On Nov. 8, citizens in five states will vote on the issue of recreational use of cannabis, but along with that general question each initiative also includes key proposed regulations affecting professional growers. If passed, many of these proposed regulations will impact you and your cultivation business.
Here are the five states and their initiatives:
Arizona: Proposition 205 (Regulation and Taxation of Marijuana Act)
Along with the issue of whether to legalize recreational use, the regulations establish new licensing for cultivators. The Department of Marijuana Licenses and Control will establish, at a minimum, a three-tiered system for licensed cultivators. Each tier has an established limit on the amount of cannabis that may be produced, and the highest tier permits an unlimited amount of growth. Each tier would have a different annual licensing fee.
California: Proposition 64 (Control, Regulate and Tax Adult Use of Marijuana Act, or Adult Use of Marijuana Act)
As almost everyone knows, recreational use is up for a vote in California. But there are also several other key pieces of legislation. Licenses for cultivation, along with other businesses, would not be issued until Jan. 1, 2018, although the state left itself some latitude to issue temporary licenses. The major regulation that would impact cultivators is section 34012(a), which would place a tax on commercial cultivation at a rate of $9.25 per ounce.
The state will also have specific “microbusiness licenses” that would allow a cultivator to be their own processor and retailer if they so choose. Growers looking to go organic would have a designation and certification program available.
Additionally, there are regulations that would try and protect against unfair competition from big corporations and prevent monopolies from forming.
Maine: Question 1 (Marijuana Legalization Measure)
Maine is another state seeking to legalize with regulations and a licensing program. The state outlines that previously registered caregivers will be given preference when licenses are established.
For cultivators, there will be a “retail marijuana cultivation” licensing system set up that limits the facility size to 800,000 square feet of plant canopy, unless the licensing authority determines that more is needed.
There will also be two types of facilities, those with 3,000 square feet or less and those with more, which will dictate the license fee. Maine has outlined only the minimum and maximum that the fees will be: The cultivation facility license fee could range from $10-$100 per unit block, with a $10-$250 nonrefundable application fee.
Massachusetts: Question 4 (Massachusetts Marijuana Legalization Initiative)
Massachusetts is also putting before the voters the question of whether to regulate cannabis like alcohol. The new regulations impose an excise tax imposed upon the sale of cannabis or cannabis products by a retailer to anyone other than a “marijuana establishment” at a rate of 3.75% of the total sales price received by the retailer. This would be on top of the state sales tax of 6.25%, and local cities and towns could add another tax up to 2%.
Nevada: Question 2 (Initiative to Regulate and Tax Marijuana)
This initiative would essentially legalize cannabis for recreational use, but would prevent those who live in a 25-mile radius of a retailer from growing at home. The Department of Taxation would create a licensing system for stores, distributors, cultivation facilities, etc. An especially important note: There is also the establishment of a 15% excise tax on wholesale cannabis sales that will be paid by cultivators.
In addition to the states that are hoping to restructure their programs to include recreational use, many states will be voting on whether to permit medical marijuana or expand on an already existing program:
On top of the broader state ballot initiatives, there are also many county and town elections taking place in multiple states that will regulate where cultivators may grow or where retailers may open stores, such as the 50 counties and towns in Oregon that are voting on these issues.
© 2019 CAN Performance Group, LLC. All rights reserved.