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There has been a lot of confusion recently about Self-Distribution under state and local laws. It hasn’t helped matters that some local (city/county) ordinances, in jurisdictions such as Monterey County, for example, allow cultivation and manufacturing permit holders to “self-distribute” their material or products without the use of a third-party distributor.

As such, this update is being provided to help you understand what, exactly, “self-distribution” means at the state level.

Under current California law, there are only two types of businesses that can legally transfer or transport cannabis: (1) Licensed dispensaries that are authorized to provide delivery services can “transfer” cannabis or ca...

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1. What is Proposition 65?

Proposition 65 (Prop 65) requires businesses to notify Californians about significant levels of chemicals in products they purchase, in their homes or workplaces, or that are released into the environment.[1] Prop 65 also prohibits California businesses from knowingly discharging significant amounts of listed chemicals into sources of drinking water. Once a chemical is listed as one of the Prop 65 chemicals, businesses have 12 months to comply with warning requirements and 20 months to comply with the discharge prohibition. The Office of Environmental Health Hazard Assessment (OEHHA) administers Prop 65, which is part of the California Environmental Protection Agency (EPA). The California EPA also evaluate...

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Please find a brief update on the passage of Measure M in Los Angeles, and Oakland’s ordinance.

LOS ANGELES

On March 7, 2017, voters in the City of Los Angeles voted to approve Measure M, a citizen sponsored measure also referred to as the Los Angeles Marijuana Regulation and Safety Act (“LAMRS”). Measure M allows the City of Los Angeles to issue permits for a variety of commercial cannabis activities. Below are some highlights from the new law.

Permit Types Allowed:

Under LAMRS the City is authorized to issue permits for the following activities:

  • Cultivation
  • Dispensaries
  • Manufacturing
  • Testing
  • Distribution

Permit Timelines:

  • LAMRS requires the City to release an application for manufacturing permits within 90 days of March 8, 2017; and
  • Applications for distribution, cultivation, testing, and transportation must be released by January 31, 2018

Other Highlights from LAMRS:

  • Allows currently licensed dispensaries to apply for and receive dispensary and cultivation (indoor up to 22,000 sf) permits on existing premises before anyone else;
  • City has discretion to determine total number of dispensary, cultivation, manufacturing, testing, distribution, and transportation permits it would like to issue; and
  • Currently licensed dispensaries do not count against any cap set by the City.

OAKLAND

On Tuesday, March 7, the Oakland City Council met to discuss the following cannabis-...

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Fundamentally, CBD derived from hemp is not specifically defined under the Federal Controlled Substances Act (the “CSA”) which can be found under 21 U.S.C. 812. Therefore it is not a Schedule I Substance under the United States Code. (U.S.C.)

When Congress passes a law, it is recorded in a set of books known as The United States Code, or U.S.C. That is where the CSA can be found.

However, the CFR, or Code of Federal Regulations (CFR) is written by government agencies responsible for the subject matter of the laws. The regulations found in the CFR do not stand on their own; they must be based on statutes passed by Congress and are only valid if they put into effect an actual statute enacted by Congress.

Y...

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What is a Trademark Class and How Do You Choose the Correct Trademark Class to File?

When you file an application for a trademark, you are required to select the trademark class, or classes, in which your particular product or service belongs. This might lead you to wonder what a trademark class is and how it is you choose the correct trademark class for your particular product or service.

What is a Trademark Class?

The United States Patent and Trademark Office (also known as the “USPTO”) utilizes something known as the “Nice Classification of Goods and Services”, which is a system created to classify goods and services for the purpose of registering trademarks. This classification system i...

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Personal Use

  • Goes into effect immediately
  • Anyone over the age of 21
    • Can purchase, possess, or give away up to 28.5 grams of cannabis (not in the form of concentrated cannabis) or up to 8 grams of concentrated cannabis
    • Can possess up to 6 plants, as well as the cannabis produced from the plants in accordance with any reasonable local regulation or ordinance
    • Can purchase, possess, manufacture, or give away cannabis accessories to anyone over 21
    • Can smoke or ingest cannabis or cannabis products

  • Cannabis and cannabis products cannot be smoke or ingested
    • In public place
    • Anywhere where smoking tobacco is prohibited
    • Within 100 feet of a school, daycare center, or youth center (unless in a private residence)
  • Cannot ingest or possess an open container of cannabis or cannabis product while either driving or riding as a passenger in a motor vehicle

Medical Cannabis Patients

  • Beginning on January 1, 2018, a qualified patient must possess a new identification card supported by a physician’s recommendation
  • Personal information of patients and their primary caregivers are considered “medical information” and enjoys the same protection as all other forms of confidential medical information
  • The status as a qualified patient cannot be used to restrict parental rights in any proceeding before a family or juvenile court

Cannabis businesses and Licensing

  • State licensing authorities are required to begin issuing licenses to recreational cannabis business no later than January 1, 2018
  • Commercial recreational cannabis activity is lawful if the business (1) is in possession of both a state issued license and locally issued license, and (2) operate in accordance with all applicable regulations
  • There are nineteen different license classifications to be issued by the state, they are:
    • Type I = Cultivation; specialty outdoor; Small.
    • Type IA = Cultivation; Specialty indoor; small.
    • Type IB = Cultivation; Specialty mixed-light; Small.
    • Type 2 = Cultivation; Outdoor; Small
    • Type 2A = Cultivation; Indoor; Small
    • Type 2B = Cultivation; Mixed-light; Small.
    • Type 3 = Cultivation; Outdoor; Medium.
    • Type 3A = Cultivation; Indoor; Medium.
    • Type 3B = Cultivation; Mixed-light; Medium
    • Type 4 = Cultivation; Nursery.
    • Type 5 = Cultivation; Outdoor; Large.
    • Type 5A = Cultivation; Indoor; Large.
    • Type 5B = Cultivation; Mixed-light; Large.
    • Type 6 = Manufacturer 1.
    • Type 7 = Manufacturer 2.
    • Type 8 = Testing.
    • Type 10 = Retailer.
    • Type 11 = Distributor.
    • Type 12 = Microbusiness.
  • All licenses are valid for 12 months, and must be renewed annually
  • A separate license is required for each location where the applicant operates
  • A single recreational cannabis business can obtain multiple licenses of different types,
  • The exception is that an entity holding a license for testing is prohibited from holding any other license
  • The same business can hold both recreational and medicinal licenses
  • A recreational cannabis business cannot also be a licensed retailer of alcohol
  • No cannabis business can be located within 600 feet of a school or daycare center (although this can be increased or decreased by local ordinances)
  • Until December 19, 2018, an applicant must demonstrate five years of continuous California residency to be eligible for a license
  • Licensing Authorities will give priority to applicants that can demonstrate they operated in compliance with the Compassionate Use Act prior to September 1, 2016, or is currently in compliance with the Medical Cannabis Regulation and Safety Act (MSCRA)
  • Regulations governing commercial cultivation will be issued and enforced by the State Department of Food and Agriculture
  • Regulations governing commercial manufacturing will be issued and enforced by The Department of Public Health

Product and Labeling Requirements

  • Recreational cannabis and cannabis products cannot be sold to anyone under the age of 21
  • Medical cannabis can be sold to persons 18 and older who possess a valid identification card
  • All cannabis and cannabis products must be sold in child resistant packaging and display a specific government warning in bold letters
  • Cannabis products cannot contain more than 10 milligrams of THC per serving
  • Edible cannabis products must be divided into standardized serving sizes, and producers must ensure uniform distribution of THC and other cannabinoids throughout the product
  • All cannabis and cannabis products for sale must contain a label stating the manufacture and/or cultivation date, source, and net weight of the cannabis contained in the package
  • The labeling of all cannabis and cannabis products must list the pharmacologically active ingredients and the amount of such ingredients per serving and per package
  • The labeling of all cannabis and cannabis products must list any solvents, nonorganic pesticides, herbicides, and fertilizers that were used during cultivation and manufacturing
  • Labeling for cannabis products must comply with all other state and federal nutritional labeling requirements

Local Regulations

  • Local governments can enact their own zoning, land use, licensing, and other reasonable requirements
  • Local governments can ban any and all forms of commercial cannabis activities
  • Local governments can allow cannabis to be smoked and ingested on the premises of a retailer if access is restricted to those 21 years of age or older, cannabis is not visible from a public place, and no alcohol or tobacco are served

Taxes

  • Retail sales of cannabis and cannabis products are subject to a state excise tax of 15% of gross receipts
  • Cannabis cultivation is subject to a state tax of $9.25 per dry-ounce weight of cannabis flowers, and $2.75 per dry-ounce weight for leaves (these amounts are subject to adjustment and categories can be added or changed by the state)
  • Cities and counties can enact and collect their own taxes on commercial cannabis activity in addition to the taxes established by the state

WINTER LLP® is a corporate, transactional, regulatory and intellectual property law firm focused on traditional and emerging markets, with offices in Orange County, San Francisco, and Arizona, servicing clients around the world.

On August 16, 2016, the Ninth Circuit ruled in U.S. v. McIntosh that the Department of Justice may not expend federal money to prosecute state-law compliant medical marijuana providers and entities.

Since 2014, through appropriations riders, Congress has ruled that the Department of Justice may not use appropriated funds to pursue federal enforcement actions in ways that would thwart state medical marijuana laws. The relevant language in the budget bills passed in 2014 and renewed in 2015 reads:

“ None of the funds made available in this Act to the Department of Justice may be used, with respect to the States of Alabama, Alaska, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Hawaii, Illin...

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If you’ve never been involved in the process of registering a trademark and protecting the valuable ideas and brand names of your business, it is very easy to make mistakes. Trademark registrations are actually quite complicated and counterintuitive at times. There are several steps, procedures and maintenance requirements that must be followed or your brands may be in jeopardy of infringement or cancellation proceedings. If you aren’t very careful, you can severely jeopardize all of your hard work, creativity and potentially thousands or millions of dollars in value to your company.

Here is a list of the top seven trademark mistakes people make.

Trademark Mistake #1: Choosing a Generic Mark.

The primary purpose of tra...

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BACKGROUND

On May 10, 2016, the FDA published the final “deeming rule,”[1] which extends the FDA’s tobacco product authority under the federal Food, Drug, and Cosmetic Act (FDCA) to all products meeting the statutory definition of “tobacco product.” Up until now, the existing FDA statutes and rules have only addressed cigarettes, cigarette tobacco, roll-your-own tobacco, and smokeless tobacco. The new rules expand the term “tobacco products,” to include, among others, vaporizers, vape pens, hookah pens, electronic cigarettes, e-pipes, and all other ENDS (Electronic Nicotine Delivery Systems). Notably, manufacturers of components and parts of ENDS which are sold or distributed separately for con...

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