Cenedella.de

Patient Advocate since 1977.

2018 is approaching, meaning the state of California will be REGULATING cannabis!

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https://www.cannabisbusinessexecutive.com/2017/02/voting-on-cannabis-regulation-in-los-angeles-measure-m-or-measure-n/

In my previous corporate life I was never exposed to, nor realized the complexities of public policy, politics, and true government regulation. Three years later I read senate and legislative bills like I did with the Girl with the Dragon Tattoo series, just waiting for the next! I will preface this with the fact that I’m not a lawyer nor was training in law (beyond high school constitution team) and my expertise is in business process improvement, finance and accounting.  This article is meant to give a business view and break down of cannabis regulation in the City of Los Angeles.

We voted on medical marijuana back in 1996, 19 years later Gerry Brown signed into effect 3 bills to regulate cannabis, and hopefully by January 1, 2018, the State of California will begin to issue licenses out under the Medical Marijuana program.

There are many obstacles that cannabis operators in California continue to battle, and that is the fact that to apply for a MCRSA / State cannabis license, a cannabis operator must received permission from the local government.

Cannabis Regulation in the City of Los Angeles

Los Angeles has a thriving cannabis community, and it has for quite some time. If you just google “Cannabis Los Angeles” you’re screen will be filled with articles and sites dedicated to the cannabis community, from infused dining experiences to L.A. Weekly’s pot guide. However, the paradigm between end consumer, the trail blazers of the cannabis movement and the City of Los Angeles law enforcement and L.A. City Council is one that has evolved just as turbulent as a relationship with a crazed in-law. Here’s a quick timeline overview, you can read something more detailed here:

1996-2014

  • 1996: California Voters Passes Prop 215 to legalize medical cannabis, making California the first state to legalize medical marijuana. Being the first, the wording is super grey not giving a ton of guidance on many things that regulators are demanding 20 years later (packaging, testing, licensing structure, etc).
  • 2003: Senate Bill 420 is passed. SB 420 clarifies a few things in prop 215 such as the scope of the law and which government agencies were in charge of enforcing it.
  • 2003-2007: Pot shops and green crosses pop up at an exponential rate in the City of Los Angeles.
  • 2007:  The Medical Marijuana Interim Control Ordinance (ICO) was passed as the City of Los Angeles’ temporary moratorium on new medical cannabis dispensaries. Existing dispensaries had a deadline to register with the city to obtain this filing. The ICO was intended to control the proliferation of dispensaries while the City of Los Angeles developed permanent regulations for medical cannabis uses.
  • 2010: Adult Use of Cannabis is on the ballot in California and does not pass.
  • 2013: On January 29, 2013, by an 8-4 vote, the Los Angeles City Council voted to refer Measure D to the ballot.  (Note: there were a few other ballot initiatives related to cannabis regulation) Measure D allows the 135 dispensaries approved under the interim control ordinance of September 2007 to stay open, if they follow the city’s rules on proximity to schools, churches and neighborhoods. Prop D prohibits to entrance to the market.

2015 – present

  • November 2015: MCRSA (Medical bills to regulate cannabis) is signed by Gerry Brown.
  • 2016: Cities and Counties ban cannabis and work out local regulations. Cities like Dessert Hot Springs, Coachella Valley, and Adelanto open their arms to cannabis operators.
  • 2016: AB 2385 is initiated. AB 2385 would abolish the creation of local MCRSA licensing, permitting, or authorizations in L.A. while enforcing the status quo of Proposition D. This was later vetoed by the CA Governor. 
  • November 2016: California passes Prop 64, allowing the adult use of cannabis opening up California to new capital.
  • November 2016: City of Los Angeles sponsors ballot initiative M for March 2017
  • Present Day: Everything beyond the Pre-ICO dispensaries is illegal in Los Angeles

Measure M and Measure N

Los Angeles voters will be voting on two measures for cannabis regulation under the medical program, which are Measure M and Measure 9. Below is an overview of both programs. You can read all of the city initiatives here.

Measure M Measure N
 Sponsored by:  City and Los Angeles Major Citizen-sponsored initiative.
 Prop D:  Repeals and Replaces Prop D. Those that have have a pre-ICO/Proposition D authority, may continue to operate within the City at the one location identified in its original or amended business tax registration certificate until they apply for and receive a final response to their application for a City permit or license for commercial cannabis activity being conducted at that location. This initiative would grant priority licensing and other preferences to dispensaries operating under Proposition D if they are in substantial compliance with the law.
License Types
  • Cultivation,
  • Manufacturing
  • Lab
  • Distribution
  • Transport
  • Retail
  • Cultivation,
  • Manufacturing
  • Lab
  • Distribution
  • Transport
  • Retail
 Tax Structure:
  • 10% gross receipts from adult use sales
  • 5% Gross Receipts from sales of medical cannabis
  • 1% Gross Receipts from transport, testing or research of cannabis and/or cannabis products;
  • 2% of gross receipts from manufacture or cultivation
  • 2%  of gross receipts from the commercialization of cannabis and/or cannabis products not specifically taxed under the rates specified above.
  • 8% gross receipts from adult use sales
  • 6% Gross Receipts from sales of medical cannabis
Limit to licenses? No. Barriers to entry are low. The measure limits permits to 135 cannabis establishments
Advertising Allows parents and teachers to help determine how to keep children from being exposed to advertising of marijuana products Initiative Ordinance N would permit advertising of marijuana products where it can be seen by children and teens.
Other Thoughts Gives a lot of room for the community to act and shape the law. Local areas will decide how many retail shops they want, law enforcement will work on drugged driving rules, and provides business leaders the ability to recommend how to limit the number of marijuana stores in commercial areas to avoid market saturation.  Initiative Ordinance N would create a monopoly on licenses to sell marijuana and freeze out any competition.Will grant 135 dispensaries a 10 or 10A license and allow them to apply for a cultivation license prior to other cannabis operators.
Expected Date of Implementation September 30, 2017 (Which is a Saturdaybtw)  January 31, 2018 (which is a Wednesday) is when the city would begin granting licenses.

The City of Los Angeles recommends that voters choose Measure M.

Author: Cenedella.de

Philip J. Cenedella IV - The 2-continent Cannabis Consultant First and foremost, I am a Patient Advocate since 1977. I have also served as a Board of Director for the World Trade Center San Diego, as a Lead Consultant for Deutsche Telekom's Executive Board, Founded the Dayton Human Trafficking Accords and have been a C-Level Business Development Executive for over 3 decades. From California, now residing in Germany and providing professional business development services to firms from the USA and Europe. Call +1.888.206.3264 Skype: philip.j.cenedella eMail: phil@cenedella.de

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