Growers Face Being Shut Out of MMRSA Priority Status as Deadline Looms

With the Medical Marijuana Regulation and Safety Act (MMRSA) set to go into effect Jan. 1, 2016, many in California’s quasi-legal cannabis industry are scrambling to ensure a place at the table. While the MMRSA offers priority status to prospective licensees who can prove they are in “good standing” with their local jurisdictions by Jan. 1, exactly what that means has not been clearly defined.

According to the Eureka Times-Standard, Max Mikalonis – the senior legislative aide to state Assemblyman Rob Bonta (D-Oakland) who wrote the “good standing” clause in AB 266 – some “piece of government paper” issued by a local jurisdiction that acknowledges compliance probably would suffice.

The problem is that, with the notable exception of dispensaries, most local jurisdictions do not have any sort of regulatory framework in place to authorize commercial cannabis activity, much less declare operators in good standing. At the annual Emerald Cup cannabis competition held in Santa Rosa, California earlier this month, some panelists recommended that those who want to participate in the industry under the new regulations obtain a resale permit to prove compliance. Although that may be beneficial when applying for a state license, according to famed cannabis attorney Omar Figueroa, it would have no bearing on whether an individual is deemed in good standing with local government since the Board of Equalization (BOE), which grants those permits, is a state entity.

“Registering with the BOE may make it look like at least you’re trying,” Figueroa stated in an interview with Cannabis Now.

But on the other hand, he said, obtaining a seller’s permit as an individual or LLC, as opposed to a non-profit, “could be construed as an admission of guilt,” because the industry will not become for-profit until the law takes effect – on the same day as the priority deadline.

So, where does that leave cultivators who want to secure their position in the coming regulated world of cannabis?

The Humboldt County Board of Supervisors – despite the fact that the locality currently has no regulatory scheme for cultivators – came up with a way to help its legion of growers get the local stamp of approval ahead of the deadline by authorizing the creation of a Commercial Cannabis Activity Registry last month. Board Chairwoman Estelle Fennell was quoted in the Eureka Times-Standard as saying, “If you registered [sic], that at least says you have taken that first step. We would identify that by our interpretation as being in good standing with the county. That’s as good as we could come up with in the kind of time frame we are dealing with.”

Debbie Latham, Deputy Counsel of Sonoma County in Northern California, said that her county had not yet discussed options for granting its large community of cultivators good-standing status, although she did say she was interested in hearing how other counties are addressing the issue. But with the deadline looming and no more board meetings scheduled until after the new year, counties may have to get creative.

One suggestion, offered by Luke Bruner, a California Cannabis Voice Humboldt board member, and echoed by Humboldt County Counsel Jeffrey Blanck in a Nov. 17 board meeting, is “backdating.”

“We can just determine that everybody that comes into compliance by June 1, 2016 as having been in compliance by that Jan. 1, 2016 deadline [sic],” Bruner was quoted as saying in the Eureka Times-Standard.

This would give jurisdictions more time to set up a “good standing” approval framework and allow compliant cultivators a chance at eligibility for priority status despite local government’s current uncertainty about how to proceed. Still, not getting priority status won’t preclude cultivators from obtaining a license.

“I think a lot of people are worried… that licenses will run out,” Mikalonis told the Eureka Times-Standard. “They think, ‘If I don’t have priority, I’m not going to get it,’ and that’s just not the case.”

However, since the MMRSA will allow local jurisdictions to limit the number of licenses in any category, obtaining priority status maintains a certain level of appeal to growers who want to ride the wave of new regulations.

What do you think of the new laws for medical marijuana in California? Tell us in the comments below.