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Wednesday, September 28, 2022

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California eyes out-of-state cannabis sales

California Governor Newsom has been a pioneer in efforts to legalize cannabis. Many have urged the Democrat to run for president in 2024.

As the U.S. Senate takes up again the legalization of cannabis, the state markets remain in their efforts to normalize the industry. States such as California and Oregon, whose production volumes can quickly saturate the market in the state, are blocked from legal out-of-state sales and transportation. Meanwhile, other states that are trying to legalize the use of adult or medical marijuana and regulate the sale – but are not ready to implement state cultivation programs – do not have legal sources of the herb.

Some progress is being made at the state level. Last week, a measure sponsored by California Rural County Representatives related to the interstate commerce of cannabis, Senate Bill 1326 (Caballero), Cannabis: Interstate Agreements, was approved by the Legislature. The bill is now on the governor’s desk awaiting signature. Monterey County District 12 Supervisor and RCRC Second Vice President Chris Lopez was among those supporting the measure.

“Like any other agricultural product, cannabis production must be able to be carried out in states with optimal climatic conditions and exported to other legal markets throughout the country,” agreed Aaron Smith, executive director of the National Association of the Cannabis Industry (NCIA).

The why and how of the cannabis export bill

Authored by Senator Anna Caballero (D-Merced), SB 1326 authorizes the State of California to enter into agreements with other states to allow commercial activities of cannabis (both medicinal and adult) between licensed cannabis businesses in each state . The state legislation did not affect states that did not enact cannabis programs or chose not to enter into an interstate compact.

The 2017 state bill that amended California’s Proposition 64 — and caused many of the problems that have since been blamed on the voter initiative — MAUCRSA (SB94) specifies that it does not authorize or allow a licensed state to transport or distribute, or to cause to be. transported or distributed, cannabis or cannabis products out of state, unless authorized by federal law.

The Cannabis: Interstate Agreements bill would make an exception to the prohibition described above and would authorize the Governor to sign an agreement with another state or states authorizing commercial cannabis activities for medicinal purposes or for adults, or both, between foreign licensees, that are licensed under the laws of the other state or states, and entities operating with a state license in accordance with MAUCRSA, provided that the commercial cannabis activities are legal and subject to licensing under the law of the other state or states

The bill makes foreign licensees subject to the jurisdiction of this state for the purposes of actions taken for violations of state commercial cannabis laws and regulations. The bill prohibits an entity with a commercial cannabis license issued under the law of another state from engaging in commercial cannabis activities within the borders of that state without a state license, or in a local jurisdiction without a license, permit or other authorization issued. from the local jurisdiction. The bill would require the agreement to require that the other state or states impose requirements on its licensees regarding cannabis and cannabis products to be sold or otherwise distributed in this state that meet or exceed the requirements applicable to licensees MAUCRSA, as specified. The bill would require the agreement to include provisions to address public health and welfare emergencies related to cannabis or cannabis products being sold or intended for sale in this state and provisions relating to the investigation of licensees and cases of alleged non-compliance with commercial cannabis regulation. programs, as specified. The bill requires the agreement to include provisions for the collection of applicable taxes. The bill specifies that the agreement does not constitute a project for the purposes of the California Environmental Quality Act. The bill prohibits an agreement, as defined, from entering into force unless, among other things, federal law is amended to permit it, or the United States Department of Justice issues an opinion or memorandum allowing or tolerate, the interstate transfer of cannabis or cannabis products. among licensed commercial cannabis companies. The bill would require the department to notify the governor and the appropriate policy committees of the Legislature when an event occurs that allows an agreement to take effect and to post the notification on its website.

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