After years of existing in a legal gray area, marijuana entrepreneurs now appear to have a clear pathway to full-on legal sales.

The state of California recently unveiled emergency rules under which sellers, makers, growers and deliverers of cannabis can apply for permits. At the same time, the Los Angeles City Council is considering what appear to be final drafts of local rules for entrepreneurs. Recreational marijuana sales, approved by voters last year, are scheduled to begin Jan. 1.

The momentum in rule-making means that folks could be able to apply for state permits for cannabis businesses starting in December. “We're finishing up our online licensing system now,” Alex Traverso, spokesman for the state Bureau of Cannabis Control, said via email.

Local dispensaries with quasi-legal status under voter-approved Proposition D will be given a 60-day head start to apply for permits from the city's Department of Cannabis Regulation under the city's proposed rules. (See the proposed regulations here and here). City Treasurer Claire Bartels said via email that 157 dispensaries are registered to pay tax to the city this year.

Representatives of local cannabis business organizations said they were still digesting the local draft rules.”We are still reading the state and city regulations and processing it all,” Kian Kaeni, a spokesman for the United Cannabis Business Alliance, said via email.

The state regulations, issued last week, have so far been met with approval by many in the cannabis industry. They allow localities like the city of Los Angeles, however, to have final say on many parameters of the weed business, including on whether to allow pot shops at all. State licensees must have local permission first.

“In general, I think the regulations are pretty good,” says Dale Gieringer, state coordinator of California NORML. For gray area operations running today, he notes, “There are temporary provisional licenses available to handle the transition.”

The state established a 600-foot barrier between cannabis businesses and “sensitive use” sites like schools, parks and libraries, but local jurisdictions will have the final say. Los Angeles also has proposed a 600-foot buffer zone.

The state also is requiring retailers to establish 24-hour video security surveillance and a 10 p.m. closing time. Edibles will be limited to 10 mg per serving, 100 mg per package. The idea is that edibles are more likely to overwhelm users, particularly first-timers.

Joel Milton, CEO of Baker, a customer engagement platform for California dispensaries, said the edibles rules will protect consumers and help the business get off to a good start without establishing a bad reputation. Selling edibles that are too potent “is a quick way to put someone in a bad place,” he says.

Ryan Smith, CEO of LeafLink, a company that connects cannabis brands and retailers, says, “Overall we think the state rules are really positive. This is a great collaboration between regulators and business owners so legalization doesn't shock the system.”

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