California Update: New Rules for Marijuana in 2018

At the beginning of January 2018, California’s new rules on pot took effect. With the passage of the Medicinal and Adult-Use Cannabis Regulation and Safety Act in 2016, a new sweeping era of laws governing pot effect has finally kicked in.

What can Californians now expect under the new rules?

2018 CA Pot Law

Proposition 64 made recreational pot legal for California residents, aged 21 and up. You can now possess, carry, and share up to one ounce of weed as well as eight grams of concentrate. California residents can also grow up to six plants at home.

But LA Magazine reports that California’s twenty-year history of dealing with legal pot for medicinal use has actually made establishing these new rules a little harder. That’s why there was such a long gap between the 2016 voter referendum that overwhelmingly passed and the January 2018 implementation of the new law. The rules have been particularly sticky to sort out for businesses that grow, sell, and distribute pot.

For now, here is what we know:

  • First, pot is now available over-the-counter at legal dispensaries for adults seeking recreational use. These retailers must have a license from the Bureau of Cannabis Control, the state entity charged with policing these new rules. These companies just started applying for licenses in January, but temporary licenses have been issued to medical dispensaries that also want to offer pot for recreational use. However, the licenses have been a little slow to be processed. Some licenses for growers have been delayed past 2018. The California Cannabis Industry Association has issued this fact sheet so that potential sellers of weed can stay informed.
  • Sales of cannabis will be labeled as “M” for medicinal and “A” for recreational adult use. Businesses will receive licenses with the same designation. They can also seek dual licensure. If you have a medical marijuana card, hold on to it because those products are still available for those over 18 with a valid prescription. Typically, businesses selling medicinal pot use strains designed to alleviate pain or other debilitating medical symptoms. These will still be available.

But the biggest boon for California isn’t the recreational pot itself; it’s actually the tax revenue generated by sales of the plant.

Pot and Taxes 

Businesses that are seeking to grow, distribute, or sell pot are taxed at very high rates. This means consumers are also taxed at very high rates. This has been consistent across all of the states that have legalized. LA Magazine points out:

Recreational users in L.A. will pay a 15 percent state excise tax as well as a 9.5 percent county sales tax. Some areas will charge an additional business tax, and there are taxes associated with growing, distributing, and selling, too. (Patients with a valid medical card will be exempt from sales tax.)

City and state government leaders are practically salivating over the tax revenues anticipated in the first year alone. In LA, they’re expecting $50 million in tax revenue alone. LA Magazine says the predictions are for more than $1 billion additional revenues annually for the state – at a minimum.