I get requested quite a lot of questions on what California hashish licensees can and can’t do beneath the Medicinal and Grownup-Use Hashish Regulation and Security Act (“MAUCRSA”). California is definitely enterprise pleasant as soon as operations get going with a license– regardless of its many points with the hashish business. For instance, vertical integration is allowed. There’s no license cap, and you’ll apply for a license year-round. We enable for hashish supply apps. And California permits consumption lounges in step with native legislation.
So what’s subsequent? Nicely, at this level California can also be going to attempt to enable for interstate hashish agreements, just like what Oregon did again in 2019 beneath its Senate Invoice 582. In California, the proposal up for dialogue is SB 1326.
Interstate hashish agreements
In response to AB 1326:
MAUCRSA specifies that its provisions shall not be construed to authorize or allow a licensee to move or distribute, or trigger to be transported or distributed, hashish or hashish merchandise outdoors the state, until approved by federal legislation. This invoice would make an exception to the above-described prohibition and would authorize the Governor to enter into an settlement with one other state or states authorizing medicinal or adult-use industrial hashish exercise, or each, between entities licensed beneath the legal guidelines of the opposite state or states and entities working with a state license pursuant to MAUCRSA, supplied that the industrial hashish actions are lawful and topic to licensure beneath the legal guidelines of the opposite state or states.
How interstate hashish agreements would work
Curiously, these interstate hashish agreements can be between states. Not licensees. Licensees would nonetheless want to have interaction in contracts with one another for the precise import, export, and distribution of hashish throughout state borders. The governor of California would have the ability to enter into these interstate agreements with governors from different states as long as:
- The industrial hashish actions are lawful and topic to licensure beneath the legal guidelines of the contracting state.
- With respect to the interstate transportation of hashish or hashish merchandise, the settlement prohibits each of the next: (a) The transportation of hashish and hashish merchandise by any means apart from these approved beneath each the legal guidelines of the contracting state and the rules of the [California Department of Cannabis Control]. (b) The transportation of hashish and hashish merchandise by means of the jurisdiction of a state, district, commonwealth, territory, or possession of the USA that doesn’t authorize that transportation.
Contracting state
The interstate settlement between the states would require that the contracting state agree that its hashish licensees be sure by California’s necessities round public well being and security, observe and hint, testing, inspection, packaging and labeling, and adulterated and misbranded hashish. The contracting state should additionally impose “restrictions upon promoting, advertising, labeling, or sale inside the contracting state that meet or exceed the restrictions” in California for a similar. And all California taxes apply, too. See right here for extra on California’s current hashish tax reform.
Overseas licensees
A “overseas licensee” is a hashish licensed and primarily based in a state apart from California. A overseas licensee can not interact in industrial hashish exercise in California “with no state license, or interact in industrial hashish exercise inside a neighborhood jurisdiction with no license, allow, or different authorization issued by the native jurisdiction.” So, overseas licensees may also be affected by California’s native management points in the event that they search to do enterprise in one in every of our cities or counties that enables for industrial hashish exercise.
The catch
Whereas it might be actually wonderful to have interstate hashish motion between licensees from San Diego as much as Bellingham, Washington, there’s one huge catch right here. The Feds. SB 1326 actually received’t do something until and till one of many following 4 occasions happens:
- Federal legislation modifications to permit for the interstate switch of hashish or hashish merchandise between approved industrial hashish companies, i.e., legalization. (There have been recent efforts at the federal level to permit interstate switch, even with out modifications as to the federal prohibition of hashish.)
- Federal legislation is enacted that particularly prohibits the expenditure of federal funds to forestall the interstate switch of hashish or hashish merchandise between approved industrial hashish companies.
- The Division of Justice points an opinion or memorandum permitting or tolerating the interstate switch of hashish or hashish merchandise between approved industrial hashish companies.
- The Legal professional Normal points a written opinion by means of the method . . . that implementation of interstate hashish agreements won’t lead to “vital authorized threat” to the State of California primarily based on evaluate of federal judicial choices and administrative actions.
Quantity 4 may be very attention-grabbing. Mainly, if the California Legal professional Normal releases a authorized opinion that interstate hashish agreements won’t put California susceptible to lawsuits or arrests and prosecutions by the Feds, then these agreements will likely be efficient. Undecided if the California A/G’s workplace will stick its neck out like that, however it could if the political local weather is ripe.