Written by: Virginia McCormick, NES, Inc.
Cannabis regulation has always been a complex topic for Californians.
Cannabis in California: An Overview
In 2016, voters in California approved ballot measure Proposition 64 to legalize recreational cannabis use statewide for anyone over the age of 21. At approximately $3 billion, California’s legal cannabis industry currently sits as the world’s largest. And while opinions may differ regarding the success of legalization, it is without question that the cannabis industry – just as any other industry – must be regulated.
However, long before the industry became legitimized by the State, cannabis had a notable history of making waves throughout California. From first being cultivated at Spanish missions for industrial purposes, to innovative attempts at both criminalization and decriminalization, to modern-day licensing issues and industry growing pains, cannabis has always been a complex topic for Californians.
While cannabis use has been recorded as far back as prehistoric African and Eurasian societies, introduction into the Western Hemisphere did not occur until the mid-15th century, when Spanish importers brought the plant into Chile. From there, the plant was cultivated at several missions along the southern Pacific coast of North America – in a region that would eventually become California after the State’s admission into the U.S. in 1850.
Early cultivation of cannabis was primarily intended for industrial purposes and contained almost no psychoactive elements.
The plant’s early cultivation was intended for industrial hemp, fiber, and rope production. Cannabis grown for recreational use in California began around the 1850s, during the Gold Rush. Following growing prohibitionist sentiment, cannabis possession was prohibited by a 1913 amendment to the Poison Act of 1907. This act marked the first state cannabis prohibition law.
In the 1930s, the infamous “Reefer Madness” campaign swept the nation. Cannabis was effectively criminalized in the U.S. through the Marihuana [sic] Tax Act of 1937. This act marked the first time that cannabis was federally regulated. In 1970, the act was repealed and replaced with the Controlled Substances Act, which was considered by many to be a more stringent anti-drug law and classified cannabis as a Schedule 1 drug. At the same time, positive public opinion on cannabis use was growing in California and in many other areas throughout the U.S.
Two years after the implementation of the Controlled Substances Act, Proposition 19 of 1972 (California Marijuana Initiative [CMI]) marked the first time California attempted to independently legalize cannabis. While the proposition ultimately failed, California Senate Bill 95 (The Moscone Act) was passed three years later in 1975, which downgraded cannabis possession of an ounce or less from a possible felony to a misdemeanor. While controversial at the time, many consider SB 95 to have played an instrumental role in the progression towards medical legalization.
Cannabis, as a Schedule 1 drug, is still considered illegal under federal law.
Cannabis for medicinal use can be traced to various ancient civilizations, from applications in early Chinese surgery (the Chinese term for “anesthesia” – 麻醉 – literally translating to “cannabis intoxication”) to “hemp vapor-baths” used by the ancient Scythians to remedy pain or inflammation. Today, medicinal cannabis is primarily used for nausea reduction, pain relief, and appetite boost.
Early reform efforts for the legal medical use of cannabis in California began around the early 1990s in San Francisco. These efforts soon expanded to Santa Cruz, and both cities introduced successful propositions to legalize medical cannabis use. Resolutions were passed in several California cities to allow the open sale of cannabis to AIDS, cancer, and glaucoma patients – most notably the San Francisco Cannabis Buyers Club.
In 1996, Proposition 215 – also known as the Compassionate Use Act – was passed via a statewide ballot initiative and allowed California citizens the right to obtain and use cannabis for any illness with a doctor’s recommendation. In a historic turn of events, the first state to establish a cannabis prohibition law became the first state to establish a legal medical cannabis program. Seven years later, Senate Bill 420 (The Medical Marijuana Program Act) would redefine some of the wording in Proposition 215.
Modern cannabis strains have many medicinal uses, from pain relief to appetite boost.
In 2010, California Senate Bill 1449 was passed, which downgraded non-medical cannabis possession of an ounce or less from a misdemeanor to an infraction. While polls from 2010 found that half of all Californians at the time supported legalizing recreational cannabis use, a ballot measure that sought to accomplish this goal failed to pass in the same year. Five years later, the Medical Marijuana Regulation and Safety Act (MMRSA) was passed, further regulating medical cannabis use and commercial activity. The name would subsequently be changed to the Medical Cannabis Regulation and Safety Act (MCRSA) following the passing of several smaller bills.
The following years saw increased Californian support overall for recreational cannabis use. In 2013, the Blue Ribbon Commission on Marijuana Policy was formed in preparation for a new State ballot measure to be introduced. In the commission’s final report, regulations for recreational cannabis use in California were recommended. The following year, then Lieutenant Governor Gavin Newsom announced in San Francisco that the initiative had reached enough signatures to qualify for the November 2016 ballot.
Two full decades after legalizing medical cannabis use, California voters approved recreational cannabis use with the passing of Proposition 64 – also known as The Control, Regulate and Tax Adult Use of Marijuana Act (AUMA) – in 2016. However, in contrast to 1996’s Proposition 215, California was not the first to implement legal recreational use. Rather, California was the sixth state to pass this form of legislature – preceded by Colorado, Washington, Alaska, Oregon, Nevada, and Washington D.C.
To integrate California’s two cannabis-regulating acts – MCRSA and AUMA – the legislature passed Senate Bill 94, the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), in 2017. On January 1, 2018, the State began issuing licenses for both medicinal and recreational cannabis activities.
With the passing of Proposition 64 in 2016 and the corresponding SB 94 in 2017, the sale of recreational cannabis in California was given the “green light” starting January 1, 2018 – as long as cannabis businesses successfully obtain and retain their business licenses by complying with a range of regulatory requirements.
Easing the Industry’s Growing Pains
Following recreational cannabis use decriminalization, three State licensing authorities were charged with licensing and regulating commercial cannabis activity in California:
- Bureau of Cannabis Control (BCC) – a bureau within the California Department of Consumer Affairs, responsible for licensing retailers, distributors, testing laboratories, and microbusinesses
- CalCannabis Cultivation Licensing – a division of the California Department of Food and Agriculture, responsible for licensing cultivators and implementing the State’s “track-and-trace” system to record the movement of cannabis from seed to sale
- Manufactured Cannabis Safety Branch – a branch within the California Department of Public Health, responsible for licensing manufacturers of cannabis products, including all non-flower products (edibles, concentrates, etc.)
In early November 2019, BCC reportedly suspended over 400 legal cannabis operation licenses – almost 5% of all cannabis business licenses in California – after those businesses failed to adhere to the State’s mandatory traceability system. BCC spokesman Alex Traverso referred to move as “growing pains” of a new and developing industry.
California cannabis business licensing is regulated by three agencies, depending on a licensee’s operations.
However, with State licensing fees often referenced as one of the major obstacles inhibiting entry into the State’s legal cannabis market, currently licensed businesses must stay informed of these changing and often complicated industry regulations. To avoid risking revocation of an expensive business license, as well as citations and fines from agency inspectors such as Cal/OSHA and your local Certified Unified Program Agency (CUPA), California cannabis businesses will need a multitude of EH&S services.
As an environmental, health & safety training and consulting firm that has been serving regulated businesses throughout California and beyond since 1987, NES can help cannabis businesses navigate these industry growing pains. Our clients span a vast array of sectors, and we specialize in customizing services to clients’ unique needs. Additionally, our suite of EH&S compliance services can provide your cannabis industry business with the peace of mind needed to be able to focus on your primary objective: serving the regulated cannabis community to the best of your abilities.