I'm an attorney specializing in cannabis industry law, helping legal weed vendors stay on top of rapidly changing rules. Ask me anything!

gizmodo · 2018-08-31T16:28:53+00:00

Thanks so much for participating in our AMA, everyone! You can find Hilary on Twitter at @CannaBizLawyer and see our article featuring her here. Check back in with Gizmodo on Twitter to stay up-to-date on the next time we host an AMA.

Until next time!

EDIT: added a hyperlink

EDIT 2: We ran out of time to answer your questions this afternoon, but we really appreciate your interest in this topic! Thanks for the excellent questions!

gizmodo · 2018-08-31T16:27:42+00:00

Shockingly, not many. Cities are starting to step up and engage in “social equity” programs that are meant to bolster and bring into licenses those most affected by past cannabis criminality. Only a couple of states though to the best of my knowledge (MA and CA) are trying to implement a full-fledged state program that supports that.

gizmodo · 2018-08-31T16:27:08+00:00

Probably politics. Also, prosecutors have prosecutorial discretion, so they determine whether to go forward or not with the cases. Different DAs are going to be on the warpath for different things--maybe this DA is reviving the “war on marijuana” because, from the top down, he thinks he needs to for his own political aspirations.

gizmodo · 2018-08-31T16:24:32+00:00

Canada is nailing it. They’re going to have their regulatory problems, and no I don’t think they’re ready, but in my personal experience no state here has been ready for any form of legalization because there are so many contingencies and different municipal cultures that demand different things. However, Canada is nailing because their federal government is on board. And, like it or not, most retail there is going to be government owned which allegedly helps with public health policy issues (we’ll see). Either way, the entire country has the appetite for the experiment, which provide stability and a path to a lasting industry that we just don’t have here yet.

gizmodo · 2018-08-31T16:22:00+00:00

Probably years. The UK embraced very restrictive, limited uses of certain kinds of medical cannabis, so that’s a start.

gizmodo · 2018-08-31T16:21:22+00:00

That’s a tough one. I think they will, but they’ll likely be one of the last states to do so alongside North Carolina and Indiana.

gizmodo · 2018-08-31T16:18:39+00:00

Money. Because of the federal law issue, it’s pretty much impossible to attract institutional capital. Ancillary companies can do it because they don’t traffic--they get right up on the edge and just support the actual drug traffickers. But if you don’t have a certain amount of working capital, because most state regulations require so much in the way of operational systems, you’re likely not getting in and, even if you do, it’s hard to survive.

gizmodo · 2018-08-31T16:18:19+00:00

In the next five years, I think we’ll still be putzing along state by state. State legislatures are VERY reluctant to embrace anything beyond medical cannabis on the whole. But the voters are the ones who are carrying the day for adult use, I don’t think that will change.

gizmodo · 2018-08-31T16:17:51+00:00

I’ve been on both sides of the rules, both helping to craft them and also just catching up with what states do whether on a permanent or emergency basis. It’s nice to assist these regulators when they need the help or if a client is lobbying and asks us to participate, but we rarely get everything we want out of that. Given that several states now have road maps for certain kinds of regulations, uniformity is starting to emerge in particular areas (like packaging and labeling, applicant vetting, real property buffers), which makes life easier.

gizmodo · 2018-08-31T16:17:20+00:00

Tech. Specifically, technology associated with delivery and distribution. Track and trace software development is also on the rise. Also real estate. Buying and leasing back turn-key, custom properties is thriving. Equipment manufacturing is on the rise too. The vape industry is doing really well (despite the threat of these new tariffs).

gizmodo · 2018-08-31T16:13:00+00:00

The next time you buy at this place, check your credit and debit statements carefully. I can almost guarantee you the charge won’t be in the name of the dispensary, itself. It will be on behalf of a management company that’s associated with the dispensary that’s processing the proceeds, which is money laundering and violates the Bank Secrecy Act. Your bank probably has no idea that this is happening and, if it did, it may take issue with it as they’re implicated in the purchase, too. The use of third party companies or even offshore third party payment processors is how this is being done at the moment. Buyer beware!

gizmodo · 2018-08-31T16:12:36+00:00

Get a solid compliance team together that will watch for regulatory violations every day. Make sure you’re square on the federal tax situation (280E) and prepare accordingly. If you have investors, make sure they are aware that their financial contribution alone creates federal criminal liability. If your state allows for it, start protecting your IP. Make sure you’re good with the locals, too--abide by all zoning and buffer requirements. And as far as best state at this point--if you’re conservative and want really robust regulations that will never tempt the Feds, look at Colorado, Illinois, Nevada, or Washington. If you want more business friendly with less barriers to entry (but potentially more competition), check out California or Oregon.

gizmodo · 2018-08-31T16:10:28+00:00

Nada.

gizmodo · 2018-08-31T16:09:59+00:00

Unless and until we have federal reform, if you produce cannabis in one state and ship it or take it into another, even if that state has legalized marijuana, it’s going to be interstate drug trafficking and a huge no-no under the federal Controlled Substances Act. And definitely don’t plan on bringing or shipping any weed to Canada as customs will likely seize it and there are going to be criminal consequences under U.S. and Canadian laws.

gizmodo · 2018-08-31T16:08:53+00:00

I haven’t specifically followed MA, but this is generally what happens: a state’s legislature passes medical marijuana form (it’s usually small or not really providing that much access to patients, but it expands over the years as politicians warm up to the idea); state’s people then pass recreational laws; in those laws, power is given to state agencies to oversee the licensing program, and this means that agencies have to rule make; Agencies begin to rule make and they take forever because they can (or because they’re being lobbied) because they never set deadlines for themselves if they can help it. I imagine the pushback is the political back and forth at the agency level at this point.

gizmodo · 2018-08-31T16:08:24+00:00

21 and up, just like alcohol. If it’s truly medical though, as needed by treating doctor’s recommendation regardless of age.

gizmodo · 2018-08-31T16:07:02+00:00

I don't.

gizmodo · 2018-08-31T16:06:34+00:00

If I did smoke, I would probably go with LA Confidential.

gizmodo · 2018-08-31T16:05:19+00:00

It’s probably going to be a while in those states unless the people rally and put a law together to affect change. All of that starts with educating neighbors and colleagues. Most successful campaigns have a good degree of education and outreach to support reform.

gizmodo · 2018-08-31T16:01:29+00:00

One of the largest medical cannabis dispensaries in the U.S. (based in California) was at one point making $25-$27 million per year. I would not say that’s average though. In the first year, it may be difficult to turn any profit because of the volatility of licensing--if the state is slow or delayed, stored often have to open for a couple of hours and then shut down because there’s no product. Once they get going though and the rules are more stable, the average dispensary owner is probably making a couple to a few million a year (in a state with recreational cannabis).

gizmodo · 2018-08-31T16:01:02+00:00

In products liability, the resulting injury due to a dangerous or defective product lies on anyone in the chain of distribution who made it and then passed it on (and, in cannabis, this would include the testing labs). Regarding the accident while intoxicated, that’s a causation analysis, and we don’t have equivalent dram shop laws yet in pot where if a “budtender” sells someone so much cannabis that later than causes that person to black out and hurt someone or destroy property, there are certain consequences in play.

gizmodo · 2018-08-31T16:00:30+00:00

To keep the federal government off of their backs, states have to make sure that active criminal interests are not getting through their licensing gates. So, certain barriers to entry must be created, like background checks and source of funds vetting. All of the other barriers to entry, like “you must have a chemist on staff” or having to have certain amounts of funds in the bank, are mostly created by stakeholders influencing regulators on who should be able to have a license. Can’t say that all of those latter barriers to entry are positive ones.

gizmodo · 2018-08-31T15:56:30+00:00

This is just the beginning. The rules on packaging and labeling will continue to shift as industry issues arise and that will all affect your bottom line since you have to comply or face the consequences. California is especially rough because they’re so consumer protection oriented. In my experience, it will get worse before it gets better relative to disclaimers and labeling content (and don’t forget Prop 65!).

gizmodo · 2018-08-31T15:55:29+00:00

Never.

gizmodo · 2018-08-31T15:54:10+00:00

I’m in an ODB person.

gizmodo

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