With the California cannabis economy in shambles, the idea of interstate commerce is pretty cool. While still a long way out, Senate Bill 1326 would get the ball rolling.
The bill would allow the governor to enter into agreements between California and one or multiple states allowing state-legal businesses to conduct commercial cannabis activity.
That could mean a medical-only state wants to sure up its supply line without licensing production locally. It could also mean the more tantalizing idea on the tip of everyone’s tongue: Exports.
With that, you’ve already heard speculation about an agreement that would allow Oregon to ship products south. I wouldn’t dedicate too much trauma to the idea. Regulators are well aware of the current oversupply of product in California. The idea that cannabis leaving California would eventually be part of the legal market, however, was always expected to pop up on the horizon.
SB 1326 was likely proposed sooner than some would have expected. But with the swift pace of change in the District of Columbia on weed, getting the ducks in a row for expected forthcoming federal reforms makes a lot of sense.
While the talk is outbound, there are also more protections for municipalities still on edge about the cannabis industry coming to town.
“The bill would prohibit an entity with a commercial cannabis license issued under the laws of another state from engaging in commercial cannabis activity within the boundaries of this state without a state license, or within a local jurisdiction without a license, permit, or other authorization issued by the local jurisdiction,” the bill’s text reads.
So if a small town was scared a multistate operator was positioning itself to come in and take over the marker, there might be room to stall it. But once you start getting into how the language would be impacted by the transfer of a license, it gets a bit fuzzier.
The language that reads the scariest to most is likely the part that notes any agreement would need to mandate the other state to make sure products produced with the intent of being sold in California meet or exceed our safety standards.
We’re not sure why that part needs to be in there. It sounds like the weed would be going in the wrong direction at that point, right? True. But that would also be the legal mechanism for new genetic lines worked on by legal nurseries in other states to enter the marketplace. So that part is cool and the wider weed genome across the country would be better off for it.
There are a few other taxes and public health provisions, and the mandate that anything enacted by the governor would be severable.
The California Cannabis Industry Association has had the topic of interstate commerce on its radar for a few years.
“You know, interestingly, interstate commerce has kind of been on the table for the last few years and we’ve been talking with various stakeholders and trade associations,” Lindsay Robinson, CCIA Executive Director, told L.A. Weekly. “I think it partially got shelved in the last 18 months to 24 months because of COVID.”
Robinson said interstate commerce has been discussed at length by CCIA. She has also found the bill’s sponsor Senator Anna M. Caballero of Merced to be thoughtful on the subject of cannabis.
“With that said, it is going to come down to the details in the agreement,” Robinson said. “We need to make sure that California cannabis is stabilized, and that the businesses here are functioning well, and hopefully thriving, before we would contemplate an import.”
Robinson says we can learn a lot from the trials and lessons other states have gone through, but we know there is already a ton of legal product that doesn’t have a path to market due to the lack of retail shelf space. Moving forward, she hopes the idea of using agreements to stabilize the California industry is the bedrock of the plan. CCIA will be in contact with Caballero’s office on their existing policy and principles around interstate they would support.