Thursday, September 1, 2016
Earlier this year, the California Assembly passed the Medical Cannabis Regulation and Safety Act (MCRSA) establishing among other things a licensing system for the production, distribution and sale of medical marijuana. But several prominent figures in the marijuana policy legalization movement worry that the new regulations threaten to undermine the existing medical marijuana industry. Specifically, DeAngelo and others worry that the new regulations benefit the alcohol industry at the expense of small local growers and consumers. As Politico’s Sara Solovitch explains:
Under the new regulations, licensed distributors were given control over measurement, taxing and testing for all medical marijuana before it can move to the retailer. The rules are modeled on the system that emerged at the end of Prohibition to wrest control from mobsters and their illegal liquor empires. States required wholesalers to bring alcohol from the manufacturer to the retailer, a system that has proven fantastically lucrative for distribution companies. Some of those players are now poised to make millions of dollars as the middlemen in California’s burgeoning medical marijuana market.
The familiar alcohol distribution model gives comfort to California law enforcement and state regulators who still view marijuana growers with suspicion, even 20 years after medical marijuana was legalized. But it runs counter to the 22 other states that have legalized marijuana in some form where cultivators sell their wares directly to retailers.
“We made some challenging compromises and the distributor model was by far the most challenging,” acknowledges [Hezekiah] Allen, [executive director of the California Growers Association] who found himself allied with interests like law enforcement he and his family once considered enemies. “But it was the foundation for what we’ve done.”
But the transformation [of the regulatory landscape] is causing discomfort within California’s community of renegade pot growers, many of whom worry that their long wished for legitimacy may end with them being coopted by the implacable force of corporate America.
DeAngelo claims the distribution model is “a payoff to the liquor industry,” the result of which will be higher consumer costs, more regulatory red tape, and a more robust black market. But others aren’t so sure. The California Growers Association (CGA) supported the legislation (DeAngelo was a CGA board member until resigning early last year in part because of support within CGA for the alcohol distribution model). According to CGA’s executive director Hezekiah Allen, “There’s going to be big business in this industry, we can’t keep it out. [With this model], we can put all the distributors in the Big Business box and we keep the boutique businesses for ourselves. Yeah, this is big money, big business, but it’s contained.”
DeAngelo and others have valid concerns, but it could be hard to drum up support for an alternative regulatory scheme. Many advocates have long insisted that pot is a relatively harmless intoxicant that should be treated like alcohol, and the new regulations do precisely that. To now claim that marijuana will be treated too much like alcohol might appear to observers as picayune, which could undermine the legitimacy of the marijuana reform movement in California and thereby threaten the vote on marijuana legalization this November.
* An earlier version of the post stated that the rift was over California's November ballot initiative to legalize recreational marijuana use. Thank you to the commenter who brought this error to our attention.