California – Taxes and More

Seller’s Market

While you’ve been able to light up legally since November 2016 (not just anywhere, though; for more on that, keep reading), you haven’t been able to saunter into a shop and buy the stuff over the counter for expressly recreational (officially called “adult-use”) purposes. To sell pot and its products legally, retailers need to have a license issued by the state’s Bureau of Cannabis Control (formerly known as the Bureau of Medical Cannabis Regulation) as well as permission from local authorities to operate. Alex Traverso, the bureau’s chief of communications, says his department “won’t know until the time comes” how many applicants there’ll be by New Year’s Day (although a 2016 California Department of Food and Agriculture survey found 2,718 companies interested in seeking licenses in L.A. County). The state is also prepping temporary licenses, good for four months, to go to existing dispensaries that can prove they’re in compliance with local regulations. In the city of Los Angeles, applications from existing medical marijuana dispensaries will get priority, provided they’re submitted within 60 days of when licenses become available (the city hasn’t yet determined when it will start issuing them). And, under proposed guidelines released in September, cannabis delivery will be available.

Corner Shop

As for what types of stores you can expect to see, Josh Drayton, the communications and outreach director of the California Cannabis Industry Association, says to think more boutique and less neon-and-bong head shop. “The consumer has changed,” he notes, “and modern brick-and-mortar dispensaries are turning into well-organized showrooms and lounges. My marker has always been, ‘Would I bring my mother into this space?’ ”

Adult Use Vs. Medical

In June 2017, Governor Jerry Brown signed a bill making regulations the same for recreational and medical marijuana. But distinctions between the two will remain. Beginning with cultivation, cannabis will be slapped with either an A for adult-use or an M for medical use, and all businesses involved in the cannabis industry will receive an A license or an M license; retailers have the option of being dual licensees. People with a medical card should hang onto it because medical marijuana will still be available to patients 18 and older. Plus, says Jolene Forman, a staff attorney for the Drug Policy Alliance , some strains and some shops will continue to cater specifically to patients’ needs. “That will ultimately be really good for medical patients because it preserves strains that are meant to alleviate symptoms,” she notes. “For instance, for the most part you’re probably not going to see a lot of topical remedies in the A category, but topical remedies for muscle spasms or chronic pain are common.”


Whether your purchases are to ease pain or boost pleasure, they’re likely to be in cash for the near term: Since the federal government deems pot illegal, banks have been loath to provide cannabis-related operations credit. Recreational users in L.A. will pay a 15 percent state excise tax as well as a 9.5 percent county sales tax. Some areas will charge an additional business tax, and there are taxes associated with growing, distributing, and selling, too. (Patients with a valid medical card will be exempt from sales tax. ) Economists estimate that those fees could bring $1 billion in revenue to the state, and according to City Controller Ron Galperin, L.A. could bring in at least $50 million in tax revenue next year.

After the government takes a piece of that cash to cover its costs, the money will be spread around, including:

• $2 million to the UC San Diego Center for Medicinal Cannabis Research

• $3 million a year for five years to the California Highway Patrol to establish DUI protocols

• $10 million every year until 2028 to a California public university for legalization-related research

• $10 million in 2018 to areas disproportionately affected by criminalization. The figure will grow by $10 million a year and remain at $50 million in 2022 and beyond

Of any remaining funds, 60 percent will go toward drug education, treatment, and prevention for youth; 20 percent will be distributed to state and local law enforcement; and 20 percent will be put toward cleaning up environmental damage caused by pre-regulation grow operations.

Fines and Penalties

As of November 9, 2016, the fine for driving with an open cannabis “container” (what defines a container is anybody’s guess) is up to $250. In September 2017, Governor Brown took it a step further by signing a bill that specifies a $70 fine for smoking or consuming marijuana while driving. And those people you see vaping on the sidewalk? They are indeed breaking the law. Smoking in public carries a $100 fine that jumps to $250 for smoking in places where tobacco is banned (think: restaurants and offices, in front of certain buildings). Selling weed without a license or having more than the allowable amount of cannabis carries a penalty of $500, six months in jail, or both. Finally anyone caught selling to a minor faces three to seven years.

Ohio – update from ResponsibleOhio

CLEVELAND- The movement toward legalizing marijuana in the state of Ohio is taking another turn.

ResponsibleOhio, the group leading the movement, now is proposing that Ohioans be allowed to legally grow pot in their backyards.

Under the proposal, people over the age of 21 would be able to grow up to four plants on their property, provided they get a state permit first. The marijuana would be for personal consumption only, not for sale.

Lydia Bolander, spokesperson for ResponsibleOhio, said, “I think the biggest reason was just understanding the more we talked about our proposal that we hoped we could be silent on the issue of home grow and leave that to the General Assembly, but the more we talked about it with people in the community, with experts, it became clear we really had to address the home grow issue.”

The proposal calls for ten marijuana farms and testing sites around the state. Backers need to get 1,000 people to sign the amended proposal which includes the home grow provision. If the state approves, they will need to gather another 305,000 signatures to get the issue on the ballot.

ResponsibleOhio is confident voters will have the chance to decide the issue in November.

Redding , California – Proposed ban on outdoor grow ops!

REDDING, Calif. –

Measure A is a proposed ordinance that will be on Shasta County ballots this upcoming election.

If passed the ordinance would stop all outdoor growing of marijuana in unincorporated areas of Shasta County.

Currently, any medical marijuana patient can grow on their own property with a few land restrictions.

Measure A will only allow marijuana to be grown inside in a separate building detached from the residence.

The measure also limits marijuana cultivation to a total of 12 plants for each grow site.

It would still prohibit growing marijuana within 1,000 feet of a school or other similar sensitive places.

According to those who support the measure, a yes-vote would prevent clear-cutting land, water theft, stream diversion and chemicals entering the water supply.

Kathy Grindstaff, a concerned citizen who supports Measure A, says this measure would reduce crime and would help the environment.

“This is about land use. We are trying to bring the cultivation of marijuana use back under control,” Grindstaff said. “It has just gotten so crazy here in Shasta County. It is being over-run with marijuana cultivation and we just want to see a stop to it.”

Grindstaff says by voting yes on Measure A, the quality of life in Shasta County will improve.

People who are against Measure A say the ordinance is a violation of property rights for patients who rely on medical marijuana for medicine.

Rick Arons, who owns a grow shop in Redding, is against the measure as he thinks the ordinance completely overlooks the people who need marijuana for medical purposes.

“This ban on outdoor cultivation is just hurting patients who are doing things the right way,” Arons said.

He said the priority should be with the people who need it to survive.

“It’s hugely important for a cannabis patient that needs this medicine to be able to cultivate their own. It’s the only true and safe way to be able to know what you have done to your own medicine,” Arons said.

Arons said by forcing people to grow inside, it also forces patients to purchase extremely expensive equipment to grow the marijuana correctly.

He says growing organically is the best way for people to keep costs low.

For more information on Measure A and how it may affect you can read more here.

Missouri Bill Would Legalize Hemp Farming, Nullify Federal Ban

A bill introduced in the Missouri State Senate would authorize the farming, production, and sale of industrial hemp in the state, effectively nullifying the federal prohibition on the same once put into effect.

Senate Bill 255 (SB255), introduced by State Sen. Rob Schaaf, R-St. Joseph, would open up the industrial hemp market in Missouri if successfully passed. It would make it “legal for any person who maintains a permanent home in Missouri, has not been convicted of a felony or drug-related misdemeanor offense, and has received a three-year industrial hemp license from the Missouri Department of Agriculture to grow and cultivate industrial hemp.

A person wishing to do so would also have to receive an agricultural hemp seed production permit from the department of agriculture.

Missouri has the opportunity to join several other states – such as Colorado, Oregon, South Carolina, Tennessee and Vermont – that have already passed similar measures. Farmers in SE Colorado started harvesting the plant in 2013, effectively nullifying federal restrictions on such agricultural activities.

Experts suggest that the U.S. market for hemp is around $500 million per year. They count as many as 25,000 uses for industrial hemp, including food, cosmetics, plastics and bio-fuel. The U.S. is currently the world’s #1 importer of hemp fiber for various products, with China and Canada acting as the top two exporters in the world.

During World War II, the United States military relied heavily on hemp products, which resulted in the famous campaign and government-produced film, “Hemp for Victory!”.

But, since the enactment of the unconstitutional federal controlled-substances act in 1970, the Drug Enforcement Agency has prevented the production of hemp within the United States. Many hemp supporters feel that the DEA has been used as an “attack dog” of sorts to prevent competition with major industries where American-grown hemp products would create serious market competition: Cotton, Paper/Lumber, Oil, and others.

Earlier in 2014, , President Barack Obama signed a new farm bill into law, which included a provision allowing a handful of states to begin limited research programs growing hemp. The new “hemp amendment”

…allows State Agriculture Departments, colleges and universities to grow hemp, defined as the non-drug oilseed and fiber varieties of Cannabis, for academic or agricultural research purposes, but it applies only to states where industrial hemp farming is already legal under state law.

SB255 goes a step further than what is currently ‘allowed’ by the feds by authorizing industrial development of the hemp plant. This is an essential first step forward. Similar to the way marijuana prohibition has been nullified because of massive state action, states defying the federal industrial hemp ban can unleash a tidal wave of resistance that forces the feds to get their priorities in order.

Washington state growers struggling to sell legal marijuana

SEATTLE – Washington’s legal marijuana market opened last summer to a dearth of weed. Some stores periodically closed because they didn’t have pot to sell. Prices were through the roof.

Six months later, the equation has flipped, bringing serious growing pains to the new industry.


A big harvest of sun-grown marijuana from eastern Washington last fall flooded the market. Prices are starting to come down in the state’s licensed pot shops, but due to the glut, growers are — surprisingly — struggling to sell their marijuana. Some are already worried about going belly-up, finding it tougher than expected to make a living in legal weed.

“It’s an economic nightmare,” says Andrew Seitz, general manager at Dutch Brothers Farms in Seattle.

State data show that licensed growers had harvested 31,000 pounds of bud as of Thursday, but Washington’s relatively few legal pot shops have sold less than one-fifth of that. Many of the state’s marijuana users have stuck with the untaxed or much-lesser-taxed pot they get from black market dealers or unregulated medical dispensaries — limiting how quickly product moves off the shelves of legal stores.

Officials at the state Liquor Control Board, which regulates marijuana, aren’t terribly concerned.

So far, there are about 270 licensed growers in Washington — but only about 85 open stores for them to sell to. That’s partly due to a slow, difficult licensing process; retail applicants who haven’t been ready to open; and pot business bans in many cities and counties.

The board’s legal pot project manager, Randy Simmons, says he hopes about 100 more stores will open in the next few months, providing additional outlets for the weed that’s been harvested. Washington is always likely to have a glut of marijuana after the outdoor crop comes in each fall, he suggested, as the outdoor growers typically harvest one big crop which they continue to sell throughout the year.

Weed is still pricey at the state’s pot shops — often in the $23-to-$25-per-gram range. That’s about twice the cost at medical dispensaries, but cheaper than it was a few months ago.

Simmons said he expects pot prices to keep fluctuating for the next year and a half: “It’s the volatility of a new marketplace.”

In Washington, many growers have unrealistic expectations about how quickly they should be able to recoup their initial investments, Simmons said. And some of the growers complaining about the low prices they’re getting now also gouged the new stores amid shortages last summer.

Those include Seitz, who sold his first crop — 22 pounds — for just under $21 per gram: nearly $230,000 before his hefty $57,000 tax bill. He’s about to harvest his second crop, but this time he expects to get just $4 per gram, when he has big bills to pay.

“We’re running out of money,” he said. “We need to make sales this month to stay operational, and we’re going to be selling at losses.”

Because of the high taxes on Washington’s legal pot, Seitz says stores can never compete with the black market while paying growers sustainable prices.

He and other growers say it’s been a mistake for the state to license so much production while the rollout of legal stores has lagged.

“If it’s a natural bump from the outdoor harvest, that’s one thing,” said Jeremy Moberg, who is sitting on 1,500 pounds of unsold marijuana at his CannaSol Farms in north-central Washington. “If it’s institutionally creating oversupply … that’s a problem.”

Some retailers have been marking up the wholesale price three-fold or more — a practice that has some growers wondering if certain stores aren’t cleaning up as they struggle.

“I got retailers beating me down to sell for black-market prices,” said Fitz Couhig, owner of Pioneer Production and Processing in Arlington.

But two of the top-selling stores in Seattle — Uncle Ike’s and Cannabis City — insist that because of their tax obligations and low demand for high-priced pot, they’re not making any money either, despite each having sales of more than $600,000 per month.
Full article here

Delaware – Medical Marijuana Update

DOVER, Del. (AP) — State officials have entered into a contract with a lobbyist who once worked for U.S. Sen. Tom Carper to operate Delaware’s first medical marijuana dispensary.

Officials finalized an initial two-year contract Monday with First State Compassion Center, whose president is Mark Lally, a former state trooper who also served as Carper’s Sussex County director.

“FSCC has assembled an experienced team with a high level of competency in the field of medical marijuana,” public health director Dr. Karyl Rattay said in letter to several legislators Tuesday.

First State is linked to Massachusetts-based Sigal Consulting, which specializes in developing medical marijuana operations, including the Thomas C. Slater Compassion Center in Rhode Island, which opened last year. Rattay noted that Rhode Island’s medical marijuana laws bear “striking similarity” to Delaware’s Medical Marijuana Act.

Lally said in a prepared statement that the medical marijuana operation will offer “high quality, affordable medicine” and will include “industry leading protocols for security, patient access, compassionate care, and regulatory compliance.”

FSCC plans to operate its medical marijuana “compassion center” at an industrial park on the southern outskirts of Wilmington.

“In addition to being situated in an industrial area that has the appropriate zoning for cultivation and distribution facilities, this location also offers easy access for licensed patients and caregivers,” Rattay wrote. “The facility will be within driving distance of a large percentage of Delaware’s population, and is set within walking distance of two bus routes.”

Officials said the growing operation is set to begin this fall, and that plants should be ready for processing about four months later, with product sales beginning early next year. Rattay said officials will review the operation and patient demand after one year and determine whether there is a need for additional compassion centers.

A law signed by Gov. Jack Markell called for compassion centers in each of Delaware’s three counties. But Markell later halted implementation of the medical marijuana program after federal officials indicated that the individuals involved could face civil fines or prosecution. Last year, Markell decided to move forward with a scaled-down pilot program involving just one center, limited to growing no more 150 plants and an onsite inventory of no more than 1,500 ounces.

Meanwhile, a Chancery Court judge is considering Lally’s request to dismiss a lawsuit in which former Lewes city councilman A. Judson Bennett claims Lally breached an agreement to help Bennett seek a medical marijuana license.

Bennett said he believes state officials were “foolish” to award the contract while the lawsuit, which he believes he will win, is pending.

“It’s very unfortunate that they chose to award the final bid under these circumstances, because it’s only going to hurt the state of Delaware and the people who need the drugs,” Bennett said.

Jill Fredel, a spokeswoman for the Department of Health and Social Services, said officials considered the potential effect of the lawsuit on First State Compassion Center’s operations.

“While we can’t predict the outcome of litigation, we are satisfied that First State can continue to serve patients even if there is an adverse result in the case,” Fredel said.

RIVERSIDE COUNTY: Ordinance to target open-air pot grows


A budding trend in some of Riverside County’s poorest areas worries officials who fear hard-core criminals are turning backyards into drug farms.

In the past year or so, more than 200 open-air marijuana grows have popped up in the unincorporated communities of Mead Valley, Good Hope and Meadowbrook, according to county officials. The fenced-in fields dotting the rural landscape are hidden in plain sight.

It’s to the point where county Supervisor Kevin Jeffries, who represents the communities, said that on a recent recruiting drive for a local residents’ council, he had to check backyards for signs of marijuana cultivation “so we weren’t inviting the drug cartel” to join.

Tony Davila, president of the Mead Valley Municipal Advisory Council, said someone replaced Mead with “weed” on a dedication plaque at the Mead Valley Library. Marijuana grows are a source of complaints at council meetings, he said.

Jeffries plans to introduce an ordinance with the aim of cracking down on large-scale marijuana grows generating product that is illegally sold for profit instead of helping sick people.

The new law could be introduced during next Tuesday’s Board of Supervisors meeting. A public hearing would be set at a later date, after which the board could vote on the ordinance or ask for changes.

The ordinance would clarify that it is illegal to grow marijuana outdoors and set up an escalating series of fines based on the number of plants, said Jeff Greene, Jeffries’ chief of staff.

County law bans outdoor cultivation, but what’s currently on the books makes marijuana grows a code enforcement issue instead of a police matter, Greene said. He added it’s hard for code enforcement officers to enforce the rules because they are complex and require a lot of staff time.

Jeffries, a first-term supervisor, said earlier this month he doesn’t want to go after “the mom-and-pop or the grandma who needs a couple plants to deal with her glaucoma or something like that.”

Medical marijuana advocates, however, fear those are the people the ordinance will punish in a county where dispensaries are already banned.

“They sit there and say ‘criminals, criminals, criminals,’” said Lanny Swerdlow, a marijuana legalization activist from Whitewater. “They just want to make it as difficult as possible for patients to obtain medical marijuana.”

California voters in 1996 legalized marijuana use for medical reasons. But the federal government forbids all uses of the drug, and state and local laws on medical marijuana form a confusing hodgepodge.

State law spells out that qualified patients or their primary caregivers can possess six mature or 12 immature plants unless local governments set a higher threshold, said Ellen Komp, deputy director of California NORML, which advocates marijuana law reform.

However, Komp pointed to a 2008 state Supreme Court ruling that struck down those limits.

“The real legal limit is whatever amount of marijuana is consistent with a patient’s need,” she wrote in an email. “We recommend patients still stay within state guidelines, however, whenever there is no local ordinance.”

The law also allows for patients to form collectives to grow and distribute marijuana, Komp said.

In March, the state Supreme Court upheld the right of local governments to ban personal cultivation. A court ruling involving the city of Riverside allows cities and counties to ban dispensaries. Palm Springs is the only city in Riverside County to allow them.


Located between Perris and Lake Elsinore, Mead Valley is home to just under 19,000 people, census figures show. Modest single-story homes on dirt lots mix with small farms, mom-and-pop stores and little else in the way of employment.

Mead Valley’s median household income is almost $14,000 lower than the countywide average. Roughly one in four Mead Valley residents lives in poverty; the countywide poverty rate is about 16 percent, according to the census.

It’s here that solicitors go door to door offering landowners and renters $2,000 a month or more to grow marijuana in their backyards, said Tom Ketchum, a Jeffries aide. They are told they don’t have to do anything; the growers will take care of the permits and oversee the crops, Ketchum said.

He pointed out suspected grows during a brief tour of Mead Valley and Good Hope. Eight- to 12-foot-high fences rigged with green or black tarps shield the crops from public view.

Notices posted outside the fencing announce the marijuana is being grown for medicinal use, Ketchum said. Oftentimes, permits are posted horizontally so they can be read from above if a police helicopter swoops in, he added.

Growing takes place outside because it’s cheaper, and indoor growing could involve illegal construction, said Britt Starkweather, a supervising code enforcement officer.

Many of the grows are 99 plants in size, Ketchum and Starkweather said. That stems from a Sonoma County district attorney’s suggestion of 99 plants as a permitted amount because 100 or more plants trigger federal mandatory minimum prison sentences, said Komp of NORML.

“Some people mistakenly think that 99 plants are legal federally,” she said. “And because we haven’t been able to get regulation at the state level … doctors stepped into the gap and some are issuing cultivation certificates for 99 plants.”

Ketchum said marijuana from commercial grows is often shipped to Colorado and Washington, two states that legalized marijuana for recreational use.

Full article here

Minnesota Senate to vote on medical marijuana bill Tuesday

By Patrick Condon

Legalization of medical marijuana is head­ed for a vote by the full state Senate on Tuesday.

The proposal, which would allow marijuana to be used for a broad range of ailments and set up a statewide system of dispensaries, cleared its last Senate hurdle on Monday. The Senate Finance committee approved the bill 14-7.

“We have the votes to pass it,” predicted Sen. Scott Dibble, DFL-Minneapolis, the bill’s chief sponsor.

The effort for legalization had been in limbo for much of the session, stymied by a powerful set of opponents: Gov. Mark Dayton and the law enforcement community. But shortly after Dayton told legislators to “quit hiding behind their desks” on the issue, the proposal was revived and began racing through committees, picking up momentum to make Minnesota the 22nd state in the nation to legalize some version of medical marijuana.

Should the bill pass the Senate, it would still face a serious obstacle in the House, where a much narrower proposal is being considered. The House version would tightly regulate medical marijuana, restricting its use to patients eligible for a clinical trial. Vaporized marijuana could be used only in the presence of a health provider. There would be only one provider and no system of dispensaries. Law enforcement and Dayton have appeared willing to consider the House bill, but remain opposed to the Senate version.

The Senate bill would allow patients with qualifying conditions to get a doctor’s prescription for up to 2.5 ounces of marijuana. Eligible conditions would include can­cer, HIV/AIDS, glau­co­ma, ep­i­lep­sy, post-trau­ma­tic stress dis­or­der and sev­er­al con­di­tions that cause chron­ic pain. Pa­tients would not be able to smoke mar­i­jua­na, but could use a vaporizer to inhale fumes. The could also ingest the drug in pill or oil form.

State budget officials estimate the state would have to spend about $3 million in 2015 to implement the Senate’s version of legalization. Those costs would be covered by fees related to purchase of the drug. The state budg­et of­fice an­aly­sis pre­dict­ed about 35,000 Min­ne­so­tans would par­tici­pate in the new program, a figure that Dibble contended was too high.

Full article here

Washington State Court of Appeals bans medical marijuana stores

Source: Samefacts.Com

By Mark Kleiman

I completely failed to see this one coming.

A brief history lesson:

Washington State has had a medical marijuana law since 1998. In 2011, the legislature passed a bill allowing the creation of “collective gardens” (aka stores) to grow cannabis for patients registered with the state, and regulating those outlets in various ways: all members of the collectives would have had to register with the state. The governor used her line-item veto to take out major provisions of that bill, including the part that would have created the patient registry.

Until now, the prevailing view has been that the permission to open stores was valid law even though the regulations designed to control them had been zapped, leaving Washington with a booming, and virtually unregulated and untaxed, medical cannabis industry; a everyone says, Seattle has more “medical outlets” than it does Starbucks locations. Some players in that industry were among the strongest opponents of the I-502 initiative that legalized non-medical sales.

Once I-502 had passed, its proponents and administrators started to worry about how a regulated and taxed commercial market could compete with a wide-open, but untaxed and unregulated, quasi-medical system. There were efforts in the legislature this year to rein in the “gardens,” but the industry (speaking, of course, in the name of “the patients”) and a partisan split in the legislature made it impossible to pass anything. Battle was expected to be joined again in January, with the threat of federal intervention lurking in the background.

In the meantime, the town of Kent had passed a local ordinance banning medical outlets. Various industry players sued, citing what was left of the 2011 law. But now the Washington State Court of Appeals (the second-tier court) has ruled that the governor’s partial veto makes all the collective gardens illegal, because a legal collective garden must serve registered patients and there is no patient registry. Therefore, Kent is at liberty to ban what was – according to the court – an illegal activity in the first place. All that’s left of the medical marijuana law is permission for individuals with medical recommendations to grow their own: if charged with a violation of state law for production or possession (but not, apparently, sale), a medical recommendation creates an affirmative defense.

Presumably most of the localities that have collective gardens, including Seattle, will continue to let them operate, especially since the commercial outlets won’t even start to open until sometime around the end of June or early July.

There may be an additional layer of complexity: the Liquor Board planned to allow newly-licensed growers to bring some of their existing cannabis plants into the legal system, since otherwise there would be nothing for the new stores to sell. If newly-licensed growers have to grow new product from seed starting late this spring, the shelves will be bare until fall at the earliest. Whether the new ruling puts a monkey-wrench in that machinery remains to be seen, as does the effect of the ruling on the bargaining over a new law next year. (Or will the governor call the legislature into special session to give it another try this year?)

Never a dull moment.

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