Welcome back to Higher Law, our new weekly briefing about all things cannabis. I'm Cheryl Miller, reporting for Law.com from Sacramento. Happy 4/20 Eve! There's lots to celebrate this year. John Boehner has evolved into a pot pitchman. President Donald Trump may protect marijuana-legal states from Jeff Sessions. And Mitch McConnell wants to legalize hemp. But before sparking up with a whole bunch of friends, California's bureau of cannabis control would like to remind you: You just might need a permit for that. This week, we're looking at what the president's statements on marijuana might mean for state-legalization efforts. Plus, California is trying—again—to find a banking solution for cannabis businesses. Scroll down for more on a marijuana law boutique's expansion and to see who got the work. Thanks, always, for reading.
Trump, a Pot Ally?
So it turns out President Trump supports state authority to legalize marijuana. Feeling any safer? To recap, Colorado Senator Cory Gardner announced last week that he had received "a commitment from the president" that Attorney General Jeff Sessions' rescission of the Cole memo in January "will not impact Colorado's legal marijuana industry." "Furthermore, President Trump has assured me that he will support a federalism-based legislative solution to fix this states’ rights issue once and for all," Gardner said. Trump spokeswoman Sarah Huckabee Sanders said Gardner's description of the conversation was accurate. But don't plan those bill-signing parties just yet. "If I'm going to speculate, I'd say we'll probably see the passage of legislation with regard to hemp before we see anything substantive happen with regard to marijuana," Greenspoon Marder partner Rachel Gillette said during a recent webinar on state marijuana legalization. "But there's definitely some interesting developments in both realms." Legalized Industrial hemp now has the backing of Senate Majority Leader Mitch McConnell. Recreational marijuana use is still bitterly opposed by many congressional leaders, especially in the House. Gillette did point to former House Speaker John Boehner's announcement that he's joining the board of advisors for Acreage Holdings as "kind of a big deal." "We're seeing shifting attitudes from … legislators and former legislators because I think it could create a lot of traction federally," she said.
Got a story idea? A regulatory victory you'd like to share? A 4/20 horror story? Drop me a line at email@example.com or call me at 916-448-2935. I'm also tweeting @CapitalAccounts.
Another Shot at Marijuana Banking in California
California's treasurer has tried. The state's Business, Consumer Services & Housing Agency has tried. Now the state Legislature is trying to find a banking solution for cannabis businesses shut out of traditional institutions. A bill to create a closed-loop, limited-charter bank to serve marijuana businesses and their vendors cleared its first committee Wednesday. SB 930 by Sen. Bob Hertzberg, D-Van Nuys, would authorize privately financed banks to accept cash from marijuana businesses—for what is expected to be big fees—and issue special-purposes checks so account-holders can pay rent or taxes. Lots of questions remain about how the system would work. How readily would checks from these special banks be accepted? Would private insurance be available? Would enough outlets open to serve a reasonable amount of the state? "This is not perfect," Hertzberg said at Wednesday's committee hearing. But with California's adult-use market growing rapidly "urgency is everything" in getting the cash these businesses generate off the street. The bill is backed by the California Cannabis Industry Association. Executive director Lindsay Robinson said the association's own account was shut down a few weeks ago. Robinson spoke also of a CCIA member who has an $800,000 tax bill due in a month, "and they will be paying in cash."
'Skyrocketing' Demand Drives Firm's Expansion
Clark Neubert, a cannabis specialty boutique with offices in Los Angeles and San Francisco, is setting up shop in Sacramento and Santa Cruz as well. Founding partner Ariel Clark cited "skyrocketing" demand for servicesfrom cannabis businesses seeking licenses and a foothold in the recreational market. Associate Joanna Hossack will lead the Sacramento office. Senior associate Jay Purcell, formerly at Wilson Sonsini Goodrich & Rosati, has joined the firm to work on corporate and securities issues. Associate Nicole Laggner will held the Santa Cruz office. Laggner's private practice work has focused on cannabis businesses in Santa Cruz and Monterey counties.
Who Got the Work
➤➤ Golden State Government Relations, newly registered as a California lobbying firm, will represent All Good LLC, Cal Can Solutions; the California Cannabis Tourism Association; and Giffen Avenue Property LLC. Golden State's president is Nick Caston, who will be joined in lobbying by Jennifer Price. ➤➤ Massachusetts' Cannabis Control Commission has hired Yaw Gyebi Jr. as chief of investigations and enforcement. A long time assistant district attorney in Suffolk County, Gyebi most recently served as chief of enforcement at the state's Commission Against Discrimination. ➤➤ GB Sciences Inc has appointed John Davis as executive vice president and general counsel. Davis was a partner in Baker, Donelson, Bearman, Caldwell & Berkowitz's Baton Rouge, Louisiana, office. Davis was also named president of GB Sciences Louisiana, which will produce therapeutic cannabis under an agreement with Louisiana State University AgCenter. ➤➤ Main Street Strategies, a young Sacramento, California firm specializing in cannabis consulting and lobbying, has been retained by E.C. Events and Steep Hill Labs. Main Street's principals are Joshua Walters and Dustin Moore.
In the Weeds...
• U.S. Senate Minority Leader Chuck Schumer wants to remove marijuana from the DEA's list of controlled substances. The New York Democrat says he'll introduce legislation that would let states regulate marijuana. Schumer isn't the first senator to propose decriminalizing marijuana. But he may be the highest-ranking one to date. [VICE News] • HP Inc. wants in on the marijuana market. The computer maker plans to sell cash registers to the cash-intense industry. The machines will come equipped with legal compliance software from Flowhub. [Bloomberg] • Maryland marijuana regulators have approved seven new medical marijuana dispensaries. Almost 50 dispensaries are now licensed to serve 28,000 registered patients in the state. [The Baltimore Sun] • Another bank is saying no to marijuana clients. Citizens Bank in Massachusetts has told legally operating marijuana businesses that it's closing their accounts. The executive director of the Massachusetts Grower Advisory Council said he was told his account would close on April 20. "I think it was a kick in the face on the way out the door," said Peter Bernard. [The Berkshire Eagle] • A Calgary oil advisor is ditching barrels for buds. Sonny Mottahed said transactions in the oil market dried up. So he partnered with tax lawyer Jason Kujath and turned his business attention, and investments, to Canada's emerging cannabis market. [Bloomberg] • Colorado lawyers consume a fair bit of weed … but not as much as media professionals. A study by the U.S. Centers for Disease Control and Prevention ranked occupations by how many of their job-holders use marijuana. The legal profession ranked 11th out of 22 occupations with a 15.9 percent use rate. The media—combined with arts, design, entertainment and sports—ranked second. The occupation with the most marijuana fans? Food preparation and serving. [NJ.com]
What's Next: Upcoming Events and Webinars
April 20: Cannabis Regulation 2.0: Emerging Issues in Law, Technology and Marijuana. UC Berkeley School of Law. Speakers include Bret Ladine, assistant general counsel, California Department of Business Oversight. April 20: The National Cannabis Policy Summit The Newseum, Washington, D.C. Speakers include Attorney General Karl Racine of Washington, D.C. and Betsy Cavendish, general counsel, executive office of D.C. Mayor Muriel Bowser. April 26: National Cannabis Bar Association webinar: Cultivating Intellectual Property: Patents with Jeremy Kapteyn of Rose Law Group in Arizona and Matthew Lapple of Lapple Ubell in California. April 26: The Bar Association of San Francisco's solo small firm section of the Barristers Club presents Risk Management & Insurance Coverage for Cannabis Businesses. Speakers include Jason Horst of Horst Legal Counsel. April 30 - May 2: Arcview International Investor Forum, Vancouver, British Columbia. Speakers will include U.S. Rep. Dana Rohrabacher, R-California.
"Trump's announcement . . . Boehner, our longtime opponent, joining a cannabis company . . . movement on the ground—MI, IL, MO . . . can you feel the earth shifting for lasting marijuana reform??"
—U.S. Rep. Earl Blumenauer, D-Oregon.