This November California voters will be asked to vote a bill that which would legalize marijuana for recreational use. That bill, known as AUMA has asked voters to decide if it’s time to legalize marijuana for recreational? When phrased that way the majority of people tend to be in favor of doing so as they they don’t see anything wrong with cannabis and how it’s worked in medical form for over 20 years now. But AUMA is a complex, 62 page document that, even if you’re a lawyer, is difficult to get through. And since there are many issues in AUMA that will affect how we grow and access marijuana we really do need to understand what exactly it is we’re voting for in this bill. As the old saying goes: ‘the devil is in the details’ and to make an informed decision on this matter we really need to explore what is in those details.
We ask those of you reading this, to take the time to read both, the AUMA as well as the questions and comments that have been developed within this document and ask yourself, “Is this AUMA initiative really the best we can do, and has it earned my vote?”
The following questions and comments are listed in the order they are presented within the initiative. If you don’t see an AUMA Section or paragraph being addressed here it’s because we didn’t have an issue with it at the time.
Here is a link to the 62 page Proposition 64 AUMA initiative which we recommend printing so you can make your own notes and follow along with this document :
The following page is a Table of Contents for the bill as there is not one provided. Hopefully it will make it a little easier to follow along with the discussions that are generated from our analysis.
At the of this document we list locations around the state in which there will be open forum discussions taking place over this initiative and the effects of its passage.
The page numbers seen here are the page numbers in the AUMA bill, not this document.
B Citing the ‘widespread abuse’ of the medical marijuana system in California, this bill will work to ‘consolidate, tax and regulate’ both the medical and non-medical industries. The difference between the the medical and recreational cannabis user requires that these be separate issues and should be treated so under the law. One only has to look at how well the consolidation process has worked in Washington State with the passage of I-502 which legalized recreational cannabis and rolled medical and recreational into one ball and you will see that it is the medical patients who have suffered due to lack of access to their medication.
D The language that by passing AUMA, the black market will be incapacitated and children under 18 won’t have access to marijuana, is a lofty goal but meritless. Our youth find ways to get alcohol and those laws are strict. Statements like this are intended to get people to vote yes for the bill without realizing that not only is it unlikely to have any impact on youth who are determined to access marijuana, but that yes vote just made every aspect of AUMA the law of the land. It’s no accident that this inflammatory paragraph is on the first page of the bill. The authors knew what they were doing.
- This paragraph describes the safeguards the bill provides for local governments to regulate marijuana businesses through zoning and permitting requirements and that with a vote of the people, marijuana may be banned within a locality.
F I like that this paragraph addresses environmental and water diversion issues, but the creation of strict environmental regulations that ensure marijuana is grown efficiently and legally leaves much to the imagination. Why does it take the passage of AUMA to enforce current laws that require those who wish to divert water to have a permit to do so? These laws are already on the books and just need to be enforced. Like paragraph D, it is designed to empassion those who care about the environment, to garner a yes vote on AUMA without their fully comprehending the consequences of that vote.
- Regardless of whether or not AUMA passes the reduced consequences for marijuana related offenses should be made into law and not be a condition that requires the passage of AUMA. As in the previous paragraphs, this is language that was added as a way to empassion people to vote yes on this bill. Those who vote yes will be doing so because they have seen too many people have their lives upturned for what we see today as inconsequential activities that stem from a plant. A plant that for 80 years our government has declared as so dangerous it is ranked as a Schedule One drug and we need to lock those up who have anything to do with its cultivation or distribution. Today we know it is not the evil gateway drug it’s been portrayed as and its medicinal benefits are undeniable. So to those who would vote yes to AUMA as a way to get serious about reducing sentences and expunging those records, ask yourself why this language is in the bill in the first place? It should not take passage of this bill to see that happen anyway. It was added to get your vote for the rest of the bill.
H The reasoning here is flawed. If AUMA passes, there will be fewer cultivators as the illicit black market growers disappear. After licensing and taxes on the cannabis bring the prices to new levels this will create greater financial incentives for those who would maintain a position in the black market. All they have to do to succeed, is not get caught and be cheaper than the licensed cultivator or distributor. The only portion of this paragraph that makes sense is that there will be a greater incentive for interdiction of unlicensed cultivation as those gardens directly affect taxable revenue streams. With the passage of AUMA there would be more money available from licensing, taxes and asset forfeiture that would be used to fund the various law enforcement agencies mission to shut down any black market activities they might encounter.
J The language states that with the passage of AUMA the small to medium sized business will be protected because they will be given a 5 year window of non-compete opportunity against large scale cultivators. At the end of 5 years licenses will be granted to those large scale cultivators who would be able to grow crops of what is not stated but may be virtually unlimited in size. In 5 years the RJ Reynolds and Philip Morris’s will have their acres of cannabis farms and to those small to medium size licensed cultivators, who have not already gone bankrupt, they’ll likely be bought out. Who will be affected most by all this? The customer. Ask yourself why did AUMA not state the maximum allowable size of large scale crop licenses? The answer is because in 5 years Big AG is going to step in and the face of recreational cannabis will be forever changed after that.
(c) I found this to be a confusing paragraph but my best interpretation is that local governments don’t have to construct these laws themselves whereas they can default to state law and have the provisions for recreational marijuana in their city or county. . .
(d) If local governments can ban non-medical cannabis business can they also ban medical cannabis business?
(s) How does taxing the growth and sale of marijuana in a way that drives out the illicit market actually work? Increasing taxes will give the illicit market a competitive advantage.
(i) What does a licensed, non-medical business retailer look like? How will they be different than the medical dispensary? Under AUMA they can’t sell alcohol or tobacco products so I’m wondering what other products they can sell? For example, if you go into a Walgreens you have a pharmacy which allows you to buy your prescription drugs. When you checkout you can also buy beer and cigarettes. And that example would closer parallel a medical marijuana patients needs. What’s so different about recreational marijuana that the licensed retailer could not include tobacco and beer sales?
(k) Why are we addressing the medical marijuana patient in this bill at all? If the physician’s recommendations system needs to be fixed it should not be a condition of the AUMA initiative whatsoever. This is an overreaching aspect of the bill’s recreational intent.
(m) If AUMA passes, outdoor cultivation of recreational marijuana may be banned by any local government who chooses to ban it. This would force the recreational grow indoors where they are going to have to use artificial lighting and HVAC systems to maintain temperatures in the room. This is going to lead to increased demand on the individual indoor growers electrical systems. When considering all the indoor growers collectively, this will be putting additional demand on the electric grid as a whole. Where does that restriction to indoor grows, square with Section 2 (F) whereby passage of AUMA would ensure that marijuana is grown efficiently and in an environmentally sensitive manner.
Let’s take a look at the big picture here. When only recreational growers can legally grow 6 plants indoors, a 6 plant grow room is going to need a minimum of 2,000 watts to supply enough power to grow their plants. They are going to need that power for a 12 hour period in flower, and an 18 hour period in vegetative states. For the purposes of this exercise, I’ll factor the loads at only a 12 hour period for one garden as follows:
12 hours at 2,000 watts = 24,000 watts per day or 24 kWh per day (creates 51.6 lb’s of CO2)
30 days in a month x 24kW per day = 720 kWh per month (creates 1,548 lb’s of CO2)
365 days in a year x 24 kW per day = 8,760 kWh per year (creates 18,834 lb’s of CO2)
There is no real data available that would indicate how many indoor recreational marijuana growers would be added to the grid should AUMA pass but it’s safe to say that when recreational users are faced with paying $25/gram for midshelf because of what a licensed recreational dispensary has to charge to stay in business, more of these users will want to grow their own. So if we were to project 50K new gardens across the state that would equate to 941,700,000 lb’s of CO2 being added to the atmosphere annually. This is not an insignificant amount of CO2 and it’s coming from California recreational marijuana growers.
When one considers that it takes 117 trees to process the CO2 from each kWh of electricity generated from a coal fired power plant (2.15 pounds of CO2 for each kW) there is no good reason that AUMA should allow for any recreational gardens, regardless of plant count, since they must be grown indoors. It’s just not environmentally responsible.
So what are the alternatives? Either the state finds a way to accept a personal outdoor garden for the recreational marijuana grower, which can help alleviate some of the electrical demands, or be true to your earlier statements about protecting the environment, and not allow for any personal recreational marijuana gardens. Had that prohibition of indoor gardens been in the bill, it would have most assuredly not passed.
Of note, I have been told that this section was patterned off of the recreational cultivation limits as set forth in Colorado, where the law allows the cultivation of limited amounts of marijuana in an enclosed, locked space. Under the proposed California law, AUMA restricts the 6 plants to the property, whereas in Colorado each adult can legally grow up to 6 plants (3 of which can be in the flowering stage). It is because of increased demand on the utilities that Xcel Energy in Colorado has experienced a steady increase of 1.2% per year (45% of that is attributed to cannabis cultivation) since their laws were enacted. And that energy increase goes on despite aggressive clean energy programs, such as wind and solar.
(s) This is counterintuitive. By taxing something, you are actually making it easier for the illicit market, who would not be subject to those taxes, to thrive by keeping their prices below those who are paying them and having to charge more.
(x) How are you reducing barriers to entry with any of this? There are no existing reference points to show what reduced would mean. At best you’re minimizing illicit marijuana activity. You’re also creating barriers with the need for Surety Bonds, taxes and regulations that would not make it profitable to any small business to even want to consider getting into this new marketplace without a complete understanding of what the overall costs will be. Under AUMA the license fees have not even been established.
(z) As stated previously regarding Section 2 (G), it should not take the passage of AUMA to get these sentences reduced. This is a carrot on a stick to get the bill passed.
11018.2 Def. of marijuana accessories: as to cultivation they define any tool used. When I think of cultivation I can not come up with any tool or equipment that is so specific to marijuana that would justify it having this specific definition, after all, most everything can be purchased today at your local garden center. What is the reason for this strict definition, possible taxation of tools and equipment, or to define a criminal code similar to “burglary tools? But, at a minimum it may be a case of over regulating
- 11362.2 (2) is stating that no city or county can completely prohibit growing and processing within the 6 plant limits per residence as defined in this section and an earlier statement in Section 3 (m) which empowers local governments to regulate cultivation for personal use through zoning and other laws. It’s bad enough that non-medical is limited to 6 plants, but this contradiction spells ambiguity even on that front.
- 11362.1 (3) does this mean that the limit of 6 plants counts clones, vegetative and flowering plants? For example, a mother plant would create 5 clones and you would be at your six plant limit. If you wanted to grow two strains the two mothers would now limit that grower to 4 clones. The wait time to take that plant from cloning into flower would be 90 days with 2 weeks of cure. Once I harvest these 4 plants, can I start the next the grow or do I have to wait until the plants have cured to take more clones? The word ‘processed’ is what causes me concern in that it is subjective and finishes with ‘at one time’. That very likely puts us in the position that you can’t even begin to grow another round of plants until such time that all of the processed marijuana has been consumed.
- 11362.3 (d) Here we have volatile solvents and I’m not sure why? The reference that you are not permitted to use these unless you are licensed in accordance with Business and Professions code Chapter 3.5 of Division 8 or Division 10 leads to another long hunt to find out what it takes to get that particular license. And when you do find the referenced documents I challenge you to tell me where that licensing information is within the document. Lastly they don’t state a position on Ethyl Alcohol as it is not listed.
- 11362.4 (c) this section will then point back to 11362.3 (d) and call it a violation of restrictions in those subdivisions (c) or (d). 11362.3 just lists solvents and does not state anything about how they may or may not be used for personal use.
Also see Page 29: Chapter 10. Manufacturers and Testing Laboratories which section 26100 which defines Manufacturing Level 1 as non-volatile and Level 2 as volatile solvents.
(d) States that the meaning of volatile solvents can be found in the Health and Safety Code 11362.2. Here is the link. Tell us where that is defined within the document. It’s not there. For such an important element in the licensing requirement how do they get the reference document wrong? https://oag.ca.gov/system/files/initiatives/pdfs/13-0051%20(13-0051%20(Marijuana)).pdf
The other element of 11362.4 (c) is that it maintains Health and Safety Code 11357 (c) making anyone who would have more than 28.5 grams of marijuana in their possession punishable by
imprisonment in the county jail for a period of not more than six months or by a fine of not more than five hundred dollars ($500), or by both such fine and imprisonment.
My underlying problem with combining recreational and medical under one new bill is it is all encompassing when the two users of cannabis based products needs are for entirely different reasons. I do not think medical patients regulations should be included in any of the AUMA. Nonetheless, since it’s here I’ll address it as presented in the bill.
11362.712 (a) As of January 1, 2018 Physicians must comply with these new Business and Professions codes in Article 25 before a patient recommendation can be given. Undr AUMA these physician recommendations are going to be much harder to get as doctors can be prosecuted for not following prescription guidelines when granting a recommendation for marijuana. Also no hospital physician will give one for fear of losing their job or their incentives from pharmaceutical companies.
(b) As of January 1, 2018 A County health dept shall have a database that supports the Physician’s Recommendation is valid and in compliance with section (a) for that patient.
11362.713 (a) This requires that within the County database they store the names, addresses, or social security numbers of patients, their primary caregiver as ‘Medical Information’.
Insofar as prescription drugs go, where is this being done with any other County database ? The doctor/patient relationship is sacrosanct and should not be subject to government intrusion or interference.
So what happens to all marijuana be it recreational or medical if the day ever comes when it is federally descheduled? Well under AUMA a provision for that event has been made as stated further down in this section (11362.85) and the CURE DOJ database tracks every patient in every state as described here:
Submission of Controlled Substance Data
California Health & Safety Code Section 11165(d) requires dispensing pharmacies, clinics, or other dispensers of Schedule II through IV controlled substances to provide specified dispensing information to the Department of Justice on a weekly basis in a format approved and accepted by the DOJ. Currently, the ASAP 2009 Version 4.1 format is accepted.
(b) Within 24 hour of the County receiving ‘any’ request to see that patient’s information the patient will be contacted that the request has been made.
It says nothing about the patient being able to deny the request and it says nothing about what authorities or non authorities can make the request.
11362.755 (b) This speaks to a County fee, not to exceed $100 per application or renewal that in addition to the Physician’s Recommendation fee would be born by the patient.
(c) This speaks to that fee being reduced by 50% if you are an indigent adult who can prove you’re on Medi-Cal. We are supposed to be happy with this?
(d) This speaks to the County fee being waived entirely if you are an adult caregiver of a patient under the age of 18. See above.
Where is the County database for patients who take Oxycontin? In addition to all this piling on of the AUMA bill, it lacks any historical precedent. It is bad policy, bad law and should not be part of a recreational initiative in the first place.
11362.84 Adding language into AUMA about how a qualified medical patient can not lose custodial rights over their legal use of marijuana is another obfuscation. Any patient who would be in a position where a court would consider much less rule against that patient because they were legally using a doctor prescribed marijuana product would be grossly incompetent.
If this language is necessary at all, it should be in a separate bill that regulates medical marijuana patients. Another reason I don’t see this is even relevant here, is because it does not apply the same protections in family court as if it were a recreational user of marijuana.
How this language got into the bill smacks of the spaghetti strategy, wherein everything the authors can think of, is thrown at the wall to see what will stick, and once again a carrot on a stick is applied to get people to see this one element as a good thing and approve the bill as written.
11362.85 Here you have language stating that if and when the federal government were to amend, reclassify or declassify marijuana the legislature may amend or repeal the provisions in the Health and Safety Code, as necessary, to ‘conform’ state law to such changes in federal law.
What utter hypocrisy. The fact that the federal government has marijuana as a Schedule One drug, has not stopped the state from ignoring that prohibition and offering it as a medical treatment, and under AUMA wishes to offer it as a recreational product. So let’s look at where this is being addressed. It’s in the Use of Marijuana for Medical Purposes portion of AUMA. So what happens if the federal government accepts some medical reclassification but not a recreational one. How will the state handle that?
The fact that this language is even in the AUMA bill strikes me as hypocritical. For example, if the federal government were to raid one of these licensed businesses, would the state stand shoulder to shoulder in defense of that business? Why wouldn’t the federal government go after the state who licensed that business? Weren’t they guilty of aiding and abetting the crime the federal government is accusing them of?
26000 (a -c ) Establishes a comprehensive system to control and regulate non-medical marijuana by expanding the powers and authorities of existing state agencies for medical marijuana to include commercial non-medical. Once again, I see the need for delineation of recreational and medical insofar as how enforcement is applied.
26001 Defines the meaning of words listed in the bill
(dd) ‘unreasonably impractical’ I love how the bill considers this; ‘If the measures to comply require such a level of risk, money, time or other resources that the operation of a marijuana establishment is not worthy of being carried out in practice by a reasonably prudent business person’. Let’s see that would apply to a whole host of areas including not being able to deduct normal business expenses under IRS 280 (e). Why is unreasonably impractical even in here and where is it used in the bill?
26013 (b) This section gives Licensing Authorities the power to prescribe, adopt and enforce any Emergency Regulations that would be necessary for the immediate preservation of the public peace, health, safety and general welfare.
26014 (a) Convenes an advisory committee that would advise the bureau on standards and regulations for a regulated environment for commercial marijuana activity that does not impose impractical barriers so as perpetuate, rather than reduce or eliminate, the illicit market for marijuana. I’d like to see an advisory committee report before we vote on AUMA. This looks like the intention is to pass AUMA, than let an advisory committee steer recreational rules and regulations into law afterward. If it is the intent of the advisory committee to convene as a way to reduce illicit marijuana activities,than it’s going to be recommending ever increasing enforcement techniques.
26038 (a-c) What this section describes are the civil and criminal penalties associated with running a commercial marijuana activity of any type that is unlicensed. The fines can go up to 3X the cost of the license for each day of operation. That is each license the unlicensed operator should have had. So in a hypothetical case of someone being unlicensed for cultivation and distribution operations with license fee’s being $500 each (Page 37 Chapter 18 defines license fees and they have yet to be established) that would be $1000 per day x 3 or $3K per day for not holding that license.
While the person running that business would, or at least should, know that they don’t possess the required license, the landlord of the property may not be aware that there tenant has set up this type of business, or that the license has been suspended. What it means is that the landlords will have to be intimately involved in the tenant’s business to assure that their property rights are protected in the event civil or criminal charges are filed against the tenant by a local city attorney. BTW the law establishes that any money that would be awarded to the city or county who brings these charges, will first go to the city or county to cover costs with any remaining monies, if any, to go to the state General Fund.
26043 (b) (1) During an appeal, it would be interesting to see at what point the Marijuana Control Appeals Panel will decide that a local government may have exceeded its jurisdiction.
26050 (b) The language here gives special instructions that a clear designation be assigned to the activity license that this is a Type 1 – Non-Medical or Type 1NM to distinguish that any of the 19 types of licenses for recreational are clearly identified. Which begs the question, will the licensee need a another license for medical grows?
(c) Licenses shall be valid for 12 months from the date of issuance. Yet there is no indication as to what the costs for these licenses will be.
(d) See above
26051 (a) (4) States the licensing authority can restrict the number of licenses or renewal of existing licenses based on an ‘excessive concentration’ of licenses in a given city, county or both. Section (6) (c) goes on to describe what constitutes excessive concentration but provides a waiver if the determination is that by not granting the licenses it could lead to greater black market opportunities in that region.
(6) The licensing authority can further refuse a licensee if their operation would violate any environmental protection laws. This is potentially huge as it is an area where subjective enforcement can and does occur.
c (1) This language leaves a lot of ground for interpretation to go one way or another in respect the business concentrations. This should apply mostly to retail. This certainly is not working out well in the city of San Diego and licensed MMCCs.
26052 This section defines what activities the licensee, their employees, agents or contractors may not engage in.
(3) The licensee may not lessen or discount their products pricing to undermine or to lessen competition or to create a monopoly. So how is that going to work? If a competitor licensee has less expense they can’t sell their products for less? To do so could potentially be putting their license in jeopardy
(4) You will not be able to sell any marijuana or products at less than cost.
(5) You must maintain the same prices throughout the state so that a Northern California dispensary does not have a flower advantage over a Southern California dispensary.
(6) Adds to para (4) by also stating that the licensee may not give away any of their products as a way to injure competitors or destroy competition. The ability to give away samples of any marijuana, marijuana related products or any marijuana accessories as a type of business promotion or other commercial activity is also prohibited under Chapter 15. Advertising and Marketing Restrictions Section 26153.
(b) States that any violations of this section by a director, officer or agent of the licensee either directly or indirectly, would hold the licensee responsible for that action.
(d) Any person or trade association may bring an action to enjoin and restrain the actions of a licensee who is in violation of this section for the recovery of damages.
26053 Except for the Type 8 Testing license a licensee may hold multiple licenses. A licensee for Type 8 Testing may only hold that license. This is contrary to what many believe to be that the Type 11 Distributor license can also only be held as a single license.
26054 (a) The licensee may not hold a retail license for alcoholic beverages or tobacco products. I have no idea why this is in the bill? Can a licensee hold a medical and non-medical license? What does the medical license look like?
(b) No licensee shall be located within a 600 foot radius of a school. Local governments can make their own set back regulations that as an example also include churches and parks. This allows a local government to effectively ban marijuana businesses without a vote of the people on that ban by making it impossible to meet zoning criteria for the business.
(c) This states that it is not unlawful for a business engaged in product research and development to have ‘small amounts’ of marijuana as long as that marijuana was obtained by a licensee under this division. What is considered a small amount?
26054.1 Requires that a licensee prove that they have been a resident from January 15, 2015.
26056.5 (1-5) The bureau is seeking to devise protocols for cultivation, extraction, infusion transportation, inventory, and quality control that really should be in place in at least a general form prior to voting for this bill such as are already determined for the water use rights as shown in para (6).
(6) Here AUMA states exactly what it wants to see happen insofar as where the water will be coming from if you are going to be a licensed cultivator. The lack of standards and regulations as shown in para (1-5) leave room for ambiguity and should have at least generally established guidelines prior to approval of this bill.
26056.5 If you do decide you want to apply for one of the annual cultivation licenses as it stands today there is no fee structure set for these licenses and the environmental impact regulations, under a new set of protocols specifically devised for marijuana cultivation, will be issued once the bill has passed.
Other than the fact that these environmental regulations are already in place for traditional crop production values by establishing a set of environmental protocols unique to marijuana cultivation the government will be able to charge fees for the various levels of enforcement that each department (and there are a number of departments) who would be in charge of overseeing these regulations can charge. And since it’s marijuana cultivation we’re talking about here you can bet those fees will be hefty. Who in their right mind would vote yes on a bill when you have no idea what the economic impact will be on you as a farmer?
26057 (6) The applicant will be denied a license if they have even been subject to fines or penalties for cultivation or production of a controlled substance on public or private land.
(7) The applicant or their officers, directors or owners will be denied if they have ever been sanctioned by a city or county for unauthorized commercial marijuana activities or commercial medical cannabis activities. Might this be a way of eliminating growers that have been growing for years and against a big AG model that doesn’t want the competition?
26059 This section appears to give some leniency to those who have been convicted for a crime that had something to do with marijuana by not denying the license based solely on that conviction. But the earlier paragraph 26057 would deny the license based on a sanction? This is doublespeak at its finest.
26060 States that the Department of Food and Agriculture will govern the licensing of indoor, outdoor and mixed-light cultivation. Additional oversight will be governed by (b) Dept of Pesticide Regulation, Dept of Fish and Wildlife and the State Water Resources Board.
26061 (e) As of January 1, 2023 a Large Cultivator 5, 5A or 5B will be the only license type that allows full integration of Cultivation, Retail-Type 10 and Manufacturing Type 6 & 7.
26065 This is a noteworthy area in that anyone working in cultivation will be protected under Wage Order No. 4-2001 of the Industrial Welfare Commission.
26066 This paragraph cites all the agencies that will have a say in how you farm. I’m not saying that this is necessarily a bad thing but again we need regulations and the appropriate enforcement standards that would be enacted prior to passage of the bill. I think it was Nancy Pelosi that said we need to pass this thing (health care) before we know what’s in it. How well has that worked?
26067 (2) This section goes to implementing a program that would regulate water use and environmental impact with the caveat that this program will ‘not be limited to’ just these two issues. I like regulation of water and environmental issues that would be caused by cultivation. What concerns me and should anyone else reading this, is the ‘not limited to’ language.
26067 in its entirety asks for the licensee to be in cooperation with the track and trace identifier program at the base of each plant that identifies the number of plants that can be grown by the licensee relative to the available watershed for that farm. If the watershed can not support the additional cultivation no new identifiers will be issued. Should this not be worked out in the licensing stage and not after the license is issued and the operator is in production?
(B) Cultivation will not negatively impact springs, riparian wetlands and aquatic habitats. Water is the new oil and it will spell what shape the industry takes.
The other thing that comes to mind here is if the grower is doing a smaller plant veg with more plants or a vertical garden. This is going to raise plant counts and tags on systems and techniques that may be more productive than large plant grows. Yet the tags are going to create greater expense for the cultivator. If the regulating authority is not open to different cultivation approaches, the result could be a defacto plant count despite actual canopy square footage.
26070.5 This section throws out there this whole section based on them doing a feasibility investigation, before January 1, 2018 for the creation of a non-profit license category for marijuana businesses. I don’t see the point of putting in this the bill unless it’s designed to give the impression that the bill is concerned there be a non-profit opportunity. There should be no opportunity for a non profit to participate in recreational marijuana at all.
(3) With this language the bill is considering giving non-profit marijuana businesses that served low income priority licensing under the new bill. My question here is why would a non-profit medical provider want a recreational license under special considerations in the first place? Do we have discounts for non-profit liquor stores?
26080 (b) This makes sense. It addresses the rights being granted for unimpeded travel in any jurisdiction.
26090 (a) Why are they talking about licensed non-profits being one of only three authorized to perform delivery services? How does a non-profit fit into delivering for profit recreational marijuana which after all is what this bill is about?
26100 Defines Manufacturing Level 1 as non-volatile and Level 2 as volatile solvents.
(c) Testing license shall not be allowed any other licenses.
(d) States that the meaning of volatile solvents can be found in the Health and Safety Code 11362.2. Here is the link. Tell us where that is defined within the document. It’s not there. For such an important element in the licensing requirement how do they get the reference document wrong? https://oag.ca.gov/system/files/initiatives/pdfs/13-0051%20(13-0051%20(Marijuana)).pdf
26101 In this, as in the Marijuana Tax section of the bill they took the time to get very specific about what the licensee needs to do be in compliance with law. We don’t see that type of specificity on other regions of the bill such as what the license fees are going to be, where the regulations will come ‘promulgated’ is the word they use, only after the law is passed.
This section requires testing for THC, THCA, CBD, CBDA, CBG,Terpenes, CBG, CBN and for the presence of contaminants proving they do not exceed the latest version of the Cannabis Inflorescence Monograph published by the American Herbal Pharmacopoeia. This is disingenuous. Why not just give us a specific link to where we would find the limits of these pesticides? Why make it so difficult to have this information readily available? We have a Bureau of Pesticide Regulation. Can’t they provide us with those limits from their medical marijuana standards? Why do we have to hunt for this information?
In a Google search of the Cannabis Inflorescence Monograph published by the American Herbal Pharmacopoeia one can see the list of chemicals in table 10 that are common pesticides for cannabis but the limits are not given in that reference document. That document references the limits as set forth in the International Conference on Harmonization (ICH) (ICH 2011) and can be seen here:
(b) Residual levels of inorganic solvents limits are also stated here to be found in the United States Pharmacopeia (USP 467) which a Google search was difficult to find
Although in my searches I happened across some informative articles on cannabis testing:
Perhaps the reason AUMA does not make a direct link to these limits is because the legislature has not established them:
The Legislature finds and declares all of the following:
(a) The United States Environmental Protection Agency has not established appropriate pesticide tolerances for, or permitted the registration and lawful use of, pesticides on cannabis crops intended for human consumption pursuant to the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. 136 et seq.).
(b) The use of pesticides is not adequately regulated due to the omissions in federal law, and cannabis cultivated in California for California patients can and often does contain pesticide residues.
(c) Lawful California medical cannabis growers and caregivers urge the Department of Pesticide Regulation to provide guidance, in absence of federal guidance, on whether the pesticides currently used at most cannabis cultivation sites are actually safe for use on cannabis intended for human consumption.
(Page 31) Chapter 11. Quality Assurance, Inspection and Testing
This entire section consists of just 2 tiny paragraphs.
26110 (a) In a regulated industry a licensee agrees to random inspections. That’s the way it is. I’ve seen posts where people relate this section to police entry without a warrant. When you apply for and are granted a license under AUMA you are giving law enforcement the right to enter your place of business and search all records and activities without a warrant. See Section 7: Marijuana Tax 34016 (c) whereby when applying for and accepting their license, the licensee agrees to these terms.
(8) Labels must have a list of any solvents, nonorganic pesticides, herbicides and fertilizers that were used in marijuana or marijuana product.
26130 (a) (2) All products must be in standard doses not to exceed 10 milligrams per serving.
(3) This 10 mg per serving goes on to describe marijuana products in ‘solid form edible’ may be delineated into 10 mg doses while the total quantity of the product is greater, which would exclude liquid form products.
What’s not been made clear if this section applies to liquid extracts? Does it mean it needs to be packaged in individual 10 mg doses?
If it were to apply to say a vape cartridge with 300 mg of THC you would label it as 30 ea., 10 mg doses. This allows the end user to associate a cost per dose value. But if we’re talking wax or shatter it makes it impossible to sell those products under a 10 mg per serving dose.
26140 (b) This section authorizes the use of underage decoys. Not saying it’s wrong as that’s what’s done with retailers who sell alcohol. Just saying be aware.
26150 thru 26152 Sections such as this are recreational marijuana specific and quite detailed. This once again shows that specificity can be accomplished when the authors want to provide it. The authors took the time to develop language in 26152 (d) that prohibits any billboard type advertising on an interstate or state highway that crosses into another state.
26153 No licensee shall give away any amount of marijuana or marijuana products or marijuana accessories as part of a business promotion of other commercial activity. How does this impact your Emerald Cups and similar events? Under AUMA they would be forever changed.
How would the passing of AUMA impact events held in California when local law enforcement has to uphold this section. Pretty straightforward. It puts a stop to the giveaway and sampling side of things. But the marijuana accessories part is confusing. Would that accessory include a gardening tool used to grow marijuana?
26160 (b) All records must be kept for 7 years. I’d be curious as to what other industries have to keep their records for 7 years.
(c) Inspections can be done as the inspecting agency ‘deems necessary’ which can be at any time during standard business hours at the licensed facility.
(d) The licensing authorities may make ‘any examination’ of the records of ‘any licensee’. As a licensee you agree to waive your 4th Amendment rights as stated: The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.
(e) If there is any impeding of the investigative process or the records have not been properly maintained the licensee will be subject to a $30K fine per individual violation.
26170 (a) Requires the same level of tracking as the medical marijuana products.
26180 (a) Each licensing authority shall establish their own fees based on the costs of enforcing this division. I find this to be broad ambiguous language that offers zero accountability prior to voting on the bill as to what the fees will actually be.
(b) But not to worry. We don’t need to know what the annual fees are going to be this paragraph describes the new fees to be ‘fair and proportionate’.
26181 In a new section they go on to describe ‘The other agencies that may establish fees’ would be the State Water Resources Control Board, The Dept. of Fish and Wildlife and other agencies to establish fees. What I have to wonder with 26180 and 26181 saying the same things unless there are additional agencies other than those described in 26181 why wasn’t this agency description in 26180? It makes me wonder how many agencies might eventually be feeding at this trough or is this just a catch all paragraph?
(Page 38) Chapter 19 Annual Reports; Performance Audit
This section would be one that those who advocate voting for the law than making changes along the way would point to as how the law would work and get better in time.
26190 As of March 1, 2020 this section requires that each licensing authority submit a report that details the rulemaking and regulatory relief changes that are submitted to the agencies by the licensees.
(Page 38) Chapter 20. Local Control
26200 (a) This is where the local governments get to regulate marijuana based businesses on land use regulations and other local licensing requirements they would set forth. The problem here is rezoning and we see it already. If the local authority rezones a property that was acceptable for a marijuana business and then it is not eligible based on the rezone as a licensee you would potentially have an issue that would have to be adjudicated in a court of law. In the meantime the bureau may strip the licensee of their license because the situation with the local government had changed from when the license was first issued. I would like to see this rezoning issue be in a bill that would at least protect the licensee from losing their license until such time that the zoning issues were resolved. ,
(c) This states that if a local authority takes action against the licensee the local authority will notify the bureau of the violation and the bureau will commence proceedings to determine if the licensee shall have their license should be suspended or revoked. When I read this language it makes me wonder where the innocent until proven guilty part of the proceedings went?
Adds Section 147.6 of the Division of Occupational Safety and Health Labor Code which will determine if there needs to be specific safety regulations established for employees exposed to secondhand marijuana smoke and if there are special safety requirements standards needed from the risks such as armed robberies, repetitive injuries etc.
Amends Section 13276 of the Water Code
- Creates a multi agency task force that is assigned to respond to the damages caused by marijuana cultivation.
- The multi agency task force shall work with regional boards.
California is in serious financial trouble and AUMA represents an aggressive method to pull us back from the brink of financial ruin with this tax mechanism. But in so doing it would forever change our relationship with a plant that for over 70 years our government has lied to us about. Is it really any surprise that the largest portion (20%) of AUMA deals with taxes generated from marijuana sales and those agencies who will reaping the financial windfalls? Read Section 7: Marijuana Tax and you’ll see immoral when they start charging a patient a 15% excise tax and taxing already taxed products.
(a) There will be a 15% excise tax imposed upon purchasers of marijuana.
(d) This excise tax will be in addition to any local sales or use taxes.
(g) The sales and use taxes will not apply for a primary caregiver or a medical patient. How are they going to back out the excise tax for the medical patient? They aren’t. Patients will have to pay an extra 15% for their meds.
(a) There will be a cultivation tax which will be due once the marijuana is harvested.
(1) The cultivation tax for marijuana flowers will be $9.25 per dry weight ounce.
(2) The cultivation tax for marijuana leaves will be $2.75 per dry weight ounce. Not sure how they got this value, the ratio of flower value to leaf value is far greater than this. The leaf tax should be much less and what about leaf that is of no value? Also how is this going to work for live resin extract when we don’t have a dry weight value? Are we to pay the tax on wet weight or guess on what it would weigh dry?
(c) The board may add other categories for taxable purposes such as immature plants, unprocessed or frozen marijuana products. I see this as a way to collect nursery taxes coming from cloning operations. So if you do your own clones will you have to pay that tax too?
(e) Any person who fails to pay the taxes imposed under this part shall, in addition to owing the taxes not paid, be subject to a penalty of at least one-half the amount of the taxes not paid and subject to having their license revoked.
(b) Here is where the board states they ‘may’ require the licensee to have ‘security’ for any of the taxes that would be due under these regulations. This means that deposit or a bond issued by a surety would have to be provided to The State Board of Equalization of sufficient amount to cover any monies that would be due but not paid.
(a) Any peace officer or board employee is granted access to enter any place within the licensee’s place of business to conduct inspections to assure all marijuana and related products are being accounted for and all appropriate taxes are being paid.
(b) Failure to allow an inspection shall result in a fine up to $5K and/or up to 1 year imprisonment in a county jail.
(c) If the inspecting officer sees any evidence that retail sales are occurring without the appropriate taxes being paid then the law enforcement agency shall be authorized to seize all the marijuana and marijuana related products. Within 7 days of the seizure those products are deemed forfeited.
This section states that the Legislative Analyst’s Office shall submit a report to the legislature by January 1, 2020 to consider whether or not tax rates need to be adjusted to achieve the goals of undercutting illicit market prices and discouraging use of those under 21 while ensuring sufficient revenues are generated for all the state agencies involved in regulation of the industry. The goals of undercutting an illicit drug market by presumably reducing tax rates is in direct conflict with their other goals of feeding this massive new bureaucracy. It’s obvious an economist wasn’t involved in this strategy.
The monies generated by all the taxes and fees shall be appropriated to a special California Marijuana Tax Fund and shall not be a part of the General Fund. Let’s see how long that lasts.
34019 (a) (1- 7)
This section broadly describes how the tax money will be distributed to these agencies to recover ‘reasonable costs’:
The Department of Consumer Affairs
The Department of Food and Agriculture
The Department of Public Health
The Department of Fish and Wildlife
The State Water Resources Control Board
The Department of Pesticide Regulation
The State Controller
The State Auditor
The Department of Finance
The Legislative Analyst’s Office
The Bureau of Marijuana Control
The Division of Labor Standards
The Department of Industrial Relations
Occupational Safety and Health (OSHA)
Employment Development Department (EDD)
What is worth noting here is that many of these agencies will already be getting funds from the licensing of these new recreational marijuana businesses.
Now we see this section get more specific in terms of how the money will be spent:
(b) $10M to a public university or universities annually from 2018 thru 2023
(c) $3M annually to the California Highway Patrol (CHP) annually from 2018 thru 2023
(d) $10M Governor’s Office of Business and Economic Development annually 2018 thru 2023 at which time it will be raised to $50M annually
(e) $2M UCSD for medicinal cannabis research
(f) (1) After paying the above recipients the remaining monies (60%) will be distributed to new sub-trust accounts administered by the Department of Health Care Services and the Department of Education which will provide grants to a wide variety of organizations that work to educate and treat substance abuse disorders.
(2) 20% of the remaining monies will go to the Environmental Restoration and Protection Account and disbursed to;
The Department of Parks and Recreation
The Department of Fish and Wildlife
(3) 20% of the remaining monies will go the State and Local Law Enforcement Account. With distribution as follows:
(A-B) California Highway Patrol to fund internal CHP programs that educate, provide grants and would buy equipment necessary to enforce detection and apprehension of those who would be driving under the influence of alcohol and/or drugs, including marijuana. Beginning in 2022 the CHP will be given not less than $50M (see subparagraph D) annually from this fund.
(C) The Board of State and Community Corrections that would give grants to law enforcement, fire protection, or other local governments to be used in protecting public health and safety as a result of the implementation of AUMA. Local governments that have banned marijuana business of personal cultivation shall not be eligible for grant monies under this section.
34021 (a) The taxes imposed in this part shall be in addition to any other tax imposed by a local government tax.
34021.5 (a) (1) A county may impose a tax on the privilege of cultivating, manufacturing, producing, processing, preparing or selling marijuana or marijuana products by a licensee.
Taxation and Black Market Analysis
A lot of the language in AUMA goes to reducing the black market and even eliminating it. As to eliminating it, we don’t need too much analysis to realize that is likely impossibility. Reducing it would be a function of enforcement and market conditions, if there is enough price differential between the legal and black market, there will always be motivation for users to pursue or continue to purchase cheaper marijuana in the black market.
The high taxation proposed in Auma is counterintuitive to reducing black market activities since this will increase the overall expense to the user and increase the price differential of the legal and non-legal markets.
Taxation, Taxes, Tax, and more Tax
The following is a taxation analysis based on prices of the current San Diego medical marijuana dispensaries. Let’s assume a high quality product sold in a dispensary at $60/eight oz.
It starts with the Cultivation Tax which the farmer pays @ $9.25/oz. or $1.16 per 8th oz which will be reflected in the price going forward. Keep in mind that this tax is a FIXED VALUE as it applies to any weight regardless of quality. That means $9.25/oz on a high end plant($2K/lb) won’t be as big an issue as opposed to a low end plant where the $9.25/oz is a larger percentage of the value on a low-mid ($1K/lb) level plant
$1.16 Cultivation tax for 1/8th oz.
X 3.5 Times mark up from cultivator to retail purchaser.
= $4.06 Added to the retail price.
+ $60.00 Current 1/8th oz. price.
= $64.06 new price with cultivation tax influence.
Then we add the Point The Excise Tax, Sales Tax, and Local Tax to the new price:
$64.04 NEW PRICE
+ $9.61 15% state excise tax.
+ $5.12 8% state sales tax (San Diego).
+ $5.12 8% local tax (San Diego).
= $83.89 Total out the door cost to the purchaser.
40% increase in cost to the retail purchaser.
Other factors affecting cost
Cost of compliance to new regulations
IRS code 280e
(b) (2) If you are over 18 you are not allowed more than 28.5 grams of marijuana or 4 grams of concentrate which is punishable by 6 months imprisonment in a county jail, a not more than $500 fine or both. This language is in direct conflict with the Section 4. Personal Use 1136.1 (2) limits that allow 8 grams of concentrate. Which are we to believe? There are those who would say that this is language that would apply to over 18 and less than 21 years of age but that is not the way it is stated. Furthermore in 11358 (b) when the regulation is for cultivation between the ages of 18 – 21 it is clearly stated.
(c) (1) What are the fines if you’re on a school grounds (K-12) and get caught possessing over 28.5 grams of marijuana or 4 grams of concentrate? Well the fines go down to not more than a $250 fine for the first offense. Subsequent offenses would subject you to the normal not more than $500 fine and/or 6 months imprisonment. My question is how is this reduction of the fine on the first offense protecting our youth and why is there not a first offense reduction for everybody?
11358 Planting, harvesting or processing.
(c) Every person over 18 who plants, cultivates, harvests, dries, or processes more than 6 living plants shall be punished by imprisonment in a county jail, a fine not more than $500 or by both.
(d) Here we have reference to where the defendant ‘may’ be punished by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code which reads:
(h) (1) Except as provided in paragraph (3), a felony punishable
pursuant to this subdivision where the term is not specified in the
underlying offense shall be punishable by a term of imprisonment in a
county jail for 16 months, or two or three years.
11359 Possession for Sale
(b) Every person 18 years of age or older who possesses marijuana for sale shall be punished by imprisonment of not more than 6 months in county jail and/or not more than a $500 fine. As with the previous section AUMA once again cites that the defendant may face harsher (up to 3 years) charges as defined within subdivision (h) of Section 1170 of the Penal Code.
11360 Unlawful transportation, importation, sale or gift
(a) Every person 18 years of age or older who transports, imports, sells, furnishes, administers or gives away marijuana or marijuana products shall be punished by imprisonment of not more than 6 months in county jail and/or not more than a $500 fine. As with the previous two sections AUMA once again cites that the defendant may face harsher (up to 3 years) charges as defined within subdivision (h) of Section 1170 of the Penal Code.
(d) This section does not preclude or limit prosecution for any aiding and abetting or conspiracy offenses. This section would be cited in any legal action that sought to enjoin the landlord of a property where the infraction was taking place.
11361.5 Destruction of arrest and conviction records: Procedures and Exceptions
Limits the time that the agencies can hold these records in their databases to 2 years from the date of conviction or if there was not a conviction the date of arrest.
11361.8 Requires those serving marijuana related sentences to petition for a recall or dismissal of sentence before the trial court that entered the judgement of conviction. These may not be routine dismissal petitions as the petitions can be opposed by an opposing party and the judge can deny them based on a determination that the petitioner would pose an ‘unreasonable risk of danger to public safety’.
There is no reason to put industrial hemp into this bill as it is already legally recognized under SB- 566, the California Industrial Hemp Farming Act as an agricultural product. If changes to SB- 566 were necessary as a result of anything to do with the passage of AUMA they should be done in an amendment to that bill not within a proposed initiative like AUMA. Tacking this section into the tail end of the initiative is in my opinion a way of loading up the bill so it looks like every aspect of the recreational regulatory process has been addressed within the initiative.
The legislature may by majority vote to amend, add or repeal and provisions to further reduce the penalties for any of the offenses addressed by this Act. Any other provisions of the act may be amended by a ⅔ vote of the legislature to further the purposes and intent of the Act.
This is where it pays to be a lawyer. They state that no part of AUMA shall create ‘positive conflict’ with federal law. I’m not a lawyer but what I believe this is saying is that federal law will trump state law if it were to come down to it and you can’t use federal law to make claims that state recreational laws can’t stand because they are in conflict with federal law.
Suggested Areas of Discussion:
1) What makes the AUMA better than previous laws such as Prop 215?
2) Could previous laws have been adapted or modified to make better use of an AUMA type bill that would have set forth a regulated recreational cannabis law in California?
3) What are the specific differences between recreational and medical laws here. For example, if a doctor were to prescribe a patient can grow more than 6 plants for a medical condition, would they be able to do so under the medical laws but not able to so under the recreational laws?
4) How does the AUMA protect a business that is in full compliance with all state laws from Federal interdiction under the Controlled Substance Act? If the State does not have a position on this, aren’t we at risk for Federal asset forfeiture and the State would be guilty of aiding and abetting the violation of Federal law?
5) To those who say to pass this bill and we’ll fix it, how does that really work when it comes to how taxes are collected? Do regulations ever get relaxed?
6) What are some proposals to replace AUMA and create recreational marijuana laws?
General Comments Section
1) James Brady Comments: In addition to zoning codes for Urban Ag how do we apply for conditional use permits for Cannabis growers?
Will value added products be allowed for sale at farmers markets? Can a grower or property owner take advantage of Tax incentive zones when selecting a dispensary location?
This Agribusiness will not be like others in the marketplace.. It must establish public trust in its operations by ensuring public safety issues are addressed! Concerns about educated professionals running profitable cannabis businesses who have not been properly trained in the health impacts of cannabis, responsible use and the critical priority of limiting youth access?
The Hemp and cannabis marketplace must establish larger scale marketing and educational programs to introduce all the new products to Californians over the next decade.
Adult use of cannabis and businesses entering the recreational marketplace will need to understand the legal and regulatory framework, to increase sales and margins through branding in high valued products!
How will the state of Calif hinder or support health and wellness in the cannabis industry? As the market expands the demand for product certifications and for trained nurses and health providers will grow, especially at assisted living facilities, to include hotels, spa’s, and vacation destinations. They will have to incorporate medical use cannabis products in their operations and train employees, locally and at state levels!
SD Union Tribune: Fewer Marijuana Dispensaries than Expected. http://www.sandiegouniontribune.com/news/2016/aug/09/weed-shop-dispensary-cannabis-san-diego/
State of CA Initiative Website.
DEA seeks more applicants to grow cannabis for research projects:
Weed for Warriors Project Response to Lt Gov Gavin Newsome’s endorsement of AUMA
In Support of AUMA links:
In Opposition to AUMA links :
Open Forum Discussions: Time/Date/Locations
We are looking to have a series of three Open Forum Discussions in San Diego over the next 60 days. We would also like help in establishing a Sacramento and a Los Angeles event. If you have any ideas as to where would be a good place to hold these events, please notify email@example.com
8-16-16 (6-9pm) Giovanni’s Restaurant 9353 Clairemont Mesa Blvd San Diego CA 92123
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