A Guide to CA’s Medical Marijuana Regulation and Safety Act

In October of this year, California Governor Jerry Brown signed the Medical Marijuana and Safety Act (Assembly Bills 266 and 243 and Senate Bill 643, hereafter the MMRSA). The MMRSA finally regulates California’s medical marijuana industry at the state level almost 20 years after the Compassionate Use Act made medical marijuana legal under state law. The MMRSA provides needed clarity to the legal status of medical marijuana in the state and has some important provisions designed to protect consumers and the environment. It also comports with the priorities outlined in the Cole memo and should serve to insulate the state’s industry from federal action — if that action is, in fact, legal and if the next president doesn’t decide to disregard the Cole Memo (which is, after all, merely about enforcement priorities).

The article provides my reaction to the MMRSA, which, overall, is extremely favorable. What I like best about the MMRSA is that so much of it reads just like the ordinary business of government: it’s not a different kind of regulation, just a regulation applied to marijuana. The provisions dealing with licensing, for example, are codified under the Business and Professions Code, just like provisions for other state licenses.  The details of the regulation are, of course, different from those involving pest control, landscape architecture, and other regulated industries, and in the remainder of the article I will focus on several different areas: licensing of producers, sections which affect consumers, and environmental protections, and what didn’t change.

Licensing

Licensing regulations will go into effect with a grandfather clause: businesses in compliance with local and state regulations as of January 1, 2018 will be allowed to operate until a state license is issued; the state will prioritize the issuance of licenses to those entities in good standing as of January 1, 2016.  This provides incentives for current businesses to comply with existing local regulations; they will be first in line for state licenses if they do so.

The stated purpose of the licensing scheme is “protection of the public” — but state licenses will also protect businesses who have the licenses or who do business with licensees, exempting them from legal penalties and asset forfeiture, for example.  Licenses will be issued to manufacturers (think concentrates), cultivators (three tiers, indoor and outdoor, with the largest up to one acre in size at a given site), distributors, testers, transporters, and dispensaries. There are restrictions on which licenses can be combined: no distributor can sell products directly, and no testers can be involved in other licensed businesses.

Marijuana will be tracked from seed to sale.  The state will enforce the licensing scheme with civil penalties (i.e. fines and loss of licenses). Local governments will have the option of imposing local taxes and local regulations as well — the state licenses are just a minimum standard.  Local authorities have to allow the transportation of marijuana on public roads, but they need not permit dispensaries or delivery.

Consumers

The biggest change for consumers is in ensuring access to marijuana that is safer and more predictable.  All medical marijuana sold will be tested for contaminants (such as mold and pesticides) and for potency. Labels will ensure that consumers know what they’re getting; the tests will ensure that those statements are accurate. Marijuana will be sold in tamper-proof packaging. All of this is a win for consumers, guaranteeing them a more safe and predictable experience.

While the MMRSA does not change any of the qualifying conditions for a medical marijuana recommendation, nor does it change the basic method by which recommendations are obtained, the new law has placed emphasis on ensuring that recommendations aren’t given by the medical equivalent of pill mills. The MMRSA directs the Medical Board of California to make, as its fourth highest priority (above sexual misconduct with a patient and below excessive prescribing of controlled substances), the investigation and prosecution of doctors who engage in “Repeated acts of clearly excessive recommending of cannabis… or repeated acts of recommending… without a good faith prior examination of the patient and a medical reason for the recommendation.”  Doctors who make medical recommendations are also expressly forbidden from remuneration from marijuana businesses.  Those doctors who run afoul of the regulations risk losing their licenses and/or being fined.

Patients who wish to grow their own marijuana can do so without obtaining a cultivation license, although they cannot sell or donate their crops to anyone and are limited to cultivating 100 square feet of canopy.  Caregivers with 5 or fewer patients also do not need to obtain state licenses, though they cannot be remunerated for their efforts, cannot distribute or donate marijuana to others, and are limited to 500 square feet of canopy.

The Environment

The environment has emerged as one of the most salient issues in marijuana regulation — witness the emphasis placed on environmental protection in the Adult Use of Marijuana Act (and the sizeable number of environmental groups that have endorsed it). The MMSA directs existing environmental agencies (such as Fish & Wildlife) to issue regulations and standards around cultivation and water usage, covering issues like the proper usage of pesticides and the use of the freshwater habitat of anadromous fish species. Fees from licenses are expected to cover the costs of enforcement — including the enforcement of new and existing environmental regulations. All existing laws and regulations concerning the protection of fish and wildlife still apply, and a permanent multi-agency task force will oversee the direction and development of state policy.

What’s not in the MMRSA?

One of the things that isn’t in the MMRSA is any change to existing DUI laws. It remains illegal to drive under the influence of marijuana (and alcohol and other drugs) in California, but the MMRSA does not provide a per se THC blood test limit that presumptively establishes intoxication. Given the fact that the science behind blood THC concentration is so different from that of blood alcohol concentration, it is premature to codify particular limits, but it remains to be seen how the state will deal with the problem of impaired driving.

One other thing that perhaps hasn’t changed enough in the MMRSA is the treatment of former black market participants. Red flags in the licensing process include prior convictions for possession for sale or sale of controlled substances, meaning that those with criminal records for selling marijuana do not have a ready way of joining the legal market. There is a procedure for review, however, and those who have certificates of rehabilitation for prior offenses are not automatically disqualified from receiving licenses.

Conclusion

The MMRSA is a tremendous step forward.  Not all of the regulations are spelled out, and there will no doubt be more to pay attention to as the details are worked out.  We will undoubtedly see some growing pains, but the market has been taken from unregulated at the state level to regulated, and its provisions have already been influential in determining the shape of the leading adult-use ballot initiative, the Adult Use of Marijuana Act.

What do you think about the changes coming to medical marijuana in California? Tell us in the comments below.