Welcome to Higher Law, our new weekly briefing about all things cannabis. I’m Cheryl Miller, reporting for Law.com from Sacramento, where our once reefer-hating senior U.S. senator, Dianne Feinstein, now says marijuana-legal states should be protected from the feds.
Feinstein says her views changed after talking to constituents. Facing a liberal opponent in her re-election bid this year probably helped too. Feinstein may not be the biggest legalization cheerleader, but she’s one less congressional roadblock for advocates.
This week, we’re looking at the big dollars behind pot lobbying and campaign donations in California. Plus, the perplexing problem of legal weed in the workplace. Scroll down to see who got the work. Thanks, always, for reading Higher Law.
The Lobbying Buzz in California
First quarter lobbying reports are now filed in California, and two non-plant-touching companies emerged as the biggest marijuana industry spenders. Eaze Solutions Inc., owner of the Eaze delivery app, dropped $74,000 on lobby shop Governmental Advocates over the first three months of the year. Online dispensary locator Weedmaps paid $45,000 each to California Strategies & Advocacy and to Lang, Hansen, O’Malley & Miller for advocacy in the Legislature, the governor’s office and marijuana-licensing state agencies.
Those numbers don’t rival mega-political players in Sacramento like the Western States Petroleum Association, which racked up a $2 million lobbying bill for the first quarter. But they are significant, especially for two companies attracting unwanted attention from state regulators.
Weedmaps executives have exchanged terse letters with the Bureau of Cannabis Control, with the agency telling the company to “cease and desist” displaying advertisements that don’t display valid license numbers. Nothing more has ensued publicly—yet.
Eaze has billed itself simply as an internet-based connection between customers and delivering retailers. But as Leafly recently reported, critics say Eaze has gone much further by requiring retailers to use a standardized product menu.
“If the Eaze business model has changed from an internet platform application assisting licensees to a more direct role where they are conducting or directing cannabis activities, they may need a state license,” Lori Ajax, California’s chief marijuana regulator, told Leafly last month.
Both companies are keenly interested in legislation that would bar California cities and counties from blocking licensed marijuana deliveries within their borders—even if they have banned commercial sales and cultivation. Delivery service We Drop, which spent $12,000 lobbying in the first quarter, is the main sponsor of SB 1302.
The debate over the bill encapsulates one of the biggest problems California’s new regulated market faces. A big majority of voters may have approved recreational use in 2016, but the initiative gave cities and counties broad authority to outlaw marijuana sales—and they are. More than 300 cities and counties in the state ban the delivery of both medical and recreational cannabis, according to CannaRegs.
Not surprisingly, cities and counties don’t like SB 1302. And while it passed out of its first policy committee hearing by the slimmest of majorities, the bill needs support from two-thirds of those voting in the Senate—a heavy lift for any bill, let alone one that deals with marijuana.
“We’re really going to have to roll up our sleeves and have some conversations if we have any shot of getting it out of the Senate,” the bill’s author, Sen. Ricardo Lara, D-Bell Gardens, said.
Eaze and Weedmaps will surely be part of those conversations. We’ll see what that costs when the second-quarter lobbying numbers are filed in July.
Got a tip? A marijuana M&A deal to crow about? Drop me a line at email@example.com or call me at 916-448-2935. I’m also tweeting @CapitalAccounts.
Workplace Weed Worries
One of the top-read stories so far this year at The Recorder—ALM’s San Francisco-based publication—was my colleague Caroline Spiezio “Weed in the Workplace,” which looks at employers’ rights when it comes to workers who are legally using marijuana at home. Clearly this is an issue flummoxing companies and their attorneys.
The Associated Press tackles the topic this week, suggesting that marijuana testing is hurting employers trying to fill jobs in a hot economy. “I have heard from lots of clients things like, ‘I can’t staff the third shift and test for marijuana,’” said Michael Clarkson, head of the drug testing practice at Ogletree Deakins.
The Society for Human Resource Management has a good round-up with thoughts from California employment attorneys on how to handle employees who are legal users, especially those using medical marijuana.
The California Legislature is currently considering a bill that would require employers to accommodate certain non-safety workers who use medical marijuana, so long as they don’t show up to work stoned.
The bill—AB 2069—is opposed by a slew of business groups, including the powerful state Chamber of Commerce, as well as the Healdsburg, Calif. firm Walter Prince, which specializes in workplace safety law.
Who Got the Work
➤➤ The National Cannabis Industry Association has retained Steve Fox and his Denver firm, VS Strategies, to beef up its federal lobbying efforts. Fox, also of counsel to the Colorado law firm Vicente Sederberg, is a veteran of campaigns to legalize marijuana. His biography says that when became director of federal policies at the Marijuana Policy Project in 2002 he was the only full-time cannabis lobbyist on Capitol Hill.
The NCIA’s three-person government relations staff has worked primarily with the lobbying firm Federal Advocates Inc. The trade group recently reported federal lobbying spending of $180,000 in the first quarter of 2018.
➤➤ The neighbors of Cambridge, Massachusetts, dispensary Health Pharms are suing under federal anti-racketeering laws. Sound familiar? Neighbors of a legal marijuana grow in Colorado also cited the federal RICO statute in attempting to shut it down. Scott Schlager, an associate at Nathanson & Goldberg, is lead counsel for the plaintiffs in the Massachusetts case. Emma Quinn-Judge, a partner at Zalkind, Duncan & Bernstein represents Healthy Pharms. [Masslive]
In the Weeds
- Insurance regulators have approved California’s first insurance policy for landlords renting to cannabis businesses. California Mutual Insurance Co. will offer lessor’s risk coverage to property owners “who are exposed to specific risks resulting from cannabis-related business activities of their commercial tenants,” the Department of Insurance said. [California Department of Insurance]
- Marijuana-legal states are tracking and collecting a whole lot of data from the industry. But at least two states have had technical problems with all that data collection. And Oregon doesn’t have enough staffing to check for compliance issues in all those numbers. [Associated Press]
- Democratic New Jersey Gov. Phil Murphy says he’s tried pot “once or twice.” He confesses he’s “never been a marijuana guy,” according to the AP. Meanwhile, the firm Flaster Greenberg says it’s launching a cannabis practice group in response to proposed legislation to expand marijuana business opportunities in New Jersey.
- More than 100,000 Florida residents have registered in the state’s medical marijuana system. Thirteen companies operate 34 dispensaries despite heavy local restrictions and ongoing fights about what business can locate where. “We are looking at Florida as the biggest medical marijuana market in the United States,” said Randy Maslow, president of iAnthus Capital Holdings. [Orlando Sentinel]
- The National Rifle Association is meeting in Dallas this week, and sure, the Second Amendment lawyers there are talking about guns. But they’re also talking about marijuana. “Think potheads don’t have rights?” asks columnist Jacquielynn Floyd. “Try taking their guns away.” [Dallas News]
Mark Your Calendars
—> May 14: Nominations for the National Cannabis Bar Association’s board of directors are due.
—> May 16: A trial is scheduled in a Leon County courthouse to consider whether Florida’s ban on smokable forms of medical marijuana violates a 2016 state constitutional amendment that legalized medical marijuana. The case is People United for Medical Marijuana Inc. v. Florida Department of Health.