Willie_Nelson_2009 QS

Musician and well known cannabis consumer Willie Nelson is right on the nose with this recent quote. Though legalizing marijuana has undoubtedly increased access to it (and in a multitude of forms that aren’t just smokable flower), making marijuana illegal again in all states would not cause all consumers to stop dead in their tracks and quit utilizing weed. As the United States learned during the Prohibition Era with alcohol, and as we learned again during the decades-long ridiculous War on Drugs, limiting access to something doesn’t make it go away–it only forces consumers to purchase it illegally. Making cannabis illegal again in a currently cannabis-legal state would only cause consumers to start smoking unregulated cannabis, and also cause those states to cease reaping the economic benefits of being able to collect cannabis taxes.

And who would that prohibition benefit anyway? Attorney General Jeff Sessions and his hatred of weed and its proponents? Those who cannot seem to let go of the stigma attached to marijuana despite living in a country with overwhelming support for cannabis legalization in some form?

As Willie says, “they should have learned that” prohibition is the wrong idea. But have they?

Cannabis attorneysEmployment law is often unforgiving of medical marijuana patients. Workers are in many instances subject to the same consequences of using marijuana in cannabis-legal states as in states where cannabis remains illegal. Federal illegality has thwarted attempts by employees in many instances to guard against termination or other negative action linked to their consumption of cannabis.

It is therefore notable that an administrative law judge in New Jersey last month ordered an employer to reimburse an injured employee for his purchase of medical marijuana permitted by New Jersey law. Though not a binding rule of law, the judge’s decision is an undeniably positive outcome for medical marijuana patients and could be a harbinger of things to come as marijuana goes mainstream. This week’s Cannabis Case Summary breaks down the administrative law judge’s decision and what it might mean for the future.

The plaintiff in the case, Andrew Watson, worked for 84 Lumber, where he sustained a serious hand injury on the job. Watson’s psychiatrist/neurologist recommended Watson use medical marijuana to treat the pain from his injury. He then purchased around two and one-quarter ounces of medical marijuana over the course of three months, all legally under New Jersey law. Because 84 Lumber refused to cover the cost of the cannabis under its workers’ compensation policy, Watson was unable to continue using marijuana as a pain reliever. Instead, per the company’s policy, Watson relied upon prescription opiates to cope with his chronic pain.

Watson then brought his case before administrative law judge Ingrid L. French to secure reimbursement for the amount he had spent on marijuana and a ruling that his future purchases of medical marijuana to treat this injury would be covered by his employer. Watson argued that medical marijuana was both effective and a fit substitute for the more dangerous and addiction-linked opiates he was prescribed as an alternative. The judge ultimately sided with Watson, stating on December 15 that reimbursement was appropriate and that Watson’s future medical marijuana expenditures should be covered.

The administrative law judge’s conclusion raises interesting questions. Does it make sense for companies in medical marijuana states to make effort to expressly cover medical marijuana as an alternative to (often more costly) pharmaceuticals to treat pain or other ailments? Can employees bank on this reasoning to carry the day if they decide to obtain medical marijuana as an alternative to narcotic painkillers? The answer to both questions is uncertain and will be affected by political as well as legal shifts in the United States. Nonetheless, the outcome in this case should be encouraging to medical marijuana patients in New Jersey and beyond.

It should be noted that the decision in this case was rendered by an administrative law judge. Such an opinion has similar but different effect than a decision by a state or federal judge. New Jersey is, however, known for its robust state administrative law. The persuasive authority of this decision should not be discounted nor overestimated.

Good news for medical marijuana patient Watson is good news indeed, but the overall place of this decision in the mosaic of favorable rulings amidst continued federal prohibition is inherently precarious.

 

Barcelona lawyersOur Barcelona lawyers have lately been receiving a steady stream of calls about producing and distributing cannabidiol-based products around the world, from Spain. Cannabidiol  (CBD) is a compound found in cannabis but unlike tetrahydrocannabinol (THC), the compound in cannabis that gives users a high, CBD is non-psychoactive. Studies suggest CBD can be effective in treating epilepsy and other neuropsychiatric disorders including anxiety and schizophrenia. CBD may also be effective in treating post-traumatic stress disorder and may have anxiolytic, antipsychotic, antiemetic and anti-inflammatory properties. With so many potential benefits, it should come as no surprise that our Barcelona attorneys are so often asked about the legality of CBD oil in the European Union?” In short, it depends on what part of the cannabis plant from which the CBD oil was derived.

CBD can be extracted from marijuana plants (cannabis sativa) or from industrial hemp plants. Both are cannabis varieties but grown for a different purpose and with a different “legal personality” reflecting the legal status of extracted CBD oil in the EU. Hemp has been cultivated throughout the world for industrial and medical purposes, and for the production of useful objects such as clothing, candles, paper, and thousands of other products. Hemp oil and hemp seeds also contain many essential nutrients. In Europe and in Spain, hemp must be grown under EU regulations. Industrial hemp must contain no more than 0.2% THC on a dry weight basis. If the EU criteria are met, then a hemp producer may obtain EU certification for the product. Failure to follow protocol can lead to trouble. Local Spanish farmers producing hemp are right now facing criminal charges for crimes against public health for having not fulfilled current regulations in production. This adds uncertainty for foreign investors in finding the right provider of raw material. Medical marijuana contains high levels of THC, concentrated mainly in flowers and trichromes of the plant.

Those wishing to import CBD based products into Spain face labeling requirements. The number of CBD products available on the Spanish market has increased but most consumers are unaware of the exact amount of CBD they should take, or do not know the exact composition of the CBD oil or tincture they are buying. Clear labeling is essential when distributing CBD in Spain. A product’s label should describe the exact concentration of CBD as an active ingredient, the content of the solution, the specified amounts of each ingredient, the manufacturing method used, and the instructions for use and dosage. The label should also refer to a website with more detailed information.

Uncertainty also comes from a recent change in US law. Previously, the legal status of CBD products in the US also turned on the part of the cannabis plant from which the product was extracted. However, the Drug Enforcement Administration recently promulgated a rule creating a new “Controlled Substances Code Number” for “Marihuana Extracts” and extends that classification to extracts “containing one or more cannabinoids from any plant of the genus Cannabis.” CBD is a cannabinoid and hemp is a plant of the genus Cannabis so the rule explicitly applies to CBD products sold in the US. Though we vehemently dislike this new rule, it does mean that companies should not distribute CBD products in the US unless they are doing so pursuant to state law in a state where marijuana is legal in some form.

The Spanish market has an appetite for CBD dietary supplements that is not being met by the many other plant-based dietary products being launched and accepted by the Spanish public. The opportunities for CBD products are clearly there in both the EU and in Spain, but this is a complicated legal arena that calls for caution.

California Cannabis lawsSince Proposition 64 passed last November, there has been a spike in reports of California dispensaries advertising their willingness to sell recreational cannabis to anyone 21 years and older “with only a valid ID” (i.e. physician’s recommendation not required). However, Prop 64 requires dispensaries apply for and obtain a state retailer license to sell recreational cannabis or face criminal and civil penalties for each day of illegal operations. Since the State of California has yet to issue such a license, any dispensary currently selling recreational cannabis in California is doing so illegally.

For marijuana consumers, your options are simple: (1) obtain a valid physician’s recommendation and purchase medical marijuana from a dispensary; (2) grow your own recreational marijuana at home by following local regulations; or (3) get home grown marijuana from other adults in California through a free, sharing economy.

For dispensaries, your options are even simpler: (1) sell medical marijuana legally by following local laws and securing any necessary permits or licenses; or (2) operate illegally and face severe penalties, raids, and criminal prosecution.

Dispensaries in California have been making illegal sales long before Prop 64 passed. But local law enforcement believe dispensaries have become “more emboldened” now that recreational cannabis is legal in the state. Some dispensaries might wrongly believe that any and all sales are allowed under a Prop 64 regime, but others clearly choose to operate outside of the law. This angers legal dispensary owners who pay the high costs of operating a legal business (including taxes, licensing fees, and security costs) while also waiting to profit on recreational sales after state licenses are issued.

Though Prop 64 makes clear that anyone making retail sales or deliveries of recreational cannabis must have a California state license, the challenge faced by local (and soon state) prosecutors is how to go about shutting down illegal businesses. Often when a city or county attempts to shut down an illegal dispensary, the dispensary owner just relocates the business and changes the name, resulting in an endless game of “whack-a-mole” for local authorities. But now that cannabis businesses are beginning to set their sights on state licenses, is it more important than ever to play nice with your local city and county officials as local authorization is a requirement for state licensing. Businesses caught operating illegally can be disqualified from receiving a local permit, and even if state and local authorities cannot prohibit these business from applying for a California cannabis license, past troubles with following the law will likely be a negative mark on your cannabis license application.

We also expect state and federal enforcement to pick up over the next few years. California state agencies do not currently have jurisdiction over illegal cannabis businesses, but once state licenses are issued they plan to work with local authorities to enforce the cannabis laws. Even worse, If illegal businesses continue to thrive in California, the federal government could challenge California’s entire regulatory system under the guidance of the Cole Memo. With a new federal administration coming in, and the possibility of an anti-marijuana Jeff Sessions as Attorney General, California could face even greater scrutiny. So by operating an illegal business not only do you risk your own chances at the legal market, you also risk undermining the legalization effort California strived so long to achieve.

As California transitions into a regulated legal market, the grey areas we have long been dealing with will soon shrink. In a post-Prop 64 world you can either follow the laws and obtain a license to make legal recreational sales or you can risk fines, jail time, and the loss of the chance to ever operate again.

Oregon Cannabis lawsThe 2017 Oregon legislative session begins two weeks from tomorrow, on Wednesday, February 1. Already, there are many proposed bills, measures and resolutions posted on the legislature’s website, ranging from marquee bills to tackle the state budget shortfall and its gun registry loopholes, to resolutions naming an official state horse (the Kiger Mustang) and a dog (the Border Collie). For our faithful readers, there is also a generous helping of cannabis bills. We count 28 of them.

Back in October, we wrote that issues surrounding public consumption, like cannabis cafés and special event (temporary) licenses, would be up for discussion. As shown below, that has proven to be true. We have also written time and again (and again and again) about the need to merge Oregon’s medical and recreational marijuana programs. That appears to be up for serious consideration as well. Finally, we have written about the state’s burgeoning industrial hemp program, which is also addressed.

Below is a compilation of the 28 introduced cannabis bills, sourced from the Oregon legislature’s website. Each bill is linked to its summary page, and you can click through to the text of any proposal of interest. When reading a bill, it’s important to understand that any text in bold letters would be new, while language in [italics and brackets] would be removed from existing law. It’s also important to note that each proposed bill has a specific enactment date: some are “emergency” laws, effective on passage, while others would take effect at a future date. Finally, some of these bills would sunset after a certain period; others are proffered as evergreen.

As in the 2016 short session, many of the bills listed below will fall by the wayside as the senate and house convene and begin to knock heads. Others will be revised, consolidated or otherwise modified, but it is altogether certain that we will see some changes in Oregon cannabis law this session.

Draft Senate Bills

SB 56. Authorizes Oregon Liquor Control Commission to require cannabis-related licensees, certificate holders and applicants for licenses and certificates to submit information related to persons who hold financial interest in business operating or to be operated under license or certificate.

SB 108. Modifies certain definitions for purposes of regulating cannabis. Imposes tax on retail sale of marijuana seeds. Conforms terms throughout statutes governing regulation of cannabis.

SB 130. Waives fees for obtaining a medical marijuana card for veterans who have total disability rating of at least 50 percent as result of injury or illness incurred or aggravated during active military service, and who received discharge or release under other than dishonorable conditions.

SB 300. Establishes Oregon Cannabis Commission to fulfill duties, functions and powers relating to medical use of marijuana. Directs Oregon Health Authority to transfer duties, functions and powers relating to Oregon Medical Marijuana Act to commission. Makes commission operative January 1, 2018.

SB 302. Removes provisions related to marijuana offenses from Uniform Controlled Substances Act. Moves crimes, penalties, defenses to crimes and procedural provisions in Uniform Controlled Substances Act that apply to marijuana offenses to Control and Regulation of Marijuana Act. Adjusts penalties for certain crimes. Makes corresponding changes to statutes referencing controlled substances to clarify applicability to cannabis and cannabis-derived products.

SB 303. Amends, clarifies and creates consistency in statutes setting forth prohibitions and procedures related to minors possessing, purchasing, attempting to purchase or acquiring alcoholic beverages or marijuana items.

SB 304. For purposes of laws regulating cannabis-related businesses, standardizes language with respect to issuing, renewing, suspending, revoking or refusing to issue or renew licenses.

SB 305. Clarifies law requiring notice to Oregon Liquor Control Commission when person licensed by commission to engage in cannabis business is convicted of violation of state law or local ordinance of which possession, delivery or manufacture of marijuana item is element.

SB 306. Repeals provisions regulating marijuana grow sites, marijuana processing sites and medical marijuana dispensaries on June 30, 2018. Updates and creates provisions providing for licensing of marijuana grow sites, marijuana processing sites and medical marijuana dispensaries by Oregon Liquor Control Commission.

SB 307. Provides for regulation by Oregon Liquor Control Commission of consumption and sale of marijuana items at temporary events, including licensure of premises on which temporary events are held. Provides for regulation by commission of consumption of marijuana items at cannabis lounges, including licensure of premises where cannabis lounges are located. Prohibits licensing temporary events or cannabis lounges in cities or counties that have not adopted ordinances allowing for the consumption of marijuana items at temporary events or cannabis lounges. Excepts from prohibitions on public use, including restrictions set forth in Oregon Indoor Clean Air Act, consumption of marijuana items in designated areas of premises for which temporary event or cannabis lounge license has been issued. Applies current law regulating licensed marijuana producers, processors, wholesalers and retailers to new types of licensees. Makes certain exceptions.

SB 308. Establishes Task Force on Social Consumption of Cannabis.

SB 319. Authorizes local governments to allow medical marijuana dispensaries and marijuana retailers licensed by Oregon Liquor Control Commission to be located within certain distance [500 feet] of schools.

SB 342. Clarifies total number of mature marijuana plants and immature marijuana plants and total amount of usable marijuana, medical cannabinoid products, cannabinoid concentrates and cannabinoid extracts that patients and caregivers registered under Oregon Medical Marijuana Act may possess.

SB 570. Creates crime of intentionally administering marijuana item to body of person who is under 18 years of age. Punishes by maximum of 20 years’ imprisonment, $375,000 fine, or both. Creates crime of knowingly administering marijuana item to body of person who is under 18 years of age. Punishes by maximum of 1 year’s imprisonment, $6,250 fine, or both.

Draft House Bills

HB 2151. Allows property tax exemption for food processing machinery and equipment newly acquired by persons engaged in business of producing cannabinoid edibles, alcoholic beverages and alcoholic liquors.

HB 2197. Directs Oregon Liquor Control Commission to enter into agreement with nongovernmental entity that conducts or funds research on cannabis and cannabis-derived products. Specifies terms of agreement. Requires public dissemination of data, information, analysis and findings procured pursuant to research.

HB 2198. Changes name of Oregon Liquor Control Commission to Oregon Liquor and Cannabis Commission. Changes composition of Oregon Liquor and Cannabis Commission by adding commissioners from cannabis retail industry. Specifies that Oregon Health Authority may not register marijuana grow sites, marijuana processing sites and medical marijuana dispensaries. Creates within authority, for purposes of administering Oregon Medical Marijuana Act, Medical Use of Cannabis Board. Becomes operative June 30, 2018. Repeals provisions regulating marijuana grow sites, marijuana processing sites and medical marijuana dispensaries on June 30, 2018. Updates and creates provisions providing for licensing of marijuana grow sites, marijuana processing sites and medical marijuana dispensaries by Oregon Liquor Control Commission. Makes other technical changes to laws regulating cannabis. Creates alternate registry system administered by State Department of Agriculture for growers that produce marijuana for registry identification cardholders. Directs Oregon Liquor and Cannabis Commission to coordinate with department for purpose of regulating marijuana producers.

HB 2199. Eliminates provision indicating that cannabis-related business licenses may be for term other than one year. Qualifies provision providing that cannabis-related business license expires upon death of licensee.

HB 2200. Changes name of Oregon Liquor Control Commission to Oregon Liquor and Cannabis Commission. Changes composition of Oregon Liquor and Cannabis Commission by adding commissioners from cannabis retail industry. Directs commission to coordinate with State Department of Agriculture for purpose of regulating marijuana producers. Makes other technical changes to laws regulating cannabis. Specifies that Oregon Health Authority may not register marijuana grow sites, marijuana processing sites and medical marijuana dispensaries. Repeals provisions regulating marijuana grow sites, marijuana processing sites and medical marijuana dispensaries on June 30, 2018. Updates and creates provisions providing for licensing of marijuana grow sites, marijuana processing sites and medical marijuana dispensaries by Oregon Liquor and Cannabis Commission.

HB 2201. Corrects and conforms definitions for “cannabinoid concentrate” and “cannabinoid extract” in laws regulating cannabis.

HB 2202. Modifies statute under which lien may be imposed against building or premises used to illegally produce, process, sell or use marijuana items.

HB 2203. Changes distribution of moneys collected by Department of Revenue as tax imposed on retail sale of marijuana items.

HB 2204. Changes statutory limitation on local government’s authority to impose local tax or fee on retail sale of marijuana items. Specifies that if electors of city or county approve ordinance imposing tax or fee, governing body of city or county may amend ordinance, without referring amendment to electors, to adjust rate of tax or fee.

HB 2205. Directs State Department of Agriculture to solicit proposals from third party vendors to create for producers of cannabis efficiency standards for energy and water consumption and certification protocols for meeting those standards.

HB 2371. Specifies that, for purposes of statutes regulating seeds, agricultural hemp seed is flower seed. Directs Director of College of Agriculture and dean of College of Agricultural Sciences of Oregon State University to establish program for labeling and certification of agricultural hemp seed.

HB 2372. Establishes Oregon Industrial Hemp Commission.

HB 2556. Restricts sale and delivery of marijuana paraphernalia. Creates violation for unlawful sale or delivery of marijuana paraphernalia. Punishes by maximum of $2,000 fine.

Altogether, the index above seems to support the sentiment that Oregon is committed to getting it right with cannabis. We will continue to offer updates as events unfold. In the meantime, please let us know if you have comments on any of the specific bills listed above, or on the Oregon legislature’s approach to cannabis this session.

Arkansas CannabisArkansas voters’ decision to approve state-legal medical marijuana evidences a shift in attitudes towards medical cannabis that transcends stereotypical red-state/blue-state division on progressive cannabis reform. Arkansas will soon join Florida and Louisiana as traditionally “southern” states to embrace some form of medical marijuana legalization.

The Arkansas Medical Marijuana Commission is developing rules and regulations that will shape the trajectory of medical cannabis in the state. Though medical marijuana is now enshrined in the Arkansas state constitution, the Commission’s implementation of the law will largely determine the character and viability of the system.

Investors and entrepreneurs looking to capitalize on Arkansas medical marijuana should consider several questions raised by the legalization amendment itself and by the actions the Medical Marijuana Commission has taken since the November vote. The Commission has yet to promulgate final rules, and it will not do so for at least a few more months. But the rules trickling in already shed some light on several challenges and opportunities facing early movers in Arkansas’ medical marijuana industry.

Do I have to be an Arkansas resident to enter the industry? Not necessarily. Issue 6 as passed requires an individual applying for a dispensary or cultivation license to have been a resident of Arkansas for the past seven consecutive years and a rule adopted by the Commission requires applicants establish residency through two forms of identification. However, Issue 6 requires only that 60% of the individuals owning an interest in a medical marijuana dispensary or cultivation operation meet the residency requirements. This means that even though the individual named as the applicant on the form must be a long-time, continuous resident of Arkansas, that individual can recruit non-resident investors if Arkansas residents make up 60% of the syndicate. Interestingly, Issue 6 states that 60% of owners must be Arkansas residents – not that 60% of the cannabis company must be owned by Arkansas residents. Accordingly, a group of six Arkansas residents could own a medical marijuana facility with as many as four non-residents even if the four non-residents own a disproportionate share of the ownership interest.

Residency rules are more and less restrictive for other medical marijuana stakeholders. For example, “visiting qualified patients” (defined as visitors and those who have lived in Arkansas for less than 30 days) may receive medical marijuana from Arkansas dispensaries if they present a valid medical marijuana registry identification card from another state. On the other hand, members of the Arkansas Medical Marijuana Commission must be residents for ten years.

Are there capital requirements to obtain an Arkansas cannabis license? Capital requirements are a big obstacle to entering the Arkansas medical marijuana market. The Commission recently approved a licensure and renewal fee of $100,000 for dispensaries and cultivation operations. This is in addition to the several thousand dollar –- and only partially refundable -– application fee. The fees are steep, especially considering the uncertainty surrounding the mostly unknowable and uncertain market and regulatory environment of the fledgling Arkansas medical marijuana industry. The Commission also required proof of assets or a surety bond of $1,000,000 and proof of $500,000 in liquid assets to obtain a license. We see these high financial barriers as likely to limit the growth of Arkansas’ cannabis industry, while at the same time leading to experienced and well-funded non-residents taking a large stake in it by providing necessary start-up capital. Our cannabis business lawyers are already getting a slew of calls and emails from cannabis industry veterans from outside Arkansas looking to get in and from Arkansas residents looking for experienced outside help and funding.

What else should I know before getting into an Arkansas cannabis business? In addition to the usual concerns about federal illegality of marijuana and obstacles to operating a marijuana business like lack of banking, investors in Arkansas should beware that the Arkansas Medical Marijuana Commission has yet to complete its work creating rules and much could change. Ultimately, the Commission’s final rules will not be finalized for a few months and all manner of restrictive local land use codes, ordinances, and other laws could result. Nonetheless, the potential for a vibrant medical marijuana industry in Arkansas is undeniable and investors and entrepreneurs should pay close attention. After all, Arkansas is famous for its diamonds in the rough.

oregon

2016 was a huge year for cannabis. So we decided we would rank the fifty states from worst to best on how they treat cannabis and those who consume it. Each of our State of Cannabis posts analyzed one state. We started this series on January 10, 2016, and now, over a year later, we are ready to crown the top state for cannabis law: Oregon.

Our previous rankings are as follows: 2. Colorado; 3. Washington; 4. California;  5. Alaska; 6. Massachusetts;  7. Maine; 8. New Mexico; 9. Nevada; 10. Hawaii; 11. Maryland; 12. Connecticut; 13. Vermont; 14. Rhode Island; 15. Kentucky; 16.Pennsylvania; 17.Delaware; 18. Michigan; 19. New Hampshire; 20. Ohio; 21. New Jersey; 22. Illinois; 23. Minnesota; 24. New York; 25. Wisconsin; 26. Arizona; 27. West Virginia; 28. Indiana; 29. North Carolina; 30. Utah;  31. South Carolina; 32. Tennessee; 33. North Dakota; 34.Georgia; 35. Louisiana; 36. Mississippi; 37. Nebraska; 38. Missouri; 39. Florida; 40. Arkansas; 41. Montana; 42. Iowa; 43. Virginia; 44. Wyoming; 45. Texas;  46. Kansas;  47. Alabama;  48. Idaho; 49. Oklahoma;  50. South Dakota.

Oregon

Recreational Marijuana. Oregon voters approved Measure 91 to legalize recreational cannabis in 2014. This was two years after the failure of the Oregon Cannabis Tax Act, which appeared on the 2012 ballot and would have legalized recreational marijuana.  Measure 91 allows adults, 21 and over, to grow up to 4 plants on their property, possess up to 8 ounces of usable marijuana (dried marijuana flowers or leaves that are ready to smoke) in their home, and carry up to 1 ounce in public. Like other legal states,  marijuana cannot be consumed in public.

The Oregon Liquor Control Commission has the authority to tax, license and regulate recreational marijuana grown, sold, or processed for commercial purposes but does not regulate the home grow/personal possession provisions of Oregon law. The OLCC oversees multiple license types including producer, processor, wholesale, retail, and researcher licenses. Oregon has not limited the number of licenses it will grant, meaning that OLCC is continuously accepting applications. It also allows a single licensee to own multiple licenses (e.g., an entity can hold a producer, processor, and retail license). This differs from the approach taken by Washington, which limits the number of licenses granted and is currently not accepting new marijuana applications. Oregon’s marijuana market is open to out of state actors as the state does not impose a residency requirement. This also differs from Washington and from Colorado which require licensees to be state residents. Oregon imposes a relatively low 17% tax on recreational marijuana sales. Finally, Oregon is one of the few states to allow for cannabis delivery, although Portland, the state’s largest city, does not (yet) allow for marijuana delivery.

Medical marijuana. Oregon first legalized medical marijuana in 1998 by passing Ballot Measure 67. Oregon’s medical market is distinct from the recreational market although there is some regulatory overlap between the two. For example, Oregon medical dispensaries were authorized to sell recreational marijuana from October 1, 2016-January 1, 2017 while the recreational market took shape.

Oregon medical marijuana is regulated by the Oregon Health Authority. Individuals with a qualifying medical condition and a recommendation for medical marijuana from an attending physician can apply for a medical marijuana card. Qualifying conditions include the following:

  • Cancer
  • Glaucoma
  • Alzheimer’s
  • HIV/AIDS
  • Cachexia (wasting syndrome)
  • Severe pain
  • Severe nausea
  • Seizures, including but not limited to seizures caused by epilepsy
  • Persistent muscle spasms
  • Multiple sclerosis

Medical patients may possess up to 6 plants, which may only be grown at a registered grow site address, and up to 24 ounces of marijuana. This means patients are legally allowed to possess more cannabis than recreational users. Medical users may purchase from licensed medical marijuana dispensaries, but are limited to purchasing the following amounts in a single day

  • 24 ounces of usable marijuana;
  • 16 ounces of a medical cannabinoid product in solid form;
  • 72 ounces of a medical cannabinoid product in liquid form;
  • 16 ounces of a cannabinoid concentrate whether sold alone or contained in an inhalant delivery system;
  • Five grams of a cannabinoid extract whether sold alone or contained in an inhalant delivery system;
  • Four immature marijuana plants; and
  • 50 seeds.

Many expect Oregon’s medical and recreational cannabis regimes will eventually merge, and proposed legislation could accomplish just that.

Bottomline. Determining the top state in this series was not easy. There was significant debate among our cannabis lawyers as to whether California, Colorado, Oregon, or Washington should take top honors. Seeing as how we have offices and lawyers in California, Washington and Oregon, we must concede just a bit of bias here. Ultimately, we determined that Oregon has the best marijuana program.

One of the prime determinants for us was Oregon not having a residency requirement, as we see this as very business friendly and making it much easier for cannabis businesses to secure funding. Oregon also has shockingly low licensing fees and it does not cap the number of licenses it will grant. This means one need not be a millionaire to get into the industry and this also means there will be (and there is) substantial competition to keep cannabis prices down. Oregon also allows its cannabis licensees to vertically integrate by owning multiple license types. The state is also consumer friendly, with relatively low taxes and with laws that allow for home growing your own cannabis. Oregon has had legal medical marijuana for nearly twenty years and it used this medical market to permit early sales of recreational marijuana, evidencing the state’s willingness to take a pragmatic approach to marijuana legalization.

Oregon’s cannabis laws are not perfect, but they are the best in the nation.

Do you agree?

jeff-sess-quote

Despite our strong dislike of Jeff Sessions’ views on cannabis, he actually makes a very good point here. It is indeed a concern that Congress has made the possession and distribution of marijuana an illegal act, as that is definitely not something “desired any longer.” With over half the country supporting legalization of recreational marijuana and far more people favoring legalizing medical marijuana, what’s truly criminal is maintaining our outdated and undesired federal cannabis laws. Why continue playing games by saying it’s illegal, but we as the federal government will not fund certain enforcement actions? Why keep laws that have become irrelevant and unwanted? Weak, unpopular and unenforced laws weaken the concept of law as a whole.

As Sessions essentially says, Congress should get off the pot and “pass the law to change the rule.” It is time and just about everybody would benefit.

Proposition 64California cannabis laws states that adults in California age 21 and older may legally possess, plant, cultivate, harvest, dry, or process up to six marijuana plants as well as possess the marijuana produced from those plants. Though cities and counties can completely prohibit personal outdoor cultivation (and some already do), Prop 64 does not allow them to prohibit personal cultivation indoors or in an outside structure that is fully enclosed and secure.

However, Prop 64 does grant California cities and counties the authority to reasonably regulate these activities and requires that all persons cultivating cannabis for personal use comply with any local ordinances. In addition, Prop 64 limits personal cultivation to six marijuana plants per private residence (regardless of the number of adults living in the residence) and requires any marijuana produced from the plants that is over the legal possession limit of 28.5 grams be kept within the residence or in a locked, outdoor space not visible to the public.

Some California municipalities have already started passing local ordinances to regulate personal cultivation. Prop 64 allows cities and counties to “enact and enforce reasonable regulations to reasonably regulate” personal cannabis cultivation activities. So now the question is just how reasonable are these new regulations?

In December, the City of Indian Wells passed an ordinance that requires residents to register for a permit from City Hall to cultivate marijuana at home. To receive the permit, residents must allow home inspections by city employees and pay an annual fee of $141. According to Erwin Chemerinsky, Dean of University of California, Irvine Law School and prominent constitutional law scholar, Indian Wells’ regulation “goes significantly beyond what state law allows local governments to do.” There is also concern that by requiring individuals to register to grow, the City’s regulation forces them to self-incriminate themselves under federal law and is therefore unconstitutional.

Last week, the City of Los Banos also considered an ordinance requiring its residents to first register with the City to cultivate marijuana indoors for personal use. The stated reason for requiring residents to register was so authorities could educate them on how to safely grow marijuana and avoid fire hazards. However, one City Council member did not support the ordinance because he was concerned about creating a public registry that could potentially expose home growers to “shaming, harassment or violence.” The Los Banos City Council later amended the proposed ordinance to provide greater privacy for registrants by avoiding collection of personal data. The modified ordinance was approved unanimously on January 4th.

We’ve been working with plenty of cannabis companies in California on the local permitting and future state licensing processes, but this is the first time individuals are being asked to register to cultivate marijuana in their own homes for their own personal use. Ultimately, it may be up to a court to decide whether these new local regulations are indeed “reasonable,” as required under Prop 64. In the meantime, California residents should be aware that they cannot legally purchase recreational cannabis from any dispensaries and, if they happen to live in a city or county that has passed regulations on personal cultivation, they also may not be able to legally grow marijuana in their residences without first registering and complying with any new rules.

Yes, California has legalized recreational cannabis, but we still have a long way to go until it becomes widely available for all adults living in our state.

Cannabis lawOn Tuesday, we wrote that Jeff Sessions’ confirmation hearing had begun, for the post of U.S. Attorney General. In that piece, we expressed our hope that one of the committee members would “drill down from civil rights to marijuana legalization, and specifically, to enforcement of the Federal Controlled Substances Act.” The hearing concluded yesterday and no one did exactly that. No one turned the screws.

Still, Sessions fielded questions from a few different Senators related to marijuana and the Controlled Substances Act (CSA). Below is a close reading on Sessions’ pot-related testimony, beginning with the opening question, when Senator Patrick Leahy (D-VT) asked if Sessions would use federal resources to prosecute sick people using marijuana in accordance with state law. Sessions responded: “I won’t commit to never enforcing federal law, Senator Leahy, but absolutely it is a problem of resources for the federal government….”

This comment is interesting in a few respects. First, and unfortunately, Sessions keeps all options on the table as to CSA enforcement. As we have mentioned, that could mean suing states to block implementation of state marijuana programs, or, more narrowly, wielding the CSA’s asset forfeiture provisions against specific cannabis businesses and related parties. That probably sounds ominous, but two years ago, current Attorney General Loretta Lynch said this (in response to a question by Sessions himself, at her own confirmation hearing): “I can tell you that not only do I not support the legalization of marijuana, it is not the position of the Department of Justice currently to support the legalization. Nor would it be the position should I become confirmed as attorney general.”

We all know that states have largely proceeded with impunity on cannabis during Lynch’s tenure, even though the country had far less state-sanctioned pot activity than it does today. Sessions’ reservation about “never enforc[ing] federal law” seems benign by comparison. Regarding the second part of Sessions’ quote, and the “problem of resources for the federal government,” he concedes a key point: even if it were the Trump administration’s number one goal to eradicate state level marijuana, there are likely too many people involved and too much money to revert to the past.

In the hearing on Tuesday, Sessions continued by discussing the Cole memo and the factors considered by the current administration regarding prosecution of state-level marijuana programs:

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. I know it won’t be an easy decision, but I will try to do my duty in a fair and just way.

Again, Sessions leaves open the possibility of enforcing federal cannabis prohibition. His talk of “using good judgment about how to handle these cases” is a euphemism for using prosecutorial discretion, something he misleadingly claimed he didn’t have in a subsequent response to Sen. Mike Lee (R-UT):

One obvious concern is the United States Congress has made the possession [of marijuana] in every state and distribution an illegal act. If that’s something that’s not desired any longer, Congress should pass a law to change the rule. It is not so much the attorney general’s job to decide what laws to enforce. We should do our job as effectively as we’re able.

Here Sessions appears to have forgotten his earlier reference to prosecutorial discretion. His disingenuous argument that “my hands would be tied” by Congress, compelling enforcement action, should not be taken seriously – especially because Congress has sheltered state level medical programs for the past few years, and is likely to do so again. Sessions’ point, however, that Congress should pass a law if it permanently wants to prohibit federal enforcement actions, is probably a fair one, and only reinforces the need for us to secure federal legalization of cannabis.

In all, the hearing could have been better, could have been worse. Sessions was far less retrograde in his statements toward marijuana than he has been in the past. He played his cards closely, as nominees are wont to do, and — like it or not — he is going to be confirmed. This means cannabis operators will simply have to wait and see, which has been the name of the game for a while now.