The End of the Wild Wild West: California To Regulate Its MMJ Industry

After months of negotiations, California lawmakers struck a deal late Thursday night on a historic framework to regulate the nation’s first and largest medical marijuana industry, one that has been essentially autonomous for 19 years.

The much-anticipated Assembly Bill 266 and its companion Senate Bill 643 could put an end to an era of rampant self-governance in California’s billion dollar medical marijuana industry, announced several state assemblymembers in a statement Thursday night.

“AB 266 is the result of an unprecedented stakeholder process in which my colleagues and I brought everyone to the table, from medical marijuana businesses to law enforcement and patient advocates, to create a comprehensive regulatory framework for the state’s billion dollar medical marijuana industry,” said lead author Assemblymember Rob Bonta (D-Oakland) in a press release with his co-authors Assemblymembers Ken Cooley (D-Rancho Cordova), Reginald Byron Jones-Sawyer (D-Los Angeles), and Tom Lackey (R-Palmdale).

AB 266 and SB 643 will require state and local licenses for businesses at all levels of the industry from production and distribution to sales. A new Bureau of Medical Marijuana Regulation — run by someone dubbed the “marijuana czar” — would oversee the regulations with support from the California Department of Food and Agriculture and Department of Public Health. It also requires that cannabis products be tested for purity and potency to protect patients.

Representatives from Assemblymember Bonta’s office and industry experts expect the bills to pass the Senate and Assembly on Friday night, hours before the legislative session ends at midnight on September 11. Governor Jerry Brown is also expected to sign the bills, and his office confirmed on Friday that his administration was in support of the bills.

“We’re optimistic,” Amy Alley, Bonta’s communications and legislative director, told Cannabis Now.  “There’s maybe [10] hours left in the legislative day, and I don’t want to say that we’re confident, but we’re hopeful that it will pass.”

These bills are the first time the California State Assembly, the California State Senate, and the Governor’s Office have all agreed upon marijuana regulations, the press release stated.

California first legalized medical marijuana with the Proposition 215 in 1996, which had no regulations whatsoever, and followed it with Proposition 420 in 2004 that only established state “guidelines” on growing and arrests and did little to create a formal legal framework for the industry.

So for two decades, medical marijuana businesses in California have had no legal incentives to operate under best practices. Each business could decide whether or not it wanted to pay state taxes, or get products tested for pesticides, or comply with environmental regulations — practices that are much more expensive, and therefore unappealing. Both good and bad actors in the medical marijuana industry were treated the same under state law with all considered criminal under federal law.

Hezekiah Allen, the director for the Emerald Growers Association — an organization representing over 100 California cannabis farmers — has been lobbying for AB 266 so that responsible and sustainable growers can be rewarded with legal protections like business licenses and criminal black market growers can be incentivized to improve.

“AB 266 is the biggest policy breakthrough since Prop 215, even bigger than legalization in other states,” said Allen, who praised the authors of the bill for including every group impacted and spending over 10,000 human hours working on the bill. “It’s monumental, and it will become the new benchmark in cannabis public policy. This is the first time our community has been treated with dignity at this level.”

As California faces a record-shattering drought, these regulations are crucial for helping the marijuana industry exacerbate the strain on water resources as little as possible, Allen said.

Part of the deal reached Thursday night was that AB 266 would be combined with AB 243 from Assemblymember Jim Wood (D-Healdsburg), which intended to create funding to address environmental damages from illegal marijuana grows.

“The medical marijuana industry has expanded rapidly and without check in my district because direction from the State has been absent,” said Wood in a statement. “This long overdue direction is finally closer than ever. I am thrilled that AB 243, which is focused specifically on the needs of the north coast, will serve as the foundation of the cultivation language in this year’s marijuana package.”

Many speculate that these regulations passed after so many years of legislative inaction because lawmakers are operating under the expectation that Californians will vote to legalize and regulate recreational cannabis in 2016.

“I’ll be candid, I would not have recommended that we supported legalization if we did not regulate the market now,” said Allen. “Right now we have an unregulated mess. There’s no standard, there’s no rules. Why would we scale that up? We have a mess now, so why would we want a bigger mess?”

AB 266 has been supported by groups representing law enforcement, local government, California’s cannabis industry, laborers and patients, including the League of California Cites, the United Food and Commercial Workers Union and the Police Chief Association.

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