Sean Hocking, Author at Green Market Report

Sean HockingSean HockingNovember 16, 2018
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2min90

Danish Cannabis Pilot Program Reaching End of First Year, A Model for Others to Follow

While it has gotten decidedly less English-speaking press than other countries in Europe on the front edge of cannabis reform, Denmark’s pilot four-year cannabis program is chugging along nicely and can help provide a model for other European Union nations….

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Big Canadian Producers Announce Major German and EU Moves

As the German cultivation bid deadline ticks down, the big Canadian Licensed Producers (LPs) are solidifying their presence in Germany and far beyond across Europe.

Two, in particular, have made major announcements last week, coming hot on the heels of Aurora’s Polish expansion.

Canopy Growth Corporation, continues to move aggressively across Europe to solidify its presence across the continent. As of the beginning of November in fact, Canopy’s European HQ in Frankfurt announced that the company is currently eying additional cultivation sites in…

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Sean HockingSean HockingNovember 16, 2018

1min90

The City of Pasadena is swinging into full gear and getting ready to release and accept commercial cannabis business permit applications.

Last Tuesday, November 13, the City held a workshop to address their application process, as well as set a timeline for when the applications will be released, submitted, and awarded.

The City is going to be accepting questions regarding their process until December. 7, 2018 and will post the application, along with Frequently Asked Questions, to their website, on December. 14, 2018. The tentative window they set to accept applications is between January 1, 2019 and January 31, 2019.


Sean HockingSean HockingNovember 16, 2018
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11min110

Right at the start, the city of Fontana, CA., might have doomed its own effort to enact a harsh ordinance governing the personal cultivation of cannabis.

Source  https://www.leafly.com/news/politics/judge-rules-in-favor-home-growing-marijuana-in-california

Just before the city council held its vote in January 2017, city manager Ken Hunt told council members, right out in public, “It is our intent . . .  that this ordinance is not a permissive regulation, it is a restrictive regulation.” He added: “By adopting this, you are placing more restrictions on the personal growth of marijuana.”

He might as well have said, “we intend to break state law.”

“Localities can’t do what Fontana did, and if they do, they’ll be sued.”

Tamar Todd, director, office of legal affairs, Drug Policy Alliance

On Nov. 2, state Superior Court Judge David Cohn agreed, striking down most of the ordinance, including its extraordinarily restrictive provisions that included high permit fees and, perhaps most remarkably, a requirement that anyone who wanted to grow cannabis for their personal use must agree to allow city officials inspect their homes.

“I remember that quote [from Hunt]”, says William Freeman, who fought the law in his capacity as senior counsel for the American Civil Liberties Union of California. “It was very clear from the start that they were saying ‘we don’t really care what the voters say.’”

Nor, apparently, did Fontana officials care very much what state legislators say when they pass laws.

The text of Proposition 64, called the Adult Use of Marijuana Act, is clear: Unlike the state of Washington, personal cultivation is allowed, throughout the state. Adults can grow up to six plants in a private residence for personal use. Localities can enact “reasonable” restrictions, but Fontana’s were so unreasonable as to effectively outlaw personal cultivation, Cohn ruled, saying the ordinance went “too far.”

The ordinance required permits, and disallowed them for people who owed the city money in fines and who had a felony conviction for possession of a controlled substance —including cannabis—in the last five years.

And to get a permit, residents had to agree to allow a city employee inspect their home to determine whether utilities were up to local codes. They also had to pay to have their criminal backgrounds checked through Live Scan—which can cost up to $70—plus pay another $25 for a state review of their records. The state law, AUMA, doesn’t mention any of that.

Then there were the permit fees, which were outlandish. The cost was $411 for the first year, and $253 every succeeding year. Almost needless to say, Fontana has never issued a single permit, which was the point all along.

“They were trying to have a dry city, but that’s not what’s contemplated under state law,” says Joe Rogoway, an attorney who represents clients in the cannabis business. He says that Fontana’s effort, like similar (if less severe) efforts around the state, was a purely “ideological” exercise—the city government is anti-cannabis.

Cities Will Think Twice

It’s unclear what effect the judge’s ruling will have on other efforts by local governments to restrict cannabis, either for private citizens or for businesses. Legally, it likely will have no effect at all, Rogoway says, because the ruling happened in a lower court, so it can’t be used as precedent for any future rulings. It can’t even be cited by lawyers in other cases.

However, it might get at least some local officials to think twice about going too far to thwart the will of both the state government and the majority of Californians, says Tamar Todd, director of the office of legal affairs for the Drug Policy Alliance, which together with the ACLU represented the plaintiff who sued the city of Fontana, Mike Harris, a local resident and longtime medical cannabis patient.

Cohn’s ruling, Todd says, “is a clear indication that localities can’t do what Fontana did, and if they do, they’ll be sued.”

Cities Lag On Legalization

That doesn’t mean the fight is over. Not by a longshot. Thanks largely to restrictive local laws governing permitting, zoning, and other aspects of cannabis, the marijuana business is still absent from about 65% of the state’s localities. Cities and counties have proven to be the weak link in implementing reform.

Mainly, this takes the form of cities and counties simply refusing to issue commercial permits, which they are allowed to do under AUMA. Sometimes, it takes the form of local governments, perhaps trying to have it both ways, technically allowing cannabis businesses to set up shop while also enacting ordinances making it difficult for them to do so.

And finally, there are the cities that, like Fontana, are trying their best to circumvent AUMA’s explicit provisions allowing personal cultivation—for example, by requiring permits (even if not for such high fees). Hundreds of cities have banned outdoor cultivation altogether. The ACLU’s position, says Freeman, is that “there shouldn’t be any application or permit process at all.” AUMA simply says it’s legal to grow up to six plants, he notes, and anything localities do to restrict that right goes against the intent of the law.

“Cities can’t enforce federal law. They are not an arm of the federal government.”

Joe Rogoway, attorney, California

Fontana had argued that it was within its rights to enact such heavy restrictions because cannabis is still a felony under federal law. Cohn dispensed with that argument by citing California’s rules governing state-local legal interaction: essentially, local governments can’t do anything that thwarts state law. “It was a non-sensical argument,” Rogoway says. “Cities can’t enforce federal law. They are not an arm of the federal government.”

It’s not clear what might happen next. Fontana officials declined to comment. They might “tinker” with the ordinance to make it as strong as possible, Rogoway says, but it’s unlikely they’ll enact anything like the ordinance that was struck down. Legally speaking, that will affect only Fontana. What will happen in the rest of the state remains to be seen.

Todd, of the Drug Policy Alliance, says it will likely take a while before the state reaches a tipping point, and most localities are fully on board with legal cannabis, and the business can really thrive.

“People say, ‘Oh, we’re ten months in and it’s not working,’” she says. “But legalization requires a long transition time.”

How long? “At least ten years,” she says.


Sean HockingSean HockingNovember 16, 2018
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3min150

Here’s the announcement sent out as part of their latest MJ Biz Vegas update

 

NCBA Membership Rates Increase November 18

NCBA is incredibly proud of our membership, your engagement with the association, and the growth we have shown over the past year. In an effort to further expand our services to you, we have reached a point when we must increase the price of our annual membership.

On November 18, just following our Las Vegas Solicitors’ Soiree, the price of annual membership will increase from $200 to $350.

To lock-in the current rate of $200 for one more year, we encourage you to update your billing information and renew your membership today.

The increased level of funding will enable us to:

  • Offer a greater number of Regional Networking Events.
  • Expand our in-person educational offerings to additional venues.
  • Increase the number of membership benefits available to you, which may include, among others, discounts on:
    • Industry conferences.
    • Services providers that will help you in your practice (legal research tools, case management software, and more).
    • Benefits that you will be able to pass on to your clients (market research tools, access to financial service providers, and more).
  • Increased committee activity, and expanded presence in shaping the cannabis industry as it grows.

Discounts on the new prices will be available for group rates and financial hardship. Please inquire at info@canbar.org for more information.


Sean HockingSean HockingNovember 15, 2018
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8min110

MJBizCon – Productive versus Madness – we need to begin by stating that we have a built-in bias against cannabis industry conferences and trade shows. Pardon us for being cynical, but the combination of NCIA’s predilection for “pay to play” for speakers, the myriad of attorneys and “consultants” have embraced tradeshow appearances over serving the needs of real clients, and what seems to be a focus on “partying” over actually getting business done has left a taste in our mouths that we lovingly refer to as “smells bad, tastes worse”.

The focus [perceived or real] on offsite “parties” and events where both cannabis product and alcohol flow freely may have some value for “winks and nods” but, can’t possibly be conducive to the conduct of substantive business development and negotiation. We have heard from multiple individuals in the industry that they didn’t bother purchasing a ticket for the conferences presentation sessions but opted for an “exhibits only” pass and indicated that they were going to set up meetings outside of the conference, or just look for individuals that they were seeking to engage with at the parties.

Our view is that everyone attending a week-long party in Las Vegas is neither the most productive use of everyone’s time, and it certainly doesn’t do much to project a professional or even business-like image for the commercial cannabis industry.

MJBizCon – Productive versus Madness

We have written extensively about our thoughts [see Gumballs] on steps that the legal cannabis industry needs to undertake urgently to shore up its image and seek support at the Federal level to get cannabis off of DEA Schedule 1. The four pillars that we believe the industry needs to focus on are:

  • Regulated Markets

The creation and development of regulated, legal markets that are perceived as fair, having a reasonable cost without the complexity that so onerous that compliance is impossible [Our view is that California is well on its way to achieving that goal, though there are some significant corrections, notably with respect to compassionate medical use, compliance, and lab testing, and banking to be addressed.]

  • Licensed Professionals

The development of a significant pool of licensed professionals, particularly attorneys, certified public accountants, enrolled agents [yep, that group that I poke at all the time is critical here assuming that they have the requisite thirty hours or accounting], and scientists [my term for the chemists, healthcare, and others with graduate-level degrees and professional licenses that are critical to demonstrating the integrity of the industry to the regulators.

  • Competent Skilled Workforce

The workforce that performs substantially all of the labor and services [distinct from Licensed Professionals] that provides skilled, semi-skilled and manual labor for the cannabis industry [akin the enlisted ranks in the military] are critical. The workforce needs to be recognized as performing legal, legitimate services that feed families and contribute to communities, part of the legal immigration, taxation, and healthcare systems [free from the scourges of human trafficking and scourges of discrimination, sexual harassment and abuse]. Cannabis needs to lose its status as “a plant with an attitude” and be recognized for what has become, legal agricultural activity in California and other states. [The larger discussion includes, delisting from DEA Schedule I, acceptance by FinCEN and the banking system and a change in IRC Sec. 280E, possible replacement with an excise tax.].

  • Industry Self-Governance, Guidelines, and Process

The commercial cannabis industry needs to follow through on the creation of organizations, standards, and procedures to demonstrate its integrity. The process is going to have to include leadership from industry associations that take a long view with respect to lobbying activity, an objective process for the selection and sponsorship of content providers at trade shows and on websites. The abhorrent practices of “pay for play” for platform speakers, and tolerance of incompetence, outright criminal conduct, and the pontification of rubbish, blather, and gibberish as “expert knowledge” needs to cease. Pseudo-scientific claims and self-aggrandizement can NOT be tolerated if the industry is going to have credibility.

The coming months are going to be critical for the industry…we would certainly hope that everyone considers the need to step up and demonstrate the attributes that would support the respect and recognition that the industry is seeking.

MJBizCon – Productive versus Madness


Sean HockingSean HockingNovember 15, 2018
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13min230

SAFE STREETS ALLIANCE V. ALTERNATIVE HOLISTIC HEALING

A federal jury recently found a Colorado cannabis cultivator not liable for violating the federal Racketeer Influenced and Corrupt Organizations (RICO) statute following a three-day jury trial. The trial followed three years of litigation, including an appeal to the Tenth Circuit. While the defendants may be celebrating a hard-fought victory in this battle, the war between marijuana businesses and hostile neighbors is far from over.  In fact, the media narrative seems to have missed the point of this case. Even though a Colorado jury sided with the marijuana business, the court’s instruction that the business constituted a criminal enterprise for purposes of the RICO statute, as a matter of law, shows that RICO liability remains a very real concern, even for state-legal businesses.

To put the case in context, it is worth looking at the history of the matter. The plaintiffs were owners of property adjacent to a medical marijuana facility. The defendants were the medical marijuana facility and affiliated individuals and entities. Over the course of multiple rulings [See Safe Sts. All. v. Alt. Holistic Healing, LLC, Civil Action No. 1:15-cv-00349-REB-CBS, 2016 U.S. Dist. LEXIS 5934 (D. Colo. Jan. 19, 2016); Safe Sts. All. v. Alt. Holistic Healing, LLC, Civil Action No. 1:15-cv-00349-REB-CBS, 2016 U.S. Dist. LEXIS 36113 (D. Colo. Mar. 21, 2016)], the federal district court dismissed the case entirely in 2016 for failure to state a claim. In a June 17, 2017, decision, however, the Tenth Circuit reinstated certain counts, including the plaintiffs’ RICO claims. Safe Streets Alliance v. Hickenlooper, 859 F.3d 865 (10th Cir. 2017).

The appellate court affirmed the lower court’s dismissal in part, rejecting the plaintiffs’ arguments that Colorado’s recreational marijuana laws were preempted by the federal Controlled Substances Act (CSA). The ruling was limited, however, because it was based on the court’s conclusion that none of the plaintiffs had standing to make such a claim because none possessed any substantive federal rights that were injured by the state law.

On the plaintiffs’ RICO claims, the Tenth Circuit reversed the dismissal. The plaintiff landowners claimed the defendants’ marijuana cultivation facility injured the value of their property. They also claimed that “noxious” odors from the facility negatively affected their ability to use and enjoy the property for recreation and that the operation of a federally illegal marijuana cultivation facility diminished the value of their property. The court held that each of these theories adequately stated an injury to property for purposes of RICO liability and remanded the case for a jury trial.

The jurors in the case were instructed that the plaintiffs had established the first element of a RICO claim as a matter of law, i.e., that defendants’ operation of the marijuana cultivation facility was a violation of RICO. Accordingly, the jurors were only required to answer whether the plaintiffs had suffered an injury to their property interest and whether the injury, if any, was proximately caused by the RICO enterprise. The completed verdict form submitted by the jury indicated that the jurors found that the plaintiffs had suffered no injury, and that they did not prove that any injury was caused by the marijuana cultivation facility.

This verdict will likely bring the Colorado case to a close, but the Tenth Circuit’s decision in this case as well rulings in other similar cases indicate that federal RICO claims remain viable.

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AINSWORTH V. OWENBY


For example, although RICO claims in a case brought in the District of Oregon were dismissed on August 17, 2018, for failure to state a claim, Ainsworth v. Owenby, 326 F. Supp. 3d 1111 (D. Or. 2018), the plaintiffs were permitted to amend their complaint to address deficiencies in the pleadings. As in other similar cases, defendants included the owners of the cannabis business, property owners and other participants in the business on theories of state law nuisance and civil RICO. In dismissing the nuisance and RICO claims, the court held that the plaintiffs had failed to allege a compensable property injury under the civil RICO statute, diverging from the Tenth Circuit’s reasoning in Safe Streets Alliance.

As in Safe Streets Alliance, the plaintiffs were residential neighbors of a marijuana cultivation and processing facility. They claimed that the defendants operated a greenhouse with commercial exhaust fans running 24/7, pit bull guard dogs roaming the property, marijuana refuse and debris burning, and traffic to and from the facility that transformed their quiet streets into commercial roadways. The plaintiffs claimed that they could no longer use their yards or even open their windows due to the noxious smells and noise. They also claimed that the neighboring marijuana operation lowered their property values and made them harder to sell.

The plaintiffs claimed that they had suffered three types of injury that satisfied the “injury to property” element of a RICO claim: loss of enjoyment of their property, diminution of value of the property, and expenditures on security equipment and guns to protect themselves from perceived safety issues relating to the marijuana operation. The court held that loss of use of the property was a non-compensable personal injury for purposes of RICO liability. It also held that expenditures on security measures could not “transform their distress over neighborhood safety into an injury to property.” Finally, as to the claim that their property values had been impacted, the court held that, as alleged, such harm was “abstract.” Where the plaintiffs had alleged “no past or present intent to rent, sell, or otherwise monetize their property interests,” they had not adequately alleged an injury to their property for purposes of RICO.

The plaintiffs have since filed an amended complaint, alleging that they had their property appraised, that the appraisals were lower than expected given the soaring real estate market, and that their ability to borrow against their equity was reduced as a result of the lower property value. It remains to be seen whether these allegations adequately allege an injury-to-property element for purposes of the RICO statute.

BOKAIE V. GREEN EARTH COFFEE

Shortly after this decision was issued on August 27, 2018, a group of plaintiffs in California filed a civil RICO suit against Green Earth Coffee, alleging that they suffered injury to their property as a result of the defendants’ marijuana growing operations. In an interesting twist, that operation is allegedly not properly licensed under California law, and thus may not be a “state legal” business as other targets of RICO suits have been. The case is Bokaie et al. v. Green Earth Coffee LLC, 3:18-cv-05244-JST. Following the lead of plaintiffs in other cases, these plaintiffs have named individuals involved in the business, the owner of the property, and even the bank that allegedly loaned money for the acquisition of the property.

CRIMSON GALLERIA V. HEALTHY PHARMS

In the meantime, on August 21, 2018, a federal judge in the District of Massachusetts issued a ruling on motions to dismiss in yet another civil RICO case, which allowed certain claims to go forward. Crimson Galeria Ltd. P’ship v. Healthy Pharms, Inc., Civil Action No. 17-cv-11696-ADB, 2018 U.S. Dist. LEXIS 141689 (D. Mass. Aug. 21, 2018). In that suit, property owners in Cambridge claimed that a yet-to-be-opened medical dispensary was hurting their property values. In addition to suing the owner of the dispensary, the plaintiffs sued the City of Cambridge, the cultivation facility and the town in which it was located, as well as various cannabis business consultants and the dispensary’s banking services provider. 

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The court followed the ruling of the Tenth Circuit in Safe Streets, holding that no private citizen could sue to enforce the Controlled Substances Act, because “allowing private litigants to interfere with the Department of Justice’s discretionary decision to allow states to develop their own regulatory schemes regarding medical marijuana ‘would create precisely the type of risk of inconsistent interpretations and misincentives’ that strongly counsel against recognizing an implicit right to a judicially created equitable remedy.” The court accordingly dismissed the government defendants.

As to the non-governmental defendants that had initially moved to dismiss on the grounds that the claims were not ripe since the dispensary had not yet opened, the court permitted the plaintiffs to amend their complaint to reflect the fact that the dispensary had since opened. Likewise, while the court noted that allegations regarding other defendants, including cannabis consultants, were insufficiently specific, the court also permitted the plaintiffs to amend their complaint as to the other defendants. However, a recent check of the docket revealed that prior to filing their amended complaint the plaintiffs voluntarily dismissed several of those defendants without prejudice, perhaps realizing that they could not provide the necessary specificity at that juncture

CONCLUSION


While marijuana legalization continues to expand throughout North America, there still is significant resistance from both public and private interests. As noted above, even though a Colorado jury sided with the marijuana business, the court’s instruction that the business constituted a criminal enterprise for purposes of the RICO statute, as a matter of law, shows that RICO liability remains a very real concern, even for state-legal businesses.

Source: http://marijuanaretailreport.com/dont-declare-victory-yet-over-rico-suits-against-cannabis-companies-and-co-conspirators/


Sean HockingSean HockingNovember 15, 2018
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2min170

Newsweek report..

Several Asian nations have taken note of cannabis legalization movements in North America and other countries, with several moving to chart a similar path.

Last Friday, Thailand’s National Legislative Assembly sent a proposed amendment to the country’s Health Ministry, which would reclassify marijuana as medicinally legal and regulate its possession and distribution, British online newspaper The Independent reported. The proposed law change will be reviewed by the ministry before being sent to the cabinet for potential revisions. After these steps, the legislature will vote on the amendment, with some analysts suggesting medicinal cannabis could be legalized by the end of the year.

In Malaysia, where trafficking marijuana has led many to receive the death penalty, legalization campaigners have recently seen glimpses of serious reform as well.

Read the full article at   https://www.newsweek.com/where-will-weed-be-legal-next-asian-countries-race-toward-cannabis-1213390


Sean HockingSean HockingNovember 15, 2018
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5min320

A major group representing over 19,000 cities, towns and villages across the United States is calling on the federal government to take action on marijuana reform and protect states where cannabis is legal.

The National League of Cities (NLC), an organization founded in 1924 to empower local governments, passed two far-reaching resolutions related to cannabis at its conference over the weekend, a representative confirmed to Marijuana Moment in an email.

The first resolution focuses on marijuana businesses’ access to financial services and implores the Trump administration and Congress to “resolve the conflict between state and federal cannabis laws” and “provide guidance to financial institutions that results in the cannabis market having access to the federally regulated banking system.”

Here’s an excerpt:

“Cannabis’ status as a Schedule I illicit substance on the Controlled Substances Act (CSA) and the CSA’s coupling with the Bank Secrecy Act have created a condition under which the cannabis industry has severely limited access to the federally-regulated banking industry, and this condition has led to a reliance on ‘cash only’ models that involve the transportation of large sums of paper money through cities, increase the risks of theft crimes and tax evasion, and deny large groups of business owners the capital needed to enter the market.”

The second, much lengthier, resolution calls for the removal of cannabis from the list of Schedule 1 drugs under the Controlled Substances Act and asks Congress to “pass legislation that would ensure states and local governments have the ability to establish laws and regulations on the manufacturing, distribution, and sale of medical and adult-use cannabis within the state.”

Rescheduling cannabis would “allow greater federal, state and local regulation of the industry to ensure the cannabis people are buying is not covered with mold, fungus, pesticides, or other harmful substances,” the resolution argues.

It would also “allow the federal, state and local governments to set rules and regulations that would restrict driving under the influence, set age restrictions on buyers and regulate the entire supply chain of cannabis, including growers, distributors, retailers, and testing laboratories.”

That second resolution also calls for the establishment of “federal regulations for the manufacturing, distribution and sale of legal medical and adult-use cannabis” by the Food and Drug Administration, Drug Enforcement Administration and the Bureau of Alcohol, Tobacco, Firearms and Explosives.

In addition to considering policy resolutions like the marijuana ones, local officials attending the NLC City Summit in Los Angeles were able to attend two separate panels, including one that offered advice on how to navigate the legal cannabis market and another providing information for elected officials on how to get ahead of the curve when it comes to implementing and regulating marijuana programs in their jurisdictions.

Separately, attendees were invited on a behind-the-scenes tour of marijuana businesses to learn how cities of various sizes “handled implementing cannabis regulations from manufacturing to retail sale.

Read more at Marijuana Moment

Local Officials From Across US Call For Federal Marijuana Rescheduling



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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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