THE GOLDEN STATE IS GREEN: The ABC’s of Cannabis in California

Among the states of the US, California probably has the longest history of marijuana use. By 1895, Arabs, Armenians, and Turkish immigrants to California were growing cannabis to make hash. Through the early 1900s, illicit use of cannabis was common. In the 1950’s and 60’s, the Beatnik movement and then the Hippies made marijuana part of the counter-culture and part of campus life. So, not surprisingly, in 1975, possession of less than an ounce was decriminalized under the Moscone Act.

In 1996, California became the first state in the Union to legalize medical marijuana. This took place after extensive and strenuous lobbying by well organized groups supporting medical use, including those groups advocating use for the recently diagnosed AIDS patients. With a doctor’s recommendation, patients were permitted to cultivate cannabis plants. No specified limits were established as long as the cannabis was exclusively for the patient’s use. In 2003, a formal ID program was initiated.

Proposition 64 in 2016 authorized the legal sale and distribution of marijuana for recreational use. At least 57% of the population voted in favor of the legalization. In early 2018, licenses were instituted and issued for commercial cultivation and business establishments.

But, cities and counties can decide whether to permit these businesses within their borders or to ban them. Fewer than one in three cities allow any kind of cannabis business within their borders. Even medical marijuana dispensaries are permitted in fewer than one in five cities. The result has been a crazy quilt of regulations.

Overall, Southern California has embraced the new businesses with much greater gusto than Northern California. Various explanations have been offered for this discrepancy. One possibility is that the black market associations in Humboldt and Mendocino counties may have retarded a change in attitudes. Another possibility is cost. Legal marijuana prices include a 15% state excise tax, a county sales tax of 7.5% to 10%, and often a city tax. Medical users are exempt from the sales taxes.

Use in public is illegal so city dwellers living in rentals have a problem finding a place to use. Cities are the most accepting of recreational use but few dispensaries have lounges and many landlords ban use in their rentals. Fans and air quality equipment must be employed in lounges that do permit use. Strict laws are enforced against driving while intoxicated; also against anyone using in a car and against carrying an unsealed container of cannabis. Adults can possess up to an ounce of marijuana or 8 grams of concentrated marijuana and may cultivate up to six plants.

Large cities do have a variety of cannabis inducements. Tours may include ganja yoga, cannabis infused food feasts, and, in Los Angeles, trips to the White Rabbit High Tea Salon and an elegant emporium named, Buds and Roses. Purchased edibles are limited to 10 milligrams of infused THC per serving.

California has moved forward on practical steps to support cannabis businesses.  Politicians have sponsored measures to devise a Central Bank of California banking system to track and oversee legal cannabis transactions. In addition to proving legitimacy to federal authorities, such a system would eliminate the danger of violence and the inconvenience of transactions in cash (due to federal regulations). Exasperated with the difficulties of using cash, one member of the California Cannabis Industry Assn. has declared she plans to pay an $800,000 tax bill to the state of California in cash.

Besides confronting the banking problems, the state has been trying to find a solution to the difficulty of seeking insurance for the cannabis industry. On June 4, 2018, California Insurance Commissioner Dave Jones announced the approval of the first Cannabis Business Owner’s Policy in California. CannaBOP, as it will be called, will provide property and liability coverage for dispensaries, processors, manufacturers, distributors, cannabis storage facilities and related businesses. This will alleviate the major financial risks which have been the norm in most instances. Hopefully, they will include wildfires and earthquakes. Additionally, insurance has been instituted which would protect landlords renting to cannabis business operations.

In the US Senate, Elizabeth Warren of Massachusetts and Cory Gardner of Colorado are trying to organized legislation to sort out some of these thorny problems. California’s roll out for recreational cannabis may stutter a bit but the efforts to find solutions that would provide a solid foundation for serious cannabis business investment is admirable and a model other states might want to consider.

A marketing and publishing professional and the Director of Publicity at GB Sciences, Liz Bianco monitors media activity and co-writes the “State of the States” on cannabis in America.


 

A consultant and co-author with Meredith Patterson of “Pillars of Brain Health” at BrainstormMindFitness.com, Pete Goodwin does research and co-writes the State of the States blog.


 

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