California Gov. Gavin Newsom (D) unveiled his annual budget proposal on Friday, and it contains several provisions aimed at simplifying and streamlining regulations for the marijuana industry.
The biggest proposed change concerns the state’s cannabis licensing system, which Newsom hopes to consolidate into one agency—the Department of Cannabis Control—rather than the three that are currently in charge of approving marijuana businesses.
“Establishment of a standalone department with an enforcement arm will centralize and align critical areas to build a successful legal cannabis market, by creating a single point of contact for cannabis licensees and local governments,” the administration said in a summary.
Under the current system, the Bureau of Cannabis Control, the Department of Food and Agriculture and the Department of Public Health each have licensing responsibilities.
Another area that will be of particular interest for stakeholders is the governor’s plan for changes to marijuana taxes. The purpose of the proposed reforms is “simplifying cannabis tax administration by changing the point of collection.” The administration wants to “move the responsibility for the cultivation excise tax from the final distributor to the first, and for the retail excise tax from the distributor to the retailer.”
Doing so would allow businesses to avoid a requirement to “estimate product mark-up and set wholesale tax rates” and therefore simplify both the industry’s tax burden as well as the collection process.
Other changes to cannabis taxation may be on the horizon, as the notice states that Newsom will be meeting with stakeholders to discuss other issues such as amending the number of taxes and the tax rate in order to “support a stronger, safer legal cannabis market.”
2020 is going to be a big year for CA🌿 https://t.co/M62iJ6GTFl
— Nicole Elliott (@nicolewheaton) January 10, 2020
Finally, the governor’s budget describes allocation of tax revenue from marijuana sales
After funding implementation costs and research and actions related to resolving the past harms of prohibition, his office estimates it will have more than $332 million in revenue to distribute to other social services. That will go toward education and prevention for youth substance use disorders and school retention ($199.7 million), clean-up and enforcement efforts connected to environmental damages from illicit marijuana cultivation ($66.6 million) and “public safety-related activities” ($66.6 million). These allocations were unchanged from the previous year.
Lindsay Robinson, executive director of the California Cannabis Industry Association (CCIA), said in a statement to Marijuana Moment that her group “has been strongly advocating for the streamlining of business operations for cannabis operators for years, and we are finally seeing a budget that reflects an understanding of our challenges, and furthermore provides solutions that will simplify tax collection, ease licensing, and eventually increase access to the regulated market.”
“We support the three licensing authorities operating under the same umbrella, which should increase efficiency and communications, and will assist in minimizing differing interpretations of the regulations,” Robinson said. “This proposal also increases the enforcement authority that will be assumed by the new State Department of Cannabis, which is essential in battling against the illicit market while increasing consumer safety, and a policy that CCIA has advocated and formally requested of the administration in the prior budget.”
The United Cannabis Business Association (UCBA) also released a statement applauding the proposal.
“Since legalization, the California cannabis industry and its consumers have struggled to navigate an increasingly complex regulatory landscape—a situation that contributed to the growth of the illicit market and the current accessibility of untested products, as well as an increased cost of compliance to license holders,” UCBA Board President Jerred Kiloh said.
“Today’s announcement from the Governor marks a turning of the tide and we are encouraged by the efforts outlined to streamline the industry’s regulatory framework and simplify licensing and taxation,” he continued. “UCBA looks forward to working closely with the administration to ensure that the intended simplification, especially as we shift the majority of taxation burdens onto retailers alone, does not result in undue burden or complications at the dispensary level and that we keep our eyes on the prize—a safe, stable and accessible legal cannabis market in the golden state.”
The proposals are not yet final, and the administration is scheduled to post changes based on “the latest economic forecasts” in May. The final budget is expected to be enacted by lawmakers in the summer.
Photo courtesy of WeedPornDaily.
New York Legal Marijuana Push ‘Effectively Over’ For 2020, Governor Says
New York Gov. Andrew Cuomo (D) conceded on Saturday that it’s unlikely marijuana will be legalized in the state this year.
“Marijuana and the gig economy were two of the more complicated initiatives that we wanted to work through that we didn’t get a chance to do,” he said in response to a question about which policy issues he would’ve liked to tackle in the annual budget bill that passed this week.
“Is the session effectively over? It’s up to the legislature, but I think it’s fair to say it’s effectively over,” he added, noting that several state lawmakers have been infected with coronavirus.
(Marijuana Moment’s editor provides some content to Forbes via a temporary exclusive publishing license arrangement.)
Congresswoman Wants Ban On DC Marijuana Sales Lifted Through Coronavirus Legislation
A congresswoman is calling on the government to end a policy prohibiting Washington, D.C. from legal marijuana sales, arguing that the jurisdiction is in particular need of tax revenue from cannabis commerce due to the coronavirus outbreak.
Rep. Eleanor Holmes Norton (D-DC) has repeatedly condemned the congressional rider barring the District of Columbia from allowing retail sales that has been extended each year since 2014, shortly after local voters approved a ballot measure to legalize low-level possession and home cultivation. But given the need for resources to combat the pandemic, she said a reversal of the provision should be included in the next COVID-related relief bill.
“At this moment of unparalleled need, D.C. should be able to collect tax revenue from all available sources, like every other jurisdiction, including from recreational marijuana, which is believed to be widely used in the District,” the congresswoman said in a press release on Friday, adding that D.C. was shorted in the last stimulus because Congress treated it as a territory rather than a state.
“While I am working for a retroactive fix in the next coronavirus bill, it is imperative that Congress also repeal the D.C. recreational marijuana commercialization rider in the next bill to help D.C. shore up its finances,” she said. “It is beyond unreasonable that congressional interference keeps only the District from commercializing recreational marijuana, while all other jurisdictions are free to do so.”
— Eleanor Holmes Norton (@EleanorNorton) April 3, 2020
“Bringing the District in line with other jurisdictions would create a critical source of tax revenue in our time of need.”
Last year, the House approved an appropriations bill that excluded the D.C. rider, but it was included in the Senate version and ultimately made its way into the final package that the president signed. The cannabis commerce ban was also included in President Trump’s budget proposal earlier this year.
“True to form, Representative Eleanor Holmes Norton continues to be one of the best allies to the cannabis reform movement,” Justin Strekal, political director for NORML, told Marijuana Moment. “During this unprecedented COVID-19 outbreak, it is critical that lawmakers analyze and reform any and every aspect of public policy to mitigate the health crisis and build a foundation for a strong recovery.”
“As the majority of states that regulate cannabis have deemed the industry essential to the continued functioning of their jurisdictions, the continued congressional prohibition of the District of Columbia enacting it’s own adult-use program becomes even more ridiculous,” he added.
Norton, in an interview about her push, said that the congressionally mandated prohibition on sales doesn’t prevent people from accessing cannabis but does block the city from collecting tax revenue.
“You can buy two ounces but, by the way you’ve got to do that on the black market,” she told WUSA-TV. “But there’s nobody to tax it. And I’m simply trying to get the taxes the District is due for merchandise, in this case marijuana that’s being consumed readily in the District of Columbia.”
🟢🟢 LEGALIZING COMMERCIAL MARIJUANA IN D.C. 🟢🟢
I spoke to D.C.'s Delegate @EleanorNorton
She's pushing for fully legal commercial marijuana sales in the District in a 4th Congressional stimulus package.
The District needs the money.
And people are smoking weed anyway. pic.twitter.com/PL9yoDKlrj
— Adam Longo (@adamlongoTV) April 3, 2020
Legislative priorities for Congress have shifted significantly as lawmakers attempt to address the outbreak, and that’s meant putting some reform efforts on hold. However, the issue isn’t being ignored entirely, and it’s possible that other members may look to attach modest marijuana proposals to additional coronavirus legislation.
For example, Rep. Katherine Clark (D-MA) said this week that U.S. Department of Veterans Affairs policy preventing its doctors from recommending medical cannabis in legal states puts service members at risk in Massachusetts because the state is shuttering recreational shops (but not medical dispensaries) and some veterans fear registering as patients out of concern that they could lose federal benefits.
Eleven senators wrote a letter to Appropriations Committee leadership asking that they allow small cannabis businesses to access federal loans and disaster relief programs. While the lawmakers said it should be enacted through an annual spending bill, advocates have argued that the policy change should be pursued through coronavirus legislation since these businesses are facing challenges just like those experienced by many other companies during the pandemic.
Photo courtesy of WeedPornDaily.
North Dakota Activists Say Marijuana Legalization Initiative Unlikely In 2020 Due To Coronavirus
North Dakota activists announced on Thursday that they are suspending their campaign put marijuana legalization on the November ballot due to the coronavirus outbreak.
In a Facebook post, Legalize ND said “we are going to have to face a few hard realities going forward” as businesses are shuttering, public events are being cancelled and individuals are encouraged to shelter in place. The pandemic means in-person signature gathering can’t take place, and the state does not allow for alternative signing options such as by mail or online.
“Due to the virus all of our major avenues for signature collection have been cancelled or indefinitely postponed, and going door to door is not safe for both those knocking and those getting knocked,” the group said. “Businesses will continue to collect, but we don’t want to create another vector for the coronavirus. As a result, at this time if something major doesn’t change we will not be able to make the 2020 ballot.”
Legalize ND said there’s no way for state policies related to signature gathering to be changed ahead of the November election. They needed to collect 13,452 valid signatures from voters before July 6 in order to qualify. In all likelihood, the campaign said it would have to shift its focus to the July 2022 primary election.
“This isn’t the solution we want, but given the situation it is what will have to happen,” the post states. “Stay safe, and hopefully we can make a major push when the quarantine ends.”
The proposed initiative would allow individuals to purchase and possess up to two ounces of cannabis. Unlike a much more far-reaching measure the same group pushed in 2018 that included no possession or cultivation limits, which voters rejected, this version would prohibit home growing, impose a 10 percent excise tax and establish a regulatory body to approve licenses for marijuana businesses.
North Dakota voters approved a medical cannabis initiative in 2016.
The coronavirus outbreak has dealt several blows to drug policy reform efforts in recent weeks.
Likewise in Washington, D.C., advocates for a measure to decriminalize psychedelics asked the mayor and local lawmakers to accept online signatures for their ballot petition.
In Oregon, advocates for a measure to decriminalize drug possession and a separate initiative to legalize psilocybin for therapeutic purposes have suspended in-person campaign events amid the pandemic.
In New York, Gov. Andrew Cuomo (D) recently conceded that legalization was “not likely” going to happen through the budget, as he hoped. Coronavirus shifted legislative priorities, and comprehensive cannabis reform seems to have proved too complicated an issue in the short-term.
Idaho activists announced on Thursday that they are suspending their campaign, though they are still “focusing on distributing petitions through online download at IdahoCann.co and encouraging every volunteer who has downloaded a petition to get them turned in to their county clerk’s office by mail, regardless of how many signatures they have collected.”
Finally, in Arizona, a legalization campaign is petitioning the state Supreme Court to instruct the secretary of state to allow individuals to sign ballot petitions digitally using an existing electronic system that is reserved for individual individual candidates seeking public office.
Photo courtesy of Philip Steffan.