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California cannabis farmers are now legal but they face lots of red tape

January 1, 2018

A farm of ready-to-harvest marijuana plants in Glen Ellen, Calif. California: Recreational use is legal from Jan. 1 Paul Elias

Jane Futcher and her wife, Erin Carney, were thrilled that California voters legalized cannabis a year ago. They loved the sense of community that came with long-underground growers coming together and shaping a legal marketplace.

But by May, the couple had enough. Despite ploughing nearly $15,000 into making the farm where they grew medical marijuana with a county permit comply with new state and local rules for recreational use, they scrapped it all, frustrated with the layers of bureaucracy and seemingly endless government edicts.

"It seemed like everywhere we turned there was a new regulation that was making it difficult," Futcher said.

Recreational use of cannabis will be legal for adults older than 21 in the state starting Monday. (Medical marijuana has been legal for years.) Along the way, an edgy, sexy industry has become beholden to reams of regulations and compliance issues - in other words, marijuana has become just another business in California, except that it remains illegal federally.

A year ago the Hollywood sign was vandalized to say "HOLLYWeeD." Damian Dovarganes
 

"It's like any other heavily regulated industry. Look at the pharmaceutical industry or the liquor industry. They're heavily, heavily regulated industries, and the cannabis industry is no different," said Cara Martinson, federal affairs manager for the California State Association of Counties. "It's a cultural shift, and that's what makes it interesting."

 

The change has not been easy, and some feel in limbo as the cannabis industry, which has been valued at between $5 billion and $7 billion, starts to take form. Australia is only just developing a legal medicinal cannabis industry.
 

To be above board, businesses must comply with regulations from the state and the city or county where they operate. The state's rules were only released in mid-November. San Francisco and Los Angeles approved theirs in December.
 

Local rules and regulations vary widely across the state. In some places, marijuana remains completely banned. In others, it won't be legal immediately.

 

Local rules and regulations vary widely across the state. In some places, marijuana remains completely banned. In others, it won't be legal immediately.
 

"On January 1, people are going to want to go out and buy cannabis," said Alex Traverso, spokesman for the California Bureau of Cannabis Control. "They're going to have to be patient in that not every place will be up and running."

 

Consumers won't be able to buy cannabis, or marijuana, in San Francisco until Thursday. Many involved believe it will be several months before the market starts to settle and availability will become much more widespread. The regulations will, in many places, continue to be tweaked.
 

"We're building an airplane while we're flying it," said state Sen. Mike McGuire, a Democrat who represents the northern coastal region of California, where many marijuana farms are located.
 

Cities and counties have instituted different rules on where businesses can locate, what signs and security are required, and how many businesses are allowed in town.

In San Diego, which has fully embraced the marijuana business, facilities must be at least 1,000 feet from parks and child-care facilities. Neighboring National City has banned all cannabis businesses. Los Angeles requires video surveillance of businesses.

But in some places, when business owners ask cities about their cannabis regulations, there are no answers.

"You get these very detailed questions from business operators that are way ahead of government on that and oftentimes you're like, 'hell, no one thought of that,' " said Joe Devlin, chief of cannabis policy and enforcement in Sacramento.

The state had just a few months to complete a monumental task: crafting regulations from scratch and merging into them an existing medical marijuana industry.

 

Licensing

 

The regulations had to touch every aspect of the cannabis business, including farming, water use, shipping, retail and consumption, and required the construction of an online licensing system.
 

California has issued about 200 permits for a variety of uses, including retail stores. They will be good for 120 days, after which a permanent license must be obtained. The state said more than 1,185 licensing applications have been submitted.
 

There has been ample criticism of municipalities, some of which have not finalized the regulations needed for a marijuana business to open. 

 

"At the moment you have counties that have either outright banned, you have counties that have no clue, you have counties that have a clue," said David Hua, founder and chief executive of Meadow, a medical marijuana delivery service.

 

Southern California Coalition, which advocates for the marijuana industry and has been working with cities and businesses ahead of legalization, said there is concern that not all businesses will be able to afford the costs of the new rules and regulations. There is worry that the system could fuel the black market that he said almost everyone wants to eradicate.
 

Los Angeles City Council President Herb Wesson said the city's system will make it easier to police illicit businesses. He believes Los Angeles will be able to accommodate the number of cannabis businesses it needs based on how the market bears out.

 

The Washington Post


Originally published here: http://www.afr.com/business/agriculture/crops/california-cannabis-farmers-are-now-legal-but-they-face-lots-of-red-tape-20180101-h0bx5o
 

 

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