When California voters passed Prop 64 in the November 2016 election, they legalized the use and possession of recreational cannabis. This may sound simple, but the decriminalization and legalization of a previously illicit substance requires an intensive regulatory scheme. Prop 64 authorizes three main state agencies to promulgate cannabis regulations: The Bureau of Cannabis Control is in charge of licensing cannabis retailers, distributors, and microbusinesses; CalCannabis licenses and regulates cannabis cultivation; and the Manufactured Cannabis Safety Branch licenses and regulates the manufacturing and testing of cannabis.
The Bureau of Cannabis Control (the “Bureau”) is established within the California Department of Consumer Affairs. The Bureau is dedicated to regulating the cannabis industry, both recreational and medical, and is charged with overseeing other state departments that are given specific licensing duties in certain areas of the industry. The Bureau’s activities, as well as the activities of those departments under its supervision, are supported by the Marijuana Control Fund. In turn, the Marijuana Control Fund is supported by taxes levied on marijuana products and cultivation, as well as civil penalties for violations of marijuana regulations. These taxes go into the California Marijuana Tax Fund, which is kept separate from the state’s General Fund.
CalCannabis is set up within the California Department of Food and Agriculture. CalCannabis is the agency that regulates cannabis cultivators and importantly establishes a track-and-trace system for cannabis. It is in charge of giving licenses to cannabis growers. The track-and-trace system is essential to keeping California in line with the Cole and Ogden memos providing states some leeway with recreational cannabis, within federal guidelines outlined in the memos, as discussed in a previous post. CalCannabis will focus much of its regulatory power on ensuring that California-grown cannabis stays within the state and is not sold to underage individuals.
Finally, the Manufactured Cannabis Safety Branch (the “Branch”) is housed within the California Department of Public Health, and is charged with regulating and licensing manufacturers of cannabis products, like edibles and other THC-infused products. The Branch also regulates the transport, distribution, and storage of medical cannabis in California.
Since Prop 64’s passage in November 2016, these agencies have been working to establish a regulatory scheme comprehensive enough to meet a January 2018 “launch” date, when recreational cannabis sales are scheduled to go “live.” Even with these three agencies working hard to develop regulations in time, some issues remain unresolved – particularly the banking issue, to be covered in a later post. But for now, the Bureau of Cannabis Control, CalCannabis, and the Manufactured Cannabis Safety Branch are rapidly developing regulations to get the new recreational cannabis industry running for the new year.