By Sean Donahoe 12/2/15
With new state regulations coming into law next month, and with some sort of a statewide voter initiative on the ballot coming in less than a year from now, the political work has only just begun. Cities and counties are beginning to wrap their heads around the notion of licensing something other than traditional collectives, with manufacturing and cultivation licenses being debated from North to South. Cities that have always resisted allowing collectives are beginning to adopt new ordinances and dip their toes into the water of safe access. Elected officials and staff are beginning to understand that a responsible, professional cannabis industry might actually be a welcome addition to their communities.
What’s nice about having a state framework, having regulators in Sacramento concerned with setting a reasonable, rational set of operating standards, is that local governments need to only concern themselves with that which no other level of government can accomplish: land use decisions. What cultivation license type can go on parcels of how many acres? What types of industrial zones should manufacturing be allowed in? Should collectives be allowed in commercial zones, or only in industrial areas? What should the permitting and hearing process look like? Everything else that has traditionally confused local governments will begin to be handled by other agencies at the state level.
The tracking and tracing of medical cannabis will be handled by the Board of Equalization. For outdoor cultivation, clearance will be handled by Cal Fire. Construction permitting will be handled by local Planning Commissions, and water diversion issues will be handled by the regional Water Boards. The simplicity and workability of the new framework shouldn’t be underestimated, as medical cannabis commercial activity begins to resemble other commercial activities more and more. With increased certainty comes increased stability as more investors will feel comfortable about moving into the cannabis industry. Even better, existing industry folks will feel more comfortable in investing in their operations, making bets on horizontal expansion to new markets, in increased spending on laboratory testing, quality insurance and product development, etc.
What you should expect to see from a non-industry perspective is an exciting new set of brands, products and retail outlets in addition to increased quality and maybe even lower prices. Real estate prices may skyrocket, as a scarce number of parcels and buildings are deemed compliant with new zoning rules and located sufficient distances from schools and youth-oriented facilities. The “green rush” is on, and with it, a whole new “land rush” that will change California as we know it—but let’s not get too carried away. Until we have complete federal legalization, taking cannabis products across state lines, whether for medical or recreational, adult use, just isn’t going to be legally permitted. Perhaps a first step might be federal allowance of transfers from medical states to other medical states, or from legalized states to other legalized states—but the type of mass-scale agriculture and mass-scale manufacturing that many Wall Street investors are salivating over, as hucksters pitch their green dreams to them, just isn’t going to happen. Just because it’s physically and financially possible doesn’t make it politically possible— not yet, at least.
What will happen first, the land rush, as parcels and buildings get snapped up, as retailers expand into newly permitting markets, and as manufacturing and cultivation comes out of residential areas and into compliance with industry standards that the investors, law enforcement, elected officials, and the general public demand. There should be a lot of commotion to the existing cannabis industry, disruption even, but the future looks green—very green.