6:00AM PST on the first day of 2018 marks an historic timestamp—the state of California officially became the world’s largest legal-cannabis market, and the 6th state to open up the sale of recreational cannabis (Colorado, Washington, Oregon, Nevada, and Alaska are the others). Being the most populous state, California adds a ton of volume to a growing industry and opens up the entire U.S. West Coast as the land of legal cannabis.
California has had 20+ years with legalized medical cannabis, and is known for its less-than-stringest marijuana laws in general, but this official move makes buying cannabis for anyone 21 and over a breeze… or does it? Cali residents may not need a medical cannabis card anymore, but if you’re expecting a weed-for-all, you might need a reality check. After all, “legal” also means “rules.”
And there are a lot of them! MMJdoctor.com summarizes the Proposition 64 rules well HERE, and if you really want to dig into the massive rulebook from the state’s Bureau of Cannabis Control, check out these pages:
Regulations for shops, distributors and testers (PDF)
Regulations for cultivators (PDF)
Regulations for manufacturers (PDF)
For now, here are some interesting “nuggets” (see what we did there?):
California isn’t turning into the American Amsterdam anytime soon. State law does not allow smoking cannabis in public, and doing so is subject to a $100-250 fine.
When it comes to cannabis and driving, it’s pretty much the same as open-container laws for alcohol—you can’t be smoking while driving, and your cannabis products should be sealed in their packaging. There still isn’t a definitive method to assess cannabis impairment—though people are apparently hard at work on this—but for now, if you get stopped for impaired driving and a blood test shows cannabis in your system, you can be charged just like you would for a DUI.
Believe it or not, even if it’s in CA, you can’t carry or consume cannabis on federal lands, like national parks. So much for smoking that joint in Yosemite!
You also cannot bring cannabis across state lines, even if it’s crossing into another cannabis-legal state.
While cannabis may be state-legal, it doesn’t necessarily fall outside drug-testing regulations. The 2008 Supreme Court ruling that employers can fire people for failed marijuana screenings still stands, in spite of state law; but Proposition 64 also dictates that employers are to use their own values and judgments in deciding on drug policy. They can so choose to remove marijuana from the common drug-test panel (which also tests for cocaine, PCP, opiates, and amphetamines). Of course, federal agencies and transportation companies still need to defer to fed regulations, which still label cannabis a Schedule 1 controlled substance.
When it comes to the legitimacy of cannabis sellers, there are now many ways to track them. Check out the Bureau of Cannabis Control’s online database HERE. You can track cultivators via the Department of Food and Agriculture’s CalCannabis Division portal HERE. And for manufacturers, the Department of Health is working on a Manufactured Cannabis Safety Branch online database as well.
Is there still any point in getting doctor recommendations or cannabis cards post 1/1/18? Well, yes—Californians with medical cards will definitely have some advantages in this new space. For one thing, they are not subject to the 8%-ish sales tax that will be added to already-heavily-taxed cannabis products. Card carriers also gain access to more potent products, and a wider range of them. When it comes to THC, they can buy products containing up to 2,000 mg, whereas 1,000 is the legal limit on the recreational stuff. They are also allowed to carry more at a time (a half pound vs. an ounce) and can grow more than the six-plant state legal limit at home.
One thing we really like about the new CA cannabis laws is what they mean for quality control—the new order requires that all cannabis products sold in CA be tested for purity, tracking pesticides and other contaminants, and that they be tested for potency and labeled explicitly with their levels of CBD, THC, and other cannabinoids and active compounds. CA is also setting some new limits on THC content in some products, like edibles, which must be portioned out with no more than 10 mg THC per serving and no more than 100 mg for the total package
Some of these rules won’t be seen in effect until July, as the state has given shops six months to sell off noncompliant inventory (as long as the products have warning labels). But by summer 2018, CA cannabis products should meet these new purity and testing standards.
One thing to be aware of is that with these new laws come new state and local business regulations and the requirement of new business licenses. CA was scrambling to get this all together in the months leading up to 1/1/18, so it’s not like all medical dispensaries automatically went recreational as of the new year. Different licenses are required to sell medical or recreational cannabis, and cities actually determine the issuance of these licenses. Many CA cities still aren’t down with recreational legalization, so some medical dispensaries might stay medical, while medical dispensaries in cities that are fine with it (LA, for one) get approval to sell both classes of cannabis when their new licenses come through.
A big thing to watch now will be pricing. Expect cannabis costs to fluctuate now that legalization has kicked in, and expect them to be soaring at first. New taxes are a part of this new picture, and businesses will have additional costs associated with compliance to the new regulations—these likely get passed to the customers. A special whopping 15% tax will be added to cannabis sold in CA, and recreational cannabis will be subject to the 8% CA sales tax on top of that. Local governments that regulate businesses can also impose another 5-10% tax. Oh, and hey, don’t expect to pay for your cannabis with plastic—most licensed shops are cash-only, at least for now.
This sounds pretty grim, but historically speaking, prices should settle over time as the CA market adjusts. In Colorado, the wholesale price of marijuana has dropped about 40% since early 2016, while in Washington, prices for recreational cannabis halved over the year after it was legalized in December 2014.
Watch out for the possibility of competition between underground/black market sales and legal ones, at least at first with the price spikes—we’ll venture a guess that there will be a number of buyers going underground in an effort to save some money before cannabis costs rebalance; but at the same time, state cannabis tax dollars are being earmarked for use in cracking down on nonlicensed sales. The New York Times states, “Legalization here will test whether that vast black market of growers, many of whom have been reluctant to join the legal market, will come out of the shadows.” Let’s see how this all shakes out, no pun intended.
One final point of interest—you can expect a lot of new interest around starting a licensed CA cannabis biz. State agency workshops detailing the process have had thousands of people lining up for attendance during these last few months. CNN reports that the CA cannabis business is estimated to reach $7 billion in the next few years, which is more than the $6.6 billion that was the 2016 value of the entire U.S. cannabis industry.
And let’s not all forget that cannabis is still technically illegal, and that the federal government is still at odds with the passing of state laws. Some of the powers-that-be in the White House are still looking for ways to crack down on cannabis culture.
There’s no shortage of resources for those who want to learn more about what’s been happening in CA. A good place to start is the California Cannabis Industry Association, and by checking out the links shared above.