AUMA (Prop 64)*

AUMA (2016) Adult Use of Marijuana Act ( Prepared by California NORML (including comments)) 

Prop 64 includes licensing that mimics much of AB 266 however there are differences (for example, applicant qualifications). Please call and make an appointment with my office to discuss these matters and how and  where you can obtain a license under the new legislation

POSSESSION:  

In general, AUMA makes it lawful under both state and local law for adults 21 or over to possess, process, transport, obtain,  or give away to other adults no more than one ounce (28.5  grams) of marijuana (AUMA Sec. 11362.1). 

The initiative sets inconsistent limits for marijuana concentrates,  allowing possession of up to 8 grams in Sec. 11362.1 (a)2 , but penalizing more than 4 grams in Sections 11357(a), (b) and (c)  and 11360. This contradiction will have to be resolved by the  courts or the legislature. 

CULTIVATION: 

Adults could cultivate up to six plants and possess the  marijuana from these plants at their residence for personal use  (Sec. 11362.1(3)). No more than six plants per residence. (N.B:  These limits don’t apply to medical users, who may in principle  grow whatever is necessary for their medical use under Prop.  215. However, local governments may restrict and even  prohibit cultivation in some circumstances by local nuisance  ordinances, Prop. 215 notwithstanding. Othwerwise, MMRSA  allows patients up to 100 square feet of growing space per  person, with collective gardens limited to 5 patients unless  they obtain a state license). 

All plants and harvested marijuana in excess of one ounce  must be (1) kept with the person’s private residence or on  its grounds, (2) in a locked apace, and (3) not visible from a  public place. (11362.2). Violations of (1) – (3) are punishable  as infractions with a maximum $250 fine. Cities and counties  may regulate and restrict personal use cultivation, but cannot  completely prohibit cultivation inside a private residence or  accessory structure that is “fully enclosed and secure.” Local  bans on outdoor cultivation are permitted at present, but only  until such time as federal law is changed to allow adult use  marijuana (11362.2(b)). 

CONSUMPTION:  

The initiative makes it lawful to smoke or ingest marijuana, but  forbids consumption in any public place except for licensed  dispensaries when authorized by local governments. Violations  are a $100 infraction. “Public place” is commonly construed  broadly to include any business or property that is open to the  public. This will greatly reduce the locations where medical  patients can inhale their medicine, as they can presently  consume legally in streets and public areas where smoking is  permitted. Also forbidden is consumption within 1,000 feet of  a school or youth center while children are present, except on  residential property or on licensed premises and provided the  smoking is not detectable by the kids. (11362.3(a)3). 

SMOKING AND VAPORIZERS RESTRICTED:  Smoking cannabis is prohibited except in tobacco smoking  areas (11362.3(c)). Violations are a $250 infraction. Smoking is  defined to include the use of vaporizers and e-cigs, despite  compelling scientific evidence that smokeless electronic  vaporizers pose no public health hazard. The initiative goes on  to declare that this section does not override laws regarding  medical use; however, no state laws currently protect patients’  right to vaporize or consume in non-smoking areas, so this  point is moot except in the handful of localities (San Francisco,  Sebastopol) that have local ordinances allowing on-site  medical marijuana smoking or vaporization in dispensaries. 

USE IN VEHICLES:  

Current laws against driving while impaired are unchanged.  Consumption or possession of an “open container” of  marijuana or marijuana products is prohibited while driving  or riding as a passenger in a motor vehicle, aircraft, vessel, or  other transportation vehicle. Violations are a $100 infraction. It  is not clear what constitutes an “open container” of marijuana,  for example, in the case of edibles or e-cigs. (Note: at present,  there is no law prohibiting legal Prop 215 patients from  possessing medical marijuana in open containers.) Exception:  AUMA permits consumption in the passenger compartment of  vehicles specially licensed for on-site consumption (11362.3(a)  4,7-8). 

DRIVING WITH MARIJUANA: 

Sec. 11362.1 states that it is lawful for adults to transport one  ounce of marijuana for personal use. This provision is intended  to override an existing law (VC 23222(b)) that makes it a $100  infracction to drive in possession of marijuana. It is possible  that some law enforcement officers might wrongly try to issue  citations for VC 23222(b) after Prop 64 passes, but such charges  should be dismissable in court. 

SCHOOL GROUNDS: 

Possession or use on school grounds is banned while  children are present, as is already the case under current law.  (11362.3a(5)). 

MANUFACTURE WITH VOLATILE SOLVENTS Unlicensed manufacture of concentrates using volatile or  poisonous solvents (not including CO2 or ethanol alcohol)  are subject to heavy felony penalties, as under current law  (11362.4(a)6). 

EMPLOYMENT RIGHTS: 

The initiative does not interfere with the right of employers  to discriminate against marijuana users, medical or otherwise,  both on and off the job (11362.45(f )). 

PARAPHERNALIA: 

Marijuana accessories would be legal for adult use and  manufacture. (In practice, paraphernalia offenses are rarely  prosecuted in California since passage of Prop 215). 11362.1  (a) 5. 

The initiative does not alter the protections of the  Compassionate Use Act of 1996 (Prop 215) allowing medical  use of marijuana (11362.45(i)). Physician recommendations  must conform to minimal standards already established under  MMRSA and current medical marijuana legislation (11362.712). 

ID CARDS: 

Both AUMA and current law allow patients to voluntarily  obtain official state medical marijuana identification cards  from their county board of health. Under AUMA, patients  who do obtain ID cards are exempted from the 7.5+% sales  tax currently imposed on marijuana sales (34011(g)) effective  immediately. However, beginning in Jan, 2018, all marijuana  will be subject to an additional 15% excise tax plus a $9.25/ ounce cultivation tax. No card is required to enjoy the standard  legal protections of Prop. 215. The cost of the state patient ID  card is limited to $100, or $50 for Medi-Cal patients; free of  charge for indigent patients (11362.755) effective immediately;  this is a reduction from the prevailing fees in most counties.  Identifying information in the ID cards is made subject to the  Confidentiality of Medical Information Act (11362.713). 

CPS/CHILD CUSTODY :  

Qualified patients may not be denied child custody rights  merely because of their status as medical marijuana users.  11362.84. 

PHYSICIAN RECOMMENDATIONS (SB 643): There are  several new provisions clarifying the duties of medical  cannabis physicians; however, they don’t substantially affect or  impair patients’ current access to medical recommendations: 

SB 420 COLLECTIVE DEFENSE SUNSET: The provision  in SB 420 affording legal protection to patient collectives  and cooperatives, HSC 11362.775, shall sunset one year  after the Bureau posts a notice on its website that licenses  have commenced being issued. After that date, all cannabis  collectives will have to be licensed, except for individual patient  and caregiver gardens serving no more than five patients. 

OVERSIGHT: 

The Bureau of Medical Marijuana Regulation in the Department  of Consumer Affairs is renamed the Bureau of Marijuana Control  and given chief authority to regulate the industry. The Bureau/ DCA is charged with licensing transport, distribution and sale;  the Dept of Food and Agriculture with licensing cultivation;  and the Dept of Public Health with licensing manufacturing  and testing (Sec 26010-12). 

The Bureau is to convene an advisory committee of  knowledgeable stakeholders to help develop regulations and  issue reports (26014). 

The Governor is to appoint an independent, three-member  Appeals Board to adjudicate appeals subject to standard  procedures (26040). 

TRACK AND TRACE PROGRAM: The DFA shall implement  a unique identification program for all marijuana plants at  a cultivation site, to be attached at the base of each plant.  The information shall be incorporated into a “track and trace”  program for each product and transaction (SB 643, 19335  and AB 243 11362.777(e)). Cultivation in violation of these  provisions is subject to civil penalties up to twice the amount  of the license fee, plus applicable criminal penalties.  

The initiative establishes 19 different license categories parallel  to those in MMRSA, covering cultivation, manufacturing,  testing, distributing, retailing, and distributing. Licenses for  adult use facilities are distinct from those for medical facilities  issued under MMRSA. (26050) 

LARGE CULTIVATORS:  

A new category of Type 5 “Large” cultivation licenses is created  for farms over the MMRSA limit of ½ acre indoors or 1 acre  outdoors. No limit is set on the size of Type 5 gardens. No Type  5 licenses are to be issued before Jan 1, 2023. (26061(d)). 

MICROBUSINESSES:  

A new category of Type 12 microbusiness licenses is  established for small retailers with farms not exceeding 10,000  sq. ft. ( 26067 (e) 2). and to act as a licensed distributer, Level 1  (non volatile solvent ) manufacturer, and retailer. Like licensed  retailers, licensed microbusinesses may deliver cannabis and  a local jurisdiction may allow for the smoking , vaping, and  ingesting of cannabis or cannabis products on the prevmises  of a licensed microbusiness . 

VERTICAL INTEGRATION:  

Unlike MMRSA, AUMA does not prohibit vertical integration  of licenses. In general, a licensee may hold any combination  of licenses: cultivator, manufacturer, retailer, and distributor.  Exceptions are testing licenses, and type 5 large cultivators,  who may not hold distribution or testing licenses (26061(d)).  In contrast, MMRSA allows applicants to have at most two  different license types, effectively prohibiting direct farm-to consumer sales (AB 266, B&P Code 19328)

DISTRIBUTORS:  

Unlike MMRSA, AUMA does not prohibit licensed distributors  (Type 11 licensees) from obtaining other kinds of licenses,  except for large-scale Type 5 cultivation licenses. Thus other  cultivators, manufacturers, and retailers may apply to be  distributors themselves. 

APPLICANT QUALIFICATIONS:  

(SB 643, 19322) Applicants must provide proof of local approval  and evidence of legal rights to occupy proposed location.  Applicants shall submit fingerprints for DOJ background  check. Cultivation licensees must declare themselves  “agricultural employers” as defined by the Alatore-Zenovich Dunlap Berman Agricultural Labor Relations Act. 

LICENSE CONDITIONS:  

Licenses may be denied based on various factors, including  restraints on competition or monopoly power, perpetuation  of the illegal market, encouraging abuse or diversion, posing  a risk of exposure to minors, environmental violations, and  excessive concentration in any city or county (26051). 

“Excessive concentration” is defined quite loosely to include  any concentration in a local census track that is higher than  elsewhere in the county (26051(c)). Taken literally, this would  include any new facility in a county that doesn’t already  have one. An exception is made for denying applications  that would “unduly limit the development of the legal  market.” The overall effect is to give regulators a blank check  to determine for themselves what constitutes excessive  concentration. Local governments can also impose their  own limits on concentration. 

APPLICANTS WITH PRIOR CONVICTIONS:  

Licenses may be denied for convictions of offenses “substantially  related” to the business, including serious and violent felonies,  felonies involving fraud or deceit, felonies for employment of  a minor in controlled substance offenses. Except in rare cases,  a prior conviction for a controlled substance offense may not  in itself be the sole grounds for rejecting a license (26057(b)5).  This is a departure from MMRSA, which makes past CS offenses  valid grounds for license denial. CS offenses subsequent to  licensing are grounds for revocation. 

Note: Under Prop 64, convictions for marijuana offenses  are not a basis for disqualification for licensing. 

RESTRAINT OF TRADE: Licensees are barred from price  fixing, restraint of trade, price discrimination between  different locations, and selling at less than cost to undercut  competitors. (26052) 

NO ALCOHOL OR TOBACCO LICENSES may be held by  marijuana licensees (26054(a)). 

SCHOOL BUFFER ZONES: 

  No licensee shall be located with 600 ft. of a school or youth  center in existence with the license was granted, unless a state  or local licensing authority allows otherwise. (26054(b)). 

RESIDENCY:  

All licensees must be continuous California residents as of Jan  1, 2015. This restriction sunsets on Dec 31, 2019 (26054.1). 

PRIORITY TO EXISTING OPERATORS:  

Licensing priority shall be given to applicants who can  demonstrate they have acted in compliance with the  Compassionate Use Act since Sept 1, 2016 (26054.2(a)). 

TRANSPORT & DELIVERY:  

Unlike MMRSA, AUMA does not have a separate license  category for transportation between licensees. The Bureau  shall establish standards for types of vehicles and qualifications  for drivers eligible to transport commercial marijuana  (26070(b)). Local government may not prevent delivery  of marijuana on public roads by licensees in compliance  with the initiative and local law (27080(b)). Like MMRSA,  AUMA does require a special license for retail deliveries to  customers. Under MMRSA, local governments are entitled  to ban deliveries of medical marijuana to residents in their  jurisdiction. There is nothing in AUMA to change this by  requiring local governments to allow deliveries. 

NON-PROFITS:  

The Bureau is to investigate the feasibility of creating  nonprofit license categories with reduced fees or taxes by  Jan 1, 2018 (Sec.27070.5). In the meantime, local jurisdictions  may issue temporary local licenses to nonprofits primarily  providing marijuana to low income persons, provided they  are registered with the California AG’s Registry of Charitable  Trusts. This section is of questionable effect because marijuana  non-profits are not allowed on the registry due to federal law.  Nonetheless, there is nothing to prevent non-profits from  registering as commercial entities under the act. 

MANUFACTURING and TESTING LABS are regulated by the  Dept. of Public Health along similar lines as MMRSA. (26100) 

LABELS & PACKAGING:  

Products shall be labeled in tamper-evident packages with  warning statements and information specified in Section  19347. 

The act prescribes specific label warnings on every package of  marijuana and marijuana products (26120):  

“GOVERNMENT WARNING: THIS PACKAGE CONTAINS  MARIJUANA, A SCHEDULE I CONTROLLED SUBSTANCE.  KEEP OUT OF REACH OF CHILDREN AND ANIMALS.  MARIJUANA MAY ONLY BE POSSESSED OR CONSUMED  BY PERSONS 21 YEARS OF AGE OR OLDER UNLESS THE  PERSON IS A QUALIFIED PATIENT. MARIJUANA USE WHILE  PREGNANT OR BREASTFEEDING MAY BE HARMFUL.  CONSUMPTION OF MARIJUANA IMPAIRS YOUR ABILITY  TO DRIVE AND OPERATE MACHINERY. PLEASE USE  EXTREME CAUTION.”  

(The Schedule I warning is to be deleted if the federal  government reschedules).

MINORS MAY BE SNITCHES:  

As in the alcohol industry, minors may be employed as  peace officers to try to entrap marijuana dealers into illegal  sales. (26140) 

ADVERTISING:  

Misleading claims and marketing to minors are banned. No  billboards along interstate highways, and no use of cartoon  characters, language, or music known to appeal to kids.  (26150-5). 

LOCAL CONTROL:  

No person shall engage in commercial activity without BOTH  a state license and a license, permit, or other authorization  from their local government (AB 266, 19320(a); AB 243,  11362.777(b)).  

Local governments may restrict or completely prohibit any  type of business licensed under the act, as is also true under  MMRSA (26200).  

However, local governments stand to lose grant funding under  Section 34019 (f ) 3(C) if they prohibit retail sales or cultivation,  including outdoor personal use cultivation. Section 34019 (f ) C  authorizes state grants to local governments to assist with law  enforcement, fire protections, or other public health and safety  programs associated with implementing AUMA. 

ON-SITE CONSUMPTION: 

Local governments may permit on-site consumption at  licensed retailers and microbusinesses provided: access is  prohibited to persons under 21, consumption is not visible  from any “public place” or non-age-restricted area, and sale  or consumption of alcohol or tobacco aren’t allowed (this  effectively ends the current practice of allowing beer and wine  at medical marijuana expos (26200(d)). 

LABOR LAWS IN EFFECT: 

The Division of Labor Standards Enforcement and Occupational  Safety and Health shall apply the same labor standards as  apply to medical producers under MMRSA, including the  requirement that all businesses with 20 or more employees  have a labor peace agreement (34019(a)7). 

CULTIVATION 

Cultivation regulations are similar to those established  under MMRSA:  

All retail sales, medical and non-medical, are subject to a 15%  excise tax in addition to the regular state sales tax, effective  Jan 1, 2018. 

All marijuana is also subject to a cultivation tax of $9.25/ounce  dry-weight for flowers or $2.75 for leaves, effective Jan 1, 2018.  Other categories of harvested product are to be taxed at a  similar rate based on their relative price to flowers (34012). 

Patients with state ID cards are exempt from the current 7.5+%  sales tax (effective immediately), but not from the excise or  cultivation taxes. (34011) 

Cities and counties are free to impose their own additional  business taxes on facilities cultivating, manufacturing,  processing, selling, distributing, providing, storing, or donating  marijuana (34021). Many cities already impose such taxes on  medical marijuana. (Technical exception: AUMA does not  allow cities to impose an extra, BOE-collected “sales and use”  tax on marijuana). 

INSPECTIONS  

The board and other law enforcement officers may inspect  any place where marijuana is sold, cultivated, stored to assure  taxes are collected. (34016). 

TAX REVENUES 

Tax Revenues are allocated to a new California Marijuana Tax  Fund. (34018). 

Proceeds go to: 

implementation of the act 

Current marijuana laws (Health and Safety Code 11357- 111360) are rewritten with a new penalty structure. In all cases,  offenders under 18 are not liable to criminal punishment, but  to drug education and community service. 

POSSESSION (HSC 11357):  

Illegal possession of an ounce by persons 18- 21 continues to  be a $100 infraction. Illegal possession of more than an ounce  by adults continues to be a misdemeanor, punishable by $500  and/or six months in jail. Possession of less than an ounce  upon a school ground during school hours by a person over  18 is a misdemeanor punishable by a fine of $250, or $500 plus  10 days in jail for repeat offenses. In the case of concentrated  cannabis, Section 11357 makes possession of more than four  grams an infraction; however eight grams are authorized  under Section 11362.1(a)2. According to AUMA’s authors, their  intent was to allow eight grams; hopefully this will be affirmed  by the courts. 

CULTIVATION (HSC 11358):  

Illegal cultivation of six plants or less by minors 18-21 is a  $100 infraction. Illegal cultivation of more than six plants  is a misdemeanor punishable by $500 and/or 6 months.  The current mandatory felony penalty for cultivation is  eliminated, but felonies may be charged in the case of repeat  offenders, persons with violent or serious priors, and various  environmental offenses. 

POSSESSION FOR SALE (HSC 11359):  

Penalties are dropped from current mandatory felonies to  misdemeanors ($500 and/or 6 months). Felony enhancements  allowed for repeat offenders, serious or violent priors, and sale  to minors under 18. 

TRANSPORTATION, IMPORTATION, SALE  

OR GIFT (11360):  

Penalties are dropped from current mandatory felony to  misdemeanors ($500 and/or 6 months). Felony enhancements  allowed for importing, exporting, or transporting for sale more  than 1 ounce of marijuana or 4 grams of concentrate. 

RELIEF FOR PRIOR OFFENDERS: 

Persons previously convicted of offenses that would not be a  crime or would be a lesser offense under AUMA may petition  the court for a recall or dismissal of their sentence. The court  shall presume the petiioner is eligible unless the state provides  clear and convincing evidence to the contrary (11361.8). 

INDUSTRIAL HEMP: SECTION 9 

The initiative enables legal production of industrial hemp  under California’s existing hemp law, which has been in  suspense pending approval by the state Attorney General and  federal government. 

AMENDMENT: SECTION 10 

The legislature may by a 50% majority vote (1) reduce any  penalties in the act, (2) add protections for employees of  licensees, or (3) amend Section 5 (Medical Use) or Section 6  (Regulation and Safety) consistent with the intent and purposes  of the act. A 2/3 vote is required for other amendments,  consistent with the intent and purposes. 

INTERPRETATION: SECTION 11 

No provision of this act shall be construed in a manner to create  a positive conflict with federal law, including the Controlled  Substances Act. 

SEVERABILITY: SECTION 12 

If any provision of this act is ruled invalid or unconstitutional,  remaining provisions of the act remain in full force and effect. 

*Prepared by California NORML  

(including comments) 

http://www.canorml.org/Cal_NORML_Guide_to_AUMA 

Contact the Law Office Of Bruce Margolin regarding cannabis business licensing, regulations and representation. 

Call1-800-420-LAWS (5297) or 310-276-2231.

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