In summary

Newsom’s budget offers an opportunity to address California’s cannabis woes by providing local governments with a licensing framework.

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By Alexis Podesta, Special to CalMatters

Alexis Podesta, former secretary at the California Business, Consumer Services and Housing Agency, is a political consultant.

It’s been four years since the cannabis industry began the transition from medical to legal adult-use in California. Yet, in almost 70% of localities throughout our state, consumers still don’t have access to the regulated market. 

Proposition 64’s intent was simple: to create a regulated market that allowed all adults in California to have access to safe cannabis. The initiative was overwhelmingly approved by voters, but our current legal cannabis landscape doesn’t fulfill Prop. 64’s promise. 

Establishing a new, legalized industry was never going to be simple. One reason is California’s dual licensing structure, which means cannabis retailers must obtain two licenses to operate: one from the state and one from their local city or county. This system relies on local governments to set up and implement a licensing framework with a lack of resources and experience – a tall task. 

As secretary of the California Business, Consumer Services and Housing Agency during the transition period from medical to adult-use expansion, I saw the many challenges that arose from this framework first hand. 

The industry, the state, local governments and consumers all faced a rapidly changing cannabis landscape, virtually overnight. The lack of support for tackling these challenges has resulted in local elected officials choosing the false promise of outright banning cannabis sales in their jurisdictions. And, despite full legalization, consumers – many being veterans and patients – are left to travel long distances to purchase legal cannabis or turn to the illicit market for lack of legal options. These illicit cannabis products are potentially dangerous, untracked and untested, as well as bad for the environment

Gov. Gavin Newsom’s budget offers an opportunity to address California’s cannabis woes. The budget proposal includes a “grant program” to “aid local governments in, at a minimum, opening up legal retail access to consumers.” The budget puts real stock in this growing industry by outlining additional support for Department of Cannabis Control programs, which will strengthen this new entity in offering state services and oversight. 

We currently have a patchwork of local regulations, with many jurisdictions banning all cannabis business activities, while the illicit market continues to cement its footing in their backyards.

Since the implementation of Prop. 64, we’ve learned that local governments are reluctant to open their doors to a new industry without staff and funding. It’s true that allowing cannabis businesses to operate in their jurisdiction can provide tax revenue; it’s also true that creating a regulatory framework is a heavy lift and requires staff and funding – two things that Prop. 64 did not provide to locals. Without investing locally, the promise of Prop. 64 cannot be met and Californians will continue to lose out on benefits like jobs, business opportunities and community investment from this industry. 

This blind spot was addressed in the governor’s most recent budget. Locals need all the support they can get. And, the governor has given the Legislature a prime opportunity to tackle a major barrier of creating safe, regulated cannabis to all Californians. This grant program will help local governments get the legal marketplace off the ground and provide the necessary infrastructure to begin licensing cannabis while awaiting tax revenue from the first year of sales. 

I am hopeful the Newsom administration and Legislature will work together to give the industry the tools they’ve been missing to be successful. 

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