Cal Growers comments on budget trailer bill

Thank you for the opportunity to comment today. Today I am speaking on behalf of the California Growers Association and our more than 1000 business members, our partners the California Minority Alliance and a network of 13 regional cannabis industry advocacy groups throughout the state.

We generally support the overarching goal, to combine the MCRSA and the AUMA, and we remain steadfastly committed to compliance with state regulatory requirements.

However, we do not think that the proposed trailer bill strikes a reasonable balance between the two frameworks. We have taken an oppose unless amended position.

As written, the trailer bill threatens to wash away the level playing field that we have all been working together to build. That level playing field is critical to increasing participation and drawing operators into the regulated marketplace and achieving the broad public health and safety goals.

We raised these concerns during the campaign, and often supporters of Prop 64 would point to language in the initiative that would protect against monopolies and seek to ensure a level playing field.

Unfortunately, the trailer bill proposes to repeal those provisions.

Section 26051, passed by the voters as part of Prop 64, requires a licensing authority to consider whether issuance of a license would:

  • Allow unreasonable restraints on competition
  • Perpetuate the presence of an illegal market
  • Encourage underage use or adult abuse
  • Result in violations of any environmental protection laws.

And a handful of other laudable goals.

The trailer bill also proposes to repeal to other provisions:

  • Residency requirements, giving California residents a bit of a head start on getting licensed
  • Restrictions on crossover ownership between the alcohol and tobacco industries.

We should be talking about how to implement these provisions, and the MCRSA is a great place to start that process. The repeal and replace approach in the trailer bill is an abdication of the core responsibilities of the state to the voters to implement Prop 64. 

As we implement these provisions it would be well advised to remember the guidance of the Blue Ribbon Commission Pathways Report, which noted that: “There are many small players already in the marijuana market in California, and bringing these players into the fold of a legalization system is a valid goal, as is the goal of spreading the economic opportunities and benefits of a legal market.”

In this context, the blue ribbon commission noted that it would be “appropriate and probably wise to limit the size and any single entity in the marketplace,” and further found that “In addition to limiting the scale of operations, it may be appropriate for the state to set limits on vertical integration, namely what different licenses the same entity can have in the supply chain; or horizontal integration, namely what other non-cannabis businesses in which a cannabis business can also participate.”

In closing, I’d like to remind the lawmakers that when the voters passed Proposition 64, they also passed provisions that allow for changes to the initiative: “The Legislature may by majority vote amend the provisions of this Act contained in Sections 5 and 6 to implement the substantive provisions of those sections, provided that such amendments are consistent with and further the purposes and intent of this Act as stated in Section 3.”

Thank you for the opportunity to comment today.