Rift opens between the Brown administration and legislators over new marijuana laws in California

Patrons shop at Bud and Bloom, a Santa Ana marijuana dispensary.

April 14, 2017 12:05 AM PT

Reporting from Sacramento — A proposal by the Brown administration to revise marijuana laws in California is drawing backlash from lawmakers and police chiefs who say it would repeal rules approved by the Legislature two years ago and benefit the pot industry over the public.

Gov. Jerry Brown wants to merge medical marijuana regulations approved by the Legislature in 2015 with standards set by Proposition 64, an initiative approved in November by California voters that legalizes the sale of cannabis for recreational use.

The proposal, to be acted on in a budget trailer bill, may not win the necessary two-thirds vote of the Legislature in its current form, some key lawmakers say. If the rift results in a prolonged legislative stalemate, it could delay using Brown’s proposal in some state licensing that is required to begin in January, activists worry.

Law enforcement officials and legislators object that the administration proposal jettisons some provisions of the 2015 regulatory scheme, including a requirement that pot shops get permits from the cities in which they are located before the state will issue a license.

The Legislature’s bipartisan approval of regulations in 2015 was “one of the most significant accomplishments” of that legislative session, Assemblyman Ken Cooley (D-Rancho Cordova) said in a letter last week to Nancy McFadden, the governor’s top aide.

“To undo that work now in favor of a pork-barrel proposition run by the industry is antithetical to good governance,” wrote Cooley, a co-author of the 2015 law. “If the governor intends to move forward with this proposal, I will vigorously oppose the trailer bill and urge my colleagues to do so as well.”

The proposal also faces opposition from Ken Corney, president of the California Police Chiefs Assn.

“It’s shocking,” said Corney, who is Ventura’s police chief. “It’s a giveaway to the commercial marijuana industry which will not be good for California.”

The language proposed for the budget trailer bill by the state Bureau of Cannabis Control would, if adopted by the Legislature, become the framework the agency would use to draft regulations.

“The first priority of the administration in implementing the new regulatory system that will govern the cannabis industry in California is to protect public and consumer safety,” says a report by the bureau.

State law requires any change in Proposition 64’s execution to be approved by a two-thirds vote of the Legislature and be consistent with the intent of the initiative.

The Brown administration concluded that having different rules for medical and recreational marijuana would result in waste and confusion from using parallel systems.

The rules proposed by the administration include eliminating a requirement that those who grow and sell pot use a third-party distributor and not distribute it themselves. The provision was sought to provide accountability and prevent monopolistic businesses.

The 2015 legislation requires licenses for cultivation, manufacturing, retail, distribution and testing of medical pot. But medical marijuana businesses are allowed under the law to get licenses in only two of those categories — and they can’t be a distributor and a seller.

Proposition 64 and Brown’s proposal would allow one corporation to get licenses in all of the categories at once, except testing.

“Allowing for a business to hold multiple licenses including a distribution license will make it easier for businesses to enter the market, encourage innovation, and strengthen compliance with state law,” according to the 79-page Brown administration report.

Supporters of the legislation’s restrictions say Brown’s proposal could create a conglomerate with a competitive advantage.

“We think that having an independent distributor prevents a vertically integrated industry that is susceptible to monopoly control,” said Barry Broad, a lobbyist for the Teamsters union, which is seeking a role in the burgeoning industry.

Updates from Sacramento »

But industry leaders said requiring an independent distributor would increase the costs of cannabis for consumers, who might choose the black market as a result.

“We believe that open distribution is the best way to ensure that small- and medium-sized businesses have access to the market and consumers,” said Lynne Lyman, California state director of the Drug Policy Alliance, which co-wrote Proposition 64.

Cooley said the industry is behind provisions of Proposition 64 that allow businesses to dominate multiple levels of the industry, from cultivation to distribution to sales.

“It is so outrageous to take what was one of the notable accomplishments of 2015 and shunt everything into the framework of the self-interested, moneyed backers of Proposition 64,” Cooley said.

Another point of contention involves a requirement in the 2015 law that every medical marijuana sales and farming business get a permit from the state, which would issue a license only if the business first obtained a permit from its city or county. That provision was meant to guarantee that pot shops would not violate city ordinances because cities would have the power to shut them down by revoking a permit.

The administration’s proposal outlines a mandate for a state permitting process, but permits would not be required from local agencies.

“With 58 counties and 482 cities, it is unrealistic to expect the licensing entities to verify that each applicant is in compliance with any local law or regulation,” said the report from the Brown administration.

The Brown proposal would allow applicants for state licenses to voluntarily submit a local permit if one is available, arguing some cities will decide to issue permits. In cases where a city does not issue permits, the applicant for a state license must abide by local ordinances and submit an environmental impact report to the state.

“The Bureau [of Cannabis Control] will have to contact someone at the local jurisdiction to ensure that the potential licensee is in compliance” with local planning rules, said bureau spokesman Alex Traverso.

If a city bans marijuana farms or shops, the state would not issue a license, Lyman said.

But she said an alternative was needed where cities have not banned pot businesses but also do not have a license procedure.

“Otherwise we feared we would have large swaths of the population and the state without access,” she said.

Assemblyman Rob Bonta (D-Oakland), who co-wrote the 2015 marijuana law with Cooley, said he sees the proposals drafted by Brown’s bureau as a place to start negotiations. Asked if he could support the Brown budget trailer bill, Bonta said: “Not in its current form. It has to change.”

Assemblyman Tom Lackey of Palmdale, one of several Republicans who voted to support the 2015 law, shares the same concerns.

“There will certainly need to be some improvements before it is something I can support,” Lackey said. “Law enforcement and local governments have some serious concerns about the proposed changes by Gov. Brown’s administration.”

Lyman said she has heard that some lawmakers may try to obstruct the Brown proposals. But she said her side has a strong argument in the fact that Proposition 64 should be deferred to, because it was approved by 57% of the voters in the state.

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Twitter: @mcgreevy99

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