Medical vs. Adult use Cannabis Products

This is for the benefit of those attempting to understand (including myself) the differences of cannabis deemed for medicinal use as opposed to adult use aka recreational use of cannabis and how best to make it available to consumers.

  • What's the difference between medicinal and adult use cannabis?
  • How will it be licensed for retail?
  • How will it be tax exempt for State ID issued card carriers?

In essence, there is physiologically no difference between a Type M-licensed medicinal cannabis plant and a type A-licensed cannabis plant destined for adult use. In addition, the standards of quality will be the same for both license types as per California Dept of Public Health. The only difference between an “A-license” and an “M-license” is how the consumer could be exempt from paying sales tax if used as a prescribed medicine for treatment of a specific ailment and holds a State issued ID card.

Definitions:
“A-license” means a state license issued under this division for cannabis or cannabis products that are intended for adults who are 21 years of age and older and who do not possess a physician’s recommendation.

“M-license” means a state license issued under this division for commercial cannabis activity involving medicinal cannabis.

“Retailer,” for the retail sale and delivery of cannabis or cannabis products to customers. A retailer shall have a licensed premises which is a physical location from which commercial cannabis activities are conducted. A retailer’s premises may be closed to the public. A retailer may conduct sales exclusively by delivery.

“Microbusiness,” for the cultivation of cannabis on an area less than 10,000 square feet and to act as a licensed distributor, Level 1 manufacturer, and retailer under this division, provided such licensee can demonstrate compliance with all requirements imposed by this division on licensed cultivators, distributors, Level 1 manufacturers, and retailers to the extent the licensee engages in such activities. Microbusiness licenses that authorize cultivation of cannabis shall include the license conditions described in subdivision (b) of Section 26060.1.

Tax exemptions:
“The sales and use taxes imposed by Part 1 (commencing with Section 6001) shall not apply to retail sales of medicinal cannabis, medicinal cannabis concentrate, edible medicinal cannabis products, or topical cannabis as those terms are defined in Division 10 (commencing with Section 26000) of the Business and Professions Code when a qualified patient or primary caregiver for a qualified patient provides his or her card issued under Section 11362.71 of the Health and Safety Code and a valid government-issued identification card.”

  • Is it feasible for a dispensary to operate as medicinal only and not offer adult use licensed products?

The short answer is no.

Tax exempt people. Let’s consider a few more complicated issues concerning “M Licensed” cannabis. The consumer is only exempt from paying taxes if they are a STATE card issued patient. This is very different from a physician's recommendation that is widely used to gain membership in today’s collective. Please see HEALTH AND SAFETY CODE - HSC for the requirements for patient & caregiver tax exempt status.

So in comparison to what collectives accept now as a “medical recommendation”, this state issued identification card isn’t something I see a majority of dispensary visiting consumers applying for, in my opinion. The question I’d ask now is, of those that have a current “medical recommendation”, how many will actually go to the state and apply for the tax exemption status vs. how many will just opt to pay taxes for either type A or M licensed products? From what I can understand a consumer can purchase both A or M licensed products. Only the State ID card carriers would be exempt from paying tax on M licensed products only. So it’s not a matter of the Medicinal or Adult Use of the products, it’s just whether or not sales tax is collected.

I would estimate that a larger percentage of those who currently have current “medical recommendations” to gain access to a collective currently would opt to not renew those recommendations and purchase type A or M licensed product and happily pay the taxes, (motivation to keep them low). Because they are essentially the same products.

Considering that From 2004 through January of this year, 85,370 medical marijuana identification cards have been issued by California counties, an average of 7,100 cards per year, wouldn’t that would severely limit the opportunity for profitable business if a dispensary were limited to selling only type “M-Licensed” products to only State ID holders? And would it cause consumers to unnecessarily obtain a medical ID card to be able to purchase a product such as a pain relieving topical.

I often hear elected officials contemplate medicinal only dispensaries because “we’re just not comfortable with adult use yet”. I ask you to consider this truth; A large part of the SLO County population is comfortable with it. They are experienced, educated, ready and eager to purchase the products they voted for access to. Aside from prohibition of adult use complicating product sales for such things as topicals it would seem that by allowing for a combined A & M licensed dispensary or retail store-front would result in:

Providing the consumers what they asked for.
Lessen the propensity for black market sales.
Keep revenue in your locality instead of giving it all to Grover Beach or outside delivery services.
Save time in the future from having to go back and change ordinances.
Greater chance of profitability for the dispensary by being able to offer a wider range of products for consumers.

These matters are extremely complicated especially if one is unfamiliar with the how’s, who’s and why’s of cannabis activities. So without seeming to minimize the complexity and implications of cannabis business in our communities, I’d argue that by allowing a dispensary that sells both type A & M licensed products the process would be less complicated in the long run, better suited for local consumers and profitable for the store owner.

San Luis Obispo County Cannabis Business Association is a local non-profit agency offering assistance in understanding state law and how it applies to SLO County and it’s residents. We strive to bridge the gaps of understanding by working with stakeholders and community leaders to compile timely and accurate information needed to implement conscientious regulations that will serve our communities without compromising their integrity.

Please feel free to use us as a resource by reaching out to any of our SLOCCBA Board Members, or myself.

Kindly,
Marie Roth
SLOCCBA President
(805) 712-5963

P.S.

AB133 is now positioned to replace SB94. Other notable language in the trailer bill AB133:

By using the “Ctrl F” key please search “requirements” to learn more about licensing requirements.

MAUCRSA requires that a licensed medicinal cannabis manufacturer only manufacture cannabis products for sale by a medicinal cannabis retailer. AB133 would repeal those provisions making it possible for one manufacturer to produce for both medicinal as well as adult use products. These products can also be sold in the same store right next to each other on the same shelf.

“The Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), among other things, consolidates the licensure and regulation of commercial medicinal and adult-use cannabis activities.”

Waiting with anticipation the Draft #3 SLO County Cannabis Ordinance…..

SLO County slow to release Draft #3 Ordinance 1 week before public comment. 

SLO County Admin has decided to not release the next draft ahead of it being posted with the BOS agenda. It will be attached to the agenda due for release either Tuesday or Wednesday of this week, is the word from the SLO Planning Dept.

Keep tabs on the SLO County Website checking the agenda often in the next few days to be one of the first to read this much anticipated third draft to the SLO County Cannabis Ordinance.
Main contention points to the #2 Draft are:
22.40.020 C. producers of edible products cannot extract at home.  How many of you use a Magic Butter Machine or a crock pot to extract?
22.40.040 C. 3. Nipomo Mesa Area - Separation of sites by 1000ft from property lines. Can there be mfg, testing or processing within that 1000 ft? It seems that limitation would be in contrast to a "campus" style production facility model.  Why?
Click here In case you need to refer to the entire Title 22 Land use Ordinance of SLO County.
F. 1. Water - Does anyone realize all cultivators need to be registered with the California Water Resources?
G. 4. Cultivation is not allowed on previously undisturbed land in SLO County.  Won't that hamper the ability to expand or start a new outdoor grow?  Again, why?
Ooooh, if you've had a previous code enforcement violation # G. 5. might hurt a little.

Then there's the 22.90.030 where all cannabis activities in the Carrizo Planning Area are prohibited.....apparently that includes all Ag land as well.

Let's now hop over to the Coastal Zone, shall we?  Take into consideration where you'll be able to operate your non-storefront mobile dispensary or cultivation site.

This is just touching on a few of the issues. What we need is more input as to how these proposed regulations will effect your future business plans.  Get the conversation going!

Until Next time!

Marie

A Challenging Task for SLO County Cannabis Planners & Regulators

SLO County Planning Department looks to have swatted the cannabis ordinance birdie back to the BOS for further public comment today.  A #3 Draft Ordinance was due for release by Monday June 5th but instead, today, released this statement:

From: Brandi Cummings <bcummings@co.slo.ca.us>
Date: June 6, 2017 at 12:56:26 PM PDT
To: Brandi Cummings <bcummings@co.slo.ca.us>
Subject: County of San Luis Obispo Cannabis Update This email is an update regarding San Luis Obispo County's cannabis regulations and process.For jurisdictions across California, crafting legislation on a topic as dynamic as cannabis is a significant challenge. This is no different for the County of San Luis Obispo. We want to ensure that the Planning Commission receives a draft that is clearly in line with the Board’s broader direction. For this reason, the ordinance’s next draft will be brought to the Board of Supervisors on June 20th, as opposed to issuing another public input draft on June 5th.We will post details and a link to the agenda item about the June 20th meeting on our website as soon as the agenda is published online. The public is encourage to participate and comment at the meeting on June 20th.For more information, please visit our website at http://www.slocounty.ca.gov/planning/Cannabis-Cultivation.htmBest, Brandi CummingsPlanner II(p) 805-781-1006

bcummings@co.slo.ca.us

 

Yes, your vote to legalize it matters, however in this particular instance as it sometimes happens, you’ll need to continue to articulate what your expectations of legalization are to your elected officials and policy makers. Even though Prop 64 passed in SLO County at about 60%, there’s a good chunk of the population who oppose the legal use of cannabis and they aren’t taking it lightly.  See the latest questionable DOJ behavior reported just today. 
In SLO County we still have much to focus on,  Cultivation sites, brick and mortar dispensaries, testing and manufacturing but what about the collectives currently operating delivery services?  Consumers now have to deal with another barrier to access by cities and counties banning the non-storefront delivery system currently known as "The Collective Model"

Where will you get your cannabis?

Imagine having to drive to the industrial part of Grover Beach (serving all of the 805 area code, including Santa Maria) to wait in long lines at one of the two dispensaries operating on the ENTIRE central coast, (as currently there are no plans anywhere that I know that will be in operation before GB's cannabis park) If you place your order for their mobile delivery how long will it take to get your delivery?.....1, 2 or 3 days to make it up to you in the North County?  Will they be as compassionate as your current provider?  Because remember, those two dispensaries legally are the only way delivery of cannabis is allowed to happen as it currently stands in SLO County.  See Draft #2 page 24.  Your local friendly collective that's taken care of your needs in the past will be targeted for operating without a license and who knows what else by what I can only assume will be some kind of sting operation.  We need to protect all segments of the cannabis market, especially those who are currently serving consumers with success.

What do we do?

We're still needing to show some viable solutions to regulations that could cripple clustered cultivation sites (aka cannabis campus or co-ops') as well as future dispensary sites on actual farms located throughout the county.  In addition, those of you making your own topicals, salves, lotions? Any products you create using cannabis will need to be produced by a legitimate licensed business in order to make it into the legal market, Will you be able to continue to produce those products in your home?  Will your current production facility pass the State requirements, let alone your city or county?  Sorry, I'm getting ahead of myself.

Prepare public input. Thankfully it looks like SLO County is thirsting for more public input.  Come on out of the closet!  Prepare your public comment for June 20th at the County Board of Supervisors meeting. MARK YOUR CALENDARS NOW TO BE AT THE MEETING!  You don't have to speak, just be there.

Share your business plan: Consider participating in the writing of regulation for your particular business idea?  Want to be a cottage producer?  Show regulators your business plan, expected income, potential (or existing) market.  We've got them curious, now's the time to share your dreams.

Delivery businesses currently operating.  1. Let your customers know they need to reach their county or city representatives.  2. Let your county and city representatives know how many customers you are currently serving.  Offer up your business and security plan. Policy makers need to understand your unique business, only you can teach them.

Consumers: Cannabis use has come with a long history of stigma.  I've lived it for the past 25 years.  Wishing I could share my creative secrets but fear of judgement kept me silent until 1 year ago.  It was scary at first, wondering what my professional peers would think of me.  Turns out that for me, it was a motivator.  This whole experience has motivated me to work harder than ever before. It's expanded my horizons in ways I never thought could be possible and helped me to understand compassion and tolerance on a whole different level. My professional peers see that I am who I am and will always be.   They now get to see and appreciate the real me, the whole me, and they still believe in me.

Most Importantly, get plugged in!  Use @SLOCCBA in your url search to find our social media sites or connect, or hit the social media buttons on this website.   Join in the conversation on our SLOCCBA blog page!

Stay tuned! SLOCCBA will be hosting more public comment workshops.  Please contact Marie@sloccba.org ASAP if you'd like to host a workshop next week or have questions.

Until next time!

Marie Roth, SLOCCBA