Last Friday, September 11th, 2015, California lawmakers in the Assembly and Senate passed legislation that regulates the commercial cannabis industry in the state. After nearly two decades of ambiguity and confusion, the state has created guidelines for a legitimate medical cannabis industry. The three cannabis bills, AB 266, AB 243, and SB 643, lay out a framework for a legitimate cannabis industry in California. The bills have reached Governor Jerry Brown’s desk for a signature of approval.

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Commercial Cannabis is Now Legitimate

One of the most substantial features of the new cannabis legislation is the establishment of licensing for cannabis businesses. The new bills provide protections for organizations operating in compliance with the licensing authority, essentially making cannabis a legitimate, profitable industry.

Under the Compassionate Use Act, production and distribution of cannabis and cannabis products fell into the loose requirements of collectives and cooperatives. These entities were required to operate as not-for-profit organizations, often landing profitable groups in legal trouble, including raids and arrests. The new language, specifically within AB 266, abolishes the old collective/cooperative model and lays the foundation for medical cannabis producers and dispensaries to truly operate as profitable businesses without fear of harassment and prosecution.

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The following text from AB 266 defines the end of cooperative and collective business operations, and provides licensees with the relevant local and state permits to conduct business operations without prosecution or sanctions:

(2) Under existing law, certain persons with identification cards, who associate within the state in order collectively or cooperatively to cultivate marijuana for medical purposes, are not solely on the basis of that fact subject to specified state criminal sanctions.
This bill would repeal these provisions upon the issuance of licenses by licensing authorities pursuant to the Medical Marijuana Regulation and Safety Act, as specified, and would instead provide that actions of licensees with the relevant local permits, in accordance with the act and applicable local ordinances, are not offenses subject to arrest, prosecution, or other sanction under state law.

(ab) “Licensee” means a person issued a state license under this chapter to engage in commercial cannabis activity.

This next section from farther along in AB 266 also confirms protections to those licensees operating in compliance with state and local laws.

19317. (a) The actions of a licensee, its employees, and its agents that are (1) permitted pursuant to both a state license and a license or permit issued by the local jurisdiction following the requirements of the applicable local ordinances, and (2) conducted in accordance with the requirements of this chapter and regulations adopted pursuant to this chapter, are not unlawful under state law and shall not be an offense subject to arrest, prosecution, or other sanction under state law, or be subject to a civil fine or be a basis for seizure or forfeiture of assets under state law.
(b) The actions of a person who, in good faith, allows his or her property to be used by a licensee, its employees, and its agents, as permitted pursuant to both a state license and a local license or permit following the requirements of the applicable local ordinances, are not unlawful under state law and shall not be an offense subject to arrest, prosecution, or other sanction under state law, or be subject to a civil fine or be a basis for seizure or forfeiture of assets under state law.

(ab) “Licensee” means a person issued a state license under this chapter to engage in commercial cannabis activity.

To sum this all up, current state law allows certain persons with identification cards to collectively or cooperatively produce medical cannabis. This new bill repeals those provisions, and establishes the licensing of commercial cannabis businesses. Provided these “licensees” are operating with permits from state and local jurisdictions, then their actions are not unlawful under state law, and they shall not be subject to arrest, prosecution, sanctions, civil fines, or asset forfeitures.

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A new era for a legitimate cannabis industry has begun. Many cannabis organizations that were once subject to asset seizures and prosecution will now have the opportunity to register for a state license and operate as a for-profit entity. While the federal government still considers cannabis a Schedule I drug, the California cannabis licensing system will provide businesses with more legitimate standards of operation. Hopefully, this will appease any agencies that have previously interfered with medical cannabis in California.

Protester stands outside British Columbia Marijuana Party headquarters after police rain in Vancouver.

Moving Forward with Cannabis Legislation

These three cannabis bills mark a historic moment for sensible cannabis policy in California. There will still be friction as cannabis transitions into a legitimate industry, and already many are calling these bills restrictive and overreaching. Many issues regarding taxation and regulation have still yet to be defined, which worries businesses who fear prohibitive costs from taxes, fees, licensing, product testing, and normal business operation. Smoke Reports feels that for the most part, these new cannabis laws are very positive and could pave the way for a safer and more responsible cannabis industry.

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