California Gov. Gavin Newsom wants to bring all of the state’s cannabis licensing programs under one roof, aiming to better coordinate a complicated mix of regulators.
In his 2020-21 budget plan, Newsom is proposing to create a Department of Cannabis Control.
It would assume licensing authority from the three existing agencies, the Bureau of Cannabis Control, under the Department of Consumer Affairs; CalCannabis, under the Department of Food and Agriculture; and the Manufactured Cannabis Safety Branch, under the Department of Public Health.
“Establishing a stand-alone department with dedicated enforcement will centralize and align critical regulatory functions to build a successful legal cannabis market, and create a single point of contact for cannabis licensees and local governments,” according to the budget summary.
The Newsom administration plans to submit more concrete details on this new department this spring.
So what would happen to the existing regulatory agencies?
“I think a lot of it is still too soon to tell at this point,” said Alex Traverso, spokesman for the Bureau of Cannabis Control. “But this just shows that the administration is paying attention to industry stakeholders who have thought this would be a logical move for some time.”
For those in the industry, all that can be done is to wait and see what shape this new department takes.
Jackie McGowan, a Sacramento-based industry consultant, said that “with legislative intent, the devil is always in the details.”
“While consolidation would be welcomed by many in the industry, if this new integrated agency were to follow the existing guidelines of the enforcement arm of the Bureau of Cannabis Control, then we will likely see more raid-like inspections throughout the entire supply chain,” McGowan said. “If the new agency were to follow the lead of the Department of Food and Agriculture, then we will likely see a much less aggressive approach toward regulating this plant.”
The industry group Legal Cannabis for Consumer Safety issued a statement that it is still “digging into the specifics” of the proposed change, “but broadly we’re pleased to see a push for consolidation and simplification, because the complexity of regulations has been a big driver behind the illicit market’s success.”
The group said that “enhanced, streamlined enforcement” is necessary to keep consumers safe from potentially dangerous unlicensed marijuana products.
The governor’s budget also called for changing how both the state’s cultivation and excise taxes for cannabis are collected.
Under the proposed change, the cultivation tax would be collected by the first distributor (instead of the last distributor), while the retail excise tax would be collected by the retailer.
“The changes will reduce the tax collection burden on the cannabis industry and simplify the tax collection process,” according to the budget summary.
Jerred Kiloh, president of the United Cannabis Business Association said that his organization “looks forward to working closely with the administration to ensure that the intended simplification, especially as we shift the majority of taxation burdens onto retailers alone, does not result in undue burden or complications at the dispensary level and that we keep our eyes on the prize — a safe, stable and accessible legal cannabis market in the Golden State.”
Andrew Sheeler covers California’s unique political climate for the Sacramento Bee. He has covered crime and politics from Interior Alaska to North Dakota’s oil patch to the rugged coast of southern Oregon. He attended the University of Alaska Fairbanks.
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