The medical marijuana industry in California, established in 1996, is soon to be joined by a recreational market. When it does, California will have the largest marijuana market in the country. California voters approved Proposition 64, when they voted in the national election, by a much larger margin than medical marijuana.
Regulations for medical marijuana in California are well established. The state brings in an estimated average $50 million annually in tax revenue from medical marijuana, and there are currently more than 750,000 patients registered as qualified medical cannabis users.
The new laws governing the recreational market for marijuana were recently rolled out, and confusion soon followed. The state is now in the process of making changes to the new laws to reduce the conflict between the two. Some hope that when the medical and recreational marijuana laws are aligned, California will set the national standard for an integrated marijuana industry.
One area of conflict between the medical marijuana legislation and the new recreational cannabis regulations is for businesses. Under the medical marijuana laws, a business cannot hold a license to cultivate marijuana and sell it at the same time. The medical marijuana laws separated marijuana business licenses into several areas:
Regulations for recreational cannabis businesses are a little different. They allow a single entity to hold multiple types of marijuana business licenses. Cultivating and selling marijuana would be acceptable practices under the new law, though they are not currently under the medical marijuana law. The only license combination that would be restricted under the new law is cultivation and testing. No one entity could legally grow and test marijuana.
Governor Brown proposes to loosen the business restrictions on medical marijuana to align with the new regulations for recreational marijuana. There is also a proposed temporary restriction that would prevent any one entity from owning more than three retail stores and a farm that’s bigger than four acres. This would be intended to keep the marijuana industry in California from being monopolized by giant conglomerates.
A proposed tax structure for the recreational marijuana industry includes a 15% sales tax and a tax by weight for growers. Marijuana production and sales would be open to taxes and fees by the local municipalities. Medical marijuana patients would remain exempt from marijuana sales tax.
Under Proposition 215, medical marijuana patients were allowed to grow and possess whatever amount of cannabis they required for medical purposes, within reason. Proposition 64 limits recreational users to six or fewer plants to be grown indoors, with a limit of six plants total in one house.
Recreational marijuana will be treated like alcohol — anyone who is a legal adult can have access. Consuming marijuana will be restricted to private locations or licensed public locations designed for that purpose. These restrictions are not different from the rules for medical marijuana.
There are a number of proposed bills designed to regulate recreational marijuana use in California in a way that doesn’t conflict with medical marijuana or confuse the public. Some changes are proposed to medical cannabis regulations, but the goal is to operate two separate programs in California for marijuana users.
Here’s a look at the proposed marijuana bills:
The California legislature is working to align the newly approved recreational marijuana rules with those of the successful medical marijuana business. The measures approved by voters in 2016 were in many ways broader than the scope of medical marijuana, and the state is attempting to deliver what the voters asked for while maintaining a fair business environment and public safety.