Grace Period Sunsets for California’s Medical Cannabis Co-Ops

Today marks the repeal of a subsection of California’s Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) that affords legal protection to cannabis collectives and cooperatives, leaving those that remain unlicensed exposed to penalties and sanctions, and marking the end of a grassroots chapter for the state that began when it became the first in the US to legalize medical cannabis in 1996.

In 2017, MAUCRSA amended a section of the Health and Safety Code, under which qualified cannabis patients, primary caregivers, and collectives or cooperatives that manufacture medicinal products are protected from criminal sanctions, with the protection ending one year after state authorities began issuing licenses. As a result, as of January 9, 2019, all cannabis collectives and cooperatives must possess a permit from the California Department of Tax and Fee Administration, in addition to state and local licenses—an impossible task in regions that have either chosen to ban cannabis sales, or  haven’t yet issued licenses. The only exceptions will be individual patients and caregiver gardens that serve no more than five patients.

The expired provision dates back to 1996 when California passed the Compassionate Use Act, which gave medical cannabis patients and their primary caregivers limited protection from prosecution for cannabis cultivation and possession. Then, in 2003, California enacted legislation that set up a system for medical identification cards and expanded protections for patients and primary caregivers.

In a recent post, Omar Figueroa, a longtime cannabis attorney, pointed out there were two loopholes to the provision. First, there was no limit on how many patients or caregivers could join a collective, which led to several with thousands of members. There was also no cap on how many collectives a patient or caregiver could join. Combined, these loopholes made it so that those with medical cannabis recommendations could become members of a medical cannabis collective, which provided them with cannabis in exchange for “reimbursement” for expenses. This, alongside conflicting local regulations, led to a chaotic landscape where the lines between legal and illegal activity were often blurry.

It is hard to determine the potential impact on patients resulting from this repeal. State agencies lack data on how many collectives and cooperatives are still  operating in California. However, without legal protections, those that remain in operation unlicensed risk being raided and shut down by law enforcement. Employees and operators could also face criminal charges and civil penalties up to three times the amount of the license fee. And should a court order the destruction of confiscated cannabis, it will be at the expense of the violator. Moreover, under MAUCRSA, those who are sanctioned by a cannabis licensing agency or receive a criminal conviction could become ineligible to obtain a cannabis license in the future.