This document provides an overview of legalized recreational marijuana in California, including the regulatory structure established under the Adult Use of Marijuana Act (AUMA) and potential impacts of local regulation and the new presidential administration. It outlines the state agencies that will regulate different aspects of the marijuana industry, as well as the role of local approvals. Key issues discussed include local jurisdictions adopting regulations, uncertainty around federal enforcement under President Trump, challenges around banking for marijuana businesses, and other common problems that may arise.

1. February 1, 2017
LEGALIZED RECREATIONAL MARIJUANA:
Local vs. State Regulation and the Trump
Administration’s Potential Impact
Eric Casher, Senior Associate
Alex Mog, Associate

2. 2
• Regulatory Structure & Regulations
• Local Regulation
• New Presidential Administration
• Common Issues
Overview

3. 3
AUMA Creates Comprehensive
Regulatory Structure
Department
of Consumer Affairs
Bureau of Marijuana Control
Department of Public Health
State Board of Equalization
Department of Food
and Agriculture

4. 4
AUMA Regulatory Structure
Department of
Consumer Affairs
(Bureau of
Marijuana Control )
Transporters
Retailers
Distributors
Microbusinesses
Department of
Food and
Agriculture
Cultivation
Tracking
Department of
Public Health
Manufacturing
Testing

5. 5
• State Licenses in January 2018
• Agencies to adopt rules and regulations to
implement and administer AUMA
• Draft regulations anticipated in April 2018
• Possible merger of medical and
recreational regulations
State Regulations

6. 6
• AUMA requires compliance with local
ordinances and regulations, but…
– MCRSA: Requires proof of necessary local approvals
– AUMA: No documentation of local approvals necessary
– Effect of local license revocation on state license
• Burden on state
• Change on the horizon?
Role of Local Approvals
MARIJUANA LICENSE

7. 7
• Local jurisdictions may adopt and enforce local
ordinance to regulate or completely prohibit the
establishment or operation of one or more types of
business
• Make sure to regulate everything
you want to regulate
• Beware of reliance of
permissive zoning
Local Regulations

8. 8
• Must be proactive with regulations
• Will the state allow for the sale or
transfer of existing licenses?
Local Regulations

9. 9
• Ogden Memo (2009): Don’t focus on
individuals whose actions are in compliance
with state law regarding medical marijuana
• Cole Memo (2013): To receive low-priority
status in federal enforcement, states must
take various steps
• But…Obama Administration against federal
decriminalization of Marijuana
Federal Regulation

10. 10
• Conflicting statements and no clear policy yet
• Attorney General (nominee) Sessions very
anti-marijuana
• President Trump has expressed varying
degrees of support
Trump Administration

11. 11
• Range of options available
– Raids and seizures?
– Enforcement of Cole memo?
– Status Quo?
Federal Enforcement

12. 12
What to do with all the cash?
• Cannabis Banking
Working Group
• Cannabis Safe Payment Act (proposed)
• Options for local jurisdictions
Banking

13. 13
• Enforcement of state licenses
• Enforcement of criminal penalties
Other Common Issues

14. 14
• Oversaturation of marijuana businesses
• Potential loss of grant funding
Other Common Issues

15. 15
Questions
Q&A
15
Q&A

16. 16
Presenters
16
Alex Mog
Associate
amog@meyersnave.com
916.556.1531
Eric S. Casher
Senior Associate
ecasher@meyersnave.com
510.808.2000