Warned of a possible federal crackdown on marijuana, California elected officials and cannabis industry leaders said Friday they were preparing for a potential showdown in the courts and Congress to protect the legalization measure approved by state voters in November.
The flashpoint that set off a scramble in California was a news conference Thursday at which White House Press Secretary Sean Spicer told reporters that the administration had no plans to continue the Obama administration's permissive approach in states that have legalized marijuana for recreational use.
"I do believe that you'll see greater enforcement,” he said, adding that the administration would continue to allow states to regulate the sale of marijuana for medical use.
The latest development could force California officials and marijuana industry leaders into an unusual alliance against the federal government, with billions of dollars in profits for businesses and taxes for state coffers at stake.
The state agency responsible for drafting regulations said Friday it was going ahead with its plans to start issuing licenses to growers and sellers in January.
“Until we see any sort of formal plan from the federal government, it’s full speed ahead for us,” said Alex Traverso, a spokesman for the California Bureau of Medical Cannabis Regulation.
In Congress, Rep. Dana Rohrabacher (R-Costa Mesa) plans to introduce legislation that could blunt Spicer’s threat by preventing the Department of Justice from enforcing federal laws against the recreational use of marijuana in states that have legalized it, a spokesman said Friday.
And industry officials warn that any federal crackdown in California and other states will result in many growers and sellers continuing to operate, but on the black market.
California Atty. Gen. Xavier Becerra says he is ready to safeguard the rights of the 56% of voters who approved Proposition 64, which allows California adults to possess, transport and buy up to an ounce of marijuana for recreational use.
“I took an oath to enforce the laws that California has passed,” Becerra said in a statement Thursday after Spicer’s comments. “If there is action from the federal government on this subject, I will respond in an appropriate way to protect the interests of California.”
State lawmakers also say California should do what it can to preserve Proposition 64.
“We will support and honor the laws that California voters have democratically enacted,” said Assemblyman Rob Bonta (D-Oakland), an author of legislation creating the licensing system for medical marijuana dispensaries.
Becerra would likely be joined in any defense of the state’s marijuana policy by attorneys general in other parts of the country. Recreational use has also been legalized in Washington state, Colorado, Oregon, Alaska, Maine, Massachusetts and Nevada, home to a combined 68 million Americans.
Washington Atty. Gen. Bob Ferguson, who has worked with Becerra on opposing President Trump’s travel ban, said he and Democratic Gov. Jay Inslee last week asked for a meeting with U.S. Atty. Gen. Jeff Sessions to discuss how the recreational marijuana use system is working in their state.
California Lt. Gov. Gavin Newsom, a leading supporter of Proposition 64, took a similar approach, sending a letter Friday to Trump urging him not to carry through with threats to launch a federal enforcement effort.
“I urge you and your administration to work in partnership with California and the other … states that have legalized recreational marijuana for adult use in a way that will let us enforce our state laws that protect the public and our children, while targeting the bad actors,” the Democrat wrote.
If the Justice Department starts arresting licensed marijuana sellers, the multibillion-dollar industry would join forces with the states that issue permits to challenge the action in court, said Amy Margolis, an attorney whose law firm has more than 200 clients in the marijuana industry, including businesses in California.
“This industry is so mature and it’s so far along that I have no doubt that if the Department of Justice started true enforcement actions against cannabis businesses, that they would go to court,” Margolis said. “I see joint actions between the states and the industry hoping to prevent those type of actions.”
Margolis would argue that it is a states’ rights issue.
“The argument would be that this is a situation where the states have the right to regulate and tax an industry the way they want,” she said, adding that states are gaining tax revenue to pay for government programs.
Although federal law does not outline a medicinal use for marijuana, Trump administration officials have made public statements indicating they recognize that such a benefit exists, which could help the industry in a potential court case, Margolis said.
However, the states may find their hands tied legally if they try to keep federal agents from raiding and shutting down marijuana growing and sales operations, according to Adam Winkler, a professor at UCLA School of Law.
“I imagine that California will mount a legal challenge to any crackdown on recreational marijuana,” Winkler said. “Yet there is not much California can do. Federal law is supreme over conflicting state law. Federal agents are entitled to enforce federal law anywhere in the country, including California.”
He said there are limits to federal power, but the courts have held that the federal government does have the authority to enforce federal drug laws.
Aaron Herzberg, an attorney for the industry, agreed that the state would face a tough fight. He cited the 2005 case Gonzales vs. Raich, in which the U.S. Supreme Court found that under the Commerce Clause of the U.S. Constitution, Congress may criminalize the production and use of homegrown marijuana even if states approve its use for medical purposes.
“Let's face it: If the federal government wants to shut down recreational marijuana they could quite easily accomplish it using federal law enforcement and taxation tools,” Herzberg said.
Others say one basis for legal action would be an argument that enforcing laws against marijuana would damage states that have put regulations in place and are depending on hundreds of millions of dollars in taxes to pay for government programs.
States are too far down the path of regulating, licensing and taxing those who are making big investments in the sanctioned marijuana industry to pull the rug out now, said Richard Miadich, an attorney who co-wrote Proposition 64.
“Given the strict regulatory structure set forth in Proposition 64, that medical and adult-use regulations are being developed in concert, and that public opinion is squarely on the side of states’ rights on this issue, I think it is impractical for the federal government to reverse course now,” he said. “Not to mention the potential for great harm to individual states.”
Supporters of Proposition 64 say there is also a potential political solution.
In recent years, Rohrabacher and Rep. Sam Farr (D-Carmel) won congressional approval of a rider to the federal budget that prohibited federal funds from being used to prosecute medical marijuana businesses that are in compliance with state laws.
Rohrabacher plans to introduce legislation that would expand the protection to businesses that comply with state laws allowing the growing and sale of marijuana for recreational use, according to spokesman Ken Grubbs.
The congressman is planning the legislation “because recreational use is an issue of individual freedom and should be dealt with legally according to the principle of federalism, a bedrock conservative belief,” Grubbs said.
Rep. Ted Lieu (D-Torrance) is also “reviewing options to counteract whatever the Trump Administration’s plans” are for state marijuana laws, said Lieu senior advisor Jack d’Annibale.
Another option, though a long shot, would be for Congress to attempt to change the federal Controlled Substances Act to decriminalize the use of marijuana nationally.
Herzberg said reinstituting federal raids would be “a major setback for the industry.”
But the state could still go ahead with a licensing system for medical marijuana growing and sales in spite of a federal crackdown on recreational use, according to Hezekiah Allen, head of the California Growers Assn.
“A vast majority of California growers and cannabis business owners would choose to participate only in the medical marketplace if given the option, and some would choose to avoid licensure entirely if they were unable to distinguish themselves from adult-use businesses,” Allen said.
Because Spicer did not provide details on what an enforcement effort might look like, many in the industry hope it will focus on the illegal exporting of marijuana to other states, leaving alone state-licensed firms that grow and sell pot.
“The biggest crackdown we may see is on the increase of cannabis being illegally exported out of recreational states,” said Nate Bradley, executive director of the California Cannabis Industry Assn.
State Sen. Mike McGuire (D-San Rafael) said any change in federal enforcement policy on states that have legalized recreational use would be misguided.
“You can’t put the genie back into the bottle — marijuana regulation and enforcement can’t and shouldn’t go backwards,” he said.
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Lieutenant Governor of California Gavin Newsom sent a letter to President Trump Friday expressing his support for the marijuana industry. The letter comes after an announcement made by Press Secretary Sean Spicer Thursday, stating that the Trump Administration viewed recreational marijuana use as a flagrant violation of federal law, and hinting at increased enforcement.
Marijuana legalization in California passed under Prop. 64 last November, garnering 57 percent of the vote—equating to nearly eight million people. But this latest move by the federal government could throw a wrench in plans to expand the lucrative marijuana growing industry.
“When you see something like the opioid addiction crisis blossoming around so many states the last thing we should be doing is encouraging people,” Spicer stated. “There is still a federal law we need to abide by in terms of when it comes to recreational marijuana and other drugs of that nature.”
Newsom slammed a crackdown on marijuana use, citing the “draconian” policies that have encouraged illegal underground sales of drugs and have been largely ineffective in keeping marijuana out of kids’ hands. “A 2014 National Institute on Drug Abuse study showed that, despite cannabis’ classification by the federal government as a Schedule 1 illegal substance, 34 percent of 10th graders had used cannabis – making the substance more prevalent among this age group than the highly regulated and legal tobacco industry,” Newsom stated.
But Newsom says he does believe there are solutions to be found through legalization and the accompanying enforcement. “I urge you and your administration to work in partnership with California and the other eight states that have legalized recreational marijuana for adult use in a way that will let us enforce our state laws that protects the public and our children while targeting the bad actors. We have a shared goal of reducing crime, and the best way we can achieve that is through a tightly regulated market.”
The letter concluded with a zinger aimed directly at Spicer. “With regard to your Press Secretary’s grossly misinformed comments, marijuana is nothing like an opioid and there is no scientific evidence that marijuana use increases the use of opioids,” he stated. “Unlike marijuana, opioids represent an addictive and harmful substance, and I would welcome your administration’s focused efforts on tackling this particular public health crisis.”
Read more here.
Trump administration spokesman Sean Spicer said yesterday that he believes "you'll see greater enforcement" of federal drug laws in states that have legalized recreational marijuana.
The remarks have harshed the mellow of an industry celebrating California's November passage of Proposition 64, which allows anyone 21 and older to legally possess up to one ounce of weed and will allow retail purchases of recreational weed starting in 2018. Marijuana entrepreneurs have been chomping at the bit at the prospect of a projected $6.6 billion in legal pot revenue in California by 2020.
If you'd like to envision what federal raids on otherwise legal marijuana enterprises in Los Angeles look like, you only have to go back a few years. In 2014 the U.S. Drug Enforcement Administration raided four medical dispensaries in town. And in 2011 the DEA cracked down on medical pot shops in West Hollywood, the San Fernando Valley and the Antelope Valley. One Southern California dispensary operator was sentenced to 10 years in federal prison in 2013 for selling medical weed. The Obama administration later softened enforcement, and in 2014 Obama signed into law a cessation of funding for federal crackdowns in medical marijuana states.
"There were people who lost their freedom as a result of aggressive federal agents targeting key players," says Ethan Nadelmann, executive director of the Drug Policy Alliance. "This is a good time for everybody involved to batten down the hatches and move forward carefully and strategically."
Spicer differentiated medical and recreational cannabis, saying that his boss "understands the pain and suffering that many people go through who are facing especially terminal diseases, and the comfort that some of these drugs, including medical marijuana, can bring to them." He also acknowledged that Congress has blocked Justice Department funding for crack downs on state-recognized medical marijuana concerns.
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By Dave Boyer - The Washington Times - Updated: 3:58 p.m. on Thursday, February 23, 2017In a departure from the Obama administration’s policies, the White House said Thursday that the Trump administration is likely to crack down on recreational marijuana use.
“I do think you’ll see greater enforcement,” said White House press secretary Sean Spicer. “The Department of Justice, I think, will be further looking into [the issue]. I believe they are going to continue to enforce the laws on the books with respect to recreational marijuana.”
He drew a distinction between marijuana use for medical purposes, and compared recreational marijuana loosely with the opioid epidemic.
Advocates of recreational marijuana reacted quickly to his comments.
“If the administration is looking for ways to become less popular, cracking down on voter-approved marijuana laws would be a great way to do it,” said Tom Angell, chairman of Marijuana Majority. “On the campaign trail, President Trump clearly and repeatedly pledged that he would leave decisions on cannabis policy to the states. With a clear and growing majority of the country now supporting legalization, reneging on his promises would be a political disaster and huge distraction from the rest of the president’s agenda.”
Read more here.
If the Trump administration decides to crack down on state marijuana programs, a group of legislators wants to make it illegal for California authorities to help them.
A bill introduced Friday in the state Assembly would prevent state and local agencies from using their resources to help federal authorities go after marijuana consumers or businesses who are following California law unless the feds have a court order signed by a judge.
The bill is the latest in a string of efforts by Democratic leaders in California to prevent President Donald Trump’s administration from reversing state policies aimed at protecting immigrants, the environment and affordable healthcare. This time, the goal is to protect the state’s 20-year-old medical marijuana program and its three-month-old law on recreational marijuana.
“I think this is a definitely one of these laws which is being passed to make a statement,” said Aaron Herzberg, an attorney and cannabis real estate developer based in Costa Mesa. “Whether or not it changes the reality is up for debate.”
California was the first state to decriminalize medical marijuana in 1996, with 27 other states following suit. And in November, with Proposition 64, California joined seven other states that have now legalized recreational cannabis.
Still, marijuana remains illegal under federal law, classified as a Schedule I narcotic – a category reserved for drugs such as heroin that are said to be highly addictive and have no medical value.
The Obama administration largely let states carry out their own legalization schemes so long as they enforced regulations aimed at preventing sales to minors, money laundering and other criminal offenses. But its unclear what might happen under the Trump administration, which includes staunch marijuana opponent Jeff Sessions as Attorney General.
In response to that uncertainty, Assemblyman Reggie Jones-Sawyer, D-Los Angeles – who was an outspoken supporter of Proposition 64 – authored this new bill with support from Assemblymen Rob Bonta, D-Oakland; Jim Wood, D-Healdsburg; and David Chiu, D-San Francisco; plus Senators Scott Wiener, D-San Francisco, and Nancy Skinner, D-Berkeley.
Assembly Bill 1578 says law enforcement officers and anyone involved with licensing marijuana businesses could not use staff, money, property or equipment to help federal authorities “investigate, detain, detect, report or arrest” anyone who’s acting in accordance with California’s medical and recreational marijuana laws.
State authorities also couldn’t hand anyone over to federal agents for marijuana enforcement under AB 1578.
Read more here.
Alleging that the San Diego district attorney's office missed a deadline to file a formal forfeiture petition, the attorney for a marijuana entrepreneur whose business assets, along with $100,000 of his family's money, were seized in a civil asset forfeiture case plans to file a motion today initiating the process to demand that the family's money be returned.
On January 28, 2016, a joint drug task force raided Med-West, a medical marijuana CO2 oil manufacturer founded by James Slatic. The police seized the company's equipment, products, and more than $300,000 in cash found at the warehouse after an anonymous source said the company was using illegal solvents to extract THC from marijuana, according to the search warrant. On February 2, 2016, police, with another search warrant signed by a judge, froze the personal bank accounts belonging to Slatic, his wife, and two stepdaughters. Slatic has not been charged with a crime, but his company's money and his family's money have been seized because the state alleges the funds are proceeds of an "illegal marijuana extraction" business.
In California Superior Court on November 15, 2016, deputy district attorney Jorge Del Portillo told judge Jay Bloom that the state had until February 2017 to file a petition of forfeiture against the money in bank accounts belonging to James Slatic and his family because the one-year statute of limitations on filing that petition began running when the family's funds were frozen by a February 2, 2016, search warrant. But this week, a spokesperson for the San Diego district attorney's office said Del Portillo was mistaken about the statute of limitations deadline and the actual deadline is in June.
Tanya Sierra, the spokesperson, says the yearlong statue of limitations started on June 7, 2016, because that is the day Judge Bloom signed the seizure orders to transfer the money from the Slatics' frozen bank accounts to the DA--months after judge Frederick Maguire signed the search warrants to freeze the family's bank accounts on February 2, 2016.
Wesley Hottot, an attorney at the Institute for Justice who is representing the Slatic family's money, says according to California Health and Safety Code 11488.4, which the DA's office used to seize the Slatic family's assets, the statute of limitations for the government to bring a forfeiture action against a person's property is within one year of seizure, or within one year of some "other process against the property, whichever is earlier."
"The freezing orders, which they obtained from a judge in February 2016, were considered 'other process' against the property," says Hottot. "Rather than acknowledging this and returning the money, the DA's office is forcing us to litigate for the money's return."
Read more here.
Amid concerns that California may not be ready to issue licenses for the sale of marijuana by next year, one state lawmaker raised the possibility Thursday of the Legislature stepping in to delay taxes and permits.
At a hearing Thursday, the Senate Budget and Fiscal Review Committee heard testimony from Legislative Analyst's Office representatives who said it is unclear whether the Trump administration will enforce federal laws that designate pot as an illegal drug, complicating California's rollout of Proposition 64, which legalized the sale of marijuana for recreational use.
State Sen. Holly Mitchell (D-Los Angeles), chairwoman of the committee, said she was concerned about banks being unwilling to handle marijuana sales revenue because the drug is still illegal under federal law, which could require license holders to transport large amounts of cash to pay state taxes and fees.
“Does the Legislature have the authority to delay implementation of either the tax collection or the Jan. 1 due date with regard to licensing?” Mitchell asked attorneys at the hearing. “Do we have the authority to pause this process given its complexity, given the lack of clear sense of direction from the federal government at this point?”
Proposition 64 sets an excise tax at 15% for the sale of marijuana, but the state can delay collection of the tax while it puts in place a secure system for handling large amounts of revenue, according to Richard Miadich, an attorney who helped write the initiative.
The initiative requires the state to issue licenses for the sale of marijuana for recreational use by Jan. 1, 2018. But the state could decide to issue provisional licenses until it is ready to implement the detailed process for background checks and issuing more permanent licenses, Miadich said.
Read more here.
In any business, the owner can trademark the name, logo and even images associated with their business with the United States government.
Every business, that is, expect the marijuana business.vThe federal government grants trademarks for businesses but the federal government still classifies marijuana as an illegal drug. That makes getting a trademark at the national level impossible.
However, lawmakers in California, which has been among those leading the way in the new era of legalized marijuana, have proposed a solution for businesses in the Golden State.
California Trademark ProposalBusinesses need trademarks to protect intellectual property, keeping other businesses from stealing names and logos associated with their product and using it on products of their own. The lack of trademark protection in the marijuana industry already has led a German pipe maker to sue companies in the United States for appropriating their name and placing it on other products.
Under current law, a secretary of state can provide trademark protection for businesses at the state level, but only if they already have a federal trademark.
“Not being able to trademark your brand is a huge setback if you’re trying to get capital investment,” Nate Bradley, a lobbyist for marijuana sellers, told non-profit journalism site Calmatters.com. “If you’re not able to protect what you’re asking people to invest in, you’re not likely to get investments.”
California lawmakers have introduced a bill that would provide that protection. Assembly Bill 64 expands provisions of the Model State Trademark law allow the state to grant trademarks to business that deal in “medical cannabis and nonmedical cannabis goods and services.” Assemblyman Rob Bonta, a Democrat representing the Oakland area, is lead author on the bill.
Both Colorado and Washington have passed similar laws to offer marijuana businesses in those states trademark protection.
Read more here.
Los Angeles County Supervisor Sheila Kuehl thinks that marijuana should be treated like alcohol. That's an important thing to know, because she's the one leading the charge on how L.A. County is going to regulate cannabis.
Even though pot's legal in California, the state, cities and counties are still deciding how they should treat the drug. L.A. County is in a unique position, given that it's the most populous county in the United States. That makes it the largest county with legal weed.
Just last week, Kuehl kicked off the county's move towards regulating cannabis in the unincorporated areas — a broad swath of land that stretches from Altadena to Ladera Heights, East L.A. to Topanga Canyon.
When you've got that large of an area to cover and that many different communities to consider, how do you decide which rules are right for a previously unregulated industry?
Below is a conversation that I had with Kuehl about how her own substance abuse issues inform her view of the drug, as well as what she hopes the Board of Supervisors will be able to do for people living here.
HAVE YOU SMOKED MARIJUANA BEFORE?
Oh, I think I did in my twenties. You know, that's 50 years ago now, so it's hard to remember whether I think I did or I [actually] did. But I don't want to deny it. I'm sure a lot of people did it and I probably did too.
WHEN IT COMES TO CREATING REGULATIONS THAT WORK FOR L.A. COUNTY, HOW DO YOUR PAST EXPERIENCES WITH THE DRUG AND BEING AROUND PEOPLE USING THE DRUG, MEDICALLY AND RECREATIONALLY, INFORM YOUR DECISIONS?
It has a very big influence on me, but so does my youthful drinking and being in recovery. I mean, not a big fan of alcohol either, I have to say. And I don’t drink, and don’t do any of these drugs. Those are my choices, because I came to understand the impact on me, and millions of other people have as well.
I think the biggest question for governments now is how to shift from kind of an underground illegal economy, which is thriving, to fulfill what the people have in mind by voting for legalization, which is to treat this more like alcohol was treated after the 21st Amendment, when Prohibition was repealed.
So, it shifts from 'this is an illegal drug' to 'this is a kind of substance that affects your vision and your judgement while you're under the influence and needs to be regulated.'
Making sure that when we do regulations, we worry about strength and potency, the way we do with alcohol.
I think that’s an important role of government, not to over-terrorize people, but to say, 'look, you need to understand.' And we’re going to regulate strength, we’re going to regulate distribution, we’re going to try to make sure all of these businesses are licensed, so at least there’s some quality control. And that’s a big lift for the county, because we have to create a whole new process for this, and that’s what I hope to do.
Read more here.
A state Senate panel recommended confirmation of Lori Ajax as California’s chief of marijuana regulation on Wednesday after she promised equal opportunity in making licenses available.
The move came after Alice Huffman, president of the California NAACP, initially opposed the appointment of Ajax based on concerns that the strict rules she is developing might disproportionately exclude people of color from getting licenses to legally grow and sell pot.
But Huffman said she and Ajax met and agreed to work together to address the concerns.
“We can make sure people of color and low-income people are included as the law requires,” Huffman told the Senate Rules Committee.
Ajax was appointed chief of the Bureau of Medical Cannabis Regulation by Gov. Jerry Brown. The bureau is developing regulations for the sale of marijuana for recreational use, as allowed by the voter-approved Proposition 64. It will also license medical marijuana firms starting Jan. 1, 2018.
Senate President Pro Tem Kevin de León (D-Los Angeles), the committee’s chairman, supported Ajax after she agreed to his request that she “even the playing field for access.”
De León noted that African Americans have been disproportionately arrested on marijuana charges, which could disqualify them at a greater rate than other ethnic groups from getting licenses to legally grow, transport or sell pot.
“We don’t want to exclude anybody,” Ajax told the panel.
She said her office is developing regulations that would allow people with drug convictions to go through a rehabilitation process that allows them to apply for licenses.
Read more here.