The Medical Marijuana Regulation & Safety Act is a set of three bills (Assembly Bills 243 and 226, and Senate Bill 643) that were enacted in September of 2015 to overhaul California’s medical marijuana industry from the ground up. The act went into effect on January 1, 2016, and that summer was renamed the Medical Cannabis Regulation & Safety Act (MCRSA). The MCRSA brings sweeping changes to California’s medical marijuana industry.

Whether you want to start a medical marijuana business from scratch, or you want to transition your business to the new licensing and regulation system, the assistance of a San Diego medical marijuana lawyer is essential. You will need to consult with an experienced legal professional about state licensing, local permitting, local zoning laws, corporate entities, environmental impact, security, and avoiding the attention of the federal authorities.

If you’re ready to set your medical marijuana business on the path to success, call an experienced San Diego medical marijuana lawyer with McElfresh Law today at (858) 756-7107.

Free consultation for criminal defense cases only. Cannabis business consultation requires a fee.

Regulatory Changes to Medical Marijuana Under MCRSA

MCRSA creates a new regulatory framework by tasking the following agencies with developing licensing standards and regulations:

  • California Department of Consumer Affairs – Establishes the Bureau of Medical Cannabis Regulation to oversee the licensing and regulation of cannabis transportation, distribution, and sale.
  • Department of Food and Agriculture – Regulates and issues licenses for cannabis cultivation.
  • Department of Health – Governs the manufacture, testing, and production of marijuana products such as concentrates, oils, ointments, and edibles.
  • Department of Fish and Wildlife and the State Water Board – Regulate cultivators to protect California’s waterways and riparian zones.

One of the most significant changes to the industry is the shift from collectives towards dispensaries. For-profit cannabis businesses were not authorized under the Compassionate Use Act, so growers banded together as collectives to sell their crops. But MCRSA explicitly makes it legal to operate a for-profit medical marijuana business – but requires them to obtain a state license. As for collectives, they will be allowed to operate through the end of 2017. The only medical marijuana growers who may continue to operate without obtaining a state license under MCRSA are individual patients and primary caregivers with five or fewer patients.

The finalized regulations applying to California’s medical marijuana industry have been in place since January 1, 2018. Some of these regulations include:

  • Taxation – Local governments may tax medical marijuana businesses. On top of that, the state will levy a 15 percent sales tax on businesses, and take $9.25 per ounce of buds grown by cultivators.
  • Packaging – Medical cannabis and related products must have tamper-evident packages and display consumer warnings.
  • Organic Certification – The Department of Food and Agriculture may create standards for certifying organic cannabis by 2020.
  • Pesticide Standards – The Department of Food and Agriculture will put in place requirements on the use of pesticides in cannabis cultivation.
  • Appellations of Origin – Growers cannot misrepresent where their product is grown. Eventually, the Department of Food and Agriculture may create appellations of origin, similar to wine.
  • Track and Trace Program – The Department of Food and Agriculture is developing a computerized system to track every plant and marijuana product that makes its way through California’s cannabis industry.
  • Deliveries – Licensed dispensaries can deliver cannabis to qualifying patients, but only in jurisdictions that permit deliveries.
  • Protecting Children – Cultivation and retail businesses must be at least 600 feet away from schools.
  • Labor Relations – Any medical marijuana business with 20 or more employees must negotiate a labor peace agreement with the relevant union.
  • Privacy – A medical marijuana business must protect the identities of patients and their medical conditions.

Failing to comply with these and any future regulations will result in significant civil fines. Additionally, you may be prosecuted as an illegal marijuana trafficking organization if you are operating outside of the scope of MCRSA.

How Do I Obtain a License Under MCRSA?

In an effort to prevent large monopolies taking over the California medical cannabis industry, MCRSA effectively bans vertical integration. A cannabis business is vertically integrated when it grows, manufactures, distributes, and sells its own products. Under MCRSA, only some cultivators will be allowed to obtain a dispensary license. The distribution, manufacturing, transport, and testing phases of the marketing process must be handled by third parties.

Some of the application requirements include:

  • You must have permission from your local government to operate the business.
  • You must have proof of legal right to occupy the premises of the proposed business.
  • Cultivators must be registered as agricultural employers.
  • Submission of operator fingerprints to the Department of Justice is mandatory.
  • People convicted of felonies involving drugs, violence, or fraud – or any criminal offense relating to the qualifications needed to operate a medical marijuana business – may have their application denied.

Proving compliance with local laws may be the most difficult step. Many municipalities in California have either banned medical marijuana facilities, or are in the process of developing new regulations in response to MCRSA and the Adult Use of Marijuana Act (AUMA).

How Will MCRSA Protect Me From Criminal Prosecution?

As long as your medical marijuana business complies with all applicable state and local laws, the California authorities cannot arrest, prosecute, or take any other adverse legal action against you.

At the federal level, marijuana is still a schedule I controlled substance. But the Department of Justice has instructed its prosecutors to leave legal medical marijuana business alone, except if there is evidence that your business:

  • Distributes marijuana to minors
  • Gives its revenue to gangs or other illegal groups
  • Diverts marijuana into states where it is illegal
  • Is a front for an illegal drug trafficking operation
  • Uses violence of firearms in the cultivation of marijuana
  • Contributes to drugged driving or other public health issues associated with marijuana
  • Grows marijuana on public lands or degrades the environment
  • Allows the use of marijuana on federal property

So long as your medical marijuana business avoids doing any of the above, it is unlikely that the federal authorities will interfere with your operations.

A Skilled Medical Marijuana Business Lawyer Can Help You

Attorney Jessica McElfresh has built her reputation on providing sound legal counsel to her medical marijuana business clients in the San Diego area. Whether helping your business overcome administrative hurdles or defending against criminal marijuana trafficking charges, her strong advocacy skills and experience of medical marijuana laws can get you the results you need. To schedule a consultation, call McElfresh Law today at (858) 756-7107.

This website is intended for informational purposes only. Use of this website does not create an attorney-client relationship. Free consultation for criminal defense cases only. Cannabis business consultation requires a fee.

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