NEWS-PRESS STAFF WRITER
Amy Steinfeld didn’t bring any cannabis samples with her to Cal Lutheran’s Corporate Leaders Breakfast on Thursday. Instead, she gave the audience an overview of the legal landscape surrounding the controversial recreational drug.
“We spend about $47 billion annually on the U.S. war on drugs in what is largely seen as a failed effort. It has resulted in up to 500,000 deaths in Latin America as a result,” said Ms. Steinfeld, who added that in 2016 over 600,000 people were arrested for cannabis-related crimes and most of those were possession only cases.
Ms. Steinfeld is managing partner of Brownstein Hyatt Farber Schreck’s Santa Barbara office. The lobbying and law firm has 12 offices across the country, including in Washington D.C.
Ms. Steinfeld said the modern roots of cannabis criminalization date back to the Nixon administration.
“There’s been a lot of attention recently looking back into the Nixon papers and some of his archives. It’s really been revealed that the reason he classified cannabis as a Schedule 1 (drug) is he was really concerned about his opponents, primarily African Americans and hippies, who were opposed to the Vietnam War. It was a simple measure to incarcerate people who were opposed to his policies,” said Ms. Steinfeld.
Cannabis’ status as a federally illegal Schedule 1 drug has created complications for growers attempting to enter the market in states where the drug is legal, such as California.
“We have a lot of clients that come to us. They want to get into the cannabis industry, but they’re worried about it. And they should be, because it’s still federally illegal,” said Ms. Steinfeld, who observed Drug Enforcement Administration has taken a “hands off approach,” to states with regulated cannabis markets.
“They’re not coming in like they used to and doing the big raids, but that could change at any time,” said Ms. Steinfeld.
The STATES Act, proposed in 2018, would alleviate some of these complications by removing cannabis from the DEA controlled substances list in states where it is legal. This would allow businesses to use formal banking and write off business expenses; however, the legislation is still under debate said Ms. Steinfeld.
Of the cannabis-legal states, California has one of the most regulated markets. Proposition 64, the 2016 Adult Use of Marijuana Act, gave local government full control of whether to regulate commercial operations or ban them completely.
The patchwork of rules across the state has left some communities with no access to legal dispensaries and only 12 of 58 counties have legalized outdoor cannabis cultivation.
Ms. Steinfeld said that cultivation is an extremely capital-intensive endeavor in counties where it is allowed, which has caused many small farms to either go out of business or get bought up by a larger corporation.
“The county, while well intentioned, they really discouraged small farmers from jumping into the space. A lot of these local cannabis farmers are being regulated out of existence,” Ms. Steinfeld said, who added the laundry list of requirements for getting an operation off the ground include a lawyer, land use planner, biologist, archeologist and engineer. And that’s just to satisfy state regulations.
“You’re going to pay huge fees to the state. Fish and Wildlife are gonna pay you a visit, the Regional Water Board is gonna look at your water use,” said Ms. Steinfeld.
She said the Santa Barbara County permitting process takes one to two years and over $1 million dollars on average. Growers are also restricted to well water and cannot tap into the Santa Ynez River.
“California is on the verge of becoming the legal cannabis capital of the world. There is a lucrative opportunity at stake for those who can make sense of this uncharted territory,” said Ms. Steinfeld.