Our
founder Omar Figueroa is quoted in this piece on the upcoming
expiration of the collective and cooperative defense, which will happen
next week. Based on BCC spokesperson
Alex Traverso's statement that "his agency will continue to use a
carrot-over-stick approach and try to coax illegally operating
collectives/co-ops into getting state licenses" instead of coming down
hard on those without permits, Omar's impression is that the odds of
enforcement remain slim.
In sum, without a collective defense, there
may be a theoretical increase in enforcement; however, without
enforcement, it doesn't really make a difference that the defense will
no longer be available.
"The broadest impact of the disappearing collective/co-op model will
probably be on medical patients, caregivers and small local collectives
and co-ops that weren’t really focused on the business end of the
industry, but rather, were actually operating as nonprofit medical
charities, said Ellen Komp, deputy director of California NORML.
“There will be patients who will have their access interrupted, and some
of them won’t be able to access or afford a licensed facility where
they can find their medicine,” she said.
“And collective owners will get caught up in the laws, prosecuted civilly or criminally for not having a license.”
Komp also noted the BCC was originally slated to perform a study on
nonprofit MMJ collectives before the regulated market launched in
January 2018, but that deadline was pushed back to January 2020, leaving
any still-existing medical collectives in “legal limbo” for another
year.
Komp and several other industry sources said it’s possible
that after the collectives and co-ops become illegal there may be an
uptick in enforcement efforts against unlicensed MJ shops.
“You’re
still going to have a pretty robust illicit market, and what we’ve seen
over the course of this past year is cities that are choosing to crack
down on the illicit market … will continue to do so in the manner they
have this past year, which is through code enforcement violations,” San
Diego attorney Kimberly Simms said.
“I don’t think you’re going to
see this huge uptick in raids,” Simms added, saying she doesn’t believe
most communities have extra resources to devote to combating unlicensed
cannabis shops.
“It is the sort of symbolic end to what people felt like has governed the industry for the last 20 years,” Simms said.
Another longtime MJ attorney, Oakland-based Bill Panzer, said many of
the dispensaries that will face the choice Chernis referred to were
never nonprofit collectives or co-ops.
Panzer said that before 2018,
when all MMJ businesses were required to be nonprofits, “if you looked
at the shops that were operating in California under the collective
model under a magnifying glass, at least 90% would not pass muster.”
The ones that would, he added, have either already transitioned to the
for-profit market and obtained state licenses, or have already exited
the market.
“They’ve already been impacted,” Panzer said. “I don’t
think there’s going to be many more … because the state has taken the
position that nonprofits still have to get licenses. And a lot of these
places can’t afford it, so they’ve been being shut down over the last
year.
“I personally don’t know any (collectives) that have gotten a license and have still continued to operate as a nonprofit.”
Others aren’t as optimistic that law enforcement will turn a blind eye to unlicensed cannabis collectives and co-ops.
“Enforcement is likely to increase, because that (collective) defense
isn’t there anymore,” stressed Omar Figueroa, another longtime MJ
industry lawyer.
BCC spokesman Alex Traverso wrote in an email to
Marijuana Business Daily that his agency will continue to use a
carrot-over-stick approach and try to coax illegally operating
collectives/co-ops into getting state licenses, instead of coming down
hard on those without permits.
Traverso noted that, in the past
month, the BCC issued more than 1,300 temporary cannabis business
licenses, including to many currently operating as collectives or
cooperatives.
For those companies to become fully legal and
sustainable, however, they’re going to have to obtain full annual
permits – a much harder threshold.
That also doesn’t exempt
unlicensed collectives and co-ops from prosecution by local authorities,
which have largely been running point in combating California’s illicit
market over 2018.
