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California AG Proposes Lower Cannabis Taxes While DCC Increases Retail Access Via Grant Program

It’s been a busy week in California, with many recent legislative changes with regards to both cannabis and psychedelics. From California AG Rob Bonta calling for lowering taxes in the hope of combating the “illicit” market, to the DCC doubling grant money to open more licensed dispensaries in the state, and to psychedelic legislation passing on to the Assembly floor with some revisions. In addition to this, new marijuana employment bills have been proposed to help protect cannabis consumers.

California Attorney General Rob Bonta Calls for Lowering Taxes to Combat Illicit Market

The California Department of Justice (DOJ) has recently announced a new program, the Cannabis Administrative Prosecutor Program (CAPP). In an effort to crack down on illegal cannabis activity and shut it down voluntarily before administrative enforcement takes place, the program provides local governments with legal support and enforcement. Attorney General Rob Bonta traveled to Fresno, California, in order to announce the program and address illegal cannabis operations that have been perpetuated by the failed war on drugs.

Bonta stated that when public safety is at risk action is taken appropriately, however low-level offenders do not need to be treated as criminals and can be shut down through administrative processes. He also mentioned support for the pending bill AB 1684, which expands local governments’ ability to immediately fine for cannabis cultivation, as well as other cannabis activities.

Bonta emphasized that in order to uplift and support the licensed cannabis industry, taxes should be lowered temporarily for legal businesses that are competing with illegal operations. He believes this will make illicit operations “less desirable” and is a multifaceted approach to the problem. Bonta also noted that although there are barriers to entry in the licensed cannabis market, costs to stay operational are too high and further steps need to be taken in order for it to become more accessible.

Fresno City Attorney Andrew Janz also spoke in the press release, and he expanded on the intentions of the program, explaining that they will go after smoke shops, hookah lounges, and tobacco stores that are targeting children with copycat products. He also noted that as fines ramp up, they would be shutting down businesses that do not comply in order to further combat these “illicit” activities.

Doubling Grant Money to Open More Licensed Dispensaries in California

The DCC (Department of Cannabis Control) recently announced that the second phase of its Cannabis Retail Licensing Program is now open for applications. This program grants local jurisdictions funding to cover the cost of issuing cannabis retail licenses and equity retailer licenses, with the intention of increasing access to legal retail options throughout the state.

The eligible applicants include local jurisdictions (city, county, or city and county) that did not have a cannabis retail licensing program in existence prior to July 1, 2022, with a plan to develop such a program. Furthermore, these applicants must have issued at least one cannabis retail license to businesses within the jurisdiction of the city or county, or to have received an application for such a license.

In addition to expanding the eligibility for potential applicants, the Phase II funding amounts for the issuance of a retailer license and equity retailer license have been doubled. Now, a jurisdiction may receive $150,000 per eligible retailer license and $300,000 per eligible equity retailer license issued, subject to available funding. The previous amounts were $75,000 and $150,000 respectively.

This program has been welcomed by local governments as an alternative to taxing cannabis businesses in order to fund their operations. With the additional funding, more retail dispensaries are likely to open up throughout California and help to reduce access barriers for consumers seeking legal cannabis products.

“There are still many locations throughout the state where cannabis usage is notable, but existing consumers do not have convenient access to legal retail cannabis,” said DCC Director Nicole Elliott. “We know that cannabis consumers often make purchasing choices based on convenience, so sufficient access to legal retail reinforces extremely important consumer safeguards.”

California Senate Passes Psychedelics Legislation

Senate Bill 58 (SB 58) was passed by the California Senate and is now headed to the Assembly floor per Marijuana Moment. SB 58 proposes a number of changes to state law, including decriminalizing possession, purchase, and transportation of certain psychedelics for personal use or facilitated communal purposes. Specifically, SB 58 would legalize the possession of up to 2 grams of DMT, 15 grams of ibogaine, 2 grams or 4 ounces of a plant containing psilocybin and 2 grams or 4 ounces of a plant containing psilocyn. Additionally, the bill would decriminalize the purchase and transportation of these substances as well.

Since passage in the Senate, SB 58 has been amended by Assembly committees to delay implementation until January 1, 2025, when the California Health and Human Services Agency (CHHSA) must submit a report with relevant findings and recommendations regarding regulating therapeutic use of psychedelics in facilitated settings. Furthermore, synthetic psychedelics such as LSD and MDMA were excluded from the list of substances that would be legalized, as well as peyote which was removed in response to potential over-harvesting concerns. Additionally, group counseling was removed from the bill and references to drug paraphernalia were amended.

If SB 58 passes in the full Assembly, it will return to the Senate for concurrence before potentially heading to the Governor’s desk. Ultimately, passage of this bill would be a major step forward for psychedelic legalization efforts in California and could serve as an example for other states to follow.

Legislation To Protect Cannabis Users Consuming Off Jobsite

The California Appropriations Committee also approved a bill that seeks to protect cannabis users from discrimination in the workplace. The measure, passed by the Senate last week, would add to existing protections that prevent employers from penalizing most workers for using marijuana off-duty in compliance with state law.

Specifically, the legislation states that it is “unlawful for an employer to request information from an applicant for employment relating to the applicant’s prior use of cannabis.” Current law also says that employers cannot discriminate against people “in hiring, termination, or any term or condition of employment” based on off-duty marijuana use or drug tests that reveal cannabinoid metabolites.

However, there are certain exceptions to the policy, such as for workers in “the building and construction trades” or those that require federal background checks and security clearances. If approved by both chambers, the bill would provide additional peace of mind to cannabis users who don’t want their off-duty use to negatively impact their professional lives.

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