What’s Happening in Cali?
The relationship between California and cannabis has always been in the spotlight. Today, the attention is multifaceted, as several newsworthy elements are happening. Continue reading for recent California cannabis industry highlights involving a U.S. subpoena of California marijuana documents, the DEA, unseen dangers of wildfires and state government promotional campaigns.
California Cannabis DEA Rulings
According to a new federal court ruling, California regulators must comply with a subpoena from the Drug Enforcement Administration (DEA) that demands data about some marijuana businesses. Initially, the DEA requested unredacted California marijuana documents about three licensed cannabis distributors, as well as the persons associated with the businesses in 2019. The California Bureau of Cannabis Control did not comply with the request, leading to the federal agency to issue the mentioned subpoena in January 2020. The Golden State continued to decline compliance, arguing the DEA did not adequately explain the request’s relevance to an investigation, and providing the uncensored documents would violate the state’s privacy laws.
A court filing has since disclosed the requested materials were pertinent to an ongoing investigation of specific licensees involving potential illegal importation and transportation of marijuana oil from Mexico. U.S. Magistrate Judge Linda Lopez sided with the DEA Aug. 31, ruling the agency’s subpoena met all requirements for an enforceable request. The judge wrote in an order: “The Court finds that the United States has sufficiently established the relevancy of the subpoena to meet the ‘not especially constraining’ standard. The Court does not find that the subpoena is too indefinite or broad.” A possible appeal is pending. The cannabis businesses and owners in question have not been publicly named.
Cannabis and California Wildfires
Wildfires on the West Coast have become a regular event. Lives, homes and businesses are all threatened, including cannabis farms. Climate change is cited by scientists as a major role player and effects are felt in various ways by growers. An example is whether crops can pass mandated state testing after exposure to contamination from smoke, ash, fire retardant, etc. Failure of crops has ripple effects through the entire supply chain. Further, lack of insurance is an issue against recovery, as a good portion of the nation’s large insurance providers will not insure the industry due to federal laws against cannabis.
Recently, the expanding August Complex led to evacuation warnings in the state’s famous Emerald Triangle, which directed many farmers to harvest crops early. The danger in this action is the potential for microbial contamination after rushed storing techniques. Additionally detrimental to the valuable time of cannabis businesses, but helpful to potentially prevent damage, are fire safety-recommended brush management and evacuation drills. Looters during evacuations are also a threat to the industry.
Adapting to this new but now consistent state of the environment means many California marijuana farmers must adapt their business models. Cannabis cultivation consultant and farmer in Mendocino County David Najera said, “We’ve already broken the record for most acres burned in history, and we haven’t even gotten to the worst part of the season. So I think this is the new norm. Fires are just a way of life at this point.”
Increasing Licensing Opportunities
Perhaps to assist with pending upset to the marijuana industry in California, the California Department of Food and Agriculture’s (CDFA) CalCannabis Cultivation Licensing division has launched a unique educational outreach campaign to promote the industry and provide resources to assist in securing, as well as maintaining, cannabis cultivation licenses. “This is California Cannabis” pairs community events with workshops designed to inform about licensing opportunities and provide technical assistance. A quarterly newsletter also delivers tips and policy updates, and it features profiles of licensed cultivators. Although state-provided resources are not uncommon, active networking and promotion of the cannabis industry is quite an unusual approach for any state with a legalized marijuana market.
Cannabis Taxes to Stay the Same
In other California cannabis news, state taxes will remain at the same rates until at least next year. Gov. Gavin Newsom signed into law Assembly Bill 1872, prohibiting the California Department of Tax and Fee Administration from altering the cannabis excise tax markup amount until July 1, 2021, as well as from adjusting cultivation taxes from 2021 for inflation, unless adjusting the rate to less than zero. Other legislative changes include revisions to banking and advertising laws and the establishment of a cannabis appellation program. The second public comment period for the proposed regulations for cannabis appellations is open for written comments until Oct. 19, 2020.
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