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
As of January 1, 2018, a new regulatory framework has been implemented in California that includes new state licensing programs for both medical and recreational cannabusinesses.
- The Bureau of Cannabis Control (BCC) licenses retailers, distributors, testing labs and microbusinesses.
- The California Department of Public Health’s Manufactured Cannabis Safety Branch regulates the manufacture of both medical and non-medical cannabis-infused edibles.
- The California Department of Food and Agriculture’s CalCannabis Cultivation Licensing division provides licenses to cultivators of medicinal and recreational cannabis.
As the new framework takes shape, marijuana businesses will continually require assistance in challenging law and administrative decisions including business license revocations and denials, fines, sanctions, and penalties.
Federal Marijuana Laws
Even though marijuana is legal in California, on the federal level it is still classified under the Controlled Substances Act as a Schedule I drug with a high potential for abuse and no acceptable medical use.
In addition, the Trump administration has indicated that it intends to more strictly enforce drug laws against marijuana businesses throughout the country. We have an Attorney General who is a harsh opponent of marijuana legalization, pushing Congress to end protections for medical marijuana users and businesses under the Rohrabacher-Farr Amendment (also known as the Rohrabacher-Blumenauer Amendment) and recently rescinding the Cole Memo, which since 2013 had provided clear and generally hands-off guidelines for federal prosecutors in marijuana-legal states.
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.