State issues new regulations for commercial marijuana businesses - KUSI News - San Diego, CA

State issues new regulations for commercial marijuana businesses

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SAN DIEGO (KUSI) — The State of California is opening its doors at last to the launch of the multi-million dollar commercial cannabis market.

Starting next week, if you want to grow, distribute, test or sell marijuana for recreational use, you can begin to apply for a state tax permit. 

A tax permit and a state business license are both required to comply with California law.

We talked with Michael Cindrich who is a San Diego attorney who represents some of the business that are hoping to cash in on the new "Green Rush."

Until the passage of Proposition 64, only medical marijuana sales were allowed in California and many of the storefronts that have opened as medical dispensaries paid no taxes and were operating illegally.

Those operators were able to take advantage of the gray areas in the law and in some cases, defend themselves successfully in court. However, Cindrich said that ambiguity involving the law is about to disappear with the introduction of new state regulations.

"Now, it's going to go from the gray areas to the very black and white," Cindrich said. "If you have a state license, you're legal. If you don't have a state license, you're illegal." 

Last week, the State Bureau of Cannabis Control released hundreds of pages of new information about how these cannabis businesses must operate. They are required to obtain a legal permit from local authorities before applying for a permit from the state.

The new state regulations restrict retail locations to fewer than 600 feet from a school. Retailers are also barred from staying open after 10 p.m.

They're required to have 24-hour video surveillance. On the consumer side, there will be new restrictions on the dosage of edibles in the commercial market. Serving sizes cannot exceed more than 10 mg of THC and cannot be manufactured in the shapes of animals, fruits or other shapes that would be appealing to children.

Prices within the legal market may be higher initially than marijuana purchased through an illegal operator, because of state and local taxes. Licensed businesses will have to pay taxes to the state as a condition of receiving their annual permit. Unless you are a medical marijuana patient, consumers will also be charged sales and use tax.

A regulated market means more rules, but some would argue, that also guarantees more protections to consumers.

Cannabis retailers, for example, must prove their products are laboratory tested for pesticides and other contaminants. The State will soon begin issuing temporary licenses, good for 120 days.

Later in the year, the Bureau of Cannabis Control (BCC) will issue annual licenses which must renew every 12 months.

Applications by legal medical marijuana dispensaries will be considered first.

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