Regulate Cali Medical Weed Like Booze?


So no less than a dozen people have contacted me in the last 24 hours to express their concern for a new proposal being put forth by CA Assemblyman Tom Ammiano that would appoint the CA Alcoholic Beverage Control to control and regulate the industry. The Division of Medical Cannabis Regulation and Enforcement would be created within ABC to establish and oversee statewide standards for cultivation, manufacturing, testing, transportation, distribution and sales of MMJ and MMJ products;  a scale of fees for the above activities To adopt, amend, and rescind reasonable regulations for the control of cannabis; and a licensing program and fee structure for cultivation, manufacturing, testing, transportation, distribution and sale of MMJ. The program shall include an ID card program that respects the protections of the Confidentiality of Medical Information Act. The division shall work in conjunction with law enforcement for the purpose of implementing and enforcing the rules and regulations.

At first I was taken back and my knee-jerk response was “HELL NO.” But then I thought about it for a minute…..booze are everywhere. If ABC controls and regulates the booze market, and booze are everywhere, then why would I automatically be opposed to them regulating medical cannabis?

Let us be honest with ourselves and get real for a minute. Cannabis WILL be regulated in California and probably that will happen this year. There is just too much pressure from all sides, including the cannabis industry, to establish some clear guidelines of operation. The State Attorney General, District Attorneys from all over, City and County Officials, Law Enforcement, and yes….even weedheads, have been demanding that the state give us a clear set of boundaries to operate within. I have long said that the state has failed to protect cannabis users, businesses, and the communities they serve, by not establishing this framework earlier. It is all part of growing up and becoming a legitimate and serious industry.

While regulations will always suck (who likes rules?), they are often necessary to create a level playing field, to ensure that others in the industry are operating to certain standards, and of course, to make sure the government gets their cut. The question we must ask is what should these regulations entail and who should be in charge of overseeing and enforcing them?

I think the Alcoholic Beverage Control may be a good fit. Why? Because first and foremost they want the money. They are not swayed by the influences of limiting competition and creating advantages for a select group of providers like a board comprised of industry stakeholders, unions, and policy makers might. They issue liquor licenses based on a generous availability and certain administrative requirements; but they do not get into the drama of which bar is better, or which liquor store will be more successful. They issue a license and make sure you are paying the proper taxes and not selling booze to minors. As long as they get their money and you follow the rules, they could give a shit if you run the nicest bar in town, or some shitty dive that serves a bunch of alcoholics.

So that objective approach to licensing may be a good thing. I certainly am more hopeful that ABC will be a better option than what was proposed in AB2312 last year. Even that commission was problematic in make-up and likely would have been influenced heavily by the big money players in the industry to restrict licensing to only the few who would pay to play. I think that would have been a real disaster.

Now I am not saying working with Alcoholic Beverage Control will be a walk in the park by any means. Those guys want money and they want as much as they can get. So I would expect a fairly heavy tax burden to be put in place. But what I came up with is that a more competitive environment of licensed manufacturers, distributors, and retailers would create lower prices for weed across the board. We see this happening in Denver now, where the price of cannabis is about 1/2 of the price of weed in Cali. So my thought is that the extra tax burden would probably balance out by the difference in cost through a more competitive market. Not to mention, most jurisdictions currently have some sort of sin tax on medical cannabis, as much as 10% in some areas.

On top of that, many dispensaries are forced to pay HUGE fees to those cities, as much as $60-$70k a year. That cost is passed on directly to the consumer in the form of higher priced weed. There is a reason the wholesale cost per pound is a lot less than it used to be, while most retail pricing has stayed consistent. The overhead for running a dispensary has become super heavy. So do we really think that a state run program will be a hell of a lot worse than the highway robbery we see happening now in most cities? I do not think so.

So before everyone gets out the pitchforks and torches and begins to burn this idea down to the ground, ask yourself, “If not ABC, then who?”

In an ideal world I would personally get to oversee the entire program and make decisions based on what was best for weed. But even I am not that objective, so I would probably be a lousy choice too. The reality we face is that someone will likely be regulating this industry relatively soon. Could the agency responsible for leaving booze all over the community to the point of irresponsibility be a good choice for us? Maybe. I am not entirely opposed to it given the alternatives. I am going to explore it more.

There will certainly be winners and losers too. It will become difficult, or nearly impossible, for small home growers who do a few lights in a spare room to enter the commercial market like they do now. And while that may suck, the truth is that a lot of this product never sees the dispensary shelf anyways. Many dispensaries are vertical these days and growing their own; or they have large scale producers bringing them products cheaper than the small batch guys can afford to give up. So this is already happening to an extent.

The one concern I might have, as a convicted felon for my role in the infamous weed candy cartel incident of 2007, they could make it so no convicted felon can participate in the commercial market. I certainly hope they make exceptions for folks like myself who were convicted for the same actions they are issuing a license for. That would suck if we were left out based on doing the same thing we were trying to get a license for. If ABC does it like liquor licensing then we should be okay.  The ABC guidelines provide that ABC can grant a license to a felon that has been rehabilitated. However, the ABC will investigate and make a determination and could deny the transfer of the license.

So while I am going to keep a watchful eye on the situation, I feel better about it than I did initially; and much better than I did about the initiative being proposed by ASA and CANORML, as well as Ammiano’s AB2312 from last year. It should be an interesting battle to watch, but overall, I think it can and will pass the legislature. We should be prepared for that. I am already starting my outreach to the ABC. From what I hear, they have some okay people running things over there these days, which is encouraging.

Like I said initially…booze are everywhere. There is no shortage of liquor licenses in California. I want weed to be everywhere too, so maybe ABC is not such a bad option after all. Obviously no option would be best, but that is just not realistic. So we can try to get all idealistic and oppose anything and everything that regulates the industry…or we could seek out the best option for that regulation, and I for one do not think ABC is such a big bad option after quickly reviewing their systems and policies for booze….

Should we regulate medical weed like booze in Cali? I am not against it…..I am open to a discussion as to why I should be, so fire away.

UPDATE: Just got off the phone with the Public Info Officer for CA Alcoholic Beverage Control. Did you know that since 2000-2001 the amount of liquor licenses in the State of CA has increased by almost 20% from 71,000 licenses to 85,000. That is what I am talking about…more access.

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