California Gov. Jerry Brown stepped in to shepherd passage of the state’s historic medical cannabis laws in 2015. Now he’s stepping up to unify medical and recreational cannabis regulations before both markets compete in 2018.
In case you’ve been wondering where Brown stands on policy that will determine the future of an industry worth more than $5 billion, the governor dropped a 79-page trailer bill proposal last week. Some things quickly jumped out:
● Brown wants to eliminate a third-party distribution model requirement favored by the Teamsters union, law enforcement and alcohol interests.
● Brown wants to let businesses grow and sell cannabis, a vertical-integration scenario that critics fear will breed monopolies.
● Brown wants to delay wine-like appellations of origin for cannabis.
● Brown wants the state to stop issuing California Medical Marijuana Identification Cards.
Those proposals, along with prioritizing environmental protections and other nuts and bolts, will require two-thirds of the Legislature’s approval. Brown said consolidating functions of state’s 2015 medical cannabis laws and the 2016 voter initiative that legalized recreational use will save $25 million, just shy of half of the $52 million the governor budgeted to regulate California’s recreational cannabis market in 2018.
“Implementing the current medical and recreational cannabis statutes separately will result in duplicative costs,” Brown’s budget says.
Lori Ajax, head of the state’s Bureau of Medical Cannabis Regulation, said Brown’s trailer bill proposal “harmonizes the many elements of the two main statutes governing medicinal and adult-use cannabis, while preserving the integrity and separation of those industries.”
Critics say the distribution model required by Prop. 64 — in which independent middlemen distribute products from growers and manufacturers to testing labs and retail outlets, while also acting as tax collectors — will raise prices and push consumers to the illegal market when recreational sales start in early 2018.
The Teamsters backed Prop. 64’s distribution model; the union thinks eliminating a cut for the brotherhood and its allies is a gateway to monopolies.
“It’s quite conceivable that the entire market can be owned by someone who also controls distribution and access to the market,” Teamsters lobbyist Barry Broad said. “It’s a big problem.”
Brown wants to allow vertical integration, increasing the types of licenses businesses can hold.
Despite limits on the number of stores and the size of grows in Brown’s proposal, Hezekiah Allen, president of the California Growers Association, said allowing businesses to both grow and sell cannabis “could lead to mega-manufactures and mega-chain stores.”
The California Police Chiefs Association opposes the issue on similar grounds.
Appellations of Origin
The state’s medical cannabis laws authorize the California Department of Food and Agriculture to establish wine-like guidelines on growing regions and marketing names. The state’s recreational requires the Bureau of Medical Cannabis Regulation to establish appellations of origin standards by January.
Brown’s fix: Give the Department of Food and Agriculture sole responsibility and extend any deadline until Jan. 1, 2020.
State ID Cards
Brown’s proposal would kill the state ID card program and kick ID card authority to counties, which are already on system’s front lines.
According to the California Department of Public Health, 6,667 California Medical Marijuana Identification Cards were issued in fiscal year 2015-2016. Cards are obtained through counties. Fees currently vary by county — from $70 in Del Norte to $279 in Mariposa.
“Approximately 80 percent of cannabis patients do not currently use medical cannabis identification cards, but instead use their physician recommendation to purchase medical cannabis,” Brown’s trailer bill proposal states.
Meanwhile, California medical cannabis ID cards are due for discussion in the Nevada state Legislature, 130 miles away in Carson City, where lawmakers will decide whether California medical cannabis patients need to present state-issued ID cards or doctor’s recommendations to access Nevada medical cannabis dispensaries via the state’s novel reciprocity program.
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