Marijuana Industry Border Issues Would Be Solved Under New Congressional Bill

The comments stop short of the outright endorsement of legalization previewed by the Chicago Tribune, which reported in a Tuesday article that Emanuel would “call for state lawmakers to legalize marijuana.”

In fact, the mayor said during the speech that he believes “recreational marijuana has social costs that must also be considered.”

“And like a casino, revenue would take time to be realized. But if the state goes down that path, those resources can and should be used to further solidify our pensions without, again, asking anything more of Chicago taxpayers in general.”

Read  the full article at https://www.forbes.com/sites/tomangell/2018/12/12/chicago-mayor-wants-legal-marijuana-revenue-to-fund-pensions/#6be2bdb17d27

Fortune write.

Why the U.S. Cannabis Industry May Witness a $20 Billion Boom

http://fortune.com/2018/12/13/farm-bill-legalized-hemp/

AP

With Ok From Congress, US Hemp Market Set To Boom

https://www.apnews.com/0de07aff0aaa46cbad6c76314d00a3bf

USA Today

Hemp, A Form of Cannabis, to become legal with Trump’s signature on Farm Bill

https://www.usatoday.com/story/news/2018/12/13/hemp-become-legal-trumps-signature-farm-bill/2300242002/

Congress Passes Industrial Hemp Legalization

Hemp legalization passes House; Farm Bill heads to Trump for final approval

Top Cannabis Industry Clusterfucks of 2018 – the legal cannabis industry in the United States and Canada tried to drown itself in a tsunami of superlatives and hyperbole during the past year.

Everyone seems to be stoned from “huffing their own stink” and have forgotten about some spectacular “clusterfucks” that could have drowned the fledgling industry in a torrent of noxious effluent.

We have designated ourselves as the Gnomes of Darkness and present our list of five top clusterfucks for 2018.

1.)

• Medmen’s CEO and COO – Appropriate $53 million from Canadian IPO. – The risk, when allowing US weed deals to head up north to go public, is that they’ll bring their OTC way of doing things up here and soil our pretty little public company kingdom.

I mean, let’s be clear – the Canadian venture capital markets are a rank pit of vipers that live by sucking on the lifeblood of the foolish, recycling shit into prettier shit, and tapping grandma on the shoulder repeatedly for a financial refill. But hey, we’re not just watching Mr. Bierman find cheap money for the company. He’s also getting the cheap money personally.

The CEO and the Chairman will each receive US$1.5 million per year in salary for four years, plus US$10 million in ‘redeemable units’ based on share price, that have vested, plus another $30 million in long term incentive plan units that vest over 24 months, at the end of every month.

This means Bierman is coming into this deal – stock aside – with $1.5 million in salary, another $15 million annually in ‘incentives’, and $10 million ‘just cuz’, or $26.5 million off the top. President Andrew Modlin gets the same deal, so of the $100 million raised in new shares going public, $53 million of it goes straight into the pockets of the big two.

2.)

• US Customs and Border Protection Bans Canadian that came to the US in connection with cannabis industry business for life. TSA Lifetime Bans Canadian  – Unsurprisingly the TSA radar was well aware of the MJ Biz Con Vegas hoopla….

A Canadian investor traveling to Las Vegas, Nevada, to attend a prominent cannabis conference and tour a new cannabis facility has been issued a lifetime entry ban to the United States, according to an immigration lawyer he consulted.

“He was traveling straight from Vancouver to Vegas. When they found out he was going down to tour the marijuana facility and that he was an investor in marijuana, they gave him a lifetime ban,” said Len Saunders, an immigration lawyer based in the border town of Blaine, Wash., who was consulted by the individual after receiving the ban.

The individual, who invests in a Canadian cannabis business that has an operation in Nevada, received the ban on the morning of Nov. 14, as he traveled to Las Vegas to attend the Marijuana Business Conference & Expo, one of the largest gatherings of cannabis industry players. The conference attracted close to 25,000 investors, entrepreneurs, lenders, lobbyists and executives of major U.S. and Canadian licensed cannabis producers, among others.

3.)

• Tax Court “Schools” Attorney in Accounting – In Alterman and Gibson TC Memo 2018-83 where cannabis tax attorney Henry Wykowski, Esq. of Henry G. Wykowski & Associates got his balls cut off by the judge. It is plain as the nose on your face that the taxpayers got screwed due to their own crappy record keeping, Henry Wykowski, Esq.counsel’s failure to fully review records and documentation before getting to court, and failure to engage a CPA where tasks were outside of counsel’s competence. [There is an excellent article on the topic written by Prof. Bryan Camp that should be required reading Lesson From The Tax Court: Into The Weeds on COGS]

4.)

• Cannabis CPA Gets Disqualified As Expert – In Neil Feinberg et ux., et al. v. Commissioner, (2017 Memo 2017-211) if there EVER we an example of taxpayer’s being granted the benefit of the doubt by a court, and then proceeding to shoot themselves in the head due to self-inflicted wounds from a bumbling expert, incomplete and sloppy record keeping this is it.

Whether the report and testimony will be received in evidence and considered in determining THC’s COGS for tax years 2009-11 depends on the application of principles expressed in Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (1993), and Rule 702 of the Federal Rules of Evidence.

Renowned cannabis tax expert Jim Marty, CPA of Bridge West CPA’s was eviscerated by a Tax Court judge who wrote.

“The Marty report is brief and summary, and its content is unreliable. Multiple statements in the report refer to no underlying source of information. For other statements that do cite an underlying source, Marty has failed to include the[*9] information or data on which he relied. In many instances, the report does not reference or provide sufficient information or data for us to conclude that the opinions expressed are based on anything other than his own conjecture…

For the reasons stated above, we conclude that the Marty report is not admissible under rule 702 of the Federal Rules of Evidence because is it is not helpful in understanding evidence or in determining a fact and it includes legal conclusions.”

• California Legislature forced to create “provisional licenses” due to backlog in the licensing process at regulatory agencies to avoid a crisis due to lapse of Temporary Licenses as of December 31, 2018.

The California legislature is currently finalized a bill (SB-1459) which would establish a provisional licensing regime for California cannabis businesses. The bill moved into “enrolled” status late last week, which means that SB-1459 has been approved by both houses of the state legislature and is being proofread to ensure all amendments were properly inserted. Once SB-1459 is “correctly engrossed”, only a signature from Governor Brown is needed for the bill to take immediate effect. In all, provisional licensing seems imminent.

These pending, provisional licenses would provide holders with a year-long, non-renewable, provisional license to operate after filing completed license applications. These provisional licenses would alleviate pressures on licensing agencies caused by the backlog of pending applications. Provisional licenses would also allow holders to continue operating, rather than potentially ceasing operations later this year.

5.)

• AG Sessions Rescinds Cole Memo Tries to Restart War on Drugs – Attorney General Jeff Sessions undertook a single-handed effort to restart the “War on Drugs” through his edict which repealed the Cole Memorandum. In a seismic shift, will announce Thursday that he is rescinding a trio of memos from the Obama administration that adopted a policy of non-interference with marijuana-friendly state laws, according to a source with knowledge of the decision.

While many states have decriminalized or legalized marijuana use, the drug is still illegal under federal law, creating a conflict between federal and state law. The main Justice Department memo addressing the issue, known as the “Cole Memo” for then-Deputy Attorney General Jim Cole in 2013, set forth new priorities for federal prosecutors operating in states where the drug had been legalized for medical or other adult use.

The memo will be rescinded but it’s not immediately clear whether Sessions will issue new guidance in its place or simply revert back to older policies that left states with legal uncertainty about enforcement of federal law. Opponents of legal marijuana on Thursday celebrated the long-awaited action.

While there is much to be grateful for in the legal cannabis industry in 2018. However, we would be well advised to reflect on our collective missteps and learn from them.

Authored By: William F. McDevitt, Esq.

As the legal status of cannabis evolves, state legislatures are confronted with a difficult moral issue – how should local and state governments treat persons convicted of offenses that are no longer illegal? Below is a discussion of some of the options.

Expungement

Expungement is an option being considered by numerous jurisdictions. Currently, the New Jersey Legislature is considering an expungement bill that was originally part of a broad proposal to legalize cannabis. It has been reported that some legislators who are willing to legalize “adult” or recreational cannabis use are unwilling to revisit prior convictions or the effect that low-level possession cases may have on an individual’s ability to obtain credit, employment, or to avoid increased criminal penalties in any subsequent criminal proceedings.

In 2016, there were approximately 32,000 arrests for possession of cannabis in New Jersey. The deletion of the arrests from state and local records for that single year would represent a monumental task. Deleting convictions and then accounting for the effect of those convictions on subsequent cases represents an unknown expenditure of time and resources. But it is not hard to believe that an expungement statute exonerating citizens over a five- or ten-year period could bring New Jersey’s criminal justice system to a standstill. Therefore it’s no wonder that statewide expungement has been slow to gather steam.

Delaware passed an expungement law in September 2018, but the law is limited to cannabis possession cases with no other violations and applies to convictions from 2015 forward. Maryland, Massachusetts, Oregon, Colorado and New Hampshire have limited expungement programs. California, at the forefront of cannabis legalization, has not yet finalized an expungement plan. Local governments, including Denver, San Francisco, Dan Diego and Seattle have enacted procedures to expunge low-level cannabis possession cases.

Decriminalization

Some jurisdictions are pursuing decriminalization as a means of avoiding the need for expungements in the future. Seattle, Oakland, Denver, San Francisco and Philadelphia are among numerous large cities that have waived criminal penalties for low-level possession (without other offenses). Connecticut, Delaware, the District of Columbia, Illinois, Maryland, Massachusetts, Missouri, New Hampshire, Rhode Island, Vermont and the U.S. Virgin Island have abandoned zero-tolerance policies and allow citizens to possess cannabis in varying amounts. Smaller municipalities are following suit. But the majority of U.S. jurisdictions are hesitant to contradict federal law, which continues to list cannabis as a substance with no medicinal value.

States that have legalized medical marijuana under the (now withdrawn) standards of the Cole Memorandum have sought to limit the possession and use of cannabis to strictly defined parameters. Allowing possession and use without a prescription or medical approval is contrary to the concept of a controlled, regulated “state-legal” model. Under Cole (and the FinCen Guidelines for banking), a “state-legal” enterprise that limits cultivation, processing and distribution within a state − strictly overseen to prevent interstate distribution, sales to minors or influence from criminal enterprises − is allowable. Permissive non-regulated cannabis use, even within a state, invites federal intervention.

Access to Opportunities in Legal Cannabis

Avoiding federal intervention and prosecution of “state-legal” businesses requires cannabis-touching enterprises to deny employment to persons with prior cannabis convictions. Since there has been a correlation between cannabis prosecutions and race, there is a possibility that minority participation in state-legal cannabis will be adversely affected by prior anti-marijuana prosecutions.

To address this problem, Pennsylvania, Maryland, Illinois and Florida consider either the level of minority ownership or the scope of an applicant’s “diversity plan” when reviewing applications for cannabis cultivation, processing and dispensary licenses.

Ohio attempted to go further by setting aside 15 percent of all licenses for minority-owned businesses to counterbalance the negative effect of marijuana prosecutions on minority populations. Ohio’s effort was struck down in a November 15, 2018, decision in Pharmacann Ohio, LLC v. Williams, in which Franklin County Judge Charles A. Schneider held that the State failed to show that the set-aside of licenses advanced a legitimate state interest. Most notably, it was held that the inordinately high level of cannabis possession convictions among Black and Latino populations did not justify an increased access to cannabis processing or dispensing opportunities for Black, Latino, Asian and female -owned businesses. The trial court refused to conflate possession and distribution or hold that the means for redressing racial prejudice in the prosecution of illegal cannabis sales in the past would be to provide increased access to legal cannabis distribution in the future.

Fully redressing 90 years of criminal marijuana prosecutions and the effect that those prosecutions had on the lives of hundreds of thousands of Americans is impossible. States and local governments are seeking to balance the 21st Century’s growing acceptance of cannabis with four generations of anti-marijuana policy. Awareness of the social justice implications of legalization is the first step toward assuring that citizens no longer face life-long social, economic and criminal penalties for actions that have become socially accepted by the majority of Americans.

About the Author

William F. McDevitt is a partner in the Philadelphia office of national law firm Wilson Elser, where he is a member of the firm’s Cannabis Law practice. He can be reached at william.mcdevitt@wilsonelser.com

With parliament set to approve the legislation as early as next month, Thai businesses and activists have raised concerns that a raft of patent requests filed by foreign firms could allow them to dominate the market and make it harder for researchers to access marijuana extracts.

“Granting these patents is scary because it blocks innovation and stops other businesses and researchers from doing anything related with cannabis,” said Chokwan Kitty Chopaka, an activist with Highlands Network, a cannabis legalization advocacy group in Thailand.

“We were very shocked to see this because it would be like allowing them to patent water and its uses,” Chokwan said, adding that applicants are seeking patents for plant-related substances, which are not allowed under Thai law.

Opposition to foreign firms has threatened to stall the legalization process, with researchers and civic networks threatening to sue the government if the patents are granted, according to media.

Prime Minister Prayuth Chan-ocha has been urged to issue an executive order to end the impasse, but a national government spokesman said there were no plans to do so yet.

“We will proceed normally through the Commerce Ministry first. We must let everything proceed without harming people’s rights,” said Puttipong Punnakanta.

…/….

Among a handful of foreign companies that are looking to enter the Thai market are British giant GW Pharmaceuticals and Japan’s Otsuka Pharmaceutical, which have jointly applied for marijuana-related patents.

Representatives for GW Pharma and Otsuka declined to comment on their applications.

“We haven’t seen progress on our patent registration maybe because many people are opposed to allowing foreign drugmakers to enter the market. I feel like we are seeing a high bar on this,” said one foreign company official, who declined to be identified because of the sensitivity of the issue.

…/…

For Thai Cannabis Corporation (TCC), a majority Thai-owned entity that is waiting for legalization to obtain a license to sell cannabis-derived ingredients to manufacturers, the move would be “a return to centuries-old tradition”.

Source: https://www.reuters.com/article/us-thailand-cannabis/weeding-out-foreigners-strains-over-thailands-legalization-of-marijuana-idUSKBN1OB0D0