The Adult Use of Marijuana Act, which is more commonly referred to as Proposition 64, was approved by California voters in 2016. The law allows individuals over the age of 21 in the Golden State to possess and consume small amounts of marijuana, but the drug is still considered a Schedule I controlled substance by the federal government. This means that businesses involved in the cultivation and distribution of marijuana in California must navigate a complex labyrinth of federal and state laws and regulations. However, two laws that went into effect in California on Jan. 1 may provide a little more clarity for businesses involved in the legal cannabis industry.
Assembly Bill No. 34
AB 34 is a relatively straightforward piece of cannabis legislation that allows retailers licensed by the state of California to donate medical marijuana to patients who would otherwise not be able to afford it. The bill was passed because California is home to many chronically ill veterans and low-income individuals who are unable to pay for medicine that could greatly improve the quality of their lives. AB 34 also exempts donated cannabis from cultivation and use taxes.
Assembly Bill No. 37
AB 37 updates the tax laws dealing with the legal marijuana industry in California. It was passed to ensure that legal marijuana businesses are able to enjoy the same credits and deductions as other companies. Prior to the law going into effect, marijuana businesses in California were denied deductions because the state’s tax laws conformed to federal policies that view the cultivation and distribution of the drug as illegal acts. It is hoped that the implementation of AB 37 will help legal marijuana businesses in California to compete more effectively with illicit distributors of the drug.
Walking through a legal minefield
Attorneys familiar with California’s complex and growing body of marijuana laws could help businesses to operate and grow in a thriving industry that is strictly regulated. If you are in this business or thinking of entering it, an experienced attorney may help to ensure that you remain in compliance with these regulations. An attorney could also keep you informed about any new legislation that could affect your operations.