Gov. Brown helps global investors strike gold with cannabis

Submitted by: R.E. Graswich

Gov. Jerry Brown wants to merge the separate rule categories for medical cannabis and adult use cannabis in California. Simple enough. The regulations are somewhat different, and it makes sense to align them.

But the merger isn't a routine matter of mixing blue and yellow and making green. It's more complicated.

Medical cannabis rules were written by the State Legislature. It was a difficult process. Lawmakers needed 19 years to just address the topic after voters passed the Compassionate Use Act and legalized medical marijuana in 1996.

The process that became the Medical Cannabis Regulation and Safety Act of 2015 included countless discussions among essential stakeholders -- cops, growers, manufacturers, dispensaries, cities, counties and labor unions.

The Adult Use Initiative, Prop. 64, was written by a law firm and political consultants largely supported by hedge funds. It used political research to help build the public's appetite. And it used the 2015 legislation as a template.

But in key areas, Prop. 64 radically changed the legislation -- in ways to benefit the hedge funders who paid for the campaign.

Now Gov. Brown has released his plan to merge medical and adult-use regulations. His proposals overwhelmingly favor the hedge funds in Brown's "Proposed Trailer Bill Legislation 200 -- Cannabis Regulation."

The plan wipes out key provisions of the 2015 cannabis legislation, and wipes out significant work done by stakeholders.

Two suggestions from the governor are especially troubling to smaller growers -- the independent craft producers who built California's cannabis industry over the last 60 years, who endured police raids and jail sentences and worse.

First, Brown wants to abandon the three-tiered independent distribution process that was borrowed from the state's alcohol regulations. The three-tiered system requires wholesalers to use an independent distributor to reach the marketplace.

Since Prohibition, the system has kept bad actors from swallowing up the booze market with monopolies. It would do the same for cannabis, which is why the 2015 legislation prohibited producers and retailers from owning distribution licenses.

Under Brown's proposal, a giant company can move into California and grow cannabis, manufacture, distribute and sell it to customers in retail stores. If an independent cultivator wants to get in on that market, tough luck.

The governor's proposal says independent distribution "stifles new business models and does not enhance public safety and consumer safety." That's exactly what conglomerates say.

The second insult to legacy growers is Brown's decision to erase a three-year state residency requirement for cannabis licenses. This legislation was designed to give true Californians a break over wealthy carpetbaggers who swoop in once licenses are issued in January 2018. The law currently says you must have been a resident for three years before 2018 to get a license.

Brown didn't explain why he wants to wipe out the three-year protection. But obviously, he's eager to help big players from other states and countries steamroll into California.

Brown has been a good leader on the cannabis front. His intervention saved the 2015 legislation from falling part. And he stayed out of the 2016 Prop. 64 campaign.

But his proposals for open distribution and non-residency are hypocritical. If he truly dislikes independent distribution, he should apply the same rules to alcohol. And if he's against protecting Californians, he should push the University of California and State University to end enrollment caps and higher tuition fees for out of state and foreign applicants.

Instead, he picks on cannabis pioneers. Because cannabis pioneers have always been easy to push around.