The future of marijuana will not be determined by the Federal Reserve. Is a local.


Across the country, cannabis companies and advocates are cheering Marijuana Regulation and Opportunity Act As the future savior of cannabis (a copy of the bill is here). If the bill is passed, we will finally achieve federal legalization, and the consequences of the current federal conflict will end, or at least will be reversed in the few states that continue to ban the factory locally.

Of course, such development will be huge—with IRC 280E No longer a problem; cannabis companies will have an unconstrained ability to secure banking outside the bank 2014 FinCEN Guidelines, Which means there will be no more cash transactions; they will be able to raise institutional capital without the threat of criminal liability; etc. However, even if the bill passes (and the likelihood of this happening seems to be getting smaller within a month), what will not change (perhaps forever) is the power of local governments to create or disrupt U.S. cannabis businesses.

For a long time, I have been advocating that the states have complete control over these unique democratic experiments, and they are definitely where they control license types, compliance standards, taxes, reporting requirements, etc., but this power is ultimately subject to cities and counties. The bill gives great respect to states maintaining independent cannabis systems.The problem is that all states pay some (or more a lot of of) The trust in local control is given to cities and counties to protect the health and welfare of their citizens due to their inherent police powers. I cannot name a state where local control has not primarily caused major problems for cannabis operators (especially the retail industry, which has been affected in most cities and counties). Cannabis companies now need to realize that even if the bill is passed, even if the states maintain the current licensing system, cities and counties will still be one of the biggest barriers to entry.

The notorious trend among cities and counties is to either adopt an “open all” policy that allows the establishment and operation of all types of permits, restrict business only through property buffer requirements and/or zoning restrictions, or impose incredible permits on permits. It is their right to select the types they allow for use within their borders, creating high barriers to entry (or, worse, not allowing any commercial cannabis activities at all).

The following are some local barriers to entry, regardless of whether the federal government is legalized or not, operators may encounter these barriers indefinitely:

License limit. Even if the state government does not set caps by license category, cities and counties often set caps to prevent major environmental and other impacts caused by too many license holders or too many specific license types.

Local rights. If a city or county permits the establishment and operation of cannabis businesses, it will have a local rights procedure that must be cleared for cannabis businesses to operate. In each city and county, this process will be different in terms of timetable and cost.

In addition to obtaining traditional permits such as building permits and/or conditional use permits based on the property involved, some jurisdictions may require simple cannabis permits. Other jurisdictions may require permits and local permits, which will be a parallel track, requiring submission of various information about businesses and related properties.Nevertheless, other jurisdictions may also require the applicant to sign a development agreement (see here, here, and here), which includes a series of performance obligations. This could include anything from developing more parking lots to beautifying a block near the property where the cannabis business operates. It can also include compensation agreements to protect the city/county from third-party claims caused by the project. To understand your objection, you must take the time to read the ordinance of the city or county on the subject.

Competitive licensing. In order to ensure that only operators with the most capital and wealth can gain a foothold in certain jurisdictions, certain cities and counties implement competitive licensing, which makes operators have to spend hundreds of thousands of dollars to apply for/opportunistic operations. Typically, these applicants must submit hundreds of pages of information about themselves and their business, which is beyond the information that any ordinary company must provide in order to obtain a city business license—including odor plans, capitalization plans, etc. (and supporting these Proof of funds for the plan), inventory management plan, supplier lists for certain product types, community liaison plans, etc. West Hollywood, California It may be the most competitive local license application I have seen in more than ten years of practice.

Increase the crime tax. Although state tax rates may (hopefully) be nominal, locals do not necessarily have to be rational. In countless cities, operators are facing aggressive gross revenue taxes and other taxes that only apply to the cities and/or counties in which they operate (and on top of state and federal taxes).

Regulations used only by locals. Even if a state does not have a residence requirement, its city or county may have one. Operators must carefully read the local laws and regulations to see who can occupy their limit tables and inventory ledgers if they want to operate in certain cities or counties. Sometimes, the local government’s instructions are that a certain percentage of business ownership must be composed of city/county locals (or, if you have locals, your scorecard will get more points), which will force some industries Hasty business marriage.

Increase the distance requirement. State laws or regulatory agencies may (and usually do) impose certain distance requirements between cannabis businesses and “sensitive uses” such as schools, parks, and “youth centers.” Locals are free to impose more restrictions and can add other sensitive uses, such as chapels or rehabilitation facilities, and of course they can also increase the buffer distance (this can effectively eliminate the establishment of cannabis companies in the entire community).

Objections from neighbors/arguments with neighbors. State cannabis laws do not consider disputes between cannabis companies and their neighbors.However, the local laws governing cannabis businesses will always have an angry mechanism Nimbys Appealing the issuance of any local rights to cannabis businesses can cause massive and costly delays for cannabis operators (in all states, you need local rights and state permits to open the door).

Prohibition/suspension. Although cities and counties are free to regulate cannabis business (including more stringent than the state), many cities and counties still completely ban commercial cannabis activities in states where cannabis is legalized or “medicalized.” This will only promote the illegal market and hinder the success of these democratic experiments, which largely depends on the ability to provide consumers with reasonable and convenient access to cannabis and cannabis products.

To make matters worse, cities/counties usually implement rolling suspensions to study the effects of cannabis, which may take years to resolve, and cannabis operators are in trouble. Alternatively, a city or county may decide that it no longer wants to have any cannabis businesses within its borders, and under existing local laws, may declare that cannabis businesses are not in compliance with the prescribed use, and have a timetable to shut them down and shut them down .

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Here, in California, local control has Bondage Regarding the implementation and overall success of the Law on Regulation and Safety of Medicinal and Adult Use of Cannabis. As more and more cities and counties realize that the establishment of cannabis businesses can bring significant economic benefits without causing major social harm, this control is loosening. According to MJ Biz Daily, More cities Work is now underway to allow marijuana businesses (although the total number of dispensaries in the state is very small compared to citizens).

I’m sure that California is not the only state where this trend of tolerance has appeared. Still, cannabis operators should not be happy about pending federal legislation-locals can be very demanding on cannabis companies and their budgets, and even if the bill is passed, it will not change (for better or worse) in the foreseeable future.



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