Top 10 Obstacles to Establishing Legal Weed in California

Recreational cannabis was finally, officially legalized in California on November 9, 2016—the day after the Adult Use of Marijuana Act (AUMA) passed at the ballot with 57 percent of the statewide vote. The new law immediately allows for personal possession and cultivation of pot, but retail stores will not be licensed until 2018, and large-scale commercial cultivation is delayed until 2023. This provides an opportunity for the “little guys” in the form of small business to get their feet in the dank door of for-profit pot sales.

For many cannabis activists, AUMA’s passage was long overdue—as California was forced to watch on the sidelines in 2012 as Colorado and Washington made history by legalizing recreational weed, an honor that really should have been reserved for the Golden Ganja state, the cannabis capital of the world for decades. 

Though California is now ready to join the pot party, for many interests, both collective and individual, Prop. 64 is not entirely welcome, with opponents ranging from cultivators to cops, from patients to politicians, and even external opposition in the guise of shady corporations. 

All of these factions could well create barriers to the successful implementation of Prop. 64, frustrating consumers and companies alike. Oh, and we mustn’t forget the federal government—that tiny little institution that just happens to regard all cannabis as illegal, regardless of individual state designation.  

1. Local Government Greed

One of the provisions of Prop. 64 permits local cities and counties to set their own regulations, taxes and fees. And while such revenue was a major selling point to help get AUMA passed, it’s also resulted in a “greed factor” as delineated by hall-of-fame cannabis activist, author and consultant Chris Conrad.

Conrad warned of local governments seeking to cash in via licensing for legal weed businesses, based on the perceived “green rush” that Conrad flat-out terms “an illusion.” It’s the notion that everyone is getting rich overnight from legal weed, which motivates greedy politicos to jack up the price of licensing and make excessive demands bordering on legal bribery from those interests competing for canna-biz licenses. This then becomes a huge financial burden for those trying to establish a business.

As reported by East Bay Express, Oakland mandates the city be a 25-percent owner of certain new cannabis businesses and receives a seat on the company board. And while such money can be used to improve inner cities damaged by the War on Drugs, it also maintains the status quo of favoring those with more money. And does Oakland demand part-ownership of fast-food restaurants and other businesses? No way—it’s always pot that has to pay the extra price, even when legal.  

Conrad suggested acquisition of pot-biz licenses be made cheaper, “so those living in drug-ravaged communities can create their own businesses and bring money and employment to them, instead of the high-fee licensing system that results in the ‘rich white guys’ taking over.”

2. Transition from Medical Marijuana

Though California wasn’t first when it came to recreational weed, it was the groundbreaking state for legalizing medicinal marijuana when voters passed Prop. 215 in 1996. That’s a 21-year head start MMJ has on “party pot,” and there are some issues to be settled.

Josh Drayton of the California Cannabis Industry Association (CCIA) considers this potentially the biggest threat to AUMA’s success.

“I see the big fight being at the state level, and the reconciliation between MCRSA (Medical Cannabis Regulation and Safety Act, passed by state legislators in 2015) and Prop. 64.,” Drayton said.

AB 64 was introduced to reconcile MCRSA and Prop. 64, but as Drayton noted, “I think there will be many (related) bills introduced this year, but I think the thing to watch is to see how closely the legislature is willing to support Prop. 64’s rules and regulations, which were approved by the voters, in comparison to what they wrote in the MCRSA regulations. Because there are big gaps in cultivation and distribution levels, and those are some real hot topics.”

Prop. 64 represents an increased financial burden for pot patients, as they will have to pay the 15 percent excise tax to be added to all pot sales, recreational or medicinal.

Though there is the option to avoid state sales tax with a state medical marijuana card—if you’re going to spend enough money on those taxes in a calendar year to justify purchasing a card for $66 for non-MediCal patients. Taxation is one of the most unpleasant aspects of Prop. 64, but then, it was what helped get AUMA passed in the first place.

Additionally, not every medical marijuana patient is all in on Prop. 64.  As noted by the OC Register, patients like Alexandra Rice of Grand Terrace in Southern California worry that MMJ users will be “misplaced and thrown to the side,” as the priority shifts to recreational cannabis. Rice is also concerned about medicine no longer being available at a “reasonable price.”

However, what Rice and others, especially younger pot patients, may fail to realize is that the use and social acceptance of modern medical marijuana began in the gay community of San Francisco—where it was initially used solely for recreational purposes, and then eventually discovered to be efficacious towards those suffering from HIV and AIDS.

Still, medical cannabis use in California must be respected by the incoming recreational industry.

3. Local Government and Community Acceptance 

AUMA permits local governments to flat out ban outdoor grows, but also allows the administration of “reasonable regulation” of indoor ganja gardens, which is cause for some controversy. 

Elk Grove—in Sacramento County—could become the first municipality sued over its own “unreasonable” ordinances that circumvent Prop. 64, as reported by Elk Grove News. The city has not let anyone grow any pot at all for three months and counting. 

In January, the Elk Grove City Council voted unanimously to extend by 45 days a previously passed moratorium on establishing guidelines for personal use and cultivation, further delaying residents’ rights to use and grow recreational cannabis.

Cannabis licensing consultant Jackie McGowan criticized the Elk Grove moratorium on any indoor cultivation, noting that it is actually in violation of the AUMA law as it now stands.

There’s also the NIMBY—”Not In My Backyard”—factor to consider, the resistance of otherwise pro-weed supporters, as well as the haters, to having cannabis storefronts located in their particular neighborhoods. This attitude ranges from suburbanites who don’t want their pristine locales tainted by pot shops as well as inner cities damaged by drugs that don’t want another substance for sale in the hood.

And of course, there’s the holy rollers who seek to stand on a higher moral ground than the rest of us—by opposing legal pot stores as an affront to their faith. Yet somehow life-destroying gambling, alcohol and tobacco are perfectly permissible by their particular God.

4. The Advances of “Big Weed” 

This category obviously directly relates to number one on this list regarding the greed of local governments looking to cash in on the perceived huge profits of legal weed, which creates a system of big-money players who buy their way into the industry. The purported goal of AUMA is to avoid a system of pot “have’s and have-not’s” that would render the legal industry as just another reflection of soulless capitalism, but will it work out that way?

Even Prop. 64 supporter California Lieutenant Governor Gavin Newsom expressed concerns about keeping the “big money interests at bay” in an interview with Billboard. Newsom envisions a “highly regulated market” that both protects public safety and benefits “the small farmer,” those who’ve cultivated cannabis in the state for years.

As Chris Conrad noted on the Leaf, Prop. 64 attempts to restrain corporate control of cannabis by withholding large scale (half an acre or larger) cultivation licenses for five years—until 2023—to see if they are needed or will be issued. If enough small growers can establish viable companies, it may well preclude the issuance of such licenses to “Big Weed.”

5. Federal Interference 

With notorious anti-pot-hawk Jeff Sessions newly minted as U.S. Attorney General, California’ legal industry—as well as the existing medical infrastructure—is now on high-risk-alert, at least until Sessions and the Dept of Justice unveil their full strategy. There is obviously cause for concern given Sessions’ recent comments (AKA alternative facts) that “there’s more violence around marijuana than one would think.”

Josh Drayton of CCIA is “cautiously optimistic; we want to have faith this administration does believe in states’ rights and they’re going to stick to that. From what we’re seeing, cannabis is low on (Trump’s) priority list, because they’re got their hands full (with other issues).”

Chris Conrad speculated the Trump administration can ultimately take one of three possible roads: “The first is a massive federal crackdown. That would result in a lot of negativity, but they could do that because they’re so openly fascist. The second would be to let the states do their own thing, follow Obama’s model, and that would be nice. But the third alternative, which I think is the most likely scenario, is they’ll create a federal marijuana law where certain corporations—run by Trump’s cronies—make the bulk of the profits, with everyone else having to buy it from them. Trump will try to figure out, ‘How do we make the money off of (legal weed)?'” 

6. External Interference 

Legal pot is a perceived threat to the bottom-lines of existing industries such as Big Pharma and Big Alcohol, and there is a report of some alleged interference into Prop. 64’s implementation in the Bay Area from at least one of those industries. 

As reported by Chris Conrad, coming second-hand from Sean Donahoe, formerly of CCIA and now with the Medical Jane website, there is some sort of “neighborhood group” consisting of the same exact people popping up at numerous Bay Area city council meetings on Prop. 64, such as in El Cerrito in the East Bay. This group voices their collective opposition to a cannabis retail outlet operating in “their neighborhood”—even though they don’t appear to belong to the particular neighborhood they’re “defending” at a given municipal meeting.  

Even more alarming, allegedly this group of people report to a woman connected to a pharmaceutical drug distribution company. Big Pharma has good reason to fear legal weed, especially with the growing publicity that cannabis can replace deadly opioids as a safer form of pain relief, as noted by the Washington Post. 

7. Opposition from the Old-Guard Growers 

The cultivation of cannabis in Northern California, particularly in the ideal mountainous forests of the Emerald Triangle—comprised of Humboldt, Mendocino and Trinity counties—is a multi-generational phenomenon with families firmly entrenched in the pot biz, legal or otherwise, and not necessarily ready to get all warm and fuzzy with every facet of Prop. 64. 

The executive director of the Sacramento-based California Grower’s Association, Hezekiah Allen, told Fortune.com, “I don’t want to replace a criminal injustice with an economic injustice”—an allusion to big-money marijuana interests that could wipe out the old school farmers.  

Chris Conrad expressed the complexity of the issue; there is a long-standing tradition of growers in the Triangle who paved the way for the marijuana industry we have now, yet that doesn’t mean that their way is the only proper method of running a pot industry. The older generation tends to be attached to an “outlaw culture” that wants exclusive control of the market, while the younger generation of ganjapreneurs have grown up in a climate of legalization. 

Conrad detailed one of the darker stories: “In Trinity County, it seems like the old guard of growers have worked really hard to get anyone new trying to grow arrested. There were a bunch of Hmong (Southeast Asian) people that tried to start growing in Trinity, and they ended up getting busted left and right.” 

Conrad added the racism of law enforcement in the Triangle may have also played a role in selectively eliminating the Hmong attempts at getting in on the marijuana market.

Humboldt Growers Collective CEO Steve Dodge told  Fortune he opposes Prop. 64 due to regulatory inspections that a certain percentage of cultivators view as the equivalent of a warrant-less search by officials.

8. Law Enforcement Resistance

Prop. 64 is a “sticky bud” for cops; legalization takes away the easy quota-fills of busting pot users, yet once retail sales kick in during 2018, THC tax revenue will be directed to law enforcement. One issue for police is that public pot use remains criminalized, but of course, peeps are still gonna get high in the California sunshine! Especially when it’s smoked at a protest or festival with hundreds—if not thousands—of people consuming cannabis openly.

Josh Drayton opined that educating cops is key, “giving law enforcement the right tools to understand (Prop. 64) and to learn what (actions) are appropriate. They need to learn the law as well, (for example) how much (weed) can people transport, what do people (legally) require in order to transport large amounts?”

There’s also the issue of local and state law enforcement being used in conjunction with federal raids, if the newly elected Trump administration decides to go that route (see number five).

It remains to be seen if law enforcement will “go down easy” when it comes to handling Prop. 64.  As noted by Brown-White Law.com, despite having some of the most lenient pot laws in the nation, there were nearly half-a-million weed busts statewide from 2006-2015, so cops in California are conditioned to make pot busts. Besides, there are ways in which the cops can still gladly arrest people for cannabis offenses in California (see #10).

9. Controversy Over Dank DUIs

It’s as inevitable as the rising sun or having to refill the bong—a state legalizes weed, and there’s instant concern about a sudden surge in vehicular accidents on its highways and byways. But is the worry warranted?

As reported by the Washington Post, a 2015 study from the federal government’s own National Highway Traffic Safety Administration found motorists using marijuana are at a markedly lower risk to get into an accident than drivers who drank alcohol. One issue is that cannabis metabolites can remain in the system long after consumption, meaning even if a driver tests positive for weed, he or she might have been as a sober as a DUI judge during the crash. 

10. Individuals Respecting the Law 

Surprise! Despite the many wonderful things about Prop. 64 liberating the weed, you can still be arrested and convicted for marijuana offenses in California—a whole bunch of ‘em, as it turns out. This applies to both the consumer and retailer. 

For example, as noted by the San Diego Union Tribune, businesses have to check IDs when selling retail reefer to ensure that the buyer is at least 21 years old, and they cannot utilize any advertising that appears to be directed at minors.

One of the many great attributes about AUMA is that even should someone grow more than the legal limit of six plants, that offense is now a misdemeanor—provided it’s not a “third strike” conviction or an aggravated offense, like a grow involving a minor or weapons. Any kind of sales are required to have a license, but the penalty for illegal sales has been reduced from a felony to a misdemeanor. You can give up to an ounce away for free, if you’re so deep in dank you can afford to do that sort of thing.

Yet, you can still be fired from your job—or forced into rehab by your employer—for pot use, as reported by the Mercury News, depending on a company’s particular drug policy. Yet should that fate befall you, there’s an easy solution—get a job in the recreational cannabis industry! 

We hear they’re hiring…

RELATED: The Ultimate Prop 64 California Marijuana Legalization FAQ

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