Inconsistent state and federal laws have resulted in numerous regulatory challenges for marijuana-related businesses. It is crucial for individuals involved in the cannabis industry to constantly adapt their businesses to meet the requirements of evolving regulations and legislation that relate to marijuana laws on both the state and national levels.
A New California Regulatory Framework
With the passage of Proposition 64, also known as the Adult Use of Marijuana Act, California legislators are now tasked with creating an effective state licensing program for both medical and recreational cannabusinesses. The new regulatory framework is scheduled to commence on January 1, 2018.
As the new framework takes shape, marijuana businesses will continually require assistance challenging law and administrative decisions including business license revocations and denials, fines, sanctions, and penalties.
Federal Marijuana Laws
Although on the federal level, marijuana is still classified under the Controlled Substances Act as a Schedule I drug with a high potential for abuse and no acceptable medical use, the 2013 Cole Memo clearly stated that medical marijuana cases in states where the drug is legal are not the priority of the Department of Justice. The new Trump administration has indicated that it intends to more strictly enforce drug laws against marijuana businesses throughout the country, but has yet to issue clear guidelines regarding its intended approach.
Marijuana-legal states have worked hard to adhere to the eight clear guidelines provided by the Cole Memo for federal prosecutors involved in marijuana enforcement. FinCEN has also provided some guidance to banks, indicating that they should make the decision whether or not to do business with marijuana-related businesses in a manner consistent with their existing Bank Secrecy Act obligations. Few banks, however, are willing to take the risk of servicing cannabusinesses.
In the meantime, marijuana businesses continue to experience financial service and monetary issues and an uncertain legal and regulatory environment.
Legal and Tax Services for California Cannabusinesses
Moskowitz, LLP’s lawyers and accountants actively assist the firm’s clients in navigating the State of California’s cannabis laws and regulations, and help to minimize the likelihood of federal prosecution. Contact our San Francisco office at (888) 829-3325 or (415) 394-7200.
Disclaimer: Growing, cultivating and distributing marijuana are violations of federal law under the Controlled Substances Act, Title 21, Section 841(a)(1). The tax firm of Moskowitz, LLP can assist you in adhering to state and local law and regulations, and advise you how to conduct your operations in a way that will minimize your risk of federal prosecution. However, we do not intend for our advice to assist you in the violation of any law and in light of the evolving nature of the marijuana industry in the U.S., clients must understand that our legal and tax services can guarantee neither success nor immunity from civil and/or criminal prosecution. In all areas where the legal landscape is constantly changing, we recommend that our clients act with caution, stay abreast of developments in the industry, and consult with us often.