AB 2385: MMJ Licensing for California, But Not for Los Angeles

Posted by Meital Manzuri, Esq. | Apr 20, 2016 | 0 Comments

Licensing for medical cannabis enterprises remains a complicated and polarizing issue in California. AB 2385 is a supposed blueprint that solves the issue, which it does for much of the state. However, it's not a complete remedy – and to those in Los Angeles, it just adds more to what is already a soul-sucking behemoth.

The Initial Draft of AB 2385

In October 2015, when the Medical Marijuana Regulation and Safety Act (MMRSA) was signed into law, it was hailed by many for finally putting California on the path to having a regulated medical cannabis system.

While it is true that the MMRSA does address the concerns and goals of legislators and the general public, it's also true that the law has gaps that leave many in the industry vulnerable. AB 2385 is but one of several attempts to revise or amend the gaps that have been drafted, but the results have been mixed.

A Major Concern – Licensing

In 2018, the state will tentatively begin issuing permits to operate legally in California, and any MMJ enterprise wanting to receive one must have been running in good standing locally by December 31, 2015. (We say 2018 because that is approximately how long it will take to put the licensing regulations and infrastructure together) The MMRSA explicitly mandates that an MMJ enterprise can receive its state license in 2018 only if it is also licensed by the local jurisdiction in which it operates.

Furthermore, AB 2385 stipulates that an MMJ business cannot legally operate in that city or county, even if it holds a state license, if any of the following is true:

  • The MMJ business doesn't have a local license,
  • The enterprise operates in a jurisdiction where local licenses are not permitted (as is the case in Los Angeles),
  • Its local license is revoked or cancelled for any reason, even if its state license remains in valid.

For most of California, this is great news.

But not for MMJ businesses in Los Angeles – the voter-approved Prop D does not provide for local licenses to be issued.

Amendments

In March and early April, 2016, amendments to the original AB 2385 were proposed.

One specific proposal cuts out the licensing requirement as long as the MMJ business it meets two criteria:

  • All the other requirements stipulated in the MMRSA, AND
  • The criteria specified in Proposition D

In other words, with regard to the MMRSA, an MMJ enterprise operating in a jurisdiction that doesn't issue local licenses would still be permitted to hold a state license, provided that the business adheres to all other stipulations in the MMRSA.

Furthermore, having only a state license would provide an MMJ firm with the same powers and benefits that businesses with both licenses are given.

But there's also the Prop D issue: that an MMJ business cannot get a state license without having a local license provided it follows criteria specified in Prop D.

Situation solved, right? Not quite.

Prop D impliedly prohibits the operation of MMJ businesses within Los Angeles city limits. However, a select group of dispensaries – numbering 134, to be exact, and often known as “Pre-ICO” – is granted immunity from this under the measure's auspices if they have been in operation and in compliance with all laws and regulations since September 2007.

If a Los Angeles dispensary is not part of this group of “untouchables”, then it will not be protected by either the MMRSA or AB 2385.

Conclusion

It's simple – although AB 2385 in its current draft will help MMJ businesses in other parts of California, it's a stopgap measure for Los Angeles more than it is a permanent solution. If AB 2385 is approved as it stands, it's still not a complete fix. More steps will have to be taken to address and repair the ongoing issues and conflicts between state MMJ regulations and local (city and county) ones.

Los Angeles MMJ firms that aren't part of the select Pre-ICO group aren't offered much protection or hope for getting legal permission to operate.

As it stands though, AB 2385 still doesn't provide city dispensaries with physical licenses provided by local authorities.

We still have much work to do either to fix Prop D or get approved another measure that adequately addresses what Prop D doesn't. AB 2385 addresses the needs of much of the state, but it doesn't help those affected in Los Angeles.

Stay tuned to Manzuri Law as this issue continues to evolve.

About the Author

Meital Manzuri, Esq.

Managing Partner.

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