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

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

4. 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

5. Image source: “States that have legalized Marijuana, Money Morning blog, September 21, 2017,

6. 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)

7. 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 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

8. 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)

9. Prop 64: Some questions How much is that 60 percent?
$1 billion revenues less (estimated) set-asides = maybe $545 million?
Context: statewide FY 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 . . .

10. 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:
fact sheets: legal questions, pregnancy, youth, parents, general safety
digital toolkit for local stakeholders (forthcoming)

11. 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

12. 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

13. 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,

14. Prop 64 resources California Cannabis portal
State regulatory homepages
Bureau of Cannabis Control:
DPH Manufactured Cannabis Safety Branch:
CDFA cultivation licensing:
“Let’s Talk Cannabis”
Legal summaries, fact sheets and updates
Drug Policy Alliance:
Canna Law Blog:
Cannabis laws by county/city
Canna Business Laws:

15. Cannabis policy resources
2017 National Cannabis Summit presentations
Legalization policy options (Rand Corporation)
State of the science (NIDA)
Local regulations and public health (*Public Health Institute, CA-focused)
Lessons learned in Colorado

16. Contact Information:
Paula Wilhelm