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California pot shops prepare for their first day of legal recreational marijuana sales

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California pot shops prepare for their first day of legal recreational marijuana sales

Pot dispensaries in Southern California were scrambling Sunday to prepare for their first day of legal recreational marijuana sales, with a historic state law permitting such businesses set to take effect New Year’s Day.

“We are excited. We just got our state license on Saturday … so immediately there was extra energy in everyone’s step,” said Robert Taft Jr., founder of the medical marijuana dispensary 420 Central in Santa Ana. “Being part of history is an amazing thing.”

Taft said he brought in five new cash registers and hired six additional “budtenders” in preparation for the new law. He also doubled his inventory and consulted with his attorneys daily to ensure his store was in full compliance.

In addition, Taft has increased the store’s security, adding 24-hour armed guards. Selling recreational marijuana is an all-cash business.

The state has issued dozens of permits for retailers to begin recreational sales this week, expanding a market that is expected to grow to $7 billion annually by 2020 in California. Several of those retailers are in West Hollywood, but they won’t open until Tuesday at the city’s request. That makes Santa Ana’s licensed stores the closest option for Angelenos who want to buy recreational marijuana on New Year’s Day, unless buyers are willing to trek to San Diego or the Palm Springs area.

“This is a special moment,” Taft said.

To sell cannabis commercially in January — for recreational or medical use — marijuana businesses must have local approval and a state license. Existing medical marijuana dispensaries have been given first priority for recreational sales.

The city of Los Angeles has yet to start issuing local licenses to pot shops, which stirred unease among some existing medical marijuana dispensaries that have been following city rules.

Until recently, Jerred Kiloh feared he would have to temporarily close his Sherman Oaks dispensary to avoid breaking state law.

Kiloh, president of the United Cannabis Business Assn., now says his dispensary will be able to continue providing medical marijuana to patients in January by operating as a “collective” until it has received state and local licenses. After weighing their legal options, most of the marijuana shops in his group are operating the same way, Kiloh said.

As soon as L.A. grants them approval, those marijuana dispensaries will seek state licenses, he added.

For many in the industry, the new law signals a long-awaited shift.

“The days of the dime bag are long, long gone,” said Daniel Yi, spokesman for MedMen, one of the three West Hollywood shops that will be selling cannabis for recreational use.

Medical marijuana customers at the shop Sunday browsed through lotions, honey and wellness packages infused with cannabis. Some poked at an iPad with a menu showing close-ups of different marijuana buds.

Yi said the new law will make it hard for the country to ignore the impact of cannabis.

“This is the most populous state. We’ve popularized yoga. We’ve popularized sushi,” he said. “I think this is going to move the needle like nothing else when it comes to the national conversation.”

Brian Gordon believes the new law will help remove the stigma from a drug that is already widely used.

Unfortunately, he said, that progress costs money.

When he went to purchase an ounce of low-grade cannabis from his regular West Hollywood dispensary, he was told that the new law would significantly drive up prices. State, city and sales taxes will push up the price of the drug by more than a third.

Those who register with the Los Angeles County Department of Health and enroll in the medical marijuana program will be exempted from paying sales taxes, but they will still see a 25% increase.

Gordon, who is between jobs, said the increase will hurt him and other patients who use the drug for medical purposes.

“I don’t mind paying the extra money if the money is actually being used for good,” said Gordon, who uses cannabis to ease his sciatica pain.

At a nearby marijuana shop, a budtender said that patients have expressed shock and anger at the increased cost.

“This is not right,” he said. He requested anonymity because he feared losing his job for speaking about the issue without the shop owner’s permission.

The budtender said he would not have voted to legalize recreational marijuana use if he knew the cost would jump so high. He was worried that additional tax increases would be enacted, and that shop owners will pass on the cost of running a legal marijuana business to customers.

Kenneth Churchill, chief executive of West Coast Cannabis Club in Cathedral City, said he plans on opening two hours early Monday, at 6 a.m.

“This is what I got into this business for,” he said. “This is what I signed up for.”

Churchill said he usually expects increased sales in the first few months of the year. But this year, he expects business to “double or triple on top of that” because of recreational marijuana sales.

Allowing recreational marijuana use will change California for the better, he added, because regulations will ensure that dispensaries are operating safely and selling quality products.

“I think regulations will be good for everybody,” he said. “Having the safety net of not worrying about going to jail is worth the extra tax.”

sarah.parvini@latimes.com

angel.jennings@latimes.com

Times staff writer Emily Alpert-Reyes contributed to this report.

Original Article at http://www.latimes.com/local/lanow/la-me-ln-marijuana-prep-20171231-story.html

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[Winner] November 1, 2018 Giveaway (Episode 2)

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Brady Shepherd wins our 2nd Rate.Review.Win! Giveaway!

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Automatic Weapons to host November CannaMaps Giveaway!

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Automatic Weapons | CannaMaps

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Will mega marijuana deal get approval in New York?

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Will mega marijuana deal get approval in New York?

ALBANY — The planned merger of two of the nation’s largest cannabis companies is being closely watched by industry insiders in New York who are wondering just how state regulators are going to handle an acquisition that, on its face, seems to violate state law.

MedMen Enterprises and PharmaCann announced the $682 million deal to stockholders last week, noting that the acquisition would create the nation’s largest cannabis company with licenses to operate 79 facilities across a dozen states, including two cultivation facilities and eight medical marijuana dispensaries in New York.

The only catch?

New York Public Health Law, which allows marijuana for medical use only, prohibits a registered marijuana organization from owning and operating more than four dispensaries in the state. The provision was designed to prevent market domination, even as some argue it limits access for patients who must travel to far-flung destinations to get their medicine.

In response to that concern, the state last year doubled the number of medical marijuana organizations allowed to operate statewide from five to 10 — a move that also doubled the number of allowed dispensaries statewide from 20 to 40.

The four-dispensary-per-company limit remains, however.

MedMen, a Los Angeles-based company known for its high-end marijuana stores, would acquire the assets and licenses of Illinois-based PharmaCann in the stock deal, though it must gain regulatory approval from local and state authorities in each of the markets where those assets are held.

“We are in talks with the regulators in all of the jurisdictions impacted by this acquisition, including New York,” said MedMen spokesman Daniel Yi. “The first step in any acquisition is for the two parties to agree to the terms and enter into a binding contract. Then you go seek approvals from all the relevant regulators. We have begun that process now.”

New York’s Department of Health, which oversees the state’s still-nascent medical marijuana program, said Monday that any merger proposal submitted to the agency for approval must be in compliance with state law. There are also requirements regarding ownership changes, said department spokeswoman Jill Montag.

“Regulations prohibit a registered organization from changing the composition of its ownership without prior written approval of the Department of Health,” she said. “MedMen and PharmaCann do not have approval from the department to conduct this transaction, and at this time the department has insufficient information to determine if approval can be granted.”

MedMen said it expects the transaction to close within six months to a year. It declined to speculate on its plans should New York reject the deal.

“It would not be proper for us to get ahead of the process,” Yi said. “We are currently in talks with regulators and we feel confident about the outcomes.”

In a news release issued Monday, MedMen said that it will use “commercially reasonable efforts” to transition licenses to a third party if it is unable to gain regulatory approvals within a two-year time span, with proceeds going to the company and its investors.

Founded in 2014 in Oak Park, Ill., PharmaCann was one of the five original organizations registered to operate grow sites and retail stores in New York, which went live with its medical marijuana program in January 2016.

The firm quickly became a major player in the industry, and today is considered one of the nation’s leading providers of medical cannabis with operations in Illinois, New York, Maryland and Massachusetts, and planned expansions in Michigan, Ohio, Pennsylvania and Virginia.

Its facilities in New York include a cultivation center in Orange County and dispensaries in Albany, the Bronx, and Central and Western New York.

MedMen, meanwhile, had become a major player of its own, primarily out west, selling both recreational and medical marijuana. It entered the New York market last year when it bought out Bloomfield Industries, one of five original organizations licensed to operate in the state.

But it didn’t garner much attention until this past spring, when MedMen opened its first dispensary in Manhattan on pricey Fifth Avenue. The move appeared to be a gamble that New York would soon legalize recreational marijuana, since the state’s tightly regulated medical marijuana program is small by industry standards and unlikely to generate sizable revenues without significant expansion.

Indeed, New York appears poised to jump on the recreational bandwagon. Gov. Andrew M. Cuomo in January ordered a study into a regulated, adult-use program, and by June the Department of Health concluded such a program would have more positives than negatives.

A task force is currently researching and crafting legislation for consideration in the upcoming 2019 legislative session, and public hearings on the matter are being held statewide.

MedMen said Monday that it has consistently advocated for full legalization of marijuana, as well as an increase in the number of licenses and dispensaries.

“We believe that legal, regulated cannabis leads to safer, healthier and happier communities,” Yi said.

Original Article at https://www.timesunion.com/news/article/Will-mega-marijuana-deal-get-approval-in-New-York-13311377.php

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