First, a hearty congratulations and Mazol Tov to Canada which became the first major world economy to legalize recreational marijuana. This move will inextricably alter the country’s social, cultural and economic fabric, while presenting it with extraordinary public policy challenges. “Legalization of cannabis is the largest public policy shift this country has experienced in the past five decades,” said Mike Farnworth, British Columbia’s minister of public safety. “The fact that we are moving away from a Prohibition model is a victory for human rights and social justice, an economic windfall for the Canadian economy and a sign of social progress,” said Adam Greenblatt, a director at Canopy Growth, a producer that has been valued at more than $10 billion. When Justin Trudeau ran for prime minister, he ran, in part on the platform of legalizing recreational marijuana which has broad support reflecting a liberal minded and progressive country in fact, as opposed to one just in words.
However, there is a dark side to full legalization for Canadians who work in the industry and want to visit the United States for either business or vacation. BE WARNED: US border agents, who work for the Federal government have immense leeway over who is allowed to enter the United States. If not a U.S. citizen nor a permanent resident, the crossing person’s rights at the border are severely curtailed and limited. Border guards may ask you about anything including your employment, drug use or even your investments. A wrong response, in their mind, will deem you “inadmissible” to this country. In what seems like a twilight zone moment, the U.S. border agents held a media conference to detail the new rules for crossing through the Canadian-American border and what it takes to be “deemed inadmissible” into our country, which in turns out is quite a low bar.
If you have a pot conviction in Canada, though it may be pardoned, said pardons are not recognized in the U.S. and you are then deemed not admissible into the U.S. Question: How about in a cross border, B2B situation between a Canadian Cannabis company and one in a fully legalized State like CA or CO? NO! Turns out if you work in the legal Canadian cannabis business and head to the United States on a work-related trip, you may not be let in. Even if you head to a legal US State for pot business, i.e., CA, CO, it has been intimated that a U.S. border agent may still deem you inadmissible. Not fully flushed out yet, but if you work in the weed industry in Canada and are heading into America for pleasure, not business, you may be let in. However, one may still be rejected for past cannabis use or even if one is peripherally related to the cannabis industry. Worst of all, if you do get blocked at the border, you may be deemed permanently inadmissible for entry to the U.S. Trying to reverse a “deemed inadmissible” label, well, you may have better luck picking Powerball numbers. It goes without saying that If you are driving over the border and your car is more aromatic than usual, you will be thoroughly searched. Moral of the story, immigration attorneys have a whole new revenue stream, meaning, even if you are a law-abiding Canadian in the cannabis industry who needs to cross the border, you may have very few options and it would be incumbent upon you to seek legal counsel. In September at the CWCBExpo in Los Angeles, there were several prominent Canadian booths that stood completely empty as those companies chose not to risk being deemed inadmissible and getting a permanent mark on their record.
This next topic centers on delivery services in California. To digress, California allows local governments to ban cannabis retailers in their jurisdictions, but prevents them from blocking legal deliveries to residents. Therefore, the logic goes that a local jurisdiction should therefore, not be able to prevent delivery of marijuana products on public roads by a licensed business “acting in compliance” with the law. There is now mounting opposition on what is being labeled “wandering weed” by Law enforcement agencies from across the state. The proposed regulations by the Bureau of Cannabis Control would permit delivery of recreational cannabis from jurisdictions that have banned such sales. Officials have argued local control played an integral role in the passage of Proposition 64. Opponents state that the proposed changes will undermine local governments’ ability to control their local cannabis industries. It seems like the opponent’s arguments are spurious, at best. Opponents claim that in addition to restricting local control, they claim a public safety threat. “As the labor union representing the largest number of workers in the medical cannabis industry, UFCW worked hard to keep communities safe by making sure recreational cannabis is sold with strict safeguards,” said James Araby, executive director of UFCW. “Regulated marijuana dispensaries have tough security, checks for identity and legal age, and strictly licensed workers. If marijuana can be delivered anywhere with virtually no regulation, California will lose these safeguards that protect communities and children.” Query whether it really is a public safety threat to have deliveries in counties where they may not want it. Or, is it a threat and personal infringement upon to their absolute ability to locally control/stifle the cannabis industry? The BCC has stated that they are currently revising the subject regulations which should be issued by December 3rd of this year. However, “wandering weed” does not seem like it will be halted anytime soon from its statewide forays.
Is it just me or is anyone else confused as to the legality of CBD in beverages and cocktails? Ok, we now have more clarity on the subject than before. On September 27, Governor Jerry Brown (do you recall his moniker used to be Gov. Moonbeam) signed AB 2914, which outlaws bars or restaurants from adding THC or CBD to any beverage. The bill prohibits selling, offering, or providing cannabis or cannabis products, including an alcoholic beverage that contains cannabis or cannabis products.” In addition to which, the bill declares that cannabis licensees are not to sell alcoholic beverages. Hence, as of January 1st, said drinks will disappear, so, like the song says, “get it while you can.”
In other cannabis legislation Gov. Brown had a busy week for cannabis regulation; in addition to signing AB 2914, he vetoed a measure that would allow medical CBD in schools, signed AB 2215, which classifies veterinary administration of cannabis for animals as a misdemeanor. Take note, your Vet cannot prescribe cannabis! However, on the upside, The Gov did approve SB 1459, which establishes provisional licenses for cannabis businesses—a boon for those currently without a full annual permit, whose licenses would have expired at the end of the year.
If you believe in common sense and logic, it would dictate that over time such a regulation may get overturned.
Everyone knows the mighty brand High Times which is expanding its footprint in the industry. You may have heard that iHeartMedia Inc. previously pledged $10 million to High Times, the 44-year-old marijuana magazine which would offer iHeart, currently the biggest U.S. radio broadcaster, direct access to cannabis consumers. “Cannabis at the end of the day is mainstream,” said High Times Chief Executive Adam Levin. “And iHeart has a huge mainstream appeal.” So, it was with some surprise that High Times recently announced the postponement for their well publicized and attended Cannabis Cup October 27-28th along with a Spooktacular event. The Cannabis Cup is tentatively rescheduled for April 2019. The reason it was taken off calendar pertains to the permit for cannabis use on-site, a requirement for the legal consumption and sale of marijuana. The approval permit for the Cannabis Cup was pulled off the City Council’s law and legislation committee agenda for a Sept.18 meeting and therefore, DOA. AB 2020, signed by Gov. Brown on Sept. 26, authorizes temporary event licenses to be given for events held at any venue approved by local jurisdictions.
Under existing law, legal cannabis sales at temporary events were only permitted at county fairground sites. AB 2020 goes into effect Jan. 1. The previous Sacramento Cannabis Cup event, this past May at Cal Expo in Sacramento, became the first legal, permitted event allowing cannabis use in California since recreational use was legalized Jan. 1st. There appeared to be minimal drama, as Lauryn Hill and Lil Wayne were among the headliners. You may recall, last April, the San Bernardino City Council, not known as a bastion of liberalism, voted unanimously to deny the Cannabis Cup its marijuana permit just days before the High Times 4/20 event, forcing it to cancel or move forward with no product. Solutions are being put into place in the form of AB 2641 and 2020. AB 2641 would permit cannabis growers and manufacturers to sell their products at cannabis events. Only licensed retailers are presently allowed to sell marijuana products. AB 2020 would allow cannabis events to take place at any venue that is permitted, as opposed to just county fairgrounds or district agricultural associations. High Times says state Assembly Bill 2020 played a big role in the postponement, as it would allow “ample opportunity for all parties to work together towards a predictable long term compliance process for future cannabis events.”
Tailored Benefits is an employee benefits company that has had cannabis clients for over eleven years. Jeffrey Rosen, Tailored Benefit’s founder, practiced law for ten (10) years in San Francisco, Silicon Valley & Taipei, Taiwan. He has run an employee benefits company for over twenty years. Tailored Benefits’ has evolved over the past several decades to play an integral part in the cannabis industry and specifically Employee Benefits. With the surge in demand for cannabis employees, Tailored Benefits’ specific cannabis employee benefit solutions is how you can set yourself apart, attract and retain valuable employees.
If you need more information on how to insure your cannabis business, Tailored Benefits is here to guide you and keep you informed on local and federal policies.
All the best,
Jeffrey Rosen, President
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