Northern California

Updates to California budget proposal ease concerns of Humboldt area lawmakers, cannabis industry leaders

California’s Legislature is set to vote on a set of amended regulations as part of the state budget process on Thursday that would seek to rectify the differences between the state’s medical and recreational cannabis laws.

The revisions released earlier this week have eased concerns raised by North Coast lawmakers and cannabis industry groups who had issues with Gov. Jerry Brown’s original proposals in an April trailer bill.

If the new bill is approved by the Legislature and Brown, North Coast Sen. Mike McGuire (D-Healdsburg) said the state would invest $118 million to create more than 500 jobs to begin regulating the cannabis market by the time it comes online in 2018.

“California is coming out of an era of prohibition, and while there will be significant problems ahead I do believe the budget advances some bold solutions to our biggest challenges,” McGuire said.

Support gained

The California Growers Association, a statewide marijuana farmers organization, was opposed to the trailer bill until Monday, and is now offering “unconditional support” for the amended version mainly because it provides protection for smaller growers.

“The big structural questions have been answered and it feels really, really good,” California Growers Association Executive Director Hezekiah Allen said Wednesday. “Proposition 64 was pretty divisive and created factions within our community and in the first time in about a year or more, it all feels like we’re back on the same page.”

The group’s stance changed because the trailer bill allows for cannabis cooperatives to form.

Humboldt County Growers Alliance Executive Director Terra Carver said this will allow smaller farmers like those in Humboldt County to compete against larger farms and businesses.

“They would be able to utilize all their resources for processing centers, to create a unified brand and be able to kind of band together and enter the market with more of a stronger presence,” Carver said.

Protections against misbranding originally proposed by McGuire in Senate Bill 175 are also included in the trailer bill.

Carver said these appellation of origin proposals would not only protect the Humboldt County name from being used to brand cannabis grown outside the county, but also varietals of cannabis and methods of production like sungrown or cannabis grown using rainwater catchment.

International Cannabis Farmers’ Association Chairwoman Kristin Nevedal said the trailer bill also includes language prohibiting monopolization of marijuana trades and protections against asset forfeiture and civil fines for lawfully operating cannabis businesses.

“That’s pretty exciting to us,” Nevedal said. “For transporting product through a county that is not friendly to cannabis, you shouldn’t be subject if you get pulled over in a banned area to have you money or product seized.”

The trailer bill would also settle conflicts between the state’s medical and recreational use, including issues surrounding local government control.

McGuire said while the medical marijuana laws he helped write in 2015 gave local governments the right to deny cannabis licenses and permits or ban them altogether, he said Proposition 64 was silent which caused these protections to disappear.

“We had to fight this issue twice, but we won working with Assemblyman [Jim] Wood on this one as well,” McGuire said.

The bill would also allow recreational use and medical cannabis retail sales to take place in the same location — a change from Brown’s original proposal — allow businesses to hold multiple business license types, which is currently limited under medical marijuana laws.

Wood (D-Healdsburg) represents the state’s cannabis cultivation center in the 2nd Assembly District, which includes all of the Emerald Triangle counties. He said the trailer bill also contains several other benefits for the North Coast including $1.5 million in funding to enforce against illegal water diversions by marijuana grows. Wood had personally asked Brown to appropriate the funds.

“It’s a drop in the bucket, but it is a jump-start and we desperately need that,” Wood said. “… We’re ground zero for some really good things and ground zero for some really bad things.”

McGuire said the legislation would also allow local jurisdictions to deny cannabis business permit applications if the business does not meet environmental standards.

One-stop shop

The legislation would also create a one-stop state office located in the North Coast — thought the location has not been finalized — by July 1, 2018 where cannabis business owners can pay their licensing fees and taxes. Federal banking restrictions require most cannabis businesses to pay taxes in cash which means physically taking the cash to the closest Board of Equalization offices.

For the Emerald Triangle, the closest offices are in San Francisco and Sacramento, which McGuire said has been one of the top complaints he’s heard.

“You have law abiding California tax payers driving hundreds of miles from Humboldt, Trinity, Del Norte and Mendocino counties to pay their taxes in San Francisco and Sacramento,” McGuire said. “That is absolute madness.”

Allen said he appreciates the state is now recognizing the North Coast as a cannabis cultivation center by setting up a fully staffed state office in the region.

“For someone like me who grew up on the North Coast hiding what we did and feeling ashamed of it, it feels really good to be recognized and acknowledged,” Allen said.