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CannaBeat – April 24, 2023

by Emerge Law Group

CannaBeat is a curated biweekly selection of top news stories impacting business, research, and culture in the cannabis industry, crafted by Emerge Law Group.

Emerge’s Hot Take

California State Policy Update

California continues work on the regulatory structure of its cannabis industry.  Many of the proposed bills could help the industry grow by increasing opportunities and reducing regulatory burdens.  Below are a few bills that California is considering:

AB 374 – Consumption Lounges: This bill would permit local governments to allow the sale of non-cannabis foods and beverages (except alcohol) at consumption lounges. This would also allow lounges to sell tickets to concerts and other events.  As discussed in our previous CannaBeat post HERE, this could create exciting opportunities for dispensaries.

SB 508 – CEQA & Licensing Reform: This bill proposes to remove the duplicative CEQA requirements between the state and local governments.  This would streamline the application process and lessen the regulatory burden on operators.

AB 1111 – Cannabis Event Sales: This bill allows direct-to-consumer sales from small producers.  “Small producer” means less than one acre outdoors.  Indoors, “small producer” means 22,000 square feet of mixed-light tier 1 or 5,000 square feet of mixed light tier 2.  Under this bill, small producers with the proposed license could sell their products to consumers up to 32 days per year at certain temporary events. This would give small farmers a huge opportunity to work directly with consumers and capture those lifetime buyers.

Other Noteworthy News

New Congressional Bill Would Provide Federal Tax Relief for Marijuana Businesses By Amending IRS’s 280E Code
“A congressman has reintroduced a bill that would amend an Internal Revenue Service (IRS) code known as 280E to allow state-legal marijuana businesses to finally take federal tax deductions that are available to companies in other industries. Rep. Earl Blumenauer, founder of the Congressional Cannabis Caucus, refiled the Small Business Tax Equity Act on Monday. The measure been introduced several times over recent sessions but has never advanced to a hearing or vote. ‘State-legal cannabis businesses are denied equal treatment under 280E,’ Blumenauer said in a press release. ‘They cannot fully deduct the cost of doing business which means they pay two or three times as much as a similar non-cannabis business. […] This grotesquely unfair treatment incentivizes people to cut corners,’ he said. ‘If Congress wants to get serious about supporting small businesses and ending the illicit cannabis market, it is commonsense that we allow legal cannabis operations to deduct business expenses, just like any other industry.’”
Cannabis Culture on 4/20 – A Look at Efforts to Legalize and Tax America’s Most Controversial Crop
“[Last Thursday] was 4/20, a counterculture holiday based on the celebration of cannabis. A few years ago, the day would have confounded some. Now, 4/20 is so mainstream that it trends on social media. Cannabis simply doesn’t have the same taboo as it once did, largely due to legalization efforts. While there are dozens of theories about how the date came to have such significance, [according to one] widely accepted explanation, it can be traced to a group of teenagers from San Rafael, California. The group, nicknamed the Waldos for their favorite hangout spot (a wall outside of school), used to meet after school to smoke pot. The timing of their meeting, 4:20 pm, became a kind of greeting in the hallway, and the rest, as they say, is stoner history.”
Delaware Governor To Let Recreational Cannabis Legalization Bills Become Law
“Delaware Gov. John Carney said Friday he would allow pending legislation that legalizes recreational cannabis in the state to become law. That means Delaware becomes the 22nd state in the U.S. to legalize adult-use marijuana and set up a regulated industry. This year, after both bills passed the state General Assembly with a veto-proof majority, the governor faced the choice of vetoing the bills and risk the Assembly overturning the veto or allowing both bills to become law without his signature. He had until Saturday to act on House Bill 1, which ends criminal penalties for adults 21 and older possessing small amounts of cannabis. The deadline to act on HB 2, which creates regulations for a legal industry, was April 26. He chose to return both unsigned, while voicing serious reservations. ‘As I’ve consistently said, I believe the legalization of recreational marijuana is not a step forward,’ Carney note in a statement released by his office on Friday.”

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CannaBeat by Emerge Law Group
CannaBeat is a weekly brief on news, business, and culture in the cannabis industry curated by members of Emerge Law Group's distinguished Cannabis Industry Group.

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