As a lifelong conservative, I’m no fan of government regulation. Even so, I’m convinced it’s time for California to aggressively regulate the medical marijuana industry.
I’ve spoken with concerned citizens, local government officials, rural law enforcement officers, federal officials, anti-drug crusaders and medical marijuana industry insiders.
I visited the Emerald Triangle with fellow Board of Equalization member Fiona Ma. Our April tour showed how we can work with the industry to generate greater voluntary compliance with California law.
The current cash-based system is dangerous. Crime, corruption and tax evasion are far too common. Murder and armed robbery rates in California’s rural counties have skyrocketed as the cannabis industry has grown. The FBI and U.S. attorney are investigating and prosecuting local law enforcement officials at staggering rates for taking cash bribes.
These problems stem in part from ongoing conflict between state and federal laws. Nearly 19 years ago California voters approved Proposition 215, making medical marijuana legal under state law, even while it remained illegal under federal law.
Cannabis has become readily available to the seriously ill – and anyone who has an hour to visit a “doctor” to get a recommendation and a “215 card.” Freeway billboards advertise local dispensaries, while apps provide for doorstep delivery. During this time, federal raids and prosecutions have waxed and waned depending on the political climate in Washington, D.C.
There’s no state regulation, just a patchwork of local rules. True, the California Department of Public Health runs a voluntary identification card program for patients and caregivers, but it has no jurisdiction over retail dispensaries or the production industry.
A better structure would be what Californians voted for in 1996. Proposition 215 sought to “encourage the federal and state governments to implement a plan to provide for the safe and affordable distribution of marijuana to all patients in medical need of marijuana.”
State rules would help law enforcement distinguish the good actors from the bad, leading to improved public safety. Rules would help stem the tide of rural murders, armed robberies and public corruption, allowing for a more effective use of limited law enforcement dollars. Local governments would be able to better respond to complaints related to cannabis grown and sold in their communities.
One irony of the status quo is that tax evasion deprives governments of the funds it needs to enforce laws already on the books.
As an elected tax official, it’s my job to ensure the collection of taxes owed the state. Cash-based businesses are very difficult for the Board of Equalization to audit, especially when we can’t get records of their wholesale transactions. It’s also a safety risk to have dispensaries pay their taxes by carrying duffel bags into state offices with hundreds of thousands of dollars in cash.
A new Board of Equalization effort, the Cannabis Compliance Pilot Project, aims to determine the scope of noncompliance and develop strategies to address compliance barriers. A report is due in November.
We won’t solve this problem on our own.
The good news is state lawmakers appear ready to do their part. A recent bipartisan vote for Assembly Bill 266 is a sign that lawmakers see the need for a regulatory structure.
The federal government must also act. Under current federal law, it’s nearly impossible for those in the medical marijuana industry to have bank accounts.
Many conservatives fear that regulating the medical marijuana industry will pave the way for full legalization of recreational marijuana – I disagree. One can oppose recreational marijuana, as I do, while recognizing the reality of the current situation. To improve public safety and tax compliance, we need greater state structure and oversight.
George Runner represents more than 9 million Californians as a taxpayer advocate and elected member of the State Board of Equalization.