Insiders share their stories from the 'fastest-growing industry in America'; marijuana isn’t included in mainstream jobs reports, but another report says pot outsold Girl Scout cookies in 2015
Some have messy buns and sleeve tattoos. Some have salon cuts and $2,000 suits.
Some are joining blue-collar unions, getting health benefits as they grow and sell a plant they’ve long loved. Some say they never touch it, but they’re standing guard outside shops and fiercely lobbying legislators in Sacramento to ensure that others can.
As public support and legalization of cannabis spreads, those who’ve quietly worked in California’s medical marijuana industry are slowly emerging from the shadows. And professionals who never would have considered joining the industry a couple of years ago are leaving behind traditional careers in law, real estate and finance as they flock to what they see as the next big boom.
“The fastest-growing industry in America is marijuana, period,” said Jake Bhattacharya, who recently quit his information technology job to open a cannabis testing lab in Upland.
With medical marijuana legal in 25 states and recreational use allowed in four, pot outsold Girl Scout Cookies in 2015, according to a report from Marijuana Business Daily, a 5-year-old news website covering the industry.
Pot retail sales are expected to hit $4 billion this year, and Marijuana Business Daily is projecting that number could nearly triple by 2020.
The actual size of the industry may already be much larger, too, since California hasn’t tracked its massive medical marijuana market in the 20 years since it’s been legal. And it could skyrocket if voters here and a handful of other states approve recreational use Nov. 8.
The lack of reliable data coupled with the “niche” aspect of the industry is why cannabis — and the connected marijuana jobs — isn’t included in mainstream economic and jobs reports, according to Christopher Thornberg, director of the Center for Economic Forecasting and Development at UC Riverside.
“It’s still too fly-by-night,” Thornberg said.
California’s Employment Development Department doesn’t track the diverse daisy chain of cannabis jobs either. And several recruitment firms said they don’t deal with the industry.
Job seekers and employers instead turn to Craigslist or specialized sites. There’s a recent post on WeedHire.com for a $75,000-a-year account manager at GFarmaLabs, which makes marijuana products in Anaheim, and one on 420careers.com for growers and trimmers at Buds & Roses dispensary in Los Angeles.
Working in the industry isn’t without complications.
It remains illegal at the federal level, which limits access to financial services and causes lingering concerns over raids by federal authorities.
California’s market is also emerging from two decades of nearly nonexistent regulation and intense battles with local governments who were less than welcoming to “potrepreneurs.” That legacy means newly licensed shops often still rely on growers and manufacturers in the gray market, and they struggle to survive alongside unlicensed operators who aren’t paying the same hefty taxes.
Then there’s the glaring disapproval that comes from shrinking (per the polls) but vocal pockets of the public. Fear of backlash from conservative family members or future business associates kept a number of cannabis workers from speaking on the record for this story.
“Let’s face it, of course there is a stigma,” said Juliet Murphy, a career coach who runs Juliet Murphy Career Development in Tustin.
Murphy expects that it would raise eyebrows for more traditional employers to see a weed industry job on someone’s résumé. However, Murphy sees it as less of an issue going forward as the industry becomes more mainstream and as millennials continue to transform the workforce.
“There are still a lot of kinks that are being worked out. But I think this presents an opportunity for a lot of jobs, provided that people do it right,” Murphy said. “I think in the next 5 to 10 years, it’s going to be huge.”
May 2, 2016
But, but...weed is for the people, it's the people's weed.
On Friday, longtime weed enthusiast Woody Harrelson lost a Hawaii-wide bid for licensing a medical marijuana dispensary through his company Simple Organic Living LLC. The State of Hawaii Department of Health opened applications for "a total of eight dispensary licenses: three for the City & County of Honolulu, two for Hawaii County, two for Maui County and one for Kauai County." According to Reuters, the state "did not specifically say why the actor's application was denied." Sure, he's not too upset, though. He'll find something else to do with all that would-be dispensary money.
Stacking the vapors... ILLA
It’s hard to ignore the prevalence of medical marijuana dispensaries in California and elsewhere. They are on the corner and in the news. If you are a tax lawyer, it is even harder to ignore them, for there are big tax problems in this industry. See Voters Say Yes To Marijuana, IRS Says No. But when I said I thought the industry was going corporate—Is Medical Marijuana Going Corporate?—I didn’t realize how true it was.
Now I’m getting merger notices. Yes, marijuana M&A is here. In this case, it’s about the vapor machines that can obviate smoking and instead dispense the meds without even using a match (or a lighter for that matter).
Medbox, Inc. (OTC Markets: MDBX) announced the acquisition of 100% of Vaporfection International Inc., manufacturer of Vaporfection vaporizers. Medbox was featured on the cover of the Los Angeles Times Business Section: Wall Street sees opportunity in marijuana.
Vaporfection makes “herbal delivery systems.” The deal involved the issuance of 260,864 MDBX stock warrants. Medbox sells and services automated, biometrically controlled dispensing and storage systems for medicine and merchandise. And Vaporfection seems quite a catch.
Vaporfection claimed Best Vaporizer in Product of the Year at the Cannabis Cup Amsterdam 2011, and Best Vaporizer at the Kush Expo LA 2012. The company’s patented designs cause marijuana to release its medicinal ingredient into the vapor. The resulting vapor is pure, virtually odorless, and goes into the patient’s respiratory system.
Vaporfection was created by Amir Yomtov in 2006. In 2011, the company was purchased by entrepreneur Herb Postma. Mr. Postma continues to manage Vaporfection and notes that under Medbox, Vaporfection revenues are projected to exceed $4 million in 12 months. All this sound rosy, but not to the feds.
After all, legal dispensaries are still labeled as drug traffickers under federal law, and that creates big tax problems. Section 280E of the tax code denies tax deductions for any business trafficking in controlled substances. The IRS says it must enforce Section 280E. Yet the U.S. Tax Court has opened the door a crack by allowing dispensaries to deduct other expenses distinct from dispensing marijuana. See Californians Helping to Alleviate Medical Problems Inc. v. Commissioner.
If a dispensary sells marijuana and operates the separate business of care-giving, the care-giving expenses are deductible. Some expenses might relate to both. If only 10% of the premises are used to dispense marijuana, 90% of the rent is deductible. But good record-keeping is essential. See Medical Marijuana Dispensaries Persist Despite Tax Obstacles.
But even good records won’t make vaporizers or drug paraphernalia deductible. In Olive v. Commissioner, Martin Olive sold medical marijuana at the Vapor Room, where he used vaporizers so patients didn’t have to smoke. However, with only one business, Section 280E precluded Olive’s deductions.
Robert W. Wood practices law with Wood LLP, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009 with 2012 Supplement, Tax Institute), he can be reached at Wood@WoodLLP.com. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
Oakland sues U.S. to stop medical marijuana property seizuresL.A. Now
The city of Oakland filed suit Wednesday against top federal prosecutors in an attempt to stop them from seizing property leased by the nation’s largest medical marijuana dispensary.
The unprecedented civil complaint, filed in federal court against Atty. Gen. Eric Holder and Melinda Haag, U.S. attorney for the Northern District of California, seeks to “restrain and declare unlawful” a July federal forfeiture action against Harborside Health Center’s landlords in Oakland and San Jose.
The suit comes as federal prosecutors have ramped up efforts to shutter dispensaries statewide, targeting those close to schools as well as operations such as Harborside, which are in compliance with local and state laws but that prosecutors have deemed "superstores."
Launched in 2006, Harborside now counts 108,000 patients in its collective and paid $3.5 million in taxes last year, $1.1 million of that to Oakland. Co-founder Steve DeAngelo worked closely with Oakland officials as they crafted one of the nation's strictest regulatory schemes to monitor and tax the industry.
The lawsuit refers to Harborside as "vital to the safe and affordable distribution of medical cannabis to patients" suffering from pain, illness and injury.
San Francisco attorney Cedric Chao, who is representing Oakland, said in a statement Wednesday that the federal government "acted beyond its authority" by filing the forfeiture action outside the statute of limitations. He added that the government has indicated for many years "by its words and actions that so long as dispensaries and medical patients acted consistently with state law, the dispensaries would be allowed to operate. Oakland has reasonably relied on these assurances."
In an interview, Oakland City Atty. Barbara J. Parker said the lawsuit "is about protecting the rights of legitimate patients who need this medicine” and “doing everything we can to assure that this pipeline is not shut off."
If federal prosecutors succeed in shuttering Harborside, she said, “public safety could be worsened because those patients would be out in the black market purchasing this medicine from criminals.”
A representative for the U.S. attorney’s office did not return a late afternoon call for comment Wednesday.
Advocates for medical marijuana said they know of no other instance in which a city has sued federal prosecutors in an attempt to protect a dispensary.
"I would definitely welcome them to the fight," said Don Duncan, California director for Americans for Safe Access. “The symbolism of this is very important.”
Harborside's Oakland dispensary is the largest in the nation, and the center also operates a smaller sister dispensary in San Jose. Landlords facing the forfeiture action have moved in state court to evict, while Harborside has countered that it is meeting all lease requirements. Court rulings are expected soon.
Meanwhile, a federal court hearing is scheduled for Nov. 1 on a motion by the San Jose property owner "to enjoin us from selling cannabis," Harborside's DeAngelo said. He called Oakland’s lawsuit "the first time that any official governmental body has formally challenged the federal government’s attacks on medical cannabis laws."
"I think the city realizes that Melinda Haag is not only attacking Harborside but attacking the entire system of regulated medical cannabis sales that the city painstakingly developed," he said.
Ads running to legalize marijuana in three states
By Carl Marcucci
In November, voters in Colorado, Washington and Oregon will consider legalizing marijuana for recreational use. Although similar initiatives have failed in the past, this time the groups fighting to legalize pot are well-organized, professional and backed by high-dollar donors willing to outspend the competition, reports Raycom News Network.
In Colorado, the Campaign to Regulate Marijuana Like Alcohol (CRMLA) has produced several ads that say marijuana is healthier than alcohol. The campaign’s website points to medical studies that claim marijuana, unlike alcohol, has not been linked to cancer, brain damage, addiction or high healthcare costs.
CRMLA was given nearly $1.2 million from the Marijuana Policy Project, a DC-based lobbying group, as well as more than $800,000 by Peter Lewis, the founder and chairman of Progressive Insurance. Lewis has been a vocal proponent of marijuana legalization for several years and donated millions to legalization efforts around the country.
In an online video ad campaign, CRMLA has young adults explaining to their parents they prefer marijuana to alcohol. In one of the ads, titled Dear Mom, a 20-something woman tells her mother marijuana is “better for my body, I don’t get hung-over and honestly I feel safer around marijuana users.”
In Washington, rather than comparing marijuana to alcohol, New Approach Washington (NAW) is focusing on legalization, arguing outlawing cannabis does more harm than good, by wasting tax dollars on law enforcement while letting gangs control the money. She describes the possible benefits of legalization through saved law enforcement dollars and extra tax revenue.
The TV spot has a professional/executive looking woman, “I don’t like it personally, but it’s time for a conversation about legalizing marijuana. It’s a multi-million dollar industry in Washington state, and we get no benefit.”
These efforts appear to be working. In Washington, 50% of voters say marijuana should be legal while 38% say it should not, according to an Elway Research poll. And in Colorado, a Denver Post poll showed 51% of Coloradans were in favor of legalization, while 41% opposed it.
In Washington, the effort to legalize marijuana is being fought with a bankroll of between $4 and $5 million, according to the Raycom News Network story. NAW used those funds to put $1 million into television advertising during August, and hope to put triple that amount into the weeks preceding the November vote.
In total, groups in Colorado fighting to get marijuana legalized have a war chest of $2.5 million.
The campaigns are especially targeting women ages 30 to 55, whom tend to be less supportive of legalization and regulation than men.
The only visible group opposing the marijuana ballot, SMART Colorado, has been given less than $200,000 – most of it from Save Our Society, a Florida-based anti-drug group.
RBR-TVBR observation: Interesting that the Chairman of Progressive Insurance is donating so much money in this legalization effort. Perhaps legalizing it would create fewer accidents/injuries from police chases and save the insurance industry money? We doubt drivers with the stuff in their car would try to flee if it’s no more illegal than a pack of cigarettes. Who knows, but Progressive is a big corporation and Lewis seems to not be concerned about sticking his neck out on this.
Medical Marijuana Laws Go Up in Smoke
By CAMERON LANGFORD courthousenews.com
Sixteen years after California voters passed Proposition 215, legalizing medical use of marijuana, it's clear the plant is not going to disappear.
Now if only the federal government could figure that out.
The message will be exhaled across the West Friday, as pot smokers gather to celebrate their national holiday: 4/20, a number whose origins are veiled in time and rumor, if not in smoke.
President Obama does not hear the message.
At a Summit of the Americas conference in Columbia on April 14, the host nation's President Juan Manuel Santos discussed alternatives to the "War on Drugs," and urged consideration of a middle ground short of decriminalization.
In response, Obama said, "I think it is entirely legitimate to have a conversation about whether the laws in place are ones that are doing more harm than good in certain places." But, he added, "I personally, and my administration's position is that legalization is not the answer,'" according to The New York Times.
Consider some numbers the War on Drugs has generated:
The annual marijuana crop in California is worth $13.8 billion, according to "Ganjanomics," an Aug. 15 story in High Country News.
Mexico's war with drug cartels, backed by $1.6 billion in U.S. money for training, support and equipment, has brought that country 50,000 deaths in 5 years.
If marijuana were legal in the United States, you could grow it in your back yard, bring it to your local farmers' market to trade or sell, and buy it commercial grade at your corner store or at specialty shops.
Law enforcement could use a device, akin to a breathalyzer, to determine if someone was too high to be driving.
Drug cartels would have less incentive to battle over supply routes marijuana would no longer be expensive.
Unfortunately for California, the Obama administration is making the state it the poster child for what flouting federal drug laws will get you.
Under the Controlled Substances Act marijuana is classified as a Schedule I drug, meaning: "a) The drug or other substance has a high potential for abuse, b) The drug or substance has no currently accepted medical use in the United States."
But in the rural Northern California counties of the Emerald Triangle, including Mendocino, Trinity and Humboldt Counties, marijuana is what powers their economies.
Tired of dealing with hunters and hikers encountering gun-toting pot growers in its forests, Mendocino County started a first-of-its kind permitting program in 2010 that let medical marijuana collectives grow up to 99 plants, to bring pot growers out of the black market.
Participants paid the county $1,500 in application fees, $50 for zip ties for each plant and $300 to $600 per month for monthly garden inspections by sheriff's deputies.
Nearly 100 farmers signed up for the program, which generated $663,230 for the Mendocino County Sheriff's Office from July through December, according to county officials.
That all changed in October, when DEA agents raided Northstone Organics' owner Matthew Cohen's Mendocino County farm and cut down his 99 marijuana plants.
Cohen ran a medical marijuana delivery service for patients in the Bay Area and Los Angeles, and appeared on the PBS documentary show "Frontline" earlier in the season, touting his garden's compliance with county law.
Due to threats from U.S. Attorney Melinda Haag that Mendocino County could face litigation if the program continued, the board of supervisors voted in February to end it.
Mendocino County Sheriff Tom Allman was an advocate of the program.
"This step that the U.S. Attorney's Office took in California, in my humble opinion as an elected sheriff, was a step backwards," Allman told KQED News. "We're further away from a solution today than we were two months ago."
On April 3 federal agents raided Oaksterdam University, a medical marijuana training college in Oakland, founded by Richard Lee, who spent more than $1 million backing a defeated 2010 California ballot measure that would have legalized recreational marijuana use.
An IRS spokeswoman told reporters that agents were serving a federal search warrant but said she could not comment on the raid's purpose.
Given the federal government's position, and the U.S. Supreme Court 2005 ruling in Gonzalez v. Raich, that Congress can criminalize homegrown cannabis production and use even where states approve it for medical purposes, this is a battle that will play out over decades.
What will it take for our nation's leaders to even start discussing solutions to a problem that will only keep growing?
Marijuana test lab sues Santa Monica to force city to issue a business license
Richard McDonald's Golden State Collective tests medical marijuana for THC levels as well as mold, bacteria and pesticide content. Growers and dispensaries use his service to make sure their pot is safe and have the necessary potency.
It isn't a dispensary and doesn't sell pot.
The Santa Monica Daily News says McDonald has been refused a business license because the laboratory isn't an approved use in the city.
McDonald says City Hall has been dragging its feet so he opened his lab this month without one.
McDonald says City Hall has been dragging its feet so he opened his lab this month without one.
McDonald's lawyer Roger Diamond filed suit on March 19, claiming the lab's activities are within the limits of California law.
California legalized medical marijuana in 1996.
California marijuana workers ready to unionize
The United Food and Commercial Workers union is welcoming medical marijuana dispensers into its ranks, at a time when the city government is moving to crack down on the shops.
MyFoxLA.com reports that the move could help legitimize the industry as the city considers whether to impose a ban on local marijuana dispensaries.
The UFCW, which represents grocery and health care workers among others, is a powerful force whose donations and endorsements are a valuable commodity for public office-seekers.
According to MyFoxLA.com, medical marijuana workers have also started to unionize elsewhere, joining up with the UFCW in Oakland, Calif., as well as in Colorado.
The Teamsters welcomed California marijuana growers into their union back in 2010.