On Tuesday night, a majority of Californians voted in favor of Proposition 64, the Adult Use of Marijuana Act (AUMA). The AUMA is the legislative blueprint for California to regulate and tax the cultivation, transportation, and sale of cannabis for recreational use.
Now that the law has taken effect, here are 10 aspects of the AUMA to be aware of:
- You must be an adult to legally ingest cannabis. The AUMA allows people who are 21 and older to possess, transport and buy up to 1 ounce (28.5 grams) of marijuana for recreational use. Medical marijuana patients may still possess the quantities necessary to meet their medical needs, even in excess of the 1 ounce limit.
- Adults may cultivate cannabis for personal use in their homes. AUMA allows adults to grow and use up to six marijuana plants. Local jurisdictions may still ban outdoor cultivation for personal use but may not ban indoor cultivation; however, local ordinances may reasonably regulate indoor cultivation (e.g., standards for use of water and/or electricity).
- There are restrictions on public consumption. Cannabis users will not be allowed to smoke marijuana on sidewalks or public places, nor will its use be permitted within 1000 feet of a school, day care, or youth facility when children are present. Marijuana cannot be smoked in places where state or local law already prohibits tobacco smoking, including restaurants and theaters, and cities may expand bans on marijuana by expanding their tobacco bans. Violators of the restrictions will receive a $100 fine ($250 if the offense is committed near a school/youth facility).
- Recreational commercial activities will not be allowed until licensing is in place. Commercial cannabis operators that cultivate, process, transport, test, or sell marijuana must get a state license and pay a fee—as yet undetermined—to cover the cost of the state processing and enforcing the licenses. Applicants will be required to undergo a background check to obtain a state license, and they can be denied if they have felony convictions involving violence, fraud, drug trafficking or selling drugs to a minor. Local governments may also set their own ordinances to require local permitting to conduct commercial cannabis operations in their jurisdiction.
- Multiple regulatory agencies will be involved in the licensing of recreational cannabis activities. The Bureau of Medical Cannabis Regulation (BMCR) in the Department of Consumer Affairs will now be renamed the Bureau of Marijuana Control (BMC) and given chief authority to regulate the industry. The BMC is charged with licensing transport, distribution and sale; the Department of Food and Agriculture (CDFA) with licensing cultivation; and the Department of Public Health (CDPH) with licensing manufacturing and testing.
- AUMA does not have a dual licensing system. AUMA will allow cannabis operators to freely conduct business within any local jurisdiction, unless that jurisdiction passes an outright ban or creates a local permitting regime. Therefore, if local law bans recreational cannabis, the state will not issue a license. If local law allows it subject to a local permit, the state will issue a license only if the applicant is in local compliance. If local law is silent, a cannabis operator only needs a state license.
- Public roads to transport cannabis are fair game. Local jurisdictions may not prohibit the use of public roads to transport cannabis to another jurisdiction. This means that even if a particular locality has prohibited commercial cannabis activity, it cannot prohibit the use of public road ways for cannabis operators passing through its jurisdiction.
- Cannabis will be taxed by the state and by many counties and cities. The AUMA allows the state to impose a 15% excise tax on the retail sale of cannabis. In addition, the state will levy a cultivation tax on growers of $9.25 per ounce for flowers and $2.75 per ounce for leaves. Medical marijuana patients would be exempt from paying state sales taxes. Cities and counties may also impose their own local taxes on cannabis operations that will be assessed in addition to the aforementioned state taxes. The November 2016 election featured dozens of local ballot measures proposing to tax cannabis operators. The results of these ballot measures can be found in our article, "Getting Into The Weeds: Californians Voted On 52 Local Cannabis Measures Last Night."
- California could make lots of money on pot sales. Here’s how it could be spent: State analysts estimate state taxes could generate up to $1 billion annually to be used for expenses. Just a few of the potential uses for cannabis tax revenue include: covering state costs for running and enforcing the program; allowing state universities to research health and safety issues; permitting California Highway Patrol to develop processes for determining when a motorist is impaired by marijuana use; programs to prevent and reduce environmental damage from illegal marijuana producers; and youth programs for drug education, prevention and treatment.
- There are numerous restrictions on advertising and marketing cannabis under the AUMA. The AUMA prohibits the marketing of marijuana products to minors. Advertisers and retailers will not be able to use symbols, language, music or cartoon characters aimed at appealing to those who are underage. Furthermore, cannabis cannot be advertised on billboards located along an interstate highway or state highway that crosses the border of any other state, nor within 1,000 feet of schools or youth facilities. Federal prohibitions on marijuana disallow any advertising of marijuana on radio or television.
Kronick will be hosting a free "Lunch and Learn" event on Thursday, December 8th that will explore the potential legal impact of recreational use on the current state of the cannabis market. For more information and to register for attendance, please visit the event page here.