The new marijuana laws that came into existence as a result of the passage of the famous Proposition 64 gave a new face to the Cannabis industry but at the same time have raised a lot of questions that remain unanswered up to date. Folks who have an interest in getting to the industry have been making numerous calls to attorneys regarding the expected developments now that the medical marijuana is legal in California and other states. So what’s unclear about these laws? Well, while the laws lay groundwork for California’s growing and handling of the medical/recreational marijuana, they fail to make everything clear especially when it comes to business side of this industry.
Every entrepreneur would like to have a place in this industry that has been recreated and given new laws to govern its operations. However, the many blanks are slowing many from taking their first step into the market. That’s why many are resorting to seeking help from attorneys before things are up and going on in the industry. According to experts, the Medical Cannabis Regulations and Safety Act in California isn’t straightforward especially in some sensitive areas. That makes it questionable as to whether or not the state agencies which are given the governing authority will deal with them. Here are four unknown things we expect them to make clear:
#1 Cannabis Distribution
According to the passed Proposition 64, a distributor is a person that’s licensed to purchase medical cannabis from a licensed cultivator or marijuana products from a licensed manufacturer and sell them to licensed individuals/dispensaries. So what’s the issue here? Well, unlike other states which have legalized cannabis, those cultivating the drug in California must go through a legalized distributor to have their product taken to retail. Besides that, the law doesn’t state clearly the other roles that a distributor should play. It, therefore, means that once the law is fully operational, the agencies given the mandate to govern the industry will have to come with additional roles by making rules to regulate the actions of distributors.
Lack of clarity on the role of distributors and other players wishing to act in between the cultivation and retail of medical cannabis is what makes it difficult for willing distributors to join the business. That’s why many of them are seeking help from those already in the industry and also from attorneys. Everyone would like to know exactly the role they will play once they are licensed to work as distributors in the California’s medical and recreational cannabis industry. It’s likely that the distributor’s role under the passed Proposition 64 will only be made clear through rulemaking.
#2 Requirements for License Application
Until now, no one is sure about what the state will ask for a license application. Will California be like some other states that want to see every detail of what you intend to do once you are licensed to cultivate, distribute, or manufacture products from marijuana? To the potential clients, this is not only unclear but also a big hindrance to kicking off the process of getting licensed to start either cultivating or distributing medical cannabis products. In the meantime, those interested should ensure they comply with the already existing rule governing the marijuana industry.
#3 Residency Requirements
Residency requirement under the Medical Cannabis Regulation and Safety Act in the state of California isn’t provided. On the other hand, Proposition 64 makes it clear what one requires when it comes to residency so as to receive licensing to get into the marijuana market. These two controversies between the Safety Act and the recently passed Proposition64 is a red light to potential industry players. Until the residency requirement is made clear through rulemaking, it will no doubt continue being an issue to those planning to have businesses dealing medical marijuana in California
Chapter 5, section 26054.1(a) of the newly passed Proposition 64 states that “no…authority shall issue or renew licensing to any person who cannot demonstrate…California residency from and before 2015 Jan”. It goes further to direct that this requirement will expire on 31st Dec 2019. It means, therefore, those willing to set up medical cannabis businesses must have been residents of the state before or from the said date.
We do not know how much one will be required to pay as a license fee in order venture into the industry. Both the famous Proposition 64 together with the Medical Cannabis Regulation and Safety Act do not have any provided amount to be paid as a license fee. Though it should be made clear, no one should worry about it because California is not expected to come up with huge figures or costs that will scare away those intending to join the industry. Ideally, licensing fees should be an amount enough to cover administration costs.
All the above four important things are still not clear and remain unknown especially to those who were planning and are still hopeful of getting a place in the marijuana market sooner or later. If you are one of them, it’s advisable that you seek to understand every aspect of the business you intend to do before setting your foot there or beginning your operations.