Weed People: Aaron Herzberg

A major prohibitionist argument against marijuana these days is the perceived threat of the cannabis industry turning into “Big Marijuana.” Those fearful of change can’t shake the foreboding image of weed monoliths surreptitiously preying on our children’s propensity toward addiction like Big Tobacco.

Their assumption is that profit will take precedence over public health. Somehow, there are fewer complaints about rampant alcohol advertising or the over-prescribing of pharmaceutical drugs. What opponents of legalization need to realize is that the success of the cannabis industry will directly benefit the public by giving them access to a safe alternative to booze and pills. That spirit guides the business of cannabis. You can’t compare it to tobacco just because you roll it up and smoke it. Each opportunity in legal cannabis comes with a fundamental belief in the power of the plant, and that sentiment persists throughout the industry.

In the emerging legal cannabis landscapes across the country, you’ll find guys like Aaron Herzberg making moves to ensure that the business of weed operates in a way that benefits entrepreneurs, patients, and recreational users. He’s a corporate marijuana lawyer, and in this week’s Weed People, he shares his insight on legalization.

Describe your involvement with cannabis in all aspects, personal, professional, etc.

I am a Corporate Marijuana Lawyer and entrepreneur. I represent a broad array of marijuana business interests including well-known manufacturers and distributors of vaporizer pens as well as infused products down to individual cultivators and dispensaries. I am increasingly involved in helping marijuana entrepreneurs expand their operations into newly legal medical and recreational marijuana jurisdictions including California, Colorado, Nevada, and Washington.

On a personal level, I am a cannabis patient and consumer. I discovered cannabis later in life, when I was age 40. I am diagnosed with very mild Asperger’s syndrome and have found that marijuana helps relieve anxiety and helps me socialize and bring me out of my shell. As a California patient, I have personally legally cultivated over 20 pounds of marijuana over the past five years and I have given it out to my fellow patients for free. It made me a lot of friends! For me, it’s been very helpful.

Unfortunately, my home state of California has lagged on adult use behind jurisdictions such as Colorado and Washington as well as medical marijuana states with highly regulated marketplaces such as Illinois and Nevada. It was our hope that California would legislatively pass a comprehensive law, SB 1262, which would establish a well-regulated marketplace in California that would allow a permitting process for cultivation, production, and distribution of cannabis. But it looks like California will have to wait for a voter-initiative in 2016.  In the meantime, our firm is helping California marijuana-related businesses navigate the messy grey areas of California medical marijuana laws.

In the meantime, I have personally become highly involved in assisting individuals in Nevada, Colorado, Washington, and soon Florida to apply for marijuana licenses in those states. The trend has been for experienced owner-operators to expand their operations to other states and things are moving extremely quickly now that Colorado and Washington have opened up. I expect to be on the road a lot for the next 3-5 years as my firm helps bring experienced marijuana entrepreneurs with established well-known brands into new states.

What are some of the victories of state-level legalization in your area?

While I am ecstatic about Colorado and Washington, it pains me when fellow marijuana industry leaders refer to Colorado as the “Silicon Valley of pot.” The way I see it is that California took the real lead in 1996 when we passed the compassionate use act, and we became the first state to allow medical marijuana. California is still the largest legal marketplace for marijuana in the United States and when voters pass the widely-anticipated initiative to bring regulated adult use of marijuana to our state in 2016, we will be the 1,000 pound gorilla of the marijuana world — in many estimates the legal marijuana marketplace in California could easily be in the range of $20-30 billion!

What are some of the failures of state-level legalization in your area?

California has been lagging behind other states in terms of progress. Unfortunately, many cities and counties have enacted local bans and regulations that create non-uniformity throughout the state. A Recent bill (SB 1262) that would have created a statewide regulatory system did not pass. And the illegal and gray market for marijuana in California is rumored to be $30 Billion dollars, arguably the largest cash crop in the state, and many of these growers have no incentive to move towards a taxed and regulated marketplace.

Do you believe the federal government is making progress towards decriminalization or legalization?

There is clearly progress. It was historic that my partner Dan Riffle, who was previously at the Marijuana Policy Project as their director of Federal Policy, was successful in helping to pass the Hinchey-Rohrabacher amendment in the U.S. House of Representatives with a vote of 219 to 189, when just the year prior it only garnered 163 votes.

It’s clear that the federal government is increasingly giving more deference to state laws in this area, and for the most part it has ceased meddling in those states that have enacted highly regulated laws regarding marijuana production and distribution. We still face significant challenges with taxation issues such as Internal Revenue Code Section 280e, which forbids businesses that cultivate or sell marijuana from deducting most ordinary business expenses. We also need significant banking reform — the FinCen Guidelines give some direction to banks but most banks are still weary of entering this marketplace.

20 years.

50 Years? More?

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