Help for California’s fledgling cannabis industry finally appears to be on the way. For years, the industry has shouldered heavy taxes – a 15% state-wide excise tax, sales and use taxes up to 10.75%, and local business licenses taxes up to 15% in some jurisdictions. And, to top it off, California imposed a cultivation tax on cannabis flowers of $161.28 per dry-weight pound. While growers could sustain this tax burden when business was good, wholesale prices plummeted in the fall of 2021 and left growers unable to turn a profit.
Residents of California often complain about high taxes, but no one pays higher taxes than the cannabis industry. In addition to the Federal 280E penalties, the cannabis industry in California is subject to a 15% state-wide excise tax, sales and use taxes that can reach up to 10.75%, and local business licenses taxes which are as high as 15% in some jurisdictions. On top of these excise taxes, which combined can approach 40%, there is a state cultivation tax currently imposed on cannabis flowers at a rate of $161.28/dry-weight pound (and some local jurisdictions impose additional cultivation taxes). …
Continue Reading California Cannabis Farmers May Finally Get Some Relief
For many in the cannabis industry, April 1, 2022 is seen as a day of reckoning following the July 2021 passage of Assembly Bill 141 and Senate Bill 160 (collectively, the Cannabis Trailer Bill). In an attempt to transition to an annual licensure program, April 1st marked the beginning of the end for provisional cannabis licensure. It also ushered in significant changes to renewal process for previously granted provisional licenses. These modifications now require applicants to comply with the California Environmental Quality Act (Pub. Res. Code §§ 21000 et seq.) (CEQA), a complex statewide policy of environmental protection fraught with potential traps for those unversed in the law, before an operator is eligible to be awarded a cannabis state license. This requirement alone carries the potential to create a much higher barrier to entrance into the cannabis market.
Continue Reading No April Fools: Starting April 1st, Cannabis Operators Face CEQA Compliance Requirements for State Licenses
Although Congress failed to pass federal legislation legalizing cannabis in 2021, the push to end the federal prohibition of the ever-growing industry continues to gain steam. While Republican lawmakers have traditionally opposed decriminalization, more are beginning to support or even introduce new cannabis legislation. On top of that, recent polls indicate that an estimated 68% of Americans now support legalization with many consumers now viewing cannabis as less dangerous than alcohol. In addition, the industry’s total addressable market has been forecasted to grow to $84B by 2026.
Continue Reading Cannabis Legislation Year-in-Review
California’s comparable-to-organic “OCal” certification program for cannabis and nonmanufactured cannabis products officially went into effect on July 14, 2021. The OCal program represents a new branch of state cannabis regulation, but remains firmly rooted in existing state and federal organics standards and procedures. Its goal is to “assure consumers” that certified OCal products “meet a consistent standard comparable to standards met by products sold, labeled, or represented as organic.”
Continue Reading California Breaks New Ground With OCal: Answers to Key Questions About “Comparable-to-Organic” Cannabis
In January 2020, Illinois legalized the use of recreational marijuana through the Cannabis Regulation and Tax Act (“the Act”). Two months later, many employees began working remotely because of the pandemic. Today, work-from-home continues to blur the lines between “work” and “home” in countless ways, and employee drug policies are no exception. The new world of remote work has left many employers wondering what to do with their drug policies now that cannabis is legal and their employees are remote or hybrid. Can an employer lawfully prevent their employees from using cannabis while working from home?
Continue Reading What Do I Do With My Workplace Drug Policy Now That Cannabis Is Legal in Illinois and My Employees Are Remote?
On March 31, 2021, New York Governor Andrew Cuomo signed the Marihuana Regulation and Taxation Act (the “MRTA”) into law, making New York the latest state to legalize recreational marijuana. …
Continue Reading New York State Legalizes Recreational Marijuana: What Employers Need to Know
The end of 2020 was not the end of the California Legislature’s focus on employment-related legislation. Just two months into the new year, the Legislature has already introduced several bills addressing the workplace that could impact employers who still may be implementing coronavirus-related legislation. This article discusses two such bills on the horizon that employers will want to follow as they work their way through the Legislature.
Continue Reading California Legislative Update: Employment-Related Bills on the Horizon
This article is the second part of a two-part article which provides an overview of Texas cannabis-related legislation and regulations affecting Texas cannabis operators and consumers. Part I covered the State’s regulations for limited medical cannabis use and consumption. In this article, we will discuss the State’s hemp program for both consumable and non-consumable products.
Continue Reading Hemp Revisited: Beyond Medical Use, Texas Cautiously Legalizes Consumable and Non-Consumable Hemp Products
Even two weeks after Election Day, jurisdictions nationwide are riding high after a number of positive wins related to the possible systemic legalization of cannabis use nationwide. As of November 3, 2020, the pendulum now undeniably swings in favor of cannabis, with medical cannabis legal in 33 states and recreational adult-use permitted in 12 states and Washington D.C. …
Continue Reading Green Wave: The Latest Election Cycle Brings Hope for Standardized Cannabis Legalization
The viability of California’s cannabis delivery businesses continues to hang in the balance as trial in the landmark litigation between the Bureau of Cannabis Control (BCC) and over two dozen local municipalities was postponed at the eleventh hour. In her tentative ruling, issued the afternoon before the much-anticipated bench trial in County of Santa Cruz v. BCC (County of Fresno Super Court, Case No. 19CECG01224), Judge Rosemary McGuire questioned the ripeness of certain municipalities claims challenging implementation of California Code of Regulations, Title 16, section 5416(d) (Regulation 5416(d)), which allows delivery of cannabis to any jurisdiction within the state.
Continue Reading Long-Awaited Trial in Cannabis Delivery Litigation is Again Postponed Until November