California's MMRSA

California's Medical Marijuana Regulation and Safety Act will become effective January 1, 2016 (in the form of a trio of bills). The legislation outlines how state agencies will regulate medical marijuana in California, the country's largest marijuana market. 

Most importantly, MMRSA is a "dual license" system. Marijuana businesses will be required to have both a state and local license. In fact, a condition of applying for a state license is the existence of having a local license.  (It's also worth reminding that MMRSA is a state law and that federal law still applies though one of the intentions of MMRSA is that it is sufficiently robust as to reduce the likelihood of federal intervention with businesses who are in compliance of its rules.)

Another important aspect of MMRSA is that with limited exceptions vertical integration is highly discouraged. (See charts below. The numbers at the top of each box are the MMRSA “Type”).

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MMRSA specifies what other Type license Type X license holders can apply for or hold. It plainly states that no licensee should hold more than 2 licenses and that license bundles cannot exist outside the ones specifically described in the law (AB 266). In the graph below, the black and red arrows between types show what licenses a Type X licensee can also hold (arrow from the license holder toward the other Type available):

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Holders of testing licenses (Type 8) cannot own any other type of license. Owners of distribution/transportation licenses (Types 11 and 12) can only operate together at the exclusion of anything else. 

For a more detailed explanation of MMRSA, visit Cal Normal's summary.

Update: As part of an ongoing cleanup of MMRSA, its name was changed to MCRSA ("Medical Cannabis Regulation and Safety Act").

By: JP Clement