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Medical Cannabis Regulation Passes Two Key Committees

July 20, 2015
On July 15, AB 266 (Bonta, Cooley, Jones-Sawyer and Lackey) passed the Senate Governance and Finance Committee by a vote of 4-0, and the Senate Health Committee by a vote of 8-1.
The League and the California Police Chiefs Association continue to support this legislation due to its strong local control provisions, including dual licensing, which requires both a local permit and a state license for a marijuana business to operate legally within California. Permits will be issued according to local ordinances, which will unconditionally protect jurisdictions that have enacted bans.

The League and Police Chiefs’ continued support of the bill will depend upon the outcome of negotiations pertaining to disqualifying felonies for licensure, restrictions on vertical integration, and the regulation of Uber-like delivery services for marijuana. 
Disqualifying Felonies
Debate continues over the proper universe of California felonies that will disqualify an applicant from being licensed to operate a marijuana business under the bill. The Police Chiefs, joined by the League, have been adamant that a range of drug felonies, including those involving marijuana trafficking, should be on that list.
Vertical Integration
This issue involves the degree to which cross-licensing will be allowed, preventing a single business entity from being licensed in cultivation, transport and dispensing, i.e. all the major instrumentalities in the stream of commerce affecting medical cannabis. AB 266 already contains a strict prohibition on operators of testing labs being licensed to perform any other activity, as well as transport licensees being restricted from other activities. Discussions are ongoing as to whether and to what degree to impose further limitations.
Uber-like Delivery Services
AB 266 already specifies that delivery services may only operate in areas where they are explicitly authorized by local ordinance, but the issue of Internet-based technology platforms linking patients with potentially unregulated, unlicensed delivery services is one that must also be addressed in the bill. 
The bill will now go to the Senate Appropriations Committee, with a hearing date pending in the third week of August.

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