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Understanding Cannabis Business Law Our Attorneys at Purdy & Bailey are ready to support you!

San Diego Cannabis Business Law Attorneys

Navigating Complex Cannabis Laws in California

Due to the regularly changing laws regarding cannabis, it can be difficult to get a handle on what exactly is legal and what is not, which is why having an experienced and knowledgeable counsel is so important as you grow your business. The San Diego cannabis business law attorneys at Purdy & Bailey, LLP provide preventative legal services to help you avoid crisis management.

Our firm is available to answer your questions and present you with all of your options. We are not afraid to handle our case and will effectively use our vast experience to help you achieve the results you are hoping for. We have more than 50 years of combined experience and can use this experience to your advantage.

The Gray Area in Cannabis Law

In the world of cannabis jurisprudence, there remains a critical gray area: Under the federal Controlled Substances Act of 1970, the cultivation, distribution and even—technically speaking—possession of any amount of cannabis— which is a Schedule 1 narcotic under the Act—is a felony. Under the very much alive and well Supremacy Mandate (Article VI) of the U. S. Constitution, federal law is the supreme law of the land, meaning it preempts state and local laws to the contrary, including laws concerning the regulation of cannabis.

Thus, whatever the State of California officially passes regarding the decriminalization, legalization or regulation of cannabis, the cultivators, transporters, and distributors of cannabis are at risk for federal prosecution and related forfeiture actions. This possibility of federal prosecution must, from the standpoint of anyone engaging in regulated activities, be the prism through which all decision–making must pass.

This is where our firm can help you, especially as a cultivator or transporter or inspector or tester of cannabis. Contact our team at (858) 360-7080 to discuss your legal concerns.

Understanding Changing Cannabis Laws

On August 29, 2013, U.S. Deputy Attorney General James M. Cole signed and circulated amongst those tasked with the enforcement of federal criminal statutes a “Memorandum For All United States Attorneys” concerning Justice Department policy regarding cannabis enforcement.

According to the Cole Memo, US Attorneys are advised that the policy, moving forward, will be one of hands-off so long as the potential target or person of interest is:

  • In compliance with a state regulatory mandate and licensing scheme that is “robust” and;
  • Not in violation of any of the eight federal “priorities” set forth in the Memo warranting the attention of federal prosecutors (including, by way of example, activities too close to a school or somehow connected with organized criminal conduct).

Indeed, the Cole Memo goes so far as to say that even “commercial” or “for-profit” activities by someone engaging in regulated activities will not necessarily be a trigger for federal enforcement absent transgression of one of the stated priorities.

Impact of the Medical Marijuana Regulation and Safety Act

Since October 9, 2015, when California enacted its Medical Marijuana Regulation and Safety Act, the state has put in place a comprehensive and clearly “robust” regulatory apparatus (with administrative regulations to follow soon from the newly formed Bureau of Medical Marijuana Regulation, a Division of the California Department of Consumer Affairs as well as the Department of Food and Agriculture and the State Department of Public Health).

There are now 17 different licensing classifications pertaining to various kinds of cultivators, testers, distributors, and transporters, among others. In addition to the new state law, there are also many municipal ordinances that present compliance issues.

Just recently, Proposition 64 has been approved in California, making it the largest state in the nation to legalize recreational marijuana usage. This means the market for marijuana products and businesses will continue to grow exponentially.

How Can Purdy & Bailey, LLP Help You?

First, anyone engaging in any of the regulated activities must, like anyone else engaged in the provision of goods or services to others, consider the very real possibility of civil third-party liability, including:

  • Claims for alleged tortious acts (by, for example, providing product that is unsafe)
  • Breach of contract
  • Any of a wide variety of other possible claims

Thus, it makes sense to consider forming a corporation or limited liability company for purposes of limiting potential exposure. Specializing in private entity formation, we are able to structure formation and charter documents so as to maximize not only your insulation from personal liability but also maximize the effectiveness of the argument that you are conducting and participating in regulated activities in compliance with state and local law as well as the dictates of the Cole Memo.

Second, anyone engaging in regulated activities should not fear written agreements memorializing investment, financing, vender-vendee, employment, and subcontractor terms with third parties. Such agreements for good reasons deal with all sorts of issues (partnership, control, compliance, milestones, indemnity, warranties, dispute resolution, to name a few). Such fears were well-founded in the past because such documents could be evidence of federal criminal conduct warranting federal prosecution.

Instead, today, persons engaging in regulated activities should develop and use such documentation—not only because it makes good sense to memorialize obligations and establish boundaries with persons and companies you deal with, but also because if such documentation is carefully crafted, you can actually facilitate proof of compliance at the state, local and all important federal levels. Specializing in the drafting of written agreements and all sorts of related documentation, we can provide the advice you need in this area.

Third, we can assist with state and local regulatory compliance. Finally, we are very well connected to other professionals in this field, including criminal defense attorneys and CPAs.

Representation of Municipalities & Counties

Given our firm's extensive experience representing the local government in California, as well as our experience with the licensing, taxation and discretionary aspects of the Medical Cannabis Regulation and Safety Act, we are well-positioned to represent local government on such issues as establishing a licensing apparatus, issuing licenses, and enforcing compliance.

Our San Diego cannabis business lawyers have the background, resources, and connections to help you. Call (858) 360-7080 to set up an initial consultation. We are ready to represent you!

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