Background: Applicable Law

On June 27, 2017, the Governor signed SB 94, a budget trailer bill that became effective immediately, to consolidate state licensing of medicinal and recreational "adult-use" cannabis businesses in a single regulatory scheme titled the Medicinal and Adult-Use Cannabis Regulation and Safety Act" (MAUCRSA).

Purpose of SB 94

The purpose of SB 94 was to, among other things, consolidate the state licensing scheme of commercial cannabis businesses set forth in Proposition 64, approved by the voters on November 8, 2016, with the legislation enacted by the State in 2015 regarding medical cannabis businesses. The distinction between medical and adult-use cannabis remains in the state law (designated by an "M" or an "A" prefix on the license type), but the overall licensing requirements and process is now consolidated to be the same for both medical and adult-use cannabis businesses.

Proposition 64

Some jurisdictions in California are adopting zoning ordinances to allow commercial cannabis uses. Proposition 64 establishes up to 19 different categories of state licenses for commercial cannabis, including commercial cultivation, manufacturing, testing, distribution, and dispensary/retail sales. Proposition 64 also authorized the State of California to begin issuing commercial cannabis licenses to entities as of January 1, 2018 if the business activity is also permitted under applicable local (i.e. city) ordinance.

Amendment to the Law

On September 16, 2017, the Governor signed AB 133 into law, which further amended State law regarding commercial cannabis businesses. Of particular significance, AB 133 amended the law to allow operators to conduct multiple and different types of commercial activities on the same physical premises.


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