January 20, 2017

2017 is promising to be another exciting year in Sacramento, particularly as it relates to the cannabis industry. Regulations need to be drafted for medical and recreational cannabis, and reconciliation should be done between Proposition 64 and the Medical Cannabis Regulation and Safety Act (MCRSA). December 5, 2016 marked the beginning of a new two-year legislative session with several fresh faces added to both the California State Assembly and Senate, and legislators have wasted no time introducing bills that will affect a multitude of industries, with cannabis being no exception.

Here’s a rundown of the cannabis-related bills that have been introduced so far:

  • AB 64 (Bonta, et al): AB 64 tweaks some language in the MCRSA and begins to reconcile differences between the medical laws and Proposition 64. The main provisions clarify the allowance for medical and recreational delivery-only dispensaries, add marketing and advertising restrictions to the MCRSA, and state that collectives may operate either for profit or not for profit.
  • AB 76 (Chau): This one is a spot bill – i.e. a placeholder bill that does not have any substantial language in it yet – that states its intent to introduce a law to prohibit the marketing of adult-use cannabis to children.
  • AB 171 (Lackey): AB 171 makes a minor change to reporting requirements that are already mandated on the state cannabis licensing authorities (i.e. Bureau of Medical Cannabis Regulation [BMCR], California Department of Food and Agriculture, and State Department of Public Health), adding in a requirement to report the number of conditional licenses issued.
  • AB 175 (Chau): AB 175 modifies packaging and labeling requirements for edible cannabis products. It requires manufacturers to submit all new or modified packaging and labeling for edibles to BMCR for compliance checks and approval before use.
  • SB 64 (Hill): This bill bans smoking and ingestion of cannabis products while driving, boating, flying, or operating a vessel, and imposes an infraction or misdemeanor as a penalty.
  • SB 148 (Wiener): Named the Cannabis State Payment Collection Law, SB 148 is a reintroduction of AB 2149 from 2016, which never made it to the Governor’s desk. The bill allows the Board of Equalization or a county to collect cash payments for cannabis-related businesses on behalf of a state agency under certain conditions.
  • AB 96 and SB 72: Budget bills that will make appropriations to support the state’s budgetary actions in 2017-18.

In addition to these bills, Governor Brown revealed his proposed budget earlier this month, allocating $52.2 million to fund cannabis regulation in 2017-18.

Another significant change is that the Democrats now hold a supermajority in both houses, which could have a major impact on the types of legislation that get passed this year. How does this affect cannabis? A 2/3rd vote threshold is required for bills that include things like taxes and urgency clauses (which allow for bills to take effect immediately), and is also required to amend some parts of Proposition 64. The big question is how will the Democrats use this potential power and how will bills affect businesses and consumers? Right now, it’s too early to tell. It will depend on a variety of factors: the level of involvement by the new federal Administration on state cannabis policies, how the state Administration and Legislature decide to reconcile Proposition 64 and the MCRSA (which is still unclear), and, of course, politics. The one thing you can be sure of is that these bills won’t look the same in a few months and that 2017 will be another one for the cannabis history books.

Disclaimer: This article has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice.