Update on Transportation/Distribution IssueYou may recall my previous post discussing the transportation/distribution issue (here). In that post we basically concluded that: - Under the MCRSA regulation AND Adelanto Ordinance 573, LDS cannot operate a cultivation & manufacturing operation in the city AND SIMULTANEOUSLY hold a state Transporter License
- On June 27, 2017, the California Governor (Jerry Brown) signed a new bill, SB 94, entitled the Medical and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), which took effect immediately (thereby repealing the MCRSA)
- 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)
- 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.
If you look at any of the Ordinances passed by the city of Adelanto that you can find in yesterday's post (link), you will notice the following: WHEREAS, on June 27, 2016, Governor Brown approved Senate Bill number 837 (“SB 837”), effective immediately, which amends the MMRSA and renames it the Medical Cannabis Regulation and Safety Act (“MCRSA”)
All the Ordinances have the above language so all of the City of Adelanto Ordinances are based on MCRSA (Medical Cannabis Regulation and Safety Act) which is now repealed. At some point, they will need to be rolled forward to the less restrictive and more flexible MAUCRSA legislation.
There was a very good article on this two days ago that you can read here:
https://abovethelaw.com/2017/08/cashed-california-cannabis-distributors-arent-really-distributors/?rf=1
Here are key excerpts from that article which I encourage you all to read: Under the MCRSA, California’s cannabis cultivators and manufacturers would have had to sell their products to licensed distributors who would then sell those products to licensed retailers. MCRSA distributors had to be separately owned from other licensees and the MCRSA draft rules mandated that distributors take title to all product. All of that has changed with passage of the Medicinal and Adult Use Cannabis Regulation and Safety Act (a/k/a MAUCRSA, SB 94, or the Governor’s Budget Trailer Bill), which combines medical and adult use cannabis laws and rules, repeals the MCRSA, and forces withdrawal of the MCRSA draft rules.
Under MAUCRSA, cannabis licensees can vertically integrate and even act as their own distributor. All cultivation and manufacturing licensees must go through a distributor for testing and packaging and labeling quality assurance and distributors can charge fees for these services. Distributors will also be the ones to collect and remit taxes on behalf of cultivators and retailers. With passage of the MAUCRSA, it’s likely California will issue a slew of cannabis distributor licenses to actors of all sizes and these distributors will become one-stop-shops for mandatory quality assurance and little more.