2017 Budget Trailer Bill

After the passage of Proposition 64 in November of 2016 Cal Growers focused efforts on implementation and bridging the gap between the MCRSA and the AUMA. SB 94 and AB 110 represent the capstone of this work--and in many ways--the culmination of a 3 year sustained effort to regulate commercial cannabis in California.

June 12, 2017

Honorable Jerry Brown
Governor, State of California                         
State Capitol
Sacramento, CA 95814
Members of the California State Legislature
State Capitol                           
Sacramento, CA 95814

RE: Support for Committee on Budget, SB 94 & AB 110 – Cannabis: Medicinal & Adult Use

On behalf of the California Growers Association (CGA) representing over 1,000 members in 48 counties throughout California, I write to indicate our strong “support” position on both SB 94 & AB 110 from the Assembly and Senate Budget Committees which seeks to conform and implement a single regulatory structure under provisions of Proposition 64 (2016) and the Medical Cannabis Regulation & Safety Act adopted by the Legislature in 2015.

We commend the effort of the leaders in the Assembly, Senate and Governor’s Administration who have developed this package of implementation provisions.  This legislation represents a tremendous commitment of time and energy on the parts of dozens of offices and we are grateful for the investment that has been made.

We believe the policy reflected in these budget trailer bills strikes an appropriate balance between the interests of large-scale businesses and the small-to-medium producers who are the backbone of the cannabis industry that Cal Growers represents.  The package of reforms outlined in this legislation offers a strong foundation for the thousands of businesses in California’s existing marketplace and sets a strong foundation to ensure that marketplace is equitable.

Specific highlights include:

1.     Agricultural Cooperatives for Cannabis Producers:  The existing culture of cannabis commerce is cooperative in nature.  While we continue to have concerns about the insidious impacts of conglomeration, the ability to form cooperatives under this proposed section of law will allow us to realize the benefits of the efficiencies that come from scale while protecting the independent ownership of our farms. This changes the whole environment and is a priority issue that Cal Growers has been working on since early in the development of the MCRSA.  We strongly support this provision in the final trailer bill.
2.     Tax Collection: The trailer bill clarifies that tax collection will happen when products enter the commercial marketplace—not when the product is harvested.  The language contained in the legislation adequately addresses our concerns about the “harvest tax.”
3.     Delivery Services:  A license for every business type has been a core principle of our organization since our inception.  By allowing for delivery-only dispensaries the trailer bill closes the biggest hole in the licensing framework.  This will significantly reduce barriers to entry for the retail segment of the marketplace.
4.     Appellations and Organic Standards: Expanding the scope of the appellations will provide more opportunities for small producers to add value.  One of the most important value adds for many agricultural producers in California is the organic certification.  Federal prohibition prevents cannabis growers from availing themselves to this value.  We support the inclusion of language that would authorize the state to develop an alternate set of standards that would serve a similar function.  The proposed changes will help California cannabis business owners work together to build a values based marketplace.
5.     Environmental Protections:  The proposed trailer bill includes robust regulations for the protection of natural resources, especially water.  We strongly support these provisions and the proposed funding for watershed restoration and cleanup.
6.     North Coast Office:  The North Coast of California is the global epicenter of cannabis cultivation. The isolated region has limited access to government agencies and services.  The remote nature of these communities creates significant barriers to North Coast businesses.  The establishment of the North Coast Office will help reduce these barriers for thousands of legacy businesses and help to stabilize the regional economy. 
7.     Temporary Event Licenses:  Events are an important part of our culture.  Countless festivals throughout the state have long been a cornerstone of California cannabis—just as they are with wineries and microbrews.  The proposed trailer bill is a first step toward bringing this important aspect of canna-culture into the fold of regulation.

We thank the leaders within the Legislature, Governor’s Administration and the staff who are engaged in reconciliation process to create one comprehensive regulatory model to ensure cannabis licenses can be issued in January, 2018.  We look forward to continuing the discussion on these important issues for California’s cultivators.  We urge support of the conformity language contained in both SB 94 and AB 110 through the passage of the 2017-18 California State Budget.

Sincerely,

 

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