By Patte Purcell
Being in the legal medical marijuana industry and writing this column I get to speak with many individuals in the business. Growers, small manufacturers and of course dispensaries, are people I speak with on a daily basis. In addition, I get multiple marijuana newsletters everyday letting me know the state of the industry. I’ve noticed a very interesting fact, since the opening day of legal recreational marijuana with their initial lines of people waiting to get in, there has not been one article come across about how well Prop. 64 is doing in California. The silence is deafening.
I decided to do a little investigation of my own into how this voter approved bill is doing for the people of California. Let’s start with manufacturers of edibles for the medical market. Thanks to Prop 64 many of the dispensaries are confused at what they are allowed to purchase and some are requiring multiple licenses and also distribution licenses as of Jan. 1, according to the law there is a phase in period for up to Jan. 9 of 2019 before laws ‘sunset’. The emergency regulations put in place in late November are not the final laws and are going to be changed and changed again. If you look up the current bill as it stands you will see lots of lines scratched out. This bill is far from settled.
Under this bill you can ‘choose’ to be for profit or non-profit, and protection for a ‘for profit collective’ will be given only if they have a ‘for profit’ license. (This is the current text from the bill as it exists, as you can see nothing is finalized. Many collectives are non-profit.)
Existing law exempts qualified medical marijuana medicinal cannabis patients with valid identification cards, the designated primary caregivers of those patients, and persons with identification cards who associate within the State of California in order, collectively or cooperatively, to cultivate cannabis for medical medicinal purposes from specified criminal liability, including possession, cultivation, and transport of cannabis until one year after the bureau posts a notice on its Internet Web site that licenses for medical commercial cannabis activity have begun being issued.
This bill would authorize these collectives and cooperatives to operate for profit or not for profit. The bill would limit the protection for collectives and collaboratives operating for profit to those collectives and collaboratives that possess a valid seller’s permit from the State Board of Equalization and a valid local license, permit, or other authorization.
The damage to small businesses and small medical growers is already devastating an industry that is reeling from a loss of up to 1/2 of the cannabis crops due to the fires. The truth of the matter is that none of the laws are set in stone. But that isn’t keeping lawyers from scaring hundreds or maybe thousands of people out of business due to compliance issues which they may not be required to meet.
Let’s also take a look at the information being given out by the attorneys that you are ‘required’ to change your 215 collective of individuals into a California franchise model complete with 24 hour a day intrusion from the authorities and possible retaliation from federal agents if the location is disclosed. Despite the hysteria from the legal community and of course the accompanying big bucks they receive to peddle that line, here is the actual information from Canormal.org. 215 laws ‘remain in effect’. Let me repeat… 215 laws ‘remain in effect and will remain in effect’ (see below).
Rights of Prop 215 Medical Users
California’s medical cannabis laws under Proposition 215 remain in effect under AUMA. Prop 215 gives patients and their designated primary caregivers the right to possess and cultivate cannabis for their personal medical needs given the recommendation or approval of a California-licensed physician. Because there is no set limit on the amount patients may possess or cultivate, the argument can be made that patients may legally possess more than the one ounce and six plants allowed under AUMA if their medical needs require. Patients who do so should exercise discretion by keeping their stash at home and not carrying more than one ounce in public.
There is no age limit on medical use. Minors under age 18 need permission from their parents or guardians to use medical cannabis. Young adults age 18-20 are allowed to visit state-licensed medical dispensaries, but not adult-use ones.
Patients who have state medical cannabis ID cards are exempt from the sales tax on medical cannabis and cannabis products [BPC 34011(g)].
The parental rights of qualified Prop 215 patients are protected by AUMA in family and juvenile court proceedings (HSC 11362.84)
Prop. 64 added Section 26033 to the Business and Professions Code, protecting patients and primary caregivers who cultivate an unspecified amount for themselves or no more than five patients, if they receive compensation only under Subdivision (c) of Section 11362.765 of the Health and Safety Code. Under Prop 215, patients are still entitled to grow and possess whatever amount of marijuana is consistent with their medical need, though this is subject to local limits and land-use restrictions, including bans. Locals may not ban 6-plant-per-parcel gardens under Prop. 64, though they may “reasonably regulate” them, including banning outdoor cultivation.
Why is this such a big deal? Because it is the small medical growers who are currently supplying patients directly and through the medical dispensaries. These attorneys scare off these small (under 99 plant) medical growers by forcing them into a corporate business model that they want no part of. We are already seeing a decline in these growers which will stifle innovation and medical breakthroughs. This is turn will raise the price, lower the quality, variety and force patients to look elsewhere to get their medicine. Where most of those will turn is the black market. This is the exact opposite of what the bill was designed to accomplish.
Prop 64 provisions “promised” to favor small growers and manufacturers in this bill. What it has done is set unsurmountable obstacles for small growers who mostly grow indoors to obtain. In order to meet these requirements businesses will have to spend tens of thousands to millions to apply with absolutely zero guarantee they will get a license. The bill requires a local approval before a state license can be granted. Most small medical growers growing for patients don’t require a local approval under 215 because it’s being grown for themselves and other patients in their collective. It is legal and will continue to be legal to grow under these same 215 provisions. You can read the laws for yourself (above). You may also give away up to one ounce to a patient or someone with a medical rec.
I am someone who has cured my asthma primarily with cannabis. My boyfriend is a stage 4 cancer survivor who is alive and thriving due to cannabis and Rick Simpson oil (no chemo or radiation, just cannabis and Kangen water). It makes me sick to see what this law is doing to the medical industry. People in the industry say that up to 60% of small businesses will be lost. The strain on the economy will be felt. No wonder Brown is suggesting that a recession is coming.
Let’s also look at the taxes being imposed on the industry. First of all a cultivation license is $900 and up. A $9.75 tax on every ounce cultivated and a $2.75 per ounce tax on dried flower or trimmings. Add on top of that the taxes imposed on state and local levels, new packaging requirements, tag systems and costs may go up to the medical patient by as much as 70% depending on the area. There are also ‘distribution’ costs. There is also a new ‘state’ medical license that patients will have to purchase from the state health department along with an exam in order to get the license. This can impose costs of up to $500 per patient over what they are currently paying. While an online recommendation which includes a doctor interview runs $45 and up this is a far easier amount for a patient to pay.
There are some pretty substantial rumors that there is going to be a general amnesty where the state will override the local requirement for those that want to be a license. This would be a step in the right direction. However, the market is already showing it is going back to black market to avoid the high taxes. Leave it to California to kill the golden goose before it can lay its first egg.
This column does not give legal advice but is a culmination of findings that I have researched and found. Please check them out yourself on Canorml.org or contact a 215 attorney instead of a corporate marijuana attorney to check it out for yourself. Canorml.org also has a list of attorneys they recommend.
Patte Purcell does private 420 parties for the medical marijuana patients and industry professionals. To get on the invite list text your name and email to 1-702-219-6777.