Sacramento Report: Putting an End to Silent Pot Investors

The oversight of California’s pot industry continues to grow.

The Bureau of Cannabis Control has offered draft regulations for public comment that broaden the definitions of an owner and financial interest holder of a marijuana business.

One of the main selling points of Proposition 64, which legalized marijuana for adult use, was that industry players would be known and held accountable. But a San Diego lawsuit involving competing claims of ownership over several marijuana businesses exposed how easily the system could be subverted.

Some marijuana financiers don’t want to be known because of their past ties to the black market. Others run publicly traded companies and fear their attachment to marijuana may harm other business interests. So they find ways to keep their names off state applications, but continue to make money as property owners and silent investors.

The new state regulations are expected to help put an end to that practice.

“I can’t think of any way to conduct a cannabis business that would be outside of these regulations,” said Edward Wicker, an Escondido-based marijuana attorney. “The new definitions are expansive.”

Of course, there’s also a possibility of a chilling effect among certain types of financiers.

Lance Rogers, a marijuana attorney based in Del Mar, said he’s consulted traditional investors who are interested in the industry but chose not to participate because of the disclosure requirements.

The new regulations have gone through several drafts in recent month — touching on everything from advertising to labeling to the amount of cash that deliverers can carry — and could go through additional revisions before they’re approved in December. The state’s attempt to gain more control over the industry “represents a fundamental change,” Rogers said, and major marijuana interests in Sacramento are likely to push back.

One of the major changes involves technology platforms, like Weedmaps and Eaze, which works with Urbn Leaf, a licensed dispensary in San Diego’s Bay Park neighborhood. Those companies will be prohibited from entering into profit-sharing agreements with licensed dispensaries and delivery services, which could cut into their bottom lines.

State marijuana officials are also sticking by their plan to allow licensed companies to make house calls in any jurisdiction, regardless of whether that jurisdiction permits local dispensaries or other marijuana businesses. That includes places like rural San Diego County, where the Board of Supervisors has told legal medical marijuana dispensaries to wind down and stop doing business by 2022.

— Jesse Marx

What’s Happening With the Sanctuary State Battle

In July, a federal judge upheld most of the three laws intended to buffer immigrants in California from increased federal immigration enforcement. Those laws had been challenged by the Trump administration, and the judge dismissed part of the suit.

But the back-and-forth between California and the federal government isn’t over. Nor is the implementation of the laws within California.

The federal government has appealed the dismissal to the 9th U.S. Circuit Court of Appeals.

Meanwhile, a judge in Orange County ruled against the state in a legal challenge over the so-called “sanctuary laws,” in a case brought by Huntington Beach, which said the state interfered with the city’s charter, the Orange County Register reported.

California Attorney General Xavier Becerra has said he will continue to enforce the law as the various legal challenges work their way through courts.

Last month, he issued guidance under the California Values Act, restricting Immigration and Customs Enforcement agents’ access to courthouses after reports of immigrants being arrested in courthouses in Fresno, Sacramento and other places emerged, the Fresno Bee reported.

Local police and sheriff’s departments must report information to the state by January regarding immigration-related arrests that stem from joint task forces between local and federal law enforcement, and the attorney general’s office has said it will publish a report on those arrests in March each year beginning in 2019.

In two weeks, San Diego County will hold a community forum to discuss the transfers of unauthorized immigrants between local law enforcement and ICE. The County Board of Supervisors and several cities in the county, like Escondido, Carlsbad and Vista, voted to support the federal government in the lawsuit against the California Values Act.

— Maya Srikrishnan

Harkey’s Prop. 6 Comments Spur a Bike-Lash

Congressional candidate Diane Harkey’s comments at a press conference last week in support of Prop. 6, the gas tax repeal, have gotten a lot of attention.

“This is just fraud,” Harkey said, as captured by KPBS’s Andrew Bowen. “It’s forcing you to take bikes, get on trains, hose off at the depot and try to get to work. That does not work. That does not work with my hair and heels. I cannot do that and I will not do that.”

State Sen. Scott Weiner, a San Francisco Democrat who opposes the gas tax repeal, is organizing an event aimed at proving Harkey wrong. Weiner “plans to join Emeryville Mayor John Bauters in organizing a hair and heels bike ride on Sunday at 2 p.m. starting from Market and Castro streets in San Francisco,” the San Francisco Chronicle reported. Weiner said he plans to don a sensible wig for the event.

No word on whether Weiner and Bauters plan to hose off at the depot afterward.

— Sara Libby

Golden State News

• This is a great and accessible feature that zeroes in on the effects of Prop. 13 on a single neighborhood, where people have similar homes and wildly different property tax bills. (California Dream project)
• California is adding an extra layer of review to the Motor Voter program after a series of problems. (Sacramento Bee)
• California and Texas are always cast as opposites and enemies – but they have an enormous amount in common, as this insightful package of stories looping in immigration, the economy and climate points out. (Curbed)
• The “cockroaches of the ocean” are threatening California’s kelp forests. (New York Times)