Cannabis Can Go From Conundrum to Catalyst

Back Commentary Feb 27, 2017 By Daniel Conway

In the morning of Nov. 9, following a historic election in the U.S., the world just felt a bit different for many of us than it had the day before.

Elections matter. The people have spoken. And marijuana — more appropriately known by the less pejorative label, cannabis — is now legal for adults in eight states, including California, and for those with medical needs in 28 states. That means the majority of Americans now live in states where cannabis is legal in some form.

Yet, for those in California’s nascent legal cannabis industry, little if anything changed. While “the people have spoken,” the reality is that the people with the most immediate control over the industry’s destiny are county supervisors and city council members, some of whom remain skeptical and inclined to proceed with caution. This hesitation is understandable given that the last 20 years of permissive policies have created a robust gray market that government has refused to either sanction or subvert.

Cannabis today is laced with contradictions. Understanding these contradictions helps to explain why the so-called “green rush” feels more like waiting in line at the DMV. Resolving these contradictions could create the kind of economic boom that the Sacramento region has not seen since its founding over 150 years ago.

Good Intentions Meet Poor Execution

The recent history of cannabis in California is a simple if unsatisfying story, defined by the contradictions between what we as a society sought to create through the compassionate use of medical marijuana and what we ultimately let it become.

In 1996, voters approved Proposition 215, which allowed for the use of cannabis for medical purposes. However, the state government failed to enact a set of regulations to specify who exactly could produce, sell and consume cannabis. Meanwhile, the promise of medical cannabis for patients coincided with our society’s increasing acceptance and acknowledgment that for many adults, ending the day with a bit of cannabis is no different than enjoying some fine wine or craft beer: It’s a way to relax, reconnect and reflect.

Ultimately, it fell to local governments to determine licensing and enforcement policies, which quickly led to a patchwork of rules and ensuing problems. This lack of consistent and comprehensive regulation helps explain the apparent contradiction one can encounter inside medical cannabis dispensaries where a visibly ill cancer patient stands in line next to a seemingly able-bodied 20-something. While both customers may have legitimate needs, the ambiguity of the law allowed skeptics to question or dismiss the overall integrity and efficacy of the medical cannabis system. But the reality under Prop 215 is that both consumers — the seemingly sick and the apparently able — are doing what the law allows, and the retailer is playing by the rules while satisfying an unmet demand in the marketplace for quality cannabis. Furthermore, there could be no “abuse of the system” when, for nearly 20 years, there was no system.

The murkiness of Prop 215 started to change in 2015 with the enactment of legislation known as the Medical Cannabis Regulation and Safety Act (the MCRSA), in which the State of California began to truly regulate medical cannabis for the first time. It created a Bureau of Medical Cannabis Regulations to oversee the industry and a “dual licensing” system that requires every cannabis business to get a permit from both state and local governments to operate, starting in 2018.

A recent study paints an eye-opening picture of what could be — a legal cannabis industry that creates over 20,000 jobs and $4.2 billion in total annual economic output in the Sacramento region alone.

Currently, local governments are the only ones issuing permits, which is why the past year has seen headlines from across the state about cities and counties deciding to ban or permit the new commercial cannabis industry in their communities. Many local governments simply decided to wait and see what happened with Proposition 64 this past November. With 57 percent of Californians voting to legalize recreational cannabis, the message from voters to elected officials seemed clear.

Making the Most of a New Era

Or perhaps not.

The reality is that urban parts of the state supported Proposition 64 while rural areas were less receptive. Elected officials in some parts of California can rightly say their constituents rejected commercial cannabis. But that doesn’t change the facts on the ground, where — like most other products in California — production primarily occurs in rural areas in the northern half of the state while consumption is concentrated in urban, coastal areas. This presents us with both a contradiction and a choice: Do we continue to turn a blind eye to society’s growing acceptance of cannabis use and the thriving underground, unregulated industry that has grown up around it? Or has the era of benign neglect ended and the time come to build an economic engine that benefits our communities?

A recent study by the University of the Pacific’s Center for Business and Policy Research paints an eye-opening picture of what could be — a legal cannabis industry that creates over 20,000 jobs and $4.2 billion in total annual economic output in the Sacramento region alone. The study is a call to action for area leaders to create a roadmap for the region to approach this new industry in a manner that maximizes the benefits of job creation and innovation, while sharply reducing the impacts of illegal and unlicensed activity. If policymakers can implement comprehensive licensing programs for all segments of the industry, from seed to sale,  Sacramento has the potential to be to cannabis what Detroit is to automobiles or Silicon Valley is to technology: a world leader. We need to support these efforts.

The cannabis industry presents a rare opportunity to weave together our urban and rural economies; to create quality jobs for our diverse workforce, from people with GEDs to Ph.D.s; and to leverage the strengths of our region’s universities. A vibrant cannabis economy could go a long way toward attracting young professionals to our region eager to participate in a new and dynamic industry.

This is an exciting time for our region. We have momentum, we have swagger and we’re creating an identity of our own. The cannabis economy can join the farm-to-fork movement and Sacramento’s revitalized downtown as catalysts for a new era. The opportunity is ours.