatory system.

Trump as president so far seems not to care much one way or the other about cannabis legalization. In the meantime, cannabis legalization continues to move forward.

 

source https://www.cannalawblog.com/trump-on-cannabis-the-first-year/