California

Humboldt County Collects $2 Million in Fines from Illegal Growers

Humboldt County continues to step up enforcement against illegal growers. Over the past year, the Humboldt County Code Enforcement Unit in California has actively identified illegal grow operations using satellite imagery. The county pays over $200,000 a year to access Planet’s software, which allows the staff to quickly identify possible violators.

The Eureka Times Standard reports that cannabis enforcement efforts are up 700% in 2018, and brought in over $2 million in fines for the county. Humboldt County holds around 20% of the overall commercial cultivation licenses in California.

The fines sought by the regulators continue to increase. In October, the Enforcement Unit was seeking a $10,000 per day penalty against 87 growers for commercial cannabis land use and building code violations. The illegal grow sites were given 10 days to dispose of the cannabis plants and illegal structures, after which, the $10,000 per day fine took effect.

Today, the Enforcement Unit is seeking fines per day fines of between $20,000 and $30,000 for code violations. Now that cannabis is legal, regulators are raising administrative fines as a means of forcing cannabis operators into the legal market. Humboldt County continues to transform its legendary cannabis market into the legal framework, although at a greater cost and regulatory burden for its local residents.

California State vs Municipal Battle Heats Up As the 42% of Cities That Said No to Cannabis May Be Forced to Open Stores

The United States is witnessing the rise in state power. The states are uniting to fight the federal government, lead social causes such as global warming, and they are driving innovation. We are also witnessing the rise in municipal power as cities fight to retain control over regulating the place, time and manner of businesses within their jurisdiction. Recently, twenty-five (25) cities banded together to sue the state over its implementation of cannabis regulations that allowed marijuana delivery in every city, regardless of whether the city prohibited this activity. The cities believe that cannabis delivery is a public nuisance that will increase crime.

The California Legislature ratcheted up this debate by scheduling a public hearing on a bill tomorrow that preempts a local municipalities control to prohibit cannabis establishments. The bill would require a city to permit adult-use cannabis storefronts if 50% of the voters in the municipality voted for Proposition 64. The bill requires the city to permit one (1) retail cannabis licenses for every four (4) liquor licenses.

The cities are fighting back. Cities such as Carpinteria are submitting letters to the California Legislature objecting to the preemption of local control over these businesses and the arbitrary 1 for 4 license requirements. This is significant given that our database for California indicates that over 42% of cities prohibit cannabis altogether. Although we are seeing a slight trend of cities revisiting this decision as a part of budget considerations.

As states fill the federal void, we are seeing an increased battle between the state and local municipalities in other states such as Oregon and Florida. California’s cannabis delivery lawsuit will provide us some insight on the future of a state’s ability to drive the growth of an industry at the local level.

California Bill Proposes $900 Million Tax Loss to Curb Black Market Cannabis Sales

The California Assembly proposed a bill is focused on reducing black market cannabis sales by temporarily reducing the excise tax from 15% to 11% until 2022. The Assembly Committee on Appropriates will hold a public hearing on the bill tomorrow, May 1, 2019. The Assembly Appropriations analysis report shows that the bill would result in a $900 million tax loss for California between 2019-2022. This loss would be in addition to the lower than expected tax revenues produced by the cannabis industry in fiscal year 2018-2019 ($270 million versus projected $350 million).

The report indicates that other factors allow the black market to offer competitive pricing including local taxes, licensing and compliance requirements including testing, and banking restrictions. The committee may decide to take a longer term wait and see approach before slashing tax revenues. Finally, the staff notes that, even if the state does lower the excise tax, local municipalities can fill that void by increasing local tax rates.

California Senate to Vote on Bill that Makes Cannabis Tour Buses Safer

The California Senate will hold a third reading of a bill that makes cannabis party buses safer for passengers and the public. The legislation is intended to support California’s burgeoning cannabis tourism industry. Passengers on cannabis tours take buses or other transportation to visit dispensaries, cultivation facilities and edible kitchens. The bill is designed to close a loophole that currently allows passengers on a cannabis tour bus to smoke pot on a bus where the driver is exposed to the second-hand smoke. The bill fixes this problem by requiring smoking buses to have a separate compartment for the driver that is sealed off and has a separate ventilation system. The bill would also limit passengers to those who are older than 21.

Los Angeles Creates SWAT Team to Tackle Illegal Cannabis Businesses

The Los Angeles City Council approved recommendations to fund a Business, Licensing and Compliance program designed to shut down illegal cannabis businesses. Los Angeles will pay $3 million per year over the next three years to establish an inter-agency enforcement response team comprised of the Los Angeles Police Department (LAPD), the Los Angeles Fire Department, the Department of Cannabis Regulation, and the Los Angeles Department of Building and Safety. The group will share information about illegal operations through a new technology platform, and work together to direct enforcement efforts.

Over the past year, Los Angeles has developed creative administrative measures to tackle the growth of illegal cannabis businesses including shutting off their electricity and access to premises. In the report dated November 9, 2018, the LAPD indicated that, during the prior year, it executed 143 search warrants on unlicensed businesses, and made 435 arrests. The LAPD confiscated 67 firearms, over $600,000 in money and 34,852 pounds of cannabis. The arrests did little to stop the reopening of the unlicensed businesses. The LAPD indicated that additional enforcement efforts were needed as the misdemeanor charges for most violations was not adequate.

The California Cannabis Delivery Crises: Will the Black Market Prevail?

California’s new cannabis regulations allow for the home delivery of cannabis in all 482 cities in the state. The state adopted these regulations to fight the black market in areas where municipalities have opted out of the cannabis marketplace. Twenty-four (24) of these cities filed a lawsuit against the state to stop these delivery services. They claim that California’s new delivery regulations violate Proposition 64 by removing their ability to prohibit cannabis activities. The cities also claim that the delivery service will introduce crime and unsafe conditions.

Without the state delivery rules, Californians must travel to purchase cannabis or buy from the black market. Our review of the 212 cities within Southern California shows that 187 of these cities do not permit retail cannabis activity. Only sixteen (16) cities permit non-storefront delivery, and twenty-one (21) cities allow cannabis stores to deliver to a person’s home. This data substantiates the existence of cannabis deserts. If the cities to the lawsuit prevail, California will need to develop creative tactics to combat the growth of the black market in these areas.

Free Cannabis Legislative Tracker For 20 States: Access THC, Hemp And CBD Bills

Access our free legislative trackers for Arizona, California, Colorado, Connecticut, Florida, Illinois, Kentucky, Massachusetts, Maine, Michigan, Missouri, North Dakota, New Hampshire, New Jersey, New Mexico, New York, Oregon, Tennessee, Utah and Washington. Review and access the cannabis & hemp bills introduced by the State Legislatures in the 2019-2020 session. The trackers include a summary description of the legislation, status and link to the full legislative text. The legislative trackers will be updated on a weekly basis.

Free Cannabis Legislative Tracker For 20 States: Access THC, Hemp And CBD Bills

Access our free legislative trackers for Arizona, California, Colorado, Connecticut, Florida, Illinois, Kentucky, Massachusetts, Maine, Michigan, Missouri, North Dakota, New Hampshire, New Jersey, New Mexico, New York, Oregon, Tennessee, Utah and Washington. Review and access the cannabis & hemp bills introduced by the State Legislatures in the 2019-2020 session. The trackers include a summary description of the legislation, status and link to the full legislative text. The legislative trackers will be updated on a weekly basis.

Free Cannabis Legislative Tracker For 20 States: Access THC, Hemp And CBD Bills

Access our free legislative trackers for Arizona, California, Colorado, Connecticut, Florida, Illinois, Kentucky, Massachusetts, Maine, Michigan, Missouri, North Dakota, New Hampshire, New Jersey, New Mexico, New York, Oregon, Tennessee, Utah and Washington. Review and access the cannabis & hemp bills introduced by the State Legislatures in the 2019-2020 session. The trackers include a summary description of the legislation, status and link to the full legislative text. The legislative trackers will be updated on a weekly basis.

Los Angeles to Shut Off Illegal Pot Shops' Electricity

Los Angeles will soon be adopting an ordinance that is aimed at shutting down illegal pot shops. The Los Angeles City Council directed the City Attorney to draft an ordinance as quickly as possible. At a meeting held on February 26, 2019, City Council members voiced their frustration over the inability to effectively shut down the illegal operations that are not following the rules. Illegal pot shops reduce the city’s overall tax revenues and engage in criminal activities.

The proposed ordinance would allow the Los Angeles Department of Water and Power (LADWP) to disconnect utility services after the Department of Cannabis Regulation has informed the illegal pot shop that it needs a license to operate, and a Los Angeles city department confirms that illegal cannabis activity is occurring at the address

The city of Los Angeles started to focus on shutting unlicensed cannabis businesses in July 2018. The Los Angeles Police Department issued a report on November 9, 2018 that noted that, in the last year, it executed 143 search warrants on unlicensed businesses, and made 435 arrests. The LAPD also confiscated 67 firearms, over $600,000 in money and 34,852 pounds of cannabis. The arrests did little to stop the reopening of the unlicensed businesses. The LAPD indicated that additional enforcement efforts are needed as the misdemeanor charges for most violations is not adequate.