FROM GUNS, CASH, CARTELS TO REGS AND ECONOMICS--California’s marijuana industry will soon begin its transition from an illicit ecosystem fraught with guns, cash, and cartels into a regulated economic juggernaut.
GOLDEN STATE’S NEW INDUSTRY--If you’ve got more than a few questions about California’s new recreational cannabis policy, you’re certainly not the only one. Millions somewhat naively expected to wake up January 1 with a booming recreational cannabis industry blossoming all around them. In reality, things aren’t nearly as simple.
Quite to the contrary, Proposition 64 is a 62-page-long document that goes into immense detail as to how, when and by whom the new commercial cannabis industry will be controlled. It’s a pretty complex document to say the least, but for the most part, it doesn’t have a great deal of relevance to the average citizen. Or cannabis tourist, for that matter.
While things are never quite as black and white as they seem, it’s nonetheless possible to condense the most important elements of Proposition 64 to a much smaller, more digestible guide. Which will undoubtedly emerge at some point in an official form at, but in the meantime we figured we’d lend a helping hand. Whether you live in California or are planning to pay The Golden State a visit in the near future, there are certain things you really need to know about the new cannabis policy.
All of which counts double if you have any intention of selling the stuff, which for the time being at least simply isn’t going to happen. At least, not if you plan to do so legally, anyway.
The new law only applies to adults aged 21 and over
First up, not to mention most obviously of all, the newly implemented cannabis legislation in California applies exclusively to adults. Specifically, the possession and use of cannabis is only legal for those aged 21 and over. If you meet the minimum age requirements, you are now legally permitted to buy and carry on your person up to 28.5g of cannabis for recreational purposes. If you are caught carrying more, you could be hit with an on-the-spot fine of up to $100. Anyone under the age of 21 is not permitted to purchase or carry any amount of cannabis for any reason, including transportation purposes.
Home growing is semi-legal
For the first time, those preferring not to hand over their hard-earned cash for recreational cannabis now have the freedom to grow their own. Specifically, anyone residing within California is legally permitted to grow up to six cannabis plants, for their own personal consumption. . So there’s never been a better time to head over to Seed Supreme and stock up. While it is only legal to carry 28.5g of cannabis on your person when leaving your property, you can nonetheless hold onto your entire harvest at home, regardless of how much your six plants produce.That said, landlords still have every right to prohibit cannabis cultivation – thousands of whom are already doing exactly that.
You can’t legally smoke cannabis everywhere
For the most part, the rules with regard to smoking cannabis in public places are now exactly the same as those involving tobacco. Which generally means as a rule of thumb that you cannot smoke cannabis in the vast majority of public places, shy of a specific public ordinance and clear permission to do so. It is also illegal for cannabis to be smoked within 1,000 feet of any school, youth centre, day care centre or similar establishment.
Vehicular rules still apply
Of course, getting baked before driving or smoking cannabis behind the wheel remains 100% illegal and is being clamped down on state-wide. However, it’s important to note that even if you yourself aren’t touching the stuff, it is still illegal to allow anyone else in your car to light up. Which also applies to vehicles that are stationary, along with boats, aircraft, motorcycles and so on.
If you break the rules, you’ll get a fine
Generally speaking, anyone found to be flouting the rules when it comes to prohibition of cannabis consumption in public places will be liable for a fine up to a maximum of $100. Should the offence take place anywhere tobacco is prohibited, the fine can go as high as $250. In both instances however, the incident will not be noted on the individual’s criminal record. As a means by which to demonstrate that they are taking new cannabis legislation seriously, it is widely expected that lawmakers will be particularly heavy-handed when it comes to doling out punishments during the initial months following legalization.
Commercial cannabis will be kept away from kids
One of the most important focus points of Proposition 64 is that of outlining exactly how cannabis and cannabis products will be kept away from teenagers and children. Various measures have been outlined, which include the requirement for cannabis products to be packaged in a manner that does not appeal to children, all marijuana products being supplied in child-resistant packaging and the prohibition of supplying cannabis products of any kind to anyone under the age of 21 under any circumstances.
There won’t be any TV commercials for weed
Falling largely under the same legislation as tobacco, there will not be any televised commercials of any kind for cannabis or cannabis products. In addition, any kind of marketing that is permitted for cannabis will be highly scrutinized and must be able to demonstrate that it will not appeal to anyone under the age of 21. Advertisers and marketers will also be unable to betray the use of marijuana as positive or a glamorous in front of influential audiences.
You can’t just grow your own and sell it on
One of the key arguments behind Proposition 64 and the cannabis legalization movement in general is the way in which regulated distribution can drive drug dealers off the streets. As such, Proposition 64 clearly states that while growing, using and purchasing cannabis from licensed vendors is legal, selling the stuff yourself most certainly isn’t. If you have any intention of selling cannabis at any level, you will first be required to obtain the required licensing, pay the necessary fees and ensure you are satisfying applicable taxation requirements. Which is, of course, where things become extremely complicated.
Gifting is legit
However, if you’re feeling generous or simply have too much stockpiled away at home, actually giving cannabis away as gifts in reasonable quantities is legal.
If you don’t get a license, you’re in trouble
Choose to sell cannabis at any level without the required licensing and you could be in for a fine of around $500, or perhaps even six months behind bars. Proposition 64 states clearly that anyone involved in any kind of commercial cannabis activity at any level that is not fully authorized will find themselves in serious bother. Along with potential jail-time and steep financial penalties, those busted breaking sales and distribution laws will also have to watch their entire crop being destroyed and disposed of.
It’s going to take some time
Last up, anyone with the intention of visiting California over the coming months to dive into dispensaries on every street corner might want to consider delaying their vacation. The reason being that while Proposition 64 passed and the new laws are now in effect, actually setting up the commercial licensing and distribution system is going to take some time. Probably January next year, at the earliest. Which is something that’ll likely prove even more frustrating for those looking to get into business than members of the cannabis community out to indulge.
(Pausali Das is a writer whose work appears occasionally at Huff Post) … where this analysis was first posted.)
GUEST WORDS--Let’s face it. Los Angelenos love marijuana. In 2009, there were reportedly more unlicensed dispensaries in the city than Starbucks (over 1,000). By some estimates, medical marijuana is currently a $1 billion market in the city, surpassing Colorado’s entire market. And New Year’s Day 2017 will perhaps be most remembered for the infamous “Hollyweed” sign stunt that garnered international attention. Clearly, Los Angeles is a 420-friendly city. Now, with the passage of Measure M, the City Council will be able get a handle on this popular local industry.
The City of Los Angeles has had a checkered past with marijuana businesses. In 2003, when the state enacted the Medical Marijuana Program Act it created a legal basis for nonprofit medical marijuana “collectives” to buy and sell marijuana from retail locations. As a result, hundreds of unpermitted shops began popping up around the city.
Supported by local marijuana consumers, these businesses quickly became very large enterprises. By the time the City began clamping down on this unregulated activity, Los Angelenos were already accustomed to buying cannabis from these shops and supported the dispensaries’ efforts to remain open at the ballot box.
In 2013, citizens passed Proposition D that essentially immunized 135 of these businesses from prosecution by the City for what would otherwise be criminal activity. Although those dispensaries that were grandfathered in were pleased with this success, this reactive citizen initiative did not foster a productive relationship between City officials and the local cannabis industry.
In 2016, Proposition D created a direct regulatory conflict between the state and the city when state legislators passed the Medical Cannabis Regulation and Safety Act. Under MCRSA, the state will begin licensing cannabis businesses in 2018 and will ultimately regulate the entire industry throughout California. In order to obtain a state license, marijuana businesses must possess a license from their local jurisdiction. Since Proposition D only immunized Los Angeles dispensaries from prosecution rather than issue local permits for the activity, those businesses would not have been eligible for state licensure. As a result, Prop. D dispensaries would have been precluded from participating in the state regulatory framework and ultimately would have been deemed illegal despite local protection.
Facing this harsh reality, a group of Los Angeles dispensaries organized to place a licensing ordinance on the March election. The City Council then drafted Measure M which was similar to the industry initiative but granted authority to City officials to regulate the industry with input from the public. Perhaps as a sign of a new working relationship between the City and the local cannabis industry, the dispensary group ultimately backed the City’s proposal which then easily passed with an overwhelming 79% of the vote.
Measure M repeals Proposition D thereby allowing the new locally licensed cannabis businesses to be regulated by the state and to participate in the new regulated medical marijuana system. The initiative also enacted local excise taxes for both medical and recreational cannabis businesses creating additional tax revenue to the City. Lastly, the ordinance provides additional law enforcement authority to the City to allow for the speedy prosecution of unlicensed marijuana businesses operating in the City. For example, in addition to civil and criminal penalties, city officials are now authorized to disconnect water and power utilities for those businesses conducting unauthorized cannabis activities.
Many wonder how these new state and local regulations will affect the local cannabis industry and impact communities. Will the local regulated cannabis market flourish or will the unregulated cannabis market continue to be a major presence in Los Angeles? Although it is impossible to predict the success of the new regulated cannabis industry it will be influenced by several factors.
First, the federal, state, and local government agencies will continue to influence the black and regulated markets. Despite state and local legalization laws, marijuana remains a Schedule I illegal substance under federal law. If the federal government continues to prosecute individuals engaged in marijuana activity outside of the regulated state system and leaves alone those businesses that comply with state and local laws, then we may see a decrease in the number of unpermitted marijuana businesses operating in the City. Illegal marijuana operators may decide that the risk of federal prosecution does not outweigh any short-term financial benefit.
Second, the quality and price of products in the legal marijuana industry will likely impact the success of the new regulated industry in Los Angeles. If dispensaries offer unique, safe products and services to cannabis consumers at a competitive price then these businesses should be able to compete with the unregulated, black market. Recent media reports and litigation surrounding the health risks caused by mold and pesticide in cannabis have highlighted some of the dangers of purchasing cannabis from the unregulated market.
And lastly, consumers will have to support the legal industry over the black market with their pocketbooks. Some compare the purchasing of unregulated cannabis to buying pirated music or DVDs. In order to support those businesses that pay taxes on cannabis, pay their employees a decent living wage, and pay farmers a fair price for their products, consumers should only buy cannabis from properly licensed and regulated businesses. For comparison, the City of San Diego recently supported efforts of a local marijuana trade association with PSA-type magazine advertisements encouraging medical marijuana consumers to only purchase products from licensed dispensaries.
Assuming all of these factors fall into place and the Los Angeles cannabis industry becomes a fully regulated system, the economic opportunities are endless. Within the same statewide regulatory system, consumers in the city will have access to the world-renowned strains of the famous Emerald Triangle growers. The production regions of Humboldt, Trinity, and Mendocino Counties are already well on their way to create region-specific or “appellation” zones of high quality cannabis products.
Capital investment is already pouring into the cannabis industry from institutional investors and private equity funds alike. As the center of the international entertainment industry, Los Angeles is poised to become the “Silicon Valley” of cannabis with the creation of new world class cannabis brands and potential celebrity endorsements of those brands.
As the new state laws begin to allow for advertising for the cannabis industry, it is not too difficult to imagine a magazine ad in the future featuring Brad Pitt but rather than sipping a martini he is puffing a branded cannabis joint or vape pen. If art imitates life, Hollywood may very well become “Hollyweed” someday.
(Lance Rogers manages Greenspoon Marder’s Cannabis Law practice in California and handles a wide array of matters related to cannabis including criminal defense, civil rights, asset forfeiture, land use, business disputes, unlawful detainer, and municipal zoning challenges.)