Cannabis lawyersIt is easy to burn through money when starting a business. Expenses like market research and professional fees can kick in almost immediately, and capital expenditures like inventory, property and tools are unavoidable beyond the early stage. In addition to these traditional start-up costs, the state-legal cannabis industry brings regulatory add-ons, like licensing and permit fees, and, in some jurisdictions, requirements for plans by architects and engineers. Like any business, starting a pot business can be expensive. Only more.

In our Washington, Oregon and California offices, our cannabis business lawyers speak daily with entrepreneurs in the early stages of cannabis business planning. Given the recent advent of state-legal marijuana, even our most “seasoned” industry clients and those with industry cachet have operated above board for only a couple of years. Because the regulated cannabis industry is a start-up industry, everyone needs to monitor costs closely. Those costs include professional fees.

At the onset of business planning, it is tempting to engage a range of professionals to handle any foreseeable matter. Like any industry, the cannabis industry has its experts: lawyers, accountants, realtors, vendors and any variety of “consultants.” Many of these individuals can be helpful along the way, if used correctly. The key is knowing when, whether and how to engage each provider in the life cycle of your cannabis business.

Lawyer. Potential clients are surprised when we sometimes send them away. In Oregon, for example, licenses are tied to locations, and unless there is an urgent need for legal services (i.e., the business is being capitalized), we often suggest that would-be clients return after they have sourced a target property. At that point, we can hone in on zoning issues as well as the lease or sale transaction, while structuring the business to boot. Otherwise, with no location in mind, there is a tendency to run up fees unnecessarily, and before the point where a lawyer is truly required.

Accountant. In the cannabis industry, it is critical to have an accountant (as well as a lawyer) who understands the quagmire of IRC 280E. An accountant versed in the cannabis industry will be able to assess the pros and cons of various tax elections in the context of a tax code tilted against pot businesses, and offer ongoing planning advice. Like cannabis business law, cannabis accounting is highly specialized, but the right CPA can make all the difference.

Realtor. Many aspiring pot businesses attempt to find a realtor. Unlike lawyers or accountants, realtors generally do not work for an hourly fee; they typically get paid when a deal closes. In the marijuana industry, realtors are not enthusiastic about pounding the pavement for smaller placements, like a dispensary lease. The commission simply isn’t there. But, if you are looking at a larger transaction—and specifically to buy a building or a piece of property—a good realtor can be a real asset.

Vendors. Most cannabis businesses enlist a couple vendors at the onset of operations. The two most commonly retained vendors are insurance providers and security operators. Regarding insurance, cannabis businesses need the same products as other small businesses. This tends to include property insurance and workers’ compensation, in a highly specialized field. As to security, the cannabis industry is unfortunately still a cash game for the most part. Not only are security providers required for property set up and installation, but they are often hired to transport cash during business operations.

Consultants. There are innumerable cannabis consulting firms nationwide, but many of them do not add value. For this reason, we have cautioned (on more than one occasion) to be wary of expensive consultants, particularly at the outset of business operations. Most of what a consultant can provide can also be obtained for free, from other industry sources. Anything worth paying for can almost always be got somewhere else.

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.

 

 

 

Cannabis mortgages and bank loansMy law firm represents a large number of cannabis operators in Oregon, Washington and California. Some of these operators own the land they trade on; others simply lease. Whenever we are lucky enough to meet the client before the onset of cannabis activity, our first question is often whether the target property is mortgaged, or if it is owned free and clear. If the property is mortgaged, we ask “by whom?” If the answer is “a bank,” we tend to say, “let’s talk about that for a minute.”

Your standard institutional mortgage contains language allowing the mortgagee/lender to call the loan if the property is being used to conduct “illegal activity.” Lenders won’t budge on that provision: it relates back to federal lending guidelines, and attempting to pare back that language is impossible. If a borrower acquires a bank loan with the secret intention of operating or leasing to a cannabis business, that borrower is running a risk of foreclosure, to say nothing of allegations of fraud.

When a bank discovers that cannabis is being grown, processed, held or sold on its mortgaged property, it has the option, under contract, to call the loan. This means the bank can declare the entire mortgage balance due and owing on the spot. In practice, if a loan is in good standing it won’t always get called; but if a bank learns that cannabis is being traded on the property, a real possibility exists that the mortgage will get called. And refinancing with the lender will be all but impossible.

Although banks typically do not troll their commercial loans looking for pot merchants, many loans require borrowers to inform lenders about tenants and new leases on the property. When a bank decides to call a loan due to cannabis activity, the bank may give the mortgagor a limited window of time to cure the defect (stop the cannabis activities), or to find alternative lending. Given the realities of business investment and operations, the strictures of leases and the high cost of private lending, this can cause tremendous headaches.

There is no work-around for the “illegal activities” issue in institutional lending, but that hasn’t stopped some folks from trying. Among other creative ideas, we recently saw one owner give a second, unrecorded mortgage to a cannabis operator as “insurance” against the first loan getting called. Not only would this approach fail to prevent the first mortgage from getting called, it would typically allow the first mortgagee to declare the balance of its loan payable immediately, as “due on sale.” Such an action could wipe out the junior, unrecorded mortgage interest in any subsequent foreclosure.

Finding a cannabis property is not always easy, but it’s important to understand how the property is financed (or otherwise encumbered) before you sign a lease or begin operations. If you intend to purchase a cannabis property and cannot pay cash, seller financing is a popular option we have written about elsewhere. Otherwise, it’s hard money or trying to fool the bank. Neither of those is a good business plan.

DocumentsOur cannabis business lawyers have recently been making the rounds with our many and varied cannabis clients in Oregon, Washington and California, and creating an inventory of which businesses have executed operating agreements (in the case of an LLC), shareholder agreements and bylaws (in the case of a corporation) and the odd partnership agreement (in the case of a limited partnership). Too often, we learn that a business may be operating informally, against advice. Because many cannabis entrepreneurs are used to operating informally, we tend to push this conversation pretty hard.

In all 50 states, companies are subject to statutes that govern their members and shareholders, directors and officers. These laws tend to cover basic provisions like what happens when a company is dissolved administratively or judicially, or what duties an owner may owe her co-owners, and even the company itself. Sometimes, people are surprised to learn about default rules that give all members equal management rights, or require unanimity for certain key actions. The default rules almost never cover issues unique to the company, like ownership percentages or contributions of capital, to name just a few.

Whenever two or more parties own a business, lack of basic documentation is dangerous, and this is especially so for cannabis businesses. People inevitably develop their own ideas as to “what the deal was.” When disputes happen, there may be nothing to fall back on but text and email fragments, or fuzzy recollections of who said what, and when. No one can point to a governing framework; no one can point to a clear way out.

There are several reasons parties ultimately fail to execute company documents, but here are the big three:

  1. It’s an expense. Resources may be limited at the start of a business venture, and the parties feel that company documents can be negotiated at some later date.
  2. It’s confusing. People may not understand basic concepts like capital account protocol, member withdrawal, drag- or tag-along rights, or any number of standard entity considerations.
  3. It’s uncomfortable. People may be averse to negotiating “against” their partners, particularly at the outset of a business venture. Or people may just feel nervous signing a formal agreement, despite the fact that they are running a business.

None of these reasons are good ones, and spending some time and money at the outset of a business venture to get things right will almost always pay off in the end. The compilation of company documents does not necessarily need to be a great expense: many cannabis companies are lightly structured to start, though others opt for complex tiers of ownership and highly nuanced management. Still, parties can often agree to basic documents without each owner hiring her own attorney or becoming mired in intractable negotiation.

A skilled cannabis business attorney will be able to walk the parties through the early steps of entity formation, explain unfamiliar terms, and facilitate conversation about what you should do and what you should not. In cannabis, each state presents unique rules on business ownership and licensing, and it is imperative to address the implications of federal illegality on company structure up front. If you are operating without agreements in your cannabis business, you are courting risk and conflict. And if your ownership or operations have changed since the time you first put ink to paper, it’s time to dust them off and have a look.

CROPLike many commercial crops, cannabis cultivation can be water intensive. Increased production in pot-friendly states has been flagged by many as a water and electricity usage issue, especially in light of oft-strained natural resources. For this reason, some of the Western states have begun to regulate cannabis businesses’ water and power usage. In the case of Oregon, environmental impact has been a key consideration for some time.

Last year, the Oregon legislature passed HB 3400, an omnibus bill legalizing recreational marijuana. In that historic law, the legislature called for a task force to assess water and electricity use by cannabis cultivators. The aptly named Cannabis Environmental Best Practices Task Force has been busy, meeting five times between April and August of 2016. Recently, it published its Working Document, which will soon be finalized into a proper report and submitted to the legislature. Oregon hopes these findings will serve as a model to other states with similar concerns.

Those who testified at the Task Force meetings represent a wide range of parties vested in Oregon cannabis, including growers, private sector service providers, and public utilities. Based on their testimony and other research, the Task Force identified best practices for cannabis cultivation, and identified ways stakeholders can encourage responsible cultivation practices for new industry entrants. According to the Task Force, Oregon should follow four distinct priorities to address the environmental impact of cannabis producers:

  1. Support access to education and technical assistance related to cultivation practices;
  2. Support the creation of voluntary third party certification programs;
  3. Encourage research into cannabis issues, including environmental best practices, health, and other aspects of the cannabis sector; and
  4. Investigate water regulations for small-scale producers.

This guidance demonstrates progressive, institutional concern with creating a sustainable medical and recreational cannabis industry. It seems likely that the state will adopt these recommendations. As to the cannabis cultivators themselves, they would be wise to proactively comply with any “best practices” identified by the Task Force and adopted by the legislature. Not only is that the right thing to do, but gaining certification as an environmentally friendly operator may boost the bottom line.

For existing cannabis producers in Oregon, the new guidance does not change the requirement to acquire and maintain required water rights. Nor does it eliminate the need to submit an Electricity and Water Use Estimate form upon license application. Instead, the guidance simply focuses on the manner in which cannabis growers can shrink their collective environmental footprint.

Looking ahead, increased regulation of water usage for cannabis cultivation is inevitable as water-starved states like California vote on recreational pot this year. Oregon’s move – explicitly billed as a model for other states – sets a positive standard for states that will encounter these issues in the coming months and years. It is our hope that these recommendations see wide acceptance and smooth implementation, and lead the conversation on the environmental impacts of cannabis production nationwide.

Cannabis business lawyersThe Ohio State Supreme Court’s Board of Professional Conduct last week issued an official opinion stating that attorneys are not allowed to assist in the formation of state-legal medical marijuana businesses, because cannabis remains illegal under federal law. The opinion also clarified that Ohio attorneys are not legally permitted to consume medical marijuana, nor are they permitted to be personally involved in related businesses (something our firm has always advised against anyway).

This opinion follows Governor John Kasich’s signing into law of House Bill 523, legalizing medical marijuana in Ohio. The law goes into effect next month, prompting attorneys to seek clarification from the Board of Professional Conduct as to whether or not they can assist cannabis license applicants with setting up businesses that comply with state and local law. Continue Reading Ohio Does Not Allow Attorneys to Advise Medical Marijuana Businesses

Cannabis international trade lawyersOn one of my recent trips to my local pet store, I ended up involved in an unexpected and lengthy conversation with the owner about cannabidiol (CBD) pet treats. We’ve written before about the precarious legal status of CBD, but CBD-infused pet products seem to be flying under the radar.

As an initial matter, is CBD legal under federal law? As we’ve noted in previous posts, the answer depends.

Marijuana is a Schedule I controlled substance under the Controlled Substances Act (CSA), and is federally illegal. Therefore, CBD derived from marijuana violates the CSA. The Drug Enforcement Administration has stated that it believes CBD to be a marijuana derivative and, therefore, a Schedule I drug. However, the CSA does not include in its definition of “marijuana” the “mature stalks” or “sterilized seeds” of the plant. The mature stalks and sterilized seeds constitute hemp products, which are not scheduled under the CSA.

Though the DEA has no enforcement authority with respect to hemp products, it does control hemp cultivation. To cultivate hemp in the U.S., you must have a permit from the DEA; the only exception to this is the 2014 Federal Farm Bill, which allows state departments of agriculture, and universities and colleges to cultivate hemp without a permit from the DEA for educational and research purposes. Because of the prohibition on U.S. hemp cultivation without a DEA permit, the hemp products we purchase in the U.S. typically come from hemp imported from overseas.

Therefore, when we’re talking about CBD products for pets, the only way these products can be legal is if they are derived from imported hemp and not from marijuana. However, the process of extracting CBD from hemp is more involved than from high-resin marijuana plants, and “products with heavily processed ‘pure’ CBD derived from industrial hemp lack the full spectrum of aromatic terpenes and other cannabinoids found in high-resin” plants.

A few different scenarios are possible here. Of course, one is that all of the claims made by the manufacturers of these pet products are true. Another is that the quality of CBD, assuming it is produced from imported stalks and sterilized seeds of hemp, is less than it would be if produced from marijuana plants. And yet another scenario is that the importers of the CBD oil used in these products have not been entirely truthful with customs. Verifying the true origin of CBD oil is difficult for customs officials, particularly given how murky federal law is on the subject. Our international trade lawyers  frequently deal with U.S. customs on behalf of our clients, even on clearly legal cannabis products.

Adding another layer of complexity, generally whenever a company makes a medical claim about a product, including a product for pets, that product is classified as a drug. Under the Federal Food, Drug and Cosmetic Act (FDCA) new drugs are not allowed to enter the U.S. market without first being tested by the FDA, unless they meet the definition of a dietary supplement.

However, the FDA does not consider CBD to be a dietary supplement; it considers CBD to be a new drug. And the FDA has issued warning letters to numerous companies making medical claims about their CBD products.

Setting aside the issue of FDA regulation, let’s go back to the issue surrounding the source of CBD oil. What if you happen to live in a state with legal recreational or medical marijuana? Can state-licensed producers and processors make CBD oil for use in pet products? In Washington, marijuana products must be “intended for human use.” And in Colorado, regulations are based on the FDA standards described above. So neither of these states would allow licensed producers or processors to manufacture products for consumption by pets. However, an issue has recently arisen in Oregon, where the regulations are less clear. And Oregon manufacturers have been making edibles for pets that do not appear to be legal, so far without any legal ramifications.

The bottom line here is that regardless of where you live, if you walk into your local pet store (or place an online order) for CBD pet products, there are currently no standards in place to ensure you are getting what you think you have ordered. Even where companies state on the packaging that the products are imported, the legal status of those products is uncertain, as is their true CBD content and medicinal value.

Oakland cannabis lawsOn May 4, 2016, the city of Oakland took a big step toward expanding opportunities to become a permitted cannabis business in the state of California. Oakland has always been at the forefront of the cannabis legalization movement and has had local marijuana ordinances since 2004, when the Medical Marijuana Program Act first passed in California. It was the first California city to permit and regulate medical marijuana dispensaries, however its original ordinances addressed only retail dispensaries and cultivation, with only the dispensaries being able to obtain a permit to operate legally.

Oakland currently has eight licensed dispensaries operating within the city, but this week the Oakland City Council voted unanimously in favor of modified ordinances to vastly expand the number and types of marijuana permits available. Instead of capping the total number of medical marijuana dispensaries allowed (as is common in other California localities), the modified ordinances will add eight new dispensary permits each year. In addition, the availability of new permit types will potentially increase the total number of permitted marijuana businesses in Oakland to nearly 100, including a projected 30 cultivators, 12 delivery businesses, five distributors, five transporters, two testing facilities and 28 manufacturing businesses.

Oakland has also taken steps in its ordinances to address the interests of its local community – to support areas hit hard by marijuana prohibition as well as local minority business owners. The modified ordinances require half of the new permits go to residents of select East Oakland neighborhoods with a history of higher marijuana-related arrest rates, but with the condition that the original applicants maintain at least a 51% ownership in these permitted businesses. The day of the vote, the City Council also added a provision to allow for and encourage Oakland residents previously incarcerated for cannabis-related convictions to apply for marijuana permits. And the ordinances will further support Oakland’s local community by requiring 50% of staff members of permitted businesses come from local hires and 25% from areas with high unemployment rates.

The War on Drugs has disproportionally affected people of color in the United States and the modified ordinances are meant to increase opportunities in Oakland for these disenfranchised groups, such as through priority licensing. However, many of the amendments meant to effect these changes received a less than positive response from the public, who argued that the provisions did not properly confront the issues and could instead create unintended consequences for the minority groups they are meant to help. Still, the majority of commenters praised the city for creating a robust regulatory framework that other California cities could use as model for their own marijuana ordinances. Oakland Mayor Libby Schaaf boasted that “Oakland is creating a national model for how communities can bring every aspect of this growing sector of our economy into the light.”

On May 17, 2016, a final reading of the ordinances will take place in Oakland and at that time the City Council is expected to decide whether to make additional amendments or officially approve the new ordinances. I intend to be there and I would urge anyone considering Oakland for their cannabis business to do the same. Oakland has taken a bold step towards reforming its marijuana regulation and hopefully soon other California cities, and perhaps even other states, will follow in its footsteps and create marijuana laws to serve the needs and rights of marijuana business owners and consumers throughout the United States. In the meantime, if you are interested in starting a cannabis business in Oakland, now is the time for you to get ready by, among other things, studying and understanding the new and complicated rules for doing so.

California Cannabis Licensing. Get Ready.

At the end of 2015, our California attorneys handled an influx of clients looking to whip their cannabis companies into regulatory shape to meet the MMRSA’s deadline for obtaining “priority” licensing status. If you recall, AB 266, at Article 4, Section 19321, states that:

In issuing licenses, the licensing authority shall prioritize any facility or entity that can demonstrate to the authority’s satisfaction that it was in operation and in good standing with the local jurisdiction by January 1, 2016.

Operators of California collectives and dispensaries spent a frenzied December attempting to incorporate as non-profit mutual benefit corporations and to ascertain what exactly would be required to be considered in “good standing” with their local jurisdictions. And many operators did not meet the January 1st deadline. Corporate filings with the state take time, and local permitting takes even more time. So many operators opted, without that priority incentive, to abandon the path toward compliance and to continue operating as they always had: clearly outside the confines of the law.

But everyone seems to be overlooking the next opportunity for Californians to nab priority licensing status: the “Control, Regulate and Tax Adult Use of Marijuana Act” (more commonly referred to as the AUMA Initiative). The AUMA Initiative, at Article 4, Section 26054.2(a), contains the following very similar “priority” language to the MMRSA:

A licensing authority shall give priority in issuing licenses under this division to applicants that can demonstrate to the authority’s satisfaction that the applicant operated in compliance with the Compassionate Use Act and its implementing laws before September 1, 2016, or currently operates in compliance with Chapter 3.5 of Division 8.

And with respect to local law compliance, AUMA, at Article 4, Section 26054.2(b), provides as follows:

The bureau shall request that local jurisdictions identify for the bureau potential applicants for licensure based on the applicants’ prior operation in the local jurisdiction in compliance with state law, including the Compassionate Use Act and its implementing laws, and any applicable local laws.

What this means is that California marijuana operators still have every incentive to get their corporate affairs in order, pay their taxes, and comply with local law. If the AUMA Initiative passes this November, it won’t be too late to take advantage of prior experience running a collective or dispensary, but only if your entity was compliant with state and local law as of September 1st of this year.

This takes us back to the issue of what exactly “priority” means, and what your entity must do to qualify. Although the AUMA Initiative, like the MMRSA, does not define that word, we know from various other states in which we have handled licensing applications that it will almost certainly mean those with priority status in California will be the first to obtain California cannabis licenses. Being the first to market in California, where the number of marijuana license applicants is sure to be astronomical, will have major long term benefits for any licensee. And perhaps even more importantly, we expect many California cities and counties to limit the number of cannabis businesses that may operate within their jurisdiction. The state may do the same, meaning that getting a license early could be the only way to get a license at all.

Let’s also recall that defining terms like “operated” and “in compliance” will be left to the State during the rule-making period set to take place until, like the MMRSA, the AUMA becomes effective in January 2018. However, and again based on our extensive licensing experience in other states, we are convinced that California will tie “compliance” to a marijuana entity’s ability to show it is registered with the California Board of Equalization, and that it has paid (and is paying) all applicable state and local taxes.

Though there is some ambiguity surrounding what the language of the proposed AUMA will translate to in practice, there are some obvious meanings that reveal what California marijuana operators should be doing now to meet the September priority deadline. First, all marijuana operations should be registered with the California Secretary of State as non-profit mutual benefit corporations or statutory cooperatives, keeping in mind that articles of incorporation, bylaws, and the treatment of “membership” should be carefully drafted to make the transition into for-profit operation down the line a smooth one.

And then there is the issue of local law compliance, which is a hang-up for so many California cannabis businesses. Since California cities and counties are able to create their own regulations for medical marijuana, each city and county has varying medical marijuana regulations, many of which are incredibly difficult to locate or decipher. Depending on where your business is located, you will want to be able to show the state that you meet all local permitting and/or licensing requirements. Obtaining these local approvals is always time consuming, so if you haven’t begun the process with your local authorities, start now.

New operators looking to secure priority status will have their work cut out for them in the next five months. Newcomers will, at a minimum, need to find and secure a properly zoned location, execute an appropriate leasehold or purchase and sale agreement for the property, choose an appropriate corporate entity, form that entity and draft bylaws, articles of incorporation, patient agreements, etc., register with the Board of Equalization, and abide by all local laws and regulations, obtaining licenses and permits where needed. Just because the January 1, 2016 MMRSA deadline has passed, doesn’t mean cannabis businesses should sit back and forget about state and local compliance. If the AUMA Initiative passes, adult use licensing priority could still be up for grabs.