California pot industry's next move: Ballot initiative for state regulation
February 05, 2012
Peter Hecht, Sacramento Bee
A proposed ballot initiative aimed for the November elections begs a key question looming over California's medical marijuana industry: Can stricter state regulation keep the federal government from shutting it down?
Dispensaries, medical marijuana growers and a powerful union local are rallying behind an initiative that would regulate California's $1.5 billion pot trade.
They predict they will be able to raise $2 million from medical marijuana businesses and drug policy groups to qualify the measure for the November ballot. A drive to gather a required half-million valid voter signatures could begin this week after Attorney General Kamala Harris completes a legal summary and petitions are certified by Secretary of State Debra Bowen.
California's medical marijuana economy is mostly governed by local governments, often with conflicting rules. The proposed initiative, the "Medical Marijuana Regulation, Control and Taxation Act," would largely put the state in charge.
It would establish a medical marijuana enforcement bureau in the Department of Consumer Affairs. A commission – with majority representation from the medical cannabis community – would oversee the enforcement bureau, license dispensaries and marijuana cultivators, and set standards for the pot trade.
The effort is a political compromise by wary factions.
The "Emerald Growers Association" from the Humboldt and Mendocino counties pot country signed on after initiative backers rejected a model based on the dispensary-run pot growing centers used in Colorado. The group wanted assurances that rural outdoor pot cultivators wouldn't be cut out of the market by urban indoor growers.
The United Food and Commercial Workers Union Local 5, which two years ago backed the Proposition 19 effort to legalize marijuana for recreational use, signed on to the new initiative after deciding it was the best option to protect union jobs in the pot industry.
The effort also includes Americans for Safe Access, an Oakland-based advocacy group for medical cannabis users that stayed out of the Proposition 19 fight.
After a yearlong effort to update California's medical marijuana rules, they came together in the wake of a sweeping federal crackdown on marijuana dispensaries that includes criminal prosecutions and property seizures.
Local zoning enforcement efforts and the looming threat of federal action have closed 100 marijuana dispensaries in Sacramento County. Since October, the number of dispensaries statewide has fallen from 1,200 to 900.
"We lost half of our membership in California," said Dan Rush, whose United Food & Commercial Workers Local 5 has unionized more than 800 medical marijuana workers.
The state's four U.S. attorneys say they don't take issue with the 1996 California law permitting sale and use of marijuana for medical needs. But they assail California's loosely defined rules allowing medical pot users to share marijuana in nonprofit networks. They say the industry has been "hijacked by profiteers" running pot stores that are likely illegal under both state and federal law.
"The crackdown motivated a lot of people to believe we really needed to clarify state law," said Dale Gieringer, state director for the National Organization for Reform of Marijuana Laws. "The situation has been vague and chaotic. The feds were using that as an excuse to come in and trample all around."
'Unregulated free-for-all'Sacramento U.S. Attorney Benjamin Wagner said in October that federal authorities were taking action as pot stores flourished in California in "a virtually unregulated free-for-all." But federal authorities have not spelled out what they will tolerate.
Advocates say they hope formal oversight would be an elixir against federal intervention, pointing to Colorado.
Until recently, Colorado avoided friction over its medical pot market, which unlike California's is for-profit and heavily regulated. That state requires video surveillance of marijuana transactions and shipments, state licensing of marijuana workers and registration of medical pot users.
None of that is included in the proposed California initiative. Backers of the measure, which could open the door to for-profit marijuana sales in California, say they want to leave many details for the Legislature and medical cannabis commission to decide.
The initiative would impose a 2.5 percent tax and licensing fees on medical marijuana businesses to fund state regulation. It would require cities and counties to allow one marijuana store for each 50,000 residents and prevent local governments from banning dispensaries without voter approval.
The enforcement bureau would be overseen by a commission with 21 members, 14 of them from the medical marijuana community. They are to include four medical cannabis users and advocates, two marijuana policy specialists, one researcher, one medical marijuana union member and six people with experience in dispensaries, cannabis cultivation or lab testing.
"What this is about is recognizing that folks who understand the industry are best at understanding how to regulate the industry," said Dale Sky Jones, chancellor of Oaksterdam University, a marijuana trades school in Oakland.
The commission, as described, also would include a doctor, a nurse and police, tax and health officials. Still, some law enforcement groups are dubious over its bent.
"To say this board will be regulating marijuana is like saying the tobacco industry will form a commission to look at health issues involving cigarette smoking," said John Lovell, a lobbyist for California police chiefs and narcotics officers. "It's just silly."
Legislators urged to actThe measure could appear on the same ballot as two unrelated state measures, being circulated for signatures, to legalize marijuana regardless of medical need.
It comes as top state officials, including Attorney General Harris, say something needs to be done to clarify California's hazy pot rules.
In a letter to state Senate President Pro Tem Darrell Steinberg and Assembly Speaker John A. Pérez, Harris urged passage of laws offering "real solutions, not half measures" on how "individuals may cultivate and obtain physician-recommended marijuana."
Steinberg said he would support legislation to protect medical pot users and address the concerns of federal prosecutors. But he asked, "Can we satisfy them? How far can we go to satisfy them?"
Even in Colorado, the federal government's stance is now less clear. Last month, Colorado U.S. Attorney John Walsh threatened to seize the properties of 23 marijuana stores that operate within 1,000 feet of schools.
University of Denver law professor Sam Kamin said the federal actions are likely a surgical strike, not a broad assault. But he said "if the feds don't respect" Colorado's regulatory program, "they're not going to respect the watered-down version that we see (in the measure proposed) in California."
Democratic Assemblyman Tom Ammiano said he met recently with his region's top U.S. prosecutor, Melinda Haag of San Francisco. He said she "wasn't very encouraging" that an initiative – or legislation – could inoculate California's pot industry against federal actions.
But Ammiano said California must move ahead regardless to regulate medical marijuana. He said voter support or favorable polls for an initiative "may give legislators who are tepid about this a little more assurance."