AUMA: A new hope?

On Monday November 2, the final major initiative proposal to legalize recreational cannabis for adults in California was filed with the state attorney general’s office for title and summary. The AG filing is the last step before signatures are collected to qualify for the November 2016 state ballot.

Media reports say the initiative, called the Adult Use of Marijuana Act (AUMA), will be “largely funded” by Sean Parker, a billionaire tech industry investor who formerly was president of Facebook.   

Our initial response is positive. Simply put, this is the best initiative text we have seen to date. It is potentially supported by wealthy campaign contributors and has received early endorsements from Lt. Gov. Gavin Newsom and the Nature Conservancy, among others. Polling has indicated the initiative is more likely to succeed than several other prospective recreational cannabis proposals.

 There are several exciting aspects to the initiative:

  • Establishes a certified organic designation and organic certification program for cannabis and cannabis products.
  • Creates standards for recognition of a particular appellation of origin applicable to marijuana grown or cultivated in a specific geographical area.
  • Provides for the Department of Food and Agriculture to administer provisions of the law that involve cultivation. 

The initiative proposes a creative solution consistent with feedback we have received from members. The “Microbusiness” license allows a licensee to cultivate, manufacture, transport, package, test, sell and deliver. The license would be available only to farmers who cultivate less than 10,000 square feet. 

But we do have concerns. The “Type 5” cultivation license would allow for unlimited cultivation by a single licensed operator. This provision would ignore the wisdom in the Pathways Report from the Blue Ribbon Commission led by Lt. Gov. Newsom. The report concluded California should appropriately limit the size of single entities operating within the industry.

We identified one deal breaker: the lack of protections against consolidation and monopolies.

The Blue Ribbon Commission and many experts who contributed to the Pathways Report expressed major concerns about allowing market domination by large corporations. One solution would be to adopt the licensing framework and structure from the Medical Marijuana Regulation and Safety Act without changes. However, many large investors and corporate cannabis operators opposed this licensing framework because of limits on vertical integration.

The challenge facing the authors of any initiative is how to develop a policy that guards against domination by large players and monopolies while still attracting financial support to qualify for the ballot and win the election. From our perspective the appropriate starting point is recently signed legislation and building effective partnerships with stakeholders in Sacramento. 

We suggest the following provisions to help level the playing field for small and mid-sized cultivators:   

  • Mandatory distribution for licensed cultivators larger than 10,000 square feet.
  • Limit the number of medium and large cultivation licenses.
  • Delay creation of a large cultivation license until 2020 or later.
  • Authorize farmers’ markets for licensed cultivators smaller than 10,000 square feet.
  • Authorize non-profit cooperative associations (agricultural co-ops) for licensed cultivators less than 10,000 square feet.

We remain neutral and continue to work with all stakeholders. As we move toward legalization, our goal must be to protect our heritage. 

The next 30 days are critical to the 2016 campaign to legalize cannabis and restore justice to our communities. In the next few weeks, we expect vigorous dialogue among the supporters of many different initiatives as California works toward a consensus.