Adult Use of Marijuana Act


The Adult Use of Marijuana Act (AUMA) was approved by California voters as Proposition 64 in November of 2016. A 62-page legislative initiative, AUMA prescribes how recreational marijuana may be consumed, grown, and sold in the state of California. While the act is certainly a step forward in the nationwide struggle for cannabis legalization, it places significant burdens on growers and cannabis-related businesses. AUMA requires businesses to comply not only with state laws, but local regulations that are often complex.

The time, effort, and money required to start and sustain a fully-legal recreational cannabis business are prohibitive. But with a knowledgeable San Diego marijuana business attorney by your side, you can lessen the stress of opening your business and increase the chances that it will gain approval by local and state authorities. McElfresh Law does everything to help clients grow successful cannabis businesses in Southern California. Call a California marijuana business lawyer today at (858) 756-7107 to schedule a consultation about your business.

Does AUMA Legalize Recreational Cannabis for Everyone?

Effective January 1, 2018, any adult over 21 years of age can legally consume marijuana in California, regardless of whether you are a resident of California or not. This doesn’t mean you can smoke or vape everywhere, however. The consumption of cannabis is still prohibited in all public places with the exception of licensed dispensaries. If you get caught smoking in public, you face up to a $250 non-criminal fine.

Adults over 21 years of age may possess, transport, obtain, or give away (to other adults over 21) up to one ounce, or 28.5 grams, of cannabis. For cannabis concentrates, the legal limit is still unclear. Different sections of the AUMA authorize up to four or eight grams. If you get caught with more than an ounce of marijuana, you will face a misdemeanor charge involving a fine of up to $500, and a possible six-month jail sentence.

When it comes to cultivation, individuals over 21 years of age may grow up to six plants on their own property and keep the buds from these plants. If you are a medical marijuana card holder, you may be able to grow more plants. But under the AUMA, no residence may grow more than six plants for recreational purposes. All marijuana in excess of one ounce must be locked away on your personal property and out of view of the public.

Under federal law, marijuana is still an illegal substance. So if you are on federal land such as a national park, you will face much stricter penalties than you would under California law if you get caught with cannabis.

Does AUMA Affect Cannabis Businesses?

AUMA largely mirrors the regulations put in place by the Medical Cannabis Regulation and Safety Act (MCRSA). Within the Department of Consumer Affairs, the Bureau of Marijuana Control (BMC) will be the primary regulatory body for businesses involved in the transport, distribution, and sale of cannabis. The Department of Food and Agriculture will regulate and issue licenses for businesses engaged in cultivation. Cannabis and manufacturing and testing will be regulated by the Department of Public Health.

None of these state agencies have finalized their regulations, which are expected to be released by or in January of 2018. Around the same time, prospective cannabis business owners may begin to apply for one of the 19 license types available under AUMA. The license types are similar to the ones available for medical marijuana businesses under MCRSA, but they only authorize the licensee to engage in a business related to the adult use of marijuana. So if you want to grow both recreational and medical cannabis, you will need to get both AUMA and MCRSA licenses.

Some license types available under AUMA, however, are distinct from those available under MCRSA. For example, AUMA creates licenses for large cultivators with plots of over a half acre of indoor cultivation or one acre of outdoor cultivation. These licenses will not be issued until 2023 at the earliest. Another interesting license applies to microbusinesses, which are retail operations that include small farms of up to 10,000 square feet of canopy area.

Unlike MCRSA, AUMA does not prohibit vertical integration, which occurs when a single business owns several steps of the production, supply, and retail process. Therefore, under the AUMA, a single business may hold a cultivator, manufacturer, retailer, and distributor license. However, testing operations cannot hold any other license, and large cultivators are not allowed to have distribution licenses. It will be very costly and complicated to apply for each license, so being a vertically integrated recreational cannabis business may not be a realistic goal.

How Does the AUMA Licensing Process Work?

To obtain a license under AUMA, you must have been a California resident as of January 1, 2015. This restriction will no longer be in effect as of December 31, 2019. If you currently have a licensed and fully compliant medical cannabis business, the state will give your application for an AUMA license priority over other applications. Unlike MCRSA, you do not need to supply proof of compliance with local regulations within your AUMA license application. That being said, it’s a good idea to comply with your local laws whether or not it is required within the state license application.

The specific licensing steps will be finalized by early 2018. Until then, we know that state licensing agencies may deny an adult use cannabis business license based on any of the following factors:

  • Restraining competition- No monopolies will be tolerated by any cannabis business licensing body.
  • Perpetuating the illegal market- If there is evidence that your business will sell marijuana out of state or not comply with regulations your license will be denied.
  • Encouraging of abuse- Your business should promote the responsible use of cannabis.
  • Posing a risk of exposure to minors- Nothing about your business should appear to appeal to people under 21 years of age. AUMA specifically prohibits cannabis businesses from operating within 600 feet of schools or youth centers.
  • Violating environmental laws- For cultivators, demonstrating that your operation respects the environment is crucial.
  • Excessive local concentration- If there are too many cannabis businesses in your area, you may not be able to get a license to operate there.
  • Prior criminal offenses- If you or one of your business partners has a serious felony conviction, it could result in the denial of your license. A controlled substance offense is generally not valid grounds for denying a license, however.

Local governments have the authority to restrict or prohibit any recreational business. So even if you get a state license, you may not be able to open your business because of local restrictions. In San Diego County, for example, only the city of San Diego has officially allowed recreational marijuana businesses to operate within its jurisdiction. But even then, city officials have not yet finalized the permitting process.

How a San Diego Marijuana Business Lawyer Can Help

If you want to open a San Diego adult use cannabis business, you should start preparing now. In addition to the extensive rules and licensing requirements put in place by AUMA, you will need to contend with a complex permitting process at the local level. With an experienced San Diego marijuana business attorney by your side, you’ll have a much better chance at overcoming these hurdles. If you need help with your recreational marijuana business, McElfresh Law today at (858) 756-7107 for a case consultation.