2018 Marijuana Status Update

Introduction: Marijuana is big business. This article explores the things you need to know as of the upcoming deadline on January 2, 2018 and what to consider before joining the thousands of people wanting to get into the business. Because these articles are written based on immediate needs of clients and issues in the news, I apologize for any grammar mistakes.

Issue #1. The Marijuana Business is More Difficult Than You Think. Many people have a perception that those in the marijuana business are merely “potheads”. They get this view because of movies like “Fast Time from Richmont High” or from characters like Harold and Kumar. Understand that those in the marijuana business have been zealously advocating from legalization for nearly 50 years. They are intelligent and extremely business savvy. If you are looking to trick a pothead in business, you are likely to find that they are more intelligent than you – especially in the business of marijuana.

Issue #2. Proposition 64 Has Nothing to do With Medical Marijuana. If you are looking to engage in the medical marijuana business, the law on January 2, 2018 (Proposition 64) has nothing to do with you.

Issue #3. There Are More Ways to Make Money Apart from Actually Getting a License. I frequently tell people that getting a license is not the only way to make money from marijuana (aka cannabis). If you have real estate or have been a landlord, leasing or renting to a commercial or residential tenant is an excellent way to make money from an industry without heavily involving yourself in the marijuana business.

Issue #4. There Will be Heavy Government Regulation Coming in 2018. Do not think that legalization means no oversight. I believe that there will be heavy government action in 2018 to shut down and prosecute many illegal acts in the marijuana industry. Understand that one of the basics to legalized marijuana is a 15% state tax. A portion of the income that California receives will be used for enforcement of the laws. Let not legalization full you. There will be many business owners wishing for deregulation because of the sudden inspections that will commence in 2018.

Issue #5. Yes, Marijuana is Legal in California. No, the Federal Government Considers It Illegal and Still May Prosecute. Indeed, the fear of many people is whether the federal governmental will prosecute California marijuana businesses. The answer is simple, under Obama no, under Trump we do not know. Since 2014, the US Congress and the President has prevented prosecutions over acts that are legalized by the state. However, President Trump and Attorney General Sessions has reopened the door on prosecution. While there has been no formal statement either way, yes marijuana remains a risky business and once every business owner considers prior to entering into the marijuana industry.

Issue #6. Read Proposition 64. No business owner can get away from reading Proposition 64. I recommend that you read Proposition 64, in full, along with the legislative notes. The actual law, word for word, can be found here: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180AB64

Issue #7. Get Familiar with These Websites Today. Anyone that is interested in the marijuana industry needs to become familiar with the following websites: (1) the Bureau of Cannabis Control www.bcc.ca.gov; (2) the California Cannabis Portal www.cannabis.ca.gov; (3) CalCannabis Cultivation Licensing www.calcannabis.cdfa.ca.gov; (4) and the California of Public Health www.cdph.ca.gov

Issue #8. There Are Two Main Licenses to Get. One for Your City. One from the State of California. Although California has a license to issue on January 2, 2018, that license does not permit you to do business in any city. You must still get a license from the city or county that you intend to do business in. Also, even though you have a city license, you must still get a state license on January 2, 2018 to remain in compliance with the law. The state license application can be found here: https://static.cdfa.ca.gov/MCCP/document/Final%20Temporary%20Application%20with%20Instructions%20-%2020171218.pdf

Issue #9. Giving Money to Politicians Without Reporting it is Illegal and Will Lead to Prosecution. Many clients have come to our office stating that they are being told that government officials are asking between $250,000.00 - $500,000.00 in “contributions” to get a marijuana business. Giving money “under the table” is illegal and will lead to prosecution, which includes the person giving the money. Avoid any city where the politician (or employee) asks for money and report it to the police immediately.

Issue #10. You Must Keep Abreast of All New Regulations in 2018. Because of the size of the state and the complexity of the law, you can expect on a weekly basis new laws, and interpretations of those laws, to occur in 2018. California, as of December 20, 2017 still has only provided guidelines for the January 2, 2018 deadlines. Very few concrete steps have occurred to help the person seeking to get a license. That being so, expect a flurry of activity by multiple government bodies to push out regulations. Some will be confusing. But all will be exciting because California is entering into a new era – that being that marijuana is now legal.

Categories: Business Law