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California Governor Proposes Changes To Marijuana Regulations And Taxes

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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.”

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.

Mississippi Governor Hints At Alternative Medical Marijuana Ballot Measure For 2020

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Marijuana Moment is made possible with support from readers. If you rely on our cannabis advocacy journalism to stay informed, please consider a monthly Patreon pledge.

Kyle Jaeger is Marijuana Moment's Los Angeles-based associate editor. His work has also appeared in High Times, VICE and attn.

Politics

Top Trump Campaign Spokesman: Marijuana Must Be ‘Kept Illegal’

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Asked in a new interview about President Trump’s position on changing federal marijuana laws, a top reelection campaign aide said the administration’s policy is that cannabis and other currently illegal drugs should remain illegal.

“I think what the president is looking at is looking at this from a standpoint of a parent of a young person to make sure that we keep our kids away from drugs,” Marc Lotter, director of strategic communications for the Trump 2020 effort, said in an interview with Las Vegas CBS affiliate KLAS-TV.

Please visit Forbes to read the rest of this piece.

(Marijuana Moment’s editor provides some content to Forbes via a temporary exclusive publishing license arrangement.)

Photo courtesy of Gage Skidmore.

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Virginia Marijuana Decriminalization Gets Closer To Governor’s Desk With New Amendments

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One week after bills to decriminalize marijuana in Virginia were passed by both the House and Senate, they advanced again on Wednesday in committee votes, where they were revised in an effort to ease the path to the governor’s desk.

The goal was to make the language of the bills identical, with lawmakers hoping to streamline the process by avoiding sending differing pieces of decriminalization legislation to a bicameral conference committee to resolve differences.

The House of Delegates and Senate were under pressure to approve their respective versions of decriminalization ahead of a crossover deadline last week. After clearing floor votes in their respective chambers, the Senate-passed bill was sent to the House Court of Justice Committee, while the House’s legislation was referred to the Senate Judiciary Committee.

Those panels amended the bills and advanced them on Wednesday, with senators voting 10-4 to advance the revised legislation and delegates voting 8-5. However, the Senate panel also struck a part of the text of a compromise substitute version concerning a record clearing provision while the House committee accepted the substitute as offered.

That means it will be up to the Finance Committees to resolve the remaining differences if lawmakers hope to skip the conference step prior to full floor votes in both chambers.

Regardless of the unexpected complication, advocates said the new committee actions represent a positive development.

“Fortunately, the patrons were able to reach a consensus and move the bills forward,” Jenn Michelle Pedini, executive director of Virginia NORML, told Marijuana Moment. “Virginians have waited long enough for this important step, one that will dramatically reduce both marijuana arrests and the collateral consequences that follow such charges.”

The legislation as amended would make possession of up to one ounce a civil penalty punishable by a $25 fine without the threat of jail time. Currently, simple possession is punishable by a maximum $500 fine and up to 30 days in jail.

A provision that would have allowed courts to sentence individuals to up to five hours of community service in lieu of the civil penalty was removed with the latest revisions. The bill also stipulates that juveniles found in possession of cannabis will be treated as delinquent, rather than go through a less punitive process for a “child in need of service.”

Language providing a means to seal prior records for marijuana convictions was successfully reinserted into the House Courts of Justice Committee-passed bill after it was previously removed and placed in a separate expungement bill. That latter legislation is stalled, so lawmakers put it back into the decriminalization measure via the substitute to ensure its enactment.

The Senate Judiciary moved to delete that section, however, creating complications for avoiding a conference committee.

Meanwhile, the House Rules Committee voted in favor of a separate Senate-passed resolution on Wednesday that calls for the establishment of a joint commission to “study and make recommendations for how Virginia should go about legalizing and regulating the growth, sale, and possession of marijuana by July 1, 2022, and address the impacts of marijuana prohibition.” That vote was 12-5.

That’s a significant step, as the legislature is generally reluctant to enact bold reform without first conducting a study on the issue.

While Gov. Ralph Northam (D) is in favor of decriminalization, including a call for the policy change in his State of the Commonwealth address last month, he’s yet to embrace adult-use legalization. That said, Attorney General Mark Herring (D), who is running to replace the term-limited governor in 2021, said he’s optimistic that Northam will come around on the issue.

Herring organized a cannabis summit late last year to hear from officials representing states that have already legalized marijuana. That’s one tool he said the governor could use as he considers broader reform.

Also on Wednesday, the House Courts of Justice Criminal Subcommittee advanced another Senate-passed bill to formally legalize possession of CBD and THC-A medial cannabis preparations that are recommended by a doctor, an expansion of the current policy simply offers patients arrested with it an affirmative defense in court.

For now, Virginia seems to be on the path to become the 27th state to decriminalize marijuana, and the first to do so in 2020. Last year, three states—New MexicoHawaii and North Dakota—also approved the policy change.

Alabama Lawmakers Approve Medical Marijuana Legalization Bill

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Alabama Lawmakers Approve Medical Marijuana Legalization Bill

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An Alabama Senate committee approved a bill on Wednesday that would legalize medical marijuana in the state.

The legislation would allow patients with qualifying conditions to purchase cannabis products from licensed dispensaries. It would be a limited system, however, prohibiting patients from smoking or vaping marijuana.

The Senate Judiciary Committee cleared the bill in a 8-1 vote, with one abstention. The next stop for the legislation will be the Senate floor.

The proposal would establish the Alabama Medical Cannabis Commission, which would be responsible for overseeing a patient registry database, issuing medical cannabis cards and approving licenses for marijuana dispensaries, cultivators, transporters and testing facilities.

This vote comes two months after a panel created by the legislature, the Medical Cannabis Study Commission, issued a recommendation that Alabama implement a medical cannabis program.

The full Senate approved a medical cannabis legalization bill last year, but it was diluted in the House to only provide for the establishment of the study commission. Sen. Tim Melson (R) sponsored both versions of the legislation and served as chairman of the review panel.

The current bill has been revised from the earlier version. For example, this one does not require patients to exhaust traditional treatment options before they can access medical cannabis.

The committee also approved a series of amendments by voice vote, including several technical changes to the bill. Another one would shield physicians from liability for recommending medical cannabis. One would clarify that employees are ineligible for workers’ compensation for accidents caused by being intoxicated by medical cannabis, which is the same standard as other drugs.

Watch the Alabama Senate Judiciary Committee debate and vote on medical cannabis below:

Members also agreed to an amendment creating a restriction on who can be on the cannabis commission.

While it’s not clear how the House would approach the bill if it advances to the chamber this year, the speaker said this week that he’s “in a wait and see mode” and commended Melson for his work on the measure. The state’s attorney general, meanwhile, sent a letter to lawmakers expressing opposition to the reform move.

Under the measure, patients suffering from 15 conditions would qualify for the program. Those include anxiety, cancer, epilepsy and post-traumatic stress disorder. Patients would be able to purchase up to a 70-day supply at a time, and there would be a cap of 32 dispensaries allowed in the state.

Prior to the vote, committee heard from a series of proponents and opponents, including parents who shared anecdotes about the therapeutic benefits of cannabis for their children. Interest in the reform move was so strong that an overflow crowd has to be moved to a separate hearing room.

“Sometimes people are not able to empathize with others who have gone through something. I guarantee you if one of relatives, members of the legislature, went through something like the testimonies that we’ve heard today, they would want it,” Sen. Vivian Figures (D) said. “But they would probably have the means to fly somewhere and get it.”

There would be a number of restrictions under the bill when it comes to advertising. It would also require seed-to-sale tracking for marijuana products, set packaging and labeling requirements and impose criminal background checks for licensed facility employees.

A nine percent tax would be levied on “gross proceeds of the sales of medical cannabis” sold at a retail medical cannabis dispensary. Part of those funds would go toward creating a new Consortium for Medical Cannabis Research, which would provide grants to study the plant.

Last year, the Senate Judiciary Committee also approved a bill to decriminalize marijuana.

Kentucky Lawmakers Approve Medical Marijuana Bill In Committee Vote

Photo courtesy of Philip Steffan.

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