By Hongyi Wen
BERKELEY – State senator Nancy Skinner (D-Berkeley) has introduced Senate Bill (SB) 398 at the State Capitol, intended to expand California’s legal cannabis market for cities and counties that have not allowed legal cannabis businesses.
SB 398 permits cannabis businesses, in cities and counties that are incapable of managing the licensing and regulation of legal cannabis businesses, to obtain licenses through a state program.
With the passing of Proposition 64 in November 2016, California legalized the adult use of cannabis; part of Prop 64’s intent was to replace California’s massive underground cannabis market with a legal market that can guarantee safe, regulated cannabis production and sale.
Skinner expressed her frustration that “Californians legalized cannabis four years ago, yet the state is still plagued by a multibillion-dollar illicit cannabis market. Why?”
In fact, 68 percent of the California cities and counties have not allowed legal cannabis businesses, in part Skinner and others note, because Prop 64 requires a complicated regulatory framework administered by the local government. It’s resulted in the minimal numbers of legal cannabis businesses statewide.
Senator Skinner suggested that “Too many cities and counties don’t have the bandwidth to set up cannabis licensing and regulation.”
The state, according to the Legislative Analyst’s Office, estimates the legal cannabis market to be worth only $3.3 billion annually in contrast with the illegal cannabis market that is worth about $7.8 billion. Less than one-third of jurisdictions statewide are operating legal cannabis businesses.
As a result of the low numbers of legal cannabis businesses, cannabis tax revenues in California last year was reported to be a disappointing $900 million, said the LAO.
Prop 64’s mission to replace the California underground cannabis market is undermined by its complex regulatory framework, and local governments are not equipped with the resources to properly manage the licensing and regulation of legal cannabis businesses, said Skinner.
In response, the lawmaker’s SB 398 is designed to aid the growth of the legal cannabis market.
“SB 398 will help cities and counties greenlight legal cannabis by allowing cannabis businesses to get their local licenses through the state,” said Skinner.
Correspondingly, SB 398 is expected to raise an additional $1 billion of cannabis tax revenues for the state, and the measure, if passed and signed, promises a proportion of the state cannabis tax revenues will be shared with the cities and counties that enrolled into the program provided by SB 398.
“With SB 398, California will be able to deliver on Prop 64’s promise,” said Skinner about her hope to stimulate the legalized cannabis market.
Hongyi Wen is a junior at UC Santa Cruz majoring in Sociology. He is from Guangzhou, China.
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