San Luis Obispo prepares marijuana business tax measure

Marijuana StoreThe San Luis Obispo City Council formally adopted an ordinance allowing marijuana businesses on Tuesday and then proceeded with preparations to place a cannabis business tax measure on the November ballot. [Cal Coast Times]

San Luis Obispo’s new ordinance allows up to three brick and mortar pot shops to open in the city. The ordinance, a first of its kind in SLO County, permits both medical and recreational marijuana businesses, which include delivery services and some types of pot manufacturing, in addition to brick and mortar shops.

However, the ordinance contains a provision stating marijuana business operations will not be allowed in the city until voters approve a cannabis business tax. The city’s proposed tax initiative would consist of a gross receipts tax of up to 10 percent and a cultivation tax of up to $10 per canopy square foot.

Gross receipts pot taxes are assessed at every stage of marijuana production, including retail sales, testing, manufacturing and distribution. Cultivation taxes are assessed based on the size of the pot canopy or the growers’ license issued by the state.

The city’s proposed rates reflect the maximum allowable pot tax rates under California’s new marijuana regulatory scheme. At least initially, San Luis Obispo officials plan to keep the rates lower than the maximums.

Under the proposed initiative, the city council would hold the power to adjust the city’s pot business tax rates. City staff estimates the proposed taxes could raise an estimated $1.5 million a year.

If the city voters approve the initiative, the two taxes would be levied on top of an existing state gross receipts tax of 15 percent and a cultivation tax of up to $9.25 an ounce. …

Click here to read the full article from calcoastnews.com

Marijuana money flows into California politics

marijuana-leafLobbyists in slick pinstriped suits and burly veterans with tattooed arms crowded into a Capitol hearing room this week as lawmakers considered a bill to make it easier for Californians to buy legal marijuana. One supporter said people need more access to the “beautiful sacred plant.” But at its core, this was a business dispute — a question of whether legislators would allow cannabis companies to reach more customers, and make more money.

The committee passed the bill — to stop cities from banning delivery services that sell pot to customers at their doorsteps — despite objections from cities and counties that favor local control. And the standing-room-only crowd that showed up to push for it revealed the new reality in California, where cannabis interests have become a formidable lobbying force.

As marijuana companies seek laws more favorable to their industry, they are using the traditional tools of politics: hiring well-heeled lobbyists and donating money to politicians. Cannabis is big business in California, with sales expected to hit $3.7 billion by the end of the year, according to BDS Analytics. The industry’s spending on California politics soared in 2016, when voters made it legal for adults to use the drug.

“They want to be treated like every other business, and part of that is making campaign contributions so they can get access to politicians and have their voice heard,” said Jim Sutton, an attorney who represents cannabis businesses organizing political campaigns.

Cannabis companies and entrepreneurs spent at least $2.9 million to help pass the legalization measure in 2016. Since then, the industry has donated more than $600,000 to California political campaigns—more than four times as much as it spent on politics in the state during the 2013-14 election campaigns. Cannabis money is flowing to Democrats and Republicans running for re-election to the Legislature, as well as to Democratic candidates hoping to be elected governor and attorney general.

With the money comes a mainstream political presence for an industry quickly shedding its counterculture image.

At the California Democratic Party convention in February, the roster of receptions for delegates included one sponsored by Eaze, a company that delivers pot from dispensaries to customers at home. It was one of three marijuana companies that donated to the state party for the first time this year, for a total of $45,000.

“I’m sure we will [continue] soliciting from the cannabis industry,” said party chairman Eric Bauman. “It’s a legal industry in California. It’s not one that hurts the environment, it’s not undermining our society. So we welcome their dollars.”

The party prohibits donations from tobacco and oil companies.

Democratic Lt. Gov. Gavin Newsom, the front-runner in the race for governor, has raised more money from cannabis interests than any other California politician: at least $495,000 as of April. Newsom championed the legalization ballot measure and now talks about California rejecting the “war on marijuana” as part of his gubernatorial campaign.

One of his opponents, state Treasurer John Chiang, is also touting his cannabis cred. A Democrat who has received at least $10,100 from marijuana interests, Chiang has highlighted his interest in creating a state bank that could serve cannabis businesses. He visited a San Francisco dispensary on April 20, then issued a press release calling the date “National Weed Day.” It included a photo of him examining a cannabis chocolate bar and a jar of buds.

Attorney General Xavier Becerra has taken at least $21,000 from cannabis interests in his re-election campaign. It’s a marked difference from the last election for that office—in 2014, then-Attorney General Kamala Harris reported no donations from marijuana businesses. She made a deliberate decision, an adviser said, to avoid contributions that could raise questions about her role as the state’s top law-enforcement officer.

Although marijuana remains illegal under federal law, attempts to ban contributions from the cannabis sector have been unsuccessful. The state of Illinois prohibited political contributions from weed businesses when it approved its medical marijuana law in 2013. But the ban was thrown out last year by a federal judge who ruled it unconstitutional.

Cannabis businesses in California now have several trade associations and a political action committee for raising money to dole out to politicians.

“It’s just one tool folks in cannabis policy reform are using to move the conversation in a positive direction,” Lindsay Robinson, executive director of the California Cannabis Industry Association, said, referring to campaign contributions. That PAC has raised more than $290,000 since launching in 2014.

“The goal we’re striving for is for cannabis businesses to be regulated and treated like any other business, taxed fairly and able to thrive in the market….The political giving piece is important,” she said.

That point was illustrated back in the hearing room, where lawmakers were considering the bill to expand marijuana delivery services, authored by Sen. Ricardo Lara, a Democrat from Bell Gardens who has taken at least $18,900 from cannabis interests and is now running for Insurance Commissioner.

Not every legislator who accepted marijuana contributions voted for the bill. Sen. Mike McGuire, a Healdsburg Democrat, took a $4,000 check from a marijuana delivery company last year but sided with the local governments that opposed limits on their power to ban delivery services.

Still, marijuana businesses that want to get ahead have to play politics, said Hilary Bricken, a Los Angeles attorney who specializes in cannabis law—and that generally means throwing some money around.

“Cannabis has learned from Big Pharma, Big Alcohol and Big Tobacco that they have to step up in this way,” she said. “They would be stupid to not do what’s worked for the industries that came before them.”

This article was originally published by CalMatters.org

California considers lower taxes on legal pot to compete with black market

Alarmed that California’s fledgling legal marijuana industry is being undercut by the black market, a group of lawmakers proposed Thursday to reduce state taxes for three years on growing and selling cannabis to allow licensed sellers to get on their feet.

With many California license holders claiming they can’t compete because of high state and local taxes, the new legislation would cut the state excise tax from 15% to 11% and suspend a cultivation tax that charges $148 per pound.

“Criminals do not pay business taxes, ensure consumers are 21 and over, obtain licenses or follow product safety regulations,” said Assemblyman Tom Lackey (R-Palmdale), one of five legislators pushing the bill. “We need to give legal businesses some temporary tax relief so they do not continue to be undercut by the black market.”

California voters approved the 15% tax when they passed Proposition 64 in 2016, allowing legal growing, distribution and sales of marijuana for recreational use and requiring state licenses for the continued sale of pot for medical purposes. License holders began growing and selling pot on Jan. 1. …

Click here to read the full article from the L.A. Times

Berkeley Votes to Become ‘Sanctuary City’ for Marijuana Crimes

Marijuana smokingCalifornia’s war on the rule of law and the U.S. Constitution took a dramatic new step on Tuesday, as the city of Berkeley declared itself a “sanctuary city” for marijuana-related crimes.

The San Francisco Chronicle reports:

The Berkeley City Council voted unanimously to become a sanctuary city for legal adult-use marijuana, prohibiting city agencies and employees from turning over information on legal cannabis activities and assisting in enforcing federal marijuana laws.

“I believe we can balance public safety and resisting the Trump administration,” Mayor Jesse Arreguin said at Tuesday’s council meeting. “We’re keeping with the strong position Berkeley is a sanctuary for people in our community.”

The measure doesn’t prevent the Police Department and other officials from collaborating with federal agents on nonpot-related criminal matters.

Berkeley is thought to be the first such “sanctuary city” in the nation.

The new Berkeley policy takes the “sanctuary city” principle, which first developed to protect illegal aliens in defiance of federal immigration law, and extends it to drug laws.

Essentially, Berkeley is declaring that local governments have the power to nullify federal laws with which they disagree by refusing to enforce them or to cooperate with the federal government in their enforcement.

Critics have contended that the “sanctuary city” principle repeats the attempt by segregationist states in the Jim Crow South to override federal civil rights laws and policies.

Several California cities are “sanctuary cities” with regard to illegal aliens, and the state as a whole became a “sanctuary state” earlier this year.

The new Berkeley policy confirms the fear that what began with immigration policy could spread to other areas as well.

Recreational marijuana became legal in California on January 1, thanks to Proposition 64, which voters passed in 2016. However, marijuana remains largely illegal under federal law.

The policy of the Department of Justice under the Trump administration is to leave the question of enforcing federal laws on marijuana to the discretion of local federal prosecutors — a reversal of the Obama administration policy of not enforcing federal drug laws in states that had legalized marijuana.

Joel B. Pollak is Senior Editor-at-Large at Breitbart News. He was named to Forward’s 50 “most influential” Jews in 2017. He is the co-author of How Trump Won: The Inside Story of a Revolution, is available from Regnery. Follow him on Twitter at @joelpollak.

This article was originally published by Breitbart.com/California

Legislation would make it easier to clear pot convictions from criminal record in California

Buds are removed from a container at the "Oregon's Finest" medical marijuana dispensary in Portland, Oregon April 8, 2014. Over 20 Oregon cities and counties are moving to temporarily ban medical marijuana dispensaries ahead of a May deadline, reflecting a divide between liberal Portland and more conservative rural areas wary about allowing medical weed. Portland, Oregon's largest city, already has a number of medical marijuana clinics and has not moved to ban them. Picture taken April 8, 2014.  REUTERS/Steve Dipaola (UNITED STATES - Tags: DRUGS SOCIETY POLITICS HEALTH) - RTR3KMHE

Recently proposed legislation would make it easier for Californians to have their pot convictions wiped away, in just the latest drug policy development following marijuana legalization on a state level earlier this year.

Under Proposition 64, California residents can petition to have certain drug convictions overturned – but Assembly Bill 1793, introduced by Rob Bonta, D-Oakland, in January, would make it even easier, by automatically clearing the records of those convicted of crimes that are now legal under the new law.

“Let’s be honest, navigating the legal system bureaucracy can be costly and time-consuming,” Bonta told reporters last month in Sacramento. “[It] will give people the fresh start to which they are legally entitled and allow them to move on with their lives.”

Offenses that can now be wiped away include past convictions for possessing up to an ounce of weed and growing between 1-6 plants for personal use, which are both now legal.

However, Bonta has not specified what the cost of such a move would be, as it would require courts to identity who’s eligible and then notify those persons of the changes.

But the proposal is in line with the positions of district attorneys in San Francisco and San Diego, who have said their offices will go through case files themselves so that residents don’t have to go through the petition process.

For example, in San Francisco, pot-related felony and misdemeanors dating back to 1975 will be cleared or re-classified based on the new state law. The city so far has identified 8,000 such cases and San Diego has identified around 5,000.

“Long ago we lost our ability to distinguish the dangerous from the nuisance, and it has broken our pocket books, the fabric of our communities, and we are no safer for it,” San Francisco D.A. George Gascon reportedly said late last month. “A criminal conviction can be a barrier to employment, housing and other benefits, so instead of waiting for the community to take action, we’re taking action for the community.”

Proponents of the move argue that it’s a necessary part of a legalization framework, as past convictions can be a hurdle to finding a job or obtaining certain professional licenses.

“This isn’t just an urgent issue of social justice here in California, it’s a model for the rest of the nation,” Lt Gov. and gubernatorial frontrunner Gavin Newsom added.

However, not all cities are taking this approach, as Los Angeles District Attorney Jackie Lacey says the city will instead have residents follow the petition process already in place.

“The process also allows people most affected by these convictions to pro-actively petition the court for relief and move to the head of the line – rather than wait for my office to go through tens of thousands of case files,” Lacey said in a statement.

As of September 2017, around 5,000 Californians have petitioned to have marijuana convictions expunged or reclassified.

This article was originally published by CalWatchdog.com

How will U.S. attorneys in California respond to Sessions’ pot policy change?

Buds are removed from a container at the "Oregon's Finest" medical marijuana dispensary in Portland, Oregon April 8, 2014. Over 20 Oregon cities and counties are moving to temporarily ban medical marijuana dispensaries ahead of a May deadline, reflecting a divide between liberal Portland and more conservative rural areas wary about allowing medical weed. Portland, Oregon's largest city, already has a number of medical marijuana clinics and has not moved to ban them. Picture taken April 8, 2014. REUTERS/Steve Dipaola (UNITED STATES - Tags: DRUGS SOCIETY POLITICS HEALTH) - RTR3KMHE

U.S. Attorney General Jeff Sessions’ Jan. 4 announcement that he had revoked the Obama administration’s policy of allowing states to make marijuana use and sales legal without fearing a federal crackdown and would leave it up to his 94 local U.S. attorneys’ offices to decide their policies created deep anxiety in the California marijuana industry – coming as it did the same week the Golden State became the sixth state to begin permitting recreational pot use.

While none of the four U.S. attorneys’ offices in California have taken high-profile enforcement steps to date, at least two may be inclined to take on legal marijuana in some way – especially given that Sessions has already complained that pot being grown in the state is being trafficked in other states where it remains illegal.

In the California Eastern District based in Sacramento, President Donald Trump nominated McGregor “Greg” Scott to serve as U.S. attorney, returning to a job he held under President George W. Bush. He was sworn in Dec. 29. His large district is mostly inland California, from the Oregon border to the Inland Empire, including Humboldt County, ground zero for the Golden State’s pot culture.

Cannabis advocates worry about Sacramento U.S. attorney

While the Sacramento Bee editorial page hailed Scott’s selection, the Bee’s newsroom reported earlier this month that marijuana advocates are on edge because of Scott’s history of aggressively targeting medical marijuana in his first stint on the job. Scott’s office received national attention in 2008 when it secured 20-year and 21-year sentences for two Modesto men whom Scott said were running a criminal empire – not a clinic.

The Cal NORML marijuana advocacy group blasted Scott for urging local prosecutors to refer medical marijuana cases to his office, calling it “particularly notorious for harsh sentences against medical marijuana defendants.”

“He used to be a hardcore, anti-cannabis drug warrior,” Sebastopol criminal defense attorney Omar Figueroa told the Bee. “I hope he has evolved.”

Scott offered no overview of his intentions beyond issuing a statement saying he would review marijuana cases “in accordance with our district’s federal law enforcement priorities and resources.”

Cartel prosecutor takes reins in San Diego with tough statement

The other California U.S. attorney who might be inclined to take a hard line on pot is Adam Braverman in the San Diego-based Southern district. Braverman was sworn in Nov. 16 after years as a hard-charging prosecutor in the San Diego office targeting drug cartels which operate on both sides of the U.S-Mexico border. His statement echoed Sessions’ remarks that individual states should have no expectations that federal drug laws would go unenforced just because their voters or legislators had approved legal use of pot.

“The Department of Justice is committed to reducing violent crime and enforcing the laws as enacted by Congress. The cultivation, distribution and possession of marijuana has long been and remains a violation of federal law,” Braverman’s statement said. “We will continue to utilize long-established prosecutorial priorities to carry out our mission to combat violent crime, disrupt and dismantle transnational criminal organizations, and stem the rising tide of the drug crisis.”

Earlier this month, former prosecutor and criminal defense lawyer Nicola Hanna was named interim U.S. attorney for the Central District, based in Los Angeles. Hanna, who is expected to get the job on a permanent basis, has kept quiet on Sessions’ announcement. His office refers questions to Justice Department headquarters in Washington.

Any crackdown on cannabis might be difficult just from a resources perspective for Hanna. His office serves an area with 18 million residents in Los Angeles and Orange counties and five adjacent counties – by far the most heavily populated of any office. It is often responsible for complex cases involving not just drugs and white-collar crime but also national security.

Views of acting U.S. attorney in San Francisco unclear

In the Northern District based in San Francisco, U.S. Attorney Brian Stretch resigned within days after Sessions’ policy change, though he said the decision was unrelated.

Alex G. Tse is serving as the acting U.S. attorney after being Stretch’s second-in-command. Tse has kept a low profile to date on Sessions’ policy reversal.

However, his office was known for its aggressive targeting of Oakland’s Harborside Health Center, which the Feedly marijuana news website says is “perhaps the state’s best-known dispensary.”

The 9th U.S. Circuit Court of Appeals, based in San Francisco, threw out prosecutors’ case against Harborside in 2016, saying they had ignored Congress’ direction that medical-marijuana dispensaries operating within state laws should be left alone.

This article was originally published by CalWatchdog.com

Jeff Sessions just made it harder for California’s legal marijuana businesses to deposit their cash

California’s burgeoning cannabis industry, already heavily reliant on cash and detached from banks, could face even more barriers to the mainstream after U.S. Attorney General Jeff Sessions rescinded the Obama era guidelines, known as the Cole memo, which eased federal regulation of marijuana.

Sessions’ decision has left California’s state government and the legal pot industry scrambling for ways to handle all the cash that will come flowing in.

Moving to a more regulated market should, in theory, encourage financial institutions to bank cannabis businesses, but Sessions’ actions on Jan. 4 — just days after recreational adult marijuana use became legal in California — put a freeze on bank activities, leaving businesses and the financial institutions that look to support them in an even murkier state of affairs.

“The withdrawal of the Cole memo really couldn’t have come at a worse time, because now is the time that the types of banks and credit unions that are willing to take on more risk would have been entering the market,” said Robert McVay, partner at Harris Bricken, a Seattle-based law firm with a practice group dedicated to cannabis law. …

Click here to read the full article from CNBC

California predicts 1M pounds of marijuana sales in first year

SACRAMENTO — Before California voters passed a ballot measure legalizing marijuana for recreational purposes, Gov. Jerry Brown (D) warned of the dangers of importing Colorado’s “Rocky Mountain high.” But as Brown prepares to leave office, his constituents apparently had no such qualms.

The state Department of Finance expects Californians to purchase nearly 1 million pounds of marijuana over the first full budget year of legalization, between July 1, 2018, and June 30, 2019.

That would amount to $3.4 billion in recreational retail sales in the first full year, and $643 million in tax revenue for the state.

If California is like the other states where recreational marijuana use is legal, those estimates are likely to be lower than actual sales and revenue.

Finance staffers consulted with their counterparts in Colorado, Washington and other states where marijuana is already legal to arrive at their estimates, said H.D. Palmer, a department spokesman. Those states almost all underestimated the amount of marijuana businesses would sell in initial months.

And California’s Finance Department estimates project slower growth in the recreational market than other states experienced. Colorado’s recreational market grew by 40 percent per year over the first three years of legalization, and Washington’s grew by 50 percent. The Finance Department estimated California’s recreational market would grow by 22 percent per year. …

Click here to read the full article from the Hill

 

Trump Administration Takes Step That Could Threaten California Marijuana Legalization

The viability of the multibillion-dollar marijuana legalization movement was thrown into new doubt on Thursday when the Trump administration freed prosecutors to more aggressively enforce federal laws against the drug in states that have decriminalized its production and sale, most recently California.

Attorney General Jeff Sessions, long a vocal opponent of the legalization of marijuana, rescinded an Obama-era policy that discouraged federal prosecutors in most cases from bringing charges wherever the drug is legal under state laws.

“It is the mission of the Department of Justice to enforce the laws of the United States, and the previous issuance of guidance undermines the rule of law,” he said in a statement. In his memo to United States attorneys, he called the earlier policy “unnecessary” and pointed to federal laws that “reflect Congress’s determination that marijuana is a dangerous drug and that marijuana activity is a serious crime.”

Democrats and some Republicans condemned the move. Senator Cory Gardner, Republican of Colorado, threatened to retaliate by holding up Justice Department appointments that required Senate approval. Gavin Newsom, the Democratic lieutenant governor of California, vowed to encourage cooperation among states that have legalized marijuana. …

Click here to read the full story from the New York Times

Historic day as recreational cannabis sales begin in California

Celebrating a major shift in cultural attitudes about cannabis — or just looking to enjoy the right to get high without legal entanglements — Californians lined up at dispensaries up and down the state Monday morning to be among the first to purchase recreational marijuana, more than a year after the state’s voters passed Proposition 64.

In the pre-dawn darkness at KindPeoples collective in Santa Cruz, a line of 80 people snaked around the building before doors opened. The first sale – a eighth of a gram of indica flower called ‘Nine Pound Hammer’ – was made to resounding applause to Craig Reinarman, a 69-year-old UC-Santa Cruz professor emeritus of sociology and legal studies whose research has focused on drug policy in America.

“It feels great. It is long overdue,” Reinarman said. “Cannabis prohibition was conceived in fraud, spread by racist fears full of misinformation and myths. And now the law is finally catching up with the culture and people.”

Jeff Deakin, 66, lined up outside Harborside, a dispensary in Oakland, about 6 p.m. on New Year’s Eve to be one of the first people to legally purchase recreational marijuana on the first day sales became legal to adults 21 and older. He was the first of a line of several hundred people of all ages and backgrounds eager to buy recreational cannabis. …

Click here to read the full article from the Cannifornian