We Are Open For Business

This post is to let everyone know – existing and prospective clients – that despite the coronavirus mess, we are still open for business. We are working from home, however. We can communicate with you by phone, email, FaceTime, or Skype. We will not be doing in-person meetings until further notice, but we didn’t do a lot of that before. So rest assured that we are available to help you with your legal projects. If you need to reach me, send me an email at phs@spitzbusinesslaw.com, or leave a voicemail at 513-258-2062. I will check my messages several times a day, and will return your calls as quickly as possible.

Please remember to wash your hands, and look after your family, friends and neighbors. Also, be kind to strangers and your fellow grocery shoppers, because we are all stressed out and some people are frightened about what may happen. A little kindness goes a long way.

Finally, be safe and healthy!

Paul Spitz

Opening A Cannabis Dispensary in Ohio

So you want to open a medical marijuana dispensary in Ohio, now that it’s legal? Here’s a rundown of what is involved.

Licenses Available

At this time, the Ohio medical marijuana program only allows the state pharmacy board to issue up to 60 provisional dispensary licenses. The board has issued 56 licenses so far. The reason for not issuing all 60 licenses is that applications were not submitted for every district, and not every district had viable applicants. However, the board is not accepting new license applications at this time. There are 31 districts, with a maximum number of licenses that can be awarded in each district. Applicants are limited to 5 licenses state-wide, and 66% of licenses in any single district.

The board has the authority to increase the number of licenses after the program is operational. It’s my belief that until the board sees that it can manage the program effectively, it will keep a low limit on the number of licenses. The board is supposed to consider, on a biennial basis, whether the number of licenses is appropriate based on state population, patient demand, and geographic distribution of dispensaries. 

The board issues provisional licenses to qualifying applicants, and then those provisional licensees have 6 months to demonstrate their compliance with the dispensary operational requirements, in order to obtain a certificate of operation. So far, only 13 licensees have received certificates of operation. For the period beginning January 16, 2019 (the first date sales began) through March 31, 2019, the 13 dispensaries in operation have total combined sales of $2,884,096.

Restrictions on Applicants

There are a number of restrictions on who can be granted a license:

  1. Applicants must pass a criminal background check, showing that they have not been convicted or pleaded guilty to a disqualifying offense within the 5 years before applying for a license.
  2. Applicants cannot have an ownership or investment interest in or compensation arrangement with a licensed medical marijuana lab, or an applicant for such a lab license. The dispensary applicant also cannot share any officers or employees with a licensed lab or an applicant for a lab license.
  3. The applicant must demonstrate that the dispensary will not be within 500 feet of a school, church (including synagogues, mosques, etc.), public library, public playground, or public park. Schools include day-care centers and pre-schools.
  4. The applicant must be in compliance with tax laws.

Who is subject to the criminal background check? The administrator or other person responsible for daily operation of the license applicant, as well as any owner, prospective owner, officer, prospective officer, board member, or prospective board member of the applicant. All employees of dispensaries will also have to pass a criminal background check.

Other things that the board reviews in determining whether to grant a license are whether the applicant has the minimal amount of capital required, whether zoning approvals are in place, and whether the applicant has an appropriate business plan, operations plan, and patient care plan.

License Fees

When applying for a license, applicants must submit a $5,000 application fee. At the time the board grants a certificate of operation, the licensee must pay an additional fee of $70,000. Licenses must renew their certificate of operation every two years, with a renewal fee of $70,000, and if the renewal is not filed on time, there’s a penalty of $10,000. 

There are also fees for change of ownership ($5,000), relocation ($5,000), and major modification or renovation ($5,000).

Finally, there are fees for associated key employees ($500 each), key employees ($250 each), and support employees ($100 each).

Forms of Medical Marijuana

Let’s start with what dispensaries are not allowed to sell – joints, buds, or any other marijuana that you can smoke. Vaping is permitted, however. Other permitted forms include oils, tinctures, edibles, patches, plant matter, and anything else that the state pharmacy board approves (so long as it isn’t smokable). Also, the law prohibits any form or method that is attractive to children, as specified in rules adopted by the board. That could include certain types of edibles, such as candy, or chewing gum. THC content of plant material is limited to 35%, and THC content of extracts cannot exceed 70%.

Local Restrictions

In addition to the 500-ft restriction mentioned before, localities can pass restrictions prohibiting or limiting the number of cultivators, processors, or retail dispensaries within their boundaries.

Operating Requirements

There are extensive regulations governing all aspects of dispensary operation, so I will just touch on a few. All dispensaries are required to have security alarms, as well as video surveillance systems, and other internal and external security systems. All medical marijuana must be stored in an approved safe or vault, within a restricted access area. All medical marijuana must be packaged and labeled according to state regulations. Within five minutesof dispensing medical marijuana to a patient, the dispensary must electronically transmit certain information about the sale to the board. Dispensary names, logos, signs, and advertisements must be submitted to the state board for approval. Advertisements cannot be place on billboards; radio or TV broadcast (including cable, on-demand, satellite, internet); any handheld or portable sign; or within 500 feet of a prohibited facility, community addiction service provider, or game arcade (unless admission is restricted to people age 21 and over).

What’s the bottom line? Applying for and operating a medical marijuana dispensary in Ohio is not going to be an easy, move-fast-and-break-things type of undertaking. Prospective applicants should have firm commitments for at least $250,000 in funding, to cover application fees, application preparation, certificate of operation fees, leasehold improvements, equipment, and setting up operational rules and processes. Also, prospective applicants may need to wait until the board expands the number of licenses it will grant. However, if enough provisional licensees are unable to obtain their certificates of operation, the board may accept applications for those spots.  

Follow me on Twitter @PaulHSpitz

Cincinnati Bans Salary History Inquiries

On March 13, 2019, Cincinnati passed an ordinance that bars employers from asking applicants for their salary history. The law is intended to address wage disparity for women and minorities. So far, at least 14 states and a dozen cities have passed salary history bans. These include California, Connecticut, Delaware, Hawaii, Illinois, Massachusetts, Michigan, New Jersey, New York (state and city), North Carolina, Oregon, Pennsylvania, Vermont, Atlanta, Chicago, Louisville, Kansas City (MO), New Orleans, Philadelphia, Pittsburgh, and San Francisco. 

Cincinnati’s ordinance will take effect in one year and applies to employers located within the City of Cincinnati that have 15 or more employees within the City of Cincinnati.

Under the ordinance, employers:

  • Cannot inquire about an applicant’s salary history or request reports or other information to determine salary history.
  • Cannot rely on salary history to screen applicants, make hiring decisions or set compensation.
  • May communicate the proposed salary or salary range.
  • May, without inquiring about salary history, discuss salary expectations with the applicant.
  • May seek prior information about productivity, such as sales or revenue reports.
  • Must provide candidates with the pay scale for the position, upon request, if the candidate has been extended a conditional offer of employment.

Applicants will be able to sue employers directly under the ordinance, and can recover compensatory damages, reasonable attorney’s fees, costs and equitable relief for violations.

To prepare, Cincinnati employers should:

  • Review job application forms and interview questions
  • Modify the hiring process to ensure that salary information is not solicited from applicants who would be hired to perform work within the city.
  • Train staff on how to handle salary negotiations and a candidate’s voluntary disclosure of salary history information.
  • Be prepared to provide pay scale information to candidates after making an offer, if requested.
  • Review how to word requests for productivity information.

Also, given the number of other states, counties, and cities that have passed or are considering similar bans, Cincinnati companies with operations and employees in other states and cities should review their hiring practices in those locations, and make appropriate changes.

Why I Charge Consultation Fees

Visitors to the site may have noticed that I’ve recently started charging a modest consultation fee. There are two reasons for this policy. First, it deters people from booking a consultation and then not showing up. If someone has to pay a fee in advance to reserve time, and they aren’t serious about really showing up, they will probably not book the consultation. That’s fine with me, as it leaves that block of time open for me to meet with someone else, or to work on existing client projects. If the person prepays, books the time, and doesn’t show up, that’s fine with me too. I’m compensated for the inconvenience of someone being a no-show.

The second reason relates more to a specific segment of people who do book consultations. There are people who simply want to talk to a lawyer for an hour, and who have no intention or need to pursue the relationship further. These people want information about some issue, and during the course of the consultation, I’m going to provide them with valuable information as I answer their questions. If that’s all they want and they don’t plan on hiring me for additional work, that’s fine…but I should get paid for the valuable information that I provide and the time that I spend with them. If someone just wants information for free, there’s plenty of information at this blog, and elsewhere on the internet. It just isn’t customized for any single person’s specific situation. I do this for a living, and I’m sure you understand that I can’t spend hours out of my week sitting down with people, providing valuable information for free.

The biggest impediment to my decision to charge consultation fees was the fear that the number of consultations I had would drop dramatically. That has indeed been the case – there has been a noticeable drop in the number of consultations that I conduct. I realized, however, that I should welcome this, rather than fear it. The consultations that are no longer being booked are consultations with (1) people who will most likely not show up, without canceling first, and (2) people who just want information and don’t want to pay for it.

So those are the reasons that I charge for consultations, and I hope you’ll understand and appreciate why I’ve done this.

Legal Cannabis and Immigration

This is my very first repost of another lawyer’s material. I’m sharing a blog posting by Christopher Pogue, an immigration attorney, on the intersection of legal cannabis and immigration law, particular with respect to immigration from Canada:

U.S. Customs and Border Protection (CBP) enforces the laws of the United States and U.S. laws will not change following Canada’s legalization of marijuana. Requirements for international travelers wishing to enter the United States are governed by and conducted in accordance with U.S. Federal Law, which supersedes state laws.

Although medical and recreational marijuana may be legal in some U.S. States and Canada, the sale, possession, production and distribution of marijuana or the facilitation of the aforementioned remain illegal under U.S. Federal Law.

Consequently, crossing the border or arriving at a U.S. port of entry in violation of this law may result in denied admission, seizure, fines, and apprehension.

Generally, any arriving alien who is determined to be a drug abuser or addict, or who is convicted of, admits having committed, or admits committing, acts which constitute the essential elements of a violation of (or an attempt or conspiracy to violate) any law or regulation of a State, the United States, or a foreign country relating to a controlled substance, is inadmissible to the United States.

A Canadian citizen working in or facilitating the proliferation of the legal marijuana industry in Canada, coming to the U.S. for reasons unrelated to the marijuana industry will generally be admissible to the U.S.

HOWEVER, if a traveler is found to be coming to the U.S. for reason related to the marijuana industry, they may be deemed inadmissible.

Reposted with permission from Christopher Pogue

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One of the points Attorney Pogue stressed to me today is this – if someone involved in the legal cannabis industry has an immediate family member (parent, spouse, child) or member of the household who is not a US citizen, their immigration status could be in jeopardy. When applying for residency in the US, the non-citizen is at serious risk because even if cannabis is legal under certain states’ laws, it remains illegal at the federal level. Consequently, if you are a stockholder, director, officer, manager, or employee in a legal cannabis business, or are contemplating being involved, and you have an immediate family member or household member that is not a US citizen, it is recommended that you raise this issue with an attorney.