Issue link: http://digital.copcomm.com/i/599676
f a l l / w i n t e r 2 0 1 5 | 7 7 The Spice Must Flow Despite nearly 80 years of federal prohibition, cannabis has become a multi-billion-dollar industry and the largest cash crop in California. Unfortunately, most of the cannabis produced in California is illegally exported out of state due to the demand from places where cannabis is not legally produced. Supply and demand economics tend to ignore legal barriers—as long as there is demand, "the spice must flow" so they say. Given the nature of this underground market, true economic figures are hard to come by. It is estimated that California produces upwards of $12B in cannabis product annually, while the state recognizes only $26M in tax revenue from the cannabis industry. If regulated and taxed, cannabis busi- nesses could offer annual revenue to the state at levels closer to alcohol ($354M) and tobacco ($839M). In California, it has been legal to cultivate, distribute, and consume can- nabis for medical use since 1996 with the passing of the Compassionate Use Act (Proposition 215); however, the state has failed to implement a strict regulatory infrastructure to license and regulate these businesses. The lack of regulation forces most businesses underground, for fear of getting raided or forcibly shut down by local, state, or federal authorities. Many elected officials in California have forged new paths for politi- cal engagement around cannabis regulation and legalization. Among those are the legislators who crafted and spearheaded comprehensive medical cannabis legislation for a robust regulatory system in California. In mid-September, this legislation historically passed through both the Assembly and the Senate, after many months of stakeholder meetings and thousands of collective hours to develop language for the legisla- tion. The authors of these bills, and their hard working staff members, deserve to be recognized and praised, including Assemblymembers Rob Bonta, Ken Cooley, Reginald Jones-Sawyer, and Tom Lackey of AB 266, Assemblymember Dr. Jim Wood of AB 243, and Senator Mike McGuire of SB 643. This monumental accomplishment by the cannabis community and the legislature is making history and will change the lives of cannabis farmers (and Californians) forever. A wave of gratitude and hope is echoing in the Emerald Triangle as farmers (many who weren't sure they would see this in their lifetime) recognize the impact this legislation will have for their families and communities. Even with statewide regulations to come, still more work needs to be done on policy. Specific policy intiaitives have been proposed by Senator George Runner and Fiona Ma, Members of the Board of Equalization, 1st and 2nd District representatives, respectively. Senator Runner (R) has engaged his party in discussions of why and how to effectively tax the cannabis industry, while Member Ma (D) has been a leading voice for the industry by identifying solutions for banking and transportation issues that prevent cannabis businesses from operating legally and safely in the current medical cannabis landscape. "Over the past 6 months, we found that there are two major common problems: access to banking and transportation. Cash is the legal tender of the United States but is no longer the norm in the 21st century where digital transactions rule the day," says Ma. "If one cannot open a bank account and establish credit, one cannot get a home mortgage or refinance a home, access capital, or simply pay bills online, which is how our society operates today. We want everyone to pay their fair share of taxes, yet we don't apply the same rules to everyone doing business in California. This is not fair. The second major issue is transportation. Without 'Safe Passage' laws, sheriffs from the 58 counties apply different laws to delivery vehicles traveling through their jurisdictions (from pass, detain, confiscate, some- times arrest and jail) as well as the California Highway Patrol who oversee our state highways. We need to address this inequity as well." Lieutenant Governor Gavin Newsom (D) has been another strong voice for the cannabis legalization effort for Adult-Use, which is expected to be on the ballot in November 2016. Earlier this summer, the Lt. Governor produced the Blue Ribbon Commission Pathways Report to offer an in- depth analysis and possible solutions for legalizing, taxing, and regulating cannabis in California. Regulations will allow cannabis businesses to become licensed by the state. Licensed retailers will be required to purchase product made only by licensed producers. More companies and brands will emerge from the shadows, trading the obligation to become compliant for the right to be protected as legitimate businesses. Nat Buttrick, founder of Madrone California Collective in Mendocino, expresses his concerns about regulations and his hope that the small farm- ers who have carried the industry up until now will still have a place in the regulated marketplace. "It is our way of life that we're trying to protect and preserve," says Buttrick with a heavy heart. Collectives like Madrone employ families throughout the region and provide economic opportunity for the community. Buttrick and other progressive farmers, while cautious, are preparing for and welcoming regulatory change. Not all farmers, though, are willing to become a part of the regulated system. For as long as other states prohibit the production and sale of cannabis, there will be demand from outside California. Furthermore, state and federal prohibition contribute to an international drug cartel presence in California and around the United States. Advocates for the repeal of prohibition argue that we can stop or slow these illicit market forces by filling demand with domestic production. Over the next few years, California's attitude and approach to cannabis regulations will set the stage for national, and even global, cannabis policy reform. California State Board of Equalization's Fiona Ma. "Without 'Safe Passage' laws, sheriffs from the 58 counties apply different laws to delivery vehicles travel- ing through their jurisdictions as well as the California Highway Patrol who oversee our state highways." PHOTO: JEREMY BALL ■cr