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One of the hottest topics in California is the pending voter initiative seeking to legalize the recreational use of marijuana. While obviously exciting and trail-blazing – pun intended – it is still unknown whether it will pass and what the ultimate result will be.
But there is also a burgeoning legal cannabis market in California. It is still in its infancy stage, as the underlying statewide regulatory body is still in its formation stage. However, everyday this legal cannabis industry is becoming more and more a reality.
The legal cannabis market will be targeted to medical and therapeutic use. It is projected to be a $22 billion industry nationwide, according to The ArcView Group, a marijuana market research firm. California is looking forward to its piece of the marijuana pie. According to The ArcView Group, the medical market in California is expected to remain the largest market in the U.S. through 2020. Currently the California cannabis industry is valued at $2.7 billion.
Regulation of the medical marijuana industry in California first started two decades ago in 1996 with Proposition 215, the Compassionate Use Act. In 2003, the Medical Marijuana Program (Senate Bill 420) was passed, and in 2015 the Medical Marijuana Regulation & Safety Act (Assembly Bills 243 and 266, and Senate Bill 643) was passed, creating the first State licensing program for medical cannabis.
In 2016, the Medical Marijuana Regulation & Safety Act was renamed to the Medical Cannabis Regulation & Safety Act (Senate Bill 837).

The Big Three

The Act requires licenses for the cultivation, manufacture, distribution, transportation, laboratory testing, and sale of medical cannabis. Responsibility for state licensing will be split between three state entities: the Department of Food and Agriculture, the Department of Consumer Affairs, and the Department of Public Health.
The Department of Food and Agriculture (CDFA), Medical Cannabis Cultivation Program, is responsible for issuing cultivation licenses. CDFA will license cultivators in the state, establish conditions under which indoor and outdoor cultivation may occur, establish an electronic database to track cannabis from seed to sale, and assist other state agencies in protecting the environment and public health and safety.
The Department of Consumer Affairs, Bureau of Medical Cannabis Regulation, is responsible for issuing distribution, transportation, laboratory testing, and dispensary (sale) licenses.
The Department of Public Health (CDPH) is responsible for licensing manufacturers and testing labs, and testing labs will have to register with CDPH.

Dual Licensing

The Act establishes a dual licensing requirement – state and local. Businesses will need a local (city and/or county) license, permit, or other authorization, in addition to a state license. And local authorization will be required before applying for a state license. Local governments are allowed to pass more restrictive laws than the state, but they must meet the state restrictions as a minimum. Considering the state agencies are not planning to accept applications until January 1, 2018, this means local agencies will not know whether their licensing requirements will meet state compliance until then. In the meantime, applicants can review the licensing requirements outlined in the bills that created the Medical Cannabis Safety & Regulations Act.

Regulatory Approach

To develop the medical cannabis regulatory structure, the Departments are required to follow the statutory requirements found in the California Administrative Procedures Act. This involves engaging stakeholders, providing public information sessions, learning current industry practices, conducting research and studies, and learning from other licensing agencies to develop the necessary standards and regulations.
The Medical Cannabis Safety & Regulations Act requires a study be conducted by UC San Diego’s Center for Medicinal Cannabis Research regarding cannabis’ impact on motor skills. Finding study participants is going to be REALLY hard. 🙂 The study will include testing the effects of cannabis consumption on driving performance.
Medical Cannabis Cultivation Program is preparing a Programmatic Environmental Impact Report (PEIR) to determine California Environmental Quality Act (CEQA) compliance. The PEIR will provide information about the potential environmental effects associated with the adoption and implementation of statewide medical cannabis cultivation regulations.
For more information or to subscribe for email alerts, go to the Bureau of Medical Cannabis Regulation’s website, https://www.bmcr.ca.gov/.