California blazed a trail to legalize medical marijuana 20 years ago. But the Golden State is only now confronting the full complexity of regulating consumer safety and business practices in an industry that’s ballooned to an estimated $2.7 billion annually.
It’s no simple task, requiring startup-like coordination and enforcement across a dozen state agencies looking to rein in a sector of the economy that has thrived in a decidedly spotty patchwork of local oversight.
California’s lack of control over medical marijuana thus far has not gone unnoticed, according to John Hudak, a senior fellow at the Brookings Institution who focuses on marijuana policies.
“The state’s medical marijuana program is in many ways the laughingstock of marijuana policies in the United States,” Hudak said. “It’s a significant example of everything that can go wrong, serving in many ways as a proxy system for recreational marijuana.”
One measure of the challenge ahead? The state is expecting tens of thousands of cannabis businesses – from growers to distributors, testing labs to retail shops – to begin seeking one or more of 17 types of licenses starting Jan. 1, 2018.
And the regulatory challenges for the new system could skyrocket if voters approve the recreational use of pot later this year.
Three agencies will actually issue licenses. Nine more have been charged with various oversight and review responsibilities.
That includes the Medical Board, which must step up procedures to investigate and discipline doctors who aren’t adhering to ethical standards in recommending marijuana for patients. The Department of Justice will conduct background checks on all licensees. And the Board of Equalization will issue seller permits to all retailers, oversee tax collections and help develop a system to trace the movement of all cannabis products.
The departments that stand to gain the most employees and biggest boost to their budgets in the coming fiscal year are the Department of Fish and Game and the State Water Resources Control Board. Each agency will get more than 30 new positions to help mitigate impacts marijuana cultivation has on the state’s waterways.
All told, the state expects to add 126 jobs and spend $24.6 million on the new regulatory effort in the coming year alone.
Overseeing the process is the new Bureau of Medical Marijuana Regulation, created within the Department of Consumer Affairs. The BMMR – referred to as “Bummer” by some in the industry – will regulate all transportation, distribution and sales under the direction of Lori Ajax.
Ajax will lead information sessions on the state oversight in Santa Ana today. She said she’s been meeting at least weekly with other agencies involved in the new regulations. Leaders from each department also have been consulting other states that have more robust policies in place to regulate both medical and recreational marijuana.
There are “nuances” to launching programs involving multiple agencies, Ajax said. But so far, the process has gone smoothly.