Pubdate: Thu, 29 Oct 2015
Source: North Coast Journal (Arcata, CA)
Copyright: 2015 North Coast Journal
Author: Grant Scott-Goforth


Locals React to California's New Medical Marijuana Rules

With a motion of his wrist, Gov. Jerry Brown signed into law this 
month a broad set of regulations designed to rein in the state's 
massive, unruly medical marijuana industry.

The regulations have been 20 years in the making, since California 
voters legalized medical marijuana in 1996 with the Compassionate Use 
Act, better known as Proposition 215. That act led to a fragmented 
and complicated set of local rules, uncertainties for regulators and 
law enforcers, continuing interference from the federal government, 
and a green rush in our own Emerald Triangle that has fragmented 
timber lands, damaged watersheds and built an important, albeit 
shadowy, economic driver for Humboldt County.

According to the Sacramento Bee, California medical marijuana sales 
total more than $1 billion per year, with more than 1 million 
physician-approved patients throughout the state. Local estimates of 
the marijuana trade are notoriously hard to pin down, but a nearly 
five-year-old study estimates Humboldt County's marijuana trade alone 
is worth more than $1 billion. There's no question it's grown in the 
last several years. Estimates of the number of farms within county 
lines vary from 4,000 to 10,000. Permanent and temporary laborers in 
the fields and dispensaries certainly number in the tens of 
thousands. Factor in soil producers, well drilling companies, garden 
stores, water trucking companies and the myriad other support 
industries, and it's clear marijuana plays an enormous role in the 
local economy.

For most of the last 20 years, the California Legislature was too shy 
to take up the issue of medical marijuana. But a softening of 
contemporary views on pot, legalization in other states in recent 
years and growing awareness of the industry's environmental impacts 
(and, perhaps, tax potential) led to a flurry of activity in the last 
legislative session.

Thousands of hours of staff time from North Coast Assemblyman Jim 
Wood's and Sen. Mike McGuire's offices, as well as Bay Area 
Assemblyman Rob Bonta's office, resulted in a package of three bills 
that narrowly passed deadlines in August before finally earning 
Brown's signature on Oct. 11. While each of the lawmakers submitted 
independent bills by the end of the legislative session, they were 
largely rewritten by Brown's staff, with language based on the originals.

In signing statements, Brown wrote that regulatory framework was 
"long-overdue" and would begin to stem the flow of damage to the 
state's natural resources.

"State agencies will begin working immediately with experts and 
stakeholders on crafting clear guidelines, so local government, law 
enforcement, business, patients and health providers can prepare and 
adapt to the new regulated system," Brown wrote.

"This new structure will make sure patients have access to medical 
marijuana, while ensuring a robust tracking system. This sends a 
clear and certain signal to our federal counterparts that California 
is implementing robust controls not only on paper, but in practice."

Indeed, some of the rush to implement medical marijuana laws can be 
attributed to expectations that California voters could legalize 
recreational pot, or adult marijuana use without a doctor's 
recommendation, as soon as 2016. Medical use regulations could 
provide a framework for laws if the state further eases restrictions 
on cannabis through several legalization initiatives that are 
currently being drafted.

As it stands, many of California's new medical marijuana bills won't 
go into effect until 2018. But what will regulation mean for the 
industry, which ranges from rural farmers to urban retailers? And for 
law enforcement agencies, and communities where marijuana plays a big 
role in the economic and social fabric?

That remains to be seen. It's a complicated issue, so the Journal 
asked local stakeholders what they like and don't like about the 
bills, and how they think regulation will affect Humboldt County. 
Before we get into that, though, let's look at some of the major 
points of the act, which regulates many aspects of medical marijuana 
from seed to sale.

The bills are light on details, assigning existing agencies to take 
on new roles in the oversight of growing, processing, transporting 
and selling marijuana. A state licensing system will regulate 
businesses operating in all aspects of the industry.

Bonta's Assembly Bill 266 creates a new Bureau of Medical Marijuana 
Regulation within the Department of Consumer Affairs, which will be 
led by a yet-to-be-named director. That agency - funded initially by 
a $10 million loan to be paid back through the collection of 
still-to-be-determined fees and taxes - will make many of the rules 
that will define how the business of medical marijuana is carried out.

One major difference in the state-mandated business model is the 
removal of requirements that marijuana dispensaries operate as 
nonprofits, an obligation that purportedly compelled 
patient-dispensary cooperatives but, some believe, is widely ignored.

Perhaps most germane to Humboldt County are cultivation regulations, 
which are spread between Wood's and McGuire's bills. State agencies 
will be tasked with setting forth environmental and public safety 
standards, such as allowable pesticides on cannabis crops and food 
safety preparation techniques for edible marijuana products. The 
Department of Fish and Wildlife will have authority to create 
environmental regulations, and the State Water Quality Control 
Board's recent pilot project to inspect grow sites for water 
diversion and runoff violations - and levy hefty fines against 
non-compliant grows - will be expanded to the entire state.

AB 243 creates four types of state cultivation licenses, each with 
sub-specialties for indoor, outdoor and mixed-light grows. The bottom 
tier licenses cultivation of up to 5,000 square feet of total canopy 
size on one site, or up to 50 mature plants on noncontiguous plots. 
The next tier covers grows with canopies of 5,001 to 10,000 square 
feet in size, and the largest allowable canopy size is one acre, or 
43,560 square feet. There is a fourth license type for cultivators 
who operate solely as nurseries and don't bring plants to maturity for harvest.

New regulations will also require a "unique identification program" 
that will note each plant and allow tracking of marijuana from farms 
through the retail process. The bill even suggests a zip-tie program, 
clearly resembling Mendocino County's lauded tracking program, which 
was shut down by the federal government years ago.

The bills allow for personal growing as well, as long as the patient 
doesn't exceed 100 square feet of cultivation area and doesn't sell 
or give the marijuana to anyone else.

In a victory for the Emerald Triangle's small scale growers, the 
bills allow for appellation rights, meaning cannabis can't be 
marketed using the name of a California county unless it was grown in 
that county. That, farmers say, will maintain Humboldt County's 
global reputation for producing high quality marijuana.

Beyond the unique identification program, the bills also allow a fair 
amount of local control when it comes to developing land use codes 
allowing cultivation, taxing the growth and sale of marijuana, and 
outright banning many machinations of the industry. In addition to 
needing a state license, businesses will have to show they comply 
with local ordinances. This has left Humboldt County scrambling to 
put together regulations of its own by March of 2016, a state 
deadline for local laws to go into effect.

The county's been working on an outdoor cultivation ordinance for 
about a year, a process that was largely driven by a private 
political action committee that handed over its draft to the county 
for consideration in September. County staff has since developed its 
own draft, and while there is debate about the final language of the 
law, both drafts are more restrictive of canopy size than the state laws.

The state bills also call for a comprehensive track-and-trace retail 
program, the details of which will be worked out by the Department of 
Food and Agriculture and the Medical Marijuana Regulation Bureau. The 
program is required to include strict labeling, testing, security and 
transportation policies.

A total of 17 business license types will be available to applicants 
for medical marijuana businesses, in an effort to separate the 
various aspects of the trade and prevent vertical integration, in 
which one company could control medical marijuana from seed to sale. 
Those licenses pertain to cultivation, manufacturing, testing, retail 
sales, transportation and distribution, and contain a complicated 
rubric that disallows businesses from holding more than one or two 
different types of licenses. For example, cannabis cultivators and 
manufacturers will no longer be able to sell directly to dispensaries 
- - they will have to move their product to a retailer through a 
third-party distributor. Distributors will be able to apply for 
transportation licenses, but no other types of license.

The most notable item removed from the bills as the governor's office 
refined them this fall was a statewide excise tax on marijuana sales, 
an omission Wood lamented and vowed he would reintroduce in the next 
legislative session.

So what does this all mean for the North Coast's marijuana industry? 
Much remains to be seen, but local stakeholders and members of the 
industry weighed in on the good, the bad and the missing.

The Advocate

Luke Bruner has been just about the most public face of medical 
marijuana in Humboldt County for the last year. Representing 
California Cannabis Voice Humboldt, he's spoken bombastically about 
the need for local regulations, has lobbied for Sacramento 
legislation and has been relatively successful in bringing marijuana 
industry types out of the shadows and into concert with other 
community stakeholders.

And he has high praise for the recent statewide bill package. "This 
is gold standard," he said. "This is the best that has been seen in 
any state so far."

The biggest successes, he said, were taking the water board program 
statewide and the appellation zoning, which could be critical for 
Humboldt cultivators to compete with big marijuana operations that 
could crop up in more farm-friendly parts of the state. "The days of 
dirty product from trespass grows going on dispensary shelves are 
over," he said, referencing the current hard-to-stop practice that 
hurts Humboldt's brand.

He said allowing local authorities to tax medical marijuana was also 
important, adding that the combined efforts of CCVH, Humboldt County 
supervisors and other advocates could be thanked for much of the 
local protection afforded by the bills.

The flipside to local control, Bruner lamented, is that counties and 
municipalities can choose to ban cultivation (even for personal use) 
and dispensaries outright, harming patients' ability to get medicine.

The Cop

Sheriff Mike Downey supports much of the bill, though he agreed that 
"no bill is ever perfect." He called the package "pretty 
comprehensive" and expressed relief that his agency, which has been 
operating for decades without clear state guidelines, will have more 
definitive space to work within. "I'm pretty tickled about that," he said.

Downey expressed concerns about the maximum allowable canopies, 
suggesting they were too high to ensure that marijuana remained in 
the proper medical channels.

He said he was fine with the cannabis industry falling under more 
civil enforcement from state agencies, though he said he's worried 
about how agencies like the state water board, Fish and Wildlife, and 
the Department of Food and Agriculture will fund their expanding programs.

Downey has concerns about people driving under the influence of 
marijuana, and hoped that expanding education programs - both for the 
public and his officers - will be afforded under the new regulatory 
bureau. Mostly, he's sitting back to see how this plays out. He's not 
sure how quickly growers will come into compliance or what changes 
new regulations may force on the county jail, and said, "It's hard to 
say what interdiction and eradication is going to look like in the next years."

The Environmentalist

"Too bad our Legislature is not driven by common sense. It is driven 
by reaction to emotions," said Ettersburg resident Robert "Woods" 
Sutherland. He's spent decades maintaining a fine balance between 
marijuana advocate and environmental protector, and said the recently 
approved package of bills "has things in it that only a policeman who 
just wants to block marijuana would like."

Among those, he said, are restrictions and increased penalties for 
doctors found to be writing excessive prescriptions for marijuana, a 
problem that he said is widely discussed but not really proven. But, 
he said, most doctors are already "terrified" of writing 215 
recommendations, and increased regulations might make physicians even 
more reluctant to consider recommending marijuana. With fewer 
healthcare providers willing to prescribe, it could be harder for 
legitimate patients to get prescriptions, he said.

More important, he said, would be for the legislation to figure out 
"how can we encourage the right doctors to do the right thing."

Sutherland also thinks the smallest tier of cultivation licensing, 
allowing canopy areas up to 5,000 square feet, is too large for a lot 
of the niche growers in the North Coast region, and suggested that 
there should be another, smaller-scale tier to make it easier for 
niche producers to come into compliance. The large canopy allowances, 
he said, are due to Sacramento looking at marijuana as a typical 
agricultural product. Some people have expressed gratitude for that 
perspective, but Sutherland said, because of the high price of 
marijuana, it simply can't be treated like any other agricultural commodity.

And, he worried, licensing the thousands of existing grows in 
Humboldt County - even if they come into compliance with state and 
local laws - would amount to the government embracing the widespread 
environmental damage that's occurring because of years of 
deregulation. "It's not true that all the environmental issues have 
been taken care of, by a long shot."

The Provider

"This is exciting. This should've happened a long time ago," said 
Mariellen Jurkovich, the executive director of Humboldt Patient 
Resource Center, a city-sanctioned dispensary in Arcata that's often 
been lauded as the model for responsible medical marijuana retailing 
in Humboldt County.

Jurkovich said HPRC is in good shape for when the regulations go into 
effect: The dispensary already tracks its marijuana from seed to 
sale, has its products tested for potency and contaminants and, 
because they've been operating in accordance with local law for 
years, it will be able to keep its cultivation and retail licenses.

While HPRC does grow some of its marijuana on site, what might change 
is its cooperative dealings with patients who sell products through 
the dispensary. "We deal with a lot of patient vendors," she said. 
"We're very interested in them getting to be legal. Because if 
they're not we won't be able to get product from them."

For dispensaries that don't grow their own marijuana, getting steady 
supplies for patients could prove problematic.

Cultivators will need to get into compliance and producers of 
extracts and edibles have to learn how to properly prepare, test and 
package their wares. People are going to need commercial kitchen 
facilities, Jurkovich said, and fast. And while Arcata may be ahead 
of the curve, with its recent approval of a medical marijuana 
innovation zone that could host grows, labs and kitchens, Jurkovich 
said other communities are going to have to scramble to get those 
facilities in place.

The Farmer

Struggles could lie ahead for Mendocino farmer Casey O'Neill, who 
grows marijuana through his company Happy Day Farms and is the board 
chair of the California Growers Association (formerly the Emerald 
Growers Association).

"It's a great foundation," he said of the new regulations. "But 
foundations can be used to build a happy home or a prison. It really 
depends on what we do from here."

He's thrilled about the licensing for small agriculture, the 
potential for appellation designations and the water discharge and 
diversion regulations going statewide.

But he's worried about small farmers being able to come into 
compliance, and said survival is going to require that they get 
organized into cooperatives. He'd also like to see a smaller farm 
tier for cottage-scale producers. "People are hopeful and fearful," he said.

Of personal concern for O'Neill is the seeming prohibition on issuing 
licenses to felons convicted of drug or fraud offenses, a clause that 
could preclude many people previously and currently involved in the 
marijuana industry from continuing in the field when it goes forward.

O'Neill has a marijuana conviction on his record, and has previously 
said he studied how to legally and responsibly grow marijuana while 
serving time. When the new laws go into effect, he's unsure if he 
will be able to obtain a license. The bill says the licensing 
authority can choose to conduct a review of an applicant's conviction 
and grant a license.

"From a personal perspective it's important," he said. "But it's more 
important from a larger societal perspective, because the history of 
prohibition has more negatively impacted people of lower income and 
minority communities."

The Lawyer

"Get lawful and don't think about it. Get lawful now." That's the 
advice former Humboldt County District Attorney Paul Gallegos is 
offering to local medical marijuana cultivators, producers and 
retailers. Gallegos spent 12 post-215 years as the county's top 
prosecutor before deciding not to run for re-election in 2014. Now 
he's helping businesses that are scrambling to come into compliance 
before the state regulations go into effect.

Why the hurry? Tucked into a passage in AB 266 is the following line: 
"The licensing authority shall prioritize any facility or entity that 
can demonstrate to the authority's satisfaction that it was in 
operation and in good standing with the local jurisdiction by January 1, 2016."

What "prioritize" means, exactly, remains to be seen, Gallegos said, 
but it would be a boon to the local industry to be fast-tracked for 
state approval. That means businesses must show they have a voting 
board, keep records, pay taxes and are compliant with local rules and 
zoning - or are at least moving toward compliance.

Gallegos said regulation is both a "tremendous challenge and 
opportunity for this community." Crucial to getting the industry into 
compliance, he said, is statewide encouragement, not penalties. 
That's taking the form of the apparent availability of running a 
for-profit medical marijuana industry. But that's not a certainty 
yet. "There are some people who are trying to challenge that," 
Gallegos said, and for now he's advising people to continue to 
operate as a nonprofit.

Gallegos thinks it's possible for Humboldt County's industry to come 
into compliance. It'll take time, creativity and hard work, he said, 
but it's possible. "You have to be an active participant in your own 
rescue," he said.
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MAP posted-by: Jay Bergstrom