California Cannabis Law FAQ

Is cannabis legal in California? Yes, and no. Three legal regimes apply to Cannabis: Federal, State and Local. Under Federal Law, Cannabis is still classified as a Schedule I substance under the Controlled Substances Act. There has been legislation introduced to de-schedule Marijuana and reclassify it from Schedule I, but nothing has passed yet as of April 2017 and the CSA is still the Federal Law in all 50 states.

Under State law in California, you have a defense as an individual charged with possession for sale of marijuana (Cal Health and Safety Code 11359) if you are a marijuana patient collectively associating with other patients, as long as you are doing so in a not-for-profit way, which is the subject of much confusion and litigation. Prop 64 which went into effect in November 2016, decriminalizes possession of cannabis in California and allows individuals to cultivate up to 6 plants per residence.

Cannabis businesses will be able to become legal if they are approved for state permits under MCRSA and AUMA. It is important to note that in order to apply for a California state license, you will need a local permit from either your city or county and be compliant with the local regulations and have been approved by your local governing body in order to do so.

Please be advised that marijuana activity is still against federal law as noted above. There is a quasi-defense available as long as Congress continues to pass an appropriations rider (that has been reinstated every year so far since 2014) which prohibits DEA spending on medical marijuana enforcement. California also introduced a bill in 2017 (AB 1578) that would prevent local law enforcement from participating with federal authorities on marijuana enforcement activities if it passes.

What is the legislative history of legalized Cannabis in California?

California has had a legal regime for medical marijuana collectives since and it was more robustly implemented via Senate Bill 420 in 2004. Most recently, Californians passed the MCRSA and AUMA. The draft regulations for MCRSA (the medical marijuana regulatory regime) were released in April 2017. The regulations for AUMA are slated to be released in September 2017.

You can read the text of prior Medical Marijuana laws passed in California here:

HSC 11362.5 Prop 215 – Text of Prop. 215
HSC 11362.7 – 11362.85 CA Medical Marijuana Program Act (SB 420)
HSC 11362.9 California Marijuana Research Program

There are many dispensaries in my LA neighborhood. How can I open one?

If you are in Los Angeles, the only dispensaries that are currently legal are the 134 on the Proposition D compliant list that was released by the City Attorney’s office in 2013.  Although the City says this list is not official, we can tell you that if your dispensary is not on the list you will have legal issues. There are many dispensaries that did not meet the criteria for compliance with Prop. D  in 2013 and so, many existing dispensaries are non-complaint.

Measure M passed in March 2017 and regulations are currently being crafted by the City Council with input from the public. Once the new regulations are passed, applications will become available for Angelenos to apply for City permits and licenses later in 2017.

What is the process for applying for a city or county license? 

There are 58 counties in California and over 482 distinct municipalities in the state. Under the state regulations, each city and county has a right to create their own laws to regulate cannabis, up to certain limits. Because you will need a local license in order to apply for a state one under the dual licensing structure, the local laws are extremely pertinent to anyone hoping to obtain a license for their cannabis business.

Check with your City Council or County Board of Supervisors to see whether there are any ordinances in place or upcoming meetings relating to cannabis regulation. Some counties have temporary bans in place, while others are opening up for applications in the coming weeks, and still others have temporarily closed applications while they are processing those who applied in 2016.

Attend your local City Council and Board of Supervisors meetings when there is medical marijuana on the agenda. As a member of the public, you will be able to contribute to the conversation and help shape the cannabis regulations in your local jurisdiction.  If you hire us to consult regarding permitting or licensing, we can and do set up meetings with council and Board of Supervisor members to discuss our concerns and try to help shape the local regulations.

If the City or County is accepting applications, often the first step will be to obtain a Conditional Use Permit (CUP) to confirm that your location is properly zoned and comports with the land use designations the City or County has passed. After your CUP is approved, you will move to the next step and be able to submit your Business License application permit. (note that this process varies by local jurisdiction).

What are the requirements in an application for a city or county license?

The exact requirements will vary by jurisdiction. Typically, they fall into the following areas:

Some cities and counties will require more than the below, and some will not require documents to support each of these categories.

  • Type of activity: each cannabis related activity will have its own license under the new state and local compliance regimes. The main areas for licensing will be: cultivation, manufacturing, transportation, and distribution (dispensaries).
    1. Some local jurisdictions are licensing for certain activities but not for others. For example, accepting applications for cultivation but banning applications for dispensaries.
    2. Additionally, regarding cultivation, many jurisdictions have shown a preference for indoor cultivation over outdoor, due to the perceived nuisance of outdoor cultivation. Check with your local jurisdiction to see what activities are currently eligible for licensing applications.

(1) Business plan: a business plan that outlines the objectives and operating structure of the company as well as the key management and officers will be required. The plan will also require projected operating costs and revenues, planned relationships with suppliers and/or distributors, and an operational overview of how the business will work and what will be accomplished in the first 12-24 months.

(2) Zoning and Land Use: Is the property far enough from sensitive use areas? Is it in the correct zoning for land use purposes according to the municipal or county code (manufacturing, industrial, commercial vs. residential)?

The state law requires that any marijuana business be at least 600 feet from a school. Some local jurisdictions have also included parks, day care centers, and areas where youth congregate as “sensitive use.” Additionally, some have required 1,000 feet of distance. Also note that federal law has enhanced criminal penalties for marijuana distribution within 1,000 feet of schools.

(3) Security plan: many applications require a detailed security plan that shows alarms, personnel and strategy relating to securing the premises for retail (dispensaries) or cultivation operations.

(4) Insurance: some applications will require that you show proof of insurance for your operation.

(5) Site plans: some applications will require you to hire a civil engineer or architect to draw up site plans for your cultivation operation.

(6) Environmental impact / Waste management: some applications will require a waste management plan and/or statement of water usage and how potential adverse consequences will be avoided.

(7) Live Scan / Criminal History: Some jurisdictions will require a live scan of the applicants and a disclosure of any criminal history. Some have written the laws so that you will only be disqualified if your prior criminal history involves a crime of moral turpitude. Other regulations state that past marijuana crimes will not count against you so long as they were non-violent. However, check with your local jurisdiction.

(8) Tax Returns: some jurisdictions require prior tax returns for the persons involved and the entity, if it has been in operation in the past.

Do I need a state license to grow cannabis for personal use?

Under the MCRSA, qualified patients are exempt from the state license program if cultivating less than 100 square feet for personal medical use. However, this requirement begins Jan 1, 2018. It is debatable whether the sunset clause applies to this requirement. The sunset clause is the part of the MCRSA that allows the collective defense until one year after the beginning of the new regime, namely January 1, 2019. Until then, a patient may possess what is reasonable for their medical needs, and there is currently a draft gubernatorial proposal to amend the MCRSA to allow that “reasonable needs” test to continue instead of the 100 square foot regime.

As of Jan. 1, 2018, Primary caregivers with five or fewer patients are allowed up to 500 square feet (up to 30 plants). An exemption under MCRSA does not prevent a local government from further restricting or banning the cultivation, provision, etc. of medical cannabis by individual patients or caregivers in accordance with its constitutional police powers under Section 7, Article XI of the CA Constitution.

AUMA (Prop. 64) allows individuals to grow cannabis for personal non-medical use (up to six plants per residence) without a state license. Only six plants are allowed to be grown per residence. All plants and harvested cannabis in excess of one (1) ounce must be kept within the person’s private residence, in a locked space, that is not visible from a public place. But please note that Prop. 64 has statutory language that prevents CPS from interfering with families of patients on that basis alone, but is not explicitly extended to AUMA users. So, it is best practice to have a medical recommendation if you are using or growing marijuana, if you are using it medically.

Can I sell homegrown cannabis plants or products to others without a license?

No. Proposition 64 does not allow the sale of homegrown cannabis, whether whole plant, clippings, clones, or any product derived from any part of the plant. But it does allow all Californians to give away under an ounce.

Can I smoke or consume cannabis in public places?

No. AUMA (Prop. 64) prohibits smoking or consumption of medical and recreational cannabis in public places or in places where smoking tobacco is prohibited, which includes but is not limited to hallways and lobbies of apartment buildings and hotels, on the street, in schools, amusement parks, public parks and places of business usually open to the general public. Additionally, consumption or smoking of cannabis is prohibited within 1,000 feet of a school or youth area while children present, except on private residential property provided smoking is not detectable by children. One issue that will be before city councils and county boards of supervisors will be zoning issues which determine where people may and may not use marijuana for various purposes.

 

 

FURTHER READING:

 

Federal Law – The Controlled Substances Act of 1970

21 U.S. Code § 812 – Schedules of controlled substances

https://www.law.cornell.edu/uscode/text/21/812

 

California Bureau of Medical Cannabis Regulation

 

Chris Conrad’s Guide to Cannabis Yields and Dosages:

http://www.chrisconrad.com/pdf/cannayieldsdosage10.pdf

 

CA Marijuana Laws Pursuant to Prop 64 – final regulations will be released later in 2017.

You can read the draft trailer bill released in April 2017 here

 

Marijuana Taxes

CA Revenue & Tax Code Division 2, Pt. 14.5 § 34010-34021.5

 

Industrial Hemp / CBD

HSC 11018.5 – What is “Industrial Hemp?”
Food & Ag Code 81000-81010 – California State Industrial hemp regulations (effective Jan 1, 2017)