Medical Marijuana – The Current State & Federal Laws

With the growth of the medical marijuana industry in California, attorneys have been receiving numerous questions from concerned clients, investors, and real estate professionals as to whether they should or must lease real estate when marijuana use, or cultivation, or dispensing will be involved.  Real Estate and Business Attorney Steve Beede of the BPE Law Group provides a summary of the current laws below.

Although this is a huge issue, I will provide a general overview on the application of the many current laws that deal with this subject. I will not be addressing the pros and cons of medical marijuana use which has many supporters and detractors. I am only addressing the legal issues that arise when real estate in California is used for the growing, cultivation, and distribution of medical marijuana.

Applicable Laws: The legality of any medical marijuana use and business is determined by an overlapping structure of State, Local, and Federal laws which are often in conflict. A simple start point here is to understand that any such operation that is not in compliance with these laws is illegal and could subject a violator to criminal prosecution and more. This Article will focus only on determining legality.

1)     STATE LAWS – California medical marijuana law is based primarily on 3 separate Acts:

(1) Prop 215 – passed in 1996, deals with personal use only. It provides limited immunity from criminal prosecution to “Qualified Patients” and their Primary Caregiver (if any) as long as they are in compliance with the restrictions set forth in the Act. To be a Qualified Patient, the person need only obtain a letter from a Medical Doctor recommending use of marijuana for medicinal purposes. This does not require a prescription.

(2) Medical Marijuana Program Act (“MMPA”) – passed in 2004, provides limited immunity from criminal prosecution for non-profit “Collectives” to cultivate and distribute medical marijuana as long as they are in compliance with the restrictions set forth in the Act. A Collective may be a group of Qualified Patients or may be an incorporated entity.

 (3) Medical Marijuana Regulatory and Safety Act (“MMRSA”) – passed in 2015 and in effect January 1, 2016. This law expanded on the MMPA and provides limited immunity from criminal prosecution for Collectives and Incorporated entities which now can operate on a “for Profit” basis. As with prior Acts, the immunity only applied if they are in compliance with the restrictions set forth in the Act.  Those restrictions include a requirement fro separate Local Licensing.

In addition, a proposed Ballot Initiative to legalize recreational use of marijuana in California is anticipated to be brought to the voters in November 2015. Although a similar measure was previously rejected, proponents are looking to the examples of Colorado and Washington to get their measure passed.  It is unclear at this point whether any such would change the laws concerning medical marijuana.

2)    LOCAL LAWS – even though the above State laws provide a regulatory framework in California, nothing precludes local County or City governments from imposing more restrictive conditions or even totally banning such operations. So throughout California local regulation varies widely ranging from outright bans, to restricted uses, and no regulation at all.  However, while local laws can be more restrictive, they cannot be less restrictive than the above-reference State Laws.

3)    FEDERAL LAWS – Unlike California, there is no medical marijuana law at the Federal level. Under the Federal Controlled Substances Act, marijuana remains classified as a Schedule 1 Controlled Substance just like heroin and other dangerous narcotics.  As such, Federal law treats any use, cultivation, or distribution to be a criminal act which can subject the violator to prosecution and imprisonment.  Perhaps more importantly, there is the danger that a property owner who knowingly allows the criminal conduct to exist could also be subject to criminal penalties including seizure and sale of their real property (“Forfeiture”).  In such a sale, all costs of  law enforcement, legal action, attorney fees, and property maintenance costs will be paid before any lien holding creditors.

The critical question is: Will the Feds actually Seize California Property? Under the existing law, the Feds can and have – until recently – seized real property in California even where the marijuana operation was in compliance with all State and Local laws. Several proposal have been presented in Congress to re-classify marijuana from being a Schedule 1 Controlled Substance but none of these have passed. However, two significant actions have substantially reduced if not eliminated the risk of Federal intervention in California medical marijuana operations:
Cole Memorandum- issued in 2013 by the Department of Justice, this Memorandum sets forth 8 law enforcement “priorities” for marijuana. As long as State Laws are sufficiently robust to satisfy these priorities, the Feds will not pursue federal criminal prosecution for marijuana in that State.  The priorities are:
(1) preventing distribution of marijuana to minors,
(2) preventing revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels,
(3) preventing the diversion of marijuana from states where it is legal under state law in some form to other states,
(4) preventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or illegal activity,
(5) preventing violence and the use of firearms in the cultivation and distribution of marijuana,
(6) preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use,
(7) preventing the growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands, and
(8) preventing marijuana possession or use on federal property
Rohrabacher-Farr Amendment – passed in 2014 and 2015, this Amendment to the Federal Budget prohibits the Department of Justice from interfering with those acting in accordance with their state medical cannabis laws.

SUMMARY:    Taken together, the strong set of marijuana regulations in effect in California coupled with the Cole Memorandum and Rohrabacher-Farr Amendment to the Budget make it highly unlikely that the Feds will intervene in any legally compliant medical marijuana operation in California or expose real estate owners or creditors with risk of forfeiture.  While it is possible that a future President may reverse the Memorandum and Amendment, it appears unlikely that Congress would go along.  Of course, violation of these laws would remain criminal activity and subject violators to all penalties both federally and under California law.

This article is courtesy of Steve Beede of the BPE Law Group.   If you know anyone who could use legal advice, please do them a favor and pass this information along to them.

 

Steve Beede, Founder and President BPE Law Group, P.C.

Main Office: 2339 Gold Meadow Way, Suite 101, Gold River, CA 95670 Lincoln Satellite Office:  985 Sun City Lane, Suite 102, Lincoln, CA 95648

(916) 966-2260

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Armed Security Officer Patrol “Hits”

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Glock 20 confiscated by Sacramento Sheriffs at 2:30 AM after an Armed Security Patrol Officer discovered four gang members in a van at an apartment complex.

As the town sleeps at night, dozens of armed security officers go to work to combat crime. Security Patrol Officers make patrol “hits” on locations contracted with their security company to deter, detect, delay and deny crime.  As a Security Patrol Officer, it’s very exciting to get to a property in the middle of the night and then begin patrol.  The usual places are always checked, such as the garbage dumpsters, walkways, laundry facilities, pool area and the office.  The parking lot is also checked; in between cars and all of the places where there is no light.  The process repeats with the next property, and the next.  Often, a property will require three patrol “hits” at random times during the night.  A patrol “route” is established and the savvy Security Patrol Officer will mix it up every night in order to avoid creating routine times.  Mixing up the patrol hits also increases the probability of catching any repeat-trespassers trying to dodge Security.

What do we find? What they find, more often than not, is that many of the criminals found prowling are dangerous repeat-offenders.  These people are part of the revolving-door criminal justice system and can’t hold a traditional job.  They dumpster-dive in the middle of the night for recyclables to turn in the next day, and the noise wakes up everyone around; plus they leave behind a mess.  These night-crawlers are also looking for crimes-of-opportunity.  This can be a window left down on a car or something of value left in the back of a truck that can be sold or traded later.

Gang activity is also interrupted during patrol. The Glock pictured above was confiscated by the Sacramento Sheriff’s Department after a Security Patrol Officer found four gang members with it, in a van, in the middle of an apartment complex parking lot at 2:30 AM.  The magazine was fully loaded with hollow-points.  The Security Patrol Officer took control of the gang members and the firearm while calling the Sheriff.  The person in possession of the Glock was in the Law Enforcement database and described as a “Validated Gang Member” because of his repeat history of activity.  The intent of the gang members will never be known; drive-by shooting, robbery or murder.  Having an Armed Security Patrol Officer to intercept the activity may have prevented more violence on that night.

Ghosting Sites – Security Customers get what they pay for

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Fresh Graffiti on the back wall of a commercial building.

The Apartment Manager said “I’m sure your service will be great; and then after 30 days we won’t see you again” after doing my best to convince her that the company I was working for would be better than the competition. This is an example of a major hurdle I have to overcome in our area. Other “fly-by-night” companies have burned the clientele by severely under pricing the competition and then failing to provide the service as promised. This is called “Ghosting Sites” when Security Officers are overloaded with work and instructed to write and submit reports to the clients – Apartment Managers – as if they had been there patrolling the area.

Some companies have a name for it: fill-in reports. I call them: fraudulent reports. The Security Officers don’t want to write reports all night, they want to go patrol and hunt for crime, and protect the people and property using their law enforcement skills.

More than one company I worked for as a Security Supervisor was guilty of this. I lasted six weeks at one job before I figured out what they were doing. As the Supervisor on duty I would take the dispatch calls while on patrol and I would assign them to other Security Officers on duty. I took a call for service at an apartment complex over 100 miles away. Unaware of this contracted site, I called the boss and asked what Security Officer could respond to the call. The answer I received was that the company took that account and was to provide service, but they didn’t actually have anyone in the area. So, they are being paid for a service that they have no intention of providing. How irresponsible at the very least.

I handed in my uniform and collected my last pay check. That Security Company went bankrupt and was out of business less than a year later. They left behind a lot of burned clients and put a big black eye on the security industry in our area. Then, the same individuals started up a new business under a new name to do the same thing.

How do the clients that have been burned by this treatment come back from it? The clients often give up after experiencing this too many times. I often hear that they have their maintenance guy who lives on-site go take care of any security issues.

How is the security industry – that has to have honesty, integrity and accountability with clients – going to survive? The regulatory agency, the Bureau of Security and Investigative Services, has increased the standards by mandating that all Private Patrol Operators must prove that they maintain a General Liability policy – or lose their license. This should cause the number of licensees to decline as the smaller companies that are mismanaged fail to turn a profit and can’t afford it.

Accountability through technology: The smarter security companies are utilizing customized private security software with time and date stamped photographs on the reports in conjunction with GPS technology to provide verifiable locations of security officers and the services they provide. Over time, the private security industry will increase trust with the clients through the use of technology.