Tag: licenses

Will ‘Microbusiness’ Licenses Let Craft Cannabis Flourish in California?

Forest Gray’s resume reads like that of a man who has finally found his passion.

A biochemist whose academic studies focused on the benefits of psychoactive drugs, Gray entered the pharmaceutical world after college. A few years later he decided to abandon the sterility of the laboratory in pursuit of something even more noble: beer.

‘The microbusiness model is akin to the beer microbrewery.’

Forest Gray, founder, Relativity Labs cannabis

He founded Speakeasy Ales & Lagers in 1997, and grew the San Francisco company to employ 50 people and produce a peak annual revenue of $10 million. Gray oversaw nearly every angle of the business, from beer recipes to logo design, packaging choices, equipment selection and quality assurance.

Then, in the months following the passage of California’s Proposition 64, Gray decided to trade in hops for cannabis.

Earlier this year he launched his new venture, Relativity Labs.

“Even though I was in beer for 20 years, it was essentially a ginormous detour,” he told Leafly.

Gray plans to translate his Speakeasy experience into building a craft marijuana brand, where he can shape the product and consumer experience, “nose to tail.” That means controlling everything from cultivation to retail. This process would typically entail multiple permits, properties and start-up costs, but under a microbusiness license proposed by the State of California, entrepreneurs like Gray would be able to submit just a single application.

“[The] microbrewery is akin really in a lot of ways to the microbusiness model,” Gray said.

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A New Licensing Model

First introduced as part of Proposition 64 in relation to adult-use operations, the microbusiness license is now poised to be available to medical marijuana businesses too, courtesy of SB 94. The license would allow small businesses to act as a one-stop-shop; owners could grow cannabis on an area of less than 10,000 square feet, while also acting as distributor, non-volatile manufacturer and retailer.

This is essentially a smaller version of a typical vertical integration model, and can apply to indoor or outdoor cultivation sites, said attorney Habib Bentaleb of Harris Bricken.

Microbusiness growers don’t want to compete with the Budweisers of cannabis.

“It is supposed to be a nice way for craft cannabis companies to differentiate themselves [from] what will inevitably be large-scale grow cultivations throughout the state,” said Bentaleb, who specializes in cannabis regulation and represents Gray.

Not only does this help preserve the type of small-scale or cottage operations much of the industry was built on, it streamlines and simplifies the application process, allowing entrepreneurs to apply for just one all-encompassing license. This doubles as a dramatic cost-cutting method, which offers mom-and-pop shops a slight leg up when competing against large, venture capital-fueled businesses.

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Keeping With the Craft Beer Model

The microbusiness model is especially valuable for manufacturers who rely on effective branding and want to oversee the entire process leading up to sales, Bentaleb added.

People like Gray, who’ve opted to focus on production instead of cultivation, since that market is already flooded with big capital.

“To me, that’s like going against Budweiser in the beer world,” Gray said.

Will Consumption Be Allowed?

While the concept for this license is attractive and Bentaleb has seen some client interest in pursuing it, they stand to face quite a few logistical hurdles, he said. For one, there’s the issue of on-site consumption. It’s allowed under state law, and it could be huge asset to microbusinesses. But it’s also subject to the discretion of local jurisdictions, and many of their decisions have yet to be made, said Bentaleb.

The key: Patrons can consume in a microbrewery. They’ll want to do the same in a cannabis microbusiness.

The idea of smoking or ingesting weed at the very spot it’s made, where customers can witness its careful production from seed to sale, could prove highly profitable.

Just look at California’s craft brewery and winery industries. In fact, it’s this format that Gray is envisioning for Relativity as he scouts possible shop locations in Sonoma County. He plans to build an artisanal cannabis operation where he produces oils and edibles to be consumed by visitors on site.

“I’m looking forward to hosting busloads of tourists from wherever and walking them through the whole process,” Gray said. “I envision it more as an extension of the brand than as a drug store. I don’t want to run a drug store.”

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Depends on Local Zoning

While the region of California that Gray is targeting is notoriously cannabis-friendly, many microbusinesses will have to grapple with individual municipalities that have their own zoning laws, which dictate where certain types of operators can set up shop.

Municipalities that permit cultivation may not allow manufacturers or dispensaries, and vice versa, Bentaleb explained. Some municipalities have already capped or outlawed dispensaries outright. This means it may be incredibly difficult for microbusiness owners to find property where they can fully exercise all portions of their permit, said Bentaleb.

“It’s almost a non-starter in most places,” he said.

Still Not an Easy Process

Even for those enterprises that do manage to find a place to legally operate and obtain a license from the Bureau of Cannabis Control, microbusiness applicants will have to meet requirements set by additional state agencies including the Department of Public Health and the State Water Resources Control Board.

“I don’t foresee it being an easy process for the unsophisticated applicant,” Bentaleb added.

Making things even more complicated is the fact that the Bureau of Cannabis Control has yet to issue the final regulations for the state, and many local jurisdictions seem to be following suit. California’s are expected to be released sometime in November, with the application process opening January 2, 2018.

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Texas Issues One of Three Planned Producer Licenses, But Questions Remain

Production of low-THC, high-CBD cannabis can begin in Texas, as the state’s Department of Public Safety granted one of three planned licenses to a medical marijuana producer on Friday.

The constricted medical marijuana program was created by the Texas Compassionate Use Act more than two years ago. Currently, only patients suffering from intractable epilepsy are allowed to receive low-THC cannabis with permission from a very limited number of physicians.

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Cansortium Texas, the company that received the license on Friday, will now start growing medical cannabis. Two other companies, Compassionate Cultivation and Surterra, were granted provisional licenses back in May but are still waiting on their final licenses.

Heather Fazio, Texas political director for the Marijuana Policy Project, told Leafly that it remains unclear why the other two cultivators weren’t issued final licenses today. Each of the three that were given provisional licenses had to pass onsite inspections before given a final license to start producing, so that may be a reason.

Even with the delivery of a first license, the Texas medical marijuana program still has major issues to work through.

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According to the Marijuana Policy Project, data obtained from the Texas Medical Bureau, the American Board of Psychiatry, Neurology, and the American Board of Clinical Neurophysiology indicate that only 411 doctors in Texas have the necessary qualifications to register for the program.

According to MPP, this amounts to approximately 0.54% of the licensed physicians in Texas.

The number who actually register will likely end up being lower. Some physicians may not decide to register in light of the personal and professional risk involved.

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“The few patients that could be helped by this program are now one step closer to finding relief,” Fazio said. “However, the extremely limited scope and flawed language may doom the program unless it is revised.”

So far, all attempts to fix the program have failed. Earlier this year, Rep. Eddie Lucio III introduced HB 2107, which would have resolved the problems contained in the current Compassionate Use Program.

A majority of House members signed on as supporters, but the bill did not end up getting to a floor vote before the end of the session.

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Amid MMJ Delays, Maryland Approves 8 New Cultivators

Maryland regulators recently approved eight new medical cannabis cultivation licenses, and several of the companies say they’re ready to begin growing immediately.

Fifteen cultivators were originally selected originally to receive cultivator licenses, the Baltimore Sun reports, but until last Monday, only one had received final permission to begin growing the plants. With last week’s approval of eight more cultivators, production is expected finally to ramp up. Cultivators will eventually be expected to supply a planned 102 dispensaries across the state.

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The change begins to address what’s become the latest delay of many in Maryland, which passed medical marijuana legislation back in 2013.

According to the industry research group New Frontier, the state’s annual medical marijuana market will be worth around $221 million by 2021.

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The additional grow licenses come as welcome news for patients—especially after they’ve weathered numerous delays that have slowed implementation of the state’s medical cannabis law.

State courts are currently reviewing two separate cases alleging that state regulators improperly picked companies to grow cannabis. Meanwhile lawmakers in Maryland have weighed adding regulations to ensure more cultivator licenses go to firms owned by African-American entrepreneurs.

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Of the 15 cultivator licenses earmarked for approval, none were granted to black applicants—an outcome the state explicitly tried to avoid when crafting state licensing rules.

In any event, patients will have to continue to wait for medicine, as there is only one dispensary open in the state, by appointment only. As of last Monday, 12,000 people that have signed up to become eligible for medical marijuana, according to the Baltimore Sun. On the provider side, 400 medical professionals have signed up to be able to recommend cannabis.

Florida Medical Board to Vote on Cannabis Rules for Doctors

Florida health regulators will weigh in on several key cannabis issues this week, with the state Board of Medicine scheduled to vote on rules for doctors who recommend medical marijuana.

A chief issue is how how to handle disciplinary actions around medical cannabis recommendations, local WUSF News reports. Under proposed rules, physicians who improperly recommend cannabis could be placed on probation or have their license revoked, and they could face fines of $1,000 to $5,000. Under the proposal, sanctions could take effect on a doctor’s first offense.

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The board has also been working on a consent form that doctors would present to patients throughout the state. It would warn cannabis patients against getting behind the wheel of a vehicle after consuming cannabis—medical or not.

Florida Issues Two More Medical Marijuana Licenses

The state also announced on Wednesday that two more medical marijuana businesses received licenses from the state. The state Health Department issued licenses to Tornello Landscape—also known as “3 Boys Farm”—and Plants of Ruskin, both of which are located in Ruskin, FL.

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Another three licenses are set to be awarded, the department says. According to the Sun Sentinel, those licenses will go to Loop’s Nursery and Greenhouses in Jacksonville, Treadwell Nursery in Eustis, and Arcadia-based Sun Bulb Nurseries.

When Florida residents voted overwhelmingly in November to expand the state’s limited medical marijuana program, seven licenses were originally granted to cannabis operators. The state is handing out more because of a law approved by the state Legislature during special session last month. The law added several qualifying conditions for medical marijuana and expanded the number of  licenses in order to accommodate increased demand from the influx of an estimated 500,000 new patients.

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Nevada Cannabis License Applications Stream in as Deadline Approaches

Today’s the deadline to apply for a license to operate a Nevada cannabis business, and the applications are streaming in. Already the state Department of Taxation has received more than 143 license applications, according to the Las Vegas Sun.

Deonne Contine, the director of the Department of Taxation, told the Las Vegas Sun that “most, if not all” of the adult-use license applications received so far have come from entities already licensed through Nevada’s medical marijuana program.

The applications represent not only retailers, but also wholesalers, growers, processors, and others, Contine added. The department wants to issue licenses by July 1 so the state’s cannabis market can launch on schedule.

Though some Nevada lawmakers would like to begin early sales on July 1, bills remain in the Legislature that would address certain tax issues and set additional regulations.

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One point of contention is how Nevada’s adult-use law will integrate with the state’s medical marijuana program. On Tuesday, the Assembly Ways and Means Committee heard testimony in favor of keeping the medical program separate from the adult-use market. Currently, the programs are set to merge under the Department of Taxation.

Keeping the medical program strong and patient-focused has been a main concern of many in the state, especially given frustration by patients in Oregon, Washington, and Colorado who have seen price increases and product shortages in their medical marijuana programs since adult-use implementation.

Others have expressed concerns that the state’s launch of an adult-use market could invite a crackdown from the Trump administration that could threaten state’s medical program. Key administration officials have disparaged legal cannabis in recent months and pledged to review federal enforcement policies in legal states.

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Cannabis Lounges Not Coming to Sin City—Yet

When businesses do open, don’t expect to be able to light up a blunt at the Bellagio’s blackjack tables. Sen. Tick Segerblom’s Senate Bill 236, which would’ve legalized cannabis lounges to provide tourists a place to consume socially, failed to gain traction in the Assembly before this past Friday’s deadline. It’s on hold at least until next session.

The proposal would have allowed cannabis clubs in open areas where gaming was not the focal point, while also allowing promoters the ability to apply for special licenses to allow consumption at festivals and other events. It passed the Senate on a 12–9 vote.

Had the bill made it through the full Legislature, there were still no guarantee Gov. Brian Sandoval  would sign it into law. He’s said he’s not so sure social consumption is a good thing for the state.

“The Governor has called for Nevada’s recreational marijuana industry to be restricted, responsible, and ultimately respected,” a spokesperson for the governor’s office told the Las Vegas Review-Journal. “He is doubtful whether ‘pot lounges’ would achieve these stated goals but will review the legislation should it arrive on his desk for signature.”

Colorado recently attempted to pass a similar measure, but it failed to make it out of Legislature. Oregon lawmakers are also weighing social-use legislation, SB 307, which has the support of Portland officials.

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Maryland Grants First-Ever License to Grow Medical Cannabis

Four long years after Maryland lawmakers legalized cannabis for medical use, regulators have finally issued the state’s first license to grow the plant. The new licensee, a two-acre warehouse in Anne Arundel County, can begin cultivation immediately.

In a unanimous vote Wednesday, the Maryland Medical Cannabis Commission (MMCC) granted final approval to a company called ForwardGro, the Baltimore Sun reports. The firm has been positioning itself aggressively to be one of Maryland’s 15 licensed growers, pouring more than $10 million into building a state-of-the-art greenhouse in the basin of a reclaimed sand mine.

“A new industry in Maryland has been launched,” MMCC Executive Director Jameson said in a statement announcing the news. “They can start to grow immediately.”

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The company expects the first products to be available to patients early this fall—welcome news to patients who’ve been waiting to access cannabis in the state since legislators passed HB 881 back in 2014. Since then, the state’s medical program has run into numerous delays as it struggled to get off the ground.Of the 15 companies that were granted preliminary cultivation licenses in August 2016, ForwardGro is the first to earn final approval. Gail Rand, the companies chief financial officer, told the Baltimore Sun she overjoyed. Rand reportedly started to lobby the General Assembly to legalize medical cannabis more than five years ago, in the hope that it would minimize her son’s epileptic seizures.

But the state’s licensing process has also caused considerable controversy. This week a lawsuit sought to further delay the granting of final licenses over allegations that regulators failed to take applicants’ race into consideration during the process, a step required under state law.

Alternative Medicine Maryland filed an emergency request Monday in Baltimore Circuit Court to prevent the commission from issuing any final licenses. The medical marijuana company claims in the suit that the commission broke the law by not employing a race-conscious application process—a provision of the law designed to encourage more minority-owned cannabis businesses.

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Circuit Judge Barry G. Williams has not ruled on the emergency motion, according to the Sun. An attorney for Alternative Medicine Maryland says the court is scheduled to consider the request on May 25.

Once ForwardGro harvests its cannabis, it intends to sell them to licensed processors to turn the flowers into oils, tinctures, and vapor products for patients. The company will also sell directly to dispensaries.

As of Wednesday, 6,500 patients had applied for the medical marijuana program, commission officials told the Sun, and 276 physicians had registered to be able to recommend the drug.

Bills Aim to Increase Diversity in Maryland Medical Marijuana Industry

ANNAPOLIS, Md. (AP) — After Carey Tilghman’s 6-year-old daughter, Paisley, suffered from a stroke, doctors drafted a plan to use a round of Botox injections and muscle relaxers to treat her condition.

Searching for an alternative for her daughter, Tilghman found that a transdermal patch filled with cannabis, which has been linked to shielding the brain from stroke damage, could possibly be helpful to her daughter, but she hasn’t been able access the drug in Maryland’s stalled medical cannabis industry.

Maryland has had one of the slowest rollouts of medical marijuana in the country.

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The Natalie M. LaPrade Maryland Medical Cannabis Commission, which grants the licenses to growers, processors and dispensers, has been hampered by legal battles and pending legislation in the Maryland General Assembly since the state legalized medical cannabis in 2014.

This legislative session, state lawmakers are considering a spate of bills outlining different solutions intended to address a lack of diversity in licenses, and two lawsuits that have delayed the rollout of Maryland’s nascent medical cannabis industry.

The commission expects medical cannabis to be available to patients this summer, according to Vanessa Lyon, a spokeswoman for the group. Patient registry for the drug begins this month, but concerned residents are worried that bills may push back the rollout date even further.

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“We can’t delay access,” Tilghman said. “(Paisley) deserves to have a transdermal patch and play like a kindergartener can play. They want her on muscle relaxers; they want her to have surgery. How do you be a kindergartner on muscle relaxers?”

“You can’t,” she added, choking up.

The commission was tasked with ensuring racial and geographical diversity in their selection process, and on Dec. 9 it announced pre-approvals for 102 businesses to sell medical cannabis, which broke down into 15 growers, 15 processors, and 72 dispensaries.

However, preference for minority business owners may violate the Constitution, said Cheryl A. Brown Whitfield, principal counsel of the Maryland Department of Transportation.

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The state would need to conduct a study to evaluate whether discrimination does exist in the medical cannabis industry before it could take race-conscious measures in awarding licenses, said Zenita Hurley, the attorney general’s director of legislative affairs and civil rights. This study could take up to two years.

The commission used Towson University’s Regional Economic Studies Institute to rank the company applicants. RESI used a double-blind system that did not take into account the race of owners, which resulted in the commission failing to award licenses that ensure adequate minority representation, said Delegate Cheryl Glenn, D-Baltimore.

While the commission has listed the rankings of each company, it has not released the scores and the criteria for which they were ranked, said Darrell Carrington, policy director for the medical cannabis division of Greenwill Consulting, a government relations firm.

“We’re all flying blind right now because the commission refuses to release the scores,” Carrington said. “The rankings are meaningless if we don’t have the scores. How do we know how to move forward properly and know if we’re really making corrections to increase diversity and the like, if we don’t know the difference between (the companies) was 5, 10, or 30 (points).”

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Maryland includes a black or African-American population of 30.5 percent, a white population of 59.6 percent, and 9.9 percent who identify as another minority, according to data collected by the U.S. Census as of 2015.

“They can’t answer why they made the decisions they made.”

Delegate Cheryl Glenn, D-Baltimore

The majority of the companies selected for pre-approvals for growing and processing are led by white owners.

Of the 11 companies with pre-approved growing licenses that reported demographic data to the Maryland Medical Cannabis Commission, about 85 percent of the owners are white, about 8 percent are black, and about 7 percent identify as another racial minority. The nine pre-approved processing companies that reported data showed similar numbers, with 73 percent white ownership, about 15 percent black ownership, and about 12 percent other minority ownership.

The companies selected have about 76 percent male ownership and 24 percent female ownership.

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Moreover, after complaints surfaced that the commission didn’t fairly include representation in areas of southeastern Maryland, the commission revised their original unanimous decision on the 15 companies slated to receive growing licenses by bumping two higher-scoring applicants and replacing them with two lower-scoring applicants in the underrepresented areas.

GTI, one of the companies originally awarded a coveted pre-approval license, had already picked out a site in Washington County and began developing a plan to produce medical cannabis when they were replaced, said Delegate Brett Wilson, R-Washington. The company has since joined the other business bumped from the list, Maryland Cultivation and Processing LLC, in suing the commission.

The commission has been operating without oversight or transparency, Glenn said. “They can’t answer why they made the decisions they made.”

To address the lack of ownership diversity, the Legislative Black Caucus, which Glenn heads, has proposed two emergency bills that would overhaul the 15-member commission and reinstate it with members who reflect the racial and geographical diversity of the state.

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Sarah Hoyt, director of government affairs for the commission, wrote in testimony that this emergency legislation would “substantially delay the availability of medical cannabis to qualifying patients” by as much as two years.

But Glenn said her legislation would not slow the arrival of the medical cannabis industry.

“The commission operated in an arbitrary, opaque and misleading fashion,” said Pete Kadens, CEO and director of GTI, adding that overhauling the “inefficient” commission would actually speed the rollout of the long-awaited industry.

Kadens said he supported the 15 companies who have been pre-approved to start operating immediately.

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“Even though we were displaced for the purpose of geographic diversity, even though we scored higher on merit than five of the companies that now have pre-approvals for the state, even though we feel we were wronged, we do not want the patients of the state to be further distressed,” Kadens said.

One of Glenn’s bills would issue five to seven more licenses for both growers and processors. The bill would also give heavier consideration to businesses with majority black ownership.

The second bill would disband the current commission to create a nine-member Natalie M. LaPrade Medical Cannabis Licensing Unit. This new group would award new grower licenses in future years and would have a fund to provide minority- and women-owned medical cannabis businesses with loans.

Wilson has proposed a separate bill that would increase the number of growers from 15 to 17 to reinstate the two geographically bumped companies on the list. This could fix what he called a “fairness issue,” adding that it will likely immediately stop any pending litigation, he said.

Wilson said he doesn’t oppose the other bills and that it’s possible a number of the five bills may merge into “one bill that accomplishes everything.”

“We’re not in conflict with other bills,” Wilson said. “We don’t stand against the other proposals in any way.”

Delegate David Vogt, R-Carroll and Frederick, has also proposed a bill that attempts to squash the pending lawsuits, while also increasing minority and women ownership. His solution would accept the commission’s next 10 ranked applicants, which have been selected as alternates should any of the 15 growing businesses that have been pre-approved fall through.

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This bill wouldn’t impact how the commission measures any of the businesses that have been tentatively approved, but it would impact any new ones that haven’t been measured by requiring the commission to give extra weight to minority- and women-owned businesses.

Vogt’s bill also proposes to distribute grant money to the businesses’ local communities. The money would be used for infrastructure improvements, increased security and community development. He added that the amount, $250,000 for each area, is a “nominal amount” and that “ultimately, (the state is) going to get that impact money back — 10, 20 times over — with the tax revenue.”

Vogt, like Wilson, noted that he thinks it’s likely to create one bill that combined components from each to address the problems in the long-awaited industry.

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However, Glenn said she only supports the bills she is sponsoring.

Brian Bickerton, chairman of Mazey Farms, an alternate growing company ranked twentieth by the commission, said while he supports Vogt’s bill, he’s in favor of any legislation that moves the industry forward. His company has been waiting to officially launch its business for over two years.

“(It’s) been a long and arduous process,” Bickerton said. “There’s been a lot of tears on our end, but we believe in what we do, we believe in this industry, and we believe in the much-needed medicine that needs to get to the patients.”

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Mazey Farms is majority minority-owned, Bickerton said, adding that he thinks the best way to address the lawsuits and the diversity issues is to allow the commission’s next 10 alternative businesses to obtain licenses.

Carrington said it’s hard at this point to know which bill will be “the vehicle that will move (the industry) forward.”

However, taking the next 10 growing alternates, as Vogt’s bill proposes, would significantly address the diversity problem without a delay, Carrington said.

“I can’t stand another delay,” Tilghman said, her daughter, Paisley, leaning on her. “If another delay is put in place (Maryland will) lose a lifelong resident.”

Oakland Licensing Plan Builds in Diversity and Reparations

Oakland, Calif., paid big chunk of social-justice debt this week when its city council unanimously approved controversial reparations for blacks and Latinos affected by America’s War on Drugs.

‘Black folks built this city and we demand ownership in the industry,–as owners, not as workers.’

Carroll Fife, Oakland civic activist

Under a first-of-its-kind law originally approved last year, qualified minority applicants with majority ownership in medical cannabis businesses — nurseries, edibles kitchens, testing labs, distributors, dispensaries and others — will receive half of all licenses issued in Oakland, along with zero-interest loans subsidized by $3 million of the city’s cannabis tax revenue. “Black folks built this city and we demand ownership in the industry,” said activist Carroll Fife. “We do that as owners, not as workers.”

Oakland shocked the cannabis world when it approved the reparations in May 2016. The city became the first municipality to offer an institutionalized response to the disproportionate harms of cannabis prohibition—and the disproportionate opportunities that lie in prohibition’s end. Many had spoken out against the over-incarceration of people of color, and their under-representation among legal cannabis business owners. Oakland was the first city to do something about it.

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Regret and infighting followed the passage of that initial reparations program, though. Council members considered scrapping the requirement that 50 percent of permits be issued preferentially They haggled over the minimum length of residency requirements and added a sunset phase for permit preferences. Some issues were still be fixed during last Tuesday’s three-hour meeting, which drew more than 100 public speakers.

After a long night of debate and compromise, the city council finally approved a revised reparations plan.

The ordinances are designed to bring the city in compliance with state laws that will regulate the multibillion-dollar cannabis industry by 2018. Those laws stipulate that all cannabis businesses be licensed in the city in which they operate.

How will it all play out? Here’s a primer on Oakland’s preferential pot program.

What are reparations?

Reparations were conceived in 2015 to address concerns over racial inequity and tokenism in the cannabis industry, whose investors and owners are predominately white.

Oakland’s equity program created methods to help drug war victims enter the state’s legal medical cannabis market with protections that include majority ownership and appropriate responsibilities.

Although the law passed unanimously in May, many council members quickly regretted their votes as imperfections in the law became apparent. Eligibility time periods were extended and a loan program was added. The revised measure was approved unanimously, once again, on Tuesday in a midnight vote preceded by last-minute legislative sausage-making, Oakland’s equity program earmarks 50 percent of all cannabis business permits in the city for drug war victims; authorizes $3 million in zero-interest business loans to low-income blacks and Latinos; and a creates a system by which some applicants can speed the permitting process by donating office space.

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Beneficiaries

Preference will be given to blacks and Latinos arrested and convicted of cannabis-related crimes in Oakland within the past 20 years, and to residents of neighborhoods identified as having had significant numbers of cannabis arrests. Equity permit applicants are required to have lived in one or a combination of six designated neighborhoods for 10 of the past 20 years, and their current income must be below 80 percent of the city’s average median income. Even though some neighborhoods added before this week’s vote are gentrifying, all designated neighborhoods are predominantly black. By extending minimum residency requirements from 2 years to 10 years, the council clearly disfavors newer residents, many of whom are white.

Opposition

Critics of Oakland’s cannabis reparations plan say few people will meet those equity permit qualifications. They predict a crippling bottleneck created by the law’s stipulation that one equity permit must be issued for every general permit issued.

Collateral damage

Yes, it’s possible that some blacks and Latinos currently operating cannabis businesses in Oakland wouldn’t qualify for equity permits and could get caught in a permitting bottleneck.

What’s next

No start date for permitting has been announced, but Jan. 1, 2018, is the deadline by which businesses must have a local license or be operating in good standing with a city in order to continue operating under new state regulations. Oakland’s cannabis permits will be issued in two stages. In the first stage, half of all licenses will be reserved for equity applicants while an assistance program providing zero-interest business loans and technical help to equity applicants will begin raising $3 million in expected cannabis tax revenue. In stage two, after loan funds are raised, there won’t be any restrictions on licensees. City officials said approximately 130 businesses have been operating without a permit.

Drug-war math

In a city whose population is equally represented by three groups that use cannabis at roughly the same rates, 2015 statistics show disproportionate cannabis arrest rates for blacks (77 percent), Latinos (15 percent) and whites (4 percent). “The data shows that for over two decades, black and brown residents were arrested and incarcerated for drug offenses at disparately high rates, while largely white cannabis cultivators, manufacturers and distributors who were not operating entirely above board either, flourished under changing laws designed to accommodate the burgeoning industry,” said Darlene Flynn, director of the city’s newly created Department of Race and Equity.

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Fast-track options

People who are not eligible for an equity permit but want a general permit can speed the process by offering free rent or real estate to an equity applicant.

Is this constitutional?

Maybe there’s no cannabis arrest on your rap sheet. Maybe you live in one of Oakland’s affluent neighborhoods. Maybe you’re Filipino or Scandinavian. What can you do about Oakland’s reparations? You can file a lawsuit. Naresh Channaveerappa, an attorney who represents cannabis businesses, said he believes that preferential treatment is unconstitutional. “Anyone who is harmed by this preferential treatment has legal ground to challenge it,” he said.

What’s the state’s stance?

When cannabis is finally regulated in California in 2018, a cannabis business will need both a city permit and a state license before it can operate.  State law denies licenses to the cannabis convicts Oakland permits. But California’s recreational cannabis law, Proposition 64, the California Adult Use of Marijuana Act, includes a provision for record expungement. A spokeswoman for California’s Bureau of Medical Cannabis Regulation said state regulators will respond case by case and may deny licenses to people who have committed cannabis crimes. Last summer, Oakland’s City Council approved a resolution asking state legislators to expunge cannabis-related criminal records and to remove restrictions excluding people who’ve committed cannabis crimes from participating in the cannabis industry.

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California Herbal Remedies – 2016 Leafly List Winner (Southern California)

The Results Are In: Arizona Awards 31 Medical Marijuana Licenses

In a scene reminiscent of the NBA draft or a bingo hall, the Arizona Department of Health Services held a random selection on live webcast last week. The prize? One of the state’s few remaining nonprofit medical marijuana dispensary certificates.

The health department received an overwhelming 747 applications during the July 18-29 application period, but only 31 certificates were slated to be handed out last Thursday. Officials picked most of the recipients based on rules the department created five years ago, making most selections through a winnowing process designed to place new dispensaries near the greatest number of medical cannabis patients. Nine of the 31 available certificates were selected via a random drawing.

Each of the new dispensaries must be located within one of the state’s predetermined geographic areas for cannabis businesses. The random drawing was necessary because nine of the state’s so-called Community Health Analysis Areas, used to determine the distribution of dispensaries across the state, drew applicants that were so evenly matched that they were considered ties. To break the ties, a department official and two local accountants oversaw a lottery-style selection process.

Members of the <strong><a href=Arizona Department of Health Sciences during the lottery selection of nice licenses. Photo from http://azdhs.gov/" width="840" height="526" />Members of the Arizona Department of Health Sciences during the lottery selection of nice licenses. Photo from the Arizona Department of Health Services

About 20 people showed up for the proceedings, held in a small auditorium at the DHS headquarters just south of Van Buren Street on 18th Avenue, in Phoenix. Most of the 747 applicants went home disappointed, not to mention a little lighter in the wallet. Of the certificate’s $5,000 application fee, $4,000 is nonrefundable.

Some of the newly licensed businesses could have their stores open within a few months, Ryan Hurly, a lawyer who represents dispensaries, told the Phoenix New Times.

Voters approved a medical marijuana measure in 2010, and today date Arizona is home to 99 dispensaries that legally sell cannabis products to the state’s 100,000 registered patients. The latest round of license applications brought in roughly $3 million. The money goes into the state’s medical marijuana fund.

Nearly all the new dispensaries will be in the Phoenix or Tucson metro areas, which could make them some of the busiest retail stores in the state if voters approve Prop. 205, which would legalize cannabis for all adults over 21. Here’s a complete list of the recently awarded licenses:

Rank CHAA Name CHAA ID Allocated Application ID
1 Paradise Valley Village 46 AZDS000001267
2 North Mountain 52 AZDS000001240
3 Deer Valley 44 AZDS000001272
4 Chandler SE 80 AZDS000001162
5 Scottsdale N 40 AZDS000001307
6 Camelback E 56 AZDS000001185
7 Peoria 41 AZDS000001276
8 Gilbert E 77 AZDS000001481
9 Mesa E 65 AZDS000001204
10 Scottsdale S 58 AZDS000001089
11 Surprise 47 AZDS000001497
12 Tanque Verde 106 AZDS000001289
13 Tucson NE 105 AZDS000001015
14 Tempe N 68 AZDS000001010
15 Mesa W 69 AZDS000001229
16 Tempe S 74 AZDS000001239
17 Maryvale 60 AZDS000001352
18 Alhambra 59 AZDS000001359
19 Yavapai Co. NE 26 AZDS000001514
20 Superior/Kearny 93 AZDS000001438
21 Chandler NW 79 AZDS000001051
22 Tucson E Central 109 AZDS000000986
23 South Mountain 71 AZDS000001360
24 Glendale N 45 AZDS000001034
25 Desert View/North Gateway 42 AZDS000000842
26 Mesa Central 70 AZDS000000948
27 Ahwatukee Foothills 78 AZDS000001271
28 Maricopa Co. W 51 AZDS000001233
29 Lake Havasu City 8 AZDS000001508
30 Mesa S 73 AZDS000001075
31 Apache Junction 92 AZDS000001248