A bill that would have begun regulation of medical marijuana dispensaries in California and required dispensaries to get state licenses before opening stalled in the California State Assembly. ¹

Senate Bill 1262 was initially approved by the California State Senate, but it was blocked by the Assembly Appropriations Committee before it could move on to the governor for final approval. Officials are expected to try advancing a similar bill next year. ²

Requiring Medical Marijuana Dispensaries to Get a State License (Senate Bill 1262)

Introduced by State Senator Lou Correa, SB 1262 would have required medical marijuana dispensaries to get a license from the state in order to conduct business and have cities where medical marijuana dispensaries are located sign off on any such licenses. ³

In order to create a licensing system and standards for cultivating, transporting and providing medical marijuana, a Bureau of Medical Marijuana Regulation would have been created within the Department of Consumer Affairs. Similar bills that have also failed had the Department of Alcoholic Beverage Control regulating marijuana.

The bill would have allowed local governments to tax medical marijuana and develop their own regulations.

It also called for guidelines to ensure that physicians recommend marijuana only after real examinations and prohibit physicians from having a financial interest in medical marijuana dispensaries. ⁴

Financial Impact of Regulating California Medical Marijuana Industry

The bill would have helped regulate an industry that many people believe has been poorly regulated since medical marijuana was approved by voters in 1996. ⁵ In California, the medical marijuana industry is a $1.8 billion industry. ⁶

Passing the bill into law would have had an immediate financial impact on the state, but taxes generated from regulating marijuana would have made up for it quickly.

An analysis conducted by the Assembly Appropriations estimated setting up a Bureau of Medical Marijuana would have cost $20 million. However, if the bill had been approved, it could have resulted in about $400 million in sales taxes generated in California each year.

Despite the bill’s potential financial impact, stalwarts believed that were too many revisions to the bill and it included too many additional provisions to be passed into law. The most objections came from the California National Organization for the Reform of Marijuana Laws and the Drug Policy Alliance.

Among the complaints, proponents of the bill disagreed with provisions discouraging people with prior felonies from obtaining licenses and with having the Department of Consumer Affairs manage the program.

Do You Think California Should Regulate Medical Marijuana?

While Senate Bill 1262 was not passed into law, the topic of regulating medical marijuana remains a highly controversial issue. What do you think about Senate Bill 1262? Did the California State Assembly make a mistake by failing to pass the bill into law? Should medical marijuana dispensaries be required to get a license before conducting business?

Wallin & Klarich would like to hear your thoughts about this controversial issue. Please leave your comments below or join the conversation on Facebook.

^{1. [http://www.sacbee.com/2014/08/14/6629382/cop-backed-california-medical.html]↩}

^{2. [Bills on crack cocaine, medicinal pot advance in California, May 28, 2014, http://touch.latimes.com/#section/-1/article/p2p-80341482/]↩}

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^{6. [http://www.eastbayexpress.com/LegalizationNation/archives/2014/08/13/ca-pot-regs-sb-1262-in-suspense-until-tomorrow]↩}