The mouths of California lawmakers have started watering lately as prospects for hundreds of millions of dollars in marijuana tax revenue moves closer to reality. Sen. Mike McGuire, D-Healdsburg, introduced Wednesday a tax bill designed to follow long-awaited regulations in the Golden State.
Analysts there conjecture current California medical marijuana sales at $1 billion. Thus, as McGuire highlights, $100 million in tax revenue could be generated from his bill.
The bill divides revenue between a general fund, grants for local oversight agencies, state parks, and environmental restoration projects for land disrupted by illegal marijuana growers, as well as county drug and alcohol treatment programs.
“Now that there is a long overdue regulatory framework put into place,” McGuire stated, “it’s time to help fund the areas that are most affected by the cultivation – those communities that have long been paying the price of the negative effects of cultivation brought on by the ‘bad actors’ who destroy the environment and bring in crime.”
Proponents of California’s leading initiative to legalize recreational pot included a 15% tax in their October proposal. McGuire’s bill needs a two-thirds vote in the Legislature to pass.
The marijuana landscape in California is evolving rapidly. As Jacqueline McGowan states in her Facebook group, “California City & County Ban Watch”, which follows a wave of medical marijuana bans washing over the state: “As of Feb 8, 2016 we have 244 cities and counties that have either enacted a ban or still have one pending.”
The bans, enacted by cities and counties throughout California, prompted Governor Jerry Brown to sign legislation earlier this month scrapping a March 1 deadline for California cities and counties to implement medical marijuana cultivation laws. Before Gov. Brown’s actions, if the cities and counties failed to implement cultivation laws, they would forfeit authority over marijuana cultivation to the state.
Brown’s signature eliminated the March 1 deadline, removing the provision making the state the sole licensing authority for commercial cannabis cultivation. Despite this, cities and counties continue to implement bans, possibly not yet fully understanding the impact of Gov. Brown’s actions.
Cities and counties turned to banning cultivation of medical marijuana in the months ahead of the state’s Medical Marijuana Regulatory Safety Act (MMRSA), which goes into effect March 1.
MMRSA was designed to relieve local bodies of regulatory control burdens and place regulation partially under state jurisdiction (cities, for instance, would reserve the right to tax marijuana under the bill). One of the Assembly Bills, however, which comprises MMRSA (AB 243), dictates if cities and counties don’t pass their own cultivation ordinances prior to March 1, they lose local control over medical cannabis in their jurisdiction. That part of the bill, according to cannabis industry experts, is a misunderstanding blown out of proportion.
The League of California Cities moved quickly to advise jurisdictions without regulations to pass complete bans on cultivation in order to keep control over medical cannabis. They claim there is not enough time to enact sensible regulation before the deadline, so moving to ban outright is the best option.
"In an abundance of caution, we have been advising our member cities to enact cultivation ordinances—in this case a ban—to make sure they preserve their regulatory authority whether the cleanup bill goes through or not," said Tim Cromartie, legislative representative for the league. "A ban is the quickest and cleanest way."
Although the March 1 deadline relates specifically to growing cannabis, many councils throughout the state are banning dispensary delivery services and storefronts. Twentynine Palms Council Member McArthur Wright, speaking for the majority, spelled out his thinking.
“I’ve seen the effects,” Wright said regarding the council’s move to ban out-of-town dispensaries from operating there. “I don’t think it’s something we should introduce to our community because of everything else that goes along with it; it brings more problems than it does solutions.”
The Vacaville City Council passed a “No Grow” ordinance, outlawing personal cultivation of cannabis, including delivery services.
“It’s like aiding and abetting criminal activity,” Vacaville Mayor Len Augustine commented, noting cannabis is still illegal federally, and that his friends have labeled legal recreational cannabis in Colorado “out of control.”
In Alameda County, council member Donna Ziegler wrote that patients should be banned and fined "in order to protect the environment and preserve the public peace, health, [and] safety." Alameda County, interestingly, did pass among the most sensible legislation, including a “Sunset Clause” which stipulated the ban would repeal itself if the state repealed the March 1 deadline.
Coachella passed what city council members there call an “admittedly imperfect” ordinance enabling the city’s first medical marijuana facilities in the city’s auto wreckage zones. Cultivators must obtain two permits from the city “and maintain a laundry list of standards.”
The League of California Cities maintains that local agencies have no choice but to ban medical marijuana cultivation ahead of the March 1 MMRSA deadline in order to keep control over medical marijuana in their jurisdiction. As of February 10, the League has not acknowledged on its website Gov. Brown’s recent actions.
In many of the jurisdictions, council members reflect the sentiment of Brentwood City Attorney Damien Brower.
“These ordinances are not about placing new restrictions on medical marijuana, they're more about the city maintaining local control over medical marijuana regulation and not ceding that control to the state," he said. Not all cities have sought an outright ban.
For instance, Santa Rosa Commissioners agreed that a ban did not make sense. “I don’t want to turn anybody into a criminal overnight,” Vice Chairman there Peter Stanley said. San Diego is looking into its own ordinance ahead of state regulations. The city attorney there has recommended a moratorium instead of a ban. At the state level, actions have been taken to rectify the situation.
AB21, a bill introduced by California Assembly member Jim Wood to remove the March 1 deadline, passed this month through the Senate Government and Finance Committee. The American Civil Liberties Union (ACLU) and Drug Policy Alliance (DPA) opposed the bill on grounds that it did not prevent the banning of cannabis cultivation for personal use. Wood assured he shared this concern and would work towards solving the issue.
"I am committed to working as hard as I can to resolve the personal use issue and I have gone on the record making that commitment," Wood said. “Removing the March 1 deadline is not controversial and requires urgency legislation so we can assure communities they will have the time they need to develop regulations. The issue of growing cannabis for personal use while, critically important, is unfortunately not without some controversy. If these issues are combined into one bill it will result in the March 1 deadline remaining on the books for a longer period of time resulting in more bans. "
Cities feel the pressure put on them by the League of California Cities, according to San Diego-based cannabis attorney Kimberly Simms, who notes the “atmosphere is very tense” currently in the industry. Education is key, Simms argues, because many city and town councils do not know about Wood’s AB21 nor Alameda County’s Sunset Clause.
“Alameda County serves as an example of how AB21 is already having a positive impact,” Simms said.
That County added important language to their cultivation and delivery ban: “This ordinance shall be repealed by its own terms upon the adoption of state legislation repealing or eliminating the March 1, 2016 deadline.” Simms points out the irony behind the city and county bans.
"The most ironic part about this entire situation is that for years, local governments have been asking the state legislature to pass uniform legislation to create a comprehensive regulatory system to help guide them on how to regulate commercial activity at the local level,” Simms explains. “Now that those regulations are finally in place, we are seeing a rash of bans throughout the state." Simms remains confident the March 1 deadline will be removed.
“Cities will no longer be under duress and they can go back to the drawing board to craft some meaningful regulation,” she said. “Once the state agencies come back in early 2017 and are able to further explain the process for state licensing, additional cities will be willing to enact sensible regulation.” That’s just the start for Simms.
“Once the cities that do pass comprehensive regulation can demonstrate the success of the state and local program, the tax revenue increase and the decrease in crime, other cities will undoubtedly follow suit,” she said.