Author Archives: Jeff Bess

Beware Fraud in Cannabis Investment

By Jeff Bess, third-year student at the University of Washington School of Law.

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State-legal cannabis is a booming business and further state-level moves toward legalization and regulation are likely on the way. Though legalization has most famously resulted in economic growth and increased state and local tax revenues, it has also come with its fair share of problems. As Seattle-based cannabis business attorney Hilary Bricken wrote earlier this month: “[L]ike any new and high growth industry with complicated and constantly changing rules and regulations, the marijuana industry is chalk full of scammers and con artists.” A recently reported, ongoing cannabis fraud investigation in Oregon – the first of its kind in the state – illustrates one way that less-than-scrupulous investment in the cannabis space can potentially present significant pitfalls for investors and entrepreneurs alike.

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Big Changes to WA MMJ Rules Come Online July 1

By Jeff Bess, third-year student at the University of Washington School of Law.

File:Discount Medical Marijuana - 2.jpg

Say goodbye to the familiar green cross.

Big changes are coming to medical marijuana in Washington state beginning tomorrow, July 1st. That is when the Cannabis Patient Protection Act (CPPA), passed by the state legislature in 2015, will come into full effect. The law, which has been gradually rolled out since its passage, is the culmination of efforts to fold Washington’s medical marijuana program – established in 1998 – into the recreational system created following the passage of I-502 in 2012. The changes mark a profound shift in the regulation of medical marijuana in Washington that will result in a fundamentally different marketplace with significant ramifications for medical marijuana patients, producers, and dispensaries.

In the short-term, the transition will likely be rocky. The most immediate effect of the new rules will be the closure of nearly all existing medical dispensaries in Washington. This is because medical marijuana dispensaries were largely unregulated under prior law and not required to be licensed by the Liquor and Cannabis Board (LCB). Now, in order to reopen, medical marijuana dispensaries will have to go through the licensure process and conform to the same strict regulations as recreational dispensaries – a potentially significant hurdle for medical operations used to the informal status quo and unfamiliar with the process. Though LCB has already issued a number of licenses to “medically endorsed dispensaries” (a new term of art found in the CPPA), it will take time before they are up and running and even longer to match the output of the previous system. In the meantime, medical marijuana patients will have to go to licensed recreational dispensaries or continue to produce their own marijuana in accordance with state law.

Once the dust settles, here is what to expect:

New limits on medical marijuana sources and suppliers:

  • Medically endorsed marijuana stores must be licensed by the LCB
  • Additional restrictions on collective gardens authorized under earlier law

New marijuana taxes. Medical marijuana patients should note that, while they may be exempt from sales and use taxes, they will still be subject to the 37% excise tax on all marijuana products. Customers of medically endorsed marijuana stores are, however, exempted from certain taxes as follows:

  • No sales tax is due on medical marijuana purchases of products purchased by patients with a Washington medical marijuana card and a condition approved by the Department of Health (DOH)
  • No sales tax is due on medical marijuana purchases of low-THC products purchased by patients with a Washington medical marijuana card
  • No sales tax is due on medical marijuana purchases of high CBD products purchased by any patient

For more information on the Cannabis Patient Protection Act, check out Governor Jay Inslee’s FAQ and LCB’s information page on the law.

 

Photo by O’Dea, used under Creative Commons License.

New Bill Proposes to Streamline Medical Cannabis Research

By Jeff Bess, third-year stu­dent at the Uni­ver­sity of Wash­ing­ton School of Law. 

Photo by Laurie Avocado , used under Creative Commons License.

Photo by Laurie Avocado , used under Creative Commons License.

Despite how you slice it, medical marijuana is on the rise: as of earlier this month, 25 states and the District of Columbia permit medical use of cannabis and a recent US News poll shows 89% support among the public for medical marijuana programs. Additionally, Washington, Oregon, Colorado, Alaska, and the District of Columbia have voted to legalize recreational use of cannabis by adults, and there is a strong probability that list will grow this November. Even among those states that have not formally adopted a medical or recreational program, numerous jurisdictions have decriminalized possession of the drug.  Continue reading