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LEGAL SUPPORT FOR THE CANNABIS BUSINESS COMMUNITY SINCE 2010

Oregon Recreational Marijuana Businesses – Part 2 of 2 – Who Can Invest?

Posted in Legal Issues, Licensing, Oregon, Recreational Marijuana
Oregon allows out of staters to invest in its cannabis businesses

Oregon welcomes out of staters to invest in its cannabis businesses.

In part I of this series, Oregon Recreational Marijuana Businesses — Who Can Own One? I covered the age and residency requirements for owners of Oregon marijuana businesses under Oregon’s newest law, Enrolled House Bill 3400. That post discussed how the Oregon Liquor Control Commission (OLCC) rules will probably define an “ownership interest” in its pending rules. HB 3400 does not give similar requirements for investors. In fact, though HB 3400 mirrors the language in the Oregon Liquor Control Act regarding “ownership interest,” the terms “investor” and “financial interest” are not mentioned anywhere in the new law. And that is great.

Does this mean that the OLCC will not monitor or regulate investment in Oregon cannabis businesses? No. It only means that HB 3400 does not give the OLCC express parameters on this issue. Under Section 2 of HB 3400, the OLCC retains broad authority “to grant, refuse, suspend or cancel licenses” for marijuana related businesses. Presumably, this could include refusing a license on grounds related to investment.

The “ownership interest” requirements of HB 3400, which require residency for cannabis business owners, were drafted broadly enough to implicate investors. They also mirror the “ownership interest” requirements of the Liquor Control Act. When the OLCC made rules pursuant to the Act, it provided that an “ownership interest” includes anyone “entitled to exercise control over the business” (OAR 845-005-0311(3)(a)). Let’s assume the same rule is promulgated in the marijuana context: in that scenario, if an out-of-state investor takes an equity position in an Oregon business large enough to “exercise control” over the business, the business could see its license application denied (or its license revoked).

Until the rules are actually written, it’s also impossible to rule out the possibility that the OLCC will stretch and write rules similar to the “financial interest” rule it promulgated for liquor licenses under OAR 845-005-0311(3)(a). That rule allows the OLCC to “require the licensee or applicant to identify the person and legal entities with a financial interest in the business and evaluate any such person as if he or she were the actual licensee or licensee applicant.” The rule then gives a laundry list of impermissible financial interests, which would be onerous if applied to the cannabis industry.

To date, the OLCC has not publicly stated any intention to monitor investment in Oregon marijuana businesses. Though the initial owners of cannabis businesses in Oregon will need to be Oregon residents, it appears probable that the cash for those businesses can come from anywhere. But because the OLCC has a reputation for surveillance and rigidity, investors and business owners alike should be sure to structure their cannabis deals mindfully, so as not to implicate the “ownership interest” strictures of HB 3400 and whatever rules come next.

They Said It On Marijuana, Quotable Saturday, Part LXVI

Posted in Advocacy

Our nation was founded by those who — more than anything — wanted to be free. Free to govern themselves. Free to make their own decisions. So on this July 4 — serendipitously, a “Quotable Saturday,” we celebrate that freedom with two great quotes on freedom that are cannabis relevant.

Government exceeds its role when it seeks to protect us against ourselves.

Government exceeds its role when it seeks to protect us against ourselves.

The first is from President Reagan: “Government exists to protect us from each other. Where government has gone beyond its limits is in deciding to protect us from ourselves.”

The second is from the late Madeleine L’Engle, a writer of Children’s books:“Because to take away a man’s freedom of choice, even his freedom to make the wrong choice, is to manipulate him as though he were a puppet and not a person.”

Together these quotes help to make the single greatest argument for legalization: Freedom of choice.

Assume for a minute that all the studies showing cannabis is an effective medicine are wrong. And assume even that cannabis is as harmful for you as cigarettes and alcohol and bad diets and not exercising and ice cream and sleeping pills. Or even just assume that cannabis is arguably as bad as all of these things. We still should legalize it for one simple irrefutable reason. The choice on whether to partake in it (just as is true of cigarettes, alcohol, bad diets, Diet Coke, not exercising, ice cream and sleeping pills) should not be for the government to make, but you. Rightly or wrongly.

Enough said.

Enjoy your 4th.

Let freedom ring….

Oregon Recreational Marijuana Businesses – Part 1 of 2 – Who Can Own One?

Posted in Legal Issues, Licensing, Oregon, Recreational Marijuana
If you are not an Oregon resident, you are going to have a tough time playing on Oregon's cannabis playground.

If you are not an Oregon resident, you are going to have a tough time playing on Oregon’s cannabis playground.

This week, I received calls from two out-of-state clients who each hope to apply for licensure through the Oregon Liquor Control Commission (OLCC) to open an Oregon recreational marijuana business. One of these individuals hopes to apply for a grower license; the other wishes to run a retail shop.

Measure 91 said nothing about age, residency or ownership requirements for either canna-business owners or their investors (investors are different, and I will cover them in a separate post). Enrolled House Bill 3400, however, as signed by Governor Brown on June 30—signing statement, here—requires all growers, processors, wholesalers and retailers to have been Oregon residents for at least two years and to be at least 21 years old. Each applicant also must be the “legitimate owner” of the business seeking licensure.

The two-year residency requirement sunsets in 2020, but the age requirement is evergreen. The term “legitimate owner” was not defined by HB 3400 (or Measure 91), although a definition may come later this year when the OLCC issues its temporary administrative rules implementing the new law. My guess, however, is that the OLCC will choose not to define this term, because that’s what it did when issuing administrative rules for the Oregon Liquor Control Act.

The “legitimate owner” language of Measure 91 and HB 3400 mirror the Liquor Control Act almost verbatim. The latter statute provides that the OLCC may refuse to issue a license where “the applicant is not the legitimate owner of the business proposed to be licensed, or other persons have ownership interests in the business which have not been disclosed” (my emphases).

The Liquor Control Act’s administrative rules are quite detailed on permissible “ownership interest” for an owner in the subject business. So what might constitute an “ownership interest” in a marijuana business? Here’s the language the OLCC used the last time around:

Ownership Interest (OAR 845-005-0311(3))

The Commission may refuse to issue a license if the applicant is not the owner of the business proposed to be licensed or an undisclosed ownership interest exists. For purposes of this rule, an “ownership interest” is indicated by the following behaviors, benefits or obligations:

(a) Any person or legal entity, other than an employee acting under the direction of the owner, that exercises control over, or is entitled to exercise control over, the business;

(b) Any person or legal entity, other than an employee acting under the direction of the owner, that incurs, or is entitled to incur, debt or similar obligations on behalf of the business;

(c) Any person or legal entity, other than an employee acting under the direction of the owner, that enters into, or is entitled to enter into, a contract or similar obligations on behalf of the business; or

(d) Any person or legal entity identified as the lessee of the premises proposed to be licensed.

Assuming the OLCC’s rules for HB 3400 are similar to the above, a business controlled or administered by an out of state individual will not be eligible for licensure. This would include non-Oregon majority shareholders, majority partners and LLC managers, to name a few. Will there be workarounds? Sure. But unless the OLCC issues rules far different than those above, non-residents will need to structure their roles carefully to play in Oregon’s cannabis playground before 2020.

Washington Marijuana: HB 2136 Ends the Game of Chicken Between I-502 and Local Governments

Posted in Legal Issues, Medical Cannabis, Recreational Marijuana, Washington
The game of chicken between Washington State and its cities and counties will likely soon be ending.

The game of chicken between Washington cities and cannabis businesses will likely very soon be over.

Though state-licensed recreational marijuana storefronts have been open and operating in Washington State since July of last year, the ability of cities and counties to prohibit I-502 businesses through ordinances and moratoria remained an unresolved issue–until now. There is an end in sight though in the form of recently passed House Bill 2136.

Most recently, in the city of Yakima, a marijuana retailer, Happy Time, attempted to take the city to task for its rolling moratorium against state-licensed marijuana businesses. Happy Time opened its retail store despite the ban, but it was ultimately forced to close when the Yakima County Superior Court ruled last Friday that the city was entitled to enforce its ban. Happy Time appears to have thought that it had a decent shot of overturning the ban when a County Court Commissioner ordered the City to appear at a hearing to justify its position for the continued ban. But the Court ultimately sided with the city on the actual merits of the challenge.

The issue here is that I-502 is completely silent on whether local governments can opt out of I-502 implementation. Though the state’s liquor laws, after which I-502 is modeled, explicitly state that cities and counties can go dry, I-502 contains no such equivalent provision for cannabis. As a result, local governments typically argue (and the state Attorney General agrees) I-502 neither expressly nor impliedly prevents cities and counties from totally prohibiting marijuana businesses within their borders. Marijuana businesses argue against this by asserting that I-502 stops cities and counties from banning marijuana businesses because it implies that only the state has authority to regulate cannabis in Washington.

We have firsthand experience suing a city over its I-502 ban. We brought the first challenge in Washington State against a ban when we sued the City of Wenatchee for its marijuana business prohibition. Though we did not prevail in the lower court, the City ultimately opted to drop its ban after the case. That meant we never appealed the lower court decision and our client is now open and operating within the City.

This game of chicken between cities and I-502 marijuana businesses has been costly for all involved. For marijuana businesses that invest tens of thousands of dollars in their locations and operations only to be shut down or to be stopped from opening in the first place, marijuana bans equate to lost investments of time, money, and communal goodwill. For the communities that seek to ban I-502 businesses, they undoubtedly (and inadvertently?) encourage and re-enforce the entrenched illegal markets in their backyard. For the democratic experiment that is I-502, local bans do nothing but undermine the end-goal of I-502, which is to regulate and treat cannabis responsibly where prohibition tactics have clearly failed.

There is now finally some relief in sight for both cannabis businesses and local governments. On Tuesday of this week, Governor Inslee signed HB 2136 into law. In addition to reforming the marijuana excise tax standard and filling some of the gaps in I-502, the bill also finally draws a line in the sand between cities, counties, and marijuana businesses; if local governments want a slice of revenue from I-502, they cannot also ban I-502 businesses. If local governments opt to ban, they won’t receive any I-502 revenue.

So, now we know, cities and counties are free to opt out of I-502. As a result, if a marijuana business was thinking of going into a jurisdiction with a ban only to try to fight the municipality in court on a preemption theory, that strategy is rendered a losing one under HB 2136. In addition, the remaining I-502 legal actions against local governments likely will be moot as a consequence of the passage of HB 2136. Though not a total win for Washington’s cannabis industry, HB 2136 ultimately means that we finally have a concrete answer regarding the freedom and power of municipalities when it comes to banning marijuana businesses.

Washington Recreational Marijuana Laws: HB 2136 Goes Into Effect TODAY

Posted in Medical Cannabis, Recreational Marijuana, States, Washington

 

Meet the new laws, mostly better than the old laws.

Meet the new laws, mostly better than the old laws.

They took their time, but the Washington legislature finally passed its budget for this biennium. This is good news for those who love regulators, as it means that your favorite Liquor and Cannabis Board (LCB) employees aren’t going to be temporarily laid off. As we expected, the Washington legislature passed HB 2136 and the Governor signed it into law. And we’re not wasting any time–HB 2136 goes into effect today, July 1. As SB 5052 and HB 2136, complimentary bills, now constitute our governing cannabis laws, here’s a rundown of some of the ways in which HB 2136 is going to change Washington State’s cannabis regime:

Taxes. The existing multi-tier tax structure is no more. We now have a 37% excise tax levied at the retail level, and there are no excise taxes for wholesale transactions. The tax is also structured differently in order to better deal with federal income taxes. The tax dollars are now “held in trust” by the retailer for the state, and the responsibility of the tax is placed on the consumer. In practice, this doesn’t really change anything from the consumer’s perspective, but it is huge for business owners. They no longer have to book the excise tax as revenue, so they also don’t need to pay federal taxes on it (remember, IRC 280e?). The number 37% is large, but the savings at the federal level still makes this change a big winner for the cannabis industry in Washington.

*Important note about the tax transition: Yesterday, the LCB sent out a message on its listserv telling all licensees and stakeholders how it will handle the tax transition. According to the Board in its message,

[For producers and processors] [y]our tax obligation will be determined by the date the inventory was transferred, not the date the manifest was generated.  All transfers initiated prior to July 1, 2015 are subject to 25 percent excise tax. All transfers initiated July 1, 2015 or later will not be subject to excise tax.

[For retailers] [e]ffective July 1, 2015, new functionality in the traceability system will handle the new tax rate as well as calculating the tax as a buyers’ tax rather than a sellers’ tax. It’s important to remember that it’s not just a rate change, it’s a complete change in how the tax is calculated (buyer tax vs. seller tax).

Local Tax Distribution. We will be dealing with this in a subsequent post, but suffice it to say that the new tax structure will provide some tax revenue to local governments with retailers physically located within their jurisdictions. This means that cities that allow cannabis will benefit while those that don’t won’t. It also means that, if cities want cannabis revenue, they won’t be banning marijuana businesses.

Bundled Transactions. The legislature is banning what the LCB has deemed a violation: bundling of marijuana and non-marijuana items in an effort to toy with the overall sale price and thereby decrease the excise tax payment. As always, the state finds a way to get its revenue. 

Local Buffer Zones. Cities and counties are able to decrease the mandated 1,000 foot buffer from state-mandated sensitive uses other than schools or playgrounds down to a minimum of 100 feet. This means that Seattle, if it wanted, could choose to allow marijuana businesses within 400 feet of public parks and libraries.

Third-Party Deliveries. Common carriers that apply for and get a new license from the LCB will now be able to deliver marijuana among producers, processors, and retailers. Third party delivery will bring some added efficiencies to the market and allow small producers to spend more time at their facilities and less time driving around the state delivering product.

Marijuana Clubs. The legislature is bringing the hammer down on marijuana clubs and vapor lounges. Washington’s general smoking ban always made these somewhat difficult to put together, but now we will have a rule banning any business that “conducts or maintains a premises for the primary or incidental purpose of providing a location where members or other persons may keep or consume marijuana on premises.” It’s sad for those that had been trying to run with the club as a business idea, so we’ll see if they lobby to try and get back some of those rights.

Residency. With the passage of HB 2136, the residency requirement now bumps up from 3 months to 6 months for principals of marijuana companies.

Researcher License. The bill also creates a new researcher license. “Marijuana researcher” means a person licensed by the state liquor and cannabis board to produce, process, and possess marijuana for the purposes of conducting research on marijuana and marijuana-derived drug products. The LCB is tasked with creating additional rules around this license, but we’re very likely to see increased private research of marijuana within the state which is ultimately a great thing.

While there are a few let-downs in HB 2136, the changes ultimately benefit the cannabis industry overall. The tax changes especially should really help across the board, leading to big savings for businesses throughout the industry. Ultimately, time will tell on how this bill changes marijuana businesses’ underlying economics going forward and the resulting impact on consumers.

Maryland Publishes Proposed Medical Marijuana Business Regulations

Posted in Legal Issues, Licensing, Medical Cannabis

 

Out with the old and in with the new. Maryland just came out with its new cannabis regulations.

Out with the old and in with the new. Maryland just came out with its new cannabis regulations.

Medical cannabis may be available to Maryland patients by July 2016. In a big step toward making this timeframe a reality, Maryland just published its proposed medical cannabis regulations. These regulations detail the application and licensing requirements for medical cannabis growers, processors, and dispensaries.

The publication of these proposed regulations starts the clock ticking on the time period for finalizing Maryland’s medical cannabis regime. Next is a comment period on the proposed regulations that lasts through July 27. Until this date, interested entities and individuals can submit comments on the proposed regulations to Maryland’s Department of Health and Mental Hygiene.

If you are hoping to get in on the ground floor of Maryland’s medical cannabis program you should not underestimate the importance of this very short comment period — think of the comment period as that awkward moment in a wedding ceremony when the officiant states “Speak now or forever hold your peace.” Now is the time to identify any and all of your concerns regarding the proposed regulations. Changing the regulations will be much more difficult and require significant effort after they have been finalized and officially published.

The Commission also provided a proposed timeline for implementing its medical cannabis program:

  • In September 2015, the Commission expects to finalize and publish the medical cannabis regulations.
  • Also in September 2015, the Commission plans to post on its website the initial applications for growers, processors, and dispensaries.
  • Mid-October to November 2015 will most likely be the deadline period for initial applications.
  • In December 2015 or January 2016, license pre-approvals will be issued by the state.
  • During spring and summer 2016, pre-licensed entities will undergo final reviews and inspections before starting operations.

The proposed regulations allow for just 15 initial pre-approved growers, a certain number of processors, and 2 licensed dispensaries for each Maryland Senatorial district other than licensed processing dispensary facilities, with selection based on competitive scoring. If, as anticipated, more entities apply for licenses than are permitted for each category, and if there is a numerical tie in scoring for the final license slot, the Commission will decide the final licensee according to a public lottery.

The proposed regulations also detail items that must be included with an application for a medical cannabis business license, including (but definitely limited to) the following:

  • a list of investors with more than 5% of the operational investment at the time of the application;
  • a business plan;
  • documentation showing adequate capitalization and sources of funding;
  • a security plan;
  • a quality control plan; and
  • a tracking system.

Maryland’s proposed regulations and expectations for cannabis businesses are intense. Entities considering medical cannabis operations in Maryland should thoroughly review the regulations and begin preparing now for what will undoubtedly be another tough marijuana licensing round.

Oregon Marijuana: Pharmacies Will Not Be Playing This Game

Posted in Medical Cannabis, Oregon, States

Interesting news blowing out of tiny Tumalo, Oregon last week, where the Oregon Board of Pharmacy placed a pharmacy and its pharmacist under a rare, emergency suspension. The cause? Board findings that the pharmacy manufactured marijuana products and dispensed controlled substances to patients without prescriptions, among other things.

The Oregon Board of Pharmacy has had a noteworthy relationship with marijuana over the years. As recently as 2010, under direction from the Oregon legislature, the Board reclassified marijuana from a Schedule I substance (as per the Federal Controlled Substances Act), to a Schedule II substance.

Do not mix marijuana at your pharmacy. At least not yet.

Do not mix marijuana at your pharmacy. At least not yet.

Schedule I substances are considered the most dangerous class of drugs with a “high potential” for abuse, and “potentially severe psychological and/or physical dependence.” Because Schedule I drugs are so menacing, they are never available for prescription. Schedule II drugs, conversely, may be prescribed if they have FDA approval. When the Oregon Board of Pharmacy reclassified marijuana to Schedule II, however, the Board also clarified that “marijuana or products containing any amount of marijuana will not be available by prescription in Oregon unless they have been approved by the FDA.” Hence, the Tumalo pharmacy shutdown.

So, will Oregon medical marijuana dispensaries have to worry about pharmacy competition anytime soon? Probably not. Ever since California voters passed Proposition 215 in 1996, most state laws have been careful to frame medical marijuana as accessible only to patients who had received oral or written “recommendation” (and not a prescription) from a doctor.[1] The Oregon Medical Marijuana Act is no different. See Cannabis Prescriptions vs. Certifications: The Wording Matters.

The Tumalo pharmacy is a peculiar case study, because the pharmacy there took things further than unlawfully dispensing marijuana. The pharmacy was actually manufacturing marijuana products, presumably without a grower card or other license. Still, it is unlikely that other, conventional, Oregon pharmacies will be foolish enough to handle marijuana in any manner—including for patients with doctor referrals—until the drug is reclassified under the federal CSA. Thus, licensed Oregon dispensaries are secure in the medical space and they can and should ignore this case, despite rumors swirling here in Oregon to the contrary.  

 

[1] Supreme Court precedent in the abortion context had established the proposition that doctors could not be banned from discussing or recommending particular health care options. Therefore, a doctor who might lose her DEA license for prescribing marijuana could “recommend” it with impunity.

Marijuana Research: The Feds Are Slowly Warming To It

Posted in Advocacy, Federal law and policy, Medical Cannabis, Recreational Marijuana

The federal government monopolizes almost all meaningful marijuana research. The government even maintains its own “legal” crop at Ole Miss that pumps out pretty useless and questionable statistics and factoids about marijuana. But the federal government is warming to the idea of allowing outside, extended research into cannabis.

Scientific research is a good thing. So why does the federal government still so often block it?

Scientific research is a good thing. So why does the federal government still so often block it?

The federal government recently announced that it would help fund a study of sewer fodder in Washington State in an effort to determine how much cannabis use is really going on post-legalization. Second, and more importantly, the Obama administration has opted to eliminate the need for Public Health Service reviews for outside studies.

The New York Times wrote about this Washington State sewer study:

The federal government is chipping in money for a three-year pilot study using sewage samples to determine levels of marijuana use in two Washington cities — research that could help answer some key questions about pot legalization, the University of Puget Sound announced Monday.

Specifically, the National Institute of Health is giving approximately $120,000 to the University of Puget Sound for Dan Burgard, an associate chemistry professor at the University, to lead a three-year study analyzing per-capita pot usage in Washington after its first marijuana retail stores opened last summer. This “study is aimed at helping determine whether the opening of pot shops increase[s] a community’s marijuana use, whether data from the wastewater correlate to what people answer in surveys about their marijuana use, and whether weekday or weekend marijuana use has increased.” This data will likely help Washington hone in on the actual number of users, how often they are using, and what demand really looks like, all of which ultimately affects the entire marketplace when it comes to licensing and additional regulations for marijuana businesses.

The study should also help us learn more about the existing black market and whether legalization has helped reduce customer traffic there:

The data could also show how much of the illicit black market for marijuana the state’s legal stores are capturing, by comparing the wastewater data with the state’s close tracking of marijuana sales. If sales figures continue to rise, but the wastewater levels show that overall pot use is flat, that would indicate that people are getting their marijuana at legal stores instead of on the black market. But if sales figures rise and the sewer evidence of pot use also rises, that could indicate that people are still buying on the black market — and that legalization has increased overall use in the state without displacing much of the black market.

Also on Monday, the Department of Health and Human Services announced that marijuana researchers need no longer submit proposed cannabis studies to the U.S. Public Health Service for review, eliminating a significant hurdle for non-federally funded or state-funded research that doesn’t exist for the study of other Schedule I controlled substances (go figure). The Department of Health and Human Services found the reviews to be “redundant,” and stated that its eliminating this previously mandatory review will “facilitate further research to advance our understanding about the health risks and any potential benefits of medications using marijuana or its components or derivatives.”

Despite the above changes, the National Institute on Drug Abuse remains the only “lawful” marijuana grow in the U.S. and researchers must still acquire the seeds and plants from National Institute’s lone Ole Miss grow and this remains quite difficult. But that’s not all: researchers must also acquire a Schedule I license from the Drug Enforcement Administration to receive, cultivate or maintain cannabis for research which is equally hard to get.

Unfortunately, the politics of our failed prohibitionist system still permeate cannabis research and so until politicians and the DEA stand down and start truly opening up scientific research into cannabis, the United States will continue falling behind other countries in this arena and the world’s knowledge base will be the ultimate loser.

They Said It On Marijuana, Quotable Saturday, Part LXV

Posted in Advocacy
It's a Yin and Yang thing.

It’s a Yin and Yang thing.

Sorry for getting all philosophical on you, but please bear with us here. One of our lawyers loves talking about yin and yang and of how virtually everything has two sides to it. That which is initially perceived as positive has negatives and that which is initially perceived as negative has positives.

Wikipedia describes yin and yang as follows:

In Daoist philosophy, dark and light, yin and yang, arrive in the Dàodéjīng (道德經) at chapter 42.[18] It becomes sensible from an initial quiescence or emptiness (wuji, sometimes symbolized by an empty circle), and continues moving until quiescence is reached again. For instance, dropping a stone in a calm pool of water will simultaneously raise waves and lower troughs between them, and[citation needed] this alternation of high and low points in the water will radiate outward until the movement dissipates and the pool is calm once more. Yin and yang thus are always opposite and equal qualities. Further, whenever one quality reaches its peak, it will naturally begin to transform into the opposite quality: for example, grain that reaches its full height in summer (fully yang) will produce seeds and die back in winter (fully yin) in an endless cycle.

It is impossible to talk about yin or yang without some reference to the opposite, since yin and yang are bound together as parts of a mutual whole (for example, there cannot be the bottom of the foot without the top). A way to illustrate this idea is[citation needed] to postulate the notion of a race with only men or only women; this race would disappear in a single generation. Yet, men and women together create new generations that allow the race they mutually create (and mutually come from) to survive. The interaction of the two gives birth to things, like manhood.[19] Yin and yang transform each other: like an undertow in the ocean, every advance is complemented by a retreat, and every rise transforms into a fall. Thus, a seed will sprout from the earth and grow upwards towards the sky—an intrinsically yang movement. Then, when it reaches its full potential height, it will fall. Also, the growth of the top seeks light, while roots grow in darkness.

The Dao De Jing says this:

When people see things as beautiful,

ugliness is created.

When people see things as good,Cannabis business lawyers

evil is created.

Being and non-being produce each other.

Difficult and easy complement each other.

Long and short define each other.

High and low oppose each other.

Fore and aft follow each other.

 

We LOVE the above quote on marijuana being an exit drug because it turns common thinking on its head by highlighting how marijuana can be the exact opposite of a gateway; it can be an exit.

We have certainly heard as many stories of marijuana enabling people to eliminate hard drugs as we have of marijuana allegedly being their “gateway.” Countless people use marijuana instead of potentially harmful prescription medicines. In states with medical marijuana, painkiller deaths drop by 25%.

Marijuana is “just” a plant and its benefits and harms depend on how it is used. Anything can kill you, it just depends on the dose. Drinking too much water can drown you. Consuming small amounts of arsenic will not.

It’s a yin and yang thing.

Do you agree?

Oregon Recreational Marijuana: Will Sales Start on October 1?

Posted in Business Basics, General, Oregon

Oregon’s House-Senate marijuana committee is on a roll.

Nine days after recommending HB 3400 (See Oregon’s New Recreational Marijuana Market for more on that), which is already on its way to the Senate—the same committee approved Senate Bill 460-A. This new bill will allow temporary sales of recreational marijuana, beginning October 1, 2015. The sales would occur through any number of Oregon’s 310 medical marijuana dispensaries.  

Will the ability to buy and sell cannabis in Oregon come early?

Will the ability to buy and sell cannabis in Oregon come early?

Whether the bill will be approved is hard to say. The Oregon Liquor Control Commission (“OLCC”), which will oversee Oregon’s recreational marijuana industry, opposes any form of early sales. For her part, Governor Brown has been silent. From a consumer and business perspective, the problem with the OLCC position is that the commission likely won’t have Oregon’s recreational program up and running until mid to late 2016. That means marijuana would be legal for over a year, with nowhere to buy or sell it.

October 1 appears to have been selected as a safe date for legislators, as they could have rules in place by that time. Interestingly, if the bill becomes law, marijuana sales will not be taxed between October 1 and January 4, 2016 creating a three-month tax holiday. After the holiday, another measure, House Bill 2041, calls for a 25 percent tax on pot sales to recreational users.

The proposed legislation includes a number of restrictions limiting the extent of sales, including limits on purchase amounts, and no ability to sell foodstuffs or concentrated forms of the drug. The bill also allows city and county governments to bar the temporary sale program outright.

What would the temporary measure mean for Oregon dispensaries? First, dispensaries would need to comply with another set of rules promulgated by the Oregon Health Authority. There would be opportunities to give input on these rules, though the rules would almost certainly require that dispensaries set product aside for patients before profiteering on the open market. Second, the temporary sales program may make for a nice trial run for dispensaries hoping to transition to recreational storefronts under the OLCC regime.

Dispensary owners (and potential recreational customers) who want this bill to pass should reach out to their legislators immediately. July 11 is the last day of the legislative session and if temporary sales are going to happen, this bill will have to be approved in the next few weeks. Until then, I will continue to update on the possibility of early recreational sales here in Oregon.