California might be struggling with a black market problem but cannabis companies like GreenStar Biosciences Corp.’s (CSE: GSTR) are finding opportunities elsewhere in the US.
Since Donald Trump’s administration passed the Farm Bill at the end of 2018, the cannabis sector in the United States has continued to boom. The bill allows the cultivation of hemp plants for medicinal purposes across all states, whether or not some of them have already made them own legislation in that respect.
Several states have gone even further and made recreational cannabis legal. The first were Colorado and Washington State, and the states are already seeing great profits from the sector. In June this year, Colorado state reported a revenue of $1 billion since sales of recreational cannabis has become legal in 2014.
As the States bolster their tax returns private enterprise is also riding the green wave. Companies like GreenStar Biosciences Corp. (CSE: GSTR) have seen great success by focusing on innovative regional competitors. The company controls Cowlitz County Cannabis Cultivation Inc. in Washington State and things are going well. Cowlitz has generated a steady quarterly revenue of over $4 million and growing.
GreensStar’s strategy focuses on identifying promising regional competitors and providing them with the capital they need to grow rapidly. GreenStar has a management team with a wealth of experience in the Canadian cannabis market and uses this expertise to guide young companies towards success.
Despite the success of Washington State and Greenstar not everywhere is benefiting equally. Thanks to the multitude of medical cannabis users, California is the largest legal cannabis market in the world. But since the sale of marijuana was legalized for adults, the market has declined.
This may seem paradoxical because allowing the legal sale of the product is supposed to increase the size of the market. However, in California, the cannabis industry attributes this phenomenon to several obstacles it faces. On the one hand, producers and sellers are subject to heavy charges that make legal cannabis particularly expensive. Secondly, the regulations are extremely strict.
California was the first state in the United States to authorize the sale of cannabis for medical purposes twenty-three years ago. Since last January, the sale of marijuana for recreational purposes has also been authorized.
Thanks to the large number of medical users, California is the largest legal cannabis market in the world, explains The Economist magazine. However, since the legalization the market has shrunk. In theory legal cannabis was supposed to increase the size of the market because it pushes illegal sellers into bankruptcy.
“This is what has happened in other states that have decided to legalize cannabis,” the magazine says. But according to bds Analytics and Arcview Market Research, legal sales in California amounted to $2.5 billion in 2018, compared to $3 billion in 2017.
Josh Drayton, spokesman for the California Cannabis Industry Association, says that the State of California has gone from being the least regulated place in the world for cannabis to one of the most regulated. Following legalization, the state now has regulations that go far beyond those for other products.
Several companies operating in the medical market consider that the new rules are complicated and that the costs of obtaining permits and licences are too high. In addition to regulation, the sector is subject to several taxes. There is a 15% excise tax on retail sales and a sales tax that starts at 7.25% depending on the county and city administrations. Taxes on culture are also multiple and inventive, says The Economist.
Baby boomers and cannabis
In addition to this, federal taxes still have to be paid, even if the product remains illegal under federal law. The federal government refuses to allow companies to deduct their operating costs from their tax returns. Cannabis companies are therefore taxed on their gross profits. As a result, legal cannabis is expensive. A seller can buy 30 grams of cannabis from illegal sellers for $150, compared to $400 for the same product purchased legally.
Another obstacle is that most cities in the State initially decided not to allow the sale of cannabis for recreational purposes on their territory. Some cities, such as Los Angeles, have allowed stores but have been slow to issue licenses.
While the Californian cannabis industry is trying to overcome all these obstacles, the product seems to be increasingly accepted at the national level. Lisa Hurwitz, production manager at Grassroots Cannabis Grower, says that purchases are increasing fastest among baby boomers and older generations. “These generations are rediscovering cannabis or using it for a variety of ailments they face in later life. The plant is useful for everything from pain to sleep and anxiety”.
Reckless Driving in the State of Virginia
The state of Virginia is strict in its enforcement of laws against reckless driving. According to section 46.2-852 of the Virginia Code, reckless driving is listed as a criminal offense. In addition, the Virginia Code categorizes all driving that endangers the life and property of others as reckless.
Several behaviors that motorists exhibit while behind the wheels can qualify as reckless driving in Virginia. “Reckless driving causes nearly a third of all deaths involving major car accidents, which are more than 13,000 each year,” explains attorney Karin Riley Porter. As a result, you can be charged by an officer and can be found guilty or not guilty by a judge.
Types of Reckless Driving
Reckless driving is in different forms and includes:
1. Driving a vehicle with a mechanical fault
Va. Code § 46.2-853 considers driving a vehicle with faulty brakes as a reckless driving offense. Therefore, if a driver cannot maintain proper vehicle control, the driver will be held liable for reckless driving. However, if a driver could prove that they didn’t have prior knowledge that the vehicle was faulty, it would be possible to avoid conviction.
2. Not giving out the right signals when required
Not giving out a signal while driving on Virginia road is an offense under section 46.2-860 of the Virginia Code. Motorists are required to start signaling 50 feet away from the place they would be turning where the speed limit is not above 35 mph. In situations where the speed limit is above 35 mph, drivers are required to signal 100 feet away from where they would take a turn.
3. Driving alongside another vehicle on a single lane road
In Virginia, driving two vehicles abreast on a one-lane road is considered a reckless driving offense. This rule, however, only applies to vehicles and has no implications on motorcycles and bikes. If found liable, the offender will face charges.
Different Virginia roads are subject to variable speed limits. A driver can face charges for reckless driving if they exceed the speed limit specified by law on each road network. According to the Va. Code §46.2-862, a driver can face convictions for reckless driving if they exceed the specified speed limit by 20 mph or drive above 80 mph.
5. Driving with an impaired view
Some drivers overload their cars or carry passengers who prevent them from seeing all sides of the road. Overloading is most common in trucks. If the passenger’s sitting position in any way obstructs the driver’s view, then the driver can be charged for reckless driving.
6. Racing on Public Property
Section 46.2-865 of the Virginia Code considers car racing on any property that is open to the members of the public without authorization as reckless driving. If found guilty, the state can withdraw the license of the driver for up to six months.
Penalties for Reckless Driving in Virginia
A reckless driving conviction may attract different penalties to the offender, some of which may include:
- A suspension of the driver’s license for six months or more
- Up to one-year jail term
- Fine amounting to $2,500
- Increase in auto insurance
- Ineligibility for car rentals
- Possibility of permanent seizure of vehicle if found guilty of unauthorized car racing
Reckless driving is a severe offense in Virginia. If you are charged with the crime and convicted, it can stay in your driving records for up to 11 years. However, with the help of an experienced Virginia traffic attorney, you can get a lesser charge for the offense.
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