Last week, I presented oral argument to the Fifth District Court of Appeal in support of the people’s right of referendum. Long story short, the Kern County Board of Supervisors banned medical marijuana dispensaries in 2011, the people protested via referendum petition, and to this day the County has refused to comply with the legal mandate to submit the ban to voters before giving it effect. The County contends that they may reenact a protested ordinance after the passage of time; however, neither the California Constitution nor the Elections Code allow for such limitation on the people’s right to referendum.

The Court of Appeal granted our motion for calendar preference in light of the upcoming March election, at which the people and the Board of Supervisors have submitted competing ballot measures on medical marijuana for consideration by the voters.

Measure D is a people’s initiative measure, meaning it originated with the people, and will be submitted to a vote of the people. If and when the people adopt this measure (it would need to get more votes than Measure E), the Kern County Board of Supervisors will not have the ability to amend or repeal it. In other words, the Kern County electorate would gain control over the issue.

Enter Measure E. The County Board has demonstrated over the past decade that it is unwilling to relinquish control over the issue of medical marijuana, and has persistently interferes with the will of the voters. Upon the qualification of Measure D for the ballot, the County Board cooked up Measure E, which would give the Board full control over the issue. If the voters approve Measure E, the Board could amend or repeal it at any time in the future.

The Board’s agenda, as shown through its actions over the past decade, is to continue to ban medical cannabis in Kern County. The Board’s proposal of Measure E is yet another maneuver to silence the voices of the electorate and maintain control over the issue.

The initiative and referendum are powerful direct democratic tools reserved to Californians to use when their institutions are unresponsive. Measure D is the people’s way of taking control on this issue and giving power their voices. We believe the voters in Kern County are smart enough to see through the County’s intentions with Measure E, and expect it to be rejected in March.

Last month, comedian Sacha Baron Cohen delivered a now widely shared keynote speech at an Anti Defamation League event in New York, in which he spared no harsh words for social media companies who he claims provide a platform for hate speech and the proliferation of fake news. In his speech, Cohen offered sharp criticisms for social media executives’ weak justifications for allowing this to occur, and offered suggestions on how to clean up the mess he claims they created. Cohen’s criticisms aren’t new: Facebook reportedly announced that it would not fact check political ads, and Twitter has reportedly not banned certain forms of hate speech because such bans would allegedly end up blocking some political accounts.

Given all of the misconduct that social media companies allegedly let fly under the radar (mostly on the excuse that doing anything about it would infringe free speech), it may shock many readers to learn where many social media companies actually draw a line in the sand: hemp-derived CBD advertisements.

For some reason, if you are a politician who wants to run attack ads on a competitor using completely fake information, you will probably be able to find some platform that allows you to do it, if you pay enough. But if you are a small business that sells a hemp CBD bath bomb, you run the risk of having your entire social media account deleted without any repercussion or remedy. This makes no sense.

Over the past few months, there have been many reports detailing how social media companies have banned user accounts for advertising CBD products (see here, for example). Many social media companies, like Facebook and Instagram (which is owned by Facebook), do not even have a public term and condition or policy that states that CBD advertisements are prohibited anywhere on their website. Apparently, Facebook’s bans have been justified by language on its website that says: “Ads must not promote the sale or use of unsafe supplements, as determined by Facebook in its sole discretion.” But right below that language, the policy lists a series of examples, and does not include CBD, which Facebook could easily include to promote transparency.  Nevertheless, according to many articles published this year, many small businesses have lost their accounts for advertising CBD products.

Despite that Facebook doesn’t publish any terms or conditions relative to CBD, according to the Verge, Facebook’s ban is really meant to target ingestible products. According to Digiday, Facebook apparently won’t ban advertisements regarding topical hemp products. When the Digiday post came out, I attempted to verify whether Facebook had published any information that would give CBD advertisers guidance on what they can and cannot publish, but from what I can tell, the Facebook terms have not changed. All that we have are a few statements from various third-party journalists who are not affiliated with Facebook or other social media companies, and whose statements are not binding on the social media companies. Nothing is stopping Facebook from continuing to ban people who advertise any kind of CBD products.

For any small business that sells CBD products, reliance on these posts can be dangerous. Any small business owner knows that getting social media followers takes time, and often, lots of money. With the potential to have an account shut down, and to lose all the good will associated with that account, social media advertising can be a serious gamble for many businesses. There is no clear appeal right for these denials and the idea of taking a social media giant to court (or forced arbitration) is just unfathomable for almost any small business.

Of course, there are some exceptions to this rule. Twitter, for example, has express (though overly restrictive) rules regarding CBD advertising in the United States, which I’ve copied below:

       We permit approved CBD topical advertisers to target the United States, subject to the following restrictions:

As we have written about previously, we represent a property owner and retailer in an appeal against Kern County pending in the Fifth Appellate District (County of Kern v. Alta Sierra Holistic Exchange Service, Case No. F077887). The legal landscape for cannabis regulation in Kern County has been in flux since 2009, when the County enacted an ordinance allowing medical cannabis dispensaries to operate in unincorporated areas of the County. Since then, there has been a constant battle between cannabis dispensary operators, Kern County voters, the County Board of Supervisors, and the courts regarding how to regulate cannabis dispensary activity in the County. Many cannabis dispensaries opened during this decade of legal uncertainty and wound up facing criminal and civil enforcement actions.

Last month, we filed a motion for calendar preference to have oral argument heard prior to the March 2020 election, at which two new cannabis dispensary regulation measures will be put before the voters. Within six days of filing, the Court of Appeal granted our motion. Oral argument will be heard in this case in February 2020.

HOW DID WE GET HERE?

In March of 2009, the County passed an ordinance that permitted medical marijuana dispensaries throughout the County as long as they were not located within 1,000 feet of a school.

In 2011, the Board of Supervisors approved an ordinance banning all dispensaries throughout the County. Before the effective date of the dispensary ban ordinance, however, the County received a referendum petition from voters protesting the dispensary ban ordinance.

The referendum petition triggered certain obligations under the Elections Code, including that the County was required to either (1) put the ban before the voters at an election, or (2) entirely repeal the ban and refrain from taking any further action that would have the effect of implementing an essential feature of the protested ordinance.

The County failed to do either, and the issue went before the Fifth District Court of Appeal in the case of T.C.E.F. v. County of Kern, where the Court of Appeal determined that the County’s actions violated the Elections Code and held the 2009 ordinance to be of full force and effect. (2016) 246 Cal.App.4th 301.

The Court of Appeal concluded that once the voters speak on an issue like they did with the referendum petition, a legislative body (the Board of Supervisors here) is prohibited from taking any action that would have the effect of implementing the essential feature of what the voters protested.

Despite this, a month after the Court of Appeal issued its decision in T.C.E.F., the County issued a new moratorium against dispensaries, extended that moratorium, and then ultimately imposed a new permanent ban against all dispensaries. These actions violated the Elections Code and the express directive from the Court of Appeal in T.C.E.F.

Our client established a dispensary in the wake of the T.C.E.F. decision, resulting in the prosecution of our client by the County. We appealed the trial court’s decision in that case. While the appeal was pending, two new two new cannabis measures were placed on the ballot for the County’s March 2020 election.

MARCH 2020 BALLOT MEASURES

Two competing cannabis ballot measures have qualified for the March 2020 election.

The first ballot measure, drafted by the Central Valley Cannabis Association, would authorize any medicinal cannabis dispensary that had ever operated on or before January 1, 2018 to re-open in any location where pharmacies may operate, except within 1,000 feet of a school. The Central Valley measure, if passed, would effectively repeal the County’s illegal New Ban Ordinance, and largely reinstate the 2009 ordinance that the Court of Appeal declared to be operative in T.C.E.F.

The County Board of Supervisors placed a competing measure, which is substantially similar to, though more restrictive than, the industrial zone ordinance that this Court invalidated on CEQA grounds in April 2016.

MOTION FOR CALENDAR PREFERENCE GRANTED

In light of these competing measures, we filed a motion for calendar preference to have the matter heard as soon as possible, before the March 2020 election. Within six days of filing, the Court of Appeal granted our motion. The Court of Appeal will hear oral argument in this case in February.

We are hopeful that however the Court of Appeal rules in this matter, it will finally provide some certainty for Kern County voters as well as investors and operators in the cannabis industry.

• Requesting to modify business operations or their premises
• Reporting changes to the business
• Reporting the addition or change of owners or financial interest holders
• Asking questions about the agencies’ interpretation of rules
• Self-reporting potential rule violations in order to mitigate potential enforcement
• Responding to allegations from agencies that rules have in fact been violated

In any of these situations—or in virtually any other situation where a cannabis company is interacting with a state or local agency—it’s important to know exactly how to interact with regulators and what exactly to say and how.

First, what you say to regulators matters. A lot. Our cannabis attorneys have seen licensees ask routine regulatory questions, only to be told that they are violating some obscure rule, which jeopardizes the license. It’s often a challenge to communicate with agencies or governments, but that’s especially so for cannabis companies that don’t have a firm understanding of the applicable laws, regulations, and guidance materials (and especially often buried FAQs) that agencies may rely on to interpret their own rules (such as final statements of reasons for rules, guidance issued in press releases, etc.). While there are situations where even the most seasoned experts can’t avoid enforcement by the agencies, it’s still important to understand the rules before you ever open your mouth to a regulator.

Second, when you communicate with agencies or governments, you are creating a record that can either be used by you or against you. If a cannabis company ever finds itself in a position where it needs to appeal an agency decision, the communications it’s had with the agency on a specific point will be relevant in that appeal. The cannabis company will want the neutral evaluator to see that the company adequately explained how it was in fact complying with the agency’s rules or taking steps to mitigate any potential rule violation before the agency penalized it. If you have an opportunity to effectively communicate with an agency and make your case in writing, you shouldn’t hesitate.

Third, and most importantly, if a rule violation penalty is inevitable, you’re going to be neck-deep in the Administrative Procedure Act of your state, which is pretty difficult to sort on your own. Prosecuting an administrative appeal requires fairly significant litigation experience as well as a deep understanding of an agency’s rules and general administrative procedures. These appeals can carry serious consequences if not charted properly, so get your administrative appeal plan and strategy together now.

The bottom line is that regulatory compliance hinges a lot on your communications with your direct government overseers, and you need to learn the dance of how to interact with those regulators accordingly before you find yourself wading into serious rule violations from which you cannot recover.

On Thursday, the United States House of Representatives voted 267-165 to prohibit the United States Department of Justice from using appropriated funds to interfere with state-legal cannabis programs. The Rohrabacher-Farr Amendment (a.k.a. the Hinchey–Rohrabacher, Rohrabacher-Blumenauer, and Joyce Amendment) has provided similar protection to state-legal cannabis programs over the past decade, but only to medical programs. The new amendment would extend to adult-use cannabis regimes in addition to medical cannabis programs (but only if it is approved by the Senate and signed by the President). The amendment was introduced by Earl Blumenauer of Oregon as H. Amdt. 398 to H.R.3055, a bill providing appropriations for Departments of Commerce and Justice, Science, and Related Agencies for the fiscal year ending September 30, 2020.

A Spirited Debate With Alabama Leading the Opposition

Following Mr. Blumenauer’s introduction of the amendment, Mr. Robert Aderholt of (hemp friendly) Alabama spoke in opposition, arguing that under the Controlled Substances Act, the Drug Enforcement Administration defines schedule I drugs as having no current acceptable medical use and a high potential for abuse, and that there is no scientifically recognized medical benefit from smoking or eating marijuana plants.

Mr. Blumenauer responded with:

“[i]f we were rescheduling drugs today, cannabis probably wouldn’t be scheduled at all, and what would be Schedule I is tobacco, which is highly addictive and deadly. It is widely known now that there are, in fact, medicinal purposes to be obtained from using cannabis. That is why the voters in the gentleman’s own State just approved medical marijuana.

But the evidence is clear. You can find that out with children in your State who use medical cannabis to stop extreme seizure disorders; people who use cannabis to be able to stop the violent nausea associated with chemotherapy; or veterans that use it for PTSD, traumatic brain injury, or chronic pain. This is what the American people have demanded, why it is now legal in 33 States, why it has some version in 47, and is supported by two-thirds of the American public and 90 percent for medical marijuana. It is time that we extend this protection to these State legal activities so that they can thrive and move forward.”

Mr. Blumenauer yielded time to Mr. Jose Serrano of New York and Ms. Eleanor Holmes Norton of Washington, DC, who emphasized the importance of this protection to their respective jurisdictions. Following a voice vote that favored the Ayes, Mr. Aderholt demanded a recorded vote. The recorded vote showed wide bipartisan support for the measure, with 41 Republicans supporting.

Breaking Down the Rohrabacher-Farr Amendment

The Rohrabacher-Farr Amendment is a rider in an omnibus appropriations bill funding the federal government. Since it was first passed, it has been renewed periodically with bipartisan support. The Rohrabacher-Farr Amendment, which prohibits interference with state-legal medical cannabis programs only, is still included as Section 531 of H.R. 3055. The current version of the Rohrabacher-Farr Amendment is in effect through September 2019.

The Ninth Circuit has interpreted the Rohrabacher-Farr Amendment as prohibiting the Department of Justice from spending funds from relevant appropriations acts for the prosecution of individuals engaged in conduct permitted by state medical marijuana laws and who fully complied with such laws. See U.S. v McIntosh (9th Cir 2016) 833 F3d 1163, 1178 (McIntosh). In McIntosh, the Ninth Circuit warned that the federal government can appropriate funds for prosecutions under the Controlled Substances Act tomorrow, or the temporary lack of funds could become a more permanent lack of funds if Congress continues to include the same rider in future appropriations bills.

Since the McIntosh decision, the Rohrabacher-Farr Amendment has been useful in halting federal prosecutions and asset forfeiture actions.  (See e.g. U.S. v Pisarski (N.D. Cal, No. 14–cr–00278–RS–1), and this story describing the return of $257,733 seized by law enforcement officers from a licensed California cannabis distributor.) Pursuant to the Ninth Circuit’s interpretation of the Rohrabacher-Farr Amendment, where a person’s conduct strictly complies with all relevant conditions imposed by state law on the use, distribution, possession, and cultivation of medical marijuana,  federal prosecution is barred unless and until a future appropriations bill permits the government to proceed.

Bottom Line

If the new Blumenauer Amendment becomes law, the same protections from federal prosecution afforded to state-legal medical cannabis programs will extend to adult use programs. Unless and until that happens, however, adult use programs remain at risk. We perceive that risk as relatively marginal, but hopefully the Senate agrees that it is time to eradicate the possibility altogether.

When it comes to tamping down the illicit market, there is often little that legitimate, licensed cannabis companies can do besides out-market and sell a higher quality product. Instead, the ball is largely in the state’s court. And to date, the state has not really made a noticeable dent in that illicit market.

This may lie in the fact that the state’s biggest (and sometimes only) method to combat the illicit market is through enforcement of cannabis laws rather than using the legislature to deal with certain illicit-market problems (though, to be sure, there have been some attempts which I’ll get into below). In fact, trade groups in the City of Los Angeles are threatening to sue the city for not enforcing against local operators enough. This is a tricky issue, and it’s not always so clear. The limited resources at the state and local level mean that there is only so much enforcement that government agencies can do, and enforcement alone is not likely to do anything unless the cities and state can better incentivize lawful operations.

The biggest problem with enforcement over legislation is that it’s not a whole lot different from the prohibition era. Shutting down illegal pot shops is sort of like a game of whack-a-mole, which doesn’t get to the root of the problem. Creating comprehensive legislation that makes sales easier for licensed operators and eliminates barriers to entry for new operators could reduce incentives and opportunities for illicit-market sales and make the lawful market more competitive. I’ll take a look at some ways the state could do that below.

#1 Allow More Licenses

It almost goes without saying that the number one way to tamp down the illicit market is to just allow more licenses. I’m not just referring to retail sales, but to all license types. The more licensed operations there are, the less of a likelihood that there will be illicit-market sales.  As our Washington and Oregon cannabis lawyers can tell you, it’s harder for the illicit market to survive in a state with high supply and lower prices, and having more licensed cannabis companies is certainly a way to accomplish that.

As readers of this blog are likely aware, there was recently an effort under way in the state legislature to force certain cities to allow retail licenses if more than 50 percent of their populace voted in favor of legalizing adult-use cannabis a few years back (the bill was AB-1530, which I wrote about here). Unfortunately, in April, the bill failed to pass. It could be re-introduced, but that will probably take significant time and even then, it may not be likely to muster sufficient votes to ever become law.

The bottom line is that prohibition doesn’t defeat the illicit market. It didn’t for decades while cannabis was 100% illegal, and it won’t now in the regulated market. Cities that don’t allow lawful cannabis sales aren’t going to block pot from entering their limits, they are just going to miss out on taxable sales, permitting fees, and job creation, and ensure that criminal activity continues to proceed. Another possible remedy for these cities is to allow even delivery, but as I’ll talk about below, there is resistance to even that across the state.

#2 Allow More Deliveries

Allowing deliveries is perhaps the best compromise for cities that want to eliminate the illicit market but get queasy when it comes to the idea of having a pot shop on main street. Allowing deliveries from other cities that license delivery retailers is a win-win for cities like this. Cannabis will still be available, and they won’t have to deal with it head on.

But many cities, again, oppose this concept. In fact, more than 20 cities banded together earlier this year and sued the California Bureau of Cannabis Control when the Bureau passed a rule allowing pot deliveries into any jurisdiction in the state. So far, not much has happened with that lawsuit and it may be quite a while before it’s resolved. But the point is that cities here are doing everything in their power to resist this compromise, and the result may be a bigger illicit market.

#3 Speed Up the Licensing Process

Even if the state can’t force cities to accept permit applications just yet, it can expend additional resources on assisting current state licensees with their applications. Earlier this year, it was reported that businesses across the state were losing their licenses because certain state agencies couldn’t process them fast enough. Our California cannabis attorneys see the same thing—cannabis companies press on to file applications and the applications seem to just sit there for a long time. There are obvious budget issues and the agencies are clearly under a lot of pressure, but the state can act to better fund the agencies to ensure that they can process licenses more quickly.

It’s true that the state has now begun issuing provisional licenses more quickly, but those are currently only available for cannabis companies that once had temporary licenses (see this update from the BCC).  In other words, for any cannabis company that didn’t get a temporary license in 2018 (they can no longer be issued), provisional licenses aren’t currently available, and those companies will have to sit in line for who knows how long.

If licenses aren’t issued and companies can’t operate, then the same problem that I identified in points 1 and 2 above exists. The illicit market will continue to flourish where there’s a lack of competition.

#4 Broaden Hours of Operation

Cannabis stores across the state have very restrictive permissible hours of operation. The Bureau of Cannabis Control allows retailers (including delivery drivers) to make sales only between 6 AM and 10 PM. Cities can’t allow broader sales, but many of them restrict those hours even further. This is a problem, when illicit sales are available 24/7. If a customer wants to purchase cannabis at 10:30 PM, they may just look to the illicit market rather than wait. There is no great reason for cutting sales off at 10 PM or earlier and expanding the permissible sales hours could reduce the illicit market.

#5 Lower Taxes

Probably one of the bigger reasons that the illicit market can survive is the price of cannabis. Illicit-market sellers probably aren’t paying taxes or charging sales tax, and therefore can charge much lower prices. Even taxes on cultivators here in California will ultimately drive up the price of cannabis sold at retail. So, California lawmakers introduced a bill recently to lower the excise tax and temporarily suspend the cultivation tax, but that bill effectively died last month. It looks like, for now, we’ll still have high taxes on cannabis here.

#6 Enforcement

I know I said above that enforcement isn’t the answer to the illicit market, and that’s generally true. Enforcement alone will never be the solution to illicit-market sales, if there is also prohibition. We’ve already seen enforcement efforts across the state, but they’ve generally been few and far between and not too successful given the flourishing illicit market. Simply increasing them isn’t likely to do very much unless the state can ramp up its efforts to get more cannabis businesses licensed.

However, enforcement combined with active and broad licensing will be a way for states to eradicate the illicit market. If the state and local jurisdictions adopt policies that make it easier for a sufficient number of legitimate cannabis companies to survive and operate, while going after the companies that don’t follow the rules, that’s the best thing they can do to ensure the viability of the legal market.

One of the things I like best about teaching a graduate level course is the challenge of articulating difficult concepts to smart people. Good students will not let you off the hook on hard problems, and there are plenty of vexing issues when it comes to cannabis. It’s fascinating in an almost bottomless sense, and the further you go with it, the more you appreciate the breadth and scope of the problem. Below are a few observations on things that have been especially interesting, and which I did not expect.

The old laws are worse than you think.

Most people who have followed the story of cannabis in the United States understand the racially disparate impact cannabis laws have had, by design, and particularly on black and Latino populations. They will cite to the corrupt motivations behind President Nixon’s support of the federal Controlled Substances Act, and maybe to the disturbing crusades of Henry Anslinger before that. But people are often oblivious to actions and policies endorsed by states for the past 50 years, including profoundly harmful legislation like the Rockefeller Drug Laws instated in New York in 1973. Those laws were the toughest drug laws in the nation at that time and served as a model for many other states on issues like mandatory minimum sentencing, elimination of plea bargaining, elimination of suspended sentences, elimination of parole possibilities, etc. Today and historically, most arrests and imprisonment for cannabis crimes happen under state laws. The federal laws may set a trend, but state actions have been more impactful and more damaging overall.

The new laws are pretty lousy too.

States continue to adopt cannabis licensing regimes that preclude individuals convicted of crimes from participating in cannabis business ownership. Generally speaking, there are no exemptions for prior felonies related to cannabis, and none of the early recreational cannabis programs contained restorative justice or social equity dimensions. The federal laws aren’t any better. The 2018 Farm Bill, for example (and with limited exceptions) expressly bars “any person convicted of a felony relating to a controlled substance under State or Federal law” from growing hemp under a USDA certified program. There is no reasonable justification for this type of exclusion and it is disappointing that our legislators continue to leave people behind.

Cannabis law is vexing; policy is harder.

You can tie yourself into knots with legal arguments as to why state cannabis programs may be defensible under the 10^th Amendment, or why state-legal marijuana does not cause the United States to violate its international treaty obligations on controlled substances. That stuff is pretty fun. But as a sheer intellectual exercise, policy is harder.

Every semester, we do about two hours on the optimal way to tax cannabis production, distribution and sale. We could do 20 more. Every semester, we spend an hour or two talking about how to build a social equity program to benefit disenfranchised people and populations. No one has come close to figuring that one out, either. The list goes on and on.

This area is highly dynamic.

I realize this fact every year when I resurrect the syllabus and half (or more) of the readings need to be replaced. Students realize it over the course of the semester, too, when readings become obsolete– sometimes from week to week. By way of example, here is what happened in each of the past three Januaries, as we kicked off the semester.

• In January 2017, President Trump took office and appointed Jeff Sessions as Attorney General. Many of the states that voted to legalize a few months prior (including California) began to recalibrate their efforts and proposals.
• In January 2018, the Cole Memo, Wilkinson Memo and other federal guidance were abruptly revoked. Industry as well as state attorneys general like Bob Ferguson were gearing up for litigation and raids.
• In January 2019, the Farm Bill had just passed, legalizing industrial hemp. At the international level, the World Health Organization recommended total descheduling of hemp/CBD and a reschedule of marijuana.

Developments like these can be incredibly disruptive to a fixed curriculum! As with lawyering in the cannabis space, or simply running a cannabis business, everyone has to roll with it.

People love this stuff.

We end up with a long waitlist every year, and every year I get emails from students the first few weeks trying to wriggle in. The legal and policy mechanics of peeling back layer after layer of prohibition is compelling, especially to students who are accustomed to studying comparatively settled bodies of law. I’ve been fortunate to see a few of the students go on to get jobs as cannabis business lawyers in Portland and elsewhere, which may be the best part of all.

Long story short, in March of 2009, the County passed an ordinance that permitted medical marijuana dispensaries throughout the County as long as they were not located within 1,000 feet of a school.

After adopting a moratorium on new dispensaries, in 2011 the Board of Supervisors approved an ordinance banning all dispensaries throughout the County. Before the effective date of the dispensary ban ordinance, however, the County received a referendum petition from voters protesting the dispensary ban ordinance.

The referendum petition triggered certain obligations under the Elections Code, including that the County was required to either (1) put the ban before the voters at an election, or (2) entirely repeal the ban and refrain from taking any further action that would have the effect of implementing an essential feature of the protested ordinance.

The County failed to do either, and the issue went before the Fifth District Court of Appeal in the case of T.C.E.F. v. County of Kern, where the Court of Appeal determined that the County’s actions violated the Elections Code and held the 2009 ordinance to be of full force and effect. (2016) 246 Cal.App.4th 301.

The Court of Appeal concluded that once the voters speak on an issue like they did with the referendum petition, a legislative body (the Board of Supervisors here) is prohibited from taking any action that would have the effect of implementing the essential feature of what the voters protested.

Despite this, a month after the Court of Appeal issued its decision in T.C.E.F., the County issued a new moratorium against dispensaries, extended that moratorium, and then ultimately imposed a new permanent ban against all dispensaries. These actions violated the Elections Code and the express directive from the Court of Appeal in T.C.E.F.

We are representing a property owner and retailer who established a dispensary in the wake of the T.C.E.F. decision. As a result of the County’s disregard for the Elections Code and the T.C.E.F. decision, our client was prosecuted by the County, and lost his case at the trial court level.

We’ve just completed briefing the appeal before the Fifth District, where we intend to show that the County’s disregard for the will of the voters is not only a violation of the Elections Code but also of T.C.E.F., and that if the County wishes to implement a full ban against dispensaries it must put the issue before the voters.

The power of the voters cannot be usurped by a legislative body. As the Court of Appeal has already stated, allowing the Board of Supervisors to implement the essential features of the protested ban ordinance would force the voters to (1) invest more time, money and effort in circulating a new protest petition or (2) acquiesce in the board’s legislative agenda. Even if they obtained enough valid voter signatures in time to protest the additional action, a board of supervisors could start the process again by repealing the additional action and adopting a slightly modified action that still achieved the essential feature of the protested ordinance. This cycle could continue until the most determined protesters were worn down, thereby effectively nullifying the referendum power of local voters. T.C.E.F., supra, 246 Cal.App.4th at p. 322. We can’t let that stand, and we look forward to updating this blog as the case proceeds to oral argument.

Happy MLK Day!

For our international readers, Martin Luther King, Jr. Day is a federal U.S. holiday marking the birthday of its eponymous civil rights hero. Dr. King was the chief spokesperson for nonviolent activism in the Civil Rights Movement, which successfully protested racial discrimination in federal and state law. Dr. King was assassinated in 1968, four years after the passage of one of the great U.S. laws of the 20^th century, the Civil Rights Act of 1964. His death also came two years prior to one of the 20^th century’s most controversial and insidious laws, the Controlled Substances Act of 1970 (CSA).

As cannabis business lawyers, we write about cannabis law topics every day of the year on this blog, but we seldom address pure social issues. When it comes to cannabis, however, it is sometimes difficult to separate law and policy. This is because the federal prohibition of marijuana in the U.S. has had a racially disparate impact on non-white individuals, especially black and Latino Americans. That should come as no surprise to anyone: It is well documented that former president Richard Nixon wanted to link marijuana use and its negative effects to black people and hippies, who he perceived to be his enemies, when he signed the CSA.

That was almost 50 years ago, but in a way, not much has changed. Although the Trump administration has instated policies that make it more difficult to track drug arrests, publicly available FBI data reveals that 659,700 marijuana-related arrests occurred in 2017, comprising 40.4% of all reported U.S. drug arrests. This is nearly 12,000 more marijuana arrests than were made in 2016 (which, in turn, saw an increase from 2015). Thus, marijuana arrests are increasing, even as more states legalize possession and sale of the plant. It is profoundly regrettable that non-white individuals are arrested for marijuana crimes on a grossly disproportionate basis to whites, today and historically, despite lower levels of consumption overall. Most arrests are made for simple possession of small amounts of weed, and are made at the state and local level.

Last year at this time, Jeff Sessions was our attorney general. Although he is gone, his retrograde policies live on as Department of Justice directives with respect to marijuana and marijuana-adjacent issues. These policies include:

• Support of draconian federal sentences for drug-related convictions (which affect blacks and Latinos disproportionately);
• Support of federal private prisons (which impound blacks and Latinos disproportionately);
• Support of the police tool of asset forfeiture, a legally problematic procedure which allows law enforcement to seize property of individuals who have been suspected of, but not charged with, crimes (in violation of everyone’s civil rights, but to affect blacks and Latinos disproportionately); and
• Rescission of the Cole Memo, which gave some cover to marijuana businesses.

Today, it seems fairly certain that William Barr will be our next confirmed attorney general. He won’t be as bad as Sessions, but he is no friend of marijuana either. Barr commented last week that although he would not use federal dollars to chase state-compliant actors, “it’s a mistake to back off marijuana.” That’s not the type of leadership we need from the nation’s chief law enforcement officer.

As to Congress, it recently passed the First Step Act, a mild reformation of the federal criminal justice system. That law is mostly a dud when it comes to marijuana, however. And none of the “straight” marijuana bills, from the STATES Act on down, have made it to a floor vote. All the while, marijuana arrests continue to increase, despite the facts that: a) two in three Americans now support legalizing marijuana, and b) new adult use and medical marijuana states are coming online in waves.

The War on Drugs started out as a war on minority groups, and not much has changed in 50 years. If Dr. Martin Luther King Jr. were alive today, it is almost certain that he would be advocating for an end to the War on Drugs, starting with removal of marijuana from Schedule I of the CSA. Until that happens, and in honor of Dr. King, here are some ways you can pitch in to reverse the racist, immoral and counterproductive state of federal law with respect to marijuana:

Dr. King died 50 years ago, but his legacy continues to resonate and expand. On this day honoring one of our greatest leaders, it is important to remember all of the reasons we strive to put an end to prohibition, including the most important ones. Let’s hope to finally see some meaningful progress on marijuana and civil rights in 2019, particularly at the federal level.

We have handled a number of excessive fines cases on behalf of clients who’ve had their property seized, or threatened to be seized by the government. For some background on this, see our blog posts here and here.

The United States Constitution provides that excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted. U.S. Const., Amdt. 8. The Excessive Fines Clause “limits the government’s power to extract payments, whether in cash or in kind, ‘as punishment for some offense.’” Austin v. United States, 509 U.S. 602, 609-10 (1993). That constitutional protection applies in cannabis cases, just like everywhere else.

On Wednesday, the United States Supreme Court heard oral arguments in the case of Timbs v. Indiana regarding whether the Eighth Amendment’s Excessive Fines Clause is incorporated against the States under the Fourteenth Amendment. The case involves the forfeiture of petitioner’s land rover as punishment for selling heroin. The Indiana Court of Appeal held that the forfeiture of the land rover was grossly disproportionate to the gravity of the offense. The Indiana Supreme Court reversed and concluded that because states are not subject to the Excessive Fines Clause, the forfeiture was not unconstitutional.

The predicted outcome is that the United States Supreme Court will apply the Excessive Fines Clause against the states. The Timbs decision will have nationwide impacts for those accused of drug crimes and other offenses, and will be an important check on the government’s power to interfere with private property. That would be great news for the cannabis industry.

As stated in the petitioner’s opening brief:

“The right to be free from excessive fines is fundamental and applies to the States. The power to fine is—and has always been—a formidable one. And unlike every other form of punishment, fines and forfeitures are a source of revenue for the government, making them uniquely prone to abuse. The accompanying risk to life, liberty, and property is very real. “[I]n a free government,” after all, “almost all other rights would become utterly worthless, if the government possessed an uncontrollable power over the private fortune of every citizen.” 3 Joseph Story, Commentaries on the Constitution of the United States § 1784, 661 (1833).”

It’s a compelling argument, and you can read the full brief here.

We will be monitoring this case and will provide an update once the decision is published.