On the Cannabis Cutting Edge: Updates on Proposition 64 Paula Wilhelm, Senior Policy Analyst October 12, 2017

Agenda Revisit key provisions of Prop 64 Prop 64 implementation updates Prevention Perspective: Ventura County

State of the Substance: 29 states and D.C. have legalized medical or commercial cannabis (or both) 8 states and D.C. have passed commercial use laws: 2012: Colorado & Washington 2014: Alaska, Oregon & D.C. 2016: California, Maine, Massachusetts and Nevada Legal commercial sales under CA’s Prop 64 start January 1, 2018

Image source: “States that have legalized Marijuana, Money Morning blog, September 21, 2017, https://moneymorning.com/2016/10/20/map-states-that-have-legalized-marijuana/

Prop 64: The basics 1996: Proposition 215 legalized medical marijuana in California Sales and distribution side of the market largely unregulated for the next decade Medical Marijuana Regulation and Safety Act (MMRSA) passed Sept. 2015; effective Jan. 1, 2016; draft regulations released April 2017 2016: Proposition 64 legalized “adult recreational” (a.k.a commercial) use allows for the possession, use, sale and transport of up to an ounce of flower or eight grams of concentrate, plus 6 plants/household, for adults 21+ Prohibits consumption in public spaces; allows for on-site consumption at licensed businesses Creates 19 cannabis licensure types and permits vertical integration Prohibits marketing and advertising to youth and includes some packaging and labeling standards, e.g., warning labels and child-resistant packaging Eliminates or reduces existing criminal penalties; judicial process to appeal prior convictions Possession by minors treated as infraction – no jail time, mandatory drug education, counseling and/or community service Large role for local regulators (more on that later)

Prop 64: Follow the money Tax structure: Projected revenue: 15% retail tax; cultivators pay excise taxes on flowers ($9.25/oz) and leaves ($2.75/oz) Cities and counties may establish additional taxes Projected revenue: LAO: $1 billion revenue, $100 million savings annually Context: less than 1% of current budget of $181 billion FY 2015-16 MHSA revenue = roughly $2 billion (expenditures = $1.5 billion) Initial allocations/set-asides: Expenses: reimbursements for “reasonable costs” to state agencies for implementation Research: $10 million annually for 10 years to public universities for research & evaluation $3 million annually for 5 years to CHP for DUID protocols $2 million annually for UCSD Center for Medicinal Cannabis Research Reinvestment: $10 million, increasing annually by $10 million for 5 years, to Office of Business and Economic Development for grants to organizations serving communities disproportionately harmed by the war on drugs can include local health depts. for prevention and treatment services

Prop 64: The famous 60 percent After set-asides: 60 percent: Youth Education, Prevention, Early Intervention and Treatment for SUD disbursed to DHCS, who will enter into agreements with Depts. of Education & Public Health to administer programs in the following areas: prevention & early intervention; student assistance programs; programs targeting homeless youth; access & linkages to care from County Behavioral Health Depts. for youth and families with, or at risk for, SUD; a full “continuum of care”; family-based interventions; stigma reduction, including education & peer-based programs; workforce training, education & wage structures that increase BH staff with SUD expertise; construction of youth treatment facilities State agencies may contract with County Behavioral Health for the provision of services; allocations to each county “based on demonstrated need” State agencies may use up to 4 percent of this allocation for administrative costs If Dept. of Finance determines that funds exceed need for youth programs, other departments may propose plan to use funding for adults 20 percent: environmental remediation, restoration, protection 20 percent: state and local law enforcement (jurisdictions with bans ineligible)

Prop 64: Some questions How much is that 60 percent? $1 billion revenues less (estimated) set-asides = maybe $545 million? Context: statewide FY 2015-16 SAPT funding = $154.3 million How will it be allocated or awarded? Black box! State agencies must conduct stakeholder process and include treatment professionals, education specialists, researchers Funds allocated to County BH according to “demonstrated need” including number of youth in county and SUD prevalence among adults – “need” is otherwise undefined Many references undefined, e.g. “disproportionately affected” communities, “at-risk” youth and family members, “wage structures” for the SUD workforce Does emphasis on family services mean some funding can go to adult programs? Many more unanswered questions . . .

Prop 64: Where are we now? June 27, 2017: September 2017: Medicinal and Adult-use Cannabis Regulation and Safety Act (MAUCRSA) signed by Governor Brown Creates single regulatory regime for medicinal and commercial/adult-use cannabis, with Bureau of Cannabis Control (formerly Bureau of Medical Cannabis Regulation) as lead regulatory agency CDFA (cultivation licenses, track-and-trace) and CDPH (manufacturer licensing, public information) also have roles to play September 2017: Bureau released draft CEQA study - public comment period ended October 6, 2017 CDPH “Let’s Talk Cannabis” campaign released informational website: www.cdph.ca.gov/Programs/DO/letstalkcannabis/Pages/LetsTalkCannabis.aspx fact sheets: legal questions, pregnancy, youth, parents, general safety digital toolkit for local stakeholders (forthcoming)

Prop 64: Where are we now? Ongoing: Cities and counties developing regulations Counties responsible for unincorporated areas only Applicants for state licenses will need to be in compliance with local requirements Localities may: ban any/all license types establish local licensing requirements and implementation timelines impose local taxes further regulate sales and advertising ban product types, require additional warning labels, limit signage and sponsorships, limit imagery and language that appears to target youth

Prop 64: What happens next? November, 2017: Bureau to release emergency market regulations Will replace MCRSA (medical only) regs released in April 2017 Must undergo public comment, etc. before final Bureau to release application for temporary licenses January 1, 2018: Licenses may take effect; commercial “adult-use” sales may proceed Economic and public health effects TBD

Image source: Caulkins, Jonathan P. , Beau Kilmer, Mark A. R Image source: Caulkins, Jonathan P., Beau Kilmer, Mark A. R. Kleiman, Robert J. MacCoun, Greg Midgette, Pat Oglesby, Rosalie Liccardo Pacula and Peter H. Reuter. Options and Issues Regarding Marijuana Legalization. Santa Monica, CA: RAND Corporation, 2015. https://www.rand.org/pubs/perspectives/PE149.html.

Prop 64 resources California Cannabis portal https://cannabis.ca.gov/ State regulatory homepages Bureau of Cannabis Control: http://bcc.ca.gov/ DPH Manufactured Cannabis Safety Branch: https://www.cdph.ca.gov/Programs/CEH/DFDCS/Pages/MCSB.aspx CDFA cultivation licensing: http://calcannabis.cdfa.ca.gov/ “Let’s Talk Cannabis” https://www.cdph.ca.gov/Programs/DO/letstalkcannabis/Pages/LetsTalkCannabis.aspx# Legal summaries, fact sheets and updates Drug Policy Alliance: http://www.drugpolicy.org/my-prop-64 Canna Law Blog: http://www.cannalawblog.com/ Cannabis laws by county/city Canna Business Laws: http://cannabusinesslaw.com/california-cannabis-laws-by-county/

Cannabis policy resources 2017 National Cannabis Summit presentations https://ncc.expoplanner.com/index.cfm?do=expomap.handoutsBySession&event_id=18 Legalization policy options (Rand Corporation) https://ncc.expoplanner.com/files/18/SessionFilesHandouts/MGS2_Caulkins_1.pdf State of the science (NIDA) https://ncc.expoplanner.com/files/18/SessionFilesHandouts/TGS2_Weiss_1.pdf Local regulations and public health (*Public Health Institute, CA-focused) https://ncc.expoplanner.com/files/18/SessionFilesHandouts/E5_Silver_1.pdf Lessons learned in Colorado https://ncc.expoplanner.com/files/18/SessionFilesHandouts/WGS1_Freedman_1.pdf

Contact Information: Paula Wilhelm pwilhelm@cbhda.org