Cannabis in California urged to get serious — by doing the boring things other businesses do ...


In the wake of the passage final November of Proposition 64, which legalized leisure use of marijuana for adults 21 and older, by some estimates cannabis in California could also be on the verge of turning into a $7 billion industry.


Thursday night, about 50 present and potential homeowners of cannabis businesses gathered in a convention room close to University City. But they weren't speaking about things like cultivation strategies or completely different strains of pot.



Instead, the matters have been far more buttoned-down, even boring — worker classification, legal responsibility insurance coverage and regulatory compliance.


After many years of outlier and outlaw standing, marijuana in the Golden State is simply months away from turning into a legally licensed enterprise and the audio system at Thursday’s assembly mentioned these in the cannabis sector should be sure they think about regulatory and compliance points that always have been neglected or just ignored.



“These issues are going to be so much more important now,” mentioned San Diego legal professional Kimberly Simms, who has labored with shoppers in the marijuana business for the previous eight years and arranged Thursday’s assembly. “We’re going to have to be a flexible industry. California over-regulates everything and cannabis is not going to be an exception to that.”


Some points are so simple as ensuring a enterprise writes and enforces an worker handbook. Others embrace misconceptions over labor and employment regulation, starting from things similar to too typically classifying staff as impartial contractors, accurately tabulating time beyond regulation, coping with discrimination accusations and dealing with payroll.


Overlooking particulars can lead to battles in courtroom that may threaten the very existence of a nascent enterprise, mentioned Danielle Moore, an skilled in office regulation and who counsels employers in the cannabis business for the agency of Fisher Phillips.


“Everybody wants to be part of the industry because it has so much potential,” Moore mentioned. “They think it’s going to be easy. It’s not easy.”



Moore gave a PowerPoint presentation displaying how a lawsuit over unpaid time beyond regulation to one worker incomes $60,000 a 12 months can probably find yourself costing an organization with a workers of 15 practically $900,000.


“Starting and launching a small business is always hard,” Moore mentioned. “But for cannabis, it’s times 10.”



That’s as a result of whereas pot could also be authorized in California, the federal authorities still classifies marijuana as a Schedule I drug, in the similar class as narcotics like heroin.


That typically leads to nearer scrutiny from regulation enforcement and in addition scares off banks from taking over shoppers in the cannabis sector, which implies many house owners deal completely in money.


Jeffrey Rosen, the co-founder of San Franciso-based CBZ Insurance Services, warned Thursday’s viewers greater marijuana business will lead to better publicity to authorized battles, similar to product legal responsibility lawsuits.


Companies that deal in “edibles” are additionally seemingly to face fits ought to a buyer devour an excessive amount of or get unwell.


“People running cannabis companies have to look at insurance as a mandatory part of their business,” Rosen mentioned. “They need to protect themselves from all different types of liability. But I find in this industry that people see insurance as an ‘as-needed’ item, meaning, ‘when I think I need it, I’ll get it but until then I’m not going to.’”


There are other concerns, too.


For instance, the state will classify cultivation of marijuana as agriculture.


A consultant from the California Agricultural Labor Relations Board was at Thursday’s assembly and mentioned if cultivators and growers of marijuana with 20 or extra staff need to obtain a license from the state they need to signal what’s referred to as a “labor peace agreement,” in which the employer guarantees not to resist makes an attempt by a union to arrange employees.


There are additionally OSHA (Occupational Safety and Health Administration) rules to take into account in addition to potential motion from federal regulation enforcement companies. In March, the Securities and Exchange Commission charged a West Hollywood marijuana company with falsifying earnings.


“A lot of the cannabis industry is coming from an era of black market to self-regulation to quasi-compliance,” mentioned Simms. “Regulation is just around the corner and these issues are going to become so much more important.”


Prop 64 handed with 57 percent of the vote, making California the largest state to legalize leisure use of marijuana. State officers are in the course of of creating a licensing and taxation regime that's scheduled to go into impact Jan. 1, 2018.


Moore mentioned these contemplating leaping into the cannabis enterprise want to be additional cautious.


“This is not something you can do easily,” Moore mentioned. “So for someone who wants to come into it, you need to plan for that, be prepared to commit to the challenges and be über-compliant.”



rob.nikolewski@sduniontribune.com


(619) 293-1251 Twitter: @robnikolewski


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Cannabis in California urged to get serious — by doing the boring things other businesses do ...

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