California Cannabis Industry Association Policy Conference

McAllister Garfield lawyers Sean McAllister attended the second annual California Cannabis Industry Association (“CCIA”) Policy Conference in Sacramento, California on March 7, 2017. CCIA is the lead cannabis industry trade association in California. McAllister Garfield sponsored the event and has been a CCIA member for multiple years now. In addition to the nearly 500 participants from the cannabis business community, the event brought together the directors of all the relevant California state licensing agencies, including Lori Ajax at BMCR and Amber Morris of CalCannabis.

Of particular note was Lori Ajax’s announcement that the draft rules for the new medical cannabis regulatory system are expected to be released in early April 2017 and they will consist of “hundreds” of pages of new rules. In addition, Ms. Ajax noted that the state is likely to grant provisional or temporary licenses to existing operations to allow them to continue operating as of January 1, 2018. Other important rules were discussed including the expected rules around pesticide use and testing. Finally, the importance of a local license was reiterated over and over. Cannabis businesses in California need to start at the local level to ensure their operations will be allowed by the locals before seeking a state license.

On the same day as the CCIA policy conference, voters in the City of Los Angeles approved Proposition M, which for the first time authorized and directed the City Council to adopt regulations permitting marijuana businesses within the City. While some cannabis businesses had been granted limited criminal immunity under Proposition D in 2013, the City had never granted specific cannabis business licenses and arguably all 1500 dispensaries in the City could be considered unlicensed. The passage of Proposition M will trigger a rulemaking process that the City hopes to complete by the end of the year in order to be ready to issue licenses in 2018.

California is the largest cannabis market in the US, with a statewide market expected to reach $7-10 billion the coming years. In Los Angeles, the size of the cannabis market is expected to be twice the size of the entire state of Colorado. There will be thousands of companies competing to establish operations in California in the lead up to 2018, when the state will begin issuing medical and adult use licenses to operators. With four lawyers licensed in California spread out between San Diego, Los Angeles, and the Bay Area, McAllister Garfield is ready and able to assist clients in solidifying their California operations or establishing a new business in the state. The Firm has already assisted out of state companies in the California market during this transition period and helped California companies get up and running in the current unregulated environment. The Firm expects to continue to grow with our clients as California goes through the transition to a fully regulated cannabis market.