The Path to Regulating California Cannabis

Bureau of Medical Marijuana Regulation Stakeholder Roundtable

This week we joined the California Bureau of Medical Marijuana Regulation (BMMR) for a Distribution Stakeholder Roundtable in Oakland.

Their task is to take the Medical Marijuana Regulation and Safety Act (MMRSA) and fill in the blanks. If MMRSA is the bones, then the Bureau is creating the muscles, arteries and skin to animate the regulated cannabis industry.

There are more sessions coming across California, get involved and get in touch with the Bureau to attend. Together we can provide feedback to create the right framework for California.

Here’s what we heard at the session (please note: feedback and Q&A are paraphrased):

Feedback from The Bureau

• The Department of Consumer Affairs will be responsible for issuing state licenses to cannabis companies. They issue licenses in over 250 categories across industries.
• The Department of Consumer Affairs is composed of: 25 Boards, 10 Bureaus, 1 Commission, 3 Committees, and 2 Programs.

• BMMR is working with Fish and Wildlife, Pesticide Organization, and the Department of Consumer Affairs to craft regulations.
• There are 20 state agencies that will be responsible for medical cannabis licensing — BMMR only covers dispensary and distributor licenses.
• BMMR is meeting with local governments, industry participants and regulators in other states for feedback and context.
• BMMR isn’t just going to copy how other states do it, or how it is done with alcohol. They realize that the cannabis industry is not the alcohol industry and that the California medical cannabis industry is a much larger and different market than other states.
• The Department of Public Health governs product companies, labelling and product standards.
• Quality assurance and quality control is what cannabis distributors are meant to do in the context of MMRSA. It is meant to be a consumer protection.
• MMRSA is a law and can’t be changed without a new bill. Existing laws can only be further defined by regulations.
• The Regulatory Process takes time and is iterative. Any modification of regulations requires a comment period.

• The goal is for all regulations related to MMRSA to be written and in effect by January 1st, 2018. That’s 622 days away, according to the counter they had on their whiteboard.
• The BMMR team is lean and consists of two people. They are hiring — anyone interested to apply at the state personnel board.
• The BMMR is seeking feedback from 58 counties and 480 cities as they write regulations. They will be holding sessions across California to gather information and feedback.

Questions/Comments from Participants

Context for MMRSA

• The BMMR team should go on tours and field trips to learn more about operations. Answer: Yes, we’re already doing visits and we’re happy to do more.
• The cannabis industry isn’t new in California. It’s been around for decades, is huge and is well established. We shouldn’t recreate the wheel with regulations. It’s already working well.
• There are certifications available in New York and Washington to teach budtenders how to dispense cannabis. California should consider requiring certifications for people in the industry. Answer: The law does not require it. AB 26 addresses it. Reach out to your assembly representative and senate rep. Law vs Regulation: Law is in place, but regulation is more detailed and getting figured out now.
• There are “MJ Complexes” in Colorado that allow multiple cannabis business to operate in the same building. Answer: Thanks, we’ll look into that.
• Colorado has excessive electrical use. 95% of CO is indoor grows. I want to see a focus on sustainability. Don’t make the regulations so onerous to push out mom and pop shops.

Working with Other Agencies

• How does the Bureau work with other departments? Answer: We currently meet with Department of Food and Agriculture and the Department of Health regularly.

Product Packaging

• Are you taking time on product packaging requirements? You should look at other markets for examples. Answer: The Department of Public Health is in charge of that.
• Shelf life is a concern — will there be regulations around shelf life? People with autoimmune diseases need fresh cannabis. Answer: Yes this being considered.

Local vs. State Government

• There are inconsistencies in local vs. state regulations — how do we solve this issue? What if local government allows something that the state doesn’t? Answer: We are working as much as possible with local governments. We will try and work with local regulators as much as possible.
• How much does local permit/authorization/license help to get the state license? Answer: It doesn’t necessarily hold more weight, but it is in fact a pre-requisite for state licensure. Right now they have the statute, the regulations will flush out details of how they’ll implement the statute.
• Dual Licensure makes is tough to get both a local and state license. Why do we need local license? It’s too hard to get it! Answer: Dual licensure is law. We are regulating within that.

Transition to MMRSA

• We’re concerned about the transition from the collective model to structures in the new framework. How will that work?
• Let’s not make regulations so convoluted and expensive that we push people into the black market. Then people who are following the laws will have cheaper competitors out there and it will hurt everyone.
• Costs of complying with regulations and licensing costs are too high — let’s make sure we create a system that doesn’t shut out small businesses.
• There are so man laws governing medical cannabis, can BMMR provide a simple primer? The complexity of laws requires companies to hire lawyers to ensure compliance and some cannot afford spending so much in legal and compliance fees.

Plant Tracking

• Plant by plant tracking is written into the law, however it’s too onerous and hasn’t worked in other states. A per batch or lot system is better for CA. How do we make sure this piece of legislation is done correctly and plant by plant tracking isn’t required? Answer: The law says per plant, so would need legislative change or a creative way to write regulations.

Diversity

• There aren’t many black or brown people helping create regulation. Are you going to hire black people to regulate? Because there aren’t any here today. Answer: We have posted jobs and encourage anyone interested to apply at state personnel board.
• What will be the priority of licenses given out? Will black and brown communities be prioritized? Are you working with law enforcement regulations? Answer: We have not come up with a priorities list yet, and are working with law enforcement to educate them on how best to adhere to regulations we set.

Distribution and Licenses

• There’s concern about the cost for patient increasing due to distribution. Is there a possibility in distribution structure changing? Answer: Whether you have to use a distributor or not is still being worked out and has to go through legislation. We’re working on details through regulatory process. You will not have to sell flower/products to distributor and then to the dispensary, as is common in other industries. Distributors are going to be strictly a consumer protection issue. Distribution only has to do quality assurance and control.
• Is there going to be a limit on # of licenses given out for 10A licenses and cultivation licenses? Answer: Currently there is no limit.
• Will there be a canopy limit? 25 tons can be produced by 4 acres. That’s a lot. Are you worried about surplus of cannabis due to unlimited 10a licenses? We see the limiting factor being local government deciding how many dispensaries and grow they want in their city. Answer: 4 acres limit for each 10A, local gov will limit within that. We’re not currently worried about the lack of a limit as it hasn’t played out yet.

Meadow builds software for the medical cannabis industry in California, including patient services getmeadow.com, Meadow MD, and B2B platform Meadow Platform.

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