Budget Trailer Legislation Unveiled: CGA Update

Prepared by CGA Executive Director, Hezekiah Allen:

Yesterday evening the Brown administration revealed the long awaited budget trailer bill proposal. We have been working toward this legislation with the governors administration and legislative leadership since our first meeting right after the election on November 15th. It is good that it is finally available for review and I want to thank the administration for briefing us on the legislation yesterday.

The budget trailer bill can be found by clicking here. Let the dialogue and debate begin! 

The proposal seeks to bridge the gap between the regulatory frameworks in the Medical Cannabis Regulatory and Safety Act (MCRSA) and the Adult Use of Marijuana Act (AUMA) while providing operators the ability to distinguish themselves as either medical or adult use. Our initial statement on the legislation can be found here. The proposal includes several of our priorities:

  • Cultivation limits: We strongly support the cultivation limits proposed in the trailer bill. These limits are consistent with the MCRSA and will ensure unlimited Type 1 and 2 licenses with limits on Type 3 licenses.
  • Appellations: The appellations program is blended for the best of both worlds. The program remains mandatory (AUMA) and is to be implemented by the CDFA (MCRSA). The program will be implemented by 2020!
  • Environmental protections: Consistent with SB 837 last year, this trailer bill puts the environment first. We are pleased to see the provisions from the 2016 budget process included in the consolidated regulatory framework.
  • Testing standards: the trailer bill removes problematic provisions and relies on the bureau to develop scientific standards rather than the overly prescriptive language in current law.
  • Cottage Cultivation: The Type 1C Cottage cultivation license is included in the consolidated licensing structure.

We are also encouraged by the inclusion of streamlined CEQA for local governments. The streamlined CEQA process will encourage local government to enact ordinances and ensure more businesses are able to participate.

Over the next few days and weeks we will fine tooth comb the proposal and share our analysis with you and with other stakeholders around Sacramento and throughout the state as we seek to improve and strengthen the legislation before the budget is finalized this summer. In our initial review and analysis we did identify a few priority concerns:

  • Unlimited vertical integration: The proposal allows for unlimited vertical integration with no restrictions on types of licenses that can be held or the number of licenses that can be held. We agree with the administration that “overly restrictive vertical integration stifles new business models and does not enhance public and consumer safety.” However, no restrictions on vertical integration is equally problematic. We must find a better balance and ensure a level playing field for all businesses–even the ones who can’t afford multiple licenses. The trailer bill must strike a better market between a free and fair market.
  • No provisions for delivery services: Over the last few years we have worked to negotiate language that would allow delivery services to participate in the regulated marketplace while still requiring them to comply with regulations. These “non-storefront” dispensary provisions have support from all the major stakeholders and we are disappointed they were not included in the initial proposal. The trailer bill should ensure a path forward for all cannabis business types.
  • Residency requirements are removed: Residency protections are common in states that have regulated cannabis. Experts in California were already concerned at the lack of protections in MCRSA. Current legislation proposes to expand and strengthen the residency protections. We are seeking clarification on why this change was made. The trailer bill should provide adequate timelines for California businesses to get licensed. 

If you have questions or concerns about the Budget Trailer Bill please email policy@cagrowers.org. I will make sure your input is included in our conversation as we seek to improve this proposal. There is a lot of work still to do to clarify and improve the proposal. I expect many changes to come. I hope you are ready! This year is going to be full of hard work. We need to work together now, more than ever.