Welcome back to Higher Law, our weekly briefing on all things cannabis. I'm Cheryl Miller, reporting for Law.com from Sacramento, ground zero for a brewing fight between California and its cities and counties over who should control marijuana licensing. More on that state-local battle, which may play out in other states soon, below.

Also this week, Attorney General William Barr went to Capitol Hill and said some interesting things about cannabis regulations. And New York City waded into the weed-in-the-workplace dilemma.

Thanks for stepping away from all of today's Julian Assange and Michael Avenetti legal drama for a bit to read Higher Law. Please drop me a line with your tips and feedback at [email protected]. Or you can call me at 916-448-2935. Follow me on Twitter at @capitalaccounts.

California vs. California Cities: Licensing Battle

The friction between state and local entities over marijuana licensing in California has erupted into a full-fledged legal and political battle.

Last week, 24 cities and one county sued the state to block regulations that allow marijuana deliveries anywhere in California, even in jurisdictions that ban commercial cannabis operations. Thursday, Democratic lawmakers fired back, unveiling legislation that would force cities and counties where at least 50 percent of voters supported the marijuana-legalizing Proposition 64 to license a minimum number of recreational or medicinal outlets.

This same issue is playing out across the country (albeit without the litigation—so far). State voters approve marijuana legalization, usually with the promise of some local control. And then many local agencies say no to cannabis businesses, even if a majority of residents voted for regulation.

It's happened in Michigan where 300 towns have already decided not to welcome cannabis outlets. Even in pioneering Colorado, three-quarters of the state's 271 municipalities and more than half of its 64 counties ban retail marijuana sales, though some have medical dispensaries, according to the Denver Post.

Douglas White, the Churchwell White name partner who represents the 25 local agencies suing California over deliveries, told me earlier this week that some of the plaintiff-cities have already licensed marijuana operations. Others have instituted bans while they watch what happens in other jurisdictions. Mostly, he said, the cities just don't want the “confusion” of the state allowing pot delivery companies to operate in their borders without their control.

A majority of voters in 39 of 58 California counties supported Proposition 64 in 2016. But 42 counties ban recreational storefront sales, according to the office of Asm. Phil Ting, who is carrying the bill to mandate licensing.

A spokeswoman for the League of California Cities declined to comment on the bill.

William Barr (Sort Of) Backs States' Pot Rights

Federal legislation to shield marijuana-legal states from federal prosecutors got support from an unusual source this week. Attorney General William Barr, a prosecutor with a tough-on-drug-crimes record, told a U.S. Senate subcommittee on Wednesday that while he'd prefer a federal ban on marijuana he'd “much rather [have]… the approach taken by the STATES Act than where we currently are.”

The Strengthening the Tenth Amendment Through Entrusting States Act, better known as the STATES Act, is a bipartisan measure that would exempt marijuana businesses in compliance with state laws from the Controlled Substances Act.

If there's no consensus to ban marijuana nationally, “then I think the way to go is to permit a more federal approach so states can, you know, make their own decisions within the framework of the federal law, Barr said, according to Newsweek. So we're not just ignoring the enforcement of federal law.”

One day earlier, U.S. Treasury Secretary Steve Mnuchin told a House subcommittee that the Internal Revenue Service had to build “cash rooms” to handle payments from marijuana companies. But he said there is no “Treasury solution” to problems associated with a lack of banking access for the cannabis industry.

“If this is something that Congress wants to look at on a bipartisan basis, I'd encourage you to do this,” Mnuchin said, according to Marijuana Moment.“This is something where there is a conflict between federal and state law that we and the regulators have no way of dealing with.”

New York City Says No to Drug Tests

The Big Apple is a big no on marijuana drug testing.

The New York City Council on Tuesday voted to bar many employers from making a job offer conditional on a THC-free drug screen (Employers can still test applicants for jobs in law enforcement, commercial driving and child supervision as well as certain positions with state or federal restrictions.)

Mayor Bill de Blasio (above) is expected to sign the bill, which would go into effect in one year.

“We need to be creating more access points for employment, not less,” said the bill's sponsor, Public Advocate Jumaane Williams, according to Bloomberg. “And as we move toward legalization, it makes absolutely no sense that we're keeping people from finding jobs or advancing their careers because of marijuana use.”

The issue of workplace drug-testing in marijuana-legal states is one that lawmakers, businesses and courts have been struggling with and not always finding clear and uniform answers.

The one-year delay in enforcement gives employers “plenty of time to prepare to comply,” Fisher Phillips said in a client alert. “All New York City employers must stay tuned and be prepared to adjust their hiring practices once an effective date is established.”

>> Who Got the Work

• Andrew Kline has been named director of public policy at the National Cannabis Industry Association. The newly created position will oversee federal and state policy efforts on behalf of the NCIA's nearly 1,600 members. The group said in a statement: “Kline most recently served as president of the National Association of Cannabis Businesses (NACB), the first self-regulatory organization for the legal cannabis industry. At the NACB, Andrew led the creation of national standards for the state-legal cannabis industry, oversaw its standards governance board, and led day-to-day operations and strategic planning.”

• Cannabis consulting company STWC Holdings Inc. has named Jean Smith Gonnell general counsel. My colleague, Dan Clark, reports that Gonnell will oversee all legal, regulatory compliance, mergers and acquisitions, government relations and lobbying efforts at the company. Gonnell had been a sole practitioner in the cannabis space since March 2018.

• The International Cannabis Farmers Association, a Humboldt County, California-based organization promoting sun-grown cannabis, has retainedPrecision Advocacy Group of Sacramento to lobby state leaders. Precision Advocacy Group, led by Amy Jenkins, also represents the California Cannabis Industry Association, Cannacraft Inc. and Terra Tech Corp.

>> In the Weeds

>> The “edgy” life of a cannabis company chief financial officer.“Normally, a chief financial officer's job involves poring over balance sheets and bank statements. But in the pot business, the job still bears a lot of similarities to the illicit trade—transporting loads of cash under the watchful eye of big guys carrying lots of guns.” [NPR]

>> The U.S. attorney for western Washington says he has no plans to upend the state's legal marijuana market. “The voters have spoken,” Brian Moran told The Seattle Times. Moran said his office will monitor Washington's regulatory efforts but his lawyers “have plenty of other things to pursue.” [The Seattle Times]

>> New Jersey's governor tells the Legislature to pass a marijuana bill by the end of May—or else. Gov. Phil Murphy said that if lawmakers don't vote on long-awaited recreational legislation soon he'll expand the medical-use program by executive order. Some legislators want to link medical- and recreational-use in a comprehensive bill to leverage votes from members who want more medicinal licenses issued but aren't so sure about an adult-use market. [Asbury Park Press]

>> Florida lawmakers continue their push to cap THC levels in smokable marijuana. A state House committee this week approved a controversial bill to limit THC content to10 percent or less. The cap would cut in half the THC levels in plants now being grown by seven of the state's 14 licensed medical marijuana operators. [Daily Business Review]

>> Two California counties will automate clearances for 50,000 marijuana convictions. Los Angeles and San Joaquin counties will work with Code for America on a process that will remove cannabis convictions without requiring a convicted person to petition the court or appear at a hearing. [Law.com]

What's Next: The Calendar Things

April 18 - Stark & Stark and CannaRegs present the seminar ”Identifying & Securing Prime Cannabis Real Estate in New Jersey” at the Trenton Country Club. Panelists include Stark & Stark partners Gene Markin and Eric S. Goldberg

April 19 - The National Cannabis Policy Summit will be held in Washington, D.C. Scheduled speakers and panelists include Nathan Kasai, senior policy counsel at Third Way, and Tsion “Sunshine” Lencho, senior associate at Hinman & Carmichael.

April 23 - Harris Bricken presents the webinar, “It Could Happen to You: Cannabis Agency Litigation and Enforcement.” Harris Bricken attorneys Daniel Shortt, Jihee Ahn and Griffen Thorne will discuss agency enforcement and litigation against cannabis companies.