Cannabis is California’s new green crop — green in every sense of the word — green plants and greenbacks. Studies show that legal weed sales are expected to grow in North America by 26 percent a year through 2021, nearly a $22 billion market. And that may be low.
CALIFORNIA CANNABIS ACT
In June, Gov. Jerry Brown signed into law the Medical and Adult Use Cannabis Regulation and Safety Act, which created a single regulatory system for both medicinal and recreational cannabis. New mutual cannabis regulations were just adopted by California’s three licensing agencies — the Department of Food and Agriculture, Department of Health, and the Bureau of Cannabis Control.
Recreational sales, starting in January are expected to generate $1 billion a year in tax and licensing revenue for California, in addition to medical cannabis tax revenue.
The new regulations, effective January 2018, govern everything from who can legally sell and deliver marijuana to how it is grown, packaged, tested and transported.
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The big winners seem to be the large cannabis farms as the expected acreage cap was not adopted. Cannabis delivery businesses will thrive, but they can’t be delivered in planes, trains, bicycles or unmanned vehicles. Seriously.
Edible cannabis products are limited in how much tetrahydrocannabinol (THC) they can contain. Lotions and tinctures may have higher percentages of THC.
You won’t see marketing that appeals to children. Cartoons are not allowed, neither is the term “candy.” Cannabis cannot be mixed with alcohol, nicotine, caffeine or seafood.
Now there’s an idea: Shrimp-pot or Jack-pot. Instead of Bud Light, Bud-Pot. Cannabis cannot be made in the shape of human beings, animals, insects or fruit. No Charlie Brown cookies or chocolate lab brownies.
The regulations go on forever, my copy ran 62 pages, although I read there are 278 pages of regulations. (By the way, if you would like a copy of the regulations, send me an email.)
Critics claim the state sold out to big money and big business — opening the door to an industry dominated by Walmart-size players at the expense of mom-and-pop operations.
Local municipalities like Nevada and Placer Counties and the Town of Truckee are in the process of adopting their own regulations, which by and large can severely limit what cannabis activities may be undertaken within local jurisdictions. Truckee, for example, will have no recreational or medicinal storefront businesses within town limits nor any grow operations. A limited number of recreational and medicinal delivery services may be allowed in approved locations with use permits.
California, in general, will treat cannabis like alcohol, allowing people age 21 and older to legally possess up to an ounce and to grow six marijuana plants at home or in a secure accessory structure like a greenhouse. Pot from homegrown plants may not be sold without a medicinal or recreational permit.
One of the running questions is whether California’s recreational pot will be price-competitive with the black market, given the high taxes and move to allow large growers to control the market. One stated goal of approving recreational weed was to eliminate black market pot like the discrete home-grow operations in our local communities. I doubt that will happen.
Jim Porter is an attorney with Porter Simon licensed in California and Nevada, with offices in Truckee, Tahoe City and Reno. His practice areas include: real estate, development, construction, business, HOA’s, contracts, personal injury, accidents, mediation and other transactional matters. He may be reached at firstname.lastname@example.org.