SB420 Sunsets; Medical Scripts Still Vaild

Law Offices of Omar Figueroa is at Law Offices of Omar Figueroa.

17 hrs · Sebastopol, CA ·

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.