The Budget Trailer Bill — What does it mean?

Confused about how state government will implement a new regulatory system that will govern the cannabis industry in California?

So are we.

Fortunately our partners at the California Growers Association have been working diligently with state agencies to bring some light to the issues facing cultivators statewide in the next couple of years.

The Brown Administration has been working hard to protect public and consumer safety while creating regulations for licensing and permitting all cannabis business in the state, and  in 2015 it signed the Medical Cannabis Regulation & Safety Act into law to do just that.

Then add AUMA to the mix. The Adult Use Marijuana Act, or Prop 64, and which overlays a separate and different regulatory structure for the cannabis industry than MCRSA, was approved by voters in Nov and has made implementing any regulations a lot more complicated.

Enter the Trailer Bill Proposal.

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.

On Tuesday April 4, the Brown administration revealed the long awaited budget trailer bill proposal language. CalGrowers has been working toward this legislation with the governors administration and legislative leadership since right after the election on November 15th.

The budget trailer bill can be found by clicking here

California Growers Association’s initial statement on the legislation can be found here.

The proposal includes several of CalGrowers’ 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. This is great news for small, heritage growers!

One of the points that also affects us locally is a 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 CalGrowers will fine tooth comb the proposal. Stay tuned for more updates In its initial review and analysis CalGrowers 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.

As a member of the Alliance, you are also a member of CalGrowers and we 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. We expect many changes to come. We hope you are ready!