cannabis industry

Cannabis IndustryAlthough cannabis remains illegal on the list of dangerous drugs, along with heroin, states have been adopting legislation legalizing cannabis use for medical and recreational use. Both the U.S. Senate and the House of Representatives have shown strong support in favor of the removal of cannabis from that list and nationwide legalization.

States have been anxious to legalize the cultivation, manufacture, distribution, and sale of cannabis products because of the impressive tax revenues that follow legalization. But since each state has a different set of laws, separate from Federal laws, many of those laws are in conflict. Additional problems arise in trying to stamp out illegal cultivators and distributors who are selling less expensive products because they aren’t collecting tax on the sales.

One area of confusion is the delivery of cannabis products in California, which is coming under increasing scrutiny. The question revolves around whether local communities can prohibit the delivery of cannabis products while State laws make delivery throughout California legal.

Delivery of medical and recreational marijuana products has been used by retailers to circumvent local laws that prohibit the sale of cannabis and its related products. Communities that have banned commercial cannabis cultivation and sale feel that delivery creates an unsupervised market where age restrictions and such are not monitored because the marijuana transactions are essentially hidden from legal authorities.

California’s Proposition 64 guaranteed local control over marijuana sales but this has left large areas where residents could not obtain either medical or recreational pot due to local bans on its sale. Legal delivery services have ranged into these areas and the local communities that have prohibited the commercial sale of cannabis have had a little say in the matter.

On April 4th, a lawsuit was filed in the Fresno County Superior Court asking the court to invalidate the part of the law that allows delivery to any physical address in the State of California. The lawsuit asks that the State not enforce that part of its general law. What this means is that local communities can apply their legal restrictions and presumably arrest anyone making a cannabis delivery within their boundaries.

Cannabis IndustryFor people who are confined to their homes because of illness or who cannot travel to legal dispensaries, the lack of delivery creates a problem. Since cannabis is still illegal on a federal basis, cannabis products also cannot be sent through the US mail.

Communities seeking to end delivery services in their areas include Beverly Hills, Santa Cruz County, Agoura Hills, Angels Camp, Arcadia, Atwater, Ceres, Clovis, Covina, Dixon, and Downey. Other communities are McFarland, Newman, Oakdale, Palmdale, Patterson, Riverbank, Riverside, San Pablo, Sonora, Tehachapi, Temecula, Tracy, Turlock, and Vacaville.

The lawsuit by these 25 communities will act as a legal test of proposition 64 which made marijuana sales in the State of California legal in 2016. That law also gave local communities the ability to ban the sale of cannabis but it said nothing about banning delivery. This recent court challenge will clarify whether a local community has a right under California’s law to also ban delivery.

Another question currently facing regulators is whether CBD infused edibles and cosmetics can be sold in cannabis dispensaries. The FDA has not ruled on whether CBD may be used in such products and is currently taking comments prior to a hearing later this year.

Scott Gottlieb, the former commissioner of the FDA, told Congress that enforcement is only limited to retailers and companies who promised false health claims. He said that the FDA recently sent a warning letter to three companies that are touting CBD as a treatment for cancer, Alzheimer’s disease, fibromyalgia, and drug addiction.

However, manufacturers of CBD infused edibles and cosmetics are finding that stores and cannabis dispensaries are canceling purchases because legal authorities have been forcing these stores to remove such products from their shelves.

The States of California and Texas are currently pushing the U.S. Congress to take the final step and legalize cannabis for both medical and recreational use in the United States. Both Democrats and Republicans in Congress are also pressuring the FDA to come up with a decision that allows CBD to be used in edibles and cosmetics.

While it is not unusual for such a wide-spread change in law to create many different interpretations, the confusion over what is legal and what is not has caused licensed operators in California and other States to experience large financial losses. In addition, this confusion plays into the hands of illegal cannabis producers that are the targets of law enforcement crackdown by authorities in California and other states that have legalized marijuana.

“Allowing states to determine their own cannabis laws without the threat of Federal interference is a key component to sensible Federal cannabis policy and would give more states the confidence to move forward with legalization and start addressing the harms caused by prohibition, particularly to marginalized communities,” said National Cannabis Industry Association spokesman, Morgan Fox, commenting on the legislation.

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cannabis industry420 College is California’s leading source for information and training on cannabis operations. If you are researching Guidance On Commercial Cannabis Activity in your city or county, then take one of our cannabis business workshops in Los Angeles, San Diego, Pasadena and Sacramento.

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George Boyadjian

Founder of 420 College.

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