Grading the Presidential Candidates on Cannabis: RFK Jr.

Every election cycle, we grade the many of the presidential candidates based on their track record with cannabis (here’s our summary of 2020’s main candidates). We kicked off 2024 with our analysis of incumbent President Joe Biden (Grade C), and followed up with Republican challenger Ron DeSantis (Grade C+), who recently dropped out of the race and endorsed Donald Trump. Most recently, we covered Nikki Haley (Grade B-), another longshot challenger who is still around.

Today, I want to do something a little unusual and look at an independent candidate, Robert F. Kennedy, Jr. RFK Jr. initially got in the race as a primary challenger to President Biden, but dropped out of the Democratic race in October to run as an independent.

Overall Grade: A-

RFK Jr. was a long-shot candidate from the start, as evidenced by his leaving the Democratic race in favor of an independent race. But when it comes to cannabis, is more willing to entertain massive overhauls to federal cannabis laws than Biden or Trump (almost guaranteed to be the Republican nominee). For that reason, I’m giving RFK. Jr. an A- on the cannabis scale. Here’s why:

RFK Jr.’s views on drug policy reform are reportedly shaped on his own prior struggles with addiction. Early in his presidential campaign, when he was still in the Democratic race, RFK Jr. said he would legalize cannabis and even psychedelics–a view he has repeatedly affirmed. More recently, as an independent candidate, he released ads noting that he wanted to decriminalize cannabis to focus on addiction treatment.

So what would an RFK Jr. cannabis plan look like in action? We know that he proposes to (a) legalize cannabis and allow for state regulation, (b) impose federal taxes on it, (c) ensure that cannabis businesses have banking access, (d) use cannabis taxes to fund addiction treatment, and (e) according to his website, “grant amnesty to nonviolent drug offenders.” We don’t have too many specifics on what this would look like in action, but it’s leagues ahead of President Biden or former President Trump, both of whom I’ll come back to below.

Why RFK Jr. only gets an A-

I chose to give RFK Jr. an A- instead of a higher grade for two reasons. First, at this stage his plan lacks implementation detail. For example, we don’t know what kind of tax rate he’d impose at a federal level, and a high one would obviously be a burden on the industry. So I thought it best to reserve judgment until we know more.

Second, I am always very skeptical of legalization efforts that start out with the premise that a cannabis tax will solve or even put a dent in some pressing social problem. Look no further than my home state of California. I agree with RFK Jr. that the states should be free to regulate cannabis, but imposing a federal tax will just add to operators’ already heavy plates unless states or municipalities are simultaneously precluded from cannabis taxation. And that’s not going to happen.

So, with these things in mind, I gave RFK Jr. an A-. It’s still far ahead of the competition.

How does RFK Jr. compare to the main party contenders

The 2024 elections are unusual in the sense that the two main party challengers both have had stints in the Oval Office. (Yes I know Nikki Haley is still in the race for now, but let’s be real). Former President Donald Trump didn’t have a great track record on cannabis while in office. His biggest accomplishment, in my opinion, was removing hemp from the Controlled Substances Act. We’ll be coming out with a post in this series on Trump soon. Without revealing too much, he won’t get even close to RFK Jr. on cannabis law issues.

President Biden has been better, but nowhere near as transformative as many had hoped. In the 2020 election cycle, we gave him a D based in large part on his congressional track record. This time, we gave him a C. The reason for the improvement is that he’s granted a series of pardons for smaller federal cannabis offenses, and because he kicked off the administrative review that could lead to cannabis being rescheduled. That said, Biden has had the opportunity to work with Congress to pass some kind of cannabis reform bill that would have more teeth, but just hasn’t.

RFK Jr. definitely has plenty of unconventional and controversial views and positions. But when it comes to advancing a reasonable change in federal drug policy, he’s undoubtedly leagues ahead of both Biden and Trump. While another Kennedy presidency is unlikely in this election season, maybe one of the big ticket candidates will follow suit.

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Researchers say cannabis may help treat Covid-19

A growing body of research shows that cannabis can aid in prevention and mitigation of Covid symptoms.

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FREE Cannabis Loans and Investments Webinar: February 28th

Register Here

Please join us for our latest cannabis business webinar, focused on “Cannabis Loans and Investments”.

In 2024, a constellation of factors makes things very interesting for both cannabis industry investors and businesses:

• More states are open for business and investment than ever before
• In the macroeconomic environment, interest rates are high (especially compared to a few years back), but rates are projected to come down again
• Many cannabis businesses are struggling, but marijuana may move to Schedule III at some point this year, increasing margins

Whether you’re an investor eyeing favorable debt or equity terms, or a cannabis entrepreneur seeking to secure finance, this webinar has you covered. Equip yourself with financial insights that can help you stride confidently in this ever-evolving industry.

Topics of focus:

• The intricacies of the cannabis financial landscape
• Risk management
• Navigating lending complexities
• Capitalizing on investment opportunities
• Potential impacts of the proposed re-scheduling of marijuana

We’ll also tackle some of the pressing issues such as regulatory challenges and how to navigate the cannabis industry with secure financial strategies.

Don’t miss out: this is your step towards becoming a well-informed player in the world of cannabis loans and investments.

Register Here

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Archive Seeds and The Alchemist warm up The Astor Club LA’s grand opening

Nee York's beloved weed speakeasy, The Astor Club, opened its doors, and high-octane offerings, in Los Angeles in January.

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Grading the Presidential Candidates on Cannabis: Nikki Haley

Welcome to part three in our series on cannabis and those who wish to lead us. In the first two posts, we covered Joe Biden (we gave him a “C”) and Ron DeSantis (R.I.P.; we gave him a “C+”). Today’s subject is Republican candidate Nikki Haley. She’s still around as of this writing and I’m giving her a B-.

Overall Grade: B-

Haley’s position on cannabis is that she would “let the states decide.” At the federal level, she agrees with the recent Health and Human Services (HHS) re-scheduling recommendation, observing that she’d “go with the scientists” and that cannabis “obviously” doesn’t belong in the same category as heroin. Haley said these anodyne things recently at town hall events; Marijuana Moment has a good write-up here.

That story also mentions that Haley didn’t act or opine on cannabis while serving as a United Nations ambassador under Donald Trump (makes sense), and that she “doesn’t have an especially extensive cannabis background.” Haley did, however, sign a 2014 bill as South Carolina Governor to legalize hemp. I tip my hat.

In my view, Haley is sitting in a pretty typical Republican spot for 2024, which can be summarized as “states’ rights are best for marijuana” but “it’s not a federal priority.” To wit, Haley doesn’t appear to have commented on any of the federal legislative proposals floating around for cannabis reform. Her campaign website is also silent on cannabis policy (and every other policy).

One proposal that may square with Haley’s statements on cannabis is the Strengthening the Tenth Amendment Through Entrusting State (STATES) 2.0 Act. That revamped bill would undo federal criminalization of people acting in compliance with state cannabis programs, or Indian tribal law. On the other hand, maybe STATES 2.0 is a bit much for Haley, in that it would authorize interstate marijuana commerce. I don’t know.

Most likely, Haley hasn’t thought all that hard about cannabis policy. And isn’t very interested in the topic.

“Let the states decide” isn’t helping

I take issue with “let the states decide” politicians who also fail to promote a floor of federal legalization. Don’t get me wrong: it’s all well and good to let the states run their own regulatory experiments, independent of federal law (we call this “federalism”); but things get awkward when states legalize things that are prohibited under federal law (i.e. marijuana, whether on Schedule I or III). A state-licensed marijuana business simply cannot comply with the federal Controlled Substance Act.

Setting a federal floor would work for cannabis and is a common legislative approach. You see it with everything from the minimum wage to environmental legislation. In the former example, Congress decrees (apparently without shame) that “it’s prohibited to pay someone less than $7.25 per hour.” However, states are allowed to set higher minimums. We need this for cannabis. The federal government needs to say “cannabis is not prohibited under federal law” or “cannabis is not prohibited under federal law, but it is subject to the foregoing requirements.” And then allow states to regulate the plant as they see fit (where the states are not “preempted”).

In the very big picture, I commented in a recent webinar that, based on my experience lawyering in the cannabis space for way too long:

I’m coming around to a really basic, simple theory of cannabis being unregulable at the state level, given the state of federal law… I just think it’s impossible. I think these states are set up for failure and I can’t see any one state that I can honestly say is succeeding in the way that we’d like them to succeed.

Change needs to come from the top.

“I’ll go with the scientists” is a punt, not policy

I like science and the scientists, don’t get me wrong. In the context of cannabis, though, “follow the science” is too often a shibboleth for lazy thinkers. Here’s why: our federal legislators and policymakers don’t go with the science on other intoxicating (and harmful, and addictive) substances, starting with alcohol. If they did, alcohol would also be subject to federal prohibition. But it’s not; and policymakers are correct to have learned, and continue to understand, that society simply won’t tolerate that.

Yes, policymakers should listen to scientists and weight their findings well. But science isn’t policy, and there is a very good reason scientists work in labs and not the Capitol Campus. Science is a discipline of narrow considerations, i.e. the study of material phenomena. Just because the science may suggest that marijuana belongs on Schedule III, doesn’t mean politicians should ignore all other social implications of placing marijuana there. It wasn’t science that brought us to the Controlled Substances Act and its silly schedules, after all.

It is the purview and responsibility of policymakers to think big picture. Listen to the scientists, and then consider other critical factors to craft good policy.

Wrapping up with Nikki Haley

When a politician takes Nikki Haley’s position – i.e., “leaving things to the states”, or even “to scientists”– those politicians are ignoring a policy failure writ large across the country. This is a also a policy failure of the federal government’s own making. You see regressive outcomes in everything from ongoing criminalization, to depressed and distorted state-level cannabis markets, to the epidemic of gas station weed from hemp.

Still, I’m giving Nikki Haley a “B-“. She gets that grade because she: 1) is a Republican 2) is unemployed 3) doesn’t seem to have bad intentions 4) once signed a hemp bill and 5) can’t do much about cannabis now anyway. Yes I’m grading on a curve. It’s also unlikely that Haley will become President this fall. That’s probably just as well for cannabis advocates.

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Ultimate weed contest calendar of 2024

Tap in to judge and smoke the world's best pot this year.

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12 throwback, weird, or revolting weed strains for 2024

Brace yourselves for Chili Verde, Ogre Breath, and Dragon’s Fist.

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So New York City has the best weed museum in the world now

In New York City with no weed and nowhere to go? The House of Cannabis has you covered.

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2024 Las Vegas weed visitor’s guide

Where to re-up, puff tough and have stoner fun in Sin City; from a local expert.

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Live Rosin Gummies—PAX Labs, California, winter 2024

An independent, expert review of premium California cannabis gummies.

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Detox drinks for weed: How to use a THC detox drink

Detox drinks for weed like the Clean Shot from PassYourTest.com are 100% satisfaction guaranteed, or your money back.

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Travis Barker launches weed brand Barker Canna Co.

On shelves exclusively at The Syndicate dispensaries in California beginning Feb 6.

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Study: ADHD patients benefited from medical cannabis

While the UK-based team found promising data, it comes with a fair share of caveats.

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California’s Cannabis Taxes Are a Disaster

Cannabis regulation efforts are usually sold to voters or legislators with the express promise that a state will be able to milk the new industry for all it’s got through cannabis taxes. Don’t believe me? Well, look no further than California’s landmark Proposition 64, also known as the Control, Regulate and Tax Adult Use of Marijuana Act. Prop. 64’s third finding and declaration states explicitly that:

Currently, marijuana growth and sale is not being taxed by the State of California, which means our state is missing out on hundreds of millions of dollars in potential tax revenue every year. The Adult Use of Marijuana Act will tax both the growth and sale of marijuana to generate hundreds of millions of dollars annually.

In other words, from the inception, these programs were designed in large part to raise revenue for the state. And the state does so by funneling money out of the nascent industry in an extremely aggressive way – which is why I (only sort of hyperbolically) called this theft last year.

California is not alone in this, and there are certainly many other states with regressive and punitive tax schemes that all but guarantee the tax-free illegal market will thrive. But California is a prime example of failed policy which legislators and regulators seem intent on making worse. Here’s why.

California’s cannabis tax scheme was destined to fail from the start

From inception, California decided to tax cannabis at both ends by imposing a tax on cultivated plants, and an excise tax on retail. This is in addition to sales tax, with a 7.25% sale price baseline and additional local add-ons.

To make matters more, unnecessarily complicated, these taxes were not paid by cultivators and retailers, but by middlemen distributors. This meant that distributors constantly had to deal with tax issues on both ends of a delivery and hope they didn’t get stiffed. Lots and lots of distributors racked up late bills, to which the California Department of Tax and Fee Administration (CDTFA) tacked on 60% late fees and interest. I am not kidding there. As I noted last year, “Before the cultivation tax was eventually eliminated, it effectively was $161 per pound!”

This was clearly not a sustainable situation for the industry. California finally got some sense and did away with the cultivation tax, but only on a prospective basis– meaning those distributors with massive tax bills got no real relief. Additionally, California passed off the excise tax remittance obligation to retailers, but in doing so, effectively imposed double taxation on them. Here’s an image that California NORML published to illustrate:

Credit: Here

Last year, I wrote this about the situation:

The above is just excise tax, to be clear. For any sale of cannabis, the excise and sales taxes alone will amount to at least 22.5%. That’s $22.50 on a $100 bill in just state cannabis taxation. A piece of proposed California legislation would have attempted to streamline some of the state level taxes to avoid double taxation, but it looks like the bill won’t advance much further. This is pretty terrible news during the midst of a literal crisis within the state’s cannabis industry.

That proposed bill was held in a legislative committee and went nowhere. Right now there is no relief and these problems persist. Maybe the legislators will figure things out in the next few months, but let’s not be overly hopeful given the state’s track record.

California tries to raise cannabis taxes yet again

Last year, CDTFA promulgated an “emergency” regulation regarding the excise tax. Without getting too far into the weeds, the rule would change the metric for determining gross receipts for the sale of cannabis products sold at retail, and would do so in a manner that would end up increasing cannabis taxes.

Catalyst, a California cannabis retail company, recently sued the CDTFA to find that the emergency regulation violates state law. To summarize one of the claims in their suit, if a vape pen retails for $40, but only has $5 of oil in it, state law only imposes a cannabis tax on the oil ($5) and not on the non-oil things. But under the new law, the tax would be payable on the entire $40. And this, Catalyst argues, violates state law.

It’s not really clear why CDTFA decided to make this move and suddenly increase taxes for otherwise compliant operators, when so many licensed businesses are already so far in the hole. But it highlights the fact that the state is less interested in supporting its struggling industry than it is on taxing it.

California uses cannabis taxes as a piggybank

In Prop. 64, voters were promised that cannabis taxes would be used as follows:

The revenues will cover the cost of administering the new law and will provide funds to: invest in public health programs that educate youth to prevent and treat serious substance abuse; train local law enforcement to enforce the new law with a focus on DUI enforcement; invest in communities to reduce the illicit market and create job opportunities; and provide for environmental cleanup and restoration of public lands damaged by illegal marijuana cultivation.

Despite the fact that California pretends to care about fixing cannabis taxes, it doesn’t. For example, the state’s AG said cannabis taxes would be lower five months ago, and that shockingly hasn’t happened. In fact, no relief is even on the table. Instead, the proposed budget will actually take a “loan” of $100 million from the cannabis tax fund to redirect to balance the state’s $38 billion budget deficit:

To address the projected budget shortfall, the Budget proposes General Fund solutions to achieve a balanced budget. This includes a budgetary loan of $100 million from the Board of State and Community Correction’s Cannabis Tax Fund subaccount to the General Fund from currently unobligated resources. See the Criminal Justice and Judicial Branch Chapter for additional information.

If you expect that “loan” to ever be repaid, I’ve got a bridge to sell you. What’s more likely – in fact much more likely – is that these “loans” will become more commonplace in the future and that the state will magically forget about ever doing anything to reduce the tax burden on lawful operators so that it has this piggybank.

---

California’s cannabis tax regime is a failed experiment. Every time a legitimate, licensed business shuts its doors, statewide cannabis taxes are at least partially to blame. Until the state takes a hard and serious look at the issue, don’t expect much to change without people taking the state to court and holding them to task.

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Weed & exercise Part III: Can cardio make you fail a drug test?

Leafly's Nick Jikomes, Phd, explains it all.

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Grading the Presidential Candidates on Cannabis: Ron DeSantis

We recently kicked off our series of posts grading the presidential candidates on their cannabis stances (check out the first post, on Joe Biden). Today we turn to Florida Governor Ron DeSantis, who as of January 8 was a distant second in the race for the nomination to frontrunner Donald Trump. But with Trump facing a number of challenges that could, perhaps, derail his plans for a second term, the prospect of a DeSantis nomination for the White House cannot be ruled out.

Overall Grade: C+

Back in 2022, when he was campaigning for his second term as governor, we noted that “DeSantis has made it clear that he does not support legalization, though he has ‘suggested he was in favor of decriminalizing marijuana.'” At the same time, we warned against expecting any bold moves on the issue as DeSantis turned his attention to the national stage and showing off his conservative bona fides.

As we get close to the start of primary season, we must say that DeSantis is exceeding our — admittedly low — expectations when it comes to cannabis. Recently, DeSantis declared that “he’d honor state-level decisions on [cannabis] in the event he’s elected President.” That’d be a great start: Respect for states’ rights is really all we need when it comes to cannabis from the federal government. In principle, a President DeSantis should be amenable to the idea of curbing Washington’s power, in particular its overreach when it comes to regulating interstate commerce. (Of course, we’d have to see how President Ron feels about federal power once its levers are at his disposal, or when the rights in question are those of states ideologically unaligned with him.)

Why DeSantis Doesn’t Get a B- or B

The more recent iteration of DeSantis on cannabis might be deserving of a B-, perhaps even a B, if only by way of encouraging the governor. However, his grade has to be docked on account of his seeming inability to address cannabis issues without some dig or canard, either complaining about the smell, scaremongering about fentanyl-laced cannabis, or snidely referring to medical use as a “pretext” on the part of some to get high. He comes off as a guy who cares more about letting you know he’s against legalization than about the actual prospect of legalization. The same probably goes for his gripes about the Noles being left off the College Football Playoff — Go Blue, by the way.

More seriously, under DeSantis’ watch, there has been a whole-of-government effort to second-guess Floridians when it comes to recreational cannabis legalization. His attorney general, Ashley Moody, has led senseless crusades against ballot initiatives on the subject (possibly encouraged by the state Supreme Court’s receptiveness in the past to persnickety arguments over the language in these initiatives). Meanwhile, a few days ago a bill was introduced in the Florida House to limit THC amounts in the event the ballot initiative passes. We understand that the AG and legislators are elected officials unbeholden to the governor, but DeSantis could at least express support for the idea that it should be up to Sunshine State voters to decide whether adult-use cannabis should be legal — which by the way would be perfectly consistent with his vision of Florida as “freedom’s vanguard.” His failure to do so suggests that he is, at a minimum, untroubled by the AG’s undemocratic efforts.

Conclusion

DeSantis’ disparaging comments about cannabis and acquiescence in efforts to prevent Floridians from voting on legalization mean that he cannot get anything higher than a C-. While his framing of cannabis as a states’ rights issue is encouraging, there is nothing in his record to suggest that DeSantis would move to change the federal prohibitionist framework that hinders the development of legal cannabis industries at the state level. That said, there is at least the possibility that a DeSantis Administration would strike a compromise that lays down some bright lines for states and their cannabis industries. Obaman half-measures are hardly something to get excited about, but coming from Ron DeSantis, that wouldn’t be too bad, would it?

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Leafly Buzz: 12 hot strains to smoke in 2024

Leafly Buzz’s premium weed strain roundup includes Cadillac Rainbow, Blue Lobster, and Pablo’s Revenge. (David Downs)

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MLK Day: Cannabis and Civil Rights

Last fall, I came across a memorable opinion piece by Steven King (paywalled), a guy who has written some 10 million words in his career. This particular piece was four short paragraphs, however. Seven sentences. It addressed mass shootings in the United States and it was uncharacteristically short because King concluded that the problem, though devastating, was unsolvable. “There is nothing more to say,” he concluded.

I thought of that essay this morning. I’ve been writing an MLK Day post on this blog for seven years running. I am not the best person to write on that topic, demographically, but it’s certainly something I’ve studied. The theme of my posts is that cannabis is a civil rights issue. Each year, I have demonstrated with facts (upon facts upon facts) that the War on Drugs continues in insidious ways; and I’ve looked for signs of improvement. Little has changed, however. When it has, it’s often been for the worse.

So I will keep this blog post to four paragraphs today. Suffice it to say that according to The Man, marijuana related arrests topped 227,000 in 2022, which is an increase from 2021. Three things to note: 1) that number is almost certainly underreported, because many law enforcement agencies don’t report data to the FBI; 2) 92% of these arrests were for simple possession, which is just awful; and 3) worst of all, an outsized number of those arrests were certainly of minorities and people of color– just like every other year I’ve dug into this.

More states continue to legalize cannabis and lots of people make a living in the cannabis industry. Many of them not only possess cannabis, but “traffic” at a large scale under state authority. Yet, we are going backwards on civil rights and cannabis overall. How can this be? I feel out of things to say.

______________________________________________________

Facts upon facts:

• MLK Day: Cannabis and Civil Rights (2023)
• MLK Day: Cannabis and Civil Rights (2022)
• MLK Day: Cannabis and Civil Rights (2021)
• MLK Day: Cannabis and Civil Rights (2020)
• MLK Day: Cannabis and Civil Rights (2019)
• MLK Day: Cannabis and Civil Rights (2018)

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US health agency makes history, admits cannabis has medical use

'Well, duh,' says anyone who's used cannabis medically or researched the substance.

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Exploring the depths of hemp with 3CHI’s True Strains

3CHI's True Strains product line utilizes over 40 major & minor cannabinoid to provide tailored experiences like no other.

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Forbidden V CBD—Canndigenous, Wisconsin, winter 2024

A CBD flower with citrus and cookie notes, and sativa pep.

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Cannabis and Gun Rights: Predictions for the Future

Big federal law changes in cannabis regulation are on the horizon. One area where I expect a lot of movement in the coming years is with respect to gun rights. I write on this topic fairly extensively, and you can see my links below. Today I want to talk about what changes I think are on the horizon.

Before I give my predictions, I want to summarize the state of the law. If you’re looking for more of a deep dive, I again encourage you to check out my posts below.

Today, what I’ll say is that federal law prohibits gun purchases and ownership by a person who is an “unlawful user of or addicted to any controlled substance” under the Controlled Substances Act (CSA). Anyone who buys a gun must fill out an ATF form certifying that they do not meet this criteria, even in states where marijuana is legal. If a person lies on the form, they face felony charges. This is one of the allegations leveled against Hunter Biden. If a person says they use marijuana on the form, they cannot buy a gun and the gun seller cannot sell them a gun.

In 2022, the U.S. Supreme Court decided New York State Rifle & Pistol Association, Inc. v. Bruen, which created a new test to evaluate whether Second Amendment restrictions are constitutional by answering two questions: (1) is the challenger a person with Second Amendment rights, and (2) is the restriction “consistent with the Nation’s historical tradition of firearm regulation”? Bruen had nothing to do with cannabis users’ gun rights, but many courts have used the test to hold that the federal laws discussed above are unconstitutional.

With that in mind, here are some of my predictions.

1. Rescheduling won’t change the status quo

The biggest cannabis news of 2023 was the potential that cannabis will be rescheduled to schedule III of the CSA. If that happens, I expect that some people will be confused and think that cannabis users can then purchase or possess firearms. However, the federal law that I cited above makes no distinction between CSA schedules. An unlawful user of a schedule I, III, or even V substance will be barred from firearm ownership and possession. Rescheduling will have no impact on this. Unfortunately, some people may even wind up facing legal consequences for misunderstanding the effect of rescheduling.

2. Courts will invalidate federal restrictions on gun rights

As mentioned above (and in many of my below posts), almost every court that has looked at the constitutionality of laws restricting cannabis users’ gun rights post-Bruen has found those restrictions unconstitutional. The meat of the analysis focuses on whether there is a historical tradition of restricting gun rights for people who use controlled substances.

Courts have done meticulous analyses of literally hundreds of years’ worth of laws, and nearly unanimously held that there was no such tradition. Courts have found some cases in which intoxicated people have been stripped of rights, but only while intoxicated. And as they have noted, there is simply nothing analogous to the current federal restriction.

So what I expect to happen is that the issue will be resolved in the federal courts. We may see a U.S. Supreme Court case. We may also see more federal appellate decisions. But with the amount of cases already winding their way through the federal judiciary, and nearly uniform results, it’s hard to see how things could be resolved any other way.

3. Federal and state governments will not easily adapt to court-mandated changes

Let’s assume that the U.S. Supreme Court completely overturns the federal restrictions on cannabis users’ gun rights. Will the ATF and state agencies simply change course immediately? I think not. More likely, I think a few things will happen.

First, I think ATF will drag its feet in modifying the ATF form that requires purchasers to certify that they don’t use controlled substances (the Form 4473). It could take weeks or even months before the form is changed, and during that period it’s unlikely that federal firearms licensees (FFLs) will sell firearms to people who respond affirmatively to the question.

Second, I think that there will be a push to pass another law, or maybe even some kind of federal regulation, that will pose additional hurdles for cannabis users. For example, there could be a law or regulation that prohibits intoxicated individuals from possessing firearms, and while that may withstand judicial scrutiny in concept, it’s easy to see how ambiguities in what it means to be “intoxicated” could lead to government overreach.

Third, as I predicted before, it’s entirely possible that federal or state governments could prosecute individuals for allegedly lying on ATF 4473s prior to the federal change.

Fourth, expect states to go far beyond the federal government in trying to regulate this. More on that below.

4. Concealed carry laws will be the next battleground

Assume my prediction in point 2 above is correct and cannabis users’ gun rights are restored. I expect the next big battleground to be over carrying concealed weapons (commonly referred to as CCWs). In many states, concealed or even open carry is considered a legal right. However, many other states made CCWs very difficult to obtain.

Bruen held that states cannot require CCW applicants to show some kind of good-cause, special need for a CCW. In other words, as the court held, anyone is entitled to self-defense. Following Bruen, states are required to issue CCWs but can impose certain objective requirements like passing a background check. The current CCW regime post-Bruen is often referred to as “shall-issue” but as you’ll see, that’s a misnomer in many jurisdictions.

Take California. After Bruen, CCW applications skyrocketed because of the shall-issue standard. In 2023, the state legislature passed SB-2, which, among other things, prohibited CCW holders from carrying in a host of public areas – so much so that a CCW would have been nearly meaningless. A federal judge recently held that SB-2 was clearly unconstitutional, and federal courts first stopped, and then allowed his order to stand. The issue is far from resolved and things could change a lot in the coming months. If you are looking for a succinct summary, you can check out Jacob Sullum’s reporting at Reason, most recently here.

My point here is that even though the Supreme Court’s holding in Bruen was very clear, states will try to find ways to pare back the outcomes of these cases. States will probably realize that they cannot predict cannabis users from owning firearms if the Supreme Court holds that way, but they are very likely to fight the court on things like issuing CCWs, permitting public carrying, etc. when it comes to cannabis users.

States may be able to narrowly craft laws that restrict cannabis user’s ability to possess or user guns they can legally own if they are under the influence. But based on what is happening with SB-2 and other similar issues, it’s probably not going to be narrow and there will probably be a whole lot of court battles going forward.

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If you want to read my prior posts on this rapidly evolving area of the law, see below:

• What the Hunter Biden Indictment Means for Cannabis Users
• Yet Another Court Strikes Cannabis Gun Control Law
• Arkansas Passed a Cannabis Gun Rights Law. It Won’t Work.
• Feds May Restrict Cannabis Users’ Gun Rights Even After Changes in Law
• ATF Clings to Cannabis Gun Rights Restrictions
• Yet Another Federal Court Decision on Cannabis Gun Rights
• State Cannabis Gun Right Laws Won’t Work
• A Cannabis Gun Control Circuit Split is Coming
• Will Gun Control Laws Soften for Cannabis Users?

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How THC impacts your heart, lungs & exercise performance

Cannabinoids & Exercise Part II.

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Free Webinar Tomorrow, January 10: Ask us Anything!

Register Here.

Heading into 2024, the cannabis industry is as dynamic as ever. New states continue to come online, legacy states continue to refine their programs, and the federal government is looking harder at cannabis than ever before — starting with a purported recommendation by Health and Human Services to move the plant to Schedule III, and renewal of the (extended) 2018 Farm Bill.

Our cannabis business attorneys have thoughts on all of this and more! On January 10th, please join Harris Sliwoski partners Vince Sliwoski (Oregon, transactions), Jesse Mondry (Oregon, litigation) and Griffen Thorne (California and Washington, transactions) for a wide-ranging and informative discussion on the state of the cannabis industry headed into 2024.

This lunchtime webinar will be conducted in an “Ask Us Anything” format, giving you an opportunity to ask questions and gain insights into this complex industry from seasoned legal practitioners. Questions can be submitted in advance of the webinar at the registration links above and below. We will also take questions from attendees in real time on January 10th.

For now, we anticipate covering the following hot topics:

1. Forecasts for the Cannabis industry in 2024
2. Regulatory risks and challenges
3. Strategies for navigating the ever-changing business landscape
4. Deal trends
5. Litigation Trends

Whether you are a cannabis operator, investor, service provider, or just curious about the future of cannabis, this free webinar is not to be missed.

See you Wednesday at 12pm PT!

Register Here

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Fine dining and dank: Video review of Irie by PleasureMed

A dispensary with a wine bar and restaurant? Oh my.

The post Fine dining and dank: Video review of Irie by PleasureMed appeared first on Leafly.

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Grading the Presidential Candidates on Cannabis: Joe Biden

Gentle readers, once again we find ourselves in a Presidential election year. Feel free to join me in tuning out the deluge of reporting and social media as to matters you cannot control in the slightest, and which are mostly negative and discouraging.

Except for this blog post, which I promise will be great. In each presidential election cycle, the Canna Law Blog runs a classy series of posts grading the candidates as to their positions on cannabis. Four years ago, Donald Trump was President, which means we graded Trump and many Democrats. This time, it’s the opposite. We will grade President Biden and his Republican challengers, including Donald Trump. But today we start with #46, Joseph Robinette Biden Jr. (Hunter’s dad).

Overall Grade: C

“C” is a middling grade, obviously, but it’s progress for Biden. Last time around, we (one of our law clerks) gave him a “D.” He certainly earned it. Biden was the only viable Democratic candidate who opposed cannabis legalization in 2020. In the decades before that, he was entirely bass-ackwards on things, being described by knowledgeable persons as “the architect, in all ways, of the war on drugs.” Yuck.

Biden’s positions on cannabis today

Things have changed a bit in the past quadrennium. The President has not pivoted as dramatically as Vice President Harris claims to have done on marijuana reform, but we’ve seen some progress. Exactly how good or bad Biden has been is a source of much debate. The people who argue that Biden is “responsible for the most significant marijuana reform in American history”, and those who send him thank you notes, are right. The people who argue that Biden hasn’t done nearly enough on marijuana reform are also right. I’m mostly one of the latter, correct people.

Let’s take a quick look at what Biden has and hasn’t done so far.

1. October 2022 pardons

In October of 2022, Biden pardoned 6,500 people previously convicted of “simple possession” of marijuana under federal law. I observed:

The pardons don’t release anyone from prison, as no one was in federal prison for this dubious crime. Everyone serving time for simple possession of cannabis is in state prison for violations of state (and not federal) controlled substances laws.

It’s also important to understand that nearly everyone arrested and prosecuted for federal cannabis crimes is nailed for trafficking (i.e., distribution and/or intent to distribute). Biden didn’t pardon any of these people, including the nonviolent traffickers. I’m guessing none of them will ever see a presidential pardon. Their only hope is through proposed legislation like the MORE Act or the CAOA, which would make non-violent cannabis crimes expungable, automatically or otherwise.

Finally, the pardon is also just a “pardon.” It doesn’t expunge the underlying convictions at issue, or clear anyone’s record. In many ways, the 6,500 pardonees find themselves in a similar spot today as prior to October 5. They are still walking around as convicted criminals of record, and will be for the foreseeable future.

I stand by the critique.

2. October 2022 exhortations to state Governors

Concurrent with his feeble pardons, Biden urged all state Governors to issue state-level pardons for state-level cannabis crimes. I was underwhelmed with that effort too, explaining again that the pardons were not expungements, and that the crimes included simple possession, only. I also wrote:

Rather than direct his attention at state-level actors, however, or in conjunction with doing so, Biden should endorse one of the many federal legislative proposals to deschedule cannabis. There are some good ones. See:

• Federal Cannabis Legislation Roundup: Part 1
• Federal Cannabis Legislation Roundup: Part 2
• Federal Cannabis Legislation Roundup: Part 3

Recall that Biden’s VP, Kamala Harris, was Senate sponsor of the MORE Act. That one would deschedule cannabis, among a host of other provisions. Come on, man!

Biden still hasn’t come around on federal legislation, and it appears that his message to Governors had little effect. Yes, the Oregon governor erased some 47,144 convictions the following month, but that was in the works already. The Idaho governor, on the other hand, issued a predictably annoying response to Biden’s request. In all, we haven’t seen much movement here, and nothing one could tie directly to Biden’s “follow me” missive.

3. October 22 request to Health and Human Services (HHS)

This is the big one, and the reason people are split as to Biden’s cannabis doings. After Biden requested that HHS review the scheduling of marijuana under federal law, the Department recommended to the Drug Enforcement Administration (DEA) that it should reschedule marijuana, down to Schedule III. I analyzed what a move to Schedule III would generally mean here.

The HHS recommendation occurred in late August, 2023. What DEA ends up doing here is far from certain, and things seem to be moving pretty slowly. All of that was expected: our colleague Shane Pennington, an authority on the sausage-making process, recently opined that any status change probably won’t occur until after the fall elections. What Biden did here may ultimately be helpful, but certainly not as helpful as possible. Biden passed the buck, putting us on an uncertain, circuitous path.

4. December 2023 pardons and clemency grants

This proclamation came in over the holidays, probably to mitigate any controversy. Not that it seems terribly controversial. The December action pardoned convictions for simple possession and use on federal lands. It seems designed to fill in some gaps from the October 2022 pardons, though it doesn’t extend to military convictions, which is odd: affording the same small grace to military personnel as common civilians seems like a no-brainer.

Biden separately commuted the sentences of 11 Americans who were serving “unduly long sentences” with respect to non-violent offenses related to other drugs. That one was helpful and should have a more profound impact on the lives of those few individuals.

Conclusion

Biden has come a long way on cannabis over the decades, even if he hasn’t smoked any weed–as suggested by a primary challenger. However, the President had a chance to do momentous things without much effort. Instead, he has chosen what he probably thinks is a middle path, and simply ignored certain issues issues like the scourge of “gas station weed” from hemp. Overall, I don’t think Biden’s actions are consistent with his promises.

After his October 2022 efforts, I wrote:

On the campaign trail, Joe Biden pledged to “decriminalize the use of cannabis and automatically expunge all prior cannabis use convictions.” That promise sits moldering right here on the “Black America” page of his website. Biden has done nothing. During the first year of his presidency, it seems likely that 300,000 (or more) Americans have been arrested and convicted of simple possession of marijuana. Penalties range from low-level misdemeanors to life imprisonment without parole in extreme cases.

The link to Biden’s website page referenced above is now removed: instead you’ll be asked to donate to the 2024 effort if you deign to click through. Feel free to do that if you’re fine with half measures cannabis, from ongoing criminalization to an administrative scrum which may or may not lead to Schedule III.

So I’m sticking with the “C” grade for President Biden. Stay tuned for coverage of the other party’s candidates…. Should be fun.

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How to get a medical card in Texas

Hoping to access low-THC marijuana products in Texas? Use this step-by-step guide to learn how to get a medical card in Texas.

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What is the Deal with California Close Corporations?

We spill a lot of ink on the Canna Law Blog talking about different types of business entities that cannabis entrepreneurs often use. In most cases though, the choice is between LLC and corporation. It may come as a surprise to some readers that some states have many different subcategories of corporations, including California. Today I want to examine a rare, though sometimes useful entity: the California close corporation.

What is a close corporation?

You’ve probably heard the term “closely held corporation” tossed around quite a bit. The term usually refers to a corporation with few shareholders, or a corporation with shares that are not publicly traded. However, a closely-held corporation is different from a close corporation, which is actually a special type of California corporation formed per section 158 of the corporations code. If you’re wondering what the state calls a run-of-the-mill corporation, the term is “general stock corporation.”

A close corporation has a few key features that distinguish it from a general stock corporation (or one of the other dozen or so corporation types that exist in the Golden State):

• The articles of incorporation and stock certificates must state that the entity is a close corporation
• It can only have 35 shareholders – if there are more than 35 shareholders , the company stops being a close corporation regardless of what the articles or stock certificates say.
• The main governing document is a shareholders agreement which can relax many of the normal formalities that would apply to a general stock corporation. More on that below.

Why choose a close corporation?

Close corporations can be great for smaller ventures where the shareholders want a corporation but do not want the formality baggage that comes along with it. As mentioned, the shareholders can relax many of the normal formalities of a general stock corporation, including by even participating in the management of a close corporation – something reserved to directors and officers of a general stock corporation. Close corporations can also vary distribution provisions much like you’d see with a partnership (LLC).

So for small ventures with only a few shareholders that do not want to adhere to strict corporate formalities but who still want the corporate form, close corporations can offer some unique benefits. But there are still some drawbacks.

When to avoid a close corporation

Close corporations are by definition limited to a fixed pool of individuals (35). This is great if the shareholders want to keep things private, but not so great if they want to fundraise and sell equity. Sure, they could “convert” to a general stock corporation, but that would mean they’d need to fundamentally change the governance of the entity to do so.

Additionally, shareholders in close corporations also need to be concerned with liability issues to the extent they participate in the management of the company. In your average general stock corporation, shareholders have very limited liability, because they simply passively own a piece of the pie. But once that changes and they start running the show, they may have duties to their co-shareholders that could lead to disputes when things go south.

One other thing that may deter founders from forming close corporations is the fact that any shareholder can file a petition to involuntarily dissolve a close corporation. This is different from a general stock corporation where only shareholders with larger percentages of equity could initiate such a proceeding. In other words, in a two-shareholder close corporation where one has 99% of the stock, the 1% shareholder could initiate a dissolution proceeding.

The involuntary dissolution petition issue could probably be handled in a shareholders agreement, but these are often overlooked, even with close corporations. And failing to get a shareholders agreement could be a huge problem that undoes a lot of the benefits of forming a close corporation in the first place.

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In future posts, I’ll make sure to outline some of the less common entity types that cannabis companies sometimes explore. But overall, I don’t see close corporations used often in the cannabis industry. There are definitely companies that could benefit from this more “exotic” form of entity, if done correctly.

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5 easy THC cocktails for a Cali Sober Drynuary 2024

Featuring Sprig, Calexo, Fable, and Pamos THC drinks.

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Which states will legalize marijuana in 2024?

A half dozen states could pass legalization laws this year. Get the details here!

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Executing Cannabis Contracts

I spend a LOT of time blogging about the importance of written cannabis contracts as a general concept (most recently here or here). Today I want to talk about something that a lot of people overlook when it comes to cannabis contract drafting: how the contract will actually be signed. You may think this is in the weeds, and you’d be right to think that. But issues with properly executing cannabis contracts are more common than you’d think, so let’s dive in a bit.

Who is signing? And can they sign?

Most cannabis contracts are between entities, not individuals. When an entity is a party to a contract, a person needs to sign on behalf of the entity. So, each signing party will need to designate an individual who can fulfill this role. And that person will need to be properly authorized to do the signing.

Authorization here is a key concept. Generally speaking, only certain persons are authorized to sign contracts and bind an entity. For example, a budtender probably wouldn’t be authorized to sign a cannabis lease. Usually, signature authority is reserved to officers or managers of a company. At the same time, non-officer procurement employees may be authorized to sign purchase agreements (but not employment agreements). It really depends on the circumstances.

Because of this, you’ll often see representations within a cannabis contract that the person signing on behalf of a company is fully authorized to do so. Still, it’s important to determine whether the signing counter-party actually has that authority, especially if their identified title is one that generally does not have that kind of authority. It will make for one less thing to fight about if a deal goes south.

How are cannabis contracts signed?

Now let’s say two entities have negotiated a cannabis contract to finality, have selected duly authorized officers to sign, and are ready to sign. Now how do they sign? Do they need to drive to the same office and hand sign the same original copy? Can they each print, sign, scan, and exchange counterpart signature pages? Can they sign with Adobe or some kind of digital signature tool? Can they use DocuSign or an e-signature tool?

The answer to this question is: it depends. There are a few things that parties absolutely have to consider:

1. Does state law require wet (hand) signatures for this type of cannabis contract?
2. Must the cannabis contract be notarized under state law? If so, is a digital or e-signature notary sufficient or does it need to be a wet signature?
3. Even if state law allows digital or electronic signatures, do the circumstances warrant wet signatures? There may be circumstances where, despite state law, an original signature is important. For example, states may be silent on whether a personal guaranty must have a wet signature, but many lenders nevertheless insist on hand signatures on personal guarantees so that there can be no dispute about validity later down the road.
4. If digital or e-signatures are permitted, what are the specific requirements under applicable law? And what did the parties say about signatures within the cannabis contract? Some jurisdictions require parties to consent to electronic signatures in certain manners, which means you’ll often see cannabis contract provisions authorizing e-signatures.

What happens if someone doesn’t sign the cannabis contract?

Here’s a relatively common fact pattern: Company A and Company B negotiate a cannabis contract, which is in final form. One or both of the parties does not sign the contract. But, the parties perform under the contract as if it had been signed. A dispute arises and one side wants to claim breach of the contract. What happens?

The answer is complicated, and depends on state law and the circumstances. In some cases, a court may find that the contract was binding on the parties despite not being executed, if the parties performed consistently with the terms of the unsigned cannabis contract. Fact patterns usually aren’t that neat though – most of the time in these circumstances, the parties perform sort of in line with the unsigned contract, which leads to an awful lot of headbanging in subsequent litigation.

The point here – which is one I often make – is that it’s always better to just properly sign a contract rather than deal with the repercussions down the road.

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Stay high in Dry January on Blue Dream—2024’s first Leafly HighLight strain

America’s top pot is the perfect on-ramp to cannabis in 2024.

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Delta-8 Trademarks Update

The impact on Delta-8 THC (“D8”) of AK Futures v. Boyd Street Distro, a 2022 Ninth Circuit decision, has been widely exaggerated. As my colleague Griffen Thorne explains:

What AK Futures actually did was affirm a preliminary ruling in a trademark dispute where legality of delta-8 products was one of a number of issues at play. In order to have a protectible trademark, the good or service must be lawful in commerce. The infringer argued that delta-8 products were not lawful. As part of the preliminary injunction, the Ninth Circuit agreed that the plaintiff was “likely” to succeed in establishing that the products were lawful, if they came from hemp and if they contained under 0.3% delta-9 THC. This was a preliminary ruling, but it’s likely that the court would rule similarly on some sort of final ruling. However, to claim that this case is the be-all-end-all for delta-8 is just, well, wrong. The case is not precedential anywhere outside of the Ninth Circuit.

The AK Futures court held that “AK Futures is likely to succeed on its trademark claim because its delta-8 THC products are not prohibited by federal law, and they may therefore support a valid trademark.” A year and a half later, have any D8 products supported a valid trademark?

According to USPTO, as of January 2, 2024, it has registered four trademarks with the term “delta-8” included in their goods and services identifications. In all four cases, the mention of D8 is exclusionary, stipulating that the goods or services described cannot be or involve goods containing delta-8. For example, one of the descriptions is “Bar soap; Body butter; Body scrub; Body sprays; Bubble bath; Lip cream; Shower gel; Skin lotions; Cosmetic bath salts; Lip balm … all of the foregoing not containing delta-8 tetrahydrocannabinol THC …”

In this case, initially USPTO refused the application, noting in an office action that:

the Applicant’s website clearly states ‘All spa products are made with CBD and Delta8 THC!’ Thus, the identification of goods is broad enough to include goods that contain Delta-8. As discussed above and as reflected in the attached documents, tetrahydrocannabinols are listed on Schedule I under the CSA. Specifically, Schedule I identifies ‘THC, Delta-8 THC, Delta-9 THC, dronabinol and others.’

The office action goes on to explain that 2018 Farm Bill’s carveout of hemp from the Controlled Substances Act’s prohibition on marijuana “explicitly applies to delta-9 THC, and this delta-9 limitation language to the identification of goods does not convert Schedule I unlawful goods (e.g., delta-8 THC) to goods that may be lawfully used in commerce.” Bear in mind that the office action was issued on July 7, 2022 – a month and a half after the AK Futures decision was handed down – yet USPTO did not equivocate and plainly referred to delta-8 goods as unlawful.

There are over a hundred pending applications identifying delta-8 goods and services. Perhaps in its treatment of these, USPTO will take a different tack. So far, however, it is clear that AK Futures did not change USPTO’s approach and registration of a trademark in connection to D8 products has not occurred.

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Here’s the euphoric chemistry behind your runner’s high

How & why the endocannabinoid system responds to physical activity.

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Star signs and cannabis strains: January 2024 horoscopes

New year, same expert pairing of strain and horoscope, Leafly nation! This month is full of opportunities to get our finances, careers, artistic pursuits, and relationships in order. Here are the best strains for each sign to reach your full potential.

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Gas Face—Seed Junky Genetics, CA, winter 2023

An independent, expert review of premium California cannabis flower.

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New Year, New Laws: Weed workers’ rights kick in, and more

California blazes a trail yet again.

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Happy New Year – Cheers to 2024!

Wishing everyone a bright, joyful, and prosperous New Year!

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