Gov. Jerry Brown released a 79-page proposal Tuesday night outlining his administration’s solutions for resolving differences between existing medical marijuana laws and the ballot measure that legalized the adult use of recreational pot in November.
The plan eliminates a third-party distribution model favored by the Teamsters union, prioritizes environmental protections and allows marijuana businesses to apply for multiple licenses to grow, manufacture, distribute and sell their products.
Only testing facilities are barred from applying for other types of marijuana licenses under the Brown proposal. It also blocks licensees from operating recreational and medical marijuana businesses on the same property, among other key policy decisions.
The proposal marks the governor’s stance on marijuana policy that will determine the future of a more than $5 billion industry.
The reconciliation process has pitted unions, business interests and others against each other as the industry lobbies the administration, Legislature and local governments to craft regulations that benefit their particular financial interests. The state is acting on a short timeline to begin distributing licenses to marijuana businesses on Jan 1, 2018.
The Brown administration said the trailer bill builds on Proposition 64 to regulate and implement the voter-approved legalization measure. The Legislature must approve the bill with a two-thirds majority.
The proposal drew swift reactions from the marijuana industry.
The California Cannabis Industry Association, United Food and Commercial Workers Western States Council and the California Cannabis Manufacturers Association applauded Brown for upholding the will of voters.
“It seems like they kept about 99 percent of Proposition 64, but the fight is not done yet,” said Nate Bradley, policy director at CCIA. “We’re looking forward to working with both houses of the Legislature and the administration to make sure that it remains intact.”
Bradley commended the administration for allowing business to apply for multiple license types. The association warned early on that an independent distribution model would raise prices and push consumers to the illegal market.
Barry Broad, a lobbyist for the Teamsters, offered a much different take.
“We’re going to fight that part of it really hard,” Broad said. “It raises really significant anti-trust issues that we don’t think are accounted for.”
Medical marijuana laws approved by the Legislature in 2015 require an independent third party to act as a middleman and distribute the product from the growers and manufacturers to retail outlets, much like the alcohol industry. Distributors would also act as a tax collector and transport marijuana products to labs for testing.
Broad said the elimination of independent distributors allows monopolies to form. He said Brown’s position is a reversal of the medical marijuana law signed two years ago.
“It’s quite conceivable that the entire market can be owned by someone who also controls distribution and access to the market,” he said. “It’s a big problem.”