California legalizes the interstate trade in marijuana
The governor approved 10 weed-related bills, including occupational safety, re-sentencing and veterinary medicine.
California’s world-class cannabis farmers could legally sell their crops to patients and connoisseurs in other states thanks to a new bill signed into law by Governor Gavin Newsom today (September 18).
Senate Bill 1326 adds a new chapter to the Business and Professions Code, giving the state governor new powers to sign cannabis trade agreements with other legal cannabis states. The catch? The changes will not come into effect until federal laws or policies are changed. Marijuana remains a federally illegal Schedule 1 drug, considered dangerous and medically useless like heroin or LSD.
Other states are also in the process of enacting similar bills giving their governors the power to sign off on interstate pot trade agreements. Oregon passed one in 2019.
Gov. Newsom has signed nine more cannabis-centric bills in sync with SB 1326. A press release from the governor’s office describes the 10 new bills as follows:
- AB 1706 by Congregational Member Mia Bonta (D-Oakland) – Cannabis crimes: reconviction.
- AB 1646 by Congregation Member Phillip Chen (R-Yorba Linda) – Cannabis Packaging: Beverages.
- AB 1885 by Congregational Member Ash Kalra (D-San Jose) – Cannabis and Cannabis Products: Animals: Veterinary Medicine.
- AB 1894 by Assemblymember Luz Rivas (D-Arleta) – Integrated cannabis vaporizer: packaging, labelling, advertising and marketing.
- AB 2210 by Assemblymember Bill Quirk (D-Hayward) – Cannabis: Federal Temporary Venue Licenses: Venues licensed by the Department of Alcoholic Beverage Control: unsold inventory.
- AB 2188 by Assemblyman Bill Quirk (D-Hayward) – Discrimination in the workplace: use of cannabis.
- AB 2568 by Assemblyman Ken Cooley (D-Rancho Cordova) – Cannabis: Insurance Provider.
- AB 2925 by Assemblyman Jim Cooper (D-Elk Grove) – California Cannabis Tax Fund: Expenditure Reports.
- SB 1186 by Senator Scott Wiener (D-San Francisco) – Medical Cannabis Patient Access Act.
- SB 1326 by Senator Anna Caballero (D-Merced) – Cannabis: Intergovernmental Agreements.
Why do we need the interstate cannabis trade?
Because consumers benefit from price and choice competition in a free market where states can specialize in producing what they are good at.
Americans use about 10,000 to 13,000 tons of marijuana each year, and we believe only about 27% of that is legally supplied. The 14 states with recreational sales cannot transfer supplies across borders to meet demand outside of the states.
In California, pot shipments have pulled back due to local store bans, causing a retail bottleneck. For example, Los Angeles has less than one-tenth the dispensaries per capita than the state of Oklahoma for medical marijuana.
| Pharmacies in Oklahoma: | 2,000+ |
| Oklahoma population: | 3.9 million |
| City of LA Pharmacies: | 184 |
| City of LA population: | 3.9 million |
(Source:MJ Biz Daily,Politically)
California growers can now sell and ship their premium weed to states where more stores are open.
In support, California Rural County Representatives argue: “Without significant market expansion as part of the solution to stabilizing the legal industry and incentivizing participation in the regulated market, California risks the collapse of parts of the legal industry, particularly for rural manufacturing regions, which could lead to a significant expansion of the illicit market and severe economic impact on the local economy.”
“SB 1326 provides a relief valve for cannabis oversupply, an opportunity to increase California’s brand and market share, help create jobs, and give the state a competitive advantage as federal policy evolves,” the bill’s author explained .
Legislative analyzes showed no objection in the files.
How far away is a full-scale interstate trade in cannabis?
It’s not clear how long it will be before other states follow California’s example. It could take years or more than a decade if the speed of past progress is any indication.
More than 90% of Americans support medical marijuana, and Congress has yet to legalize medical marijuana. Even with adult legalization polls about 60%.
President Biden wants to decriminalize cannabis. Several bills in Congress have pushed the idea, but none have made it to the White House for signature.
Even with federal action, states would likely protect their licensed growers from the superior quality and lower prices of legal marijuana from the world’s largest producer, California. For example, growers in Florida, Illinois and Massachusetts might seek state protection from cheaper, better growers in California.
Historically, California has led the market in terms of cannabis quality, price and product innovation. The development of California tribes is months, if not years, ahead of the East Coast states. This paradigm promises to continue as cannabis becomes more legal.
“Licensed companies that risked everything to get into the legal industry cannot afford to wait for federal legalization to make California cannabis available to other legal markets…”
—Cannabis Distribution Association
“SB 1326 is an essential step in ensuring California can take full advantage of the upcoming national cannabis market and remain a leader. Additionally, SB 1326 would allow California to adopt its own labor, environmental and product quality standards in other states,” the bill’s author said.
Some experts say more interstate trade could happen soon. Observers hope the federal judiciary will use aspects of the constitution — the dormant commerce clause — to allow interstate commerce over a judgment.
“Traditionally, the Interstate Commerce Clause has been interpreted as giving Congress positive authority to regulate commerce and an implied prohibition on states to regulate, interfere with, or discriminate against interstate commerce. Despite the current state of federal law and its enforcement, the Interstate Commerce Clause remains an important issue to consider in connection with this bill,” the Senate analysis of the bill said.
The Cannabis Distribution Association said the clock is ticking for the viability of cannabis companies without free trade.
Related
Why is craft cannabis facing potential ruin in Northern California?
“Licensed companies that risked everything to get into the legal industry cannot afford to wait for federal legalization to provide California cannabis to other legal markets, particularly markets that traditionally include agricultural products import from California to supply their retail shelves, where thousands of medical patients and adult consumers need access to quality cannabis and cannabis products. Initiating interstate commerce now, rather than potentially waiting years for federal legalization, would benefit both producing and consuming states, as well as patients, consumers, small and social enterprises, and the environment.”
One of the first cannabis free trade blocs to watch could be the west coast states or maybe Nevada.
Calvin Stovall contributed to this story.
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