What California Medical Marijuana Regulation Means for You

California is entering a new era for Cannabis when Governor Brown signed a few bills that make up California Medical Marijuana Regulation and Safety Act (MMRSA). The main purpose of the bills is to move California from an unregulated grey marketplace to a completely regulated and licensed operation. It is important to note the MMRSA is comprised of three different bills; SB 643, AB 266, AB 243. Let’s go over the main points of these bills, how they will effect you, and the opportunities these laws provide.

Business/Cultivating Regulation

  • The Bureau of Medical Marijuana Regulation (BMMR) will be a part of The Department of Consumer Affairs and subsequently under the mercy of the Director of Consumer Affairs. This is the agency that will be enforcing all of the rules. (AB 266)
  • The Department of Consumer Affairs, the Department of Food and Agriculture, and the State Department of Public Health the power to pass any rules necessary to implement the MMRSA. (AB 266)
  • Local jurisdictions will have the power to tax and fee medical marijuana businesses. (AB 266)
  • Delivery services will only be licensed by the state if the city/county you plan to operate in allow it. (AB 266)
  • The California State Department of Public Health will create the standards for marijuana edible production, labeling, and potencies. (SB 643)
  • The state is tasked with developing a “organic certified” standard for medical marijuana by January 1, 2020. (SB 643)
  • All of the bills delegates the various agencies to set up rules and systems for the following:
    • Tracking of product
    • Record keeping
    • Anti-diversion systems for transporting cannabis product
    • Quality assurance testing standards
    • Robust labeling and packaging
    • Safe product handling
    • Security requirements

Not a ton of specifics have been set in any of the bills as far as the standards of practice for cultivating, transporting, packaging, testing, and selling go. So stay tuned for when the BMMR gets created to see most of the “rules”.

Business/Cultivating Licensing

  • California will allow for-profit businesses to obtain medical marijuana license from the state. (AB 266)
  • There will be 17 different medical marijuana operational license types. A Licensee will only be allowed two different license categories in only certain combinations. (AB 266)
    • One caveat, if you have a combination of unpermitted medical marijuana businesses currently. You have been operating & registers with the Board of Equalization before July 1, 2015, you can stay in operation in the new licensing system until January 1, 2026 when this will be repealed. (AB 266)
  • Permitting cities/counties can regulate medical marijuana business beyond what is set in the MMRSA. This bill will allow them to ban marijuana business as well. (AB 266)
  • Local approval of your marijuana business must be obtained before you start operation. Even if you have a stat license, you must wait of local approval. (AB 266)
  • Licenses will be prioritized for certain medical marijuana businesses. Priority will be given to businesses that can demonstrate to the state’s “satisfaction” that you were in operation and in “good standing” with your local jurisdiction by January 1, 2016. So if you are up and running by the end of 2015 with local approval, you are very likely to get licensed early. (AB 266)
  • You must provide evidence that you are legally right to occupy your proposed location of business. This can be in the form of a statement of the property or their agent. (SB 643)
    • Location must be at least 600 feet away from a school. (SB 643)
  • Businesses with twenty or more employees must have evidence that your business has entered into terms of a labor peace agreement. (SB 643)
  • Must provide a detailed operational plan disclosing your plans for cultivation, their extraction/infusion methods, transportation processes, inventory, and quality control procedures to the state. (SB 643)

California is making every owner jump through a lot of hoops which will weed out the people trying to make a quick money grab in this new industry. You will need to know your operation pretty well along with getting all of the local approvals to become licensed. They are taking interesting caution to prevent someone from creating a vertical monopoly in the industry by limiting the number of  licenses in various categories.

Physician’s Regulation

  • California Medical Board will investigate physicians who excessively recommend cannabis for medical use, don’t have an established relationship with these patients, and/or don’t keep records. (SB 643)
    • If a physician recommends patients to a state licensed medical marijuana business if they have a “financial interest” in that business. The physician can receive a misdemeanor for this. (SB 643)
  • All applicant will have to submit finger prints for criminal background checks.
    • Applicant can be denied if felony convictions involving a controlled substance, violence, fraud, deceit, or embezzlement. (SB 643)

A big part of SB 643 is to limit the number of medical marijuana patients in California by getting rid of the types of doctors you see in Venice beach that advertise “$60 and you can get licensed”. Unless cannabis isn’t legalized in 2016 (which I fully expecting it will), the number of people who can purchase from you will greatly diminish.