On November 8, 2016, California voters approved the Adult Use of Marijuana Act (“AUMA”) by approving Proposition 64. AUMA largely legalizes the recreational, non-medical use of marijuana in California, as well as the sale of marijuana to recreational users.
What does AUMA permit?
As of November 9th it is legal for any adult (21 years or older) to:
- Possess, transport, obtain, or give away to other adults 21 or older no more than one ounce of marijuana or 4 grams of concentrated cannabis.
- Cultivate up to six marijuana plants per residence and possess the marijuana produced from those plants.
How does AUMA impact medical marijuana?
- It does not!
- Medical marijuana patients keep their existing rights to possess and cultivate as much as they need for personal medical use so long as they have a doctor’s recommendation, regardless of the limits for recreational use under AUMA.
When can retail sales of marijuana without a prescription begin?
- Retail sales for adult use will not begin until licensed stores are in operation after January 1, 2018.
- This limitation has no impact on medical collectives and dispensaries operating under California’s existing Medical Marijuana Regulation and Safety Act (“MMRSA”).
What does AUMA not permit?
- Consuming marijuana in any public place ($100 infraction). Note that on-site consumption at licensed premises will be permitted at a later date.
- Smoking or vaporizing marijuana in any non-smoking area or within 1,000 feet of a school, day care, or youth center while children are present, except privately at a residence. ($250 fine).
- Consuming marijuana or possessing an “open container” of marijuana while driving or riding as a passenger in any motor vehicle, boat, or airplane ($250 fine).
- Possessing or using marijuana on the grounds of a school, day care, or youth center while children are present. ($100 fine).
- Manufacturing concentrated cannabis with a volatile solvent (except for state-licensed manufacturers).
- Possessing, using, transporting, or cultivating marijuana while under the age of 21. ($100 fine for those 18 and older; minors under 18 are subject to drug counseling or community service).
- Possessing more than one ounce. (Remains a misdemeanor punishable by $500 and/or six months in jail).
- Note: Other offenses, including cultivation of over six plants for personal use, transport of over an ounce, illegal sale or distribution for compensation, possession with intent to sell, etc. have been downgraded from felonies to misdemeanors except in certain aggravating circumstances.
How will marijuana be taxed?
- AUMA creates a new statewide system of taxation on cannabis products. These taxes will go into effect on January 1, 2018:
- Commercial growers will pay a tax of $9.25 per ounce of dried marijuana flowers and $2.75 per ounce of dried marijuana leaves.
- Retail sales of marijuana will be taxed at 15% of retail price.
- Ordinary state and local sales taxes will apply to nonmedical sales.
- Potentially additional local taxes on medical or nonmedical sales.
Will the same rules apply throughout California?
- Perhaps not. Local governments may still restrict marijuana businesses though local ordinance.
- Local governments that opt to ban marijuana businesses, however, cannot share in the tax revenue resulting from sales.
What will happen to prior offenders?
- A person who has been convicted of a marijuana felony or other offense that has been downgraded by AUMA may petition the court to have his/her record changed to what it would be if AUMA had been in effect.
Will the Federal Government intervene?
- AUMA has no effect on federal law. Cannabis is listed a Schedule I controlled substance and is accordingly illegal under federal law.
- That said, there is a growing trend towards legalization of marijuana at the state level.
- Twenty-six states have legalized marijuana in some form.
- Three additional states will soon join these 26 states, after measures permitting use of medical marijuana recently passed.
- Seven states and the District of Columbia have adopted more expansive laws legalizing marijuana for recreational use. California is now one of these states.
- The Obama Administration has, for the most part, chosen not to prosecute individuals and businesses who are acting in accordance with state and local laws permitting the sale and use of marijuana.
- Congress has also enacted the Rohrabacher-Farr Amendment, which imposes limits on the DOJ and DEA’s ability to enforce federal marijuana laws in states where it is legal. The future of this provision is uncertain, as it is currently set to expire December 9, 2016.
- The position of the incoming Trump Administration is less clear.
- Attorney General-designate Jeff Sessions has repeatedly indicated his a hostility to marijuana and its legalization. In April of this year, he stated that “This drug is dangerous, you cannot play with it, it is not funny, it’s not something to laugh about . . . and [it’s important] to send that message with clarity that good people don’t smoke marijuana.”
- Yet it is also possible that the Trump administration may take a “states’ rights” approach and not make cannabis a federal priority, leaving it to the states to exercise authority over policing cannabis and the emergent cannabis industry.
What’s next for employers?
- Employers may prohibit use of recreational use of marijuana by their employees, but must be very careful in developing, implementing, and communicating policies regarding such use.
- Medical marijuana remains a complex area for employers in California; accordingly, employers should use additional caution in regulating medical use of marijuana:
- California law provides that prohibitions on the possession and cultivation of marijuana shall not apply to medical patients.
- However, California law does not require employers to accommodate medical use of marijuana in the workplace or during the hours of employment.
- The California Supreme Court has held that the California medical marijuana law does not address the employment relationship in any manner. Ross v. RagingWire Telecommunications, Inc., 42 Cal. 4th 920 (2008).
- The Federal Government still requires drug testing for certain employees working for federal contractors, e.g., certain transportation, defense, and energy positions.