marijuana cannabis MFOA
Our thoughts on the new Senate cannabis bill.

Yesterday, U.S. Senator Chuck Schumer (D-NY) introduced the Marijuana Freedom and Opportunity Act (“MFOA”). The MFOA is also co-sponsored by Senators Bernie Sanders (I-VT), Tim Kaine (D-VA), and Tammy Duckworth (D-IL). Coming on the heels of the STATES Act, the MFOA is the latest–and hopefully a successful–attempt to put an end to America’s unjust and immoral stance on marijuana (show us the way Canada!). The MFOA, as it’s currently drafted, pulls no punches: Its stated purpose is “To decriminalize marijuana, and for other purposes.” It only gets better from there as other provisions are as follows:

  • It officially removes “marihuana” (that’s how it’s spelled in the Controlled Substances Act) as a Schedule I drug of the CSA.
  • It would create the Marijuana Opportunity Trust Fund (“Fund”) – think social equity programs but on a federal level. The Secretary of Treasury would transfer the greater of ten percent of all tax revenue generated by the cannabis industry or $10 million to the Fund. The amount transferred into the Fund would then be made available to small cannabis businesses owned by women, and by socially and economically disadvantaged individuals. There’s no doubt that America’s “war on drugs” has been implemented by law enforcement to disproportionately affect people of color and the poor. Although the establishment of the Fund won’t be able to right that wrong, it’s a step in the right direction.
  • It would authorize up to $250 million over five years for highway safety research and to help expedite the development of enhanced strategies and procedures to reliably determine the impairment of a driver under the influence of THC.
  • It authorizes $500 million over five years for critical public health research to better understand the effects of THC on the brain and the efficacy of medicinal marijuana for specific ailments.
  • It would allow the Alcohol and Tobacco Tax and Trade Bureau to regulate advertisements and promotions in order to prohibit promotions to individuals 18 years of age and under.
  • It authorizes up to $100 million for state and local governments to create expungement or sealing programs for those with prior marijuana convictions.
  • It would still grant States the authority to prohibit marijuana if they decided they preferred to live in the dark ages.

The MFOA has a little bit in it for everyone and hopefully that will lead to its passage: The cannabis industry would be able to operate, and therefore bank, without fear of government intervention; Populations disproportionately impacted by the war on cannabis will have access to capital; Funds will be allocated to prevent impaired driving and promotions aimed at minors, and; States can still criminalize cannabis if that’s their cup of non-THC-infused tea. The MFOA still has a long way to go and who knows what the November midterms or how President Trump’s position on it will vacillate from week to week (or day to day) but let’s make sure to contact our federal legislators and tell them that we demand they support the MFOA.

When California was getting ready to legalize adult-use and medically commercial cannabis sales on January 1, 2018, we all knew it would be a bumpy ride. Going from the collective, cooperative, and non-profit models that governed marijuana operators (and I use the term “governed” loosely) prior to 2018, to a robust regulatory regime that was going to keep the federal government on the sidelines (hopefully) and better serve the public and the environment was never going to be easy.

When the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) was enacted in June of 2017, it merged the Medical Cannabis Regulation and Safety Act (MCRSA) and the Adult-Use of Marijuana Act (AUMA) into one regulatory regime. Under MAUCRSA there are three state agencies responsible for regulating and licensing cannabis operators: 1) The California Department of Food and Agriculture (CDFA), regulates cultivators, processors, and nurseries; 2) The California Department of Public Health’s (CDPH) Manufactured Cannabis Safety Branch regulates cannabis manufacturers; and 3) The Bureau of Cannabis Control (BCC) regulates distributors, retailers, delivery-only retailers, microbusinesses, temporary cannabis events, and laboratories.

In November of last year, all three agencies released their emergency regulations and licensing requirements (which we covered here and here). Upon gathering input from the public and cannabis businesses, all three state agencies made changes to their emergency regulations and readopted them last month.

In both the initial and readopted regulations, cannabis businesses were provided with a transition period that allowed for exceptions from certain regulatory provisions. The goal of the transition period was to grant cannabis businesses with a period of less stringent regulations so that they could sell cannabis products that were already in their inventory. The cost of compliance is a steep one and the transition period was an attempt to soften the blow. The readopted regulations made a number of changes (which we covered here) but what they didn’t change is the transition period’s termination date. The transition period ends on June 30, 2018, so starting on July 1 (which is also Canada Day!) the following regulations will apply:

July 1 is almost here!
  • Untested cannabis goods cannot be sold by a retailer and must be destroyed, nor will a retailer will be able to send the untested cannabis goods for testing.
  • Untested cannabis goods manufactured or harvested before January 1, 2018, in possession of a distributor that are owned by the distributor will have to be destroyed.
  • Untested cannabis goods manufactured or harvested before January 1, 2018, in the possession of a distributor owned by a manufacturer or cultivator may be returned to them. The manufacturer or cultivator could then sell the returned cannabis goods after sending them to a distributor and they pass all of the testing requirements.
  • All packaging and labeling of cannabis goods must be properly performed before being transported to a retailer. This also applies to cannabis goods that were in a retailer’s inventory before July 1. The only exception is that a retailer will be able to affix “FOR MEDICAL USE ONLY” for medicinal sales.
  • Cannabis goods in a retailer’s possession that do not meet packaging and labeling requirements will have to be destroyed.
  • All cannabis goods must be in child-resistant packaging, only having exit or secondary packaging be child-resistant shall no longer suffice.
  • Edible cannabis goods may no longer exceed 10 milligrams of THC per serving and may not exceed 100 milligrams of THC per package.
  • Non-edible cannabis products shall not contain more than 1,000 milligrams of THC per package in the adult-use market.
  • Non-edible cannabis products shall not contain more than 2,000 milligrams of THC per package in the medicinal market.
  • All products sold by a retailer will have to meet the CDPH’s requirements for ingredients and appearance.

In the long-term, the end of the transition period will benefit the public as the cannabis goods consumed will have passed stricter testing requirements. However, come July 1, you can expect to see less inventory on retailers’ shelves as there will inevitably be a number of cannabis goods that cannot pass the stricter testing requirements. Cannabis businesses that have been planning for the expiration of the transition period regulations are going to be the ones with good compliance programs and they’ll be able to take advantage of a less crowded marketplace as less forward-looking operators struggle to adapt.

One major concern for the California cannabis industry is whether there are enough licensed laboratories to meet demand. The BCC has currently issued temporary licenses to approximately twenty-nine (29) laboratories and whether they have the capacity to test all the cannabis products supplied by cultivators and manufacturers will have a direct impact on how fast a retailer can restock their inventory. In the short-term, you can expect to see some steep discounts from retailers as they’re forced to unload all their marijuana products that they’d have to destroy if not sold by July 1. Be ready for longer than normal lines at your favorite cannabis retailer on June 30!

marijuana cannabis oregon CLEThis Thursday, June 7th, our own Vince Sliwoski will co-chair an all-day continuing legal education (CLE) event in Portland called The Business of Marijuana in Oregon, along with Jesse Sweet, a lawyer and senior policy analyst at the Oregon Liquor Control Commission (OLCC). The roster of speakers lined up for this CLE is better than any year to date, and everyone, including non-lawyers, would be well served to attend. Other Harris Bricken lawyers presenting include Megan Vaniman (employment) and John Mansfield (litigation). For a full event description, including topics, speakers and registration links, click here.

Looking back over the past four years, it is amazing to see how much things have changed in Oregon cannabis. At this point, the OLCC’s recreational marijuana program is fully built out, with over 3,400 applicants now on file with the state. We are proud to call many of these Oregon producers, processors, wholesalers and retailers our clients, alongside the many investors and ancillary service providers we represent.

Sometimes, it is said that pioneers get slaughtered and settlers get rich. Now that the Oregon regulatory groundwork has stabilized, we have begun to see a second wave of entrepreneurs and investors move in on the local industry. Many of these new entrants bring skills, capital and experience from other regulated markets, while others are new to the space. Over the next year or so, we expect to see big changes in the marijuana industry, especially given OLCC’s announcement last week to pause the acceptance of new applications.

Oregon attorneys and business owners alike need to be familiar with the unique regulatory concepts and industry dynamics that will be discussed on Thursday in order to best serve the Oregon cannabis industry. These concepts include state laws and administrative rules, developments in the highly dynamic federal sphere, and practical approaches to working with and in the cannabis industry. Attendees will hear from regulators, bankers, CPAs, and, of course, lawyers aplenty.

If you are in or around Portland, we hope you will join us on Thursday for an eight-hour survey of Oregon cannabis that is both broad and deep. And if you are a Harris Bricken client or a friend of the firm, please click here to request a promotional discount code, which can be applied to either the webcast, or to in-person attendance.

See you soon.

marijuana oregon seminar

On June 7, our own Vince Sliwoski will chair an all-day continuing legal education (CLE) event called The Business of Marijuana in Oregon, along with Jesse Sweet, a lawyer and senior policy analyst at the Oregon Liquor Control Commission (OLCC). This will be Vince’s fourth year presenting at the event and his third year as chair. The roster of speakers lined up for this CLE is better than any year to date, and everyone, including non-lawyers, would be well served to attend. For a full event description, including topics, speakers and registration links, click here.

Looking back over the past four years, it is amazing to see how much things have changed in Oregon cannabis. At this point, the OLCC’s recreational marijuana program is fully built out, with over 3,400 applicants now on file with the state. We are proud to call many of these Oregon producers, processors, wholesalers and retailers our clients, alongside the many investors and ancillary service providers we represent.

Sometimes, it is said that pioneers get slaughtered and settlers get rich. Now that the Oregon regulatory groundwork has stabilized, we have begun to see a second wave of entrepreneurs and investors move in on the local industry. Many of these new entrants bring skills, capital and experience from other regulated markets, while others are new to the space. Over the next year or so, we expect to see a fair amount of market consolidation throughout the Oregon cannabis industry. (See our most recent observations on the “state of the State” here).

Oregon attorneys and business owners alike need to be familiar with the unique regulatory concepts and industry dynamics that will be discussed on June 7, in order to best serve the Oregon cannabis industry. These concepts include state laws and administrative rules, developments in the highly dynamic federal sphere, and practical approaches to working with and in the cannabis industry. Attendees will hear from regulators, bankers, CPAs, and, of course, lawyers aplenty.

We hope you will join us on June 7 for an eight-hour survey of Oregon cannabis that is both broad and deep. And if you are a Harris Bricken client or a friend of the firm, please click here to request a promotional discount code, which can be applied to either the webcast, or to in-person attendance.

See you soon.

california marijuana cannabisEver since the passage of the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”), the California legislature has been busy debating and amending a wide variety of laws related to cannabis. We have been tracking these developments so you don’t have to. Below is an update on pending California cannabis legislation.

AB 2914 loosens the protections on alcohol and tobacco retailers and no longer prohibits those retailers from being able to apply for and obtain a commercial cannabis license. However, AB 2914 will continue to prohibit the infusion of cannabis and alcohol products. This bill was introduced on February 16, 2018 and was amended in assembly on May 1, 2018.

AB 2255 prohibits a law enforcement officer from being able to seize cannabis and cannabis products from licensed distributors who are in violation of MAUCRSA. If a licensed distributor is transporting cannabis in excess of what is stated on its shipping manifest, they will be issued a fine depending on whether this is a first, second, or additional violation. However, a law enforcement officer may still seize cannabis or cannabis products if the law enforcement officer has probable cause to believe a criminal violation has occurred. The bill clarifies that if a shipping manifest has been counterfeited, this would amount to a criminal violation. This bill was introduced on February 13, 2018 and was last amended in assembly on April 26, 2018. It was referred to committee on April 30, 2018.

AB 2641 places a restrictions on non-retailer cannabis businesses from holding temporary event licenses. If this bill were to pass, non-retailers would only be able to secure a maximum of 4 temporary event licenses within a calendar year. This prevents manufacturers, distributors, and cultivators from engaging in constant retails sale without a retail license. This bill was introduced on February 15, 2018 and was last amended in assembly on April 19, 2018. It was referred to committee on April 23, 2018.

SB 930 would provide for the licensure and regulation of cannabis limited charter banks and credit unions whose sole purpose would be to provide banking services to the cannabis industry. For more information about this, see our related post here. This bill was introduced on January 25, 2018 and was last amended in assembly on April 9, 2018. On May 1, 2018, committee recommended its passage and the bill is now awaiting the Governor’s signature.

AB 2555 makes a slight amendment to the unique identifier requirement under the state’s track and trace program. Instead of requiring cultivators to issue a unique identifier for all cannabis plants, the state would only require a unique identifier to be issued to mature cannabis plants. This bill was introduced on February 15, 2018 and was last amended in assembly on April 4, 2018. On April 25, 2018, committee recommended its passage and the bill is now awaiting the Governor’s signature.

AB 2215 allows medical and adult-use retailers to sell cannabis products to adults who intend to use the products for animals. This bill was introduced on February 12, 2018 and  was last amended in assembly on April 24, 2018. It was referred to committee on April 25, 2018.

SB 1409 allows individual cities or counties to prohibit the cultivation of industrial hemp regardless of whether the grower meets the requirements for the cultivation of industrial hemp. For more information on industrial hemp nationwide, see our related post here. This bill was introduced on February 16, 2018 and was last amended in assembly on May 1, 2018.  On May 1, 2018, committee recommended its passage and the bill is now awaiting the Governor’s signature.

The bottom line? We can expect some significant technical changes to California’s cannabis laws and regulations in the near future, so keep checking in, and prepare your marijuana business accordingly.

Our own Hilary Bricken will have the great pleasure of speaking at the Central Coast Wine and Weed Symposium (presented by the Wine Industry Network) tomorrow, May 10, in San Louis Obispo. While the Symposium will focus on a variety of topics covering the cross section of the wine and cannabis industries, Hilary’s panel will specifically cover “Wineries & Cannabis: What You Can & Can’t Do” in regards to the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”) and its corresponding emergency rules.

The breakdown of Hilary’s panel is as follows:

On January 1st, California finally kicked it off its newly regulated adult use and medical cannabis markets, creating a plethora of business opportunities, some of which will undoubtedly impact the wine industry, both positively and negatively. However, acquiring state licenses and local approval to operate within the confines of the law can be challenging, costly and confusing, as state regulations and tax policies remain a work in progress and local commercial cannabis ordinances are different from one county and city to the next. In addition, with three separate state agencies taking on the comprehensive regulation of all kinds of cannabis businesses, understanding regulations across agencies is of the utmost importance to would-be cannabis entrepreneurs.

This interactive session, featuring leading cannabis legal experts, will address questions regarding what’s permitted and what’s not including but not limited to analyzing distribution restrictions, prohibited products, packaging and labeling, quality assurance standards, consumer protections, brand and advertising restrictions, as well as the overall temporary and annual state licensing, taxation, operational and reporting requirements, and the expected costs of and barriers to entry.

Hilary’s fellow panelists are heavy hitters in their own regard–Amanda Ostrowitz, an attorney, as well as founder and CEO of the very popular CannaRegs, and Rebecca Stamey-White, a partner at Hinman & Carmichael, LLP and a very well known and highly respected alcohol and cannabis regulatory attorney. We expect a lively and interesting discussion: Although the wine and cannabis industries don’t always get along, these two industries have a lot more in common than you might think.

For all your questions about wine and cannabis, as well as specifics regarding the regulatory challenges under MAUCRSA, we sincerely hope you can make it to the Wine & Weed Symposium!

netherlands holland cannabis marijuana

Everyone knows the Netherlands (especially the City of Amsterdam) as a pot capital of the world. Ironically, cannabis sales in the Netherlands are illegal. The country has decriminalized its use and possession to a certain extent, but law enforcement may impose a fine or misdemeanor upon a person in possession of marijuana-based drugs. However, the government has made it clear that prosecution of cannabis possession, in particular, is the lowest enforcement priority and there will likely never be a criminal investigation over cannabis prosecution.

Because of this, cannabis coffee-shops (i.e., retailers) have proliferated in the Netherlands. The government allows cannabis coffee-shops to sell cannabis to anyone as long as they follow certain regulations. Specifically, coffee-shops are not allowed to: (1) advertise, (2) trade in hard drugs, (3) sell drugs to minors, or (4) sell drugs in quantities of more than 30 grams. They are also responsible for preventing any public disturbance or nuisance.

Although there is a system in place for selling cannabis in the Netherlands, the cultivation and producing of cannabis is illegal. Retailers must rely on the black market to supply their stores. In order to combat the growth of the illegal market, the Netherlands’ government introduced a proposal that would allow certain Dutch states to legally produce and sell cannabis for a four-year trial period. This regulated supply chain for cannabis would allow certain suppliers to cultivate cannabis without facing arrest. This program will also implement government oversight into the cannabis market, requiring product testing and proper packaging. European governments are hoping this program can give lawmakers a clear understanding of what a legal cannabis market might look like in their nations. The bill is scheduled for a vote of Parliament this summer.

Additionally, the Netherlands has moved towards providing medical cannabis for patients. Under the proposed legislation, patients will be able to go to a designated pharmacy with their prescription and obtain cannabis. The government is also planning on working with designated cultivators to grow “pharmaceutical-grade cannabis” for qualifying patients.

All in all, things are moving forward on legalization. On the other hand, public cannabis consumption recently has seen its first restriction in The Netherlands. The Hague has become the first Dutch city to ban cannabis consumption in public. This ban has come as a response to the numerous complaints of residents and visitors of unwanted cannabis smoke. Coffee shops will have to monitor their odors to ensure that on-site consumption is not causing an unwanted nuisance. Certain legislators have also pushed for initiatives that would only allow for Dutch residents to purchase cannabis and cannabis products. However, those have mostly been abandoned.

The Netherlands’ cannabis policy is in flux due to the semi-legal market. If the pilot program succeeds and the Netherlands moves towards legalization, the Country could become one of the first legal cannabis countries. As an international law firm with offices in nearby Spain, we are always keeping tabs on new cannabis markets that arise in around the world. Although the Netherlands seems to be a “pot haven,” many changes still need to be made to have a completely legalized system.

cannabis cryptocurrency bitcoin
Not just yet.

Two of the biggest buzzwords of 2018 have been cyrptocurrency and cannabis. Both industries have seen an tremendous influx of investment from people trying to capitalize on these new business ideas. Almost every week, I see a new event pop up for people who are interested in finding the synergies between these different industries. Everyone knows that banking is a huge problem for the cannabis industry (as we’ve discussed here, here, and here), and many see the obvious connection for how cryptocurrency could help resolve that. However, that connection will not likely occur anytime soon (at least not before the cannabis banking issue is resolved).

The cannabis industry is a highly-regulated industry at the state level, and marijuana remains a strictly controlled substance under federal law. In order to prevent theft, product diversion, and other criminal activity, states have required businesses to use state-run track-and-trace systems. This system also tracks the amount of money businesses are making and where that money is coming from.

Cryptocurrencies are peer-to-peer networks of decentralized currencies that are traded on a public ledger by using blockchain technology. A cryptocurrency platform could allow cannabis businesses to transact with digital currency instead of cash, making the business safer for all players, and bypassing the need for banks in many cases. It sounds like a natural fit. So, why won’t it work for now?

Combining cryptocurrency and the cannabis industry would join two extraordinary and rapidly changing industries. Although the federal government decided it would proscribe marijuana long ago, it has not decided how to manage cryptocurrencies. The underlying blockchain technology is also largely unregulated, and is overseen only by other users on the blockchain (see our articles on blockchain and cannabis here, here, and here). Both cryptocurrency and blockchain have been used by people for money laundering and evading taxes.

A growing number of recreational marijuana states have implemented stringent licensing and control programs to demonstrate the legitimacy of their respective industries to federal government. Bringing in a technology and a payment protocol that has been used for money laundering and tax evasion could delegitimize the progress that the cannabis industry has made. At the very least, if cannabis businesses start running transactions on cryptocurrency platforms, their businesses will see more government oversight from other federal bodies, like the SEC and IRS.

It will be interesting to see if a real crypto/cannabis relationship can emerge to help resolve the banking issue, but for now we have more faith in the underlying technology, blockchain. We will continue to monitor the possible synergies between cryptocurrency and cannabis and update on any developments.

california marijuana public consumption
Coming to a California locale near you?

As more cities begin to allow for and regulate commercial cannabis businesses, the State of California is seeing an influx of cannabis tourism. We’ve written before about the touchy relationships governments have with the idea of “cannabis lounges” (see here and here) and often questioned who will lead us in regards to cannabis tourism (our bets have often been on California).

Consumption of cannabis in public is illegal in the State of California, and many hotels and Air B&B’s do not allow smoking or “drug use” in their guest rooms. Nonetheless, MAUCRSA allows local jurisdictions to authorize the on-site consumption of cannabis by state-licensed retailers and/or microbusinesses, which gives tourists at least one legal way to consume. Specifically, so long as your city or county okays it, retailers and microbusinesses can have on-site consumption if: (1) access to the area where cannabis consumption is allowed is restricted to persons 21 years of age and older, (2) cannabis consumption is not visible from any public place or nonage-restricted area, and (3) the sale or consumption of alcohol or tobacco is not allowed on the premises. However, most local governments have explicitly prohibited “cannabis lounges” and on-site consumption by licensees (including the City of Los Angeles). Some cities, however, are capitalizing on the tourism potential in The Golden State. We have compiled a list of notable locales below.

The City of West Hollywood is the only city in the Los Angeles area that allows for on-site consumption. The City plans to permit eight (8) on-site consumption businesses for smoking, vaping, and ingesting, and it will also allow 8 on-site consumption businesses for edible ingestion only. The window for submission for on-site consumption applications (and for other commercial cannabis businesses) is expected during the month of May, so we may see on-site consumption up and running for the busy summer months. Los Angeles, which is an area already known for tourism, will see a lot of its cannabis tourism go to the City of West Hollywood.

San Francisco has been California’s leader when it comes to the cannabis lounge concept (and cannabis businesses in general). San Francisco’s regulations outright permit retailers and microbusinesses to allow customers to engage in on-site consumption. Unlike other cities that have placed strict limits on consumption lounges or outright banned them, San Francisco is fully embracing the cannabis lounge model.

The City of Oakland allows medical and adult-use cannabis dispensaries the opportunity to apply for and “obtain a secondary on-site consumption permit in order for cannabis to be consumed on the premises of the dispensary.” See Oakland Municipal Code §5.80.025. The City has not disclosed any limits as to how many on-site consumption permits may be issued, but the City has thus far only allowed eight dispensary permits and, as a result, there won’t be more than eight on-site consumption permits available (because only retailers and microbusinesses are allowed to undertake on-site consumption under state law).

The City of Alameda will only issue two dispensary/retailer permits. The City’s ordinance allows those retailers to have on-site use or consumption of cannabis or cannabis products in interior areas of the licensed premises. The City has made it relatively easy for those granted a dispensary/retail permit to also capitalize on on-site consumption.

Palm Springs has expanded its cannabis regulations to allow for cannabis consumer lounges. “Cannabis Lounge Facility” permits are available in the City, and those holding the proper permits may additionally sell medical and adult-use cannabis and cannabis products. With festival activities fast-approaching in the desert cities, many tourists will flock to the Palm Springs area looking to partake under California’s new cannabis laws. Palm Springs will likely see a high demand in cannabis and cannabis products from tourists looking to consume during festival time.

Other California cities that have explored the idea of cannabis lounges are Cathedral City and South Lake Tahoe, but nothing official has happened in either city as of yet. Over time, as legalized cannabis becomes more normalized (and socialized) in the state, California will likely see an increase in cities that allow cannabis lounges. For now though, on-site consumption is a rare occurrence and a political hot potato. And for the few on-site consumption lounges that exist, we expect nothing but success and increased tourism.

cannabis marijuana josephine county oregon
Josephine County is ALL IN on prohibition.

For the past several months we have been following Josephine County’s efforts to regulate away its cannabis industry, specifically in rural residential zones. This saga has taken many twists and turns (see here, here, here, and here), but this week brought perhaps the biggest twist yet: Josephine County has sued the State of Oregon in a suit that could effectively invalidate its cannabis program.

The legal skirmishes began back in December, when Josephine County passed an ordinance to severely curtail cannabis production on over 16,000 rural residential properties. A group of growers appealed the ordinance to Oregon’s Land Use Board of Appeals (LUBA), raising a procedural argument (improper notice to affected properties) and two substantive arguments (the county cannot ban pre-existing lawful uses and the ordinance exceeds the county’s ability to impose reasonable time, place, and manner regulations on cannabis production). Last month, LUBA ruled against the county, solely on the procedural issue. Josephine County failed to provide proper notice of the public hearings where the ordinance was discussed. As a result, LUBA did not reach the substantive merits. As expected, Josephine County elected to appeal the procedural question.

Surprisingly, Josephine County also decided to take the drastic step of filing a lawsuit against the State of Oregon in federal court. We gave our initial take on this aggressive move in news coverage here and here. In short, Josephine County wants the federal court to:

  1. Declare that cannabis production cannot qualify as a pre-existing “lawful use” because of federal prohibition;
  2. Declare that counties can place any restrictions they want, including a full ban, on cannabis businesses because state legal regimes are pre-empted by federal law;
  3. Declare that Oregon’s medical and recreational regimes unlawfully restrict the county’s police powers in light of federal prohibition;
  4. Enjoin the State from bringing official misconduct charges against any local or county official that ignores their duties under state law.

This is a stunning overreach, as a victory could presumably give counties the ability to even ignore Oregon’s decriminalization statutes. As a county that allegedly wants to crack down on bad actors and the black market, and is apparently struggling to provide basic services, Josephine County should be welcoming law abiding, tax paying cannabis farms with open arms. Instead, I am reminded of my young daughter breaking her own toy when she doesn’t get her way.

This lawsuit raises core constitutional questions, involving states’ rights to promulgate cannabis programs despite the federal Controlled Substances Act, and over the objection of local jurisdictions. In the past, we have seen prohibitionist states attempt to invalidate neighboring states’ cannabis programs, to no avail. This may be the first time, however, that a county in an adult use state has filed such a lawsuit against its sovereign. We will be monitoring this case closely, as will the Oregon cannabis industry at large and other prohibitionist counties nationwide.