Cal Growers Dig Into Feds, Taxes, Delivery and Distribution at Summit

Threats from Washington about attacks on California’s adult-use cannabis marketplace aren’t as scary as they sound, a California State Assembly member told the California Growers Association Spring Policy Summit.

Jim Wood, D-Healdsburg, opened the CGA quarterly summit May 28 in Sacramento by suggesting the dual-track complexities of medical cannabis and adult-use create a logistical roadblock for federal authorities seeking to prosecute one segment while ignoring the other.

“I don’t believe they are going to do it,” Wood said. “You can’t distinguish between medical cannabis and adult-use and say we’re going to stop one but not the other when they both come from the same source.”

A leading legislative voice on cannabis issues, Wood is among six authors of Assembly Bill 1578, which would restrict state and local agencies – including police and sheriffs – from assisting federal authorities in investigations and arrests of Californians lawfully engaged in the cannabis trade.

Around the State Capitol, the bill is being called "the sanctuary state rule for cannabis,” Wood said.

U.S. Attorney General Jeff Sessions has caused concern among cannabis professionals by suggesting Justice Department authorities may soon enforce federal rules prohibiting cannabis.

But Sessions has drawn a distinction between medical and adult-use – a distinction not clearly endorsed by his boss. President Donald Trump has repeatedly expressed support for medical cannabis. And Trump said states should make their own decisions about adult-use.

If California adopts AB 1578, state law would provide a layer of legal protection between licensed cannabis cultivators, manufacturers, distributors and retailers and federal authorities seeking to prosecute people under federal Schedule I drug laws.

“It would be the law of the land,” Wood said. “We’re not going to help the government come in and shut you down.”

Conservative lawmakers in Washington are typically quick to defend state authority as a matter of sovereignty, Wood noted.

But California law enforcement leaders will not support AB 1578 without revision, said Lauren Michaels, governmental affairs director for the California Police Chiefs Association.

Police leaders are concerned the proposed bill would impact communication and information sharing among local, state and federal authorities. This could lead to an unintended consequence of increased federal enforcement. 

“It’s something the chiefs look at as unintended consequences,” Michaels said.

CGA Executive Director Hezekiah Allen said his organization would work with law enforcement leadership and legislators to address concerns.

Lori Ajax, chief of the California Bureau of Medical Cannabis Regulation, told the CGA Spring Summit she wasn’t thinking about Trump, Sessions or any prospective cannabis-related actions by federal authorities.

“We’ve got enough on our plate to worry about, rather than what the federal administration is going to do,” she said. “That’s just a waste of time. It’s out of our control.”

Taking questions from the audience, Assemblymember Wood discussed cannabis taxation on state and local levels.

“There are cities that are seeing dollar signs,” he said. “Some are saying they’re OK with a retail dispensary but not cultivation, as if they don’t understand that it’s all part of a supply chain. It’s absolutely nuts.” 

Wood encouraged cannabis growers, manufacturers and retailers to work with their local governments and state representatives and establish reasonable fees and taxation programs.

“A methodical approach will be a lot better than yelling out, ‘Don’t tax us!’” he said. “You’ve got to find ways to be efficient. There will be a sharp delineation between those who are compliant, and those who aren’t.”