Cannabis is the new hot topic of conversation, moving from the smoky dorm to the board room. The green rush is on, and, and as any gold rush of the past, there is good business in selling the picks and shovels to those seeking their fortunes. Coupled with the most difficult legal market for aspiring and new attorneys in the nation’s history, marijuana law is also a hot topic in law schools and in CLEs.

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Marijuana is quickly becoming known for its health benefits. Studies are showing promise regarding marijuana’s help in managing epileptic seizures, slowing down the progress of Alzheimer’s Disease, and preventing the spread of cancer. (1)

In the United States, we are entering our 78th year of marijuana prohibition. Many states have legalized marijuana for medicinal purposes and a select few have legalized it for recreational use. Outside of Colorado, Oregon, Washington, Alaska and District of Columbia, the result of marijuana possession and use without a prescription could result in jail time.(2)

Canadian Prime Minister, Justin Trudeau, makes headlines by campaigning on pro-marijuana and made further headlines when he won!

Canadian Prime Minister, Justin Trudeau, made headlines by campaigning on a pro-marijuana platform. He caught further attention when he won running on the platform. The question commonly asked by Canadians is: “When will marijuana be legalized in Canada?”(3)

Trudeau issued a letter giving mandates to the Minister of Justice and Attorney General of Canada. Part of the mandate was to work with the Ministers of Public Safety and Emergency Preparedness and Health to create a process that leads to the legalization and regulation of marijuana.(3)

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Social Media Massacre: Marijuana Businesses Scrambling as Facebook, Instagram Shutter Accounts.
The marijuana industry is facing a growing challenge on the social media front, and there’s no resolution in sight.

Both Facebook and Instagram are closing marijuana-related business accounts without warning and seemingly at random, cutting off key connections companies have with their customers.
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Is legal marijuana delivery coming to Seattle?

SEATTLE — Legal marijuana delivery could be coming to Seattle.

Mayor Ed Murray has asked the state Legislature to make delivery a reality in hopes of eliminating companies operating illegally.

Marijuana is now legal in Washington for anyone over 21 years old, but delivering pot to customers is still against the law. Despite that, there’s a thriving black market of delivery services in the area.

“A consumer is not going to know the difference around a legal recreational cannabis shop and an illegal recreational delivery service, so I think there is a lot of customer confusion,” said Logan Bowers, the owner of Hashtag, a recreational marijuana business in Seattle.

The City of Seattle wants to eliminate illegal marijuana delivery services and has backed a bill that just passed an important House committee. The bill would legalize pot delivery, but only for two years and only in Seattle. The bill also says only five of the city’s 18 legal pot shops would be able to deliver.

Amber McGowan, the general manager at Cannabis City, wonders how the five shops will be selected.

“Cannabis City would like to participate,” McGowan said. “To be fair, across the board it would be nice if it were open to everyone.”

Only employees would be able to make deliveries, everything would be documented, and the deliveries would only be available within city limits.

But not everyone in the marijuana business is excited about the idea. Bowers, for instance, worries about delivery workers driving around with marijuana and cash.

“We’ve seen the illegal delivery market has lead to violence, has led to crime, and we won’t want to risk our employees in that environment,” he said.

Murray and some state lawmakers believe legal weed delivery would make it easier to do away with the black market delivery companies.

“With the current black market, that’s the one upper hand they have, they can come directly to your house,” McGowen said.

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Legal U.S. pot sales soared to $5.4 billion for 2015, up 17.4 percent from $4.6 billion in 2014, according to data released Monday by the ArcView Group, which tracks the cannabis markets.

The figures include medical and adult consumer sales. However, the annual gain was largely fueled by the explosive growth in consumer sales, as some states have approved adult recreational marijuana use. Adult use sales grew to $998 million from $351 million in 2014, according to the research. And voters in more states, including California, are likely to take up the issue in 2016.

By many measures, 2015 was a bellwether year for marijuana, as states like Colorado and Washington paved the way for new business models and growth. Entrepreneurs have opened spa-like retail shops for adult users and medical cannabis sales. The social experiment to abolish cannabis prohibition in some instances is melding with a for-profit corporate culture.

The growing cannabis market features a variety of innovative consumer-facing products such as vaporizers, edibles and capsules. As an example, Colorado adult use sales surpassed $100 million last year for the first time.

Washington state also saw strong monthly sales gains in 2015 — growing some three fold — with $75.3 million in sales for December from $18.8 million in January 2015. Sales of edibles and extracts in Washington already number in the hundreds of thousands of units in a single month.

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The fourth recreational cannabis market in the United States is almost here.

The Alaskan Marijuana Control Board formally signed off on rules for the industry last week, including detailed procedures for businesses that want to obtain permits.

The next step is to open the application window, which begins Feb. 24, and then start handing out permits in May.

Although the board might still tweak the rules here and there, the vast majority of regulations are done, and there almost certainly won’t be any significant changes for applicants to worry about, said Anchorage attorney Lance Wells, who founded the Alaska Cannabis Law Group.

All considered, “the Alaska rules are shaking out pretty well,” Wells said.

In fact, many entrepreneurs are more concerned at this point with local regulations, which are still being worked out, Wells said. Numerous municipalities have either already banned cannabis businesses or will soon, meaning the industry will likely be concentrated mostly in Anchorage.

Here’s a closer look at the new regulations, how they compare to rules in other rec states and key considerations for each industry niche.

General Highlights

Residency: One of the most important rules the board set is that owners of marijuana companies must be residents, which means having lived in Alaska for at least one calendar year. So those who want to get involved on the plant-touching side of the industry will have to find local partners.
Licenses: There are four overall types – retail, cultivation, manufacturing and testing, with one subcategory apiece in cultivation (for small growers with less than 500 square feet of canopy) and manufacturing (for companies that want to make only concentrates). Companies can also hold licenses of all types – except for testing labs, which are prohibited from having any crossover when it comes to financial interest.
License sales: Business licenses can’t be simply traded or sold; they’ll be tied directly to a physical location for the business. So while it will be possible to sell a license, the buyer will have to accept the storefront or grow site. If the buyer wants a different location, then a new license is required.
Caps: There’s no cap on the number of licenses that can be issued and no limitation on how many licenses a single person or company can own (similar to Colorado, but very different from Washington).
Fees: All businesses seeking a license will have to pay an application fee will be $1,000 and an annual renewal fee of $600. On top of that, retailers, cultivators with more than 500 square feet of canopy, as well as edibles makers, will have to pay $5,000 annually. Growers with 500 square feet or less of canopy, concentrate producers and testing labs will have to pony up just $1,000 annually.
Location: Cannabis businesses can be located within 500 feet of a school, whereas the general rule of thumb in other states has been 1,000 feet. But individual municipalities might end up opting for the industry norm, so Wells advised looking for locations that are outside the 1,000-foot buffer.
Wells warned that one of the biggest hurdles for new applicants will be finding any space at all for their businesses, and that one thing to avoid is leasing space in a building that’s owned by a large bank, such as Wells Fargo.

“The banks are very nervous about having marijuana in their buildings where they’re holding a mortgage,” Wells said. “I have heard that directly from bankers I know in town.”

Retailer Regs

One of the most significant aspects of the regulatory framework is that the state will allow on-site cannabis consumption at rec shops, making Alaska the first market in the nation to go that route.

This will open up a new dynamic for retailers, possibly helping them boost the average sales per customer.

All retailers will have to do is follow regulatory protocol and establish a place within their shop for those who want to smoke or vape or munch some edibles, and they’ll be able to do so. (Wells also said he expects some cities, such as Anchorage, to legalize cannabis coffeeshops, similar to those in Amsterdam.)

The state is also pretty easy on hours of operation: the only time when retailers are mandated to be closed is between 5 a.m. and 8 a.m.

There are plenty of restrictions, however, including on advertising, signage, product testing, and so forth. For example, retailers are strictly prohibited from using coupons or free samples to promote sales.

Cultivation Regs

Both indoor and outdoor cultivation is allowed. But with outdoor, sites must have at least a six-foot-high wall or fence surrounding the plants, and no marijuana can be visible to the public.

Any plant over eight inches in height has to be assigned a tracking number that will correspond to a state-monitored inventory tracking system (which will be used by all marijuana businesses to record every single plant and transaction).

Growers also have a litany of other requirements to comply with, including a rule that no cannabis can be labeled “organic.”

Product labels also must list any pesticide, herbicide or fungicide used in the growing process, and when harvesting, no commercial batch can be larger than five pounds or contain more than a single strain.

Product Manufacturer Regs

Similar to retailers, infused product manufacturers are strictly forbidden from using any cartoon-looking characters on packaging – or anything that may appear to appeal to children.

Alaska also has the lowest level allowed of potency for rec edibles to date: single servings can be no stronger than five milligrams (by contrast, it’s 10 in Colorado), with no more than 10 servings in a single package.

Edibles makers will also be subject to the same health and safety regulations as restaurants and food producers.

Testing Lab Regs

Alaska has some of the most advanced rec testing lab regulations of any state thus far. For example, the state will develop an accredited proficiency program, at which point every licensed lab will be required to take and pass the course in order to stay licensed.

Furthermore, all labs will be required to be proficient in testing for potency, pesticides, contaminants, mold, residual solvents and toxins.

Notably, labs will have to model their testing methodologies after two published texts, one by the American Herbal Pharmacopoeia and another by the United Nations’ Office on Drugs and Crime. They will also need to have on-hand written procedures for 10 separate types of processes, ranging from instrument setup to the calculation of results.

The state has even mandated that every lab hire a scientific director, with professional experience and at least a bachelor’s degree in either chemistry or biology.

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