Issues with Regulated Marijuana Sales in California

When medical marijuana was first legalized in California more than two decades ago, the state was not heavily involved in the regulation process.  While anyone in the state could use medical marijuana if they had a valid doctor’s recommendation for the use of medical cannabis, it was up the counties and incorporated municipalities to decide if there could be dispensaries in their respective jurisdictions and if there could be grow operations.

question markNot surprisingly, some areas were very liberal with respect to medical marijuana production and sales and others were less liberal.  Some areas did not permit any growing or sales within the city or county limits. A few years ago, the state started to become concerned that they were getting left out of the process, and this was creating a regulatory void.  While it was up to individual municipalities to grow or dispense, there were many other state laws regarding agriculture and water usage.  Since much of California is in the desert, and water supply is often far less than demand, this can create a major issue. For this reason, state legislatures moved to take over the regulation of the marijuana process, leaving cities and counties that did not want dispensaries and grow operations having to opt out in a timely manner.  However, as these laws were being created, there was much question as to whether the existing agencies should handle their respective parts of marijuana regulation or if a new marijuana agency should be created.

After much debate, they decided to create a new agency.  This became somewhat more complicated when it became clear that marijuana was likely to be legalized for recreational purposes, so the office was set up for the present and the future.  Not surprisingly, marijuana was legalized for recreational use by ballot initiative, and the newly formed agency is shifting roles very soon after opening its doors.

According to a recent news article from the San Diego Tribune, regulators think this will be a somewhat difficult process with a great deal of trial and error involved. While California was once literally the Wild West, state regulators hope to avoid that moniker with respect to the regulation of medical and recreational marijuana use.

One of their goals will be to step in and close down the various illegal marijuana grow operations and dispensaries that still exist in areas where local government efforts to shut them down failed. Another goal that will help legal cannabis businesses is to get them access to bank accounts.

While it may seem crazy to those who are not familiar with the business, as our medical cannabis attorneys in Orange County can explain, it is still illegal to deposit the money in an account that is FDIC or FCUA insured, which is pretty much every bank.  The reason for this is because marijuana is still illegal under federal regulations. This means that any bank that takes money from a marijuana business would be knowingly taking proceeds of a federal crime.  While this seems ridiculous in 2017, the federal government has continued to maintain this position, and it is only expected to get worse under the current administration.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 714-937-2050.

Additional Resources:
Regulating marijuana in California will be turbulent, state official says, March 24, 2017, By David Garrick, San Diego Tribune

More Blog Entries:
White House Will Step Up Federal Marijuana Enforcement, Feb. 27, 2017, Marijuana Attorney Blog