AB-1575 and AB-21: California MMRSA Refinement Begins

[dropcap class=”kp-dropcap”]J[/dropcap]anuary was a big month for cannabis reform in California, but many people may not have realized it. As cities scrambled to put in place local legislation for their individual medical cannabis markets by March 1, as stated in the Medical Marijuana Regulation and Safety Act (MMRSA), Representative Jim Wood announced that the deadline was drafting error. In attempt to push back the March deadline and tailor the MMRSA, on Monday, January 4, the same green team that authored the bill—California Assembly members  Rob Bonta, Ken Cooley, Reginald Byron Jones-Sawyer, Tom Lackey, and Jim Wood—presented Assembly Bill 1575 and Assembly Bill 21.

AB-21 has already started to help. Some local governments have indicated that if the deadline is lifted, they would be open to revisiting local regulations to permit commercial cannabis activity. Other cities have indicated that they are utilizing the ban only as a placeholder and that they are open to passing local regulation in the future. Alameda County serves as an example of how AB-21 is already having a positive impact. Alameda County added the following language to their temporary placeholder ordinance, which bans cultivation and delivery: “This ordinance shall be repealed by its own terms upon the adoption of state legislation repealing or eliminating the March 1, 2016 deadline.” California NORML strongly suggests that this language be added to any pending medical cannabis ban passed to meet the perceived deadline in MMRSA.

 As for AB-1575, its intent is to clear some of the smoke found in MMRSA, specifically those sections that pose the question—what does that mean?! Almost as soon as the MMRSA passed in October 2015, inconsistencies, errors and other issues in the law became abundantly clear. These revisions will help to smoothly implement the new infrastructure and ease the transition from free-for-all to structured regulation. One big change catching Californians’ attention is that no individual or group may cultivate or distribute cannabis in any way that does not comply with MMRSA or the Compassionate Use Act of 1996. The big reveal of AB-1575 sets the stage for just how serious lawmakers are about following through on their promise to clean up MMRSA. Clearly, Sacramento is actively working on cannabis reform.

To break down AB-1575, the bill specifies that any person or business holding a nursery license is allowed to transport live immature plants, though still subject to tracking, security or other related requirements. Also, licensees are limited from holding licenses in more than two different license categories. Furthermore, AB-1575 calls for the Bureau of Medical Marijuana Regulation (BMMR) to create specific guidelines for mobile dispensaries. Following some of the new proposed provisions, the BMMR is authorized to issue temporary permits for business events and expos, such as for Cannabis Cup, HempCon, etc. The bill also states that MMJ businesses are allowed to operate in any way seen fit: Not-for-profit, for-profit, or in any combination thereof. Under this bill, existing collectives are allowed to convert to a for-profit model.

 Under AB-1575, The Board of Equalization (BOE) must create an advisory group to analyze and discuss the issue of the medical cannabis industry’s access—or lack thereof—to traditional banking services. They are expected to examine strategies that will ease the manner in which financial transactions are conducted as well as improve financial monitoring of MMJ businesses. The BOE will then be required to report its findings to the Legislature by July 1, 2017. The Board’s report will also reflect its proposed changes to improve the industry’s ability to do business with banks, as long as the proposals are in compliance with federal law. Finally, the bill dictates that research institutions and businesses be allowed access to limited amounts of medical cannabis for research purposes without fear of repercussions from state law or local ordinances and that the State Department of Health is to establish statewide uniform packaging standards.

Although the current atmosphere is tense, industry experts are confident that once the March 1 deadline is removed, and legislation made clear, the real work can begin. Cities will no longer be under duress and they can go back to the drawing board to craft some meaningful regulation. Once the cities that do pass comprehensive regulation demonstrate the success of the state and local program, the tax revenue increase and the decrease in crime, other cities will undoubtedly follow suit.