Pot forum talks licensing, tax revenue and city oversight

If you haven’t heard by now, Californians will vote in November on whether to legalize adult recreational use of marijuana.

The ballot initiative is Proposition 64, or the Adult Use of Marijuana Act.

The ballot measure would, among its many provisions, eliminate or reduce nine cannabis-related felonies; permit people 21 and older to possess one ounce of herb, eight grams of concentrate and six plants per household; impose cultivation and excise taxes and allow for local and sales taxes; permit licenses for recreational sales; permit consumption at licensed venues; and uphold DUI rules and laws pertaining to open-container, or consumption in a vehicle.

About 40 people – many whom said they were medical marijuana patients interested in recreational cannabis business opportunities – attended a question-and-answer session Thursday at the Merced Multicultural Arts Center, hosted by Friends of Proposition 64 Drug Policy Action, a campaign group based in Sacramento.

There to answer questions were Mikki Norris and Lauren Vazquez. Norris said she’s been a cannabis activist for 27 years, and she’s also the director of the Cannabis Consumers Campaign. Vazquez, an attorney, has been working on policy change in the cannabis industry for more than a decade. She’s also the associate director of outreach for Prop. 64.

Dr. Lakisha Jenkins, a partner of the Jenasis Medical Group, hosted the forum. Jenkins, who’s also running for a City Council seat, has been an advocate for medical cannabis in Merced.

Here are some highlights from the forum’s discussion.

Licensing

Prop. 64 would create a host of licensing requirements, and it gets complicated quickly.

To sell marijuana legally, one would need both a state license and a local business license, according to a Friends of Prop. 64 fact sheet.

Businesses also would need to get a license to allow on-site cannabis consumption, similar to the way alcohol and tobacco sales are allowed.

Norris described bars and other locales that might be interested in that sort of license, comparing the business model to a Dutch coffee shop.

For those who wish to cultivate cannabis and sell it, Vazquez recommended a microbusiness license and used a winery as an example of a business model. The business could include a farm, a processing operation and retail.

“A microbusiness license is one license that lets you do everything. You can cultivate; you can do retail; you can do delivery; you can distribute; and you can wholesale to other retailers,” she said. “It saves you money. It saves you time and energy.”

The microbusiness license limits cultivation to 10,000 square feet or less and related fees are scaled to the business size.

Norris added that under AUMA, there would be a five-year moratorium on large-scale licensing.

Jenkins noted that it’s not yet clear how or when people could apply for sales licenses or what the qualifications would be for medical marijuana. (She didn’t discuss recreational use marijuana.)

“They have no clue,” Jenkins said about the Medical Marijuana Regulation and Safety Act (MMRSA) bureau. “They have absolutely no clue.”

When Jenkins approached MMRSA, officials were open to suggestions.

By Jan. 1, 2018, officials plan to have a plan, Jenkins said with a laugh. Shortly after that, they’d accept applications for licenses and hopefully begin issuing them by July.

Tax revenue

One thing I found interesting is what Prop. 64 would fund through tax revenue.

The list includes police training, research on marijuana, youth programs, environmental restoration and more.

The attorney general expects taxes for adult use of cannabis would generate about $1 billion a year, Norris said.

Under Prop. 64, a 15 percent excise tax would be built into the purchase price of marijuana, on top of a production tax for cultivation. Sales and local taxes also would be applied.

Vazquez said that could equate to a $60 tax on an ounce of marijuana, which would discourage buyers and make it tough for some stores to stay in business. Those taxes won’t apply to medical marijuana patients, she added.

In terms of law enforcement, officers would be trained and taught the new laws.

The California Highway Patrol, in partnership with universities, would study driver impairment when under the influence of cannabis, Vazquez said.

Norris described the youth programs as drug education and counseling courses for minors who receive cannabis-related infractions.

And, some of the tax revenue would go toward restoring areas damaged by major marijuana cultivation.

City and county power

Under Prop. 64, cities and counties could not ban personal use or cultivation in a private residence. They could, however, limit outdoor cultivation, Norris said.

Currently, licensed medical marijuana users can grow up to 12 plants in Merced County’s jurisdiction.

The cities of Atwater and Los Banos have banned cultivation and dispensaries completely, while Livingston and Merced have made room for cultivation by certified patients.

For more on Prop. 64, visit www.yeson64.org.

This story was originally published August 14, 2016 at 3:51 PM with the headline "Pot forum talks licensing, tax revenue and city oversight."