MENDOCINO CO., 2/8/17 — The North Coast's state senator Mike McGuire is concerned that California's new cannabis regulations will miss an important deadline, and is calling for legislative senate hearings next Tuesday to discuss the issue. McGuire, who represents Mendocino County and heads the California Senate Governance and Finance Committee, sponsored one of the bills which became part of the commercial medical cannabis regulations passed in the fall of 2015 known as the Medical Cannabis Regulation and Safety Act (MCRSA). This legislation created a framework for the development dual state and local licenses for cannabis businesses, which are supposed to be ready by January 1, 2018. Both regulators and legislators are working to reconcile these the older medical cannabis laws with the newly approved Adult Use of Marijuana Act (AUMA). Local bodies, such as the Mendocino County Board of Supervisors, have also been developing regulations so local cannabiz owners can have county licenses in place to apply for state licenses in 2018.
However, McGuire recently told the Sacramento Bee, the San Francisco Chronicle, and the Los Angeles Times that he doesn't think the state's regulatory structure will be in place in time — and is now calling for a Senate Governance and Finance Committee hearing on the topic, to be held on February 14. The hearing will be live-streamed and can be viewed at www.senate.ca.gov. McGuire has highlighted the challenges of tax collection, lack of banking options, and the "track and trace" system that is supposed to track all cannabis plants through the supply chain from "seed to sale" as important to getting the regulatory system ready for all the cannabis businesses seeking state licenses.
The most recent update on the state government's progress in developing cannabis regulations took place on February 7, during an joint assembly information hearing that discussed AUMA, and covered law enforcement issues along with state, local, and industry regulatory updates. You can watch the full meeting here. The State Treasurer's Office is also holding a series of working group meetings to address cannabiz banking issues; the next meeting takes place this Friday, Feb. 10 in Los Angeles but will also available to watch online. The Mendocino Voice will provide updates on these meetings in future articles.
See the full Feb. 7 press release from McGuire's office below:
Senator Mike McGuire, who has been voicing concern over the last several months about the tight timelines associated with Proposition 64, will chair a Senate Governance and Finance Committee hearing next week focused on cannabis business taxes, implementing California’s Cannabis tax collection system and the “track and trace” system which verifies cannabis taxes and product safety – all critical elements of the structure for cannabis that is being developed, and that is slated to go live on January 1, 2018.
Concerns about whether or not these systems will be up and running by this deadline will be addressed and leaders from the Board of Equalization, California Department of Food and Agriculture, local elected leaders, industry professionals and public safety officials will talk about some of the difficulties in regulating an industry that has been operating essentially unregulated for 20 years.
“The California Cannabis industry is worth an estimated $7 billion, and we’re only bringing in a small fraction of taxes the state is due, about 20-30%. The state’s tax collection system is not in place and it will be near impossible to get it up and running by the new year,” Senator McGuire said. “We are building the plane while it’s being flown and we need to start developing a backup plan sooner rather than later.”
The Senate Oversight Hearing: “California Cannabis in a Turbulent Time” will be held on Tuesday, February 14 at 1:30 pm in Room 2040 of the State Capitol.
There are significant unanswered questions as the state moves into a new era of cannabis under Proposition 64 and those questions will be asked and answered at next week’s hearing. Topics include current and future tax compliance rates; obstacles and hurdles retailers will face as they come into the system; how the Board of Equalization will handle the influx of hundreds of millions of dollars in cash; how long it will take the state to get the tax collection and track and trace systems up and running; how the state intends to sign up the hundreds of thousands of growers and cannabis related businesses to start paying their mandated tax and setting some realistic timelines for the track and trace system to be up and running.
“Proposition 64 put a massive requirement on state marijuana regulators and very little time to accomplish the landslide of rules and regulations mandated by the initiative. Some departments who have been working on the licensure issue for the last year may well be ready by January 1, 2018. But we have to face the facts – it’s not realistic that all of the Prop 64 rules and regulations will be in place by the New Year,” Senator Mike McGuire said. “The all-important Track and Trace program, which verifies taxes and ensures product safety, will not be in place by January 1and we have to resolve the massive and uneven tax collection process that currently exists throughout the state. I think it’s important that we are transparent and realistic, and that is why we are holding this hearing to ensure an implementation timeline is put into place over the next several months.”
Senator Mike McGuire, who represents California’s North Coast, is Chair of the Senate Governance and Finance Committee. The hearing will be livestreamed and can be viewed at www.senate.ca.gov.