well good evening.
We are. So grateful that all of
you take the time to be here
today.
On behalf of assume the member
Jim would who is an incredible
partner and had to get here on
the north coast.
Chair of the assembly health
committee is well as senator
Jerry hill. Chair of the Senate
business and professions
committee we wanna say thank you.
Thank you so much for coming out
in the glorious reign in my
right finally.
For this special joint
committee hearing.
In beautiful Ukiah.
But in many ways tonight is
truly historic. I. instead of
the north coast having to drive
hours to Sacramento as many of
you are de do. Had to advocate
for the issues that are
important to our community.
Tonight a Sacramento has packed
up intake in the show on the
road. And we could not be more
excited to be with you.
A focus on the first sixty days
a proposition sixty four here in
California.
I never before has our region
seen so much change.
Brought about by fifty seven
percent of voters across
California passing proposition
sixty four November of two
thousand sixteen.
Fifty four percent of voters
here in Mendocino county passed
prop sixty four.
California's now coming out of a
prohibition era in Golden State
residents are seen the migration
of north America's largest
cannabis market.
Transitioning into the light of
a regulated in legal system
estimated to be worth
approximately seven billion
dollars annually.
This first of its kind hearing
will focus on the first sixty
days a proposition sixty four.
This will be one of the largest
and most comprehensive events of
its kind since initiative went
into effect earlier this year.
And we wanted to hold this
hearing.
Here on the north coast
because.
New the legal recreational use
of cannabis is rapidly
transforming our region.
It is transforming the rest of
the state in ways we have never
seen before.
However and I think you may all
agree maybe not. At nothing
about the transition of
proposition sixty four has been
easy.
Arm and that's why we're all
here tonight.
Legal recreational cannabis has
tremendous potential for jobs
and economic development.
It can generate revenue for our
cities and counties.
Reign in the black market and
help protect our environment in
clean up row gross.
But if the state gets this wrong.
The promise of proposition sixty
four won't be kept.
As I have always said this is a
tall mountain to climb.
And we are currently building
the airplane.
And flying it at the same time.
And we will not be successful
unless we all in this room work
together. Listen to the leaders
on the ground in our local
communities and listen
especially to all of you who
have taken time out your busy
schedules to be with us tonight.
We're gonna begin this evening's
hearing with welcoming remarks
from supervisor Hamburg the
chairperson of the board of
supervisors here in Madison
County.
We're also could be welcoming
the mayor of Ukiah mayor doble
to the put the podium in just a
bit.
We're also grateful that
supervisor wrecks bone will be
providing welcoming remarks on
behalf of the county of humbled
as well.
Next we have the leaders from
the major state agencies
responsible for implementing
proposition sixty four.
And that includes chief Laurie
Ajax
she's head of the bureau of
cannabis control. She has a very
small job.
She is overseen the entire
implementation of proposition
sixty four for the state of
California we want to say thank
you for her fantastic work.
We also had the exact address
after I. Nicolas Maduro's who
leads the state's tax collection
efforts relating to cannabis.
I as you may all know you can't
bank cannabis so he has a tough
job.
And I want to say thank you so
much out to the executive
director for being here he's
going to be talking about how
the state of California. Will be
focusing on all issues of taxes
and fees in the months and years
to come. We've Richard Parrott
he operates the state's
cultivation licensing program
within cal cannabis that's
within the California department
of food in act. And we also have
Patrick Dionis
who coordinated the team that
launched the information
technology needed to make all of
this work.
Will they too are hard at work
in Mendocino county cinema
counties wells humble they're
gonna talk about the facts on
the ground of the way
proposition sixty four. Effects
their communities as well as the
challenges they see in the
future.
And finally we have timber card
from the cinema county economic
development board talk about the
effect proposition sixty four
has on the local economy. We
also have the leading C. E. O.'s
of two major cannabis biz first.
Steve days.
I'm a little bit of housekeeping
but if you need to use the
restroom it straight out this
door to conversation here tonight.
If it works for all of you we'd
like to be able to have not for
public comment.
We believe that we're gonna have
a lot of public comment we want
to hear your comments your
questions your criticisms.
What we're gonna ask we have
additional time we'd like to
welcome you back up but we want
to make sure that everyone has
an opportunity to be able to
address? All of our pain we can
find it on Senate dot CA dot gov
Senate dot CA dot gov it'll be
live streamed in archive for
future reference.
But before we get into our
hearing into our welcoming
remarks from our local leaders.
Wanna turn it over to my
apartment I. he has been
incredible colleague have been
proud to call my friend for many
deck at for many years. And
that's assemblymember Jim would
I. and he's gonna be providing
opening comments in is a co host
of tonight's event cylinder
would.
Well thank you so much Senate
McGuire is an honor to be here
this evening to participate in
the Senate.
Committee. M. as assembly
member so.
We don't get to do that all the
time so appreciate that very
much I want to just give a shout
out to US senator McGuire. Who
has been with us every step of
the way?
Together working on this issue
since
two thousand fifteen when when
M. C. R. save began to roll out
and I'm so we've been working
together on this. And I suspect
we will be joined at the hip for
the next several years as we as
we work to. To iron out any the
Kinks.
That they come forward so my my
my remarks to be brief but I I
do want to say a couple things
before we start just first well
thank you for being here today.
Anderson you came from a long
ways I know the weather isn't
isn't a great but it's great by
my standards because we can
shirtless use use the yacht use
the rain.
Look forward to a productive
discussion of sharing
information from all
perspectives that could lead the
dark to a thoughtful way for for
us so. Before I introduce our
first panel well in Mike stone
and what I'll throw in a few
more. The limit color on some of
that but.
I. with a few comments here.
We knew that before prop sixty
four past the counties would
have quite a burden put upon
them to build a process to
support the implementation of a
medical.
Permitting compliance processes
and all in a pretty tight
timeframe.
Well everyone knew that local
permitting would be significant
undertaking.
That role was something the
county's actively sought and we
supported.
I believe they have worked in
good faith to establish those
processes.
But as with everything new you
discover issues I need. Or
additional steps.
What we didn't know was that we
would have devastating wildfires
would its descend upon us on
beginning on October eighth upon
to the three counties
represented here tonight?
People including cannabis
farmers lost their homes and
businesses more than forty
people in our district are lost
their lives.
This disastrous for cities and
counties with their limited
resources to add to their
workload to meet the immediate
needs of survivors and support
the building process.
Today have afforded gathering
information from those of you
who have so we can assess the
needs and determine what can be
done to help expedite the we know that there are other
parts the state that are
aggressively have experienced in
in the past is at risk of being
lost.
So without further ado here are
our panelists in and Mike is
also chief Ajax's lead the
bureau since its inception in
February two thousand six
D. for work.
She is a graduate of C. S. U.
Sacramento.
As spent twenty two years the
department of alcohol beverage
control and ten years in the
private sector Jean violence go
back the private sector some
point. And I need to stop that
because I'd jump too far ahead
notes can.
Of of of this and my apologies
thank you for pointing that out
C. that's why they don't listen
the members of the house. So
anyway.
My apologies so good you up
what we take to be to do as we
liked it a welcome up I. to our
local leaders who are here
tonight. We'd like to be able to
introduce the chairman of the
board of supervisors or the
county magazine no Dan Hamburg
if you don't mind come forward.
We'd like to be a to bring
forward Amir Dobell the mayor of
youkai and we want to say thank
you to the mayor for hosting us
here in this wonderful city
facility. As well supervisor
bone who was also chairperson
for RC RC W. to come forward that's here to. Give us.
Really the feedback we need to
hear as as policy makers.
They're two people in the crowd
Allen recognize on recognize.
My vice mayor.
For the C. Kyle Maureen Mulhearn
she's here tonight and
councilmember Jim Brown.
There also here these two are
the ones that really have rolled
up their sleeves.
As it relates to city because I
and I I just wanna thank them
and recognize them.
So I'd really up when I think
the senator and then simply
meant for for joining us I
appreciate the opportunity to
think you.
Thank you all very much Kevin
and I didn't know.
How to address this August body
and this on so you sort of showed me the
way you just kind of turn around?
You know this this meeting today
is is historic M..
Can't say how much I appreciate
you all being here.
But actually this is pretty
much what the borders and when
we come home we have a marijuana
issue on on our. Under agenda
which is just about every
Tuesday so I don't know if any
of my.
Board colleagues are here is
better recount here's closer
brown eyes.
.
My colleagues on the board to.
Amazingly I hear that Mendocino
county is actually ahead
ultimate supervisor bone may
take issue with this but that
Minnesota counties actually
ahead of many the counties in
the state.
An implementor wanna
regulations and if that is true
then that really demonstrates
how far.
.
Really have things are in the entire state
because we are we are struggling
and I don't want to sugar coat
that. I want to make it seem
like this is been an easy thing
and I think.
Assemblyman would and and and.
In center McGuire and and all
of us back in the tube after
forty years of having any
cannabis industry and cannabis
communities and it is actually.
A cannabis culture
if you will in Mendocino county
and then trying to take.
An industry that has been sub
Rosa and bring it out into the
open.
Positive things about legal
industry as opposed to black
market or illegal industry but
there's a lot of.
Lana challenges to it's it's
not easy to do.
When I first.
Became a proponent of
legalizing marijuana.
I had.
I leaving that but back in
nineteen seventy nine.
A few of us have but we call the
human rights rally in front of
the courthouse in Millard shoot
major
descended on a pot garden in
Willits.
With you know.
.
You know camouflage the whole
thing and.
And busted old lady in Wilk who
took umbrage with that and
decided that something had to be
done and.
You know began talking about
legalization of marijuana and
you know I was actually the
first county supervisor back in
the early eighties because I
always felt. That with
legalization was gonna lead to
inevitably was commercialization
and corporate is ation
and that is my big fear there is
some one of the best things
about the marijuana industry
menace you know county. Has been
the mom and pop flavor the small
business person accounting.
I mean this you know calorie
dense has long been known not
only is a place where the best
cannabis in the world in the
world is grown.
Buster brown sorry about that.
Not only that but. But also the
place where were a hundred
flowers bloom M. I mean that
literally in terms of all the
different businesses that have
come up all the businesses that
have been supported. By
discounted this industry in
Mendocino county a lot of very
positive things unless you the
district attorney back during
legal cannabis and that's also.
Very true I mean there's there's
no there's no easy way to
describe an industry that has
been so stern for decades and
I've lived here.
So I'm gonna stop and.
Well there's one other person
in one recognize and that's our.
Or chief executive officer
caramel Angelo who was
recognized by the California
status a association of counties
for her.
Outstanding work in bringing
together the counties of of
particularly northern California
but through C. C. sack and being
a very important.
Source of information to the
legislature and to the work
that's been done by up by you
gentlemen. So.
Thank you very much for that
and.
I really again appreciate you
coming up here and bringing so
many experts in the field I
really look forward to the.
Thank you.
Thank you so much supervisor and
Allen.
Yeah different of a classroom.
And I think at where you are
going to see if there's an
endorsement we're gonna have a
taste test here no matter how
backs up.
I set up here is probably the
most conflicted guy in the room
I'm the redneck conservative
from the board.
In humble has is county and
state permits sob and a
greenhouse business so.
Not exactly that's fine but with
that being said I echo what
supervisor Hamburg said.
And and I and I. Appreciate the
panel I've Laurie. We met when
the first month you were on the
job and you have grown into the
job literally and I think you
understand it because in our
last call. And just take
everything works as alcohol and
put in cannabis marijuana dope
when everyone do and we run prohibition area era because
the taxation.
And.
They've the understanding being
as were not get the states and
the counties are going to get
the rich off the backs of the.
Of the growers but I think it's
about time that everybody pay
their fair share and the most of
the people in this room agree
with that and I applaud you for
that. Because you have stepped
up filled out the paperwork.
Specially Mendocino county
because I remember of health
successful the tag program like
a fart in a spacesuit itself.
You know and the because I
thought the tag program was a
great program that was
innovative in its day.
But again with this panel up
here.
.
Senator woods and obvious
assemblyman woods in center
McGuire they went out on a limb
when they put this together.
And they did it because their
region.
Expected it wanted it and they
feel the need.
Popular well maybe not but they
made it popular.
But I can remember two years ago
they both said this is a process
ten years in the making.
That's why you're seeing this
evolved met.
We have our building the
planning director John Ford who
has had add people work is tail
off of figure these things out.
Because I think the biggest
problem we have.
Is sinking all the agencies
together.
Planning a bill that we can have
up there we got we got it all
figured out that we decide fish
and wildlife doesn't like what
we have figured out then the
poor service Nielsen forced us
doesn't like.
How we get figured out but the
bottom line is you guys can't be
the pawn in that game?
You guys have to be able to move
forward you have to be able to
put your crop in the ground.
You need to figure out how to
get it out you need to know how
to do it.
You guys have suffered what it's
like to be a commodity this year
I know what the price drop
doctor my dairy farmers up there
they're selling their. They're
selling their organic dairy milk
for two dollars a hundred less
than it costs to produce it.
You guys can relate to that this
year.
But it it involves same thing
with the timber industry and
everything else so.
You you have to learn as we go
forward to do it better and
that's part of the evolved met.
And if anything else the going
community has always been
resilient.
And very smart when it comes to
doing it.
You just don't have to do it
under the shadows of the trees
anymore.
So you have the benefit.
Rex Monning first district
supervisor humble county vice
chair.
The board.
So thank you.
Thanks.
Anyway because at most one that
yet.
.
But anyway I appreciate the
panel here I think it's great.
I'm not running for election
summit cut it short thanks for
being here. And hopefully.
We get this.
Done sooner in ten years thanks
for being here.
Thank you very much supervisor.
So game tonight we are. Wanting
to be able to have a sincere
conversation.
The reason why you have three
different legislative committees
coming together.
Because we want to have.
An honest conversation in honest
feedback from all of you.
Out what's working what can we
improve upon and where your
concerns.
At my final item before turn it
over to the silly man would like
to be to say thank you to some
instrumental folks who helped
put tonight together I'm
Danielle Taylor and Kim in Sarah.
They've all been working
overtime to make sure that this
excess and I give them a round
of applause who are in each of
our teams thank you so much.
So without further ado let's
start our first panel with
whomever would. Great night
apologize that I jumped the gun
but we've already introduced
that miss Ajax I won't say that
again.
I will I'm Nick Madero's.
With the CD
well because C. D. TFA because
that's easier than the rest of
the than the rest the words are
but. You're gonna know this man
pretty well by the end of the
night.
He administers the sales and
use tax.
Prop sixty four cannabis
cultivation excise taxes
on more than thirty other fee
programs for the statements from
the chief of staff to the U. S..
Small business administration
has degrees from Yale and
Harvard Law School.
Richard Parrott.
Are are it is the overseas
implementation cultivation
licensing compliance and
enforcement programs. He is has
over thirty years of state
experience he is the.
Director cal cannabis
cultivation them licensing.
.
Wanna know data director parent
is.
Is in a tough position.
Tonight because of a recent
lawsuit.
We know that how vital this the
one acre cap licensing issue is
to small family farmers and.
And for honest and fair count
count a competition in the
market. And while he can't
comment on the issue tonight I
know that director parrot is
aware of how important this
issue is to me.
And too many of us here.
Patrick Denis a special
projects director from Cathleen
department technology.
Special I. is is.
Overseen all the activities
related to cannabis I. T.
two words I never thought I'd
see together.
Them Patrick's been a leader in
state information technology for
more than twenty years and has
successfully manage the state's
most difficult and challenging
projects and I think that we got
one for you here's. Patrick.
We will be giving you guys a
thirty second warning.
As we go forward here and.
Please miss Ajax.
Well thank you Senate McGuire
assembly member would staff and
all of you for coming out
tonight M. braving the storm.
Really happy to be here tonight
so.
I am going to provide a brief
update on where the bureau.
Sort of where we've of what
we've been doing the last few
months and what's on the horizon.
As most of you know we've met.
Several segments significant
milestones in the last few
months I. transitioning from
program development to
implementation our emergency
regulations are in fact.
Our online system is accepting
applications and were issuing
licenses daily I. we've begun
enforcement activities and our
candidacy advisory committee is
hard at work. I. we released our
emergency regulations on
November sixteenth of twenty
seventeen. In coordination with
both the California department
of food and agriculture and the
California department of public
health. Other mere duty
regulations were adopted on
December seventh of twenty
seventeen and they're currently
in effect right now.
We continue to work in close
partnership with.
Both public health and food nag.
We meet.
Regularly.
We coordinate on regulations
areas of.
Operational efficiency.
Communications out reach and
licensing.
That coordination there was a
lot of it prior to the last
couple years but it's it's even
grown to a lot more because we
want to make sure that we're
giving consistent answers. That
were coordinating together with
with all of this are we
officially began accepting
application on December eighth
twenty seventeen with the launch
of our online system. The online
licensing system allows
applicants to submit their
temporary an annual applications
check their license application
status and make payments online.
As all of you know the first
temporary licenses became
effective on January first
twenty eighteen. And a believer
in week
nine and it just seems like it's
been like a lot longer than that
by the way.
Temporary licenses are valid
for a hundred and twenty days
and during this hundred twenty
day period licensees are
required to submit a full.
Annual license application
during that time.
As of February twenty eighth the
bureau's issued.
Thirteen hundred and seven
temporary licenses across the
state and our staff continues to
work very hard to process these
licenses as quickly as possible.
If any of you are interested we
did I we have a sheet that's
available at the front table
that shows all of our license
types and how many we've issued
of each license type.
Over the last several months.
We've posted.
Eight licensing workshops
around the state and they've
taken place in riverside Los
Angeles Sacramento Irvine
Sandiego Oakland Monterey. And
this afternoon we had one
hearing you cry and I know many
of you were the here. These
workshop for focused on
providing the public with
information related to the
application process and
regulatory requirements answer
questions and hand out
educational materials. These
licensing and workshops included
representatives from food and
agriculture and department of
public health along with other
state agency involved with
cannabis regulations.
Most of these workshops were
also willing to well attended by
local government representatives.
Each week the bureau response to
hundreds of enquiries with
questions concerns and
complaints from licensees
applicants local governments and
the public. We have multiple
ways to contact the bureau of
the right tool for toll free
phone number. Email address and
online complaint form that's.
On our online licensing system
website.
Other bureaus website has
extensive information for
licensees and the public such as
regulatory information licensing
instructions a license search
tool event announcement
resources and faqs.
The bureau continues to develop
additional resources such as new
handouts E. learning videos to
assist licensee and successfully
completing their applications
and understanding the regulatory
process.
The bureau is also in in
conducting inspections of
licensed premises through armed
force met program.
And these so far these
inspections have taken place
across the state were focused on
educating our licensees.
Are we know.
A lot of regulations when they
became in effect there's a lot
to know and a lot to learn so
we've really tried to go out
there. Look at your operation
and then.
Just assist licensees on areas
where we think.
Improvement can be made of the
licensees can ask questions of
our enforcement staff and so far
it's we've gotten a really great
reception from all of our
licensees they really appreciate
it and they really appreciate
that one in one. Able to talk to
us on the field.
I'll we're also collaborating
with local jurisdictions on
enforcement manners as well
sending letters to businesses
that do not have a state license.
To inform them of the need to
obtain a license and how to do
so.
In addition the cannabis
advisory committee is tasked
with providing the canvas
licensing authorities
recommendations regarding
regulations the committee
consists of twenty two
individuals that bring a broad
range of experience in the
cannabis industry. Including
labor law enforcement local
governments social justice and
more.
The advisory committee has met
twice in full already and has
created ten sub committees to
focus on different aspects of
the regulation.
The subcommittees include
cultivation manufacturing retail
distribution testing
laboratories micro businesses
license application enforcement
equity public health in use.
The big barrel create a survey
for the public to submit
information to the subcommittees
and the first survey gathered
over three hundred forty
responses which were provided to
the subcommittees for their
February thirteenth meeting in
Sacramento. Additionally
subcommittees met also today in
Sacramento and I'm impressed if
I see some people that were in
Sacramento today with me and
they're here today so. I am also
I'm constantly impressed by how
involved you are in passionate
you are about this though thank
you for coming to both.
The recommendations adopted by
the sub committees will be
considered by the full advisory
committee at its March fifteenth
meeting in Los Angeles.
Recommendations adopted by the
fuller advisory committee will
be provided to the licensing
authorities for considerations
in developing the permanent
regulations for commercial
cannabis activity.
There is a lot of work ahead for
twenty eighteen when we know
that.
The licensing authorities were
already working on final rule
making package to be in. Noticed
later this spring in the
meantime we are gaining valuable
information on how the emergency
regulations are affecting
cannabis businesses so we can
evaluate what changes may need
to be made. Although we were
disappointed when the federal
government rescinded the call
memo we continue to strive to
make sure our regulatory system
follows those guidelines to
ensure public safety. We'll
continue to work with our
stakeholders to make improvement
to the regulations encourage
participation in the regulated
market. And get people licensed
to conduct commercial cannabis
activity.
We look forward to continue
working with all of you thank
you very much.
Thank you will go ahead and move
on to miss winters I just I just
before we do that US one a
mention that.
Mr Maduro's.
Will it Jim can queue M. appear
because or some other topics
that he'd maybe be able to
address for us tonight
specifically concerns from
banking.
And also.
What are the role the Attorney
General will?
Undertake should federal
government began to.
Intervene here so I don't mean
to put John spidery things
Maduro's but de.
Anyway you give your best shot
how's that so alright I'll. I'll
try. Thank you so much for
having me it's a pleasure to be
here tonight representing the
California department of tax and
fee administration or CD TFA
it's only seventy percent is
bureaucratic as it sounds. Yeah
I. Who?
The department was established
in July of last year and we as
was mentioned earlier Mr thirty
taxes are more than thirty tax
and fee programs for the state
of California and collect.
Almost sixty five billion
dollars a year.
For the state our largest
source of revenue is the state's
sales and use tax program
through which we collect.
More than fifty billion dollars
each year for the state as well
as for cities and counties
throughout the state.
We are responsible for this
three state taxes feature we
recognize is fairly complicated
when it comes
a cannabis I brought some charts
which
should've been out there in the
in the lobby. During each of the
chairs of these three taxes.
First there is the cultivation
tax which is based on weight and
has three de dried leaves and one for fresh
cannabis.
Dried flowers are taxed at nine
dollars and twenty five cents
per ounce dried leaves at two
dollars and seventy five cents
per ounce.
And the cultivation talks on
fresh cannabis is one dollar and
twenty nine cents per ounce.
We know.
That these cultivation taxes.
Have been very confusing for
some people and we are working
particularly for cannabis that
enters the manufacturing channel
and becomes edibles.
And other products and we are
hard at work to see what we can
do.
Together with others throughout
state government C.
we can't make that.
Work better.
For all of you.
I second is the canvas excise
tax which is set at fifteen
percent of the average market
price. And this is also a little
confusing because the tax is not
fifteen percent of the sales
price.
Rather each six months.
CDT FAA determines the retail
markup percentage and the taxes
set on the wholesale price plus
that retail markup.
So the current meet retail
markup is six
sixty percent.
I will be reset every six months
and so that rate will likely
change.
In July of this year.
And third there's the sales and
use tax.
Which applies to all retail
sales in the state including to
cannabis.
And it ranges from seven and a
quarter percent.
Which is the state wide rate.
To his highest ten quarter
percent in some jurisdictions
once you are.
Fold in all the city county and
special jurisdiction rates.
The cultivation and excise taxes
or both filed and paid by the
licensed cannabis distributors.
Distributor is responsible for
collecting the cultivation tax
in the grower and remitting that
the state similarly the
distributor. Is responsible for
collecting the excise tax from
the retailer and paying that
money to the state.
Cannabis retailers are
responsible for collecting and
remitting the sales tax.
TFA.
That is the one tax in the
system that does not go through
to
Peter.
So.
Virtually all.
Enterprises in the are chain
from the cultivator to the
retailer. Need to.
Get a permit from the
California department tax and
fee administration
the permits are issued at no
cost and.
Are we're not selective on who.
Gets a permit so if if you're
involved in the marketplace you
need to go.
To C. GFA dot CA dot gov.
To get a permit or call your
local office on
of the California department tax
and fee administration we have
an office.
In Santa Rosa that would be.
More than happy to to help folks
out we have by given permits to.
Almost twenty four hundred
retailers.
.
As well as to more than a
thousand.
.
Distributors.
Now that is many more than the
permits issued by the bureau of
cannabis control and many more
than have been issued.
By cities and counties around
the state so there are a lot of
people out there who have
permits from us.
Which are necessary.
To be engaged in the industry
but they are not so that's not
sufficient.
.
So there are a I we also
understand from.
Folks in the industry that there
are compliance issues around the
state.
We are hard at work on that to
the extent that that we can be.
A to make sure that.
People active in the business.
Have the required permits not
only from us but from.
.
Local jurisdictions and from
other state entities.
We don't yet have a great idea
of how big the market is the
first tax filing deadline.
The taxes from the distributors
are do quarterly.
And from new retailers will be
do quarterly although those with
certain sales volume will be
required to pay monthly. I. once
they receive reach a certain
threshold. But that first
quarter ends.
.
At the end of March and the
payments are due April thirty.
So not until then we have really
a sense of.
How big the market's going to
be?
Now we have some challenges.
For sure and one of them as
as mentioned by.
.
Assembly member would is banking.
.
We.
The governor has tasked the.
.
Department are there but
business consumer services and.
.
Housing agency with trying to
come up with the banking
solution we worked with them
closely.
We have looked for any type of
solution
recognizing that it's really
difficult for people to pay the
taxes if they can't get into the
banking system.
As yet we have not found an
answer.
So. What we've done is we we
have ten? Offices currently
around the state and will have
eleven locations.
Soon.
Around the state.
Where taxpayers can file?
Can remit their taxes in cash.
If anyone is in that situation
and needs the pain cash you need
to get an exemption
first so call your local C. DTF
a office.
.
You get an exemption because
we've not typically don't allow
people to pan cash but but we do
allow it. For those who can't
get access to the banking system.
Get exemption and we will direct
you to location and give you
time and and date we are. Very
mindful of the security risks
and we are doing our best to. To
harden those facilities and
provide protection for taxpayers
to the public and for our own
team members.
.
We also face challenges I
mentioned around.
Enforcement there's a second
okay so we're working to make
sure people understand the
system.
And working to make sure the
people who are not permitted.
.
Hi get permitted.
Anyway I'm I'll be here all
night I welcome your questions
your comments your suggestions
you know we're here to serve you
the taxpayers so if you got
concerns please let me know
tonight or reach out your local
C. TFA office. Thank you.
Parents.
Thank you senator McGuire an
assembly member would.
Staff and everyone here for
having me tonight.
I'd like to provide you with a
brief update regarding the.
Our compliance and enforcement
programs within cal cannabis
within department of food and
agriculture. As Lori mentioned
in November of twenty seventeen
cal cannabis released that we
really Starmer agency
regulations.
During the public comment period
we received about one hundred
and fifty five comments
we're currently in the process
of taking that feedback from
those comments. And using that
to help us prepare for a regular
rule making package for release
later this year.
Assembly member would thank you
for mentioning this and I would
like to know. That we are aware
of the concerns of many family
farmers regarding the subject of
an acreage cap and you did
mention this. I'm due to the
pending litigation on the advice
of our CDFA legal counsel I
won't be able to speak to that.
A we do have two branches within
our division I'd like to give
you some updates on what's going
on in there. In December of
twenty seventeen count cannabis
began accepting temporary
cultivation license applications
through our online system as
well as paper applications.
As of this morning we have five
thousand tuner fifty six
registered users in our system.
We have thirty a hundred
applications submitted.
We have two thousand licenses
issued.
We have nine hundred and sixty
seven applications tonight.
The tonight applications have
been a result of applicator
about the Kents it I'm not
receiving a local authorization
or providing an incomplete
application.
For annual licenses there is
currently a legislative fix
being done through the budget
process.
That clarifies that CDFA has the
authority to process background
checks.
Want CDFA has this is sort this
authority we can begin accepting
annual license application.
Also staffer currently working
on setting up two programs in
our licensing branch.
That will be coming.
In in the future years of the
organic program and the
appellations program.
We anticipate having scoping
meetings this summer to receive
feedback to help develop each of
these programs as we move
forward.
For a compliance and enforcement
branch
we will be set up in six regions
in the state with staff located
statewide.
We have began performing site
inspections.
Since the beginning of February.
Site inspections and compliance
visits.
Rig for our temporary licensees
today our our complaints in
enforcement staff of performed
over one hundred inspections of
our temporary licensees.
And we're also working with
other state and local agencies
to collaborate on inspections
and I've received some feedback
actually today at the workshop
and also through emails.
Bet.
I thinking are and thanking me
for our come.
Unplanned staff in the words
they use where that they're very
courteous and respectful and
they're really out there to
educate our licensees and I'm
very happy to get that feedback
and.
It was it was very nice to hear
today.
Up for the reporting of
suspicious activities or illegal
grow sites we've set up like a
the cal cannabis complaint
hotline. And we have any in
eight three three number it's
one eight three three we Ted.
Through that line will take
information M. and investigate
the issue.
And the event that we have an
unlicensed grower will. Provide
education to them and and how
let them know what they need to
do so we can assist them in
getting on the path of
compliance.
Where growers fail to come into
compliance and depending on the
situation we may refer to
appropriate local law
enforcement or other agencies
but will be evaluating those
cases as they come to us?
With regard to the.
That cannabis track and trace
system.
The mouse cursor charge CDFA
with implementing a C. to sail
tracking system for cannabis.
In collaboration with the other
two licensing authorities CDFA
created the California cannabis
track entry system known as C.
CTT.
All commercial cannabis
licensees operating under state
issued annual licenses will be
required to use the C. CTT
system which uses radio
frequency identification plant
and package tags.
To track the movement of
cannabis.
CFA is also working with the
California highway patrol and
other state and local agencies
to allow them access to the data
from the C. C. TT.
To meet their mandated needs.
During the temporary license
period all licensees are
required to prop to provide and
retain paper invoices and
manifests
when moving product between
licensees. So that all cannabis
in cannabis products can be
accounted for in tract.
The licensing authorities
emergency regulations outlined
the requirements for the paper
documentation and we also have a
sample manifest posted on the
cow cannabis webs web page as
well as the cannabis portal.
TDF is confident that the paper
process being used during this
temporary license period what
adequately fulfilled the
program's needs.
In closing CDFA has successfully
provided training and outreach
to thousands of potential
licensees on the requirements.
Of the program through training
workshops such as the one today
we've attended all of the
bureau's workshops.
M. information on social media
online tutorials and all of our
outreach materials.
We're confident that the CDFA is
implemented a program that
maintains the final miss
fundamental mission of the
department. And is responsive to
the needs of our new
stakeholders third helping I'll
be happy to answer any questions
when we get to the public
comment thank you servicepac you.
Thank you I will move on to our
fourth panelist.
Here Mister Dennis please write
down thank you assembly member
would senator McGuire.
Good evening everyone thank you
for opportunity beer with these
you this evening my name is
Patrick Dennis.
I serve as a special project
director on Canada's information
technology.
I want to let you know that my
director Amy Tong officer
sincere apologies for not being
to be here this evening.
She has a family issue that
requires a sixth stay close to
her home in Sacramento.
First off the department
technology like offer our
sincere congratulations to the
bureau cannabis control.
Department food mariculture the
particle that health.
If you're successful launch
of your licensing programs.
Many people in each department
worked tirelessly.
On the launch of their life.
Many people work tirelessly to
ensure all the systems raid by
the statutory deadline.
Working with these three and
he's been a pleasure for the
partner technology.
And we look forward to getting
our strong partnership.
The canvas IT systems project.
On that campus eyepieces product
apartment ecology functions
primarily as a state I. T.
project oversight agency.
And is not responsible for the
direct management of the I. key
systems used by the regulatory
services.
For the statewide cans we had
cameras I. T. mission of C. T.
serves as a central coordinating
agency.
Facilitating communications
licensing with the licensing
entities.
Taxation antes
the legislature and the
governor's office.
We facilitate nineteen cannabis
workgroup.
That meets monthly.
The bureau canvas control
department of food and
agriculture and department
public health.
As well as a department tax and
fee administration.
And the franchise tax were all
participate network group.
Department technology also keeps
the legislature apprised
a progress of by hosting a
monthly briefing on.
On the progress of Canada's IT
systems.
Open are three parter
departments get their licensing
systems online was not without
challenges.
First of which was very short
amount of time that we had a
plan procure. Configure tests
and eventually implement the
systems.
The statutory deadline gave us
just fourteen months.
To complete all these items as
part of the launching the
systems.
Another challenge was getting
licensing program staff up to
speed on the respective
departments licensing systems.
The program staff for just being
put together. When the licensing
and he's intruder systems
development phase.
There was a steep learning curve
on both the program staff in the
projects teams.
To understand canvas business
model and understand what other
states have done.
However these challenges also
create opportunities for success.
And lessons learned.
For example logging the program
staff up to speed was one of our
challenges. We were able to
accomplish with the mutual
respect and teamwork.
Within the groups of each
department.
And with groups across multiple
departments.
Being able to move quickly on
contract recurrent was also a
key component to our success.
We leverage existing agreements
of the department of general
services.
To select the fastest possible
can procurement Avenue available.
While still having a competitive
bid process.
This couple with market research
a possible commercial IT systems
that were sued for the canvas
requirements allowed our teams
to move through.
The sometimes cumbersome
procurement process
as quickly and as efficiently as
possible.
Our collaborative approach.
Has been effective in getting
all three licensing systems
online.
And we look forward to
continuing.
This collaboration as additional
functionality and system
interfaces are developed.
And delivered to the industry
and the public.
Any questions I'm able to answer
here today I will work with my.
Colleagues at department
technology and our partner
agencies here on the panel.
To be able to provide your staff
answers as quickly as I can.
Without I'm looking forward to
the rest of the evening in the
hearing and answer any questions
that may arise thank you.
Before we move on with I think
Mike as Senate required I would
like to ask a couple quick
questions.
First fall to.
To chief Ajax arm I wanted
remember remembering back to
your very first week on the job
you were here in Ukiah your
member that day I did yeah I can
get a strange your hair it's
Beth. Yeah also we know. That we
appreciate that and and I what I
stone to commend you on the the
amazing job you have done. At
that time you know we we were
looking at the.
The rollout of M. C. RSA and
then surly prop sixty four
xcelerated a lot of the time
lines that that were set out in
M. Sarah say so Mike.
Mike commend you for the work
you've done to get us to to
where we are so my question is
is really.
Is is fairly simple.
In the next you know few months
where do you see the biggest
challenges for you as an as as
an agency.
And.
It what.
What would you will we foresee?
Going forward.
So a few things I won obviously
getting our we have to get our
final rulemaking now on our
emergency regulations are good
for one year from the date they
became effective so after one
year they do go hueso really.
Making those changes to.
Our rules Ted Jim to make
things easier because we're
already finding you know that
the nice thing about the
emergency regulations in and
we're now seeing how it works
with implementation. And we are
seeing there some things that
don't quite work I have people.
I'm I'm playing that somebody up
at the advisory committee said
this isn't working for nursery
and we go I go you're right it
doesn't so making those changes
to. To really help businesses
and it as long as we can still
ensure public safety. And the
other thing is enforcement I
mean that the you know right out
the gate people want to know
okay Allen licensed I'm pain all
my fees some pain licensing fees
on pain taxes what do you doing
about the unlicensed market. And
so I that is something you know
right now we have been focused
on on making sure were were
letting people know we're going
through up you know the internet
platforms people you know a lot
of our unlicensed folks are out
there just. You know advertising
and so we are contacting them
we're letting them know you need
to have a license
and we are it we are going to
you know given the information
they need a lot of people are
saying okay thank you we didn't
know how to apply for a. License
so we are focused on trying to
get them in the regulated market
but if that you know once we
follow up and people aren't
following through with that then
we have to. Take some action and
that's gonna take working with
the local jurisdictions.
And of course enhancing our
licensing system we had a
minimum viable product for
January one but we need you guys
need you know do we wanna make
it more user friendly we want
you to be able to. You know
quickly search you know cities
and counties and so continue on
with that so there's probably
more than you why the there's a
lot no no that's great that's
really helpful and will it is
you were talking Bob because I
will point.
Just today I believe Lee flee.
Has said their point all
unlicensed businesses off their
portals and I hope that other
platforms do likewise out of
respect for the people who were
in the regulated market now so.
My hat's off to to them for that
so of a Mister Mister parent and
and and and I just one other
question here and then I'm going
to Senate McGuire of C..
.
The number of people that are.
You have license for there it's
a it's a fairly small number
compared to the number of farms
we know we have so.
Are are we de I I really
appreciate the fact that that
that we're not taking a a hammer.
And and in in in enforcement
initially with folks who may not
be aware I mean.
There there's still places in
this.
District don't have internet
access by the way maybe not even
phones so.
So but but what people just may
not be aware so I appreciate
that you're not taken the hammer
hammer out first and. So are you
is there is there activity I
reach going on to try to to try
to. Get to people who may may
not simply may not know about
the laws and in spite of a lot
of publicity. M. yes we are we
are reaching out to as many
people as we can and one of the
things that we also did was.
Or for the people who may not
have the internet you know we
held.
Workshops in regional areas to
have them come in and understand
how they can apply.
It's not all online we do allow
paper applications for people
who don't have access to the
internet. And if they didn't
that they couldn't call us and
we will mail them paper. M. and
then we're just utilizing
through all of our.
.
Our partners in the associations
and trying to get the word out
to get as many people in the
door and licensed.
That the you know. For the
temporary licenses that you need
the local approval and so in
some cases there are.
If you look at the.
The number of online registered
users there's more and there may
be people who are. Waiting for
that local authorization and
then be able to come in the door.
So were aware of it.
And as were out in the
communities doing the
inspections like I said we're
focused on education right now
would we realize that there's a
long way to go the number is.
Lower than what we know is out
there and we are working to get
everyone educated and and in in
the system.
Thank you.
The cinnamon and. To miss
Majerus Thomas Ajax
there's been a lot of
conversation.
Spike.
Twenty eight states.
In America legalizing
recreational indoor*
medicinal cannabis
there's been discussion from
Attorney General sessions and he
may want to intervene.
I in those states that have
legalized recreational cannabis.
I find it interesting when
they're not going after the
opioid epidemic that's another
story.
.
What's plan B. for California
I when it comes to a potential.
A some potential federal
intervention with Attorney
General sessions I know it's
been thought about.
You can discuss Senate I. if you
don't mind say Jackson start its
out a and then cemeteries.
Well a at I as I said in my
opening testimony I I think we
where.
When when January third they
rescinded the call memo I think
we are all pretty disappointed
because.
We felt like.
.
When we first started we were
very excited that we're issuing
the first license and I think it
was us you know it was a big
deal for California and then I
felt like when when we got that
news it's sort of for that day.
It was it was a big story up but
we came out right out the gate
including a lot of California
leaders basically saying that.
We are our regulations still
followed all of the guidelines
of the call memos and we'll
continue to do that but we
didn't stop license scene we
didn't stop any of that in fact
we don't even see. Any people
continue to apply and so that
was the message we sat when I
can't change what we're doing
California has legalize both
medicinal and or an adult use
cannabis and we're gonna
regulated that is not the focus
of all of us up here is to.
Inflict a in follow California
law and the will of the people
and put that regulatory system
in place so I think our job.
Right you know I I don't know if
I'd call it planned beep it I
think we continue to make sure
that we have a comprehensive
regulatory program. That we're
going after the. Black market
we're making sure people are
getting into compliance and we
want to make sure that those
getting licensed with us that
they feel like they're going to
be protected by the state so at
any at. However we can do that
and I think it takes all of us
we wanna. I make sure that we're
not keeping people in harm's way
when they come get a license
with the state.
Thank you spenders.
Wilk.
We in some ways already moved
onto our plan B..
Because our job is the tax
collection
and we.
Are charged by the people
California with doing the tax
collection one way or another.
And so we have.
.
Explored lots of options.
And continue to explore options
but we haven't found any so
we're.
Taking cash which is not you
know was in our first choice our
second choice for a third choice.
Boat.
We're doing it because that's
that's the job we gotta do and
will continue and and just
echoing miss Ajax's comments
that.
You know our.
The people California spoken and
we're that's.
The charge that we have and will
do whatever we can to to carry
that out faithfully.
We're gonna get into public
coming here just a bit at one
last question before we move on
to the next panel that has to do
with.
How work continuing to evaluate
the role at a pop sixty four?
There's been a lot of discussion
is the some members Ted is
wanting to be able to protect.
Small family farmers who have
been the heart. Of the canvas at
industry here in California for
decades.
And there's been a lot of
discussion about fees is well.
How do we evaluate?
I if the fees are too high
I and if that has been a
challenge bill to get folks
migrate to migrate from the
black market in the light of
regulated market. Your talk
about your process up with that
in a as we move forward
critically on the issue of fees
and if that maybe hindrance bid
to get folks legal.
Well are on the fee question D..
We're very aware and we've heard
from people in the industry in
from law enforcement that there
is.
You know a pretty robust black
or grey market out there is as
Sajak said you can go online you
can
keep your phone and see. Lots of
people selling cannabis.
Who don't have permits?
So the. You know and and their
local fees on top of as you all
know the feelings that that we
charge.
Our Caesar set.
By prop six.
Buy you all home so we.
.
And and by the people so we.
We're sort of sat in those but
we've got to.
So the two options you just
those fees I guess or to I
really ramp up enforcement and I
think.
To to make sure the people are
complying in that that's in
level playing field and I think
that's our.
.
I think that's the real
challenge in the months ahead is
to to ramp up.
I enforcement.
Yeah and it was every man up is
that we've seen some states like
for example Washington that said.
Exorbitant fees both when you
combine local.
Estate and add as well as an
excise tax
and they had to be ever bring
that down.
I. S. is similar and I were just
talking I'm in a legislature was
looking at a reduced fee
schedule. Up but then prop sixty
four is passed that then set
fees per voter mandate. I think
the important part as we
continue to move forward. Is
evaluating what's working right
now I know you all are what's
working and where we can improve
upon and I think that maybe one.
That is going to be at.
The front alas is figured.
Our it high. Number of fees.
At hindering individuals who
Monning that come into the legal
market. And I don't know if any
of you I. from your experience
from other states one of the
other. Touch on that.
Well I Jeff I can talk about our
licensing fees are licensing
fees for the bureau are set by
regulation and we can only
collect what it's going to take
to administer our program like
really known as fortunate the
costs yes.
So we did work with an economist
to set our fees and we had by
statute we had to scale them so
we did scale them by the size of
the business. Now the hard part
was is when we. I determined
these fees we work quite sure
how many licenses we're gonna
have and what license types and.
You know how many so it was
really hard to determine. A no
so we had to make some estimated
gases.
So what we will be looking at
is over the next year that the
nice thing about being having
our fees and regulations as we
can change them so if we are
charging too high we're taking
in too much money. Then we can
lower those fees I think this
next year is really gonna give
us idea of how many licensees
are coming into. And and how
much you know were also the last
two years we've been operating
with no funding because other
than that.
The loan from the general fund
in and and having to pay that
back but I just want to say this
when it comes to fees.
Are you you put us here we we
need to run our programs
efficiently and that's part of
it and I am committed to running
our program efficiently because
I don't want to charge. Anymore
than it takes to administer that
program and I and that is our
commitment here.
I just think right now O. we've
we've we've got to see what the
you know this year brings us
also are temporary what you know
we we work hard to make sure
those temporary licenses were
free we did not want to charge
for those temporary licenses so.
Out we you know we're hoping
that helps with some of this.
Thirty seconds or less because
we needed to turn next panel I.
there's gonna be a big opening
of the north coast office later
this summer.
Which we've desperately needed
I you want to just touch on that
thirty seconds or less about the
one stop shop that will be
opening.
So I all of a sudden both that
C. TFA CDFA public health.
Water resources.
Will all be opening an office
set up in Eureka.
We will have.
Be able to take both licensing
fees and taxes a we're also
trying to establish.
Offices for to do some license
seems so we'll have program
staff up there that can answer
questions do licensing. And.
Probably will start off small
for the first couple year and
then expand but that.
Looking to happen.
.
We're hoping prior to July one
the big opening but yeah knock
on wood.
I think the other item that
you've been working on his right
now folks have been trucking
down to I. Sacramento with cash
payments and that's been the
other piece of trying to better
resolve is have the north coast
office of folks who have to
drive hundreds of miles with.
Tens of thousands of dollars in
the pickup
had to be able to go deposit
that's been another big.
Focus areas so we have will
have six offices in northern
California that.
Where people can remit and
again if?
If you have questions about the
please contact your local office
and no.
Take care of you.
Thank you so much you want to
say thank you to our state panel
and a wonderful overview they're
gonna be hanging with us here
for the rest the evening. Pan
ready to answer your questions
here in just a bit I. as we on
adjourn this panel we're going
to be bringing up our local
panel. I. in the local panel is
going to be focus on
recreational cannabis and the
readiness of local government
we're gonna be providing an
update on ordinance
implementation. Permitting
compliance and challenges ahead
I and I think what you're going
to hear tonight is honest
feedback about where were at.
In where we're going that we're
gonna be welcoming Ignacio
Gonzalez we column Nash he's the
intern director for Mendocino
county planning and building. A
he is charged with are reviewing
site planes zoning requirements
and clean the processing of use
permits in building permit.
Andy guy necessary for I
cannabis cultivation permits
we're also gonna be welcoming
John Ford he is the planning a
building director for the candy
of humble he is twenty years
experience. I. in Mister Ford
has also been focused on
overseen all cannabis related
permitting is wells cannabis
land use ordinances
as well as any potential
environmental impact.
To be able to give us a in I.
towards agriculture we're gonna
be inviting Toni Lineker.
To the panel he is cinema
counties agriculture
commissioner in prior to his
experience in cinema county he
proudly serve the county of
Mendocino needs north coast
roots in his blood. I. in he is
overseen all issues in regards
to agricultural cannabis permits
for the county of cinema he'll
be providing this perspective of
three different agriculture
commissioners. Both from cinema
county medicinal counties wells
humble without further ado to be
able to give us a local
government perspective we're
gonna be turned over to Mr
Gonzalez he has five minutes and
I'll give you a thirty second.
Heads up when you get close to
it.
Nash the floor is yours.
If you can just push that.
They're not here we go.
Okay so what I want to be able
to do is to give everybody an
overview of what D. V. what have
we been dealing with that first
of all wanna go ahead thank my
staff who has worked.
Tremendous long hours in trying
to make the.
Program a success in our
department
so basically Mitchell senior
counties regulations for the
existing cultivation sites were
implemented on may fourth.
Two thousand seventeen.
We have an application deadline
for existing cultivators which
was originally stated to close
on December thirty first.
Seventeen that was extended by
the board of supervisors to June
thirtieth of two thousand
eighteen so now applicants have
time to basically comparing
address.
The county regulations with
those of the state that become
effective on that became
effective on January first.
So applications for new
cultivators.
Opened up.
It will new coal new
applications will open up on
January one twenty twenty.
We've had at least two
amendments to the current
ordinance.
With more being reviewed.
Over time and again this is
what what I would call or as
Wilk stated earlier.
Were flying the airplane and
building it at the same time so
we're looking at amendments were
looking to see what works what
doesn't work and so on.
So this is a work in progress we
know that there's changing state
law.
Things are changing so we have
to adapt as well.
As far as the cultivation permit
process
of permits are issued by the
county agricultural
commissioners office.
There are eight hundred eleven
active permits in the system.
As far as I know seventy one
cannabis cultivation permits
have been issued by. The ag
department to date.
D. county planning department.
That I oversee basically is
looking at reviewing
applications for zoning. For
building and environment health
will also look at those for
health compliance.
So we've actually had a total of
five hundred seventy four
permits have been sent over to
us for review.
We've actually have released a
hundred ninety one permit
applications or that we've
cleared in. And sent back to the
ag department.
So we know there's a difference
of three hundred eighty three in
there but again a lot of these
are incomplete.
Insufficient information has
been submitted and so on.
So.
.
Just to give a little bit more.
Flavor what's going on.
We have had some challenges up
to date
a lot of the challenges center
around.
.
The fact that this is a work in
progress that.
We do C. changes at the state
we C..
The adaptation of our local
program.
To work with those changes.
Allot a large number of these
permits many times are
incomplete because what we have
is unique situations.
Are each cultivator each
business each property owner of
will possess a challenge to the
department.
In again we're looking at.
.
Examining in depth in reviewing.
With these applicants.
These challenges and some of
these things are grading issues
drainage on permitted structures
set back issues and these are
just to name a few of some of
things that we're dealing with
so what we're trying to. Work
with a lot of these folks and so
on and so some of the amendments
that are. That are going through
right now. That are being
considered would be to.
Remove the admin permit
requirements in the range lands.
Remove the admin permit for
existing grows in TPC enforce
lance and we're currently
working on micro business.
The micro business approach
and then the other thing that's
that's out there is the issue of
of.
.
Permits in the coastal zone
which again you know we have to.
Tread a fine line there because.
We can't necessarily do things
in the coastal zone that we do
inland because of. Being
regulated at the coast by the
coastal commission.
So these are some of the
challenges the other thing that.
Thirty seconds
that we've seen is.
Were trying to deal with a
round peg a square hole and
again.
Well I just talked about some of
these things and that's why
remaining ordinances in one of
the biggest things that that has
inundated us.
Was the fact that we had the
fires in October and we were
already stretched pretty thin
with staff.
And now we have in this.
Do a balance with recovery and
cannabis is wells other.
Permitting application so with
that that gives you an idea
what's going on in the scene.
Thanks so much for seconds also
the reason why we want Mr
Gonzalez Sir for here is because.
They are overseen.
Two counties that are among the
most cannabis rich.
Candidly North America there are
four counties in this state that
generate about sixty percent of
the cannabis in North America
that's been to see no humble
Trinity like.
I M. we're grateful that both
your here tonight Mister Ford
the florist Georgia five minutes
Sir.
Take your much in humble county
we clearly see the regulatory.
Environment for candidates to
relate to things.
Permitting enforcement.
Humble county was an early
adopter of an ordinance adopting
originally Ted during two
thousand sixteen.
That was followed by a lawsuit
in a settlement agreement and
modifications the ordinance in
September of two thousand
sixteen.
One of the things the settlement
agreement did was that it
required that.
Or limited the ability to
modify the ordinance
until. An E. I. R. was prepared
and so we've been working on
preparing I. R. and a
modification to the ordinance
ever since.
Currently we have version two
point oasis affectionately
called. A through the Planning
Commission in going to the board
of supervisors on March
nineteenth.
And.
We expected it to be effective
a sometime in late April.
Well the other things the
settlement agreement did was set
a deadline for submittal
applications.
It's probably hadn't affected
nobody could have thought about.
Isn't the deadline was December
thirty first two thousand
sixteen.
So we ended up getting twenty
three hundred applications
submitted during that period of
time.
Fifteen hundred of those
applications were submitted be
tween December fifteenth and
December thirty first of two
thousand sixteen.
We literally were going to the
bank four times a day to posit
cash.
Well I'm one of the things it
isn't going so well is we're not
processing those as fast as we
would like.
Currently we have a hundred and
there been processed to
completion I used to have a lot
more hair. I keep a cut short so
it'll pull on it too much.
But we have been able to
identify ways to allow our local
existing cultivators to submit
to the state.
We have issued a three hundred
sixty in term permits.
And we're the good news about
that one of success stories is
that we have also received over
seven hundred license referrals
from the state we wanna say
thank you to the state agencies
Nancy jacks.
For per for your work in getting
those referrals to us and were
able to turn them around so many
of our existing cultivators
manufacturers processors. Are
now licensed.
We also expect start receiving
additional applications in late
April or early may one version
two point oh. Is adopted one of
the other things we did this
year is modify and change our
code enforcement ordinates it
allows us to I. impose. Steeper
penalties so one of things we
have been doing
is I. doing sweeps of areas and
identifying areas that or sites
that are in violation they're
not in the permit process.
We've issued about a hundred.
Notices of violation and
notices who obeyed without about
six a sixty five percent rate of
people coming in and entering
into compliance agreements.
Some the challenges that we've
seen is frankly it's really hard
to ramp up at the level we've
had to ramp up to.
We've problem we've right now
we've got twenty staff six
consultants there's probably six
fifty people dedicated
within day county of humbled
just the processing canvas
applications.
And we started with very
inexperienced people I. you
can't hire really experienced
people. The consultants were
inexperienced everybody was an
experience so it's there's been
a steep growth curve there.
One of the other difficulties is
managing expectations a lot of
people came in thought that they
filed an application that said
they're going to cultivate a
certain amount. They went out
and blew their slide up to that
amount only to find out that
nope that's not what they could
do.
So one of things we've had to do
was sit down with people and say
if you started before you have a
permit you're in violation.
Start assessing fines for that.
And one of the things that is
most displeasure bowl of my job
is having sitting down having
settlement agreements with
people.
To tell them that they started
early and violation and to
assess fines of assess fines up
to eighty thousand dollars.
Which is really painful.
In fact Dodd in on Tuesday and
Wednesday of this week I had
five of those meetings.
About twenty five percent of our
applicants fall into that
category thirty seconds
thank you.
I I would just I'll give you a
story that to happen yesterday.
Had applicant come into on the
settlement conferences they were
completely. In rage when they
walked in the door the reason
they worry and raids was because
they thought that they were
doing exactly what they were
told to do. They're given advice
by one consultant to move there
canvas cultivation from one
property to another which they
did which to us is a violation.
And then another consultant
wrote that up submitted to us is
an application so we sat down
with them to tell them that
they're in violation it's really
hard to tell somebody that
you're in violation you can't do
what they've already done.
Because of the zoning in the
land use and everything else and.
.
I I do have high hopes moving
forward I of C. that our staff
or consultants.
Or more experienced there's
better communication going on
with the state agencies were
currently missed a meeting with
C. W.. Or California part of
just one like twice a month
and then.
We are on actively enforcing
against the black market
thank you very much.
Thank you so much for support.
Clearly we have some growing
pains and there's gonna be some
challenges ahead and I know that
will touch on those and just a
bit thank you so much for your
work we're grateful that Toni
Lineker is here to be able to
put on the hat at Vidak
commissioner India. To give his
perspective of how permitting
it's working.
It within the greater north
coast region but then focusing
mostly on some candy Mitchell
incurred the foreshores five
minutes.
Thank you senator McGuire it's
great to be back in Mendocino
county.
I'd like to start out by
pointing out that I'm not a
planning director my perspective
is a little different. And I'm
approaching this from the
perspective of agriculture. And
how conventional agriculture is
regulated.
What I like to say to people is
that despite how we may define
cannabis cultivation in state
law? Or Orange County code as an
agricultural product or what
have you there's no colloquial
definition of agriculture that
I'm aware of that that cannabis
does not fit within.
In my presentation I'll give you
some background on our efforts
in cinema county give a brief
overview of our permitting
program some numbers and then
talk about some of the
challenges were facing.
As a little bit of background
cinema county currently only
allows for medical commercial
medical cannabis businesses and
has not yet approved.
Commercial adult use businesses
at this time we began accepting
applications in July two
thousand seventeen we divided
the permitting responsibilities
between the planning department
in the I. commissioner. The I.
commissioner issues ministerial
permits for outdoor cultivation.
A ten thousand square feet on ag
zoned properties with a few
exceptions.
And the rest is issued by the
planning department.
It's important to note that due
to extreme pressure from
neighborhood groups our board
has prohibited commercial
cultivation and rural
residential and Agra's attention
zoning.
This issue is by far the most
contentious issue that our board
dealt with during the
development of the county's
ordinance.
By all accounts this was where
many of the estimated five
thousand to seven thousand
cultivators in the county were
operating so as a result we have
a lot of displaced cultivators
they're looking for a home on ag
zoned properties or other
eligible zoning.
A key goal of the county's
program from the outset was to
bring existing operators into
the regulated market.
In that spirit the board of
supervisors adopted a penalty
relief program in may twenty
seventeen.
The penalty relief program is
designed to allow cannabis
business is to continue to
operate without being subject to
land use fines while the
complete the work necessary to
either become permitted or cease
operations.
To date two hundred and fifty
have signed up for the penalty
relief program they have until
June first of this year to
semitic up full and complete
application or cease operations.
To date the county has received
a total of one hundred fourty
one applications for cultivation
seven applications from
manufacturing and seven for
distribution.
I will be focusing my comments
tonight primarily on the
permitting process for
cultivation.
Based on what we knew of the
existing cultivation that was
taking place in the county and
the survey that CDFA conducted
early in the process we had
anticipated a lot more than a
hundred and forty one
applications.
I think it is safe to say that
we were expecting at least four
to five times that amount
I will break down the hundred
and forty one applications a
little bit further for you.
Of the hundred and forty one for
commercial cultivation sixty are
for outdoor cultivation forty
two for mix light thirty nine
for indoor in acres the outdoor
cultivation. Amounts to thirty
point seven acres makes light
seven point nine acres and
indoor four point three acres
for a total of forty three point
one acres.
At this point only five permits
have been issued out of the
hundred and forty one
applications.
I think it's important when
we're discussing environmental
impacts such as water to keep
the scale of this land use in
perspective.
Under the current zoning
restrictions are limited parcels
in cinema county eligible for
outdoor cannabis
we also have a limit of one acre
per parcel with regard outdoor
cultivation.
Indoor cultivation virtually
all industrial space was gobbled
up early on in the process.
We are going on nine months now
accepting applications and have
only thirty acres about drug
cultivation at the most under
the current zoning requirements
I could I can't imagine more
than about a hundred fifty acres.
Ever being permitted in cinema
county.
I'd like to switch gears now and
talk a little bit about the
challenges we have faced and are
facing that Eric fat affecting
the success of our program.
If the overall goal of the
program was to create a
regulatory scheme that favored a
corporate big dollar new money
industry then I think we have
succeeded.
If the goal was to create a
workable regulatory pathway for
existing cultivators to become
legal I think we've failed.
From my perspective there are a
multitude of reasons for this
and I will try to hit on a few
of the major ones as I see them.
Senator you've about thirty
seconds so it's Camille and just
get to the good part.
His Hannah wants eight just
I want to make sure that we're
able to hit everyone in that
it's also wanna remind you
Republican have a few dozen
folks are or have public comment.
So what we do this it works for
folks will say sixty seconds can
ask Mister Leonard appear to
wrap up. I mean he can also. Be
able to speak again in the
question section some cylinder
I'll start with C. club because
of the county and state programs
are subject a secret counties
must do either medicated
negative declaration rifle E. I.
are to start their program.
Takes a long time to do any I.
are and with this land use it is
difficult to establish a
baseline due to the lack of data.
In addition you'll have to
defend your ER in court against
legal challenges so that can be
expensive and type your program.
We chose to do a mitigating
mitigated negative declaration
which essentially means that you
have to mitigate all the impacts.
Cannabis cultivation this is the
reason why the environmental
requirements are over the top no
agricultural industry that I
know of could withstand the
burden of secret compliance.
So I'm sure not sure how we
expect cannabis cultivators to
do so.
Any other ag industry would be
run out of business if they were
held to the standard. As a
result of sequel in cinema
county the environmental
requirements are exponentially
disproportionate to the size and
scale of these operations.
The analogy that comes to my
mind is is killing a fly with a
sledgehammer.
There's a long list of studies
to required to attain a
cultivation permit hydrogen
logic studies for ground water
biotic assessments cultural
resource studies enrollment in
the water board program. Laken
streambed alteration agreements
on and on and on as far as I can
tell the only people that really
benefited from this are the
consultants.
It takes.
Sooner.
We're is a thirty seconds you
can also complete what you don't
hit a as soon as we complete the
other panel so please if you
have thirty seconds on network
we come back.
I'm it takes tens of thousands
if not hundreds of thousands of
dollars to get your foot in the
door of this industry.
Outside of measures to protect
public safety and security and
perhaps some provisions related
to odor mitigation I see no
compelling reason to regulate
this crop any differently than
other crops.
This has.
This has certainly impacted the
ability of small existing
operators to participate.
I'll cut through some of this
stuff and just say the local.
Control while it has its
benefits and also has major
drawbacks.
And I'm concerned about
conditional use permits and
hearings in finer boards of
supervisors.
I'm cutting through a lot of
the things I was going to say
but I'm also meta.
There is a lack of business
certainty I. which is occurring
largely as a result of this
local control not only do
businesses have to worry about
federal prohibition but they
also ought to worry about
uncertainty at the local level.
Its hard to build a house on a
foundation of sand.
The uncertainty inherent the
conditional use permit in
process and compounded by the
fact that the county can
essentially repeal that
ordinance overnight is
contributing to this.
So in summary.
I believe the major barriers to
success of the program are
excessive regulatory
requirements that result in an
overly complex and expensive
process coupled with business
uncertainty brought about by the
mechanisms of local control.
I am concerned that we may be
perpetuating the black market by
not having created a viable
pathway for small family farms
here on the north coast
.
Well ladies generate merger and
there go.
I know what to say think you so
much.
To our panel.
To our.
Buildings.
Swells agricole added.
Cinema count.
We're gonna hold our questions.
It's M. Mennonite that works
for.
Because we want to make sure
that we get to all of you here
tonight beer to say your piece
is well. If it works for all of
you would like to be a to move
on to our third and final panel
where we're going to hear from
the business leaders out from
the cannabis industry. I. as
they're coming up and we're
switching out nameplates we are
going to turn it over to us in
the room would. To be able to
provide the overuse and again
thank you all for your patience
as well and that's.
That's good or expand on.
Great what so other gathering up
here I'm gonna go ahead and
introduce them. So we can keep a
keep keep going here for
everyone tonight so. So this
panel were calling this the grid
the green gold rush will it pan
out for California's businesses.
Our first speaker will be Tim
Ricardo the cannabis program
manager first of cinema county
economic development board
Mister Ricardo is the.
He leads the business retention
and expansion program helping
local businesses connect with
the resources they need to stay
and grow in cinema county. Timmy
light utilizes background in
economic development in urban
planning to help businesses
navigate regulatory issues and
obtain valuable tax credits and
exemptions.
I'm Hezekiah Allen should be no
stranger to to a lot folks here
of the president of the
California growers association
Hezekiah Allen excuse me
executive director. Of the
California growers association
of most prominent grower and
cultivator oriented cannabis
voice in the state Allen was
born and raised in rural
Humboldt County where he now
works to protect the interests
of both growers and business
owners.
And to improve the conditions
for the California cannabis
industry at large.
I bill silver C. E. O. up can
craft.
And his the a family owned C.
to shelf of northern California
Canibus producer and distributor.
Sober was the former dean of the
cinema State University school
of business economics has a PhD
in business from the university
of Washington.
The company today somewhere out
here I think by Tiffany. Tiffany.
Duvet chief information officer
can craft
and then finally on Michael
Steinmetz the C. O. flow Connie.
And. The first sustainable son
growing cannabis brand to
partner with small biz small
farmers in in both men seen on
southern humble counties to
solve various cannabis products.
Steinmetz is a graduate of
Carnegie Mel get Mellon
University.
It do a don't double degree in
met mechanical engineering and
economics initiative
so you each have five minutes
and I know it's short and we end
and Senate requires really good
if that thirty second warning.
So at this point that Mr Ricardo.
Assembly member would and
senator McGuire for having me.
Toni is gonna be a tough act to
follow.
But I get to work with them
everyday and it's always fun.
cannabis program manager is
housed at the economic
development board and this was
it. A decision by the board of
supervisors Todd the position
that's in charge of the multi
agency implementation not be in
a regulatory by department so I
get to work with the business is
on a daily basis. I'd help them
navigate the regulatory process
I'm so honored to talk today a
little bit about some of that
business.
Challenges those businesses are
facing as well as some of the
challenges to local government
in implementing.
Our ordinance and props sixty
four are before we get into that
I did want to briefly touch on.
The temporary licenses and
congratulate the state I in my
experience that has gone out
very smoothly.
And efficiently on and we have
about seventy five businesses in
stone county that have.
Receive local authorization and
cut temporary permits I. so they
have a hundred and twenty days
of business certainty.
I however it is the uncertainty.
That the cannabis business
space but I'd like to focus on
today.
.
So partisan certainty is to be
expected as these businesses
move from the collective model
to a profit.
For profit model and a heavily
regulated business
however businesses thrive when
they have a high level of
certainty and can make informed
business decisions to forecast
their cost taxes and supply of
materials.
I talked everyday with Canada's
businesses that told me about
their difficulty in making plans
to move their businesses into
the regulated market.
Due to the unpredictability of
the local permitting process
they're changing relationships
with dispensaries and
distributors and the volatile
price scene and supply of
cannabis that has entered the
regulated market.
Even long standing practices
such as training at the
cultivation site have become
very difficult due to building
code a requirements.
I'll win every number and date
that these businesses have to
plug into their pro forma has so
much uncertainty.
Becomes very scary to risk your
life savings and enter into the
regulated market.
This is exacerbated by the fact
that it can cost tens of
thousand of dollars I to get
your foot into the door even for
small scale cultivation such as
cottage grows on.
I feel that.
Those that reach out it to me
to inquire about the cost and
time line of.
The permitting process.
I really feel for them because
I I can't provide a lot of
certainty on the.
It is a at minimum a three month
process and can be up to a
twelve month process for a C. UP
I and those as touched on before
can involve. A lot of public
input which adds further
uncertainty.
A from the government staff
perspective other regulators are
struggling.
With the hundreds of unforeseen
questions and quirks that come
with implementing a new
ordinance
I especially one that was very
quickly out of step with.
State regulations
I took a tremendous amount of
staff time and energy.
Developer ordinance was that
which was adopted in December of
twenty sixteen I'd start
implementing that I'm and now we
are we're artiste faced with it
being quite out of step with the
state regulations and looking to.
Updated and go through that very
large and look.
Labor is public information
process again in order to update
our ordinance.
.
Just as the businesses that I
talk to have a very difficult
time projecting revenue.
Sodas local government I'd
business tax uncertainty trends.
Businesses uncertainty
translates into government
uncertainty.
As I mentioned developing and
implementing the new ordinance
requires a tremendous amount of
staff time.
Which is why we have a specific
local cannabis tax to fund the
creation and implementation of
the program.
I. as Tony mentioned our board
of supervisors had the foresight
to understand we have a large
existing industry that we could
not make illegal overnight. We
had two hundred fifty businesses
take advantage of the penalty
relief program which allows them
to continue operating. I. if
they meet certain requirements
and those that have a complete
application by June one twenty
eighteen can continue operating
as their permit moves through
the process.
This is extremely valuable as
the as I mentioned because the
permit process can take.
Twelve months.
I this also.
Provides the county was some
level of certainty as as far as
tax revenue for the next fiscal
year fiscal year. However due to
the high cost of permitting and
the uncertainty. Of the a
hundred forty one applications
that we've received a we've
approved five and we have twenty
five complete applications
so at this time. I.
We. We would only have thirty
business is legally operating
incident accounting and those
that would be eligible for
taxation some really hoping that
that.
Many other businesses can come
forward and complete their
applications by the June one
deadline thirty seconds.
So.
Got moving on to some of the of
financial impacts or the
economic impacts.
.
You're one of the biggest
challenges as I mentioned has
been neighborhood opposition.
Many operators have been
quietly operating it for many
years.
And.
Without their neighbors knowing
but due to the necessity of
public notice scene and the
public process the neighbors are
learning about these operations
and coming out.
To.
.
Against them and as we've seen
in that place is like Calaveras
ideal locality Atkins quickly
change.
The direction of the cannabis
program in the ordinance.
So some county does have unique
position many cities can
regulate.
Some of the impacts by keeping.
The operations indoor and
buried.
Large rural counties have large
houses they think have a lot of
separation from residences.
Some accounting has unique
situation where we have small
parcels an egg I interfacing
with residential.
Development quite frequently so
this has created quite a bit of
conflict Tom however is the
smaller parcels near residential
ag that are attracting this
smaller operators because
they're more affordable and they
can have a resonance. And
operate their business
so I do think the it's very
important to support those
smaller local operators because
those.
Business is retain money in the
community and they spend it and
have a high multiplier effect.
Social security.
So McGuire assembly member would
thank you for the opportunity to
comment today it's tremendous
honor and a great responsibility
to provide testimony at this
important and difficult time in
California.
I'd also like to thank everyone
here today for all of their hard
working courage to get us to
this point and a special thank
you to Casey o'neill Janeane
Coleman a Patrick sellers for
their work to finally organize
the mighty M. C. GI.
I know many C. know growers have
a place in the future doing what
they have done for decades
providing the highest quality
sustainable cannabis to the most
discerning connoisseurs. Cal
growers is thrilled to finally
have a partner here in Mendocino
that embodies that vision
locally.
Growing up on the north coast
legalization was the thing my
childhood dreams are made of our
culture was one of resistance we
grew cannabis not to get rich we
grew to get by.
These ideals came to cost
medicine on humble county of
some of the highest arrest rates
per capita for cannabis in the
state. The impacts of the war
were fought desperately in our
rural communities.
Reducing the crimes getting
people out of jail cleaning up
criminal records these things
can't happen fast enough
knowing that a majority of
Californians agree with this
truth for which so many of M.
marginalized and prosecuted is
healing.
In that way legalization is a
good thing.
However the devil is always in
the details and there were a lot
of details and prop sixty four.
It is often suggested the
growers don't support
legalization because of how it
will impact price
eventually price may become a
limiting factor and it might be
a priority issue. But our state
is not there yet.
Right now policy barriers in one
time costs are the leading cause
of concern unfortunately because
of time constraints I won't be
able to detail the specific
challenges that growers face as
they work to comply.
That's that I can say that the
first sixty days of legalization
of lived up to our expectations.
Unfortunately a good forecast
does not lessen the severity of
the storm.
I'd say that in some ways we're
seeing the worst possible
outcome in unregulated market
flooded with great products many
produced and sold by people who
desperately want to license.
But are not able to comply.
Consumers are finding better
prices more choices and better
access in the unregulated market.
The calls for enforcement are
reaching a fever pitch yet we
have fair barely begun licensing.
A vast majority of businesses
are unable to obtain permits and
licenses remain elusive
a few businesses described
smooth sailing.
As competition is shot out and
their advantage in the market is
solidified.
For many I hear that the first
sixty days have taught us that
no matter how hard we work how
compassionate community minded
we are as business people we are
still at a disadvantage.
At times it's even felt like
those values have put us in a
worst disadvantage.
It's not a lesson I think the
state of California wants to
beat.
The moral legitimacy of this
approach must be questioned
especially in light of the role
that compassion and justice
played in the passage of prop
two fifteen and prop sixty four.
Some of the policy outcomes I'm
seeing the behavior I'm
observing in the industry make a
mockery of those values.
Legislative action is needed to
assure a level playing field and
ensure independent businesses
can enter the market otherwise
access the capital position in
society and other forms of
privilege that marginalize
growers and business owners
don't have.
We'll continue to be the key
components of success.
There are few specific
legislative actions that can
make a huge difference first tax
reform you both know from your
working twenty sixteen that the
current tax laws fundamentally
flawed. Can be improved
significantly downright cannabis
tax reform is likely the best
way to ensure a level playing
field look forward to talking
with both feet about the details.
Second enforcement priorities as
Casey o'neill stated last week
in the assembly hearing
enforcement without opportunity
is a failed paradigm are
imperative is the California
building inclusive markets but
we also call on the legislature
to articulate clear. Enforcement
priorities and guidelines for
all state enforcement agents.
Third tier timelines where ever
possible state agencies should
look for opportunities to expand
extend timelines.
Especially when it comes to
cleaning up decades worth of
environmental damages
small growers can't fix the
problems big timber put on our
watersheds.
Applying the concepts appeared
licenses in the
to these timelines could have a
profoundly positive impact in
the communities I represent in
the watersheds I'd love.
As to what is coming my crystal
ball is foggy what I can say
with certainty is that many in
our community at our break and
many in our community are at a
breaking point.
It is not an exaggeration to say
that a crisis is looming.
The outcome can be bad or it can
be worse.
The outcome will largely depend
on all of you here in this room
those listening on the radio or
watching on the internet.
Special you senator an assembly
member you've both done a
commendable job I know you know
there's a lot more work to do.
My message tonight is simple we
don't have a moment to spare.
Thank you again for the
opportunity to come.
Thank you Mr sober.
Senate member would center
McGuire my north coast neighbors
thank you so much for having me
here tonight some honor get to
speak with all of you.
Like many of you I came here
straight from work and a lot of
some challenges I'd like to
present I just like to say it's
a good day when you have a
chocolate chip cookie for dinner.
Thank you very much for your
hospitality us specifically I'd
like to talk about three issues
Bob banking taxes. And.
Child resistant packaging.
With respect to the first
banking I'll I'll use us center
McGuire your phrase.
In conducting a quick survey of
how many people here by show of
hands please think it's a good
idea to drive around tens of
thousands of dollars in the
pickup truck.
Note that the audience vote is
zero it is rare.
In public policy to have a
hundred percent polling on an
issue.
So whether you're pro or against
the industry no matter what you
think about the specific issues
everyone agrees we need to do
something different about
banking.
My please please find a way for
us to bank this industry it'll
help all the other issues we can
resolve this problem will keep
all the safe. Well and will help
us conducting a certain business
environment.
What we banking impart what
kind of bank our taxes and?
As good citizens good community
members we want to pay our fair
share we're happy to do so. Of
the question is is our current
tax rate a fair share of
something interesting one of the
details in the tax used.
Is that the.
High tax on cannabis leaves the
attacks cannabis leaves is
higher than the tax on flowers
but what this does is penalize
those of us that are making
products for the medical market.
So that that the cannabis leaves
are are are the trimming in fact
back in the day those are mostly
the waste product we've taken
that and turn it into a medical
product for people. And yet
we're taxed at a rate of such
that it makes it hard to do that
product in a way that we
continue to be in business and
when you. Of reexamine the taxes
please look at this differential
between the higher rate we get
for the tram.
Also.
Is that in C. heard especially
from the panel beforehand.
Is clearly shown that the.
High tax rate is fueling the
the black market.
We do want to come into the
White market we have many
colleagues and friends in the
St that we're working with and
and the tax rate needs to be it
sat at such a rate. So that the
white market can work in all
this can P. and part of that
market that the black market
hurts all of us.
Of finally it's an odd position
to be advocating against child
safety are M. it's not an M.
veal position might my wife's a
pediatrician. So up please
listen carefully to what I'm
saying I'm not advocating
against child safety.
But I do think we need to take
a look at the regulations for
for child safety packaging. Of
many of us have kitchen sinks I.
adventure say most of us.
What's underneath that kitchen
sink
a whole bunch of of hazardous
chemicals typically that don't.
Have child safety packaging on
it.
Similarly.
Many of us.
For in the canvas industry
might have been the alcoholic
beverage in which you have here
props in the wine industry.
Those enclosures aren't child
safety yet yet we've are
instituted that this this very
odd and difficult set of
regulations on our product.
Furthermore.
To add to it we have the
enclosures.
Peyton closures that we have to
put all our product into a the
effect of this is that we've
compromised another value and
that is one of child of a child
safety against sustainability. I
think we can have both Ganna
Unkar arguing that we do
anything to put our children
harm but let's do what makes
sense so that the packaging
requirements now as. A as in the
regulations of are expensive
it's a lot of plastic.
It's not what we need to do so
those C. things up banking the
taxes and that the child safety
provisions on the frontline are
things that are causing us some
difficulty of right now. Think
every time tonight.
Nnova.
Michael floor's yours thank you
senator Dodd to huge honor to be
here today.
I'm last for the evening so try
to keep it brief.
But you know it in a nutshell
Slocan as a distribution company
I. we got a distribution hubs I.
northern California southern
California as well.
But we've also made huge
investments in this region in
Mendocino and humbled and I'm
incredibly grateful for our
board of supervisors.
Caramel.
Planning a building I've had
the experience with multiple
agencies in multiple areas of
the state and its. I'm unlucky
to call this home.
So thank you so much your help.
I'm you know what excites us
that flow Connie everyday what
wakes up every morning is we
feel that at. With cannabis
California has the opportunity
to really defined this industry
not only at the national level
but on a global level. And
beyond that I feel like that.
Interesting and exceptional
ecosystem that existing
California has the opportunity
to really not only influence
cannabis in other states but
really agriculture in general
right prohibition.
Left us with armed.
Provisions been devastating
right its consummation billions
of dollars are destroyed
communities destroyed families
disproportionately affected
minorities but in California
leftists one gift.
And that gift is as his entire
supply right in this region in
medicine or humbled in Lake
County that we say produces
sixty percent of the cannabis
consumer nationwide. That's a
massive supply and it's coming
not from one or two large farms
which is the model of. Big gag
it's coming from fifty three
thousand Kalmus farmers in the
state.
And how credible would be if we
can provide and prove a new
model in agriculture that really
doesn't exist
elsewhere.
And that is what we're trying to
do it will conduct we recently
bought an abandoned winery here
in the heart of Mendocino and re
purposing IT to do a centralized
processing center. For all the
small farmers in the region
all the small farmers that don't
have the capital don't have the
tools I don't have the resources
to really build processing
centers on their farm. Nor does
the scale really married it
worked giving them that
opportunity.
Yet.
As distributors you know we
don't necessarily just see
ourselves as kind of attacks on
weak we see ourselves really is
an information hub right we
touch the different pieces of
the supply chain. Off from
cultivators to retailers to
manufacture so we're kind of
intricately involved at all the
challenges that we C. across the
supply chain and there are many.
Primarily.
But the incentives are not there.
As farmers you have the choice
to basically stay in the black
market get higher prices are
coming to the White market.
Have more fees pay more taxes
and that really doesn't work.
So that's one of my biggest ask
for today is to reach revisit
that taxation and I'll get to
that in a second.
I think the biggest challenge to
that we face is that.
At this level there's too many
agencies into many different
pieces that we've created with
this are autonomy the different
out localities has really
allowed people to take a
different bites at the pie.
And people are taking too big of
a bite and at the end there's
really not much left for the
farmers.
And at the end of the day. You
know we see these permits and we
see these applications you no we
approve them on on a screen we
have to remember that these are
not just businesses. These are
real families real families and
real communities.
So may I ask your today's is is
just too two prong to stay
focused
one is taxation.
I think it is unnecessary to
have taxation of both sides of
the supply chain
the cultivation level at the
excise tax level.
I think we must eliminate the
cultivation level and allow
these farmers to come in and M.
grace getting permitted.
The excise tax is a bit
cumbersome in fact nobody
understands it.
I myself included and we spent a
lot of time talking to
dispensaries and try to explain
how this is calculated. And.
They get often offended
anything were lying and they
have other distributors a calm
and are doing it totally off and
totally wrong and we're facing
competitors that are offering
product there fifteen twenty
percent cheaper than we are. And
at the end I'm not sure what's
gonna happen to those people is
a slap on the hand for
miscalculating it or are they
gonna be bigger consequences.
So a very simple explanation of
how the excise tax work a paper
a one pager that we can all use
across the industry would be
very helpful.
Second.
We must expand the market and
expanded rapidly California we
had a massive black market and
we had a quasi gray market where
all the good agents were kind of
acting.
And January first I. gray market
turned all black and the white
market that emerges is a very
very very small sliver.
We had about a thousand clients
that we served state wide at the
beginning of last year through
made of last year's we reduced
that to five hundred to really
focus on the ones that we
thought were in the green zones.
That were gonna be complained
there were gonna be permitted
and that five hundred numbers
been reduced to about ninety.
So my addressable market has
gone down by ten percent
I still have the same payroll
expenses they still have the
same rent I still have the same
amount of supply from my farmers
to take it to the market. And it
simply does not fit.
Mike I know you have more to go.
I was gonna say at but sixty
seconds and then you could
always answer.
.
During the question
as well it's about sixty seconds
is that cool with you that's
very cool honey.
Effect that was almost my a
closing statement.
Around expanding the size of
the market.
I think what's really important
now is.
You know sixty days into it de
it's been a challenge and I I
think it's not our it's not a
difficult task there's so many
different variables so many
different moving pieces. And I
think everybody's done
exceptional job to make it work
and I think as a compliant
operators I have full faith in
the agency's in and your guys
leadership. Out to really
improve the conditions for the
people that are trying to be
compliant.
Because simply regulation feel
that I have heard the black
market just hurt the people that
are trying to do it right.
And.
As the last statement and you
know if you like there's a lot
of farmers here in the room. You
know I have kind of an internal
a joke that I have one with one
of our partner farmers at a
visionary former friend of mine.
And he says what kind of a
constantly walking over a chasm
in distaff's kind of magically
appear I every step along the
way and every time we take a new
step. Out we can step into the
unknown and Slocan and the
farmers are here we're gonna
continue to stick taps into the
unknown and I think together
we're gonna make this work.
Thank you.
Michael thank you so much.
So what we they can be reduced
with that BR opened up to all of
you in thank you so much your
patience for neighboring seven
chairs forward at the moment.
We're gonna ask all of our
previous painless to be able to
come forward I. and then we're
going to have you. Talk with us
I. as we are bringing the chairs
forward Bergen ask each M. are.
Former panelists please
approach the tables in the front
we will have a roving Mike for
each of our panelists. I. all of
you folks who gets his stay
right where you're sitting. I in
as we are again ask folks to
start queuing up here at the
podium. Out we do have a
question for a bill and Michael
quickly I over the last sixty
days if you can just go.
Sixty second deep dive is folks
are certain to queue up at the
Mike out would you see for
supply.
I M. then how are your how is
your business dealing with cash.
So if you could address Ichigo's
out yet both Michael and bill if
you could address those two
issues number one how are you
dealing with cash number two.
How?
Go little bit deeper in the
issue of supply yes.
Please Michael.
Yeah so.
Under us both of those.
Really quickly Mr with the
latter one cash which is I think
a bigger problem for us. I.
dealing with cash is monumental
and often it really eight eight
effects are payments to our
farmers. Out we've actually had
to get these massive cache
recyclers that we have each of
our locations in transporting
cash. In these bulletproof
vehicles makes it super costly
super expensive and counting
cash along the way the biggest
challenge is that.
We depend on the cash to pay our
farmers
because the bank that we have
the money we have in the bank
through investments we can't.
Really transfer to farmers that
don't have access to banking and
simply we cannot withdraw large
amounts of cash to pay them.
So we are dependent on our
vendors to give us the cash then
gives to our farmers and it is
are a very very cumbersome and
difficult process.
In terms of supply I see the
same challenges
right we haven't Mendocino
county we have an estimated ten
to fifteen thousand cannabis
farmers seventy one. Have gotten
approved.
Right.
How do I continued to grow the
business continued to give the
certainty to my vendors to my
partners to the manufacturers
the other distributors of the
retailers that we work with?
That we're gonna consistently
have product.
The question that keeps me up at
night.
I just have to hope that we can
continue to help the farmers get
licensed odd that. I think the
biggest thing that we can do to
help them is just helping them
reduce their upfront costs of
getting licensed a lot of these
agencies are requiring. Many
changes around the water board
specifically and these changes
are being required to be. In the
moment up front and if we could
give him a couple years to get
these payments off and allow
them to enter the market would
be very beneficial. Thank you so
much Michael not turn be pushy
but if we sort of bill not so
good. Built to question same
ones.
What do you C. was supply
because we have a bit of a choke
point right because there are a
limited number of Andy
was our license?
And how are you dealing with
cash at the business.
But we're seeing the same
problem with supply think Tony's
figures from cinema county
there's five license operators
at this point time that that
just doesn't that just doesn't
work there's no way we can.
Same business long term unless
something happens to free up the
supply it's a it's a choke hold
up what with cash. How we
dealing with a carefully is is
probably the the best answer but
if you think about our our our
business part of it is it's
manufacture and we have to buy
stuff we have to buy equipment
have to buy supplies? Means you
gotta take cash Nono supplies or
are in this.
You know so rural residential
areas so.
Out of state sometimes out of
country we've gotta move funds.
That's a very difficult thing
to do without access to banking.
Thank you so much bill. So what
we're gonna do is we're gonna go
to comment and thank you all
again for hanging with us.
Outside like religious Leyva
quick format if it works for you.
On would like to be able to have
one minute comment or question.
I or criticism whatever it may
be. I. and then we're going to
ask our panelists to be able to
answer which can be a little bit
a lightning round because we
have a lot of folks who won that.
Provide comment tonight thirty
second answers
on and at the new liver time
more just let me know but I.
Just want to be a to get as many
folks talking here tonight is
possible.
So is it okay if we kick off our
public comment section everyone.
I mean if you don't mind is
giving us your first name that's
all we need tonight I just your
first name and Sir you have one
minute I'll give you a quick
heads up when we get close.
Right wrong I. C. K. nursery
well let's on a lot of issues
that come up around the nursery
side of it Tom really hasn't
been. Approach very well
particularly the a and M. who
we're dealing with a perishable
product the other side of that
transportation. Arm there
requirements for nurseries with
cameras and so forth I mention
this chief Ajax today when I was
in Sacramento racing here.
That we really need to make
that work for the nurseries off
possibly have a way of
cultivators picking up product.
Track and trace
we really need your help here
the north coast.
Our local governments feel that
they're not getting the
information that they need so if
there's anything that can be
done to provide them.
The detail information so that
we don't have to double entry.
Right now we're face to get our
local government the information
they need were working with two
track trace systems.
That's just rock for problems.
.
Also.
One of the things I think is
very clear with Santa Barbara
jumping so far ahead is the CDF
W.. On the water requirements
for the north coast that's
really the frustration it's
frustrating that we're talking
about that.
But from the farmers point of
view those of the areas that are
really causing us the problems
and.
Law enforcement uncertainties.
We really are getting a
participation from all of those
people involved and we need
everybody coming for to answer
questions to make the six.
Thank you so much I'm gonna miss
Ajax we should have a acquit we
have a Robert my particular
subjects if you don't mind
addressing at thirty seconds.
I track and trace about that
double entry issue on and then
the other area item in regards
to okay perfect.
.
She said hell no of getting this
all out.
It. Were gonna turn participar
is excited.
It we're gonna have disappeared
your talk what the issue is well
on nurseries.
Police fire way Sir.
Try to me is a song I get up so
with regard to the nurseries I.
I would ask for the eight if if.
I'm I'm not sure what the the.
Issues with the a and M. but I
would like to encourage the
gentleman to contact our office
I. if you have or if if it needs
additional discussion.
Please.
Touch base with me after this
and I can give you my card and
we can get get set up to get
some clarification.
With regard to track and trace.
And.
The the local track and trace
systems we will be talking with
the counties about what
information.
That that is being required to
be entered from the counties
that is duplicative for the
state system so you don't have
to double enter things but if
there are things that are
proprietary to the county in
different than the state system.
That's gonna be something that
the state doesn't really have a
a call over.
Thank you so much at night
Taylor is going to get your card
Sir.
Right now and we're gonna make
sure that Mr paired. Walks
waiter card as well welcome Sir
you have one minute and thank
you for being here yet thanks
rather me.
Mark I am a small farmer out of
kanji.
I want to put a strong emphasis
on my gratitude for the work
that you all have accomplished
and the days prior to January
first and the sixty days that
followed.
Our county and state have come a
long way in implementing a very
complicated system I am here in
Mendocino county at this hearing.
Because in may.
I would like to be planting my
farm during these historic times
for cannabis becoming legitimate.
And Mendocino county we are
nothing but small farmers
currently in Santa Barbara
county there are more temporary
state licenses issued than any
other county their board of
supervisors. Have allowed nearly
one hundred of the two hundred
and fifty licenses to be owned
by one person.
Let me jump straight to my
question.
What happened to the seeker
review for props sixty four and
the E. I. R. rex to mitigate
impacts through a one acre cap
for the initial five years?
We want to show you that we are
the people that are going to do
the right thing and we are ready
to.
Pay the taxes.
People stepping up here tonight
or about community first
it is the only pathway to
success
please help.
Give us a chance to keep
the legacy of Mendocino county
sustainable.
By doing the right thing
we want to work with you because
we are the part of the community
that supports you.
Thank you mark.
Any comments or panel pertinent
issue sequel.
Cool everybody's very excited
again to answer questions won't
make sure this is a dialogue so.
A any items it what market said.
Great we're gonna go to our next
speaker but I just eyesore make
sure every little bit of
dialogue here right so on.
Please I I'm I'm curious and I
and I think so so did I I what I
heard from the gentleman was
that.
Of the two hundred fifty
licenses issued and Senate
Robert one hundred went to one
person is that correct.
Eighty seven one to one person.
Is that correct.
I am I'm not sure but I'm I'm
assuming if he pulled the
information from our public
website that that is available
to the public.
So that if if that's the data he
saw that would be correct.
It is a huge loophole I. in the
system that's hurting at small
family farmers here in
throughout the California. But
on know that that's going to be.
Initiative will be following up
on.
As well.
Thank you.
Sir we welcome you Sir thank you
up my name is Alexander and I am
here to announce that the
private sector. Is stepping up
to address the one particular
failure of the government system.
And also to compensate for the.
Culture war and other conflicts
of interests.
In the central banking cartel.
And the announcement is we are
forming a private investment
house.
That is
structured according to the of
principles of the.
Banking houses of Venice and the
Hanseatic league.
Coupled with blockchain
technology to assure trends.
To assure transparency
reliability credibility and
accountability.
We are in the process.
Of raising funding to begin this
institution to meet.
The entire banking needs of the
entire cannabis community those
who handle cannabis those who
deal in cannabis those who serve
the cannabis industry. Without
exception.
Now right now we have raised
several millions of dollars
contingent on an initial raise.
We need another several million
dollars to make this thing
happen and get off the ground.
If you have a hundred thousand
dollars moles during in a Mason
jar and backyard.
If you have several hundred
thousand dollars sitting in an
escrow account that the district
attorney. If you have money that
you want to contribute to the
community at large and. Bypass
D. established game because it
is a game that the only way to
win is to not play it.
And so our ambition is to
provide a different game.
A game that has more integrity
and more.
Our connection to the earth but
I think that's ultimately the
bottom line there.
Alexander so ten seconds Titans
seconds I'm out of here I will
be here to answer questions.
I invite.
Anybody who's interested in
Mike and the solution to an
intractable problem to talk with
me afterwards thank you thank
you Anthony.
So much.
Please don't take it as a at we
are being pushy just wanna make
sure that we have as much time
as possible for everyone to be
M. speak tonight ma'am we
welcome and thank you for being
with us tonight.
Thank you my name is Hannah
Nelson and I've been involved in
cannabis policy for twenty five
years are a little bit more. And
I have some specific asks whose.
.
This is completely within the
lands of protecting small
operators I am currently in
medicine accounted for many
years lease to be humble county
and really my whole focus is the
small operator.
On the specific* are to fix
the adult verses medical
designation point in time
especially farmers but other
small operators will have a very
difficult. Uncertain path
towards distinguishing went to.
Designate product as adults use
verses medical and we ask that
you change the rules so that it
happens after testing.
Second we would ask that you
consider changing the rules to
allow small cultivators to do a
mix and match cultivation style
under one license.
So the maximum us ten thousand
square feet but different
cultivation styles under one
license maybe to one for in M..
But
it having the repeated because
of different license for
different styles of cultivation
especially for small farmers
have to diversify right now and
do different styles.
Second a separate transportation
license specific to cultivators
right now there's been a
wonderful creative fix.
Under a distribution license
however the problem is some of
the requirements for disk a full
distributor are applied to the
distributor transport only
licenses that many cultivators
and other small operators are
applying for. Those requirements
are extremely onerous and not
actually applicable to the small
cultivator who's just trying to
get their product to a
distributor can have you ever
open about ten fifteen seconds
ugly. Up coastal zone
regulations those are imperative
there's really a mess going
around we really need your help.
S. you I. R. S. I. you our
deadline there's an April first
deadline for smaller dishing use
registration that's not gonna
work given. That the regulations
rolled out so late arm and then
there are.
De cap on incorporated
associations there's a four acre
cap for the not members of
incorporated sociais tions that
particular given that there's no
key acreage cap for cultivation
is absolutely ridiculous and.
Does not allow small farmers to
effectively ban together in the
way that I think that the
legislature intended in addition
heavy bill include one one last
comment and that is there's
language in the statute. That
specifically requires the
incorporated associations to say
that they're cannabis operators
that will prevent them from
getting back.
Thank you very much thank you so
much.
Let's go to our panel I think
we're gonna have Mister silver
we're going to have Mr Allen in
C. Fini par regulated. Please in
Michael's
Michael's going to China as well
bill so a quick comment to our.
Asking you explore whether we
need the distinction between a
M. versus a.
An anecdote my my son was on a
plane two nights ago at us like
a a migraine.
My wife's pediatrician I. I
mention she got him some
caffeine which helped that.
But we think about caffeine in
the morning as as something that
that we have is is that for
recreation and it is it for
medicine and when you have a
glass of wine to relax is that
recreation is that medicine.
That stink tion it is really
tough and in most cases all
artificial were tax we have to
pay him.
Licenses for both.
Medicine and for recreation so
we're double paying for stuff
nothing to his craft. I'm sure
you know I just wanted to
comment on one of the more
frustrating thing about the
acreage that conversation is
what you mentioned I'm. I was in
the room when we negotiated the
cooperative associations and
when it was suggested that there
be a four acre capped the
assertion was we can't let coops
have an advantage over the rest
of the marketplace. And so to to
see the emptiness and that cap
maintaining its a both a
reminder that this cap is
founded on a real solid
foundation it didn't come out of
a vacuum as. Some folks are
starting and be a reminder that
it was very much a part of the
conversations I appreciate you
raising that cap I'm we we do
support it if I. cap is
reinstituted for growers but if
not obviously co option have
parity with everyone else and.
Thank you Michael.
Yeah just really quickly is to
address the a and M. issue as
well.
I would just suggest she was
making the comment making after
testing I feel like.
Distributors processors
manufacture also face the same
challenge to track this
separately as you're just be if
we want to keep the designation
she just simply be done at the
retail level. Things that pass a
lab tests of the medical should
be offered in both markets and
things that only not select as a
medical should just be offered
for the medical. But in the
supply chain to deviate the
manufacturing the distribution
it's simply just daunting the
task.
Thank you so much.
India verabradley there's like
Bates having on this.
As Ajax.
Saw say something we it we we've
we've been hearing people
especially on the distributor
transport only that some of the
requirements that were asking
for a regulation so we'll be
looking at that when we.
Start looking at changing our
regulations also on maybe
looking at our interpretation of
the statute for a M. M. and I
think working together with both
of you on. On how we can make
that work better offer the
supply chain because we've been
hearing that quite a bit too so
I I think all of this were all
open. To making those changes.
In.
Can anyone speak for it it's a
member but and I know we'll both
be working.
Further advancement of a budget
trailer bill later this year a
where there could be potential
solutions and some of the
challenges that are being
advanced tonight.
Yeah I just yet just echo that
will we continue to as we're
taking input taking in
information from people.
And learning and continuing to
learn.
Together we we will be working
continually on this.
Thank you.
Welcome.
Thank you senator McGuire
innocently men would be for. For
bringing up.
All these people together who
cares so deeply about the
community
my name's John.
And I'd like to say that we need
to support the small farmers the
mom and pops who were just
trying to be good neighbors.
Promote sound environmental
practices and make a living.
These are difficult times.
With lots of economic
uncertainty.
With that being said we need to
take the long view streamlining
taxes and regulations
ensuring that the heritage
farmers can continue to
celebrate.
And contribute to our
communities.
When big business and Tom rich
people game the system by
acquiring multiple permits so as
to bypass the cap restrictions.
And the state allows it this is
not right.
We need to support our small
farmers.
Maintain regulations.
And caps which promotes mall in
local business
and look for ways to enhance
economic endeavors and are.
Thank you.
Thank you so much I.
I know that have disappeared as
I can be a comment on that.
In regards but I think that.
.
I know the cinnamon and I are
unified in the front of ensuring
that we have protections I. for
small family farmers who are the
heart of this industry and by
the way. That we believe that
was promised.
Time and time again during the
campaign of prop sixty four in
improv sixty four so. Odd that
is at an issue that we're going
to continue to fight and I know
it's gonna be a continued
dialogue is well and also. I do
not want to put.
Disappeared on aimed at the
post's because
I it's decisions that are made.
Administration level and I just
wanna say thank you because
spirited been very good to be at
work within. An open out when he
can't so I just wasn't thinking
so much Sir there of anyone else
want to comment on this issue as
a guy.
I just want to reiterate your
last comment senator I'm you
know this this it's very
important to recognize that all
of the people up here are
working very hard in a very.
Local time and don't personalize
some of the the decisions that
have
it would be
I request this
the policy matter and and we
need to stay focused on on the
best outcomes not.
Who's
to blame our or what not so
reinforce that I. director
paired is is is a pleasure to
work with.
Thank you so much but Sir
with us tonight.
Thanks for having the warm here
for us the input and I also like
to thank all of the small
farmers that showed up for this
event as well. Thank you
policy has misguided the
cannabis industry by creating a
burger some chain. Of supply
that negatively affects all
farmers.
If the rags were more
transparent.
The voters would have never
voted for prop sixty four.
The exercise tax takes food out
of my families mouths.
A charge so much.
For wholesale product.
Is not in the spirit of cannabis
and patients are being punished.
As a cultivator.
Seeds are.
Seeds are big part of the
process.
Cultivators should be able to
sell fees without being nursery
permit.
My farm on seven point five
acres.
The nursery requirement is ten
acres
I'm unable to get a nurse three
permit and I must.
Shut down my C. business.
I'm a longtime cultivator a been
selling my sis for a long time.
Thank you very grateful for your
comments in thank you for being
so eloquent in I know it's very
personal for you Sir so thank
you so much for being here.
Welcome ma'am.
Thank you for attending today
Bankia outs I'm Amanda I'm with
the international cannabis
farmers association. And we have
one constituency and those are
farmers who grow out under the
sun so I'm here tonight with
some suggestions on how to help
them.
I'm considering how to create a
level playing field for farmers
we need to consider a three
dimensional model because it's
not just size Bates also
production cycles.
Seasonal sundown farmers and mix
light wind maybe getting one to
two cycles a year from their
farm while indoor and mixed like
to farmers in the same size or
pulling five to six cycles a
year. And that puts some ground
farmers at a disadvantage so the
I. CFA has a few suggestions one
is a production based tax
incentive like alcohol were
smaller producers are able to
get a tax break for the first X.
amount. Of product if they move
off of their farms.
Secondly financial incentives
versus dateable practices like
use of solar water catchment
regenerative farming methods
including closed loop systems
and poly culture farms that
provide produce to the community.
Thirty allow small farmers to
Ben directly to the public at
events and farmers markets
without retell license.
And fuller if we want to address
over production support the
small farmers and look at what
the E. I. are recommended that
we should start the Kappa
capping production levels and
indoor. And mix light to
facilities and see if we can
address over production that way.
And finally I want to voice
support for AB twenty eight ten
which would establish a
statewide at commission for some
grown cannabis so that like
walnuts pork in Agnes we can
have a state agency that
promotes some ground Hannah Beth.
As a superior growing method
thank you very much for your
time today. Thinking Hannah.
Spirit meaning on CD if a side
that.
One image on this one.
Just those were good points of
that that she had made regarding
the.
The.
The size the Tom.
Regarding the.
The.
Production cycles in those and I
know that the sizes up the
licenses were one put in statute
so those are are things I think
are important for all of us to
take into consideration here
tonight. And I appreciate her
comments on that thank you looks
good has guy. United just one of
those those license sizes were
put in statute and and it is
important to note that indoor
and mixed like are half the size
of outdoor and so when we look
at the. Application of the
licensing framework that wise
past it does include that tiered
approach and so that was very
much cooked into the policy to
that concept of tear taxation I
do want to remind everybody of
assembly member what's great
work and with a B. two two four
three. And twenty sixteen that
outline a very progressive tier
tax rate for cultivation to
exactly the and of tier tax
rates and lastly very important
to mention this year's
legislation. AB two six four one
that assembly member what has
introduced which would allow for
direct sales at events and so on
the two of you sitting here are
are undeniably leaders on these
issues and and you are taking up
a lot of those priority issues
to begin with and. I encourage
you to stay the course it's a
big state you represent a tiny
sliver of it but my goodness
this is life or death make a
break for so keep it up guys.
Since I.
Simmering unions you an image of
them okay thank you we welcome
the man thank you so much for
being here here only.
Joining Coleman I'm the director
of the Mendocino appellations
project.
I wanna thank you for this
opportunity comment. Menacing
appellations project established
in twenty fifteen is a nonprofit
organization devoted to the
research and development of
legal appellation of origin
protections for cannabis.
It's my privilege to stand
before you today express my
immense gratitude for the
legislative foundation. And
regulatory efforts underway to
establish appellation of origin
protections for cannabis.
Senate bills one seven five and
nine four will you recognize in
history is groundbreaking
legislation.
Not just for cannabis but for a
national agricultural heritage.
I'd like to express my support
excitement for simply bill
twenty twenty eight ten which
proposes the creation of a song
ground cannabis agricultural
commission.
As we transition the California
cannabis industry into the
regulated market.
Product differentiation is
essential to ensuring a robust
and diverse industry. This
commission for some grown
cannabis will serve as a vehicle
for the specialized research
marketing and development this
distinct commodities over
urgently needs.
This commission supports our
agricultural communities local
governments and the California
department of food and
agriculture and realizing the
regional research and marketing
required to develop and
successfully implement
appellation of origin
designations for cannabis.
AB twenty eight ten builds upon
the frameworks laid an
introduces a broad coalition
effort to the development of
cannabis appellations.
Map is committed to working in
partnership with all
stakeholders in appellations
development. Because indeed we
are stronger together thank you
thank you so much shame think
everywhere.
Grateful.
Good evening thank you so much
for being with us it's a
pleasure thank you very hosting
this.
And thank you very much for
your leadership.
My name's case union local
farmer.
That's will's and cannabis.
And I work with California
growers association deftly wanna
thank you for your leadership.
Especially.
Assembly member Senate Paris
assembly bill twenty six forty
one we're very excited about
that.
There's a lot of work to do.
We farmers are very much
struggling under the land use
requirements.
Pacific request to.
Ask
I figure out how we can push the
timelines back for C. DFW the
requirements for color
replacement and the.
Extensive costs for the Elysee
are over the top especially the
penalty fees that people are
being charged for remediation
that is very often related to
previous activities on the lance.
It's it's onerous and it's it's
very much unfair.
Tom would like to advocate
heavily for fixing the transport
license it was billed as
something that would allow
cultivators to transport. It
CDFA specifically did not
include.
.
Video camera requirements
because for many of us we are
off grid we don't have the
ability to have video
most of so to have a transport
license that requires a premises
that has video cameras.
Tire the counterproductive.
Would also like to advocate for
a streamlining of the micro
business you know micro
businesses bill does something
that will allow small producers
to vertically integrate very
easy way that has not developed
as yet and it is being worked on
a lot and I appreciate all the
work that's. Being done on it.
Vertical integration for small
produces extremely important
this is a
and we have advocated for.
Insistently on in the same boat
shared facilities lot over
medicine makers lot of our and
was producers are being put out
of business because they can't
afford the costs for
manufacturing facilities so that
is. Also very important Keith
with nineteen seconds background
would like the second support
Hannah Nelson's comments as well
as run at which I think that.
He nailed it and all the other
comments and also would like to
thank.
Thank you so excuse.
Thank you C. leading him.
Yes thank you very much Monning
Richard Tillman and I am a
medical cannabis educator and I
operate a wellness center
holistic healing center on the
coast for seven years. Focusing
on medicinal cannabis which I
think it all is anyway.
I agree with the the the thing
about caffeine up but I'm there
been so many good points made
here I'm not gonna be redundant
I agree with. My colleagues
points and I know we are in the
heartland of the best.
Cannabis cultivation in the
world and the best craft
cannabis Cannella Shaina a
spotlight on something that gets
neglected so much which is the
emphasis in the need to
port our medical outlets in our
treatment page but patients.
What we are losing and that
people might not be aware of is
that there are a lot of folks up
in the hills who have been for
generations now creating
medicines? That you cannot find
anywhere else
and they're not getting
compliant they don't know how to
they're scared too they live in
the their their be there.
Creating these wonderful
medicines in their backyards and
we don't have an Avenue for them
to come out of the woods and and
become part of this whole system.
A where are we've already
stopped calling dispensaries
dispensaries were calling and
retail outlets I'm afraid we're
gonna go the way of Washington
Oregon and Colorado will we lose
medicine altogether. I just
yesterday I got a call from all
of. Patient of ours Parkinson's
gentleman who can't open his CBD
tincture because it's child
proof he can't get it open
little things like that I'm
paying double of a tiny tiny
little dispenser dumping double
for an eight and.
It's what he said about sewn
seconds in just yes so just to
keep an eye on the structures
that are prohibiting us from
going forward with creating the
best craft medicines in this
county in addition to the best
press kit craft cannabis.
You think you so much grateful.
Thank you for your work.
Please bill.
Just a a quick comment from.
Those of us in the industry O.
or not gonna loose I. of the
medicine and that's the the
foundation of the of this plan.
Not only recently but but
across centuries and and.
World will will be there for
you.
Thank you Michael did you I.
chime in as well.
Okay thank you so what I do a
quick ten check we what we want
up everyone who's appear now to
be able to speak.
I'm but we have folks are gonna
be driving back to Sacramento
tonight.
So what would like to be able to
do is see if there's anyone else
that would like you to speak.
And I would like to ask if folks
are comfortable with us going to
about nine fif excuse me eight
fifty.
And in that would give us and
another twenty minutes let the
remainder of the individuals
were up here right now able to
speak is that okay with everyone.
Okay is it okay if our panelists
McGinnis once he thank you to
all of you who've been. Here all
evening along with our panelists
is well because I know it's been
a long day for everyone in the
room Sir we well community of
one minute.
Thank you.
A poll has very lovingly legally.
Medicine maker in Minnesota
Connie welcome thank you.
.
My criticism been touted as it
perhaps the the savior and the
game changer for the small
former.
But there's a lot of confusion
around.
We hear people listen that feel
that.
We don't know what the
definition is.
They say that the only
restriction isn't however it says manufacturing
distributing. But it's not clear
whether they can have twenty
tons and manufacture that. Under
the microbes license or
distribute twenty tons of
flowers but only cultivate ten
thousand.
Or if it's for just to self
distributors self manufacture.
Is not stated clearly and we
don't know if this is something
this from.
The auma were legislated or
regulated.
No one knows.
And we'd like to that says we
have all the people here maybe
we can put our heads together to
figure out what it is so we know
what we're talking about so we
can get. You know a license
developed.
Thank you no thank you so much.
So up Paul think yeah I wanna
make sure that we are gonna be
able that helped get a Paul's
question insert it looks like.
Mister Ford or miss Ajax is
going to be jumping and miss
Ajax.
Yeah but you know this
definition of micro businesses
in the statute.
The only limitation it has on
it you can is the cultivation
less than ten thousand square
feet. There was no limitation
placed on manufacturing
distribution retail.
Our brakes did not put any
limitations on those commercial
cannabis activities
and we have interpreted that it
it goes it's not just for self
distribute Chen you can also
distribute others but. Again
those are some things that I
think.
You know we have to as as a
state regulator we can't.
We can't make this.
Week we have to we are
interpreting the law but at the
same time we can expand on the
law. And so if if I know that's
a something that subcommittee is
working on.
To make sure them like a
business you know works and down
I and I think we're hearing
people that doesn't. Quite work
for for everybody and so we're
looking forward to those
recommendations and again
working with the legislature to
clear some of those. Those off
your bed the confusion.
Thank you.
Thank you so much for.
Good evening and thank you for
being here getting. My name is
Rachel I'm a small farmer here
magazine accounting.
Thank you all for being here
personal.
I'd like to say that the acreage
cap restriction that the state
of California and the CDFA
removed was under percent unfair
and wrong and must be reversed.
By removing a ill have a major
impact on many of the local
communities and then to see no
as well as many other
communities that have been
heavily dependent on the income
from these communities.
It's not just cannabis farmers
that will lose out it will cause
a ripple of fact that was slowly
destroy whole communities.
I'm a small farmer herein
Willits California by being
stewards on our land we take
pride in our craft and we do is
a stable practices. I've been
living in cultivating the
Mendocino county since two
thousand five my son is ten and
I've been a proud parents
putting educational system in
this county since he was in
preschool. I like many others
here tonight are not in this for
the money to get in and get out
we are here because we love what
we do and we are in it for the
long haul. We offering unique
craft that cannot be duplicated
by big corporations and frankly
I believe California needs us.
I want to continue supporting my
family in creating a stable part
of land that someday my son can
inherit. There's more than
enough for everyone to survive
if we continue to support the
small farmers.
I would like to ask for you to
please not let Mendoza seen no
and our other neighboring
communities be victims of the
one percent. By keeping mega
corporations al in educating the
powers to be that the
regulations and fees they
continue to keep sloppiness with
are not there and will most
likely force must most of us.
Of most of this thriving
community to disappear please
make that clear to us that we
have your support.
So much
thank you.
Richard thank you so much for
being here and for those words
thank you welcome Sir getting.
Hello my name's John Tom Baker.
Humble cultivars in the sauce
very of lick California.
I just wanted to.
Thank all of you guys I've been
here sort of since the beginning
one of the.
K. C. Hezekiah many people in
the room I've seen. All the
Vance everything grow so I know
our voices are being heard in a
sense.
I like live resin and focus on
on a whole plant production.
There wasn't anything for live
plants now it is and it's not a
tax that I can really.
Gripe about so I'm appreciative
of that I.
Wanted to extend a special
thank you to Toni over here.
Those are some amazing words of
truth and you can really feel it
from the heart I think a lot of
people who are in.
White collar bureaucratic will.
Elected positions often don't
speak from a place of truth like
that it takes a lot to do that
and if for some reason you ever
lose your job or something for
speaking like that. Please
remember my name and if you want
a job I would love to have
people like. You know on my team.
.
That's been one of the scariest
things so far going ahead is I
used to do everything very
independently and now with all
of the things that have to
happen in expression the
independent minded people that
we have in our communities and
humble. It's Ben definitely a
challenge of looking at that
barriers to be.
I am very close to a point of
not having any more money to go
forward and.
The black market looks very
tempting but I'm very scared of
not being able to get.
Permits on top of that so
please do whatever you guys can
to keep bringing those barriers
lower for us. Because I want to.
Be an honest citizen and it's
good to come out into the light
and I don't have to go back into
the dark. Or the proverbial
closet or whatever you know so
thank you page I think you so
much grateful.
Thank you so much we welcome you
Sir aluminum is Paul Heffernan.
I'm with California cannabis.
I mean there's a lot of details
that have been going on tonight
but I want to kind of broaden
the scope please and I would
like to give thanks the Great
Seal of this flag of the United
States of America and our
beautiful Republican California.
And which both have a I. mazing
constitution and which the
United States constitution is
written on the very beautiful
plant that we're all here for.
So I just wanna remind people of
why we're here and what a real
lawful government is and that we
are and participating in an
experiment have the greatest
government that is probably Ben
on the history of this planet.
And thank you for this
opportunity to hear the public
can be able to and take our
input and remember that you have
a job to do if you're a public
servant. If you have Tom buddy
was taking oath of office if
you're somebody who's been voted
in by the will of the people
then you have to respect that
will of the people. You cannot
go against that just because you
have been granted authority by
some.
Agency that doesn't necessarily
have.
The. Ability to to circumvent
the unlawful our government
structure so when we pass.
Proposition sixty four the will
of the people we have.
Agencies that have directly
gone against that violated the
well the people that is called
fraud then we've been initiated
into that through force and
coercion and I am a small farmer
who's just recently gone out of
business because of the over
regulated thing. I sold my farm
yesterday I did not want to.
I love this plan I love this
medicine but the over
regulations have stopped me from
being up in the former. So I
don't have a life that would
that what I thought I was gonna
have.
Okay my daughter's not gonna
have the same life that she's
gonna have okay you've impacted
my life significantly I just
want to know where's the
jurisdiction over an agency. To
to be able to do that and Sebert
my natural god given
unbelievable rights.
Thank you so much
thank you.
Public you so much for being
here and for your words as well
thank you so much Sir.
Good yes Sir my name's Bob
Wiener.
I own mobile out M. alchemy
group in southern Humboldt.
.
We've worked with the county
John Ford I think so much for.
Passing that León allowing us
to
forward. Also we have to
temporary license from State
Farm Hannah factoring.
Moon tonight when I walked in I
got this.
Matrix here and it goes there
the taxes go directly from the
cultivator to do
St Peter while on the person.
That that everybody brings their
garbage.
Basically that the product that
they can not sell on the shelf
as flower so we we process it we
we.
What we use CO two were non
volatile and Mike and I am still
charged with collecting the
taxes but I have to hold on to
that tax Mike I've talked with
the tax?
Tonight and we're gonna be
working it out and I appreciate
that I think you you know. Not
level but there has to be
something I don't know who. Who
made up?
You know that from the
cultivator to the distributor
but I mean between it and I and
I have.
Issues with.
Holding on I mean basically.
At a minimum where we're working
with you know a couple thousand
pounds a month. And that's
eighty eight thousand dollars in
taxes that are in charge with
holding onto until a distributor
decides to buy the product that
we produce. So there's this
boondoggle for us you know so
it's something maybe you can
think about I don't know how
that how that adds.
How that can be changed but it
it has to be somehow we have to
be you know?
Part of that loop ahead.
Secondly up I'm gonna need you
to conclude in about fifteen
seconds I apologize exposure
folks hip and secondly.
For my license we are charged
at on the gross amount of.
Opposed income that were
supposed to get.
Working on anywhere from six to
ten percent margins and if I
have to pay on on the gross
amount. Of.
Product we sell I'm gonna be out
of business.
That small farmer whom we we.
We will work with all all small
farmers any ounce of the small
farmer their their little bit M.
extra margin that they get from
being able to sell their tram to
us.
Produce is going to go away and
it's going to be not just me but
it's going to be all the produce
so thank you very much
appreciate thank you so much Bob.
Consumer.
I just wanted to.
Do you have a comment on a Scott
state thank you for raising that
this is definitely an issue with
the tax structure. That.
We know about but but I really
appreciate you raising its night
and we're working with the
legislature to see if we can't.
Figure out some way to. Make
this make more sense for many
for.
Bob thank you so much in before
you leave if we can grab I. your
card position than ever and I.
To just leave without I give
Mister carton in fact I will
have to either come. Grabber
cards now so we get them and
will change course night just to
be a follow up. Thank you so
much we walk me Sir thank you hi
my name is Joe and.
I'd like to take My am one
minute and give it to Toni
langgar so you can.
Keep. Keep talking.
There you go.
That's the that's we call drop
the Mike moment right there are
right C. their ego thank you so
much Sir idea. I like it so Tony
would you leave out so yeah.
Well yeah I just you know from
where I sit. And I really want
to see the six.
Its whole program in the state
level at the local level and I
think we have to be honest about
how it's going.
And you know I see the burden
that these farmers are carrying
in and it's just so
disproportionate to what
conventional agriculture house
to deal with and not nobody
knows that better than me have
been in this business a long
time. Regulating agriculture
so I understand that there are
some differences with this crop
that we have to address as I
mentioned with security.
And potentially odor mitigation
in some cases but I I really
don't see the need to be
regulating it at the level that
it is and I think it really does
not favor.
Supporting our small farmers on
the north coast so I don't know
that changes can be made to
address that at this point but.
I I just wanted to take an
opportunity to bring some
attention to this from where I
sit.
Thank you so much Toni Brimage.
Good evening Sir pie I'm not the
Mendoza.
Cofounder of old kinda just
looks.
Based here in Ukiah.
.
I.
I'm thankful to hear.
.
Laurie say that.
Enforcement is is being done
with a gentle hand to for those
who are not.
Currently permitted.
.
I would not suggest that
enforcement should be aggressive.
More punitive. I would ask
though that some of the
restrictions for the permitted.
Businesses D. E..
To allow the markets open back
up.
Because right now.
Nobody itself our like nothing
is moving up here. Manufactures
are all gone.
.
The retailers are had vanished
in southern California.
It's.
It's expensive to do what we're
doing it requires a lot of
capital and there's no access to
capital.
Because of the pack in Los
and so what we're seeing is a
massive transfer of wealth.
Wealth from the people of
northern California to like
Canadian capital markets right
now.
In addition to that I would
like someone to clue in law
enforcement that there are new
laws on the books.
We I mean it's it's no secret
but we've been harassed by local
law enforcement had products
stone.
And there's no recourse there's.
The local government shrugs his
shoulders state government shrug
their shoulders.
You know we Mike.
It's just gone it's criminal
yeah thank you.
.
Where have you wrapped up in
about fifteen seconds I thought
I'm just gonna yeah? It's hard
to talk about this stuff without
getting emotional.
I feel that the.
The law of unintended unintended
consequences as run amok with
this industry right now.
And like many of the victims
so giving people lip service
that. They got a new home in
this market has.
It's a cheap plot right. So I
ask that you take that into
consideration when and do
something for the people of
northern California.
Right here.
Many appreciate you being so
personal on that no it is a very
it's been very challenging what
I will say is that this summer
would not I..
I did convene working group with
Kevin apartment official
wildlife with
supervisors from a humble
magazine no cinema Trinity
county. And as we were hearing
at time and time again. That as
we approach January first even
after January first
that there were at what I'll say
the word rates are on.
Farms that were either becoming
permitted or were permitted.
I. N. from those discussions
cavern apartment fish wildlife
will be releasing new statewide
regulations are focused. On
by enforcing the law rather than
going after.
Individuals who be tryin to
become legal and permitted or
those who are permitted
so I'd that is at this pan a big
swing. From where they were I
just about six months ago but I.
will I think we can all agree
Nancy that there are gonna be.
Challenges up ahead.
Andy I know that a lot of law
enforcer are now at the table
and really wanting to work so I
but I think there'll be some.
John said but please has kind
yep senator I just wanted to.
Applied that effort you know six
months ago we were calling for
C. DFW is enforcement to be
defunded entirely because I
couldn't let go of the past ways.
And the work that you've done to
to turn that around is
commendable and frankly what
inspired my third priority those
types of enforcement priorities
should be legislated they should
be in statute and the
enforcement agency is.
Across the spectrum should have
clear and Forsman priorities and
guidelines as to how to approach
this new era of regulation not
enforcement.
Yeah.
It's been a voting people to
legal.
That so and that's the right the
bottom line for all of us but I
do not say it's a tractor Bonham
partition while it has been at
the table along with his.
Law enforcement chief chief
little on all a every step of
the way C. to us I think them
and and has a chi has been
dropped forces well Sir we
welcome you. Thank you so much
for and hang with us long to.
Assembly member would.
Senate McGuire.
Lady in Jim out panel thank you
for being here to allow for this
dialogue.
I just wanna it English
language is a little tricky I
think I think I heard a couple
you guys talk about legalization
and I think. Were. Regulation
and not legalization.
Just a touch on that.
And then just also follow up
unless you Monning I. when I
speak about accountability all
the farmers in here have to be
accountable to see if W.. After
you accomplish CDFA that tax
people that I mean the list goes
on. And so.
Locally here in the county only
speak local manager us most
elements you know Connie locally
we've had issues with the D. a
we've had issues with the
sheriff's office.
And we're talking about
scandalous issues
where CDFA sheriff people
involved.
The DA is.
Violating.
Farmers rights after we you know
we're coming down.
Try to be open about what we're
doing yet.
We have accountability but we
don't see accountability on law
enforcement sue who do they have
to be accountable to I
understand that we the people
thought a man. But after stern
point we it we you they can be
accountable to us and was so
they're gonna act is the act so.
D. are they accountable to you
guys as a senator Anderson
remember. I'm just curious to
know who that would be
somebody has a homecoming for
their actions.
So. The the director I can talk
about the position itself so the
director fish wildlife fees.
Is appointed by the governor.
But what I will say is where
that the legislature does have
the authority is over the purse
strings.
I'm and out over the budget.
And and Bob that's why some
member would not convene these
meetings and it was over a five
month period. Out with Mister
bottom. Along with his chief of
law enforcement achieve little.
At.
I'm gonna be candid at where we
started. Was a one eighty.
To where we ended.
I in in in a positive direction.
And what it has resulted is.
I rather than focusing again on
those who are doing the right
thing.
Becoming permitted and or are
permitted.
They will no longer be the
priority.
We said that they should be
looking at row grows on public
lands.
I have some of the lowest
hanging fruit out there if we
have stream diversions or. Are
answer question who who are they
accountable to.
You know. That did that did D.
aching coming to wreak havoc on
a local I. farm yeah which they
did or the local sheriff you
know they go out and buy some
guys form because. This is a
neighbor or is the secretary of
the sheriff and then this they
stern the CDF W. M. to bust this
guy.
And now there's a scandal the
sheriff's office so who really
accountable to they can wreak
havoc on the community. Area.
Who really comical to?
Thank you similar.
Now if as a windows OS I'm so
what what I will say is that
ultimately they are accountable
but that the trigger fish
wildlife along with law
enforcement division is
ultimately responsible to the
governor. And also the
legislature the reason why I
said the legislature citizen
legislature controls their
budget.
I so and that's why we convene
that committee with I'm.
Representatives for the board of
supervisors here of supervisor
hamburgers a representative from
Mendocino county supervisor bone
out from.
Humble county supervisor
Hopkins from cinema and I.
supervisor Morris from out from
Trinity county.
Thank you very much Sir I'm
grateful.
No one do QuickTime check. On we
that were at eight fifty.
If it works for everyone or have
the gentleman in the blue grass
will be our last speaker the
evening.
And then what we'd like to be
able to do is turn over to our
panelists with any. Quick last
closing comments along with the
silly member I. and they will
conclude in again we cannot say
thank you enough for being here
tonight are in for this
conversation as well. Ma'am the
floor is yours you have one
minute thank you for being here
pan Patricia cannon. Am I just
heard somebody say that. Regular
agriculture doesn't have it as
hard as we do but.
The reality is much seventies
and eighties all these farmers
were pushed to do exactly what
we've been pushed to do was
invest invest invest get
investors. Go big.
Grow more and then guess who has
the highest rate of suicide in
the country.
Farmers.
Yes Ohio is like a mess right
now because all these huge
corporate farms are destroying
the environment so that's why
this is so. Utterly important
may get and you know I'm.
Speaking to the choir M. sure
everybody's artists about but an
animal so gonna piggyback on
what a somebody else said it
makes me so mad that like.
I invited people I mean
thankfully today the guy
rescinded his decision he was
gonna make me do an unnecessary
expensive report just because
even those probably unnecessary
M. today he. Thankfully changed
his mind but just makes me so
mad that like we. Like by
invading the government onto our
properties.
We get attacked we get fined
it's ridiculous and then I drive
up highway one or one. And all
these properties right next to
rivers are just there's trash
everywhere like* I'm sorry
for swearing but. Everywhere and
since you guys can't get any
money out of them I guess is
this why these properties are
just lead to just faster. Well
we are I mean I had simply come
up onto my property.
That a small slash pile.
And he will it was somebody from
the water board he was like I
should find you for that and I
was like my well driller created
that two days ago lake.
Really M. like I see the
government's leaving these huge
slash piles all over the place
just
this kind of like hypocrisy
displacement so. That's about it
that's all I have to say. Thank
you very much.
Thank you so much for your
comments.
We welcome you Sir good evening
good evening. My name is Derek
Skinner I just have one question
is to.
Who is responsible for raising
the acreage?
Yeah home somebody knows out
there so.
You know.
What organization you know so
that we can?
?
And I'll get that out there.
And that's about all I have.
Here.
Anyone want to comment on that
one.
As a guy.
You know guys if I knew I'd tell
you been Askin this question to
everyone that a lesson.
Some folks won't talk to me
anymore I've been asking so much
I'm I would like to take a
moment to encourage you all in
politics.
Don't stop talking to people
because they ask difficult
questions that is a
fundamentally failed policy and
shame on the department.
For not having conversations
with us anymore.
We can put the difference aside
but we need to continue talking
to each other so if I knew I'd
tell you but we gotta keep
talking even.
We. Leaving him pleading.
This question to like the doe
officials
what solutions recreates. Up
with for the bank.
Thank you M..
There have been at.
So number one there is no easy
solution but.
Here's where we'll go.
I the.
Treasure the city California
along with the board of
equalization.
Along with me say Jackson
Longwood's Madero's is Ben.
I developing a working committee.
Together determine.
Several options yours options
of providing state sanction
armored cars to be able to go
out into the communities I'll be
very Frank with you. Of all the
large armored car company at
companies have refused to bid on
the state contract.
Because they are very concerned
about losing.
Their contracts with larger
banks
because of.
It still a schedule one which
by the way is absolutely
ridiculous I'm taking us back to
the nineteen fifties.
I. a so I there's there's gonna
be proposal this year I believe
by a gentleman in senator
Hertzberg. To be able to create
a privately funded bank.
That it would not be IV
privately insured it would not
be insured by the FDIC. Our or
you.
Even with the state of
California.
I do be able to bank exclusively
candidate cannabis related. I
del.
I'm and it would not have.
But you wouldn't be able to
transfer in or out of the state.
About you would only be able to
go into the branches and that
would be available here
throughout the city California.
That is a bill that's going to
be moving forward. On. We'll see
if that's moving if that's gonna
be as successful but being very
candid with you until the
schedule one goes away. It is
going to be extremely
challenging there are folks that
are making a credit unions are
having to pay twenty five
hundred three thousand dollars a
month.
To be able to utilize their
service and a small community
bank or credit union.
And there are credit unions and
community banks that are taking
a chance I could be a bank
cannabis related cash.
Up but that's really the update
eternal D. simply never Orbus
Madero's would like to be of
China miss Ajax meaning that I
made minutes on this.
I'll just all add my two cents
here add something that we've
been looking at since two
thousand fifteen we started this
whole journey and. I I took a
trip on my own dime to Colorado
to meet with folks in Colorado
to see how where they were. At
that point there was a credit
union that was very very close
to to a solution and at the last
minute the federal reserve came
in and and and and and shut it
down.
De for a real banking solution
that allows the vendors to be
able to accept things
electronically like we do in our
rest of our lives. Deal the
write checks to be able to take
money and.
In in variety different ways we
need a federal we need federal
solution there.
There so many I believe that
there are so many institutions
who would like to engage in this
process but they are afraid of
the federal government.
So with the recent Yahoo even
with fence and the guidelines
even with.
All the things had been set up
there is is bill is very very
onerous and so. I will I will
say that the listening to
senator her Hertzberg proposal
it is the closest thing to a
banking solution. That that
seems doable.
That that that I have heard
that is that would allow people
to actually deposit in a bank.
They could then issue checks to
their or have de checks to their
employees.
Who and who could then go back
in cash as as needed so there it
is not a total solution though
because it doesn't have the
electronic component that we so
much rely on in our in our
everyday lives so?
It's gonna take time and and you
know we got twenty twenty nine
states now have some sort of
cannabis regulation. Are or
legal legality out there.
Yeah I look look to the two
thousand eighteen cycle when
they're more states that allow
for recreational and or don't
use. And I think Wilk will hit a
tipping point at some point and
this is this is bipartisan this
is not just a not just Democrats
diss Republicans and Democrats.
That that are they're moving
forward looking for solutions to
the banking.
Thank you Simon what we're gonna
miss Maderas I would just say
that we share your concern we.
You know this puts us in a. Very
difficult position and and
state would also like to find
desperately banking solution.
And.
It became it was difficult
problem to begin with with the.
A repeal the coal memorandum it
became.
That much more difficult and so
we're. We're looking for options
but.
Haven't found one yet.
Thank you so much I think my
final animal say on this is that
I elections deftly have
consequences and we better be
working. I. here in twenty
twenty to be able to find a long
term solution in the White House
is well. But I we will get to
political tonight I we're gonna
go to.
Closing comments we're gonna
start with chief Ajax.
In any ideas that liked beer to
go to bed at offer any parting
words will go down the line here
thirty seconds as Ajax.
Sure.
And again thank you for having
us here tonight I I think worry
we're here all of us here we
want to get this right and we
know. You know some of our
regulations we we hear yield
some of them and that's why we
have we're going to be going
through the full rule making
process but you. I agree with
has a chi gotta keep talking you
gotta keep in approaching us.
Making. Helping us understand
what you're going through
because you're right you're also
still teaching us and this is
how we learn we come up here.
And all of us here have the
passion.
We we see your passion and it
makes us want to do a better job
and that's what we're here for
to continue to do a better job.
And I think there's always room
for improvement so I look
forward to working with all of
you.
Thank you ms for thirty seconds
thank you I absolutely agree
with what ms Ajax just mentioned
I just like to say one of the.
Things that I recognize is as
the director of planning
building I'm often viewed is
that white collar person that
his overly regulatory.
One of the things maybe the
mistake that I've made in the
last year and a half is that I
have really tried to be overly
accommodating.
And I've got to a point where
now there's a push back.
Because were allowing the
cannabis cultivators to get away
with too much.
And so one of the things that
the Planning Commission has
started doing is.
Is
kind of taking pass with staff
taking step to task.
For.
.
Not requiring the same things of
cannabis cultivators
manufactures processors.
That other land use applications
have to comply with
so we're not your enemy.
We're trying to work with you to
get you where you want to be the
thing that we want to do is I
want you to get on the doorstep
of CDFA and. In this age Jackson
in every other state agency
saying get your state license.
Thank you.
Thank you so much support so
thank you everybody now I also
echo what Mister Ford said we're
not your enemy we're trying to
help you. Again we're dealing
with a new use
a new type of use that hasn't
been dealt with in the past were
trying to take this.
As I've said before this round
hall round hole and put it in a
square hole or peg whatever we
want to call it. But we were
having to reinvent the
regulations to fit this new
industry.
So all I can say is have
patience with us and with the
industry to help you. Thank you.
Return of the man the myth the
legend. Yeah.
I'd like to use that my time to
really recognize senator McGuire
an assemblyman would not only
got Monning.
Not only for having the courage
to tackle this issue initially
with legislation.
Many legislators did not have
the courage to do and it was
long overdue for many years but
also being willing to have this
sort of forum.
To listen to really listen to
the real concerns about how
things are going
in giving somebody like me an
opportunity.
Tell them how it's going at the
local level this isn't something
you C. of all the legislators so
I I really want to recognize
senator McGuire and Jim what for
doing that.
So I think.
If you did this.
On the health department
technology would like to thank
you for letting us be part of
this conversation things were
looking for two.
Working with these entities to
get more.
.
Now you just.
Spare you said you're gonna have
that you're a cellphone tonight
correct yeah. Yeah.
Okay do when it thank both of
you for having me.
Being part of this tonight and I
M..
Listening in getting all the
feedback in the comments and.
Scott that we could be here to
be part of this
you very much.
D. so much for coming make the
track yeah I would just echo
that thank you so much and I'm
here it's given the opportunity
feel.
I feel more square than I ever
have in my entire life so.
Just saying something.
But I would just say to
everyone here you know you don't
need to wait.
If you got problems with the
tax issues.
I'm available be around after
I'm happy to give you my email
it's Nick Dodd Madura sit C. D.
TFA dot CA dot gov.
All all be here.
Don't wait to come you know for
us to come back up here if
you've got problems.
I wanna solve them
and.
Not to get too into.
Mine people aren't vanilla ice
fans I guess are not not. But.
Anyway.
.
I don't like it when I was in
fifth grade.
Anyway thank you for having me
it's been a pleasure and good
luck everybody.
While breaking up the dough ice
reference there we go I. day.
At the Roth same's Madero's.
Yeah there you go.
It's getting late I know.
How do you have another cookie
yeah?
To start it's.
Yeah.
.
I guess is closer margin just
what offers a some words of
encouragement to everybody.
That spoke up and others that
didn't that probably feel the
same way in and also the same
time words of encouragement
everybody on this panel.
I think we you know we wrote
these bills and I a piece of
paper and now we're trying to
like actually see how they work
in practice.
And.
Markets are very wise and they
they tell you what they need and
what they wanted when what's
necessary I think people here.
Have incredible disposition to
listen ought to act on this
forum is incredible thank you
for putting it on I really
appreciate your leadership. US
senator and Senate member and.
Just one huge last thank you to
the critics county of Mendocino
for hosting this event tonight
offer this leadership for being
probably front runners in the
state. Are really listening to
all the different constituents
as we've kind of built the
legislation together over the
past few months
it's been tireless it's been
hard work. I am very grateful
for everybody Nancy knows well.
My sewage.
Just over.
Cannabis is Madison.
We're we're proud to be a
leader in the industry and work
with all the it's inspiring to
be here tonight thank you so
much.
Thank you very much Israel.
I'm just gonna reiterate what
everyone said thank you both I'm
thank you everyone here and it's
a it's a oftentimes thankless
job very difficult job and so
I'm despite.
It takes a a have massive
respect for each and everyone of
you I wanna point out one
additional wrinkle to the
banking challenge I one of the
big problems are facing right
now are one time costs.
The only capital that's coming
into the market his growth
oriented venture capital there
is no small business affordable
capital right now for want of a
fifty thousand dollar loan I'm
watching family businesses go
out of of of. Of business and
that's very painful I'm
enclosing there's a single word
that I think we all need to be
mindful of and that's prejudice
pro do probation was built on
prejudice. Bypassing props sixty
four despite all of the details
it did at say.
Definitively that cannabis is no
longer to be prohibited but that
prejudice is cooked in the
policies it's cooked in the
culture it's cooked into laws in
so many different places and I
think we need to be very
vigilant and aggressive. As we
work to root out that prejudice
from the very core of our
governance and so with that
thank you again for the
opportunity. You guys are all
amazing keep it up.
Take some courage get it done.
Mr Ricardo.
I think you get for putting
together this panel and thank
you for all of you take for
coming out and educating us.
That working in a local
government.
We need to hear from you we
need to learn we ought we Ted
definitely get up plenty of
information from people that are
against this industry. So the
more we can educate ourselves
about what you all are doing and
how you do it and how you can do
that along with our residential
neighborhood concerns that the
better policy we can
come up with a thank you.
So much.
Why what thank everybody for
being here especially our panel
tonight?
Couple of things I I think that.
It's it's I've been very
fortunate to have some amazing
partners working through this
processing and and and McGuire
missed Senate McGuire a is has
been fantastic throughout.
When we started on this journey
into into thousand fifteen it
seems like a long time ago now
Sundays.
You know the intent was.
The intent was to fulfill the
promise of of.
Prop two fifteen.
Create some regulation around
the medical.
To bring it out of the darkness
and bring it into regulated
market.
We worked hard on that and and
as as a component of that.
We were very it's very.
.
Vocal about our need and desire
to protect the small family
small farmers.
And has been my concern from
the beginning that that as we
look to the promise of prop six
before.
That that clearly that.
There are some serious concerns
about that that actually
happening.
I. it is a I think when you
take you have an industry of of
folks who have never really
worked through a regulated
environment and then we.
Have a.
Very a very.
Robust.
Regulatory requirements it's
really really difficult and.
Might my hope was that we could
phase this in a way to not drive
people out of the market and.
And I'm and I still hope that
that that a gentler touch can
can help smaller farmers to be
able to survive.
I am concerned.
And and this is something that.
I start the story started
thinking about we're talking
about here the last day that
that farmers could sell to I.
dispensaries was December thirty
first.
Now everything that is sold.
Has to go through the regulated
market I am concerned.
Especially for folks with
manufacturing if they didn't get
everything they needed by
December thirty first.
There are businesses that are
going to run out of products.
Fairly quickly.
When you look at out toward
outdoor cultivation and the
cycles that that that they're
they're those wheels won't be
hard some of that will be
harvested until. Till late in
the fall of next year. I worry
that we will not have adequate
product for the market and that
we could if we're not looking
and cognizant of that that we
could have a collapse of an
industry that's just barely
getting started through a
regulated market. So I hope that
as we move forward that we keep
an eye on that.
So that so that said that these
amazing.
Entrepreneurs I. in this room
and and at the panels here have
a chance to be successful so.
I will see as we go forward I
don't I don't know.
But I I do have concerns that
that we won't have adequate
product in the market in spite
of the fact that we obviously
produce way more than we need in
California.
So.
Anyway that's I'd like to thank
you once again for being here I
think I might just Roth though
thanks to the seed Ukiah and
carry Randall for this facility
allowing us to be here tonight
and.
And thanks for braving the
weather.
So lazy Janet thank you all for
coming tonight again now I. if
we just give one last round of
applause to our panel in say
thank you so much for.
.
Their hard work tonight. And
thank you all of you for coming
were grateful in a big thank you
to the entire staff team to help
put this together.
Drive home safe thanks for being
here tonight