And so it begins...

Last week, three bills that had been vying for the approval of the state legislature were merged into one bill, which is now on Governor Jerry Brown’s desk. It will likely sit there until 11:59:59 pm on October 10th, as October 11th is his deadline to sign it…

Why?

“Because he wants to make us sweat” according to Hezekiah Allen from the California Growers Association (CGA), who rallied us all together at Meadow’s office in San Francisco on a recent Monday evening. 

The call to gather was arranged by a local MeetUp (Bay Area Medical Cannabis Entrepreneurs) who is aiming to align and organize people in the cannabis industry. This event was attended by well over 100 people, who all have a keen interest in understanding the act and what they will need to know for the future of medical marijuana in California. It is inspiring to see so many people who are taking a strong and active interest in participating in the implementation of this bill. 

A quick summary of the Act can be found on the CGA website: We will be completing a more thorough analysis of what is in the legislation soon, but a few highlights:

  • Cannabis cultivation is regulated like agriculture
  • Specific licenses are created for specialty, small and medium cultivators
  • Specific licenses are created for indoor, mixed-light and outdoor cultivation
  • Appellation controls may now be established

Hezekiah had some very important points for us to take away from the meeting, one being the way in which we approach the process. He noted, “It is not about fixing the legislation, it is about implementing it.” This is critical to working alongside our elected officials and task forces, rather than trying to work against them. “Nothing is broken,” we just need to figure out the best way to implement the various aspects of the bill to best serve the patients and to support the businesses. We have to know “how to win” and to work together to make this all happen. Hezekiah has clearly been through this process before!

In the meeting, we were reminded of the aspects of the industry that are truly unique to California, including the deep history of cultivation in the Emerald Triangle and the various other regions of the state...The regulations will ideally account for the deep history of cannabis in California and protect smaller, niche businesses, while also allowing it to flourish across the state. 

Important things to note… Regulation is key. We will all benefit if we learn to embrace these developments, for the impact of an unregulated market can be seen in 3 key areas:

  • Public Safety: As seen with the lack of support for banking and transportation of the medicine. Further, the regulation around clarity of labeling and lab testing is key to ensure that patients are accessing clean and pure product.
  • Environmental Issues: As we know some are cultivating in ways that are harmful to our National Forests and State land. This is also problematic with regards to the divergence of very limited water supplies.
  • Small Business Crisis: Without regulation, these businesses continue to be under great strain for all of the operational issues they face around banking, security, entity structure, etc.

We also were reminded that all interest groups of the cannabis industry are underrepresented in Sacramento. This is key for founders to understand, as the industry will have to form working groups to support each of their business interests. The delivery companies demonstrated the power of this when they formed a coalition to ensure that delivery would be included as an option in this legislation. Before they joined forces, the bills would have made delivery illegal, so their work together proved to be worthwhile to all of their businesses. 

Other areas:

  • Edibles are often the most scrutinized and yet the least clearly regulated. This group will likely have some work to do, so that the state can clarify their requirements. 
  • Extraction and processing is another hot area that will need some clarity.
  • Testing and research is critical to keeping patients safe. Determining what tests are required will be essential.
  • Seed-to-sale and POS are going to be key to the compliance side of the issues. We have seen this play out in other states, and hope to see a collaborative review of these resources.
  • Vertical / non vertical integration for cultivation through to sale -- right now this is a patchwork issue, differing across counties and local entities.
  • Distribution and the process of taxation -- hot button issue. Who will be the key distributors and how much capital will it realistically take to tackle this issue?
  • Other areas for sure will need to be addressed, so founders will want to be sure their interests are represented in the process.

Hezekiah closed the meeting with some key points that we will all want to carry as we go into this process. “We have to work twice as hard. We are digging ourselves out of a heap of propaganda and lies.” The skeptics are just waiting for the industry to miss the mark, so we have to hold ourselves to a higher standard and be compliant along the way. 

Of course, this is all tied to the ‘medical’ side of the industry. 

So where do we stand with Adult Use legalization in the next election? It is likely that some initiatives will land on the ballot for 2016 elections. As voters and people who might be engaged in the creation of that initiative, let’s aim to see it aligned to the core tenets of this legislation, so that we do not see a mass of issues in the process of legalization and regulation.

What do you think about the new Medical Marijuana Regulation & Safety Act of 2015? What are some issues you would like to focus on? We are looking forward to digging in and finding a way to work as an industry to ensure that the various facets are addressed with consideration.

If you want to get involved, here are some avenues you can take:

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