Gearing Up For Rec

Gov. Jerry Brown has set aside $52.2 million in California’s budget to regulate cannabis. This budget proposal is set to merge the regulatory system for medical cannabis with cannabis for recreational consumption.

Brown’s budget explains the reason for the merger, “Implementing the current medical and recreational cannabis statutes separately will result in duplicative costs of an additional $25 million for a second track and trace system.” He continued to explain that having two separate regulatory frameworks would cause confusion to both the licensees and those responsible for regulating the industries.

While $52.2 million in undoubtedly a large chunk of money, it isn’t clear exactly how much creating this regulatory framework will ultimately cost. CULTURE was able to discuss the budget proposal with Nate Bradley, Executive Director and Co-Founder of California Cannabis Industry Association.

“At the rate that the state’s been burning through the funds that were allocated for medical cannabis regulation last year, $52.2 million will probably not be enough, but it’s a good start.”

“It’s definitely a good start. We are really glad to see he’s taking this issue seriously. No one has legalized cannabis in the state this size yet,” Bradley said. “It will be difficult to really know how much it’s going to cost until the first year or two it’s been regulated.”

Michelle Mabugat, Esq. at Manzuri Law in Los Angeles believes $52.2 million will not be enough to create a regulatory framework for the industry. “At the rate that the state’s been burning through the funds that were allocated for medical cannabis regulation last year, $52.2 million will probably not be enough, but it’s a good start,” said Mabugat. “Also keep in mind that this number is still just a ballpark figure to be used as starting point—it’s likely to change before the final budget comes out in June.”

Only time will tell how much it will take for the state to regulate California’s new recreational cannabis market. Until then, there are issues ahead for both state lawmakers and the medical cannabis industry. “The biggest issues will be how the state reconciles the medical cannabis regulation system [that] passed in 2015 with Prop. 64, which was passed by the voters last year,” Bradley said. “While both of them are very similar, there are a few differences that will be hotly contested between different special interest groups in the state capital.”

While the state hammers out new regulations for both recreational and medical cannabis in California, medical cannabis businesses need to stay alert. “There are plenty of issues [medical cannabis businesses might face]. Coming out of an unregulated market into a regular market comes with a myriad of new regulations and rules to learn and come into compliance with,” Bradley said. He continued to share that most cannabis-related businesses would have to hire compliance officers to ensure they are keeping up with the cannabis industry’s ever-changing regulations.

Bradley wanted to share with those in California’s cannabis industry that now is the time to get in compliance with local regulations. “Because every day you wait is another day that thousands of businesses are getting ahead of you,” Bradley said. Californians must wait until June to see what amount of money Gov. Brown ultimately sets aside for cannabis regulation in the state.