Regulation is here; the Time to Participate is Now!

By Robert T. Hoban, Esq.

The response to the state’s Medical Cannabis Regulation and Safety Act (MCRSA) and the commercialization of cannabis at the local level has been rocky resulting in 55% of the state’s 482 cities and 38% of its 58 counties banning some or all aspects of commercialization. The backlash at the local level was devastating to operators as MCRSA articulates a licensing system predicated upon securing a local permit prior to the issuance of a state license.

As operators in California come out of the shadows and into the light they are grappling not just with jurisdictional hurdles but must also engage the regulatory process on a boarder level. The Bureau of Medical Cannabis Regulation (BMCR) along with the California Department of Food and Agriculture (CDFA) and Department of Public Health (DPH) has been tasked with putting forth regulation for the budding industry from development of the state-licensing program to cultivation and manufacturing, respectively.

While compliance may be new to cannabis industry it is a mainstay of virtually all other industries. Effective compliance can promote a company’s reputation and establish good will and foster trusted relationships state and local regulators. In the cannabis industry, in California, today operators are in a unique position to help craft the regulatory schemes upon which their operations will be beholden. While the regulatory process may seem daunting it is in fact a unique opportunity. One that is too important to slip through the cracks – September will be a juggernaut of opportunities for public/industry participation.

BMCR and DPH will hold regulatory stakeholder meetings with regard to their respective responsibilities. This is an ideal opportunity for industry across the supply chain to manifest their own regulatory destiny by providing the agencies with critical information from those who know it best. Without leadership from the industry regulators can develop unduly burdensome and ineffective regulations. It is at the industry’s own peril to leave the regulators to guess what the industry needs.

The environmental impacts of the green rush have until recently been marginalized for the larger cannabis debate. The CDFA is developing the Medical Cannabis Cultivation Program (MCCP), covering licensing and track and trace. Pursuant to the County’s pre-eminent environmental statute – California Environmental Quality Act (CEQA) – CDFA is required to preparation a Programmatic Environmental Impact Report in association with the Department of Pesticides to evaluate and mitigate the potentially significant impacts associated with the MCCP. CEQA mandates public comment periods and active engagement of those potentially affected by the Project to the agency. CDFA just announced a series of interested stakeholder working groups. The initial public comment period runs September 1st – September 30th.
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For those cultivators in the “Emerald Triangle” they have the additional requirement of obtaining a permit from the State Water Resources Board. The Water Boards are concerned with the diversion and use of surface water and waste water discharges associated with an array of environmental impacts resulting in potential harm to the State’s water resources. Gov. Brown’s Executive Order B-37-16 to promote conservation of water resources by holding uses to a reasonable and beneficial use standard. It is imperative for any cultivation to know the availability and rights to water as well as implementation of measures to ensure water safety and quality. The discharge of waste to the waters of the State without a permit and/or any diversion and use of water without an appropriate water right may be subject to significant enforcement penalties and preclusion of a state permit from BMCR.

Following blog posts will ferret out the specific environmental issues and can cover the specifics of each of these programs.

Bob Hoban

Hoban & Feola is the nation’s premier cannabusiness law firm (since 2008). Bob Hoban is an AV® Preeminent™ rated attorney and seasoned full-service commercial practitioner who has closed over 500 transactions across the country/around the globe in the cannabis space. Bob is recognized as a leading commercial cannabis practitioner nationwide, representing private and publicly held clients in numerous states and around the globe. He was identified as one of the “Five Pot Lawyers to Watch in 2015” by MarijuanaStocks.com. Mr. Hoban is a member of the Advisory Board for New Frontier Financials.