Washington Bans the Box: Hiring Cannabis Employees Just Got Trickier

washington employment marijuana

The Washington Legislature concluded its 2018 Session last week, and joined Oregon and California in “banning the box” when it comes to employment applications. Specifically, Washington’s new law, dubbed the “Fair Chance Act” (the “Act”),  prohibits employers from looking into any criminal history of potential employees at the point an applicant first applies for a job. The Act is less stringent than California’s legislation and tends to mirror Oregon’s legislation.

The Act passed through both houses of the Washington legislature on March 3, and Governor Jay Inslee wasted no time signing it into law. At this point, the only thing that would prevent the Act from taking effect is a provision which states that funding must be appropriated “by June 30, 2018, through the omnibus appropriations act.” The likelihood of that not happening is very slim. For this reason, we are advising all of our cannabis businesses clients to treat HB 2198 as the law of the land in Washington, starting now.

It is important to note that the Act does not bar employers from inquiring as to criminal history at all points in the application process. Once an employer has determined the applicant is “otherwise qualified” for the position, the inquiry may begin. “Otherwise qualified” means that the applicant meets the basic criteria for the position as set out in the job advertisement or job description. In most cases, whether the applicant is otherwise qualified can be determined from the application materials. Thus, employers in Washington may be able to ask about criminal history during interviews, but not before.

In addition to the initial screening rules, it is important to note that the Act also prohibits employers from advertising open positions in any way that excludes people with a criminal record from applying. Job advertisements that state “felons need not apply” or “no criminal background”, or that convey similar messages are prohibited. Finally, employers that are required by either federal or state law to perform criminal background checks are exempt from the law. This exemption does not apply to Washington cannabis businesses.

Ban the box legislation is trending nationwide: today, 31 states and more than 150 cities and counties have adopted a ban-the-box law regulating either public or private employers. These laws are especially important for cannabis businesses, which may, anecdotally, have a higher incidence of applicants with colorful backgrounds. Some states seem to care more about this than others: Oregon, for example, runs a background check while individually permitting cannabis employees; Washington does not.

The big take-aways here are: 1) do not ask about past criminal history on applications; and 2) consider seriously whether asking this question is necessary at all during interviews. By turning over too many rocks, you may find that an applicant has a past conviction for something like marijuana possession or distribution, and you may unintentionally violate one of Washington’s newest laws. Above all, and when in doubt, have an experienced employment attorney review your hiring techniques.


Washington Bans the Box: Hiring Cannabis Employees Just Got Trickier

Bi-partisan Bill to Temporarily Reduce Cannabis Taxes Introduced in California

The California state flag flies high among several skyscrapers in San Francisco, California.

Lawmakers in California have introduced legislation to temporarily reduce taxes on the state’s recreational cannabis industry in order to help the sector compete with the illicit market, according to a report from Reuters. The measure was introduced by Republican Tom Lackey and Rob Bonta, a Democrat, who said the bill is directed at “keeping customers at licensed stores and helping ensure the regulated market survives and thrives.”  

“California cannabis businesses are making significant investments as they embrace the regulated marketplace while, at the same time, being undercut by unregulated competitors.” – Bonta, in a statement, to Reuters

The measure would suspend the $148-per-pound tax on cultivation and reduce the excise tax on sales from 15 percent to 11 percent. The relief would expire in June 2021.

“We need to give legal businesses some temporary tax relief so they do not continue to be undercut.” – Lackey to Reuters

The measure has not yet been referred to an Assembly policy committee, which would need to approve it before putting to the floor to a vote. It would also need to be cleared by the state Senate. Under the current tax regime, the California cannabis industry is expected to generate at least $1 billion per year in tax revenue.


Bi-partisan Bill to Temporarily Reduce Cannabis Taxes Introduced in California

Michigan Officials Shut Down 40 MMJ Businesses Who Did Not Apply for Licenses

At least 40 medical cannabis dispensaries throughout Michigan were ordered by state officials and the Michigan State Police to stop operating as the Department of Licensing and Regulatory Affairs begins its crackdown on dispensaries that did not apply for a license by the Feb. 15 deadline, the Detroit Free Press reports. LARA spokesman David Harns said that the department expects to issue “hundreds more” cease-and-desist letters.

“Any business that didn’t apply for a license by Feb. 15 isn’t in compliance with the emergency rules that were set up.” – Harns to the Free Press

According to a copy of a cease-and-desist letter, the rule “permits an applicant for a state operating license to temporarily operate a proposed marihuana facility under certain conditions.”

“A person that does not comply with this rule shall cease and desist operation of a proposed marihuana facility and may be subject to all penalties, sanctions, and remedies under state and federal law, the act, or the Emergency Rules.” – LARA Cease-and-Desist letter, dated Mar. 15, 2018.

If a business owner does not comply, they risk not being able to receive a state license. According to Harns, officials did not confiscate any products. The Free Press reports that 378 applications have been submitted to LARA to pre-qualify for a license and while those owners are undergoing background checks, their facilities still need local approval.

(h/t MINORML board member Rick Thompson/The Social Revolution)

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Michigan Officials Shut Down 40 MMJ Businesses Who Did Not Apply for Licenses

Social Cannabis Use Lounge Opens in San Francisco

A cannabis smoking lounge has opened in San Francisco, California, the Associated Press reports, and the Barbary Coast lounge is the first of its kind in the state. Nicole Elliot, the city’s cannabis “czar” indicated that more shops will be licensed once city health officials finalize the regulations.

Other California cities are also considering allowing these lounges: According to the report, West Hollywood has plans to approve eight, Alameda will permit two, Oakland and South Lake Tahoe will allow one. Sacramento and Los Angeles are still considering regulations but have not announced any plans.

Social use provisions are still not popular among cannabis regulators. Colorado does not allow social-use; however, Denver voters passed a ballot initiative to allow on-site cannabis consumption and last month the first license of its kind in the city was awarded to the Coffee Joint.

Alaskan regulators, in theory, support social use; however, there hasn’t been much movement on the issue since last August. Those draft rules would allow licensed cannabis retailers to obtain an on-site consumption endorsement and allow use in a designated area.

Massachusetts regulators voted 4-1 last month against allowing social-use; while lawmakers in Maine tasked with implementing the voter-approved law voted 10-4 to remove all references to social-use licensing from the proposed regulations.

Neither Oregon, Washington, nor Nevada allow social cannabis use.     

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Social Cannabis Use Lounge Opens in San Francisco