Can Regulation Save California's Medical Pot Industry?

This week the backers of a California ballot initiative aimed at regulating the medical marijuana business are expected to get the approvals they need to start collecting signatures. The Medical Marijuana Regulation, Control, and Taxation Act (PDF) would let patients and their "designated primary caregivers" form "collectives, cooperatives and other business entities in order collectively or cooperatively to cultivate, acquire, process, possess, transport, test, sell and distribute marijuana for medical purposes." The initiative would create a Bureau of Medical Marijuana Enforcement within the California Department of Consumer Affairs to oversee these entities, collecting application fees from them and issuing "mandatory registrations" that would shield them from criminal penalties under state law. In addition to the fees, the initiative would impose a special 2.5 percent sales tax, on top of the existing sales taxes (7.25 percent state plus up to 2.5 percent local). It would allow cities and counties to collect their own medical marijuana taxes of up to 2.5 percent and "enact reasonable zoning regulations and other restrictions applicable to the cultivation and distribution of medical marijuana based on local needs." But the initiative says there has to be at least one dispensary per 50,000 residents, and jurisdictions with populations above that threshold could ban dispensaries only with voter approval.

The initiative's supporters, which include Americans for Safe Access as well as various growers and retailers, hope this system, which is similar to Colorado's but with less of a role for local regulation, will discourage federal interference by clarifying the rules for supplying medical marijuana. But as The Sacramento Bee notes, Colorado's regulations have not stopped that state's U.S. attorney, John Walsh, from threatening dispensaries that comply with state law. Although Walsh's threats so far have been aimed at dispensaries within 1,000 feet of a school, at least some of them are following state and local regulations. Walsh emphasizes that "the Department of Justice has the authority to enforce the federal law where appropriate even when such activities may be permitted under state law." I have been trying to get his office to clarify whether that means compliance with state law makes no difference to Walsh, but his spokesman, Jeff Dorschner, has not returned my calls. At this point it is not at all clear that Attorney General Eric Holder's assurances regarding medical marijuana suppliers who follow state law amount to anything in practice. The Bee's story reflects that uncertainty:

University of Denver law professor Sam Kamin said the federal actions are likely a surgical strike, not a broad assault. But he said "if the feds don't respect" Colorado's regulatory program, "they're not going to respect the watered-down version that we see (in the measure proposed) in California."

Democratic Assemblyman Tom Ammiano said he met recently with his region's top U.S. prosecutor, Melinda Haag of San Francisco. He said she "wasn't very encouraging" that an initiative – or legislation – could inoculate California's pot industry against federal actions.

Another possible problem with the California initiative is that it seems to conflict with the state appeals court ruling that overturned Long Beach's licensing system for dispensaries. Last October the 2nd District Court of Appeal said Long Beach violated the federal Controlled Substances Act because it went "beyond decriminalization into authorization." Specifically, the court cited the city's application fees and its awarding of permits via a lottery. The Medical Marijuana Regulation, Control, and Taxation Act does not call for a lottery, but it does establish application fees, and its "mandatory registrations" seem to be a euphemism for permits, since dispensaries could not legally operate without them. Then again, the California Supreme Court recently agreed to hear the Long Beach case, and it may overturn the 2nd Circuit's decision.

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  • rather||


  • Hugh Akston||

    Of course, once medical marijuana becomes solidly legal and respectable, providers will become an interest group that will fight tooth and nail against recreational legalization.

  • ||

    They are already doing that in California. Protectionism FTW.

  • spencer||

    You mean FTL.

    or "to the pain" of course.

  • ||

    "for the worst"

  • spencer||


  • ||

    At first glance, I thought that was a picture of a Starbucks.

  • Fist of Etiquette||

    It used to be a KFC.

  • spencer||

    I bounced there on my giant balls.

  • ||

    At first glance, I thought that was a picture of a Starbucks.

    So did I. As a result I ignored the article at first; if it wasn't a picture of a burned down Starbucks then I figured it couldn't possibly be interesting.

  • Rev. Blue Moon ||

    The first thing I noticed was that the window says "All Day. Every Day.", and then I wondered: why would it have hours posted, then?

  • ||

    I went into a London pub that said "food served all day" at quarter to 11PM after arriving in the Docklands. When I asked to see the menu, the bartender laughed at me. In many cases, "all day" doesn't mean "all day".

  • spencer||

    ALL DAYlight hours.

  • ||

    Since when is 10:45 pm part of the day?

  • Paul||

    If I lived there, I would hang a banner blocking out the $39 and replace it with "Ann Murray"

  • Tim||

    "California Growers Association, Citing Safety, seeks ban on imports of cheap Mexican Grass."

  • Paul||

    The Medical Marijuana Regulation, Control, and Taxation Act (PDF) would let patients and their "designated primary caregivers" form "collectives, cooperatives and other business entities in order collectively or cooperatively to cultivate, acquire, process, possess, transport, test, sell and distribute marijuana for medical purposes." The initiative would create a Bureau of Medical Marijuana Enforcement within the California Department of Consumer Affairs

    Man, what an unholy mess.

    Can you imagine this kind legislation if it applied to other medicines?

    And then there's this:

    But the initiative says there has to be at least one dispensary per 50,000 residents, and jurisdictions with populations above that threshold could ban dispensaries only with voter approval.

    What does that mean? That if there's a lack of dispensaries the state can mandate that one be opened? Or does that mean that they can't deny permits for new dispensaries as long as there are fewer than one per 50,000?

    And if there are too many Chick-fil-a's in a given geographic area, voters can opt to close one? Who sets up a free market like this?

  • Anonymous Coward||

    It means everything for the state, nothing against the state, nothing outside the state.

  • ||

    If they think this will call off the federal dogs, they are nuts.

    What it will do, though, is confuse and split the vote on legalization, thus (again) allowing the medpot industry to kill a better proposal. Rent protection, FTW!

  • Paul||

    This initiative looks like it was drafted by a committee of Daily Kos readers.

  • Anonymous Coward||

    A city, a county, or a city and county may enact reasonable zoning regulations relating to the location, size and number of medical marijuana facilities. Such regulations shall allow at least one medical marijuana dispensary per 50,000 residents and allow for not less than one dispensary in every county and any city over 50,000 residents.

    Yay, weed rationing!

  • ||

    Can I ask a stupid question? Why are major news outlets reporting Ron Paul with zero Iowa delegates? Did I miss something?

  • Paul||

    Paul is an unserious candidate. Therefore delegate count is meaningless.

  • ||

    And this is why he got zero delegates in Iowa?

  •  ||

    When you need over a thousand to get the nomination, three is just like zero.

  • ||

    I thought Iowa hadn't assigned any delegates yet. If they are reporting zero delegates for everyone, that would probably be accurate.

  • ||

    There is a really good written analysis explaining why this is such a poor initiative. Read it at -- Dennis Peron & John Entwistle's website.

  • FastFact||

    For those of you in your twenty's please remember this comment when you're 60. Marijuana will never ever be permitted in the United States of America. You will grow old like the rest of us did wishing and hoping but nothing will ever become of it. Because of the nature of the high we had no desire to struggle with the authorities over it being illegal or not. I suggest drinking alcohol rather than fighting the system. Booze and tobacco seem to be the only drugs that the DEA will allow so why not...tomorrow our rights to use alcohol and tobacco may be taken from us so now's is the time to drink-up, smoke cigarettes and grasp at the other personal freedoms being taken away from Americans.

  • Mandy||

    To John E, thanks for including the link to the actually relevant article. And to FastFact, in a way I agree with what you are saying but I am in my twenties and do not think that your stance on drinking should replace smoking marijuana. Medical marijuana has been proven to help many medical conditions, and while the Feds want to come down hard on weed, it is simply because politicians do not face the weed question. Marijuana could earn money for the government if they wanted to tax it, not sure why cigarettes are accepted and legal, when they are clearly unhealthy. Why not tax marijuana the same way as cigarettes, and knock the illegal drug market as well. Yes, street drugs will continue to exist, but at least the kids who are going to smoke the weed anyways, regardless of if it is legal or not, will not be in danger when they purchase their weed.

  • ||

    Has anyone actually read the initiative? This thing will make whoever is on the board a God of medical cannabis. It will eliminate most of the competition of GLACA here in LA since the board members will be made up of the same people who have been trying to influence policy for their own good for the last several years. I could tell you who will sit on the board. First, Don Duncan, Second, Michael Bauchus from the old Cornerstone collective. Third, Sara Armstrong. Fourth, Yami Bolinas.

    All of whom are on GLACA, and support this initiative. Come on Media. Don't make me break this story for you. This is a huge money grab, power grab, and a conspiracy to control the wholesale prices all while saying "we don't price fix". Yeah, they don't price fix their retail prices, but they'll be dammed if they pay more then a certain amount for the medicine they get from patients. I was in the owners meetings when the fixing was discussed.

    This initiative is only to protect the interests of a few and it's surely not meant to protect patients. The City of Los Angeles is culpable in this also. They have been lying in bed with these folks and maybe their plan was to keep fumbling the ball in order to make the voters believe that we are in need of such legislation.

    The way this was written was to clear, every other dispensary will have to shut down in three years unless you pay to play. Anyone who gets shut down then would never be allowed to be involved again. Any grower or activists who have been locked up for providing medicine wouldn't be allowed to be involved either. Whoever wrote this, and is financially backing this initiative, should be investigated under the RICO statutes.


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