Connecticut Governor Signs Legislation Cracking Down on Cannabis ‘Gifting’

Another state with legal weed is cracking down on unregulated cannabis retailers. This time, it is lawmakers in Connecticut who are taking on the practice of “gifting,” through which illicit weed shops sell a product (say, a T-shirt) that comes with a cannabis “gift.”

Now, under a bill signed into law last week by the state’s Democratic Gov. Ned Lamont, that loophole could be tightening up.

According to the Connecticut Post, cities in the state “can now fine residents up to $1,000 for gifting a cannabis plant or other cannabis-related product to another individual in exchange for any kind of donation, including an admission fee, or as part of any giveaway such as a swag bag,” while the state itself can “can also separately issue $1,000 fines for failing to pay sales taxes.”

“Gifting” has become a go-to practice for marijuana retailers who haven’t gone through the proper regulatory channels to obtain a license, or who operate in states where cannabis is legal for adults but the regulated market has not yet launched.

The Associated Press reported that unregulated “cannabis bazaars have cropped up [in Connecticut] since the drug was legalized last year,” and “[t]housands of people have attended the events, often paying a fee to be admitted, and exchanged cannabis-related products for other items or received them along with the purchase of an item such as a T-shirt.”

In New York, where adult-use cannabis has been legal since March of last year, regulators have targeted businesses that have purportedly taken part in “gifting,” warning them that the legal retail market does not officially begin until later this year.

The New York Office of Cannabis Management sent cease-and-desist letters in March to a number of businesses it suspected of employing the practice, saying that continuing to do so could jeopardize their prospects for retail licenses.

“New York State is building a legal, regulated cannabis market that will ensure products are tested and safe for consumers while providing opportunities for those from communities most impacted by the over-criminalization of the cannabis prohibition and illegal operations undermine our ability to do that. We encourage New Yorkers to not partake in illicit sales where products may not be safe and we will continue to work to ensure that New Yorkers have a pathway to sell legally in the new industry,” OCM executive director Chris Alexander said in a statement at the time.

And in Washington, D.C., where voters approved a ballot initiative legalizing recreational pot in 2014, medical cannabis suppliers have objected to the practice of “gifting,” arguing that the illicit businesses are hurting their own legal operations.

Despite cannabis’s legal status in the nation’s capital, weed sales remain illegal due to an ongoing Congressional ban on the commercialization of pot there. 

The bill designed to crack down on gifting in Connecticut was proposed earlier this year.

While the measure had support among some cannabis business owners in the state, other weed advocates objected. Businesspeople who engage in gifting have also defended the practice.

“I do not deserve to be punished for this, nor does anyone else,” Justin Welch, a member of CT CannaWarriors and the New England Craft Cannabis Alliance, said in defense of the practice at the time of the bill’s introduction. “For too long now, good people have been persecuted for their involvement with cannabis. The grassroots cannabis community that exists here in Connecticut will not cease to exist, whether you pass this bill or not. Moving forward we need sensible cannabis policy that looks more like a craft beer policy.”

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Illinois Judge Lifts Injunction on Issuing Cannabis Dispensary Licenses

An Illinois judge last week lifted an injunction that barred the state from issuing licenses for recreational pot retailers after a delay that claimed the better part of a year. The ruling from Cook County Circuit Judge Michael Mullen potentially clears the way for state regulators to issue 185 licenses for adult-use cannabis dispensaries, although further legal action could put the process on hold again.

Mullen ordered the stay on issuing new licenses for recreational dispensaries last year after lawsuits against the process were filed by applicants who alleged that they were unfairly excluded from lotteries to award the permits. State cannabis regulators have since authorized a new lottery process to give the plaintiffs another chance to win a license.

Mullen lifted the stay on Friday, clearing the way for the Illinois Department of Financial and Professional Regulation (IDFPR) to award the 185 conditional adult-use cannabis dispensary licenses held up by the order to applicants selected in three lotteries that were held in 2021. In a statement released by the agency after the ruling, the IDFPR said that it would release detailed information on the next steps applicants must take after receiving guidance in a related case in federal court.

“Today is a key development toward our ultimate goal of creating the most diverse, inclusive, and robust adult use cannabis industry of any state in the country,” IDFPR secretary Mario Treto Jr. said in a statement from the agency. “We stand ready to swiftly move forward in ensuring Illinois’ standing as a national leader in the advancement of cannabis equity.”

Creating an Equitable Cannabis Industry in Illinois

Black and Latino entrepreneurs had argued that the state’s process for issuing adult-use cannabis licenses has failed to produce a regulated weed industry that reflects Illinois’ diversity. Under state law, the first 75 dispensary licenses were supposed to be awarded two years ago. But problems with scoring the applications resulted in only 21 applicants out of 700 qualifying to participate in a lottery to award the licenses.

Mullen lifted the stay after one of the plaintiffs in the litigation, WAH Group LLC, asked the court to end the ban on issuing new licenses. The company has won the rights to three licenses, making lifting the ban advantageous to the plaintiff.

Ryan Holz, an attorney who represents other businesses that have also won licenses and some applicants who were excluded from lotteries, praised the judge’s decision to lift the stay.

“People are super excited to move forward,” Holz told the Chicago Tribune.

But he warned that additional businesses left out of previous lotteries may ask for a new injunction. And in its request to the court, WAH Group noted that Cook County Judge Celia Gamrath has said that a separate cannabis business licensing case could take months or years of litigation to resolve.

In March, Illinois Governor J.B. Pritzker announced that the IDFPR would be enacting new rules to simplify the dispensary application process and remove barriers for social equity applicants. Noting that the agency is required to issue another 50 recreational weed dispensary licenses by the end of the year, the governor’s office said that the “Pritzker Administration is committed to ensuring the new legal cannabis industry reflects the diversity of the state.”

“From day one, Illinois has been dedicated to leading the nation in an equity-centric approach to legalizing cannabis, and these proposed changes to the application process will make it much easier for social equity applicants to pursue licenses,” Pritzker said at the time. “I appreciate all the feedback we have received from stakeholders since the start of the cannabis program, whose work informed this proposal and is continuing to make Illinois’ growing cannabis industry the most equitable in the nation.”

The IDFPR noted in its statement last week that the department is working to finalize plans for three corrective lotteries to award cannabis business licenses, one for each of the lotteries held in 2021, that are scheduled for next month. Details on those lotteries will be released on the agency’s website once plans are finalized.

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Peru Issues Draft Law to Allow and Regulate Patient-Grown Medical Cannabis

The Peruvian Ministry of Health (MINSA) has decided to do something radical. Namely, obtain public comments on their next version of pending cannabis legislation before they actually pass it. This legislation amends the law passed last year which allows patient groups or collectives in Peru to legally grow their own supplies by further defining the right.

Medical use of cannabis and cannabinoid-based drugs has been legal here since November 2017. However, after the government updated parts of the law they received heavy criticism from advocates who said that patients still did not have enough access. This version will also incorporate guidelines on the artisanal production and processing of the plant by patient organizations.

It may sound like semantics, but this is actually a very important step.

The Home Grow Dispute, in Peru and Beyond

No matter how much authorities just don’t like the idea, let alone parts of the established corporate cannabis industry (which has also opposed the idea directly in places like Canada), the right to grow at home and distribute medical cannabis grown in patient collectives will not die.

During the 1980s and 1990s, for example, when AIDS was still a death sentence, patient collectives began operating in major cities. The biggest “threat” to their existence has in fact been legalization.

Now as the cannabis revolution spreads globally, the same issues are arising repeatedly.

In Germany, for example, despite initially allowing patients to obtain specific cultivation licenses from BfArM, this right was eliminated with the legislation passed in 2017, mandating insurer reimbursement when prescribed by a doctor.

That right is about to be at least partially reinstated if the rumors are to be believed. It is widely expected that home grow at least for “recreational users” will be a part of the legalization legislation now being drafted by the German Ministry of Health. How the Germans will deal with patient collectives is still an open question—but one that clearly makes sense given the pushback from the major insurers about coverage for the past five years.

How to regulate that, however, is still very much undecided, just about everywhere. For example, in South Africa, these issues are very much front and center as the government struggles to pass its first cannabis legalization bill to create structure for the commercial production of cannabis.

In countries like Peru, much as in South Africa, with a less robust public health system than European countries, there is less competition from the established industry, let alone pharmaceutical companies. People there cannot afford medication. Cannabis is just one of them.

Allowing people to grow at home will significantly alleviate demand on the health system if not give critically ill people access to medicine they otherwise would not have.

There is, in reality, no way to prevent patients from organizing to obtain home grow from somewhere—even if they cannot grow their own. The conditions that this drug treats effectively are still on the edges of being treated effectively with more conventional medications. Chronically or terminally ill people are rarely deterred by a still jail sentence.

The Re-Awakening of Patient Collectives

Organized into patient collectives or not, the issue is coming back, and in a big way, as Europe proceeds with legalization. Malta dipped its toe into the recreational discussion last year by allowing home grow. Luxembourg looks ready to do the same this year—and it is clear that Germany will have to consider these options.

Beyond this? In both Spain and Holland, there already is a defacto “home grow” movement that is, at least in Holland, being increasingly regulated out of existence—at least formally. But it won’t last long.

Indeed, in the U.K. recently, where medical cannabis legislation has repeatedly stalled, a patient who operated a collective and delivered cannabis oil to literally hundreds of patients was just given a slap on the wrist by authorities after his grateful clients testified on his behalf.

Peru, in other words, may be on the right, and potentially only, track to deal with this issue.

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Gen Z Prefers Weed Over Booze

Generation Z has been shaped by a variety of dynamics that have dominated their young lives: technology and social media, social justice movements and, according to fresh research, abundant access to cannabis.

That is perhaps the chief takeaway from a study conducted by New Frontier Data, a firm that specializes in research on cannabis policy.

The study, released last week, found that 69% of individuals aged 18-24 prefer cannabis over alcohol.

In fact, the figures were comparable among the next two age cohorts: 70% of those between the ages of 25 and 34 said they also prefer weed, while 68% of those aged 35-44 said the same.

The numbers are indicative of emerging generations of young adults who came of age at a time when a large and growing number of states and cities throughout the United States have legalized recreational cannabis for adults.

Moreover, polls routinely show large majorities of young Americans support ending the prohibition on pot.

New Frontier Data noted in the study’s analysis that Generation Z, AKA “Zoomers,” or individuals born between 1997 and 2012, “were between birth or age 15 when the first states legalized cannabis.”

“Gen Z is the first generation to be of legal consumption age in an environment with widespread adult-use cannabis access,” New Frontier Data’s vice president of public policy research Amanda Reiman told Bloomberg.

Bloomberg reported that New Frontier Data’s study “included 4,170 current cannabis consumers and 1,250 nonconsumers, found that the preference seems to fade with age, with just 44% of respondents aged 65 to 74 choosing weed over booze.”

While the research suggests a greater familiarity and comfort with cannabis, it also indicates that young people are generally less drawn to alcohol and tobacco than their older peers.

“A recent study published in the Journal of Adolescent Health by researchers at the University of Washington looked at alcohol and tobacco consumption among Gen Zers in Washington during 2014-2019,” the New Frontier researchers wrote. “Those findings saw declines in each past-month alcohol use, heavy episodic drinking, and cigarette use during that period. It is possible that the reductions were related to an overall disinterest in alcohol and tobacco among individuals in Gen Z, an observation supported in the New Frontier Data Consumer Survey.”

“Cannabis consumers aged 18-24 were most likely to say they never drank alcohol (19.7%), and the least likely to say that they drank every day (5.9%). They were also the most likely (among those under age 55) to say that they never used tobacco (39.3%), and the least likely (among those under 65) to say that they used it every day (26.3%),” the researchers continued.

Among individuals aged 18-24, “more than half (56%) reported replacing some of their alcohol with cannabis, compared to nearly 60% among ages 25-34, and more than 60% among 35-44-year-olds,” according to the study, which noted that those “rates declined further among older cohorts, from over 44% among ages 45-54, to about 43% among ages 55-64, and nearly 30% among ages 65-74.”

“The numbers suggest that young people are learning to navigate the legal cannabis landscape without adopting compulsive, increased use, and may also be less likely to consume either alcohol or tobacco, thereby making cannabis their drug of choice,” the researchers wrote in their concluding analysis. “Considering that cannabis carries a lower risk of dependence than do either alcohol or tobacco – and presents no risk of either fatal overdose (e.g., alcohol) or long-term impacts to the lungs (e.g., tobacco) – it suggests that the younger generation may indeed be making more considered choices about their consumption patterns.”

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Is Importing Cannabis Equipment Worth It?

Given the growth of both the cannabis industry and international trade, it’s more important than ever to understand the basics, and challenges of, purchasing cannabis-related goods overseas. Root Sciences, a cannabis extraction company, has been learning this the hard way. Last week, it initiated an appeal in the Federal Circuit last week after their lawsuit was dismissed in October 2021.

The facts

In early 2021, U.S. Customs and Border Protection (CBP) agents detained certain cannabis extraction equipment that had been manufactured in Germany and come in from overseas through the Los Angeles/Long Beach port. The equipment consisted of cryo-ethanol extraction system parts.

Root Sciences allegedly attempted to contact CBP repeatedly with no response, then submitted a protest with no response, and finally filed a lawsuit in March 2021 after it assumed its protest was denied by the CBP. The lawsuit against the United States was filed in the United States Court of International Trade (CIT). Root Sciences principally argued that cannabis and cannabis processing equipment are legal under California law, so the seized equipment is exempt from Section 863 of Title 21 of the United States Code, which prohibits the import of “drug paraphernalia.”

The CIT lawsuit and appeal

Unfortunately, the lawsuit didn’t go very far. The entire case was centered on whether the CIT had jurisdiction over the case, and the Court ultimately decided it did not. This was based on the Court’s decision that the equipment was “seized and forfeited” (giving jurisdiction to the federal district court) instead of “excluded” (giving jurisdiction to the CIT). Ultimately, the Court didn’t address the merits of the parties’ arguments at all, which means Root Sciences went through about seven months of very contentious litigation to end up back at square one.

On May 16, 2022, Root Sciences initiated an appeal in the Federal Circuit. We’ll be monitoring the case for review of their arguments and ultimately, the position the Federal Circuit takes. Root Sciences’ brief is due in July 2022.

The lesson (?)

Even in our own practice and client circle, our customs and international trade team is seeing this more and more. We’ve had calls about cannabis-related equipment or merchandise being seized by the CBP on what seems like a more frequent basis. And as Root Sciences’ ongoing saga demonstrates, this can turn into a long, expensive battle. In many situations, it very well could be the smart, “economic” choice to forfeit whatever was seized, even if that results in a monetary loss to a client’s business.

The overarching lesson to take here is that you should consult, research, and use caution when considering importing cannabis-related goods into the United States. If there’s an option to purchase something domestically, factor that into your cost-benefit analysis. If a piece of equipment is going to make or break a new business, consult the right people.

Finally, always be prepared for the risk that CBP agents determine your cannabis equipment is “drug paraphernalia.” In that event, this post from our customs and international trade team is a good place to start.

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The best rated weed dispensaries in Maine

Looking for the best dispensaries in Maine? Leafly List shows you our highest-rated pot shops in Maine according to reviews by real people on Leafly.com.

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DEA Reports Ongoing Decline in Federal Pot Arrests

Federal law enforcement continues to make fewer and fewer arrests for weed, according to data released by the Department of Justice, a trend that dovetails with the new cannabis laws that have bloomed in the last decade.

From 2010 until 2020, there was an 11% decline in cannabis-related arrests by Drug Enforcement Administration (DEA) officers, the report from the Justice Department said.

That same time period saw a seven percent decline in arrests for crack cocaine, and a six percent decline in arrests for powder cocaine.

In raw numbers, the DEA made 8,215 arrests for cannabis-related offenses in 2010, compared with 2,576 in 2020. 

The number of pot-related arrests declined each year in that decade.

The cannabis reform advocacy group NORML also pointed to data from the United States Sentencing Commission (USSC), which reported that “federal convictions for marijuana-related activities have similarly declined over the past decade.”

“Marijuana law enforcement is becoming less of a federal priority in an age where the majority of Americans believe that cannabis ought to be legal,” NORML’s Deputy Director Paul Armentano said. “It is vital that Congress takes action to amend federal law in a manner that comports with this reality,” he continued.

The decline in weed arrests coincided with a period in the country that has seen a growing number of states and cities end prohibition and legalize recreational pot use for adults.

Polls consistently show broad, bipartisan support for cannabis legalization.

But despite the change in laws and attitudes, cannabis remains illegal on the federal level as a result of its status on the Controlled Substances Act.

With Democrats controlling Congress and the executive branch, there is hope among advocates that legalization will finally go national.

In April, Democrats in the House of Representatives passed the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act, a measure that would remove pot from the Controlled Substances Act.

Democrats in the Senate have said that they will offer up their own legalization bill. That was initially supposed to happen by the end of April, but Senate Majority Leader Chuck Schumer later said that the bill will likely be unveiled before the Congressional recess in August.

Schumer has made no secret of his desire to pass a legalization bill.

Last year, he said that the party was eager to move on the issue, despite President Joe Biden’s own misgivings about ending prohibition.

“We will move forward,” Schumer said at the time. “[Biden] said he’s studying the issue, so [I] obviously want to give him a little time to study it. I want to make my arguments to him, as many other advocates will. But at some point we’re going to move forward, period.”

“In 2018, I was the first member of the Democratic leadership to come out in support of ending the federal prohibition. I’m sure you ask, ‘Well what changed?’ Well, my thinking evolved. When a few of the early states—Oregon and Colorado—wanted to legalize, all the opponents talked about the parade of horribles: Crime would go up. Drug use would go up. Everything bad would happen,” he added. “The legalization of states worked out remarkably well. They were a great success. The parade of horribles never came about, and people got more freedom. And people in those states seem very happy.”

There were other notable takeaways in the report from the Department of Justice, which noted that “U.S. marshals made 120,112 arrests [in Fiscal Year 2020], a 42% decrease from the 206,630 bookings in FY 2019.”

The report also said that the “coronavirus pandemic drove an 81% decline in arrests and 77% decline in cases charged from March to April 2020,” and that of “the 26,696 Drug Enforcement Administration arrests in FY 2020, the most common drug type involved was methamphetamine (8,783 arrests), followed by powder cocaine (4,474 arrests).”

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Study Finds THC Detected in Blood or Breath Does Not Indicate Impairment

A new study published this month adds further evidence that levels of THC detected in the blood or breath of cannabis users is not a reliable indicator of impairment. Researchers also found that levels of THC in blood and breath did not provide reliable evidence of how recently a test subject had used cannabis.

In their introduction to the study, the researchers noted that “finding an objective measure of recent cannabis use that correlates with impairment has proven to be an elusive goal.” Some states have enacted laws that set per se legal limits on the amount of THC a driver may have in their blood, similar to the 0.08% blood alcohol concentration limit in effect nationwide.

Critics of per se limits on THC concentrations in blood or breath have argued that such limits have little bearing on the level of impairment or intoxication, which can vary widely from person to person despite similar levels of THC concentration.

“These findings provide further evidence that single measurements of specific delta-9-THC blood concentrations do not correlate with impairment, and that the use of per se legal limits for delta-9-THC is not scientifically justifiable at the present time,” wrote the authors of the study published by the journal Scientific Reports.

To conduct the study, the researchers recruited a group of test subjects, most of whom were daily cannabis users. The scientists then determined the THC levels in their blood and breath prior to and after inhaling cannabis.

Before inhaling cannabis, most subjects had residual THC levels of 5ng/ml or higher, which exceeds the per se legal limit in several states. The authors noted that THC at such levels was detected despite “the absence of any impairment.” After the test subjects inhaled the cannabis, the researchers noted an inverse relationship between THC blood levels and impairment of performance.

“Our findings are consistent with others who have shown that delta-9-THC can be detected in breath up to several days since last use,” they wrote. “Because the leading technologies for breath-based testing for recent cannabis use rely solely on the detection of delta-9-THC, this could potentially result in false positive test outcomes due to the presence of delta-9-THC in breath outside of the impairment window.”

New Study Backed by Previous Research

The results are consistent with the findings of a study published late last year in the journal Neuroscience & Biobehavioral Review. In that study, researchers affiliated with the University of Sydney analyzed all the available studies on driving performance and THC concentrations in blood and saliva.

“Higher blood THC concentrations were only weakly associated with increased impairment in occasional cannabis users while no significant relationship was detected in regular cannabis users,” wrote lead author Dr. Danielle McCartney of the Lambert Initiative for Cannabinoid Therapeutics. “This suggests that blood and oral fluid THC concentrations are relatively poor indicators of cannabis-THC-induced impairment.”

To conduct the study, the researchers reviewed data from 28 publications that studied the consumption of inhaled or ingested cannabis. They then analyzed the association between THC concentration and driving performance, using measures of driving-related skills such as reaction time and divided attention.

The researchers documented “weak” associations between THC levels and impairment among infrequent cannabis users. But they observed no significant association between blood or saliva THC levels and impairment among regular pot users, defined as those who used cannabis weekly or more often.

“Of course, this does not suggest there is no relationship between THC intoxication and driving impairment,” McCartney said. “It is showing us that using THC concentration in blood and saliva are inconsistent markers for such intoxication.”

The authors noted that the findings in the study call into question the validity of widespread random mobile testing for THC in saliva in Australia and the reliance on THC levels by law enforcement in the United States.

“Our results indicate that unimpaired individuals could mistakenly be identified as cannabis-intoxicated when THC limits are imposed by the law,” said McCartney. “Likewise, drivers who are impaired immediately following cannabis use may not register as such.”

Professor Iain McGregor, the academic director of the Lambert Initiative, a long-term research program studying the medical potential of cannabis, said that “THC concentrations in the body clearly have a very complex relationship with intoxication. The strong and direct relationship between blood-alcohol concentrations and impaired driving encourages people to think that such relationships apply to all drugs, but this is certainly not the case with cannabis.”

“A cannabis-inexperienced person can ingest a large oral dose of THC and be completely unfit to drive yet register extremely low blood and oral fluid THC concentrations,” McGregor added. “On the other hand, an experienced cannabis user might smoke a joint, show very high THC concentrations, but show little if any impairment. We clearly need more reliable ways of identifying cannabis-impairment on the roads and the workplace.”

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Observing Memorial Day at Canna Law Blog

Today is Memorial Day in the United States.

For our international readers, today is designated for remembering military personnel who died while serving in the U.S. armed forces.

Here’s to a peaceful day of reflection and appreciation.

We will be back tomorrow with our regular programming.

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The best rated weed dispensaries in Arizona

Looking for the best dispensaries in Arizona? Leafly List shows you our highest-rated pot shops in Arizona according to reviews by real people on Leafly.com.

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Argentina’s New Hemp and Medical Cannabis Regulator

Earlier this month, we discussed the approval of a new regulatory framework for hemp and medical cannabis by Argentina’s legislature. At the time, we focused our attention on those who, reflecting antiquated thinking on cannabis, voted against the bill. Today we finally turn to the substance of what is officially known as the Regulatory Framework for the Development of the Medical Cannabis and Industrial Hemp Industry (Marco Regulatorio para el Desarrollo de la Industria del Cannabis Medicinal y el Cáñamo Industrial). Yes, it’s a mouthful.

The new regulator

The recently passed law establishes the Regulatory Agency for the Hemp and Medical Cannabis Industry, or ARICCAME (Agencia Regulatoria de la Industria del Cáñamo y del Cannabis Medicinal), a part of the Ministry of Productive Development (Ministerio de Desarrollo Productivo). The agency “will be the competent organism to regulate, control and issue administrative licenses with respect to the use of cannabis seeds, cannabis and its derivate products.” Based in Argentina’s capital of Buenos Aires, ARICCAME is empowered to establish branch offices across Argentina.

Advising the regulator

A Federal Council for the Development of the Hemp and Medical Cannabis Industry (Consejo Federal para el Desarrollo de la Industria del Cáñamo y Cannabis Medicinal) has also been created. This council will serve as an advisory body to ARICCAME. Its composition (one representative of the national government and one for each of Argentina’s provinces) appears geared to amplify the voices of Argentina’s less populated provinces when it comes to hemp and medical cannabis policy. Among its tasks is recommending to ARICCAME of policies that encourage the “harmonious development of the industry in each region.”

Licensure and social equity

Under the new framework, ARICCAME is responsible for issuing licenses to import, export, cultivate, industrially produce, manufacture, market and acquire cannabis seeds, cannabis and its derivate products. The agency is explicitly required to establish objective criteria for applicants.

In exercising its licensure function, Argentina’s new regulator is to “have special consideration toward applications oriented to contributing to the development of regional economies and promote the activities of cooperatives and agricultural SMEs.” In addition, ARICCAME must consider “the inclusion of gender perspective and diversity” when issuing hemp and medical cannabis licenses.

Penalties

The new law establishes penalties for regulatory violations. These include the cancellation of licenses when the holder does not engage in the authorized activities.

Interestingly, the cost of a liter of diesel is set as the unit of payment for fines, with one liter equaling a single “Fixed Unit” or UF (Unidades Fijas). Fines range from 100 to 300,000 UF. At the time of publication, information from Argentina suggests the UF is equivalent to just under 1.00 USD. Presumably, the legislators are trying to avoid a situation where a devaluation of the Argentine peso defangs the effectiveness of the penalty regime.

Next up

The approval of the new framework is only the beginning. ARICCAME now needs to be built up as an actual agency. It is possible that the new agency will prioritize the promulgation of application requirements, even as it is still figuring out where the light switches at its new digs are located. However, we are not counting on that, and would not expect any meaningful pronouncements until late this year, if that.

Big picture, one thing to keep in mind is that Argentina will hold presidential elections in October 2023. This may not be much of a factor in how ARICCAME proceeds, but it could be important in terms of overall policy direction.

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Webinar June 1: Global Trends in Psychedelic and Cannabis Law

The cannabis industry is evolving rapidly across North America and beyond, and the psychedelics revolution is well underway. As a result, there is a growing disparity among laws of different jurisdictions. Businesses involved in cannabis production and sales, such as growers, distributors, importers, and producers, face an array of legal challenges, including regulatory compliance, taxation, corporate transactions, and dispute resolution. Psychedelics companies face similar hurdles.

Join Harris Bricken attorney Jonathan Bench, along with Chair of Cannabis Law at WSBA, Sativa Rasmussen, and partner at Torkin Manes, Andrew Wilder, for a discussion on recent developments on psychedelic and cannabis issues from legal perspectives.

Date: June 1st, 2022

Time: 4:00 PM – 5:30 PM PDT

Tuition
$0 – International Practice Section Members (discount applied at checkout)
$35 – Standard/Non-Section Members
$18.75 – Law Students (after adding seminar to cart, enter promo code LSD1 and click checkout)

Earn up to 1.5 CLE credits

To learn more or to register for this event, click here.

Please note that registration will close at 10 a.m. PT on May 31, 2022. Information on how to join the event will be emailed separately by June 1, 2022 at 10 a.m. Hope to see you there!

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Japanese Ministry of Health to Discuss Medical Cannabis Legalization

A Japanese Ministry of Health, Labour and Welfare panel met on May 25 to begin discussions regarding lifting the ban on medical cannabis to benefit patients who suffer from refractory epilepsy.

As reported by The Asahi Shimbun, the ministry may revise the current law sometime this summer. Japanese law currently prohibits any possession or cultivation of any part of cannabis, including “the spikes, leaves, roots and ungrown stalk of the cannabis plant.”

The Asahi Shimbun references that of the “Group of Seven,” or the seven countries with the most advanced economies, which includes Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. Of these, Japan currently has one of the strictest approaches to cannabis regulation and prohibition. In August 2021, the Japanese ministry wrote a report that recommended that the government should consider following the example of other countries to allow patients to use medical cannabis.

While the ministry is discussing the addition of a provision to the Cannabis Control Law that would exclude medical cannabis consumption from becoming grounds for punishment, the agency also seeks to further criminalize recreational use.

Although cannabis is illegal, there are some Japanese cannabis cultivators who are licensed to produce hemp to create shimenawa, a specific rope that is commonly used at shrines. There are no punishments for these cultivators, for fear that the production of the ropes may include “unintentionally inhaling substances of marijuana.” However, this assumption was disproven when no farmers’s urine tests came back positive for cannabis in a survey conducted in 2019.

The Asahi Shimbun writes that some experts believe the law should provide treatment options for “those addicted to marijuana to prevent repeat offenses,” which mainly includes Japanese youth.

In December 2021, Japanese gaming company Capcom allowed the use of its Ace Attorney character to curb cannabis consumption in the nation’s youth, in conjunction with the Osaka Prefectural Police (OPP). Previously, Capcom has assisted the OPP with other crime prevention campaigns. “Capcom hopes to support crime prevention activities in Osaka and all of Japan through this program, which will see the production of 6,000 original posters, as well as 4,000 original flyers that will be included with individually wrapped face masks,” the company said in a press release.

Japan has long prohibited cannabis under the Cannabis Control Law that originally went into effect in 1948. Historically, cannabis had its place in Japanese culture and religion, but from the 1950s onward, Japanese law on cannabis mirrored that of the United State’s approach to prohibition. The Japanese hemp industry was still permitted to operate, but due to expensive cultivation licenses and a decline in demand for hemp goods, few farms remain.

While the government perspective is beginning to shift, it is still clear that Japan needs more progress before it can fully embrace cannabis legalization. In 1980, former Beatles band member Paul McCartney visited Japan with less than eight ounces in his possession, which netted him an 11-year ban from returning. In February 2022, a U.S. Marine received two years of hard labor for mail-ordering “a half-gallon of weed-infused liquid and the quarter-pound of cannabis” from an unnamed individual in Nevada. On May 17, a school nurse was imprisoned for allegedly possessing “an unspecified amount of dried cannabis in two jars and a plastic bag.”

Even when Canada legalized cannabis in 2018, the Japanese government made a statement reminding Japanese nationals living broad that cannabis is illegal to consume even if they live in a country where it’s legal.

According to Kyodo News, the National Police Agency release data that there were 5,482 people who were caught in violation of Japan’s cannabis law (4,537 for possession, 273 for illegal sales, and 230 for illegal cultivation).

The post Japanese Ministry of Health to Discuss Medical Cannabis Legalization appeared first on High Times.

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Oregon Unveils Rules For New Psilocybin Therapy Program

Regulators in Oregon have released the first round of rules governing the state’s new voter-approved psilocybin therapy program.

The rules, released last week by the Oregon Health Authority, detail various manufacturing requirements and safety procedures, as well as the permissible types of psilocybin products.

According to The Oregonian, those are “just the first set of rules for a program set to go into effect in January 2023,” while “rest of the rules will be considered in the fall and adopted by Dec. 31.”

Oregon Psilocybin Services, a division within the Oregon Health Authority Public Health Division’s Center for Health Protection charged with implementing the new law, provide some context on the new rules in a letter to the public last week.

The agency said that it “received approximately 200 written and verbal comments during the public comment period that took place April 1-22, 2022 and relied on these comments to further refine the final rules.”

“In some cases, public comments were incorporated in the adopted rules and in others they were not. OPS weighed competing priorities and viewpoints that were received throughout the rulemaking process when making revisions, while considering equity, public health and safety,” the letter said. “In addition, OPS considered the statutory authority of the Oregon Psilocybin Services Act and the scope of current rulemaking. OPS received numerous comments that may be relevant to future rulemakings but were not related to the content of the proposed rules in this subset of rules. It is important to note that this letter does not address every change to the draft rules. Instead, it responds to the most frequent themes observed from the public comment period.”

Chief among the newly unveiled rules was the decision to allow manufacturers to cultivate one type of mushroom: Psilocybe Cubensis.

“OPS received comments requesting that the rules allow additional species of mushrooms and use of additional substrates. The Oregon Psilocybin Advisory Board recommended limiting cultivation to Psilocybe Cubensis and prohibiting substrates that may pose a risk to health and safety. To avoid the risk associated with deadly, poisonous look-alikes and the potential for wood lover’s paralysis and animal-borne pathogens, OPS has upheld this recommendation in final rules. That said, although raw manure is prohibited, finished compost is allowed. OPS looks forward to consideration of additional species in the future through continued dialog with the public and recommendations from the Oregon Psilocybin Advisory Board,” the letter said.

In 2020, voters in Oregon passed Ballot Measure 110, which legalized the therapeutic use of psilocybin and decriminalized all drugs.

The successful passage of the proposal was widely hailed as a major breakthrough for the drug reform movement.

“Today’s victory is a landmark declaration that the time has come to stop criminalizing people for drug use,” said Kassandra Frederique of the Drug Policy Alliance, one of the groups that pushed for Ballot Measure 110. “Measure 110 is arguably the biggest blow to the war on drugs to date. It shifts the focus where it belongs—on people and public health—and removes one of the most common justifications for law enforcement to harass, arrest, prosecute, incarcerate, and deport people. As we saw with the domino effect of marijuana legalization, we expect this victory to inspire other states to enact their own drug decriminalization policies that prioritize health over punishment.”

“While drug decriminalization cannot fully repair our broken and oppressive criminal legal system or the harms of an unregulated drug market, shifting from absolute prohibition to drug decriminalization is a monumental step forward in this fight,” Frederique continued. “It clears the path toward treating drug use as a health issue, restores individual liberty, removes one of the biggest underpinnings for police abuse, and substantially reduces government waste.”

The post Oregon Unveils Rules For New Psilocybin Therapy Program appeared first on High Times.

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Cannabis Reform Bill in South Africa Under Criticism from Unions and Rastas

It was all supposed to be so easy. The national strategy for the commercialization of the South African cannabis industry was published last year. This February, the president of South Africa, Cyril Ramaphosa said in his state of the nation address that development of the hemp and cannabis sector was a major priority for the country because of the economic engine it represents—including creating an estimated 130,000 new jobs.

According to Ramaphosa, “We are streamlining the regulatory processes so the hemp and cannabis sector can thrive like it is in other countries such as Lesotho,” he said. “Our people in the Eastern Cape, KwaZulu-Natal and elsewhere are ready to farm with this age-old commodity and bring it to market.”

Imagine if President Joe Biden said the same thing?

However, all is not clear sailing.

Politicians vs. the People

The Cannabis for Private Purposes Bill, the current pending legislation at issue, resulted from a 2018 Constitutional Court ruling, decriminalizing cannabis for private use and cultivation in “private spaces.”

The bill is intended to create the blueprint for the industry.

Instead, it has come under heavy criticism along the way and by a variety of interests.

This starts with existing entities like the cannabis clubs, which have essentially been left in limbo.

But the critics do not stop here. Most recently, they include Cosatu, the country’s largest union. They say that the bill is contradictory—and further raised doubts as to the government’s commitment to full reform. Namely, while the legislation delineates how cannabis can be produced for personal use and how it can be used for medical purposes, it is not clear how the commercialization of the industry will proceed. And even more importantly, who will be allowed to participate in it.

As Cosatu noted, this will send confusing signals to both producers and law enforcement agencies.

Beyond this, the Umzimvubu Farmers Support Network (or UFSN) which represents traditional farmers and cannabis growing communities in the Pondoland (a large segment of the south-eastern coast of the country which is bordered by Lesotho) is also being vocally critical of the legislation.

Their biggest concern? Apart from feeling ignored by decision-makers, they feel that the vague definitions in the bill are being disregarded by the government. According to them, “It remains abundantly clear that the Bill does not, even in the slightest, make provision for the centuries old custom of cannabis use and cultivation by the beneficiaries of the UFSN—the same farmers that our Honourable President Ramaphosa specifically mentioned in his most recent State of the Union Address.”

UFSN members have been frequently raided by the police in the last couple of years.

The USFN believes that the current legislation is “lip service” to the idea of cannabis reform that will benefit Indigenous farmers rather than foreign and corporate interests.

They have now been joined in their opposition to the current provisions in the bill by the Rastafarian community.

The Fight Over Formalization in South Africa

This is not a new issue, no matter the specifics at stake in South Africa. It is actually going on all over the world right now as the legalization movement begins to be formalized into regulations. Those who are crafting the legislation are not those who are most familiar with the dynamics of the legacy industry or connected to it in any tangible way. Nor do they appear to care about the associated issues that come with that.

For example, in California, legacy growers believe they are being left out of an industry which has evolved because of them.

In Canada, the discussion is now, perennially, how to limit patient home grow.

In Germany, the discussion about domestic cultivation was so fraught that patients, who initially won the right to grow their own, even if via special license from the government, lost the same as the Bundestag decided to only allow certified companies (and only from Canada) to participate in the cultivation tender in 2017.

The reality is that cannabis legalization may sound great, but increasingly, the road to legislating that legality is fraught with such clashes.

The questions around who may or may not legally cultivate and sell the plant start with a certification process that is capital intensive—and leaves out precisely the smaller cultivators who stand to benefit the most from full and final reform.

So far, these issues have not really been answered, yet, in any jurisdiction. This is also likely to be hard fought, and emotionally fraught territory just about everywhere. In this sense, the cannabis industry, so far at least, is not just like any other commodity, and it is likely to stay that way for some time to come.

Who ever heard of such fights over tomatoes?

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Cannabis en Latinoamérica: Conversatorio este 31 de mayo

Inscríbase AQUÍ!

En fechas recientes, Costa Rica dio un gran paso hacia la creación de una industria cannábica sostenible al promulgar su Ley del Cannabis para Uso Medicinal y Terapéutico y del Cáñamo para Uso Alimentario e Industrial. Dicha ley está pensada como un medio de asegurarle a los costarricenses un acceso seguro y costeable a productos de cannabis.

Sin embargo, esta nueva ley ha suscitado casi tantas preguntas como las que contesta. Para contestar dichas preguntas, así como para aprender más acerca de la situación de la cannabis y su futuro, tanto en Costa Rica, como en América Latina, acompañen a Desirée Barahona (Abogada en Arias Law, Costa Rica), Jorge González (Abogado en Pittaluga Abogados, Uruguay) y Adrián Cisneros Aguilar (Abogado en Harris Bricken, México) a lo que promete ser una fascinante discusión acerca de la cannabis en Latino América. Germán Rojas (Abogado en Arias Law, Costa Rica) estará moderando la discusión, la cual versará sobre los siguientes temas:

• El estado actual y futuro de la legislación de la cannabis y el cáñamo industrial en América Latina.
• Retos en la implementación de la legislación en materia de cannabis en América Latina.
• Mejores prácticas para los emprendedores y empresarios que buscan incursionar en el mercado del cannabis latinoamericano.

Si usted opera un negocio de cannabis en América Latina o está pensando hacerlo, este evento gratuito es para usted. La cita es este martes, 31 de mayo a las 9:00 a.m. Pacífico, 11:00 a.m. Ciudad de México y 12:00 p.m. hora Este. ¡No se lo pierdan!  ¡Inscripciones AQUÍ!

The post Cannabis en Latinoamérica: Conversatorio este 31 de mayo appeared first on Harris Bricken Sliwoski LLP.

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New Jersey Recreational Pot Sales Hit $24 Million in the First Month

New Jersey state officials announced this week that purchases of recreational cannabis hit $24 million in the first month of sales, despite only a dozen stores being licensed to sell adult-use cannabis. The New Jersey Cannabis Regulatory Commission, the state’s marijuana regulatory agency, also revealed on Tuesday that six more dispensaries will be authorized to sell recreational cannabis soon, increasing the number of retailers statewide by half.

“It’s really only a beginning, and I think it shows that there’s a lot of growth left in this market,” said Jeff Brown, the commission’s executive director.

New Jersey voters approved a referendum to legalize recreational cannabis in 2020, and state lawmakers approved legislation to regulate the state’s adult-use market in August 2021. On April 11, the commission announced that it had authorized seven companies to begin sales of recreational pot at a total of 13 dispensaries. On April 21, sales began at 12 of the locations, with the last launching adult-use cannabis about two weeks later.

At a meeting of the commission on Tuesday, officials said that the first month’s sales total of $24 million will surely increase as more licensed businesses begin operations.

“We do anticipate that this will ramp particularly as new dispensaries are approved, new cultivators are approved, and a lot of the conditional applicants that we have approved are able to come back and convert to annual licenses and begin operating,” Brown said.

Retail Pot Market Just Getting Started

Sharon Ali, Mid-Atlantic regional general manager at multi-state cannabis cultivator and retailer Acreage Holdings, agreed that New Jersey’s legal recreational weed market is just getting started.

“With only twelve operational adult-use dispensaries open, New Jersey has already seen $24 million in sales—a strong indicator of incredible potential as more adult-use retailers are approved,” Ali wrote in an email to High Times. “At the current rate of adult-use demand, we project to almost double our store traffic per month.”

Considering that New Jersey adult-use sales are projected to reach $2.4 billion by 2026, we know that this is only the beginning,” Ali continued. “To accommodate this increase in foot traffic, The Botanist in Williamstown and Egg Harbor Township have both proactively hired talent and anticipate increasing staff by 25%. We are excited to see labor and economic opportunities take off in New Jersey as we enter a new era of cannabis legalization.”

Jane Technologies, a cannabis e-commerce platform, reported that cannabis flower generated 49% of New Jersey’s recreational pot sales between April 21 and May 21, while 10% of sales were rung up for pre-rolled joints. On the day of launch, adult-use cannabis accounted for 86% of the state’s total pot sales, with only 14% going to medicinal cannabis.

Cannabis market data analyst Headset reported that based on the first week of sales in the Garden State and data from other states, New Jersey’s total annual cannabis market size is estimated to be worth between $1.3 billion and $2.9 billion.

New Dispensary Licenses Approved in New Jersey

The Cannabis Control Commission also reported on Tuesday that it had approved new licenses for cannabis businesses, including authorization for six dispensaries to begin sales of recreational weed soon. Regulators issued approval for three stores to be operated by Ayr Wellness, and one each for Ascend and TerrAscend.

“We are thrilled to be approved for adult-use sales in New Jersey and to have all three dispensaries cleared simultaneously to open for adult-use,” Jonathan Sandelman, founder and CEO of Ayr, said in a statement from the company. “To date, Central Jersey has the lowest number of dispensaries per capita, leaving its population under-served compared with the rest of the state. New Jersey is expected to become a highly influential state for the U.S. cannabis industry, and we are honored to help shape the market landscape from its early stages.”

The commission also approved licenses for 46 smaller cannabis cultivators, retailers, and manufacturers, bringing the total of such enterprises approved by New Jersey regulators in recent months to 148. Most of the businesses, however, will take up to a year or more to begin operations.

The post New Jersey Recreational Pot Sales Hit $24 Million in the First Month appeared first on High Times.

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Cannabis in Latin America: FREE May 31 Webinar

Register HERE!

Costa Rica recently made a big move towards creating a sustainable cannabis industry when it enacted its Law for the Medical and Therapeutical Use of Cannabis and the Food and Industrial Use of Hemp (Ley del Cannabis para Uso Medicinal y Terapéutico y del Cáñamo para Uso Alimentario e Industrial). This law is intended to ensure Costa Ricans will have safe and affordable access to cannabis products.

But this new law has created nearly as many questions as it answers.

To help answer these questions and to learn more about the state of cannabis (and its future) in Latin America as a whole, we urge you to join Desirée Barahona (attorney at Arias Law in Costa Rica), Jorge González (attorney at Pittaluga Abogados in Uruguay) and Adrián Cisneros Aguilar (attorney at Harris Bricken in Mexico) for what is certain to be a fascinating discussion regarding cannabis in Latin America. Germán Rojas (attorney at Arias Law in Costa Rica) will be moderating the discussion and it will focus on the following:

• The current and future state of Latin America’s cannabis, hemp and CBD laws
• Cannabis law challenges in implementing cannabis laws in Latin America
• Best practices for entrepreneurs seeking to participate in Latin American cannabis

If you are operating a cannabis business in Latin America, or even just contemplating doing so, we urge you to join us on Tuesday, May 31st at 9:00 a.m. Pacific Time, 11:00 a.m. Mexico City Time and Noon Eastern Time for this FREE discussion by registering HERE!

The post Cannabis in Latin America: FREE May 31 Webinar appeared first on Harris Bricken Sliwoski LLP.

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9 excellent AAPI buds, vapes, and edibles of 2022

From hashy joints and frosty buds to savory spritzers and fruity treats, Asian operators in cannabis are raising the bar. Leafly rounds up all the goods you don't want to miss for 2022.

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What’s Up With Cannabis Legalization in Belgium?

As Belgian cannabis advocates pointed out in spades this year on 4/20, the country is hopelessly behind the times when it comes to reform. This is true not only compared to other countries across Europe, but also to its neighbors who exist in a tripartite political and economic union and alliance with each other within the E.U. These are the so-called Benelux countries. This inter-regional coalition, created in 1944, consists of Holland, Luxembourg, and Belgium. The cooperation between the three countries is in many ways similar to the DACH alliance which unites Germany, Switzerland, and Austria.

When it comes to cannabis, however, Belgium is lagging behind its closest neighbors and economic partners and further in a way not seen in the DACH coalition—where all three countries within the same have moved forward on reform—and Switzerland is not even in the E.U.

When it comes to the countries within the Benelux alliance, also Belgium lags dramatically behind both Holland, with its coffeeshops, pending national cultivation, and distribution system, as well as Luxembourg, now teetering on the edge of recreational reform, even if only home grow is a first step.

Belgium is the last country within the alliance where the plant remains fully illegal. That said, a person who grows a single plant in their own home, in principle, will not be prosecuted.

What is the deal?

The State of Cannabis Reform in Belgium

Cannabis offenses in Belgium are given a “low prosecution priority” as long as the perpetrator is over the age of 18, is in possession of less than 3 grams, and not considered a “public nuisance.” These are the broad guidelines followed by authorities since 2003.

CBD also falls into this legally vague space. While it is possible to buy CBD oil domestically, vendors must advise customers to search on the internet for advice on how to use it. Since 2020, CBD oil for external use can be sold in pharmacies. High THC products, like Sativex, have also been available since 2015.

As of 2018, Belgian scientists publicly concluded that the country’s cannabis policy has a harmful consequence on society. Advocates for legalization also point out that recreational reform would generate as much as 700 million euros annually (about the same in dollars right now) to the domestic economy.

Since 2006, cannabis social clubs have gained in popularity in the country. These are modelled on the Spanish clubs. Like Spain, they rely on loopholes in the law to operate. So far there have been two cases against the clubs, neither one of them leading to formal conviction.

The Belgian Labour Party—or PvdA—has a detailed plan on how to legalize the drug while also combatting abuse and addiction which includes regulation of the industry.

In April 2019, the country established a government agency for cannabis that currently holds the exclusive right to distribute medical cannabis although it is not yet active.

The Impact of Cannabis Reform Here on European Policy

Brussels, the capitol city of the country, is also the center of E.U. policy making. Given this, do not look to Belgium to make any forward-thinking moves on cannabis until sovereign reform is more established across the European Union.

That said, given the pace of what is happening this year within E.U. borders (see Germany and Luxembourg, not to mention Malta last year) as well as proximate to its borders in Switzerland, it is clear that while reform might be glacial here, the status quo will not last much longer. Even France has signed on to the idea of medical efficacy.

With multiple countries across the region, which also include both Portugal and Spain, as well as Greece and Italy now regulating at least the medical industry and, in some cases, actually progressing on the recreational side too, Belgium will follow. Even if change here trails the forerunners of progress across the continent.

However, in the meantime, there are plenty of people in this trilingual country who are eager for the government to, as the Flemish saying goes, Vooruit met de geit; colloquially it means “let’s get on with it,” even if the literal translation means “forward with the goat.”

The post What’s Up With Cannabis Legalization in Belgium? appeared first on High Times.

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Are cannabis beauty products the secret to anti-aging?

More beauty brands are adding cannabinoids to their products than ever before. Is cannabis the next anti-aging trend?

The post Are cannabis beauty products the secret to anti-aging? appeared first on Leafly.

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Mexican Supreme Court Issues Vague Support for Ending Prohibition

On May 11, the Mexican Supreme Court ruled in favor of “Édgar,” a young man facing prosecution for the last four years for cannabis possession. While he was absolved of his “crime,” the court failed to completely eliminate the criminalization of simple possession, ruling that it was not the police, but rather prosecutors and judges who should decide if possession is for personal use or not.

According to at least some of the judges, this was a victory. “The fact that the Public Prosecutor’s Office is allowed to initiate criminal proceedings against a person who possesses more than 5 grams of cannabis for personal consumption amounts to punishing moral qualities [and] personal behavior, which has no constitutional basis,” wrote Supreme Court Justice Juan Luis González Alcántara. “Criminal prosecution of the person who possesses cannabis in his or her private sphere, without affecting third parties or provoking a criminal incident, is not justified.”

Advocates, however, believe that this is a muddy, inconsequential decision by the Court (after years of behaving otherwise). Namely, they say the ruling is contradictory because it does not totally eliminate criminal charges for personal possession. Further it gives the public prosecutor too much leeway in deciding whether to pursue charges. People are still liable to be held by the police for up to 48 hours if arrested for possession, and of course, the resources taken up by this activity are still consequentially large. In 2020, more investigation files and preliminary investigations were initiated for simple cannabis possession than homicide (country wide).

Setting The Pace of Reform?

The decision is also clearly a surprise to court-watchers. Almost alone in the world at this point (apart from decisions in South Africa and Georgia), the Mexican Supreme Court has taken bold stands on the connection between cannabis possession, use, and fundamental human liberties and rights for the last seven years. And of these three countries, the Mexican court has been not only the most vocal, but at this point, has issued the most rulings.

The decision also came shortly after the Oaxaca City Council voted to stop police from arresting cannabis users as long as they were behaving respectfully. It also comes as the Mexican legislature is still plodding along on a cannabis bill, which was required by the court to pass last year.

The court’s decision, in other words, could be a reluctance on the part of the country’s top judges to dictate the amount that qualifies for personal possession—in this case 30 grams—to lawmakers as they consider how to proceed with a cannabis legalization bill.

The legislature, also despite court order, has only advanced the issue at a snail’s pace. They were supposed to finalize this last December. Instead, the federal process has repeatedly stalled at a federal level. That said, the Mexican Congress could vote to legalize this year.

The Mexican President, Andres Manuel Lopez Obrador remains ambiguously hesitant about the entire issue.

An Ongoing Clash Between the Courts and the Legislature

The battle in Mexico at the highest legal level has been going on since 2015, when the court ruled that sections of the country’s health law were invalid, by de facto legalizing the cultivation, possession, and use of cannabis. Last year the court also ruled that bans on personal consumption were a guaranteed personal liberty. However the earlier decision did not consider the 5 gram decriminalization measure in place since 2009. People in possession of larger quantities still face a prison sentence of up to three years.

That is what Mexican advocates hoped this decision would solve as the legislature slowly moves forward on passing legislation.

Could the Mexican Government Approve Recreational Use This Year?

The decision comes at an interesting time, literally five weeks after Israel decriminalized use. Mexico has been on the “cusp of legalization” at this point for seven years. Presumably, however, if either the United States or Germany passes legalization measures, it will also galvanize Mexico to finally decide its cannabis users’ fate by formal law rather than judicial decisions at the highest level.

This means that 2022 could be a record year for legalizing countries—and as a result, become a tipping point for global recreational reform.

It is certainly going to be an interesting and intriguing 8 months on a global basis.

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California Cannabis Claims: Conversion

We’re back with the newest part in our series on common California cannabis claims. Today, we’ll be covering one we often see in the context of buyer v. seller disputes: conversion.

How does California define a conversion claim?

The technical definition of conversion is “the wrongful exercise of dominion over the personal property of another.” It essentially means that the defendant interfered with the plaintiff’s right to possession of tangible property (not including real property). If a conversion claim is found, the plaintiff is entitled to recover the full value of the property. The plaintiff may also be entitled to punitive and other additional damages in certain contexts (more on that below). As I mentioned above, we typically see this claim pop up when a seller provides product to a buyer but doesn’t get paid – since the seller hasn’t received the benefit of the bargain, the buyer’s continued possession of the product could form the basis of a California cannabis claim for conversion.

Statute of limitations

The statute of limitations for conversion is three years. This means the claim needs to be filed within three years of the wrongful taking. There are exceptions to this rule though. First, if the defendant’s taking was initially lawful (like someone borrowed your tools with your permission), the clock starts ticking when the defendant rejects the plaintiff’s property rights (you ask for your tools back and they refuse to give them back). Second, if the defendant fraudulently conceals the conversion, the clock starts ticking when the plaintiff discovers or should have discovered the conversion. This second scenario is commonly known as the “discovery rule.”

Elements of a conversion claim

California Civil Jury Instructions (CACI) is a helpful that shows the elements of for California claims and causes of action. The relevant CACI instruction for conversion provides that in order to establish this claim, the plaintiff must prove all of the following:

1. That the plaintiff owned (or possessed) some item of personal property;
2. That the defendant substantially interfered with the plaintiff’s personal property by knowingly or intentionally taking possession of the personal property (or preventing plaintiff from having access to, destroying, or refusing to return the personal property);
3. That the plaintiff did not consent;
4. That the plaintiff was harmed; and
5. That the defendant’s conduct was a substantial factor in causing the plaintiff’s harm.

So what needs to be established is this: the plaintiff lawfully owned something, the defendant wrongfully interfered with that ownership, and the defendant’s interference caused the plaintiff’s harm. If a plaintiff proves all of these elements and there are no applicable defenses, they can succeed on their California cannabis claim. The issue then becomes what remedies are available.

Remedies for claims of conversion

California Civil Code sections 3336-3338 specifically address damages for conversion. The normal measure of damages is the full fair market value of the property, plus interest. The fair market value is measured at the time of conversion – so for example, if product prices rapidly fell between the time of the conversion and the time of the lawsuit, the plaintiff would be entitled to that initial, higher price.

Conversion claims are especially scary because they potentially open the door to punitive damages. Punitive damages are available where plaintiff shows by clear and convincing evidence that defendant was guilty of oppression, fraud, or malice. In a case of willful conversion – i.e., someone breaks into a California cannabis business and steals something – this may not be all that hard to prove. In most cases, this can be much more difficult to prove.

Finally, when the facts of the conversion claim also constitute receipt of stolen property under Penal Code § 496, the plaintiff may seek treble damages (damages x3), costs of suit, and reasonable attorneys’ fees. There is a line of California case law that specifically establishes that Section 496 can apply to “ordinary business disputes where traditional remedies for breach of contract, fraud, and conversion were available.”

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For our other articles on common California claims, see:

• Breach of contract
• Breach of fiduciary duty
• Fraud
• Intentional interference with contractual relations
• Unfair competition

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9 smoking accessories for the outdoorsy toker

There's nothing like getting stoned in the great outdoors. Check out these outdoor smoking accessories and enjoy your next adventure.

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Rhode Island just voted to legalize marijuana. Here’s what happens next

You can walk around with up to an ounce, and keep 10 ounces at home. Stores should open Dec. 1, 2022.

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I tried HHC and HHC-O. Do they actually get you high?

HHC is one of the buzziest hemp-derived cannabinoids around. But does this calm cousin of Delta-8 live up to the hype? We ate some HHC gummies to find out.

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New York City Cannabis and Community Boards

New York City community boards will soon become a hot topic as New York begins accepting adult-use retail dispensary and on-site consumption license applications. If you have done any reading on New York’s Marijuana Regulation and Taxation Act (MRTA) (such as here or here), you’ll have seen references to community boards. But with community boards being a very New York City-centric concept and their significant role in the adult-use cannabis licensing process, we figured it was time for an good old fashioned FAQ.

What is a Community Board?

We can’t explain it better than New York City’s government website:

Community boards are local representative bodies. There are 59 community boards throughout the City, and each one consists of up to 50 unsalaried members, half of whom are nominated by their district’s City Council members. Board members are selected and appointed by the Borough Presidents from among active, involved people of each community and must reside, work, or have some other significant interest in the community.

Each community board is led by a District Manager who establishes an office, hires staff, and implements procedures to improve the delivery of City services to the district. While the main responsibility of the board office is to receive complaints from community residents, they also maintain other duties, such as processing permits for block parties and street fairs. Many boards choose to provide additional services and manage special projects that cater to specific community needs, including organizing tenants associations, coordinating neighborhood cleanup programs, and more.

Can I look up the Community Board for a specific New York address?

Yes, by searching your address on this website: http://maps.nyc.gov/doitt/nycitymap/.

How are Community Boards Involved in New York’s Adult-Use Cannabis Licensing Process?

MRTA requires applicants for retail dispensary or on-site consumption licenses to submit a notice of intent to apply to the community board in which they intend to operate. The notice must be sent at least 30 days but not more than 270 days before filing an application with the Office of Cannabis Management (OCM).

The community board is entitled (but not required) to issue an opinion for or against granting the license. If the community board expresses an opinion, the opinion becomes a part of the record upon which the OCM makes its recommendation to the Cannabis Control Board (CCB) whether to grant or deny the application. THEN, the CCB is required to respond to the community board with “an explanation of how such opinion was considered in the granting or denial of an application.”

Do I need Community Board approval to obtain a New York cannabis license?

As indicated in the previous answer, the MRTA does not include an express requirement that the applicable community board endorse an application in order to issue a license. With that said, given the general sensitivity to community opinions regarding cannabis, it’s fair to assume that any community board opinions will be given significant consideration.

Can I present to the Community Board as part of a New York cannabis license application?

Yes. From that handy website again:

Anyone can attend a community board meeting! Board meetings occur once a month and are open to the public. At these meetings, members address items of concern to the community and hear from attendees. Boards regularly conduct additional public hearings – on the City’s budget, land use matters, etc. – to give community members the opportunity to express their opinions and concerns.

Can I appeal a Community Board decision?

Yes, there is an administrative appeal process for community board decisions. But it may also be more advantageous to appeal an overall denial of an application to the CCB and to utilize the appeal mechanism in MRTA (which will be the subject of a later post).

Clearly, there is a lot of ground to cover. As we have said again and again, familiarity with the real estate process in New York will be critical for adult-use cannabis applicants. Stay tuned to the Canna Law Blog for more updates on New York cannabis licensing!

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Legal Issues in Cannabis (2022 Update): Contracts, Real Estate, Taxation, and NFTs

Join Harris Bricken attorneys Jonathan Bench, Frederic Rocafort, Arlo Kipfer and Robert Lamb for a live video broadcast on legal issues in cannabis.

Session I – Cannabis Contracts – Rachael Z. Ardanuy, Esq.

The Session 1 presentation focuses on the different types of contracts you will encounter when representing a cannabis business, as well as drafting tips and potential pitfalls for the cannabis-curious legal transaction practitioner.

Key topics to be discussed:

• Types of commercial cannabis contracts
• Common contract clauses specific to the cannabis industry
• Drafting tips
• Potential pitfalls

Session II – Cannabis and Web3 Crossover: NFTs, DAOs, and Smart Contracts – Jonathan Bench, Frederic Rocafort, Arlo Kipfer and Robert B. Lamb

In Part 2 of this series, attorneys will learn about NFTs, DAOs, and Smart Contracts in-depth: how they are formed and used, what domestic and international jurisdictions are doing to deal with their decentralized nature, and the securities implications.

Key topics to be discussed:

• NFTs
• DAOs
• Smart contracts

Session lll – Cannabis Real Estate and Taxation – Jim Thorburn

The final part of this series will discuss how the IRS utilized Section 280E of the tax code and the current defenses and successes which have been utilized. In addition, learn how to safeguard against the common dangers of using real estate for cannabis business.

Key topics to be discussed:

• The federalism dispute rages. Just because cannabis is state legal does not stop federal enforcement attempts
• Costs of goods sold are constitutionally protected under the Sixteenth Amendment. There is numerous way to reduce tax liability using this constitutional protection.
• Non-compliance with state law by a cannabis tenant may subject the landlord to federal drug violations
• The landlord must consider remediation costs when renting to a cannabis tenant

How to Access: Viewers must sign in and watch the Program “live” in real-time. Viewers may ask questions during the presentation using the chat box. This event qualifies for “live” CLE credit.

When: Friday, May 27

Time: 12:00 PM – 4:00 PM EDT

Online Registration link: https://mylawcle.com/products/legal-issues-in-cannabis-2022-update-contracts-real-estate-taxation-and-nfts/

The post Legal Issues in Cannabis (2022 Update): Contracts, Real Estate, Taxation, and NFTs appeared first on Harris Bricken Sliwoski LLP.

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