Ten Events That Shaped the California Cannabis Industry

By Christina Sava

Dec 11, 2020

California has been long-known as the trailblazer of the now-global cannabis industry. Efforts to decriminalize cannabis in California go as far back as 1972, when Proposition 19 qualified for that year's ballot (but lost). The cannabis story we know today is often traced back to the 1996 passage of the Compassionate Use Act (Prop. 215). Still, the last decade has also been pivotal for the California industry. In this post, we will highlight the top 10 course-changing moments for California cannabis from the previous 10 years, a period that has seen lots of change for cannabis in The Golden State.

1. November 2, 2010: Another Proposition 19, also known as the Regulate, Control and Tax Cannabis Act of 2010, would have made California the first state to legalize adult-use cannabis and create a commercial market. Primarily backed by the founder of Oaksterdam University, the measure was defeated by 53% of the vote. Proponents still claimed a victory since millions of Californians voted in favor of the bill and started moving the state towards asking not whether to legalize cannabis, but how.

2. January 1, 2011: Despite Prop. 19's defeat, 2010 did bring some success for the California cannabis movement. That year, Governor Schwarzenegger signed Senate Bill 1449, which reduced possession of one ounce or less of cannabis from a misdemeanor to an infraction. The law went into effect on January 1, 2011. At a time when even getting caught with resin in a pipe could still land you in jail in many other states, SB 1449 continued the trend of cannabis normalization in California. 

3. October 9, 2015: After two decades of growth (and conflict with Federal law) for the nonprofit, medical-only industry in California, 2015 finally brought about the first iteration of a commercial medical market. Governor Jerry Brown signed a series of bills (SB 643, AB 243, AB 266) that comprised the Medical Marijuana Regulation and Safety Act (MMRSA). MMRSA established a statewide comprehensive regulatory system for medical cannabis businesses, including cultivation, manufacturing and distribution—segments of the industry that operated with much legal uncertainty until then. MMRSA also included testing lab licenses and the first-ever statewide requirement to test medical cannabis.

4. June 27, 2016: Senate Bill 837 was enacted, which, among other things, changed all references of "marijuana" to "cannabis" within and in the titles of previous acts. Notably, MMRSA changed to the Medical Cannabis Regulation and Safety Act (MCRSA). While a seemingly minor change, this marked a departure from the old War on Drugs attitudes and ideas about cannabis in favor of a more neutral, science-based approach. "Cannabis" became and continues to be the preferred terminology for many later state-legalization efforts.

5. November 8, 2016: As regulations for MCRSA were still being worked out, Proposition 64, The Adult Use of Marijuana Act (AUMA), qualified for the November 2016 ballot and passed with a 57% majority, officially legalizing and regulating recreational cannabis in California. Although it passed, AUMA was controversial even within the California cannabis community, as many feared it would forever alter the "small-business" landscape of the industry in the state. MCRSA and AUMA had many similarities and important differences, and the industry wondered how the two systems would operate in harmony.

6. March 28, 2017: Oakland, California became the first city in the nation to adopt a social equity cannabis licensing program, attempting to give a business advantage to those people and communities who had been most negatively impacted by the War on Drugs. While Oakland's program has evolved with mixed reviews, it set the stage for a nation-wide cannabis social-equity movement.

7. June 27, 2017: To reconcile MCRSA and AUMA, Governor Brown signed Senate Bill 94, comprehensive legislation known as Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA). It repealed MCRSA and incorporated certain of its provisions into the licensing scheme of AUMA, establishing a uniform licensing regime for both medical and adult-use cannabis. The departments tasked with overseeing the new California cannabis industry were the Department of Food and Agriculture, the Department of Public Health, and the Department of Consumer Affairs.

8. January 1, 2018: The first day of legal adult-use cannabis sales in California from state-licensed dispensaries. For the first time in state history, you didn't need a doctor's medical recommendation to purchase cannabis legally.

9. October 1, 2019: America's first cannabis consumption-friendly restaurant opens for business in West Hollywood. Then-known as Lowell Farms: A Cannabis Café, it became the first restaurant to hold a state-legal onsite cannabis consumption license in the United States. Lowell Café, now known as the Cannabis Café, paved the way for onsite consumption lounges in the state, advancing social use and consumption policy statewide and across the country. Along the same vein, in August 2019, San Francisco's Outside Lands became the first major music festival to allow onsite cannabis sales. The part of the festival known as Grass Lands permitted state-licensed cannabis brands to sell directly to festival-goers, who could then consume their new goods onsite.

10. February 20, 2020: The California Department of Food and Agriculture (CDFA) released draft regulations for the first-ever appellations of origin program for cannabis. Cannabis cultivators in California's renowned cultivation regions, such as the Emerald Triangle, rejoiced at finally being given a chance to be recognized—and receive protected status—for growing some of the world's best cannabis. Other famous cannabis-growing regions worldwide are watching to see how this program pans out, as California yet again blazes the trail for cannabis policy. The program is set to become effective January 1, 2021.

Looking Ahead

The California cannabis industry is in a constant state of flux, and the evolution is not over yet. In January 2020, it was announced that "in an effort to improve access to licensing and simplify regulatory oversight of commercial cannabis activity," the three licensing agencies would consolidate into a single department by July 2021. While this consolidation will hopefully simplify things for California operators in the long term, it will present some short-term challenges. In early December 2020, the state's first "cannabis czar," Lori Ajax, stepped down as Chief of the Bureau of Cannabis Control. As The Golden State's cannabis story continues, Vicente Sederberg's California team will be here to help clients navigate the winding road of cannabis regulation.

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