New California Laws Impacting Cannabis Businesses

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Governor Newsom has signed several bills that impact the cannabis industry by providing relief from federal income tax deduction limitations, encouraging minority participation, encouraging union membership, and clarifying some other existing regulations.

The bills include:

  1. Assembly Bill 37 repeals the limitation on deductions for business expenses for cannabis businesses, which had previously conformed to Internal Revenue Code section 280E for state tax purposes.
  2. Senate Bill 595 provides some relief from licensing fees for needs-based applicants and is meant to facilitate minority-owned businesses.
  3. Assembly Bill 1529, co-sponsored by the California Cannabis Industry Association, modifies the labeling requirements on vaporizer cartridges. It facilitates compliance with the requirements by making some practical modifications to the labeling specifications.
  4. Assembly Bill 1291, which requires a labor peace agreement for all businesses with 20 or more employees, is designed to facilitate union protections for cannabis industry workers, as well as protections from strikes and other disruption for businesses. The new law imposes strict timelines to comply by licensees under the threat of loss of their license. California makes it very difficult to have independent contractors instead of employees, so this provision could have a significant impact on the unionization of the cannabis industry in California.
  5. Senate Bill 34 allows retailers to provide free products to qualifying medical patients.

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Author Bios

Matt Maurer – Minden Gross
Jeff Hergot – Wildboer Dellelce LLP

Costa Rica
Tim Morales – The Cannabis Industry Association Costa Rica

Elvin Rodríguez Fabilena


Julie Godard
Carl L Rowley -Thompson Coburn LLP

Jerry Chesler – Chesler Consulting

Ian Stewart – Wilson Elser Moskowitz Edelman & Dicker LLP
Otis Felder – Wilson Elser Moskowitz Edelman & Dicker LLP
Lance Rogers – Greenspoon Marder – San Diego
Jessica McElfresh -McElfresh Law – San Diego
Tracy Gallegos – Partner – Fox Rothschild

Adam Detsky – Knight Nicastro
Dave Rodman – Dave Rodman Law Group
Peter Fendel – CMR Real Estate Network
Nate Reed – CMR Real Estate Network

Matthew Ginder – Greenspoon Marder
David C. Kotler – Cohen Kotler

William Bogot – Fox Rothschild

Valerio Romano, Attorney – VGR Law Firm, PC

Neal Gidvani – Snr Assoc: Greenspoon Marder
Phillip Silvestri – Snr Assoc: Greenspoon Marder

Tracy Gallegos – Associate Fox Rothschild

New Jersey

Matthew G. Miller – MG Miller Intellectual Property Law LLC
Daniel T. McKillop – Scarinci Hollenbeck, LLC

New York
Gregory J. Ryan, Esq. Tesser, Ryan & Rochman, LLP
Tim Nolen Tesser, Ryan & Rochman, LLP
Cadwalader, Wickersham & Taft LLP

Paul Loney & Kristie Cromwell – Loney Law Group
William Stewart – Half Baked Labs

Andrew B. Sacks – Managing Partner Sacks Weston Diamond
William Roark – Principal Hamburg, Rubin, Mullin, Maxwell & Lupin
Joshua Horn – Partner Fox Rothschild

Washington DC
Teddy Eynon – Partner Fox Rothschild