Local Cannabis Opportunities and Challenges

Transcription

1 Local Cannabis Opportunities and Challenges The State of Marijuana in California: Exploring Options Special Meeting: Avalon, CA Presented by: Neil Hall John Bliss August 4, Mangels Blvd, Fairfield, California 94534

2 Introduction SCI Consulting Group John Bliss, Vice President Neil Hall, Cannabis Group Leader Overview Unbiased Questions and Answers

3 History of Cannabis in US US hemp use common through 1937 Prohibition of alcohol from 1920 to Harry Anslinger Federal Bureau of Narcotics Mexican immigration challenges in the 1930s

4 More History of Cannabis in US Marijuana Tax Act of 1937 Opposed by American Medical Association Boggs Act of 1952 Narcotics Control Act of 1956 Strict Sentencing in 1969 First-time cannabis possession 2 years $20,000 fine Controlled Substances Act of 1970 Schedule 1 classification

5 Even More History of Cannabis in US The Cole Memo 8 criteria to maintain State right to control The Rohrabacher-Farr Amendment Prevents the DOJ and DEA from arresting or prosecuting patients, caregivers, and businesses that are acting in compliance with state medical marijuana laws

6 Legalization Trends Medical cannabis is currently legal in 25 States Recreational Cannabis 2012 Colorado and Washington 2014 Alaska, Oregon and Washington D.C. In November 2016? Arizona California Maine Massachusetts Nevada

7 Current State Situation

8 History of Cannabis in California 1996 The Compassionate Use Act 55.6% voter approval

9 More History of Cannabis in California SB 420 The Medical Marijuana Program (MMP) Numerous Dispensaries and Chaos Numerous Lawsuits: San Diego and San Bernardino Counties Garden Grove Live Oak vs. Maral Browne vs. Tehama Riverside County vs. Inland Empire

10 Recent History of Cannabis in California The Medical Marijuana Regulation and Safety Act Three bills co-joined AB 243, AB 266, SB 643 Now known as MERSA Provides needed structure and clarity Allows for local control

11 Some MMRSA Highlights Prevents vertical integration to avoid monopolization of market Requires Distributors to transport product between licensees Removes affirmative defense and provides legal protection from arrest Allows for existing cannabis businesses to integrate over time Allows for profit cannabis activity Requires implementation of seed to sale tracking Allows delivery only in public agencies that do not prohibit delivery Requires testing with specific requirements Prohibits Distributors and Testing facilities from holding any other license type.

12 Some More MMRSA highlights Licenses to be issued by 2018 Bureau of Medical Cannabis Regulation Created within Dept. of Consumer Affairs Allows local taxation and regulatory and licensing fees (a) Pursuant to Section 7 of Article XI of the California Constitution, a city, county, or city and county may adopt ordinances that establish additional standards, requirements, and regulations for local licenses and permits for commercial cannabis activity. Any standards, requirements, and regulations regarding health and safety, testing, security, and worker protections established by the state shall be the minimum standards for all licensees statewide.

13 Common Cannabis Vocabulary 420 blunt cronick bud doobie dope herb pot reefer Mary Jane weed

14 THC Psycho-Active The Cannabis Plant

15 Cannabis Ingestion Methods Today

16 Cannabis Ingestion Methods Today

17 Traditional Smoking

18 Vaping

19 Cannabis Concentrate

20 Packaged Concentrates

21 Consumables

22 Alice B. Toklas and Gertrude Stein

23 4 Elements of the Cannabis Industry Retail Delivery Cultivation Manufacturing

24 Retail Dispensaries - 1

25 Retail Dispensaries - 2

26 Retail Dispensaries - 3

27 Retail Dispensaries - 4

28 Retail Dispensaries - 5

29 Retail Guidelines Appropriate buffers from schools, etc. Signage, parking, posted operating hours No product visible Security and ID regulations Odor control No loitering off premises allowed No smoking of product within 1,000 feet of facility Devices for weighing or measuring products being sold must be compliant with State regulations and control.

30 Retail Best Practices Testing Products Selling Clones Packaging Recording the Transaction Recording the Source of Product Security Transporting Marijuana BOE seller s permit Appropriate insurances, bonds and licenses

31 Cannabis Labelling

32 Delivery Services

33 Cultivation

34 4 Aspects of the Local Cannabis 1. Community Research and Outreach, and Planning 2. Health and Safety - Ordinance 3. Taxation and Revenue Ballot Measure 4. Monitoring and Compliance defined by Ordinance

35 1. Community Research and Outreach Determine Local Health and Safety Priorities Taxation Rate Engage stakeholders Law Enforcement, Finance, Planning, school leaders, church leaders, advocates, business leaders etc. Community-wide Survey Mail Survey Phone Survey

36 2. Health and Safety Regulations - 1 Ordinance Structure Purpose and Intent Definitions Permits Operating Requirements Penalties Severability

37 2. Health and Safety Regulations - 2 Outreach and Stakeholder Input Unique to Community Comprehensive Addresses Potential and Current State Legislation Issue Recommendation Action 1 H&S School Safety Outlets zoned at least 1,500' from School City Ordinance 2 H&S Labelling City Guidelines City Ordinance 3 H&S Retail - Number of Stores Develop Total Number (i.e. 4 to 6) and conduct rigorous application process Staff Level Policy 4 H&S Retail - Zoning Identify and confirm location possibilities City Ordinance 5 H&S Retail - Lease Agreement Must provide either ownership or landlord letter acknowledging business type Staff Level Policy 6 H&S Testing requirements THC/CBD level, residual chemicals, insecticides/heavy metals/molds City Ordinance 7 H&S Testing facility Certified lab or reliable lab City Ordinance 8 H&S Tracking Seed to sale and clone management City Ordinance 9 H&S Tracking RFID short range/long range replace plastic tags at what size City Ordinance 10 H&S Packaging Accurate product labels - clearly state medicinal purpose City Ordinance 11 H&S Edibles allowed Potency limits - packaging to avoid attraction of minors City Ordinance H&S No onsite sale of tobacco/alcoh On premises and within distance City Ordinance 12 H&S Concentrates allowed Potency limits - hash/dab/budder/shatter/etc City Ordinance 13 H&S Advertising/signage Size and location restriction and with or without electrical City Ordinance 14 H&S Odor control Restrictions based on City's recommendations and method to measure City Ordinance 15 H&S Security - outside Number and distance from facility, uniform, badge, etc. Staff Level Policy 16 H&S Security - inside Number based on size of facility, uniform, badge, etc. Staff Level Policy 17 H&S Fire Hazard Control Restrictions based on City's recommendations (extinguishers, alarms, etc.) Staff Level Policy 18 H&S Employee restrictions Must have background check, arrest history, etc. City Ordinance 19 H&S Owner restrictions Must have background check, arrest history, etc. Needs proof owns building, etc. City Ordinance

38 3. Taxation and Revenue - 1 Conditional Use Permit or Business License Fee and Business License Tax based upon Gross Receipts 5%, 10%, 15%, 20% Cultivation Tax Collections

39 3. Taxation and Revenue - 2 Special Tax 66% General Tax 50% Timing and Elections

40 3. How Much Taxation? City of Avalon Sales Tax 9.5% + AUMA 15% Gross Receipts + Local Gross receipts tax (5% to 20%) + $9.25 on flower/$2.75 on non-flower plant leaf =

41 3. How Much Revenue? Year Round Sales $10 to $20 per population = $38,000 to $76,000 per year Tourist Sales =?

42 3. Taxation and Revenue

43 3. BOE Requires A Seller s Permit for MMD What is the California State Board of Equalization (BOE) policy regarding sales of medical marijuana? The sale of medical marijuana has always been considered taxable. However, prior to October 2005, the BOE did not issue seller's permits to sellers of property that could be considered illegal. A policy change was issued in October 2005 and the Board directed BOE staff to issue seller's permits regardless of the fact that the property being sold may be illegal, or because the applicant for the permit did not indicate what products it sold.

44 4. Monitoring and Compliance Inspect financial records Process applications Randomly test product Inspect labeling Inspect premises Monitor Video Community Communications Complaints Violation reports Answer questions

45 Local Public Perception - 1 Use amongst minors will increase No absolute conclusive studies yet Conventional Wisdom, Regulating location, security and price can reduce cannabis access to minors. A 2015 Columbia University study showed usage did not increase among teenagers in states in which medical marijuana had become legal. A 24-year long study recently reported in Lancet medical journal found that states that legalized medical use had reduced rates of teenage use after enacting the laws compared with states where the drug remains illegal.

46 Local Public Perception - 2 Marijuana is a gateway drug No absolute conclusive studies yet Prescription opiates Conventional Wisdom:, The scientist who coined the gateway term recently came out with a new paper showing that it s actually nicotine that is, biologically, the most potent gateway of all. A recent analysis by RAND's Drug Policy Research Center (DPRC) suggests that data typically used to support a marijuana gateway effect can be explained as well by a different theory. The new research, by Andrew Morral, associate director of RAND Public Safety and Justice, Daniel McCaffrey, and Susan Paddock, has implications for U.S. marijuana policy.

47 Local Public Perception - 3 Local Crime will increase No absolute conclusive studies yet Drugged Driving will increase No absolute conclusive studies yet

48 California Proposition 64 - Nov 2016 AUMA Adult-Use Recreational 60% Polling 21 years old Indoor cultivation of 6 plants for personal use Outdoor cultivation may be prohibited Adults may possess 28.5 grams of cannabis plant material and 8 grams of concentrate State excise tax of 15% on medical and recreational State cultivation tax of $9.25 on flower/$2.75 on non-flower plant leaf for medical and recreational

49 1996 California Proposition 215 Medical Use of Cannabis Proposition 215 Results 1996 Green = Yes Red = No

50 2010 California Proposition 19 Recreational use of Cannabis

51 2010 California Proposition 19 Recreational use of Cannabis in Avalon, CA 449 Yes 442 No

52 Trends of Cannabis in California 60 % of likely California voters say they generally favor legalizing marijuana for recreational use 51% support in October 2014, 52% support in September % of adults say that if recreational cannabis were legalized, they wouldn t be bothered if a store opened in their neighborhood Public Policy Institute of California (PPIC),

53 Typical Implementation Path 1. Create a committee within your municipality including staff from affected departments and polling and cannabis consultants. 2. Develop an implementation plan that deals with your survey, ordinance, and tax measure. 3. Conduct a survey of your broader community to scientifically understand health & safety preferences and taxation preferences. 4. Draft a health and safety ordinance and get it approved by your council. 5. Propose a tax measure, and get it approved by your voters. 6. Rigorous monitoring and compliance

54 Let s Do this Right! Efficiently provide Cannabis Medicine to patients Develop mature, safe, adult-use cannabis marketplace Eliminate Black Market and associated criminal activity Ensure unavailable to anyone younger than 21 Control Potential for drugged driving

55 Options and Next Steps for Avalon Status Quo continue Ban Propose Initiative for taxation only Along with an ordinance for health & safety Propose Initiative with health & safety and taxation

56 Questions and Answers

57 Sources for Further Research PubMed U.S. National Library of Medicine and National Institutes of Health type in marijuana Leafly Dispensary and delivery locator with additional product information see maps for locations Weedmaps Similar to Leafly see maps for locations - Website of Bureau of Medical Cannabis Regulation - link to copy of relevant MMRSA bills: AB Cultivation AB 266 Regulatory framework and administration SB 643 Regulations for doctors and medical professionals SB 837 Rider included as part of the State budget and fiscal review process