California lawmakers appear ready to finally regulate medical marijuana

Marijuana isn’t legal in California yet, but it could become even more legit going into next year’s legalization debate.

The Golden State’s billion-dollar medical-cannabis industry stands a good chance of getting its first-ever state-level regulations this year. Here in the Capitol, Assembly Bill 266 passed by a landslide vote—62-8—on the Assembly floor earlier this month, on June 4, and experts say it faces decent odds of passing the state Senate and being signed by Gov. Jerry Brown.

If that happens, California finally will begin regulating the cultivation and distribution of medical cannabis, as called for by voters 19 years ago when they passed Proposition 215 and kicked off the modern era of medical pot.

“We watched history getting made,” said Nate Bradley, lobbyist for the California Cannabis Industry Association, referring to the Assembly floor vote. “The votes came out and it was just a powerhouse—boom, 50. Then it went to 62. Even some ’no’ votes flipped. That many votes is nothing but a win.”

A.B. 266 is an unprecedented compromise—the merging of one police-crafted bill and one that was more industry-leaning. It is co-authored by local Assemblyman Ken Cooley, the Democrat from Rancho Cordova, and would spread regulatory authority over seven state agencies, with oversight by the governor’s office. It creates 20 specific business licenses for the commercial medical-cannabis industry.

“Local jurisdictions were on board—[along with] industry, patients, the reform movement, unions, the medical board; it’s really kind of historic that happened,” said Hezekiah Allen, director of the Emerald Growers Association, which represents small pot farmers.

Assemblyman Rob Bonta, who also co-authored the bill, said in an interview that his bill would benefit patients and collectives by “fully bringing the industry out of the shadows.”

The bill also could end the federal crackdown by installing the strong state controls, which the U.S. Department of Justice has demanded.

“By implementing this stronger regime throughout California, it adds a greater chance and a higher level of protection against that type of federal intervention we’ve seen in the past,” Bonta explained.

A.B. 266 now heads to the Senate, where medical pot regulations have already passed two key litmus tests, beginning with a health-committee hearing on July 7.

Last year, a regulatory bill from then-Senator Lou Correa cleared the Senate before it died in the Assembly. The Senate also voted this year to pass pot regulations from Senator Mike McGuire.

“I think that those are good signs,” Bonta said. “I think there’s some inter-house dynamics that can get tricky. This is when things get a little more difficult.”

Regulations could cost $10 million annually, but would be financed mostly by licensing fees. There are an estimated 40,000 cultivation sites throughout California, and an estimated 4,000 medical-marijuana dispensaries.

We’re also seeing unprecedented buy-in from California’s sprawling bureaucracy, and the Brown administration. Under the proposed law, the state Board of Equalization would have employees assigned full-time to a task force on cannabis taxation. The state water board would focus on water regulations. And other state agencies also would be mobilized.

“From what we’ve been told, divisions are already preparing,” Bradley said of the state agencies. “Everyone has people assigned to look at this issue.”

The bill also creates a first-ever oversight role for the governor’s office to ensure accountability and to sort out regulatory overlap. Allen of the Emerald Growers Association said he had heard that the governor’s office “was part of the conversation through which the bills were merged.”

Opposition to A.B. 266 is mostly coming from hardcore marijuana activists and law-enforcement groups; the former want fewer regulations—and the latter simply want marijuana to be illegal.

The bill would have mixed effects on patient rights. The legislation exempts patients who do not “provide, donate, sell, or distribute cannabis to any other person” or entity from having to get a license, as well as primary caregivers who have up to five patients.

But the bill also continues the patchwork of bans and restrictions on cultivation and distribution that have been enacted by about half of California’s cities. Patients in places such as Sacramento County and Fresno, as a result, would remain behind enemy lines.

But statewide rules should ease local bans over time, Bradley said. Local pot industry tax revenue is “also going to be another huge motivating factor.”

“It won’t address the patchwork overnight, but it will start standardizing the elements of regulations [that] locals can customize,” Allen added.

All in all, a tectonic shift in California policy is occurring. “A revolution is underway in how we talk about cannabis and nowhere is that revolution more obvious than in the legislature,” said Allen.

“We’re really excited with where this bill is,” Bonta said. “I think it’s historic. It’s unique. We’ve never seen a bill of this nature on this topic have this much momentum at this stage in the process.”

If California sorts out its regulations in 2015, the stage will be set for adult-use legalization next year in the eighth largest economy in the world, thereby possibly bringing the century-long war on marijuana to an end.

Next month, on July 7, the Blue Ribbon Commission on Marijuana Policy, which includes Lt. Gov. Gavin Newsom as a member, plans to release its year-and-a-half-in-the-making report on the good and bad of marijuana legalization in California.

The report is considered a road map for groups aiming to legalize pot in California on the November 2016 ballot.

Groups such as ReformCA aim to put a marijuana-legalization referendum on the 2016 ballot and must gather at least 585,000 signatures to qualify.