Regulatory Haze Fogs California Cannabis Policies

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After voters passed Proposition 64 in 2016, California cities were supposed to play the key role legalizing and regularizing the use and sale of marijuana. The reality has been hazy.

Although this has been controversial, it remains state law. Some cities are meeting the needs of their people; some are not. But the federal and state governments also are not doing their parts in facilitating what the cities need.

When voters passed Prop. 64 by 57 percent to 43 percent, here’s the short ballot summary they read: “Imposes state taxes on sales and cultivation. Provides for industry licensing and establishes standards for marijuana products. Allows local regulation and taxation.”

The full text of the initiative said: “It is the intent of the People in enacting this Act to accomplish the following: (a) Take nonmedical marijuana production and sales out of the hands of the illegal market and bring them under a regulatory structure that prevents access by minors and protects public safety, public health, and the environment.”

Epoch Times Photo
Marijuana greenhouses across the street from Rincon High School in the small seaside community of Carpinteria near Santa Barbara, Calif., on August 6, 2019. (David McNew/AFP via Getty Images)

And Prop. 64’s legal wording in Section 10 instructed, “The Legislature may by majority vote amend the provisions of this Act … to implement the substantive provisions of those sections. … Except as otherwise provided, the provisions of the Act may be amended by a two-thirds vote of the Legislature to further the purposes and intent of the Act.”

So how has it been implemented by the Legislature and cities? “The train left the station on the wrong track given how Prop. 64 was miswritten in the first place,” Dale Gieringer told me. Since 1987 he’s been the state coordinator of California NORML (National Organization for the Repeal of Marijuana Laws).

“It’s a classic case of California-style overregulation and overtaxation. Hard to fix without rewriting Prop. 64. At a minimum, the environmental review and liquor-style distributor system should be done away with. Won’t happen anytime soon, unless federal law changes and forces a rewrite of state law.”

That brings us to the federal government. It keeps marijuana a Schedule I drug, which the Drug Enforcement Administration’s Fact Sheet defines as having “a high potential for abuse, no currently accepted medical use in treatment in the United States, and a lack of accepted safety for use under medical supervision.” And, “Although some states within the United States have allowed the use of marijuana for medicinal purpose, it is the U.S. Food and Drug Administration that has the federal authority to approve drugs for medicinal use in the U.S.”

Yet, as the May 31 U.S. News reported, 23 states already have legalized recreational use of pot—and so has Washington, D.C., where the DEA is located.

Marijuana grows at an indoor cannabis farm in Gardena, Calif., on Aug. 15, 2019. (Richard Vogel/AP Photo)

Meanwhile, last October, President Biden announced a federal review of the Schedule I classification, pardoned all prior federal possession offenses, and urged all governors to do the same. On March 1, Attorney General Merrick Garland testified before the Senate Judiciary Committee he was “working on” a review of the scheduling.

“The bureaucracy has confounded so many business people, so many users. They’re overtaxing it,” Jim Gray told me. He’s a retired California Superior Court judge who ran for vice president on the Libertarian Party ticket in 2012 headed by former New Mexico Gov. Gary Johnson.

“We’ve had Prop. 64 for seven years. But it’s much less expensive, probably by half, to buy illegal pot than it is legal. And so there’s a market for the less expensive stuff. The black market is still virtually as strong as it was 10 or 20 years ago.”

Indeed, according to a May 2023 report by the California Cannabis Industry Association concerning state budget discussions, “Cannabis tax revenues have declined each of the last six quarters as legal businesses struggle in a limited retail environment to compete against illicit operators whose products aren’t taxed or tested, allowing them to be sold for much lower prices. With the state’s revenue outlook uncertain, it is imperative that we avoid any discussions that could lead to any tax increases on cannabis businesses.”

Gray explained how the cities are separate entities. Each is allowed within California law to prohibit selling marijuana in its districts.

“I don’t want to argue with that. If that’s what they want, that’s fine,” he said. But the problem is the cities can ban deliveries from other cities that allow distribution. “So it’s a hodgepodge. I believe in local control. If they believe it’s going to be harmful, and they don’t want you to have a marijuana dispensary within a thousand yards of a school, I understand that. And certainly I believe in age restrictions and in responsible parenting.

“But regulation now is just a bog. If we were to treat alcohol the way we treat marijuana, we would have illegal bootleggers around still.” He urged cities to reduce bureaucracy, regulations, and taxes.

Epoch Times Photo
A customer buys cannabis products at MedMen in West Hollywood, Calif., on Jan. 2, 2018. (David McNew/Getty Images)

Gray brought up a crucial issue cities need to deal with: “If you’re going to use marijuana, wouldn’t you want to have quality control, so you know it isn’t spiked with cocaine? Quality control is huge. The black market has none.” He pointed to alcohol Prohibition a century ago, where bootleg booze commonly poisoned people. The New York Times in 1927 reported there were 741 alcohol poisoning deaths in the city in 1926, with “Almost No Pure Whisky Available, Even for Doctors.” Currently, he said, marijuana appears not to be spiked with fentanyl, which has plagued other black-market drugs.

“So we need to emphasize the need for strictly regulated or controlled marijuana or alcohol, instead of illicit stuff,” Gray said. “And we’re not doing it for marijuana because of the pricing.”

The city Gray held up for doing the best in Southern California was Santa Ana, “And they’re making some money. So hooray for them. I’d rather they make it than the bootleggers. But it’s really the only one I can point to. Costa Mesa is doing better than before.”

I hate to say it. But as with so many badly written California initiatives that pass, Prop. 64 may need a new initiative to clean up the original’s mistakes.

John Seiler is on the Editorial Board of the Southern California News Group.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.

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