BRIEF HISTORY OF MARIJUANA REGULATION
- 1996
- Voters Approved Prop 215 (Compassionate Use Act)
- Medicinal Marijuana Use
- 2015
- Legislature Approved MCRSA (Medical Cannabis Regulation & Safety Act)
- In Part, Created State’s 3 Cannabis Licensing Agencies
- Bureau of Cannabis Control
- CDFA – CalCannabis Cultivation Licensing
- CDPH – Manufactured Cannabis Safety Branch
- 2016
- Voters Approved Prop 64 (Adult Use of Marijuana Act)
- With Some Restrictions, Adults 21 & Over Can Grow-Possess-Use Marijuana for Non- Medicinal Purposes
- As of 01-01-18, Legal to Sell-Cultivate-Manufacture-Distribute Marijuana Through Licensed Businesses (Must Have State & Local Licenses)
- 2017
- Legislature Approved MAUCRSA (Medicinal & Adult-Use Cannabis Regulation & Safety Act)
- In Part, Now a Single Regulatory System for Medicinal & Adult-Use
- 2018
- State Agencies Began Issuing Temporary Licenses on 01-01-18
- 2019
- Final State Regulations Were Approved on 01-16-19
WHAT DOES MAUCRSA ALLOW?
- LOCAL CONTROL
- All Cities and Counties are Allowed to Ban or Regulate Commercial Recreational Marijuana Activities, in Whole or in Part
- Deliveries Are Currently an Exception & Must be Allowed Under the State Regulations
- But Litigation is Pending
- IF A CITY/COUNTY CHOOSES, IT CAN ALLOW:
- Cultivation – Outdoor & Indoor Plant-Grow-Harvest-Dry-Cure-Grade-Trim
- Manufacturing – Compound-Blend-Extract-Infuse-Otherwise Make or Prepare-Package-Label
- Distribution – Between Licensees: Procure-Sell-Transport
- Testing Tabs – Test Cannabinoids-Content-Moisture-Etc (As Required by Regulations)
- Retailers (Storefront) – Retail Sale to Medicinal and/or Adult-Use Recreational Customers
- Retailers (Non-Storefront) – Retailers (Storefront)
LOCAL AGENCY AUTHORITY TO BAN OR REGULATE
MOST CITIES THROUGHOUT STATE CONTINUE TO BAN ALL RECREATIONAL MARIJUANA BUSINESSES. Some Trend Towards Regulation?
Riverside County
- Prop 64 = 52.9% Voted Yes County-Wide
- 21 of 28 Cities Voted Yes
- Prop 64 = 9 of 21 Voted Yes by 53% or Less
- Western Riverside County
- Prop 64 = 12 of 18 Voted Yes
- Prop 64 = 8 of 12 Voted Yes by 53% or Less
- 11 of 18 Ban All Businesses
- 1 Allows Limited (Riverside = Lab Only)
- Eastern Riverside County
- Prop 64 = 9 of 10 Voted Yes
- Prop 64 = 3 of 9 Voted Yes by 61% or More
- 8 of 10 Allow Some Businesses

SOME LOCAL AGENCIES REGULATING AT LEAST SOME BUSINESSES
- Western Riverside County
- Banning
- Jurupa Valley
- Lake Elsinore
- Moreno Valley
- Perris
- Riverside
- San Jacinto
- Riverside County
- Other Local Agencies
- Chula Vista
- Costa Mesa
- Santa Ana
- Of These, Most Began or Conditioned on Approved Ballot Measure
- Lake Elsinore, Moreno Valley & Riverside County Began by Legislative Action
- City of Riverside – Legislative Action to Allow Testing Only (Understand: 4 Apps; None Operating)
ARE CITIES EARNING “NET” TAX REVENUES?
- STILL TOO EARLY TO TELL / DIFFICULT TO CALCULATE
- POTENTIAL DOWNWARD PRESSURES ON PRICES & TAXES
- Appears to be Excess Inventory
- Pressure on State & Locals to Reduce Taxes & Allow Vertical Integration
THE SANTA ANA EXPERIENCE
- 2014 Ballot Measure – Medicinal Use & Tax
- 2017-18 Council Action – Recreational Use
- 2017-18 Council Action – Recreational Use
- 80+ Illegal Businesses at One Time
- Still Early, But They Firmly Believe They Will Net Tax Revenues
- 9 Corona Staff Members Spent the Day with Santa Ana Staff
- Police
- Planning
- Code Enforcement
- City Attorney’s Office
- Building/Fire Inspector
- Finance
- Discussed Experiences & Toured 2 Retail Establishments & 1 Testing Lab
- 2014 – 20 Retail Medicinal Authorized
- 2018 -10 Additional Allowed (Medicinal & Recreational)
- Currently – Only 18 Licensed Retail (Medicinal & Recreational)
- 1 Licensed Manufacturer
- 2 Distributors
- 2 Labs
- 12 Extraction Permits Issued (None Currently Open)
- Publicly Stated – Believe 18 Retailers will Generate $6M – $7M
- Our Ballpark Estimate of Santa Ana’s Retail Tax Revenues ——- $30,000/mo per Retailer
Corona – Different Market/Expectations
- SA’s Population is Roughly Double in Fewer Square Miles
- SA Currently Dominates South Orange County and Surrounding Market
- Just Use Number as a “Hopeful” Frame of Reference – Don’t Use as Expected Revenue
- These Numbers Are Educated Guesses
- Corona’s Market is Not Likely as Robust
- Downward Pressure on Prices/Taxes
- Taxes on Other Marijuana Businesses?
LESSONS LEARNED
STATE CONFERENCE – CM STEINER AND CA DERLETH
- Must Regulate for Policy Reasons – Not $$
- Make Certain Public is in Support – Ballot Measure?
- Regulating is Complicated
- Planning, Licensing, Inspections, Legal, DWP Issues, Background Checks etc….
- Social Justice Components Are Important to Many Communities But Are Complex to Regulate As Well
- Make Sure License Process is Open & Fair – Lottery System
- Take Time to Do it Right (12-18 Months)
- Have Dedicated Personnel & One Primary Point of Contact (Consistency & Expertise)
- Equipment, Support & Consultants (e.g. Auditors) Needed for Many Aspects
- Banking No Longer Seems to be a Significant Impediment
- You Will Have Increased Litigation – Take Steps to Reduce Number & Increase Likelihood of Success
- Enforcement Against Illegal Dispensaries Will Significantly Increase
- Compare – Current Ease/Low Cost
CONCLUSION
- FOLLOW-UP STEPS/CONCERNS
- Gauging Community Support – Ballot Measure
- Opening Door to Regulation – Very Difficult to Go Back
- Staffing & Enforcement Costs – “Net” Financial Impact
- Secondary Effects
- PD Concerns – Secondary Crime; Limited State Oversight; Cash Businesses; DUI & Other Calls for Service
- Zoning Must Be Primary Concern
- CD Concerns – Where to Site Businesses?
- If Policy Decision is to Move Forward – Take Time to Plan – Still Time to Learn from Other Cities While Moving Forward