In the continuing work to diversify the legal cannabis space and include communities that have been hurt the most by the war on drugs, advocates have unveiled a model local ordinance that would help more people of color enter the industry.
The Model Municipal Social Equity Ordinance, released Monday by the Minority Cannabis Business Association (MCBA), “creates a baseline framework for adopting and advancing social equity in the cannabis industry as official public policy.”
Research shows that African Americans are almost four times more likely to be arrested on marijuana-related charges than their white counterparts—even while usage rates are virtually identical. But as legalization makes its way across the country, the effects of this systemic racial bias persist: More than 80 percent of legal cannabis businesses are owned by white people, according to one survey.
In other words, the communities that have been punished the most for something as simple as marijuana possession have yet to see many of the benefits associated with legalization.
To address this disparity, MCBA’s model ordinance calls for cities to create cannabis social equity programs to provide financial and technical support to people who might not be able to otherwise own, invest or otherwise work in the cannabis industry. For example, under current policies enacted elsewhere, they may not be able to afford the high costs associated with licensing. Or they may be barred from even applying to work in the industry because of a past drug conviction.
The model ordinance is designed to even the playing field. People who were arrested on charges related to marijuana prior to legalization, who had a family member arrested on such charges and/or lived in an area with disproportionately high cannabis arrest rates would be eligible to participate in the program. It also invites people with low income—defined as those with “household income of less than 80 percent of the current fiscal year median family income for the county of residence”—to participate as well.
“The licensing structure… prioritizes folks who have been impacted by the war on drugs for ownership,” Jason Ortiz, MCBA vice president, told Marijuana Moment in a phone interview. “Those folks are often left behind, if included at all. We put them at the front of the line.”
Another important part of the ordinance, Ortiz said, is that it empowers local governments to study the impact of marijuana prohibition on their communities and use that data to influence decisions on where money generated from the industry should go.
“If your community was specifically targeted for arrests, your community now has data to support why they should be the ones to receive the support that is generated,” he said.
The model ordinance also encourages cities to create a “community reinvestment fund” from tax dollars and other revenue from cannabis businesses to use for job training, re-entry services and other community-centered support.
Other provisions include the facilitation of “resentencing and expungement to restore the civil rights of prior cannabis arrestees” (such as the automated process recently instituted in San Francisco) and the end of “suspicionless drug testing,” among other considerations.
The next step, of course, is to get municipalities to actually adopt the model ordinance. That’s going to take community engagement and dialogue, Ortiz said.
“For us, the importance and relevance of this document is that it allows anyone anywhere to start to have a conversation about equity at their local and state level,” he said.
“The Model Ordinance is a statement from the communities we represent to the local lawmakers, regulators, entrepreneurs and other stakeholders who are building our nation’s cannabis industry one town at time–social equity is not only possible, it should be the industry standard moving forward,” Khurshid Khoja, co-chair of the MCBA Policy Committee, said in a press release. “Our work gives those actors the tools they need to make equity a present reality in our industry rather than a lost opportunity.”
In 2017, MCBA released a similar model bill for state legislatures championing industry-wide equity.
Photos/screen grabs from video produced by MCBA.
GW Pharma Scores Interim Victory In Cannabis Extraction Patent Infringement Fight With Canopy (Op-Ed)
“GW’s claim construction victory bodes very well for their ultimate success in defending this lawsuit.”
Last week, U.S. District Judge Alan D. Albright issued a claim construction order favoring GW Pharmaceuticals in the high-stakes, high-profile cannabis patent litigation brought by Canopy Growth Corporation. Canopy has accused GW of infringing U.S. Patent No. 10,870,632, titled, “Process for producing an extract containing tetrahydrocannabinol and cannabidiol from cannabis plant material, and cannabis extracts,” and generally directed to CO2 extraction methods.
Canopy filed this lawsuit on December 20, 2020—the same day the patent issued—in U.S. District Court for the Western District of Texas, which has a reputation for patent-friendly juries and rapid litigation. Canopy had acquired the rights to the allowed patent application several weeks prior. The patent-in-suit claims priority to a German patent application dating all the way back to October 2000, rendering the pool of potentially invalidating prior art extremely small.
“Claim Construction” is the legal process where a judge interprets the meaning of language in an asserted patent claim. Later in a patent infringement litigation, this interpretation is used by the jury (or, sometimes, the judge) to determine whether the accused products or methods infringe the patent and whether the patent is rendered invalid by prior art. Generally, the patent owner seeks a claim construction broad enough to ensure that the accused method infringes; conversely, the defendant generally seeks a claim construction narrow enough to ensure that the accused method does not infringe.
This claim construction dispute focused on the following limitation of claim 1 of U.S. Patent No. 10,870,632: “(1) subjecting the cannabis plant material or primary extract thereof to CO2 in liquefied form under subcritical pressure and temperature conditions to extract cannabinoid components.”
The Court explained the parties’ positions as follows:
“[GW] contend[s] that ‘subcritical pressure and temperature conditions’ means that both the pressure and temperature need to be below the critical pressure and critical temperature, respectively. [Canopy], by contrast, contends that ‘subcritical’ simply means ‘not supercritical.’ As such, at least according to [Canopy], because being supercritical requires both the pressure and temperature to be above the critical pressure and critical temperature, respectively, if either the pressure or temperature—but not both—is above its corresponding critical value, then the CO2 is not supercritical, but rather is subcritical.”
In its claim construction order, the court agreed with GW that subjecting cannabis material to CO2 under conditions corresponding to the striped area of the phase diagram below is outside of the scope of the claim language and would not infringe. Canopy’s argument that subjecting cannabis to CO2 under striped-area conditions is within the scope of its patent claims was rejected.
In many patent infringement cases, a litigant who loses claim construction may concede an inability to win the case. Conceding early may enable the losing party to immediately appeal the claim construction order to the U.S. Court of Appeals for the Federal Circuit without wasting resources litigating an otherwise doomed case. Here, it is not yet clear how Canopy will respond to its claim construction loss. Canopy may concede noninfringement under the claim construction so that they may promptly appeal. Alternatively, Canopy may believe that they can still prevail on their infringement allegations and continue litigating in the Western District of Texas. Another potential consequence is that the claim construction order may push the parties closer to a negotiated settlement and corresponding dismissal of the case.
Ultimately, GW’s claim construction victory bodes very well for their ultimate success in defending this lawsuit. Additionally, the narrower claim construction adopted by the court should be welcome news for CO2 extraction companies and equipment manufacturers: At least for the time being (for those operating in stripped-area conditions), the pending threat of a patent infringement lawsuit by Canopy has been greatly diminished.
Larry Sandell, a registered patent attorney with Mei & Mark LLP and the head of the firm’s cannabis practice, focuses his practice on counseling clients on strategic intellectual property matters; drafting and prosecuting patent applications; litigating patent infringement and other matters in federal district courts and the International Trade Commission; arguing federal appeals; and handling patent-related Amazon.com take-down disputes. He can be reached at [email protected].
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Read the full claim construction order below:
Photo by Kimzy Nanney.
Congressional Black Caucus Foundation Partners With Marijuana Industry On Internship Program For Future Cannabis Leaders
A marijuana industry organization is teaming up with the Congressional Black Caucus Foundation (CBCF) to provide internship opportunities to black students and recent graduates who will get first-hand work experience at major cannabis companies next year.
The U.S. Cannabis Council (USCC) is sponsoring the spring 2022 program, which will place nine interns at one of eight marijuana firms like Canopy, Columbia Care, Curaleaf, the Marijuana Policy Project and Weedmaps.
For more than 30 years, CBCF has been supporting internships to help build leadership skills and give young people the professional experience to enter into public service. The foundation’s “Pathways to C-Suite Internship Program” is a more recent iteration that helps place black undergraduates and graduates in the private sector.
Now, in yet another sign of the normalization of the cannabis industry, CBCF and USCC are working together to mold the next generation of marijuana entrepreneurs and reform advocates.
NOW OPEN! Apply to CBCF's Pathways to the C-Suite #internship program presented by the @USCannabisCncl. Benefits of this program include housing, a stipend, professional development courses, & networking opportunities. The deadline is December 3, 2021. https://t.co/CroYYI2DDh pic.twitter.com/5Vr5UbUwQc
— CBCF Inc. (@CBCFInc) November 12, 2021
“Black Americans are woefully underrepresented in today’s cannabis industry,” Donna Fisher-Lewis, co-interim president and CEO of CBCF, said in a press release. “We’re excited to partner with USCC and its members to help build a diverse talent pipeline for the cannabis industry.”
Interns selected for the program will be able to network with industry professionals and learn the ins and outs of cannabis policy while gaining professional experience, and they will be provided a stipend and housing credit.
Applications for the internship are due by Friday, December 3.
“Really the overall goal of the program is to create pathways for future leadership in the cannabis industry, especially in upper management and future executives of cannabis,” Tahir Johnson, director of social equity and inclusion at USCC, told Marijuana Moment.
Learn more about CBCF's Pathways to C-Suite #internship program presented by the US Cannabis Council at a virtual information session! Speak directly with the Leadership Institute team & ask any questions you may have about the application and program. https://t.co/t9a0cuaP3h pic.twitter.com/WtEdaZNRuI
— CBCF Inc. (@CBCFInc) November 21, 2021
“We know that there’s a lack of [black ownership in the industry], so we want to be able to make sure that we’re training, preparing and giving opportunities to get their foot in the door at cannabis companies to help to lessen that gap and be able to create opportunities for entrepreneurship and future leaders and executives in cannabis,” he said.
Cedric Haynes, who serves associate vice president for government relations at Weedmaps and went through the CBCF Emerging Leaders internship program in 2009, said he is “a testament to the impact of these programs and the many opportunities that such an internship affords.”
“I had a front row seat to the federal legislative process while living in Washington, D.C.,” he said. “The experience that CBCF provided jump started my career in public policy, and I am forever grateful for it.”
The Spring 2022 Pathways to the C-Suite internship program will partner Black college seniors & recent college graduates with leading cannabis companies & organizations, including ACHEM, @CanopyGrowth, @ColumbiaCare, @Curaleaf_Inc, Holistic, @MarijuanaPolicy, USCC and @weedmaps.
— U.S. Cannabis Council (@USCannabisCncl) December 1, 2021
CBCF was founded about five years after the Congressional Black Caucus (CBC) came together in 1971. Its board is comprised of private industry executives, educators and several current members of the legislative caucus such as Reps. Colin Allred (D-TX), Dwight Evans (D-PA) and Sheila Jackson Lee (D-TX).
“The Pathways to the C-Suite internship program will provide our members with top-notch talent while helping build a more equitable industry,” Steven Hawkins, CEO of USCC, said. “Interns will gain valuable work experience in a dynamic, growing and evolving field. Their on- the job experience combined with the professional development provided by the internship program will set them up for success in cannabis and other professional paths.”
Photo courtesy of Brian Shamblen.
California Marijuana Businesses Seek Tax Amnesty After Spate Of Robberies In Oakland
Members of the marijuana business community in Oakland, California are calling on state and local officials to provide “tax amnesty” after numerous cannabis companies were robbed earlier this month.
At a press conference on Monday, the Oakland-based association Supernova Women urged officials to deliver financial relief after more than 25 licensed marijuana businesses were burglarized or robbed during the week of November 15.
Specifically, the non-profit group wants to see a repeal of the state’s cannabis cultivation tax and a “significant reduction” in the excise tax on marijuana products. They say that would help sustain small and minority-owned firms that are facing up to $5 million in losses following the robberies.
“All types of licensed cannabis businesses were impacted—cultivation, manufacturing, distribution and retail, delivery and storefront,” Amber Senter, executive director of Supernova Women, said at the press conference. “The cannabis industry needs tax relief.”
“Cannabis equity businesses in particular need more money and resources. Small businesses and small farmers need help,” she said. “Piling on and increasing taxes—and now with the threat of robberies and violence—is proving to be unbearable for cannabis operators. When we’re faced with targeted attacks, the effects are magnified. Our communities do not have the runway for robberies and tragedies of this time.”
Raeven Duckett, a social equity licensee who founded Text Johnnie, emphasized that “cannabis companies operating in Oakland pay at least a 6 percent tax rate while other non cannabis companies pay 0.12 percent—so cannabis companies are paying 600 percent more taxes than any other Oakland company.”
“Yet when organized crime organizations target at our facilities, we get little to no response and zero compassion from local law enforcement and city officials,” she said. “Our businesses are hurting. These operators are scared. These operators deserve the right to a safe work environment and local support in a city where we pay an exorbitant amount of taxes.”
Across the bay in San Francisco, activists have similarly criticized the police response to marijuana burglaries. Surveillance video from earlier this month that was obtained by The San Francisco Chronicle showed local police apparently observing and not intervening as suspects got away after they responded to a 911 call about a dispensary being burglarized.
State officials say they understand where the activists concerns are coming from and said that changes to laws might be needed to make it easier for businesses victimized by robberies to get relief.
“We appreciate hearing from and deeply sympathize with cannabis operators impacted by the recent increases in organized cannabis theft,” Nicole Elliott, director of the California Department of Cannabis Control, told Marijuana Moment. “Though state law does not require excise and sales tax to be paid on stolen goods, the complexities of the current cannabis tax structure mean that, in practice, it can be difficult for retailers to recover those taxes.”
“We encourage businesses to focus their advocacy on addressing the broader cannabis tax challenges and engage with their state legislators on policy proposals to reform and simplify California’s cannabis tax structure,” she said. “A 2/3 vote is needed to amend the law related to cannabis taxes so any changes will require a collective effort.”
When a theft of cannabis occurs, a retailer seeking a refund of taxes needs to work with a distributor to amend relevant tax filings. Unlike other systems where tax is due only at point-of-sale, California’s cannabis tax process—where retailers must pay estimated excise tax to distributors, who then remit the payment to state tax authorities—is relatively long and cumbersome, and requires arduous record keeping.
Senter ended Monday’s event with a clear message to city and state officials: “Listen to us. This is our cry for help. Help us.”
“We’re not going to hire people with AK-47s and put them on the roof. That’s not our job,” she said. “That’s not why we started to sell weed. We didn’t decide to get into cannabis to kill people. We’re here to provide medicine and improve people’s lives.”
Prior to the spate of cannabis-related robberies, California Attorney General Rob Bonta (D) celebrated the 25th anniversary of the state’s move to legalize medical cannabis and described today’s market as “number one in the world.” However, he did acknowledge that more work needs to be done.
Separately, California officials started accepting concept proposals last month for a program aimed at helping small marijuana cultivators with environmental clean-up and restoration efforts.
Gov. Gavin Newsom (D) did veto a bill last month that would have allowed cannabis businesses to advertise on billboards along most highways in the state.
The governor also recently approved a bill to boost the state’s hemp industry by legalizing retail sales of a wide range of consumable products derived from the plant—including CBD-infused foods, beverages, cosmetics and dietary supplements. It will also eventually allow the sales of smokable hemp products in the state.
In September, Newsom signed separate legislation to require hospitals to permit medical marijuana use by certain patients in their facilities.
California officials are also making millions of dollars available for grants programs to support marijuana social equity initiatives and assist localities in processing pending cannabis business license applications.
Next year’s California State Fair will host a first-of-its-kind, state-sanctioned cannabis competition.
Photo courtesy of Mike Latimer.