Thursday, December 3, 2015

New Regulations for Medical Marijuana in California

I've previously written on this blog about the big changes that are coming for medical marijuana in California.

It's taken some time, but I've finally had a chance to study these new laws and really wrap my head around the details.  Of course, these rules haven't taken effect yet, so the courts haven't had a chance to muddy the waters by completely reinterpreting everything that we thought we understood.  There are still plenty of unanswered questions, but I'll try to break it all down as well as I can here.

As mentioned in my previous post, available by following the link above, Governor Brown has signed a package of bills that will completely reshape the way we regulate medical marijuana in California.  Everything that you know about medical marijuana in California will be wrong after January 1, 2016.  The three new laws, SB-643, AB-266 and AB-243, will collectively be called "The Medical Marijuana Regulation and Safety Act", or "MMRSA".

State-Issued Marijuana Licenses

The MMRSA creates at least 17 different types of state-issued licenses that will be required for various commercial activities related to medical marijuana.  Those activities include cultivation, manufacturing (the process of concentrating cannabis to produce a more potent product), transportation, distribution, testing and retail sales.

The new law will establish 10 different types of licenses to specifically govern growing operations, depending on the size of the grow and the type of light used:

1) "Specialty" Outdoor:  For outdoor growing operations using no artificial lights.  Total cultivation area will be limited to 5,000 square feet, or 50 total plants on non-contiguous plots

1A)  "Specialty" Indoor:  Limited to 5,000 square feet with artificial lights

1B)  "Specialty" Mixed Light:  Mixed  light (natural and artifical), limited to 5,000 square feet

2)  "Small" Outdoor: For outdoor growing operations with no artificial lights, 5,001 - 10,000 square feet

2A)  "Small" Indoor:  Indoor growing operations, 5,001 - 10,000 square feet

2B)  "Small" Mixed Light:  Mixed light, 5,001 - 10,000 square feet

3)  Outdoor: no artificial lights, 10,001 square feet, up to one acre

3A)  Indoor: 10,001 - 22,000 square feet

3B)  Mixed Light: 10,001 - 22,000 square feet

4)  Nursery:  To cultivate seeds, seedlings and immature plants only.

Only a limited number of Type 3, 3A and 3B licenses (for larger-scale growing operations) will be issued by the Department of Food & Agriculture.

The MMRSA also creates 2 different types of "manufacturing" licenses.  A "Type 6" license will qualify the holder as a "manufacturer 1".  A manufacturer 1 may produce concentrates without using volatile solvents (e.g. "bubble hash").  A "Type 7" license will qualify the holder as a "manufacturer 2".  A manufacturer 2 may produce concentrated cannabis products using volatile solvents (e.g. butane hash oil), which is currently prohibited under California law.

All marijuana products must be delivered to a distributor for inspection.  After inspecting the product, the distributor must deliver the cannabis to a licensed testing facility for certification before it may be delivered to a retailer.  Testers must hold "Type 8" licenses.

Retail marijuana dispensaries with more than 3 locations will be required to hold "Type 10" licenses.  Marijuana retailers with 3 or fewer dispensary locations may operate with a "Type 10A" license.

Distributors (wholesalers), who purchase marijuana from cultivators and resell the products to retailers, must hold both a "Type 11" distributor's license, and a "Type 12" transporter's license. People who are engaged only the business of marijuana transportation must hold a "Type 12" license and may also apply for a "Type 11" distribution license.

Confused yet?  Here's where it gets interesting.

No license holder may possess more than 2 different types of licenses.

Small-scale cultivators (growers who are licensed to cultivate on 10,000 square feet or fewer) will also be permitted to hold manufacturing licenses.  This means that mom-and-pop grow operations can produce their own concentrates.

Small-scale cultivators may also apply for Type 10A licenses to operate their own boutique retail sales at 3 or fewer locations.  Remember, though, that license holders may only possess 2 different types of licenses. Essentially, growers who cultivate on 10,000 square feet or fewer may either produce their own concentrates or operate their own boutique retail sales, but not both.

Manufacturers may hold Type 10A licenses to operate 3 or fewer retail dispensaries.  Get ready for high-end, branded hash to come to a retail location near you!

That's just the tip of iceberg.  Stay tuned for updates.  I will continue to post regularly with more details about the licensing process as those details become available.

If you're thinking about getting involved in California's medical marijuana industry, call us for a free consultation.  (714) 505-2468.  Ask for John.  If you already cultivate medical marijuana or operate a dispensary, call us to discuss the steps you need to be taking to prepare for these big changes.

Thanks for reading.

Santa Ana Medical Marijuana Lawyer