Emerald Cup cannabis contest top judges Nikki Lastreto and Swami Chaitanya review candidate specimens. Samples came from eight California counties. (Bulldog Media)

Culture

Why marijuana legal sales rollout could be delayed

SANTA ROSA — Amid the euphoria of this weekend’s famed Emerald Cup weed fest, there was this creeping buzzkill: the glacial rollout of legalization.

Right when it seems like “The Great Pot Moment” is upon us, it turns out there are a lot of really tough regulatory issues to resolve first, according to government and industry experts who sketched out all the thorny challenges at the two-day conference, competition and harvest celebration at the Sonoma County Fairgrounds.

And implementation of commercialization could get delayed a year until 2019, said insiders.

Proposition 64, approved by voters in November, promised that, by Jan. 1, 2018, a recreational smoker could stroll into a licensed store to buy a favorite strain of White Widow or OJ Kush.  A medical marijuana law, the Medical Cannabis Regulation and Safety Act, is moving along a similar time line.

For the 23,000 cannabis aficionados at the festival, even that wait seems unreasonably long, considering people have been weaving hemp into loincloths for thousands of years.

Cannabis contest judges toss some joints out to the crowd during the Emerald Cup weedfest on Dec. 10-11 at Santa Rosa's Sonoma County Fairgrounds. (Lisa M. Krieger)

What’s the challenge? Just as the prohibition on cannabis was complicated, so is the process of ending it, experts said.

Some of the challenges are created by the different structures of the two cannabis laws, said Lori Ajax, chief of the California Bureau of Medical Cannabis Regulation.

The two initiatives are different, and may need to be reconciled. They take different approaches to issues ranging from ownership and residency requirements to timelines and license categories, said Assemblyman Jim Wood, who represents California’s 2nd Assembly District, which includes the famed “Emerald Triangle” growing region.

“It is a very real challenge,” said Wood, D-Healdsburg. “Do we have two systems that move in parallel or one unitary system that combines the two? My hope is that we can all sit down and work out the differences.”

There also are tax disputes. While the medical marijuana law only levies a retail tax, Proposition 64 applies two taxes to legal marijuana: a 15% tax on the retail price and a cultivation tax of $9.25 per ounce for flowers and $2.75 per ounce for leaves and stems trimmed from the plant.

The cultivation tax is fiercely opposed by growers, who say they shouldn’t be taxed on trimmings that might get tossed, never making it to market. Instead, they are advocating a tax when all marketable product is brought in for testing. But there isn’t much flexibility, because the language of a proposition may be changed only by a two-thirds vote of the Legislature.

Then there’s the issue of technology platforms. The state needs not only new licensing software but also a “track and trace” program to follow cannabis from seed to sale — through processing, testing and distribution. Neither currently exists.

Creating two new tech platforms, from scratch, “is very ambitious,” said one legislative staffer.

“We expect to see them run some legislation from the governor’s office that could extend it for at least one year,” said Nate Bradley, executive director and co-founder of the California Cannabis Industry Association.

Finally, there’s this: President-elect Donald Trump. While he’s supported states rights, and California has vowed to defend its laws, his nomination of cannabis opponent Sen. Jeffrey Sessions, R-Alabama, for attorney general has created some concern among some counties and cities that are wary of inviting federal Drug Enforcement Agency raids.

“A lot of local governments are cautious and want to see which way it goes, see if federal agents come close them down,” said Bradley.

“The Trump element was a monkey wrench no one saw coming,” he added. “He is such a wild card.”

It is important for California to implement a state program expeditiously to help fend off federal prosecution, said Amanda Reiman, manager of marijuana law and policy at the Drug Policy Alliance.

During the Bush administration, “the feds came in because there was no state license to hold up and say you were compliant. That’s why it is so important for California to definitely implement a state licensing program.”

Some cities, such as Oakland and Santa Rosa, are ready to get going, and don’t want to wait while the state figures out a strategy.

A legislative fix or regulatory change would give local governments the ability to issue commercial retail licenses, rather than wait for the state, said Bradley. Cities may already regulate medicinal marijuana; this would give them permission to regulate recreational weed as well.

The fates of many growers, processors and dispensaries hang in the balance.  California is the world’s sixth-largest economy, only outpaced by the U.S. as a whole, China, Japan, Germany, and the United Kingdom.

Sales are expected to bring an additional $1.5 billion flooding into the marijuana market. That number will swell to nearly $4 billion by 2020, according to the latest report by New Frontier Data and ArcView Market Research.

After slogging through a weekend of bureaucratic concerns, the Emerald Fest crowd toggled to party mode on a celebratory Sunday afternoon that included contests for best pot and growing practices: farming, extracts, oils, topicals, tinctures, and the crowd favorite — flowers.

A "cannabis clown" entertains the crowd at the annual Emerald Cup weedfest, held Dec. 11-12 at Santa Rosa's Sonoma County Fairgrounds.

Cheers erupted for this year’s first place winner in the Flowers category: “HHF 220,” derived from a strain called Skittlz. The flowers of the Humboldt County buds measured 1.8 percent terpenes, the fragrant oils that give cannabis its aromatic diversity, and 19 percent THC, the psychoactive ingredient.

“Bright orange and huge, A plus!” announced the judges. “Fruit Loops with Grand Marnier, it is loud, succulent and eye-opening, with a sweet and tasty personality!”

Declaring victory, the audience hugged, shared some fresh joints, danced to the throb of reggae, and then packed up to head home to their distant warehouses, greenhouses and fields.