March Madness; Cannabis Edition

California must implement the Medical Cannabis Regulation and Safety Act (MCRSA) and the Adult Use of Marijuana Act (AUMA) by January of 2018. Counties and cities throughout the cannabis capital are readying themselves for MCRSA and AUMA’s implementations by drafting their own cannabis ordinances. One such city is Los Angeles, whose council recently approved a regulatory ballot measure for its March 7, 2017 municipal election. While the Los Angeles marijuana industry agrees the measure is ambiguous, industry members disagree about whether measure’s ambiguity will help or harm them.

The measure gives the LA City Council near omnipotence in creating and enforcing marijuana regulations. However, it does not include industry-specific rules and only hints that the city might create six different business license categories. The measure does not define how many licensees the city will allow. Additionally, the measure gives “existing medical marijuana dispensaries operating in compliance with [Proposition D]” licensure preference and establishes a tax rate for licensees based on their gross receipts. Finally, the measure reiterates that the LA City Council will take into account comments from public hearings and stakeholder when drafting regulations. If approved, the measure will go into effect on January 1, 2018.

Some of the city’s marijuana industry members are uneasy with the measure’s ambiguity. Steven Lubell, a marijuana attorney, worries giving the city so much power may harm the Los Angeles marijuana industry, as the city council has “burned [him] in the past.” Conversely, Aaron Justis, the owner of the medical marijuana collective Buds and Roses, who has been working with the LA City Council on creating its marijuana framework, is “very optimistic,” and feels the current city council is pro-cannabis. Others believe the measure’s ambiguities will give the city time to make more informed decisions on licensure, which they hope will ultimately benefit Los Angeles cannabis businesses.

Though LA City’s measure leaves some questions unanswered, it reinforces that compliance is the key to future success for California cannabis businesses. Compliance platforms, such as PayQwick, whose thorough compliance assessment programs ensure that cannabis businesses comply with all applicable laws, regulations and guidelines, help these businesses achieve licensure and longevity under California’s incoming marijuana framework. In the meantime, Los Angeles, like the rest of California, eagerly awaits MCRSA and AUMA’s implementations.

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