Happy Friday! Welcome to the Weekly Roundup. Here I highlight some of the key pieces of legislation, regulatory changes, industry updates, and anything else I find interesting from the past week. Enjoy!
A temporary solution to the banking crisis?
One of the more important and interesting pieces of legislation to emerge this year is SB 930 (Hertzberg), which would create a state-chartered banking system for banks to offer basic services to the cannabis industry. Unlike the state-owned bank proposal considered in the State Treasure’s Cannabis Banking Working Group paper released last November, Senator Hertzberg’s proposal is seen by some in the industry as a potentially workable fix in lieu of a federal solution. The Cannabis File will publish a more in depth analysis of SB 930, on Monday, March 26. Stay tuned and subscribe to receive the update.
Will lower taxes stimulate the legal market?
On Monday, I wrote about AB 3157 (Lackey), that would temporarily suspend the cultivation tax and lower the excise tax from 15% to 11%. The idea behind the temporary tax reduction is modeled after tax adjustments in Colorado and Oregon to stimulate their adult-use market early in its formation. The critical question that remains is whether a local tax cap or sometime of prohibition is needed to ensure the tax burden isn’t merely shifted from the state to local level. The bill has yet to be set for its first policy committee hearing.
Dear Feds: Stay out of California!
On Tuesday, the Assembly Business and Professions Committee passed AJR 27 (Low), which urges the federal government to use their limited enforcement resources on other public health and safety priorities, and not California’s growing cannabis industry. Since President Trump took office, the tension between state and federal rights has been high and seems to be rising. We’ll see if the federal government takes notice and stays out of California’s cannabis business. Based on previous statements and actions, it seems unlikely.
Does the future of work in cultivation equal automation?
On Tuesday, the Assembly and Senate Labor Committees held a joint hearing on the impact of technology and automation on workers rights and job quality. Two academic experts provided a broad overview of the challenges facing the workforce in the age of technology, and also heard direct testimony from workers that have felt the impact of an increasingly automated workplace.
The concept of using technology, namely automation and artificial intelligence to improve productivity and quality of products in not new in the cannabis industry. What will be interesting to see is what impact automation and AI has on the type and quality of jobs that are produced in the industry. Remember, a part of the argument for approving adult-use in California and in other states across the nation was that the industry would create thousands of new jobs. This is an area of interest for The Cannabis File, and will be explored in detail in future posts.
Regulatory changes are a comin’
On March 15, the Bureau of Cannabis Control’s Cannabis Advisory Committee held an all-day meeting in Los Angeles to discuss and review several recommended regulatory and statutory changes related to everything from clarifying the outdoor cultivation definition online advertising. The final recommendations from the Advisory Committee will be used to inform the Bureau’s proposed changes during permanent rule making process that is expected to begin within the next few months.
Is California a Pot Desert?
On Thursday, the Sacramento Bee released a map that showed the distribution of dispensaries across California. According to statistics used by the SacBee from the Bureau of Cannabis Control, about 30% of people are within 30 miles of at least one dispensary; 29% within 30-60 miles and; 38% is within 60-120 miles. What the map and the data highlight is that California is still far away from a statewide adult-use market.