Pubdate: Mon, 12 Dec 2016
Source: San Jose Mercury News (CA)
Copyright: 2016 San Jose Mercury News
Author: Lisa M. Krieger
Page: A1


Amid celebration at Emerald Cup fest, there is angst about regulatory

SANTA ROSA - Amid the euphoria of this weekend's famed Emerald Cup
weed fest, there was this creeping buzzkill: the glacial rollout of

Right when it seems like "The Great Pot Moment" is upon us, it turns
out there are a lot of really tough regulatory issues to resolve
first, according to government and industry experts who sketched out
all the thorny challenges at the two-day conference, competition and
harvest celebration at the Sonoma County Fairgrounds. And
implementation of commercialization could be delayed a year until
2019, said insiders.

Proposition 64, approved by voters in November, promised that by Jan.
1, 2018, a recreational smoker could stroll into a licensed store to
buy a favorite strain of White Widow or OJ Kush. A medical marijuana
law, the Medical Cannabis Regulation and Safety Act, is moving along a
similar timeline.

For the 23,000 cannabis aficionados at the festival, even that wait
seems unreasonably long, considering people have been weaving hemp
into loincloths for thousands of years.

What's the challenge? Just as the prohibition on cannabis was
complicated, so is the process of ending it, experts said.

Some of the challenges are created by the different structures of the
two cannabis laws, said Lori Ajax, chief of the California Bureau of
Medical Cannabis Regulation.

Licensing system

The Medical Cannabis Regulation and Safety Act consisted of three
bills enacted together in September 2015. They create a comprehensive
state licensing system for the commercial cultivation, sale,
distribution and testing of medical cannabis. The state has said it
will need until January 2018 to set up the necessary agencies and
regulations to begin issuing licenses.

The two initiatives are different, and may need to be reconciled. They
take different approaches to issues ranging from ownership and
residency requirements to timelines and license categories, said
Assemblyman Jim Wood, who represents California's 2nd Assembly
District, which includes the famed "Emerald Triangle" growing region.

"It is a very real challenge," said Wood, DHealdsburg. "Do we have two
systems that move in parallel or one unitary system that combines the
two? My hope is that we can all sit down and work out the

There also are tax disputes. While the medical marijuana law levies
only a retail tax, Proposition 64 applies two taxes to legal
marijuana: a 15 percent tax on the retail price and a cultivation tax
of $9.25 per ounce for flowers and $2.75 per ounce for leaves and
stems trimmed from the plant.

The cultivation tax is fiercely opposed by growers, who say they
shouldn't be taxed on trimmings that might get tossed, never making it
to market. Instead, they are advocating a tax when all marketable
product is brought in for testing. But there isn't much flexibility,
because the language of a proposition may be changed only by a
two-thirds vote of the Legislature.

Then there's the issue of technology platforms. The state needs not
only new licensing software but also a "track and trace" program to
follow cannabis from seed to sale - through processing, testing and
distribution. Neither currently exists.

Creating two new tech platforms, from scratch, "is very ambitious,"
said one legislative staffer.

"We expect to see them run some legislation from the governor's office
that could extend it for at least one year," said Nate Bradley,
executive director and co-founder of the California Cannabis Industry

Finally, there's this: President-elect Donald Trump. While he's
supported states' rights, and California has vowed to defend its laws,
his nomination of cannabis opponent Sen. Jeffrey Sessions, R-Ala., for
attorney general has created some concern among some counties and
cities that are wary of inviting federal Drug Enforcement Agency raids.

"A lot of local governments are cautious and want to see which way it
goes, see if federal agents come close them down," said Bradley.

"The Trump element was a monkey wrench no one saw coming," he added.
"He is such a wild card."

It is important for California to implement a state program
expeditiously to help fend off federal prosecution, said Amanda
Reiman, manager of marijuana law and policy at the Drug Policy Alliance.

Feds' role

During the Bush administration, "the feds came in because there was no
state license to hold up and say you were compliant," Reiman said.
"That's why it is so important for California to definitely implement
a state licensing program."

Some cities, such as Oakland and Santa Rosa, are ready to get going,
and don't want to wait while the state figures out a strategy.

A legislative fix or regulatory change would give local governments
the ability to issue commercial retail licenses, rather than wait for
the state, said Bradley. Cities may already regulate medicinal
marijuana; this would give them permission to regulate recreational
weed as well.

The fates of many growers, processors and dispensaries hang in the
balance. California is the world's sixth-largest economy, outpaced
only by the U.S. as a whole, China, Japan, Germany and the United Kingdom.

Sales are expected to bring an additional $1.5 billion flooding into
the marijuana market. That number will swell to nearly $4 billion by
2020, according to the latest report by New Frontier Data and ArcView
Market Research.

After slogging through a weekend of bureaucratic concerns, the Emerald
Fest crowd toggled to party mode on a celebratory Sunday afternoon
that included contests for best pot and growing practices: farming,
extracts, oils, topicals, tinctures, and the crowd favorite - flowers.

Cheers erupted for this year's first-place winner in the flowers
category: "HHF 220," derived from a strain called Skittlz. The flowers
of the Humboldt County buds measured 1.8 percent terpenes, the
fragrant oils that give cannabis its aromatic diversity, and 19
percent THC, the psychoactive ingredient.

"Bright orange and huge, A plus!" announced the judges. "Fruit Loops
with Grand Marnier, it is loud, succulent and eye-opening, with a
sweet and tasty personality!"

Declaring victory, the audience hugged, shared some fresh joints,
danced to the throb of reggae, and then packed up to head home to
their distant warehouses, greenhouses and fields.
- ---
MAP posted-by: Matt