Analysis: The New California Medical Marijuana Regulations

New California Regulations

By Marguerite Arnold

 

It is hard to underestimate the impact of the passage of Assembly Bill 243, Assembly Bill 266 and Senate Bill 643, the new troika of legislative efforts which finally creates the first regulatory framework for the state medical marijuana industry since it technically became legal in 1996.

Gov. Jerry Brown signed the bill into law on Oct. 9, 2015.

As Leslie Bocskor, the Managing Partner of Electrum Partners, said, “After having passed the first medical marijuana law in 1996, finally the state is establishing a regulatory framework. This is significant in so many ways. Additionally, the establishment of regulations around cultivation is going to ensure that patients in the state of California will have access to cannabis that has been tested and is safe from pesticides and fungicides.”

The bill creates a new state office, the Bureau of Medical Marijuana Regulation within the state Department of Consumer Affairs which will issue licensing and oversee a multiagency licensing and regulatory effort.

It also defines many issues that have heretofore been gray areas developed in a patchwork fashion throughout the state over the past 20 years. Collectives will be phased out, and people who grow more than a personal amount will now require a license to do so. There will also be 12 different licenses for different kinds of growing operations, indoor and outdoor, and of varying sizes, as well as those for particular specialties like testing and transportation.

This is, however, just a starting point. Many issues, including those related to permits, edibles, concentrates and other topics now taken for granted in Colorado, still have to be drafted, much less worked out.

That said, the industry here is very excited. “With a revolutionized landscape for legal and state-regulated Cannabis, the Golden State will ride the largest Green Rush in history,” said Paul Warshaw, Founder & CEO of GreenRush.com, a California-based cannabis delivery service. “California cannabis will quickly gain similar status to its industry counterpart, wine, while achieving long-term far greater financial rewards.”

“We are excited, as it provides a firm and defined infrastructure and a series of rules under which a medical marijuana business must operate,” said Derek Peterson, the CEO of Terra Tech (OTCQB: TRTC). “In addition the new regulations no longer require businesses to operate on a not for profit status which should create a more entrepreneurial friendly environment in the state. At the end of the day, it will allow the industry to scale and those that are willing to run an overt, regulated and licensed business will have the staying power.”

The often unspoken thought in the air, even as the state begins to regulate its first green industry, is the coming behemoth of recreational sales.

California is widely expected to legalize recreational use in 2016, creating what many believe will be one of the biggest and most valuable medical and recreational marijuana markets in the world.

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