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RE:RE:Ordinance 573 - Medical Cannabis Distribution/Transportation

[Stranius]

I looked into it and I believe you are right @Canuck21C. I must admit, I don’t have all the answers. I often do research and pose questions based on what I find.
 
When reading these ordinances, and the ever-evolving California regulations on Adult Use Marijuana, I feel a bit like an amateur brain surgeon and my head starts to spin.
 
There is a lot of good info in them and I encourage all of you, time permitting, to at least skim them. Ordinance 573 can be found starting page 189 at this link.
 
So I did a deeper dive into Ordinance 573. Yes, Ordinance 573 does amend AMC 17.80.100 for separate distribution (i.e. dispensary) and transportation (i.e. moving cannabis from cultivator to dispensary) permits.
 
Is it limited only to operations only in the City of Adelanto? Look at the opening part of Section 3 of the ordinance:
 




So the purpose of the Ordinance is to regulate transportation of medical cannabis between Medical Cannabis Permitees in accordance to State law. City (of Adelanto) is authorized to regulate activity under MCRSA. A Medical Cannabis Permitee is an entity that has a permit by the City (of Adelanto) or another city in the State of California in accordance with MCRSA.

Everything above implies that this Ordinance 573 applies to Transportation permits issued by City of Adelanto or (by reciprocity) to similar permits issued by other cities in the state of California. So this seems good right? So I keep reading and finally get to Subparagraph G shown below:
 


Ah shucks... this section appears to limit the ability to operate using a Transportation permit in the City of Adelanto only to entities that have Transportation permits from the City of Adelanto or those entities that have State Transporter licenses with at Type 12 classification. Furthermore (another bad part), this section says that if you have a Type 12 State Transporter License, you cannot have any other State or City cannabis activity permit (for reference, LDS has access to two of these, a cultivation CUP and a manufacturing / extraction CUP).

So the bottom line under the current MCRSA regulation / Ordinance 573 is that LDS cannot operate a cultivation & manufacturing operation in the city and hold a state Transporter License simultaneously under the MCRSA regulation.
 
For reference, the MCRSA regulation can be found here, although I am not sure if this is the latest. You can look up sections 19300 and 19334 that are referenced in Subparagraph G of Ordinance 573 above to get some more details.
 
So now that you know the answer, it is this next part that really makes your head spin. All of the City of Adelanto Ordinances are based on MCRSA (Medical Cannabis Regulation and Safety Act). This is what my post on June 2, 2017 here referred to.

And as noted above, the MCRSA does limit what types of licenses you can own. But, as some of you may know <this next part is a cut and paste for the most part from a web site>, on June 27, 2017, the Governor has signed a new bill, SB 94, entitled the Medical and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), which took effect immediately. MAUCRSA melds the state’s medical-only regulations passed by the legislature (MCRSA) with the adult-use rules approved by the voters under Prop. 64, a.k.a. AUMA (Adult Use of Marijuana Act).
 
For the most part, MAUCRSA follows the more flexible, industry-friendly rules of AUMA, such as allowing applicants to get licenses in different phases of the industry - cultivation, manufacture, distribution and retailing - rather than restrict so-called vertical integration by allowing just a single kind of license, as under MCRSA. It also eliminates MCRSA's independent distributor requirement.
 
Under MAUCRSA, applicants have the choice of applying for a medical “Type M” or adult-use “Type A” license in any category (cultivating, manufacture, etc.). It requires medical and adult-use business to operate separately, but a provision to allow co-location of adult and medical use facilities has been incorporated in a separate regulatory clean-up bill, AB 64.
 
AB 64 would:

(1) allow medical and adult-use licenses to operate on the same premises;
(2) amend California’s Model State Trademark Law to allow trademarks for cannabis products; and
(3) allow existing medical collectives, which must still operate as not-for-profits under SB 420 pending state regulation, to operate on a for-profit basis immediately.
 
It would seem to me that the City of Adelanto Ordinances need to be re-drafted and re-aligned to the MAUCRSA regulation versus the current, but stale, MCRSA regulation. Confused yet?
 
So in conclusion, I say AMEN to this being an extremely crucial part of the company's business plan. I also hope they get it right. It would be nice to know more about the plan (from management) rather than just relying on Google, Hope and Prayer.
 
~S


PS. Anyone watching the City Council meeting at 7 pm PT tonight? Link is below...

https://adelantoca.iqm2.com/Citizens/Detail_Meeting.aspx?ID=1093
 

Canuck21C wrote: Thanks for answering some questions, S.  

Regarding the Distribution/Transportation licenses:  Doesn't Ordinance 573 (which wishes to amend AMC 17.80.1800) seek to, in part, require separate licenses for distribution and transportation of MJ but only "within the city?"  See June 27th Agenda Report you provided.  

From your earlier post on June 2nd (a Q and A interview) NHN answered that "those operations will have to be authorized first by the local governments.  So if the locals authorized adult-use cultivation at some point, you will need to get that authorization first.  Then apply for state licensing next year." (Jan.1st, 2018 through the Department of Consumer Affairs).  It does make sense to me that a distributor or transporter must have state authority or jurisdiction at both ends of the transaction-eg. farm and dispensary 

So while LDS may be able to apply for a municipal license for Adelanto it is likely it cannot get one from the State.  One of the main concepts behind the new California Act is that it wants to prevent vertical integration of this sensitive business.  For this reason, LDS just may have to play ball with the Azonics of the world as long as they have an air-tight reputation.  You are right....this is an extremely crucial part of the company's business plan.  I hope they get it right.