Medical marijuana is not new to the state of California. Although California was the first state to legalize medical cannabis in 1996, it never managed to establish statewide regulations on the medical cannabis industry. As a result, a mishmash of local rules were put into place that vary depending on the municipality or county.
The lack of regulations has led to a lot of uncertainty for businesses. On top of the general confusion in the market, there is also a continuous fluctuation of companies. Companies start up only to be shut down by anti-cannabis officials. This confusion and inconsistency in regulations is a statewide problem. If a regulatory scheme could be adopted statewide, it would help to stabilize the country’s largest MMJ industry.
At the beginning of September, it was announced that California was just days away from approving statewide regulations on its enormous medical cannabis industry. With the legislative session set to adjourn on Sept. 11, lawmakers and stakeholders are under a lot of pressure to work through negotiations and strike an agreement.
The key to reaching a solution will be appeasing all of the stakeholders, which includes industry leaders, law enforcement representatives and healthcare officials. All while conforming to new proposed bill language released by Gov. Jerry Brown’s office.
According to Sean Donahoe, an industry political consultant, “What’s been happening for at least the last two years is we’ve been trying to smoke out the governor – pun intended – as to what his preferred regulatory approach might be”.
While the governor’s bill language is likely to undergo further revisions, there have been hints as to what the bill might include. According to various sources and the East Bay Express’s review of Brown’s draft:
- There would be a dozen state business licenses to choose from for businesses in the industry including: cultivator, dispensary, manufacturer, testing lab, and more.
- Companies would be limited to two licenses each. A single company would not be allowed to grow, dispense and manufacture other goods, such as edibles. (However, there would more than likely be exemptions for the two-license cap for existing businesses that are currently conforming to separate local mandates).
- Organic certifications would be put into place, and testing would more than likely be implemented and required.
- Local governments could still possess the ability to ban commercial marijuana activity if it so desired.
- Growing would be limited to one acre, or 20,000 square feet (the paper did not specify whether or not this would apply to outdoor or indoor grows).
- There could be requirements that medical cannabis must be sold in the geographic region in which it was grown.
While the next steps involved are unclear, the specific regulations will be left to rulemaking under the authority of one or more state agencies. The governor reportedly preferred to choose a bigger picture regulatory bill while leaving the majority of the details to administrators. While the governor’s bill will more than likely undergo further revisions, many are optimistic in the progress that is being made.
In the words of one staffer, “This is the farthest any of the cannabis bills have come in the past few years, ever”.
The issue of regulation is obviously a big obstacle for businesses to overcome. Finding business funding is even more so. Many businesses have turned to marijuana business funding from high risk merchant account providers. Since business funding is not a loan, the application process is simple. Basic documentation is required, and the acceptance time is quick – sometimes in as little as 5-7 days. This has made marijuana business funding an attractive option as businesses wait for regulation issues to be addressed and decisions to be made.
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