Medical Marijuana Regulation and Safety Act
SUMMARY OF 2015 LEGISLATION
On Friday, September 11, 2015, state legislators in Sacramento made history by passing three bills to provide comprehensive regulations for medical cannabis.
The legislation, Senate Bill 643 and Assembly Bills 266 and 243, had widespread, bipartisan support. Compromise language was finalized and approved through discussions supported by the Governor’s Office. The basic foundation of this legislative package is that: “no person shall engage in commercial cannabis activity without possessing both a state license and a local permit, license, or other authorization.” Together these bills:
Provide for the licensure of commercial cannabis activity in California:
Provides environmental protections
Provides specific opportunities for small and specialty cultivators to be licensed
Create a multi-agency framework for licensing
Requires the Department of Food and Agriculture, the Department of Pesticide Regulation, the State Department of Public Health, the Department of Fish and Wildlife, and the State Water Resources Control Board to promulgate regulations or standards relating to medical marijuana and its cultivation.
Requires various state agencies to take specified actions to mitigate the impact that marijuana cultivation has on the environment.
Requires a state licensing authority to charge each licensee under the act a licensure and renewal fee.
Imposes fines and civil penalties for violations of the law
Licenses and regulates commercial medical cannabis
establishes within the Department of Consumer Affairs the Bureau of Medical Marijuana Regulation, under the supervision and control of the Director of Consumer Affairs
Requires the Board of Equalization, in consultation with the Department of Food and Agriculture, to adopt a system for reporting the movement of commercial cannabis and cannabis products.
imposes certain fines and civil penalties for violations
Provides that actions of licensees with the relevant local permits, in accordance with the act and applicable local ordinances, are not offenses subject to arrest, prosecution, or other sanction under state law
standards for a physician and surgeon prescribing medical cannabis
require an applicant to furnish a full set of fingerprints for the purposes of conducting criminal history record checks.
creating a new crime (misdemeanor) for physicians and surgeons who violate the guidelines
Require the Governor appoint, subject to confirmation by the Senate, a chief of the Bureau of Medical Marijuana Regulation
require the Department of Consumer Affairs to have the sole authority to create, issue, renew, discipline, suspend, or revoke licenses
require the Department of Food and Agriculture to administer the provisions of the act relating to cultivation
require the State Department of Public Health to administer the provisions of the act related to manufacturing and testing of medical cannabis
authorize counties to impose a tax upon specified cannabis-related activity.
require an applicant for a state license pursuant to the act to provide a statement signed by the applicant under penalty of perjury
establishing duties relating to the environmental impact of cannabis and cannabis products.
According to the, Marijuana Policy Project: “Not all the provisions are ideal, but taken as whole, the legislation passed by California’s lawmakers is a thoughtful and reasonable approach to regulation.”
TIMELINE FOR IMPLEMENTATION
Summary: The timeline for licensure is of critical importance to business owners. The dates below all appear in the code.
July 1, 2015
Deadline to qualify for vertical integration loophole.
January 1, 2016
Deadline for compliance with local policy in order to receive priority processing for licensure
March 1, 2016
Deadline for local government to choose to administer a permit program or prohibit cultivation. If this deadline is not met the state will become the sole licensing authority.
January 1, 2018
Deadline for compliance with local policy to ensure no disruption to your business
WHAT LICENSE TYPES WERE CREATED?
Type 1 = Cultivation; Specialty outdoor;
Type 1A = Cultivation; Specialty indoor;
Type 1B = Cultivation; Specialty mixed-light;
Type 2 = Cultivation; Outdoor; Small.
Type 2A = Cultivation; Indoor; Small.
Type 2B = Cultivation; Mixed-light; Small.
Type 3 = Cultivation; Outdoor; Medium.
Type 3A = Cultivation; Indoor; Medium.
Type 3B = Cultivation; Mixed-light; Medium.
Type 4 = Cultivation; Nursery.
Type 6 = Manufacturer 1.
Type 7 = Manufacturer 2.
Type 10A = Dispensary; No more than three retail sites.
Stand Alone License Types
Type 8 = Testing.
Type 11 = Distribution.
Type 10 = Dispensary; General.
Type 12 = Transporter.
WHEN CAN I GET A LICENSE?
Licenses will not be available until 2018. You can begin preparing for licensure now by ensuring you are in compliance with all existing regulations.
WHAT WILL THE FEES FOR THE LICENSES BE?
Fees will be determined between now and 2018. All license fees shall be set on a scaled basis by the licensing authority, dependent on the size of the business.
WILL THERE BE LIMITS ON THE NUMBER OF LICENSES ISSUED?
The legislation requires the regulatory agencies to limit the number of Type 3 (Medium Cultivation) and Type 7 (Manufacturer 2 – Volatile Solvents). The legislation does not specify whether there will be limits on the the number of licenses issued for other license types.
Regulations limiting or authorizing vertical integration are an important feature of any regulated cannabis marketplace. In California, the Blue Ribbon Commission “and many of the individuals it consulted had significant reservations about the other end of the continuum, namely a market dominated by large corporations that could exert increasing influence on the commercial and political process.”
The Commission determined that “it is appropriate and probably wise for the state of California to adopt a path that limits the size and power—both economic and political—of any one entity in the marijuana industry.” Further, the report went on to say that “In addition to limiting the scale of operations, it may be appropriate for the state to set limits on vertical integration.
CAN I VERTICALLY INTEGRATE?
Yes. But with limits.
The legislature took a decidedly cautious approach on vertical integration.
A licensee may only hold a state license in up to two separate license categories, as follows:
Type 1, 1A, 1B, 2, 2A, or 2B licensees may also hold either a Type 6 or 7 state license.
Type 6 or 7 licensees, or a combination thereof, may also hold either a Type 1, 1A, 1B, 2, 2A, or 2B state license.
Type 6 or 7 licensees, or a combination thereof, may also hold a Type 10A state license.
Type 10A licensees may also hold either a Type 6 or 7 state license, or a combination thereof.
Type 1, 1A, 1B, 2, 2A, or 2B licensees, or a combination thereof, may also hold a Type 10A state license.
Type 10A licensees may apply for Type 1, 1A, 1B, 2, 2A, or 2B state license, or a combination thereof.
Type 11 licensees shall apply for a Type 12 state license, but shall not apply for any other type of state licenses
A Type 10A licensee may apply for a Type 6 or 7 state license and hold a 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4 or combination thereof if, under the 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, 4 or combination of licenses thereof, no more than four acres of total canopy size of cultivation by the licensee is occurring throughout the state during the period that the respective licenses are valid. All cultivation pursuant to this section shall comply with local ordinances. This paragraph shall become inoperative on January 1, 2026.