Cannabis Update – New Legislation Would Let Cannabis Businesses and Attorneys Breathe Easier

Author: Annie Smiddy

A new bill was recently passed into law that will provide more certainty in contracting and consulting with attorneys for the cannabis industry. While medicinal and recreational use of marijuana is still currently illegal under federal law, California authorized medicinal cannabis in 1996, and adult recreational cannabis use in 2016. The conflict in law has provided a number of obstacles for the cannabis industry. Since existing law requires that a contract “be for a lawful object,” the federal conflict in law has created uncertainty regarding the enforceability of contracts in the cannabis industry. The new law provides that commercial activity relating to medicinal cannabis or adult-use cannabis conducted in compliance with state law, and any applicable local standards and regulations, is a lawful object of a contract, is not contrary to an express policy or provision of law or to good morals, and is not against public policy. In addition, the law increases the availability of attorney-client privilege in the cannabis industry by clarifying that attorney-client privilege protections regarding “legal services rendered in compliance with state or local laws on medicinal cannabis or adult-use cannabis and [] confidential communications provided for the purpose of rendering those services” do not fall within the crime/fraud exception to attorney-client privilege. This law is beneficial because it promotes written agreements, and consultation with attorneys who are knowledgeable in cannabis regulatory issues. The law will promote good business practices within the cannabis industry, and will lead to increased compliance with California’s regulations.

See here for the text of AB 1159.

Additional Fees in California Real Estate Transactions to Fund Affordable Housing

Author: Wendy Hillger

To help increase funding for affordable housing, Gov. Jerry Brown recently signed a bill (Senate Bill 2: “Building Homes and Jobs Act”) that places fees on some real estate transactions in the state of California.  Effective in January 2018, a fee of $75 per single parcel of property will now apply for documents such as deeds and notices.  The fees are capped at $225 per transaction.   Recording of these documents for sales of residential and commercial property are specifically excluded [SB 2 bill text, section 2(19)].

The State Senate estimated these fees would bring the state between $200 to $300 million annually.  The additional revenue from the fees will be a permanent source of funding to pay for affordable, low-income housing, of which lawmakers estimate 1.8 million units are needed in the state.

The full bill text can be read here:


Why You Want to Know an Attorney Before You Need One

Author: Annie Smiddy

Annie recently presented with a panel of attorneys on “Why You Want to Know an Attorney Before You Need One.”

From large companies to individuals, litigation is a highly emotional experience for anyone involved. Choosing an attorney at that time can be difficult.  At Ad Astra, we have experienced attorneys involved in a broad range of litigation, covering multiple practice areas. We also can help with minimizing the risk of litigation with our consultation services.

Annie and other local attorneys spoke to local entrepreneurs at the Hera Hub Business Accelerator Exposition on why it is a good idea to know an attorney before you need one. Topics included referral networks, litigation prevention, timing considerations in litigation, and the “ideal client” to keep costs down. There are many benefits to consulting with an attorney before a lawsuit is filed, so get to know us before you need us!

California Trial Courts Are Still Chronically Underfunded, Which Delays the Public from Getting their Day in Court

Author: Wendy Hillger

Have you wondered why it takes so long to have your matter heard by a judge in California?

Unfortunately, the trial courts are not being properly funded.  As a result, there are reduced hours of operation, reduced services, and fewer workers to staff the courts.   California Supreme Court’s Justice Tani Cantil-Sakauye noted that chronic under-funding of the courts, “unfairly affects members of the public seeking their day in court.”

In 2008, the San Francisco Court’s budget was $90.5 million.   At the time, the Court employed nearly 600 non-judicial staff.  However,  because of the subsequent Recession, California’s trial courts saw severe budget reductions.

While the economy has improved, the funding has not been substantially restored.

In July, 2017, San Francisco trial courts saw their budget further reduced by 9% for the fiscal year 2017-2018.   The court has a budget deficit of over $5.2 million dollars.  Today, the Court’s budget amounts to just $51.7 million, with a staff of approximately 430.

To help save money, San Francisco announced that court staff are being furloughed without pay for one day a month.   In addition, the clerk’s office will close early on Fridays.  Alameda County also has experienced a similar shortfall and has been on reduced staff hours and services for a few years now.

The July 2, 2017 news release of the San Francisco court is linked here. Here  is the County of Alameda public notice from November, 2016.

Cannabis Industry Employment Numbers on the Rise: Misclassification Claims to Follow?

Author: Katy M. Young

In a recent article in Marijuana Business Daily , author Eli McVey posited that the cannabis industry now employs 165,000 to 230,000 workers, which is more than the number of employees who are dental hygienists, bakers, or massage therapists.  At the NCIA’s Business Expo  in Oakland, I was a speaker on a panel discussing how cannabis business owners need to be mindful of employment classification issues.

Here at Ad Astra, we predict (along with many other experienced attorneys) that employment misclassification claims are going to be the next big wave of litigation in the cannabis industry.

As an example, I came upon a cannabis grower who operated as a sole proprietor.  When I asked if she had any employees, the owner responded: “No, just my boyfriend who works with me and we split profits 50/50, then a few people [her trimmers] who come and go.”   She must have seen the reaction on my face, because she then asked what it was that she said. I explained that in a business context, anyone working with you is either your business partner/co-owner, your employee, or your independent contractor. She said that her boyfriend is NOT her partner, though I was sure she called him her “partner” earlier in the conversation.

Additionally, this owner insisted that her trimmers were independent contractors.  She obviously was unaware that there is a multi-factor test for determining whether one is truly an independent contractor.  California’s default is that a person is an employee, and so it is far more likely that the trimmers are really misclassified employees. It came as a shock to her that there were no in-betweens, and that at any moment, one of those people she considers friends could go to the EDD and complain that they were misclassified as independent contractors when they are really employees.

If there are 165,000 employees we know of, how many “independent contractors” are there? How many potential claims does that translate to? Many!  Please do not fall into this trap.

If you are a business owner in the cannabis space, it is imperative that you understand the difference between employees and independent contractors; and, partners or co-owners.   Employees are further subdivided into “exempt” and “non-exempt” (non-exempt are entitled to meal and rest breaks, and paid overtime- this is a whole different topic).


In sum, please contact us for a review of your employment and ownership practices.  An ounce of prevention is really worth a pound of cure here!


San Francisco Protects Caregiver Employees

Author: Annie Smiddy

The City of San Francisco has recognized the need for protections for caregiver employees, and in particular working parents, by enacting two ordinances providing employees the right to request flexible working schedules and paid family leave for bonding time with a new child. The changes to demographics of the modern workplace have resulted in: (1) more flexible work arrangements regarding the time or place where work is conducted, and (2) more mothers and fathers wanting time to bond with their new children. However, many employees are concerned about requesting flexible work arrangements, or taking time off after the birth of a new child, due to the stigma associated with these additional family responsibilities. These protections extend to employees who have caregiving responsibilities, such as pregnant women, mothers and fathers of young children, and employees with aging parents.

Family Friendly Workplace Ordinance
In 2013 (operative January 1, 2014), the Family Friendly Workplace Ordinance (“FFWO”) was enacted to provide employees the protected right to request a flexible work schedule. The FFWO states that caregiver status is a protected class, and places notice and record keeping requirements on covered employers. The FFWO prohibits employers from retaliating against an employee who attempts to exercise of rights under the ordinance, or makes a claim or complaint pursuant to the ordinance. The Office of Labor Standards and Enforcement (“OLSE”) is authorized to investigate possible violations of the FFWO, and the agency will impose an administrative penalty up to $50.00 requiring the employer to pay to each employee or person whose rights under the ordinance were violated for each day or portion thereof that the violation occurred or continued. In addition, the City may bring a civil action for reinstatement; back pay; the payment of benefits or pay unlawfully withheld; the payment of an additional sum as liquidated damages in the amount of $50.00 to each employee or person whose rights were violated for each day such violation continued or was permitted to continue; appropriate injunctive relief; and reasonable attorneys’ fees and costs.

Paid Parental Leave for Bonding with New Child Ordinance
In 2016, the City further expanded protections for parents by enacting the Paid Parental Leave for Bonding with New Child Ordinance (“PPLO”), which requires employers who have employees working in San Francisco to provide Supplemental Compensation to employees who are receiving California Paid Family Leave benefits to bond with a new child, so that the employees receive up to 100% of their normal weekly wages during 6 weeks of parental leave. The PPLO takes effect on January 1, 2017 for San Francisco employers with 50 or more employees; on July 1, 2017 for employers with 35 or more employees; and on January 1, 2018 for employers with 20 or more employees. The ordinance places notice, posting and record keeping requirements on employers. The ordinance prohibits against retaliation for an employee’s exercise of rights provided by the ordinance. The OLSE may investigate any possible violations of the ordinance by an employer and bring an administrative enforcement or a civil action against an employer. In addition, the City may bring a civil action in court against an employer for violations of the ordinance. A person or entity may also bring a civil action against an employer after he/she/it provides the OLSE and the City Attorney with written notice and more than 90 days have passed without the City Attorney filing suit or the OLSE providing notice of its intent to bring an administrative enforcement action or a determination that no violation has occurred. The employee may be entitled to reinstatement; backpay; payment of any Supplemental Compensation unlawfully withheld or the amount of Supplemental Compensation unlawfully withheld from the employee multiplied by three, or $250.00, whichever is greater; $50.00 for each employee or person whose rights were violated for each day that violation occurred; injunctive relief; attorneys’ fees and costs.

In sum, San Francisco has expanded protections for employees with greater caregiving responsibilities. If you would like to hear more about these ordinances, Ad Astra Law Group LLP is available to help.
For a link to the text of the ordinances, as well as FAQs, please visit the following websites:



The “Day of Rest” Requirement is Now Clear for California Employers

Author: Wendy L. Hillger

Last month, the California Supreme Court issued an important ruling for employers concerning the state’s “day of rest” statute for employees.  California Labor Code sections 551[1] and 552[2] entitle employees to one day’s rest in seven and to not be caused to work more than six days in seven.  The question before the Court in Mendoza v. Nordstrom, Inc.  was whether this protection applies on a week-by-week basis or on a rolling basis.  The Court explained the difference:

Under the weekly interpretation, the calendar is divided into seven-day blocks, and these provisions ensure at least one day of rest in each block, but an early day of rest in one week and a late day of rest in the next may lead to an employee working seven, eight, or more days in a row—though no more than six days out of seven, on average.  Under the rolling interpretation, the provisions apply on an ongoing day-by-day basis, so that any employee who has worked the preceding six days in a row is presumptively entitled to rest on the next day.

One of the employees who sued Nordstrom had worked each day from Friday, January 14, 2011, to Friday, January 21, 2011.   Nordstrom’s workweek was Sunday to Saturday.  The Court ruled this was not a Labor Code violation, after a lengthy review of the statute’s text, the legislative history, the Industrial Welfare Commission Wage Orders and the general statutory scheme.  The unanimous Supreme Court noted, “We conclude sections 551 and 552, fairly read in light of all the available evidence, are most naturally read to ensure employees at least one day of rest during each [work]week, rather than one day in every seven on a rolling basis.”


There are some exceptions:

1) This protection is not applicable for workers who do not work more than six hours in any day of the workweek;

2)  Employees can work more than seven days in a row if they are given time off equivalent to one day’s rest in seven days.


[1] “Every person employed in any occupation of labor is entitled to one day’s rest therefrom in seven.”

[2] “No employer of labor shall cause his employees to work more than six days in seven.”

Triple Damages for Emotional Distress Arising from Intentional Harm to Trees

Author: Geoffrey Murry

New case law has heightened the stakes in tree-related disputes among neighbors.  In January 2017, the California Court of Appeal for the 2nd District in a case entitled Fulle v. Kanani ordered the trial court on remand to triple Encino homeowner Jeanette E. Fulle’s non-economic damages arising from intentional harm to trees on her property by Kaveh M. Kanani, a malicious neighbor. In this case, those non-economic damages arose from the homeowner’s “annoyance and discomfort” at the loss of the trees and the inconvenience arising from work at her property to remedy the damage.  The case was one of first impression in California courts, addressing for the first time whether the tree-related damage multipliers in Code of Civil Procedure section 733 and Civil Code section 3346 applied just to a party’s “out of pocket” expenses arising from the harm to trees or also to intangible damages, including emotional distress damages.  The court found that both categories of damages are subject to the multipliers.


Triple damages for willful injury to the trees of another have been allowed in the State of California since 1851.  Conduct that is merely negligent that results in injury to another’s trees requires the award of double damages.  At the time of enactment of Code of Civil Procedure section 733 and later, in 1872, when a similar provision was included in the state’s new Civil Code, the public policy supporting this extraordinary relief was primarily to discourage poaching from wooded lands over which one had no claim of right.  In 2017, however, the more common application of these code sections is to remedy negligent or intentional acts that have the effect of killing, weakening or disfiguring trees that occupy residential real property.


Despite these changed circumstances – where the plaintiff now is not necessarily an owner of substantial acreage but rather an aggrieved residential homeowner and the defendant is not a poacher but rather either a malicious or clueless neighbor or a hapless laborer – the law remains in force and is employed frequently in neighbor litigation.  The amounts at stake can be significant.  In the Fulle v. Kanani case above, the damages awarded by the jury to the homeowner were $27,500 for damage to the trees, $20,000 for the cost to repair the harm caused, and $30,000 for the homeowner’s “annoyance and discomfort, loss of enjoyment of the real property, inconvenience, and emotional distress.”  Because the neighbor cut the trees intentionally — here, to improve his view of the San Fernando Valley — all of those amounts are tripled in the award, increasing the basic award of $77,500 by $155,000.


There are several lessons present in this:


  • Always give some thought before cutting trees or even limbs and branches near property lines as mere blunders will result in double damages awarded to a successful plaintiff;
  • An intentional act that harms trees may seem like quick and easy way to resolve an annoyance but it can be very costly indeed both in terms of tripled damages and your own attorney’s fees; and
  • If trees on your property are harmed by a third party, whether accidentally or intentionally, the mandated double or allowed triple damages can make pursuing a claim more worthwhile.


You can read the full text of Fulle v. Kanani (2d Dist. 2017) 7 Cal.App.5th 1305, here.


As a seasoned real estate litigator, Geoffrey Murry of Ad Astra Law Group has the experience to handle disputes among neighbors related to trees, as well as boundaries, easements, encroachments, or nuisance activity, amid a variety of other real estate disputes, all in a competent, cost-efficient and compassionate manner. You can contact the firm at 415-795-3579 to arrange an in-person meeting or telephone consultation to discuss your matter.

New Law Regarding Single-User Restrooms

Author: Wendy Hillger

In California, the new “Equal Restroom Access Act” requires single-user restrooms to be available to individuals of all genders. California employers who provide single-user restrooms must comply with the Act’s signage requirements no later than March 1st.  If employers have questions about how this new law may impact them, please contact us.

The Supreme Court Is Set to Clarify Employment Agreements and Arbitration Clauses on Class Action Waivers

Author: Sean Gentry

The U.S. Supreme Court has agreed to hear cases regarding class action waivers in employment agreements.  In the past, the Supreme Court has upheld such waivers of class action claims, where employers have their employees sign agreements to arbitrate those claims individually if they should arise (not as part of a class) under the Federal Arbitration Act.  However, recent cases in the U.S. Circuit Courts have weighed in on whether these waivers are enforceable in light of the National Labor Relations Act, which has created a split among the courts on whether the waivers were valid under the National Labor Relations Board’s decisions in D.R. Horton, Inc. (2012) and Murphy Oil USA, Inc. (2014).  This split includes the Ninth Circuit here in California (Morris v. Ernst & Young) and the Seventh Circuit (Epic Systems Corp. v. Lewis), which both agreed with the NLRB’s decisions to invalidate the waivers under the NLRA, against the Fifth Circuit (National Labor Relations Board v. Murphy Oil USA, Inc.), which did not.  The Supreme Court’s decision on this matter will hopefully bring some certainty for employers about how effective the use of these waivers will be going forward, and whether to use arbitration clauses in their employment agreements.