Legal Alerts Jun 27, 2017

New California Law Simplifies and Harmonizes Medical and Recreational Cannabis Regulations

Bill Collapses Two into One Regulatory Scheme

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Earlier today, Gov. Jerry Brown signed SB 94 into law to create a single regulatory scheme that addresses both medical cannabis and recreational cannabis. As a budget trailer bill, it is effective immediately.
 
Up until now, there were two separate licensing schemes for medical cannabis and recreational cannabis: the Medical Cannabis Regulation and Safety Act (MCRSA) and the Adult Use of Marijuana Act (AUMA).
 
MCRSA was passed by the Legislature in 2015 and it created a new regulatory scheme to license and regulate the medical cannabis industry.
 
AUMA was passed by the voters in 2016 and it created a new regulatory scheme to license and regulate the nonmedical cannabis industry.
 
While the two share similarities, there were a number of notable differences, including whether the State can require an applicant to provide proof of a local permit to operate. Under MCRSA, the applicant had to provide proof of compliance with local regulations, whereas AUMA prohibited the State from requiring an applicant to provide proof of a local permit to operate (however, the State could not issue a license where doing so would conflict with a local ordinance).
 
In an effort to harmonize the regulatory schemes envisioned by MCRSA and AUMA, SB 94 repeals MCRSA, includes certain provisions of MCRSA in the licensing provisions of AUMA, and creates a single regulatory scheme known as the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA).
 
In addition to harmonizing MCRSA and AUMA, MAUCRSA adds language to allow local jurisdictions to exercise control over cannabis-related operations. Under AUMA, cannabis cultivators were required to generally comply with local land use laws, but MAUCRSA specifically adds language requiring cannabis cultivators comply with current building and fire safety standards. While the State imposes default regulations for building and fire safety standards, local jurisdictions have the authority to impose more stringent regulations based on local climatic, geological and topographical conditions. Accordingly, local jurisdictions may adopt amendments to the default building and fire safety standards to impose additional restrictions on means of cannabis cultivation. This is an important development that accounts for differences in local conditions that will allow local jurisdictions to regulate cannabis cultivation accordingly. For example, local jurisdictions with arid climates will have building and fire safety standards that differ from local jurisdictions that experience excess rainfall.
 
Another difference is that under MCRSA, local authorization (e.g., permit, license, etc.) was a prerequisite for obtaining a state license and the applicant was tasked with proving compliance with local laws. Under AUMA, applicants were required to comply with local laws, but the State had to determine whether the applicant was compliant. MAUCRSA requires that the State work together with local agencies to compile a database of local laws and allows applicants to voluntarily submit proof of local authorization. While this scheme eases the burden on applicants, it could lead to increased administrative costs for local agencies.
 
MAUCRSA further requires that local jurisdictions notify the State whether an applicant is either compliant or non-compliant with local ordinances. Failure to respond to the State’s inquiry within a 60-business-day period results in a rebuttable presumption that applicants are in compliance with local ordinances. Accordingly, local jurisdictions must be vigilant in reviewing inquiries from the State.
 
If you have any questions about this legislation or how it may impact your agency, please contact the authors of this Legal Alert listed to the right in the firm’s Municipal Law practice group, or your BB&K attorney.
 
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Disclaimer: BB&K Legal Alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.

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