Cal NORML Asks For Change in CDPH Hemp Regulations to Allow Non-Intoxicating Medicinal Hemp Products

Gov. Newsom speaks at a press conference announcing emergency regulations on hemp products in California.
In a letter to the California Office of Administrative Law and Department of Public Health, Cal NORML has asked that Gov. Newsom’s proposed emergency regulations banning the sale of hemp products be modified to allow continued sale of non-intoxicating hemp CBD extracts that are widely used by medical patients in California.
The letter, joined by Oaksterdam University, does not take issue with the regulations’ intent to block the sale of hemp products with intoxicating levels of THC in liquor stores, gas stations, smoke shops and convenience outlets, often with inadequate labeling and in a manner accessible to minors.
However, it calls the proposed regulations too restrictive in banning industrial hemp with any “detectable amount of THC.” In practice, it’s impossible to eliminate detectable but non-intoxicating traces of THC from natural hemp extracts.  THC is readily detectable at levels of 1 billionth of a gram, far below the threshold of human sensitivity, which starts around 2.5 milligrams, the smallest dosage of the prescription THC drug dronabinol.
As a result, the proposed regulation would wrongfully ban a host of non-intoxicating high-CBD natural hemp medicinal preparations with minimal levels of THC (around 1-2 milligrams),  which are widely used by patients and recommended by doctors in California.
Cal NORML submitted expert testimony from California physicians Dr. Bonni Goldstein and Dr. Laurie Vollen, who have been recommending high-CBD hemp preparations to treat patients with epilepsy, cancer and other serious medical conditions.  According to Dr. Goldstein, the proposed regulations “will cause serious detrimental effects to thousands of vulnerable children in California if access to these products is denied.”  Dr. Vollen notes that equivalent products are not generally available in dispensaries, and even if they were, they would be much more expensive than those now available on the hemp market.
Cal NORML is asking that the regulations be amended to allow natural medicinal hemp oils, tinctures, extracts, capsules, suppositories and topicals  by adopting the state of Colorado’s definition of non-intoxicating hemp, which allows hemp extracts with a CBD:THC ratio of at least 15:1 and no more than 1.75 milligrams of THC per dose.  Cal NORML recommends that similar standards should be applied to other non-intoxicating hemp cannabinoids such as CBG and CBDA.

“There’s no danger that minors will try to get high on hemp products with less than 2 mg of THC, especially when other, much more potent marijuana products are readily available at bargain prices on the illegal market,” argues California NORML. As currently drafted, the CDPH’s proposed regulations violate the mandate of California’s medical marijuana law, Prop 215, to secure “safe and affordable” access to cannabis for all patients in medical need.

Although a few high-CBD products are available in legal cannabis stores in California, their cost is generally prohibitive for patients who need them. Cal NORML would like to see the tax burden on medical patients lessened overall, allowing a greater variety of medicinal-grade products in dispensaries. 

By law, the emergency regulation will expire in 180 days, unless CDPH issues a permanent regulation.

Emerald Cup Honors NORML Founder Keith Stroup with Lifetime Achievement Award on 60th Anniversary of First Pot Protest

Please support NORML’s work by donating to our
60th Anniversary – Keith Stroup Celebration fund
OAKLAND – The Emerald Cup will celebrate its 20th anniversary in Oakland by conferring its Lifetime Achievement Award to NORML founder Keith Stroup sixty years after the world’s first marijuana freedom protest in San Francisco started a worldwide movement to end cannabis prohibition.
On August 16th, 1964, a lone crusader named Lowell Eggemeier marched into the San Francisco Hall of Justice, fired up a joint, and puffed it in the presence of the police inspector. “I am starting a campaign to legalize marijuana smoking,“ he announced, “I wish to be arrested.” He was promptly hauled off to jail for marijuana possession, at that time a felony.
Eggemeier’s solitary “puff-in” proved to be the spark for a movement that would grow over the next sixty years. His protest attracted the attention of a libertarian attorney named James R. White III , who described himself as “to the right of Barry Goldwater.” White filed a petition for a writ of habeas corpus for Eggemeier’s release to the California Supreme Court. He also organized the world’s first marijuana reform advocacy group, LeMar (Legalize Marijuana), to support Eggemeier’s defense.
White’s petition argued that marijuana’s status as an illegal narcotic was an unconstitutional violation of the 8th Amendment’s ban on cruel and unusual punishment and the 14th Amendment’s due process clause. He also presented evidence that marijuana was less addictive and toxic than legal tobacco. In the first of a long line of court rebuffs for marijuana reformers, the court rejected Eggemeier’s petition, and he ended up serving nearly a year in jail. Nonetheless, other LeMar groups formed in New York, Ann Arbor-Detroit, Cleveland and Buffalo, led by such advocates as poet Allen Ginsberg, John Sinclair and Ed Sanders.
As pot’s popularity soared in the 1970s, the movement gained momentum. California LeMar morphed into Amorphia, founded by Michael Aldrich and Blair Newman, which would launch the first-ever ballot initiative to legalize marijuana, the California Marijuana Initiative of 1972. Later, Amorphia merged with the newly formed NORML (National Organization for the Reform of Marijuana Laws), founded by Keith Stroup in 1971, to become California NORML. Although the CMI failed 33.5%-66.5%, it did better than expected, prompting the legislature to approve a bill sponsored by Sen. George Moscone and California NORML that decriminalized marijuana possession in 1976, saving hundreds of thousands of pot smokers from felony charges.
One of NORML’s first projects in 1972 was to file the first federal lawsuit to reschedule marijuana for medical use, which was ultimately turned down by the courts after 19 years of litigation.
Keith Stroup, who is still active with NORML, will be honored with a Lifetime Achievement Award at the Emerald Cup, a festival of cannabis craft cultivation and culture, which is celebrating its twentieth anniversary at Oakland’s Kaiser Center this August 17-18.
In 1996, California voters went on to approve the first initiative to legalize the possession and cultivation of marijuana for medical use, Prop. 215. Since then, 38 states and more than 40 foreign countries have also legalized medical cannabis. Twenty-four states, including California, have also passed laws legalizing adult use of cannabis.
For all that, cannabis is still illegal under federal law. Although the government has recently proposed rescheduling cannabis as a Schedule 3 medicinal drug, this will not change the criminal status of those possessing or selling it under current state laws. And even though adult use of cannabis is legal in California, it still isn’t legal to smoke marijuana in a police station like Eggemeier did, or in public places or even rental units, if local governments disallow it.
And so NORML has more work to do. In Washington, NORML is lobbying to end federal prohibition by descheduling cannabis entirely. In California, Cal NORML is working to expand legal consumption spaces, protect patients’ access to affordable medicine, secure workers’ right to use cannabis off the job, ban urine testing, and oppose excessive taxes and local bans.
Please support NORML’s work by donating to our 60th Anniversary – Keith Stroup Celebration fund here.

California State Fair to Allow Sales and Consumption of Cannabis

The LA Times has reported, “For the first time in the 170-year history of the California State Fair, which is scheduled to open July 12 in Sacramento, visitors will be able to do something they haven’t been able to do there before — legally anyway. They will be able to purchase and consume cannabis on-site.”
Embarc, the fair’s partner on the project, will host a dispensary and 30,000-square-foot outdoor consumption lounge space at Cal Expo that will allow fair-goers who are 21 and older (and in possession of a valid government-issued photo ID) to buy and try award-winning cannabis.
In 2022 a cannabis exhibit and awards program were added to the fair lineup, and an estimated 160,000 people have come through that educational exhibit in the last two years. This year, those thousands of potential shoppers will be able to buy and consume some 300 different THC-containing products, including many of the 98 freshly crowned winners of 2024 California State Cannabis Awards.
Cal NORML deputy director Ellen Komp was quoted in a Sacramento Bee article about the move, saying that last year, “If you wanted to order or even smell the winning cannabis entries, you could place a call from your cell phone and pick it up in the parking lot, like a criminal. And inside there was no place to peacefully consume it. I told the (Department of Cannabis Control) representatives that if their agency truly wanted to help the California cannabis farmer, it needed to advocate for this change.”
“When people come to the state fair, they can try the best wine, cheese and craft-brewed beer. That’s already in place,” California State Fair Chief Executive Tom Martinez told The Times. “This was just the natural next step that the legislature and our board of directors is taking.”
This year’s California State Fair runs from July 12 to 28. Daily hours for the dispensary and lounge, award winners and additional information will be posted to the 2024 California State Cannabis Awards website at castatefaircannabisawards.com as they are available.
You’ll only be able to consume cannabis products purchased on-site. The lounge will provide rolling papers and expects to have an assortment of other smoking paraphernalia to use, so leave your favorite smoking gear at home. And last, while the dispensary and lounge will be open for most of the fair’s run, there are three dates to be aware of: July 12 and 13 (no inhalable consumption will be allowed on those days) and July 19 when the dispensary will be closed.
Cal NORML will be tabling along with the California Cannabis Historical Society on weekends during the Fair. Stop by and say high.

Bill Excluding Law Enforcement Officers from Employment Protections for Off-The-Job Cannabis Use Fails in Committee

On June 19, the SB 1264 (Grove), a bill to exclude law enforcement from employment rights protections for off-the-job cannabis use, failed to pass the Assembly Labor and Employment Committee, in a 3-2-2 vote. The bill would have amended AB 2188, the Cal NORML–sponsored bill banning job discrimination based on urine or hair tests for inactive THC metabolites.
Watch the committee hearing (starting about 2:15 in).
Beth Malinowski of SEIU (Service Employees International Union) testified against the bill, saying, “Employers, including law enforcement, are free to test for recent use of cannabis by means of oral swab, blood or breath tests, which detect recent exposure to THC, the psychoactive component of cannabis, or by performance tests that detect actual impairment. The only thing they may not do is use urine or hair tests that detect inactive metabolites of THC which remain detectable for days or weeks after an impairment is passed.”
Kristin Heidelbach of UFCW (United Food and Commercial Workers) Western States Council in her testimony held up and read from the San Diego Sheriff’s Rules of Conduct governing against off-duty use of alcohol that would “render the employee unfit to report for their next regular tour of duty.” She said, “When we talk about holding law enforcement to a higher standard, next year is it teachers, after that is it nurses, after that is it doctors? The better thing to do is to loop cannabis into existing policies that are already in place, and trust law enforcement to be responsible with cannabis off the job.” The San Diego policy was sent to Cal NORML by a supporter via our Facebook page.
CELA (California Employment Lawyers Assn.), AFSCME CA (American Federation of State, County and Municipal Employees), California School Employees Assn., Cal NORML, DPA, and CCIA all added “me too” opposition to the bill.
Asm. Juan Alanis (R-Modesto), formerly a Sergeant for the Stanislaus County Sheriff’s department, asked about the “slippery slope” notion. “I don’t care if your grocery store worker is high,” said the bill’s author Sen. Shannon Grove (R-Bakersfield), arguing that sworn law enforcement officers should be held to a “higher standard.” (Or in this case, a less high one.)
Asm. Chris Ward (D-San Diego) spoke next, saying, “I don’t want an officer showing up to work high, or drunk,” adding that he tries be consistent with alcohol policy on cannabis. “We are maintaining a reverence for a higher standard, but the higher standard is ‘be a responsible adult.’”
Asm. Rick Chavez Zbur (D-West Hollywood) said he came from a law enforcement family, with several uncles and cousins on the force. “I have a problem with a system of testing on a legal activity that I don’t see as very different from alcohol use. We’re having trouble recruiting people into law enforcement, where we don’t appreciate them as we often should for putting their lives on the line, and then having a testing regime which doesn’t have much to do with what your condition is on the job is not the best approach.”
Committee chair Liz Ortega (D-Hayward) voted for the bill after she was able to secure a “sunset” provision making the law inactive after 2028. “This one was hard,” Ortega said, adding she’d spent time going back and forth on it. Joining her in supporting the bill were Republican committee members Flora and Alanis. Voting against the bill were Alex Lee (D-Milpitas), the chair of the legislature’s progressive caucus, and Asm. Ward. Not voting were Alan Lowenthal (sitting in for committee member Wendy Carillo) and Asm. Zbur.
Although Sen. Grove asked for the committee to reconsider the bill, we don’t expect it to advance. Thanks to all Cal NORML supporters who took action on SB 1264, including letter writers and citizen lobbyists who joined us on Lobby Day in May. As one participant put it, “We like weed so much we lobbied for the cops to use it!”

New Requirements for Vaporizer/Cartridge Advertising and Disposal

Beginning on July 1, 2024, Cal. Bus. & Prof. Code § 26152.1 will take effect, requiring cannabis vaporizer products to be labeled saying:
• An empty integrated cannabis vaporizer shall be properly disposed of as hazardous waste at a household hazardous waste collection facility or other approved facility.
• A spent cannabis cartridge shall be properly disposed of as hazardous waste at a household hazardous waste collection facility or other approved facility.
Advertising, packaging and labeling of a cannabis cartridges and vaporizers cannot state that they are disposable, nor imply that they may be thrown in the trash or recycling streams.
An “integrated cannabis vaporizer” is defined as: “a singular device that contains both cannabis oil and an integrated electronic device that creates an aerosol or vapor.”
“Authorized facility” means a facility authorized under the hazardous waste control laws under Chapter 6.5 (commencing with Section 25100) of Division 20 of the Health and Safety Code.
 
Cal NORML supports the proper disposal of cannabis vape pens, cartridges, and batteries.
Consumers can use this link to find an authorized hazardous waste facility near you.
You can also check with your licensed cannabis retailer to see if they have a waste disposal program.
Also see: How to Dispose of Vape Pen Batteries.
 
BACKGROUND
The law is the result of Assembly Bill 1894 (2022), which was introduced as a compromise following opposition from Cal NORML to another bill from the same author that would have banned disposable vape pens altogether. Instead, the proposal was amended to require a consumer advisory about how to properly dispose of them.
Find Cannabis Retailers that Support Cal NORML and Cannabis Consumers’ Rights
Also see: Vaping Resources and Products

Cal NORML-sponsored Cannabis Café Bill Passes State Assembly

AB 1775, the California NORML-sponsored “cannabis café” bill to allow California cannabis lounges to sell food and event tickets, made a media splash when it passed the Assembly floor by a vote of 58-6 last week.

The Los Angeles Times’s opinion columnist LZ Granderson editorialized:
Bring on the cannabis cafes.⁩ More Americans now consume marijuana on a daily basis than drink alcohol every day, according to a recent study. In short: “Just say no” is dead. Long live “pass the dutchie ’pon the left-hand side.” The next important step in having policy actually reflect society would be for Gov. Gavin Newsom to sign the “munchie bill” that’s likely to be headed his way soon.

Track AB 1775 and watch its hearings.
Thanks to all who took action to help pass this bill through the Assembly. Now, please write to your State Senator in support of AB 1775,

ACTION ALERT: CANNABIS COMPASSION PROGRAMS AND TAXATION BILLS HEADING FOR APPROPRIATIONS HEARINGS THIS WEEK

Please take action at this link to write to your Assemblymember, asking them to contact Asm. Appropriations committee chair Buffy Wicks and Asm. Speaker Robert Rivas asking them to move AB 2555, to extend cannabis compassion programs in California, and to vote for it when (hopefully) it moves to the Assembly Floor.
The high cost of medical cannabis, particularly its taxation, has made it impossible for many patients who are financially challenged to obtain a sufficient and steady supply of their medicine.
SB 34 (Weiner, 2019), exempted cannabis donated to financially challenged patients from taxation. Provisions of that law will expire on March of 2025, and must be renewed, in order to continue to supply needy patients with cannabis. AB 2555 would keep these critical donation programs in place.
Currently AB 2555 (Quirk-Silva) is being held in the Assembly Appropriations committee, with a hearing on May 15 to determine if it will move on from the committee’s suspense file to the Assembly floor. The bill passed the Assembly Revenue and Taxation Committee by a unanimous vote of 7-0 after veterans groups, patient advocates, and Cal NORML testified in its favor (pictured above with the bill’s author Asm. Quirk-Silva).

Also, please write to your state Senator and ask them to contact Sen. Appropriations committee chair Anna Caballero and Senate President/Pro Tempore Mike McGuire, asking them to move cannabis and to vote for the bill when it goes to the floor.

SB 1059 (Bradford) amends the definition of gross receipts in the Sales and Use Tax Law to exclude the amount of any state cannabis excise tax and sales and use tax imposed on a cannabis retailer,  preventing double taxation at the local level.
Cannabis is already heavily overtaxed relative to comparable goods in California. Compounding taxes simply leads to an artificially inflated purchase price and incentivizes consumers to purchase cannabis from the unlicensed, untested, and untaxed market.
Currently SB 1059 is being held in the Senate Appropriations committee, with a hearing on May 16 to determine if it will move on from the committee’s suspense file to the Senate floor.

Sign Up Now for Cal NORML / ASA Lobby Day on May 6 

PHOTO: Citizen Lobbyists pictured with Sen. Nancy Skinner at a past Lobby Day.

All Californians are invited to attend the California NORML/Americans for Safe Access Citizen Lobby Day on Monday, May 6 in Sacramento. The event will bring supporters from across the state to meet with their state representatives and make our voices heard on pending legislation affecting the rights of cannabis consumers in California.
Attendees are encouraged sign up now so that appointments can be made in your lawmakers’ offices on Lobby Day.
Despite cannabis legalization in California, enacted by the voters with Prop. 64 in 2016, there remain obstacles to consumer access to safe, affordable cannabis products, and to the experience of enjoying it in consumption lounges,” said Ellen Komp, Deputy Director of Cal NORML. “Citizen Lobby Days go a long way towards building relationships with lawmakers, and erasing lingering stigmas against cannabis consumers. And they’re lots of fun!”

“It’s important to realize how important Lobby Day is, because more bills that have come to fruition in California have come from a Lobby Day,” said Richard Miller of Americans for Safe Access California Advisory Committee, pointing to a 2015 bill to end discrimination against medical marijuana patients who need organ transplants. “Past lobby days have helped bring about reforms such as employment rights for cannabis consumers, and medical rights for pain patients and others who use cannabis,” Miller added.
“Participating in Lobby Day is pivotal for civic engagement, as it empowers citizens to amplify their voices in legislative processes,” said Jakki Hernandez of Orange County NORML. “This event offers an inspiring environment for training, pairing newcomers with experienced attendees to foster camaraderie and guidance. Through this collaborative approach, advocacy efforts are strengthened, enhancing the community’s influence in shaping laws that impact them. By the conclusion of the day, newcomers become proficient in discussing the relevant bills, underscoring the importance of fighting for one’s beliefs through education and activation. Every individual should experience a lobby day to witness firsthand the significance of advocating for what they believe in.”
Sponsors for this year’s Lobby Day include Silver Sponsor KIVA Confections, and these Bronze sponsors: The Law Office of Shay Gilmore, The Green Cross, Ananda Strategy, PAX, The Law Offices of Omar Figueroa, Snowtill, Ispire, Ian Rassman, and the Brownie Mary Democratic Club of San Francisco.

“At Kiva, we believe in empowering consumers to shape the future of cannabis by championing responsible consumption. Sponsoring Lobby Day is our commitment to amplifying the consumer voice and advancing efforts to normalize responsible cannabis use,” said Caryn Woodson of Kiva. Sponsor Nate Landau from Snowtill added, “We are sponsoring lobby day because Cannabis compassion donation programs (AB2555) need to be renewed, so patients in need, especially veterans, can continue getting their medicine.”
Sponsor this impactful event.

LOBBY DAY AGENDA
Lobby Day attendees will meet in the morning at the Capitol Event Center, where they will learn about pending bills and get lobbying tips. In the afternoon, participants will meet with lawmakers or their staffers. The day will end with an afterparty and reception on the patio at Cafeteria 15L.
Some of the bills on which we expect to be lobbying are:
AB 2555 (Quirk-Silva) to renew tax-free cannabis compassion programs for indigent patients, which were put into place with SB 34 (Wiener, 2019) and set to expire next year.
AB 1775 (Haney) to allow cannabis businesses to prepare and sell noncannabis, nonalcoholic food and drinks in a cannabis café model boosting both the industry and the consumer experiences. Cal NORML is sponsoring this bill and is working to address concerns raised by the Governor in his veto message last year.
SB 1059  (Bradford) would prohibit a city or county from including in the definition of gross receipts, for purposes of any local tax or fee on a licensed cannabis retailer, the amount of any cannabis excise tax imposed under the Cannabis Tax Law or any sales and use taxes. Cal NORML supports cannabis tax reform in California.
SB-1264 – (Grove) – would exclude from employment rights protections in AB 2188 employees in sworn or nonsworn positions within law enforcement agencies, including dispatch and other public safety communications, community services duties, and animal control. We oppose this bill.
Read about 2024 bills pending in the California legislature. 

LOBBY DAY SCHEDULE
MORNING
10 AM – 12 PM; doors open at 9:15 serving coffee, donuts and such
Capitol Event Center
1020 11th St. (between J and K Streets)
Gather for training/legislative overview; pick up your afternoon appointment information

LUNCH BREAK (on your own)
AFTERNOON
1 PM Group Photo at the Capitol Steps

1:30 – 5 PM
Attendees will go to the Capitol for appointments with your elected representatives or their staffs.
EVENING
5 PM – 7 PM
Afterparty / Reception – food, drinks and fun!
Cafeteria 15L

Register to Attend Lobby Day
Sponsor This Impactful Event!

Mayor Breed Kicks Off SF Weed Week

San Francisco Mayor London Breed stopped off before attending the Giants home opener today to welcome participants in the first SF Weed Week, to be held throughout the city on April 13 – 20th. 
The kickoff press conference was held in conjunction with a Cannabis Mylar Art Exhibit, showcasing over 1,000 commercial mylar product packages from the legal and illicit market, at the Mirus Gallery & Art Bar at 540 Howard Street. It was organized by cannabis journalist David Downs and attended by about 100 supporters from the Bay Area and beyond.
Downs said he got the idea for a “Weed Week” after hearing about Beer Week in the city, and by Amoeba Records in-store events. “Cannabis growers are rock stars. Strains are celebrities. We’re treating them accordingly,” he said. SF Week Week events will be held on 7 consecutive nights at 7 different dispensaries, showcasing 7 new cannabis strains.
Wearing a Giants jersey and bright orange suit, Breed said she was grateful to be part of, “an opportunity that is so San Francisco.” She added, “When you think about San Francisco, you think about fun, you think about excitement, you think about joy. And the cannabis community, even before it was legalized in California, has been such an important part of that.”
Mentioning the Beat poets in North Beach and the Summer of Love in the Haight as examples of San Francisco culture that have spread across the world, Breed said today’s efforts would help “transform the conversation and open up opportunities for people to experience joy through cannabis.” She joked that SF Weed Week should be held at the same time as Restaurant Week (because, the munchies).
Cannabis businesses are projected to bring in $789 million to the city in 2024/25 Breed said, mentioning that SF has approved 52 business permits through their equity program, and has given out $11 million in grants for equity programs in cannabis. She said SF Weed Week was an opportunity to “support our dispensaries and small business, and use this as a way to bring tourists and other people back to our city for an eperience that only San Francisco can provide.”
Speaking about some flap her office got when the official 4/20 Hippie Hill event in Golden Gate park was cancelled this year, Breed clarified, “I love 4/20…what we did instead of cancelling it we created an event where people can come together safely. We didn’t enforce our ’no smoking in the park’ rules; we allowed people to come together….4/20 is an organic event that has come together not because the city says it’s so, but because the community makes it happen….So as we embark upon this new SF Weed Week, I’m excited to see something like this happen in a more formalized way.”
After she spoke, Breed posed for pictures with the crowd, holding a cannabis bud bouquet presented to her by local cultivator Sense.
The mayor acknowledged the contributions of the Brownie Mary Democratic Club and Cal NORML board member David Goldman, president of the SF BMDC, who also spoke at the event. Goldman mentioned the club’s monthly meetings that host candidates for local office, letting them know that “our community is strong and it votes.” Follow SF BMDC on Instagram at BMSF415.
Goldman’s partner Michael Koehn, an Air Force veteran, spoke about the importance of passing AB 2555 to extend SB 34 compassion programs that provide no-cost medicine to veterans and others. Also speaking on the topic was Nicole Redler of ReCompass, who organizes compassion programs.
Downs invited all back at 4:20 for the official Mirus Gallery show opening, and noted that the show would be up all month, and the gallery will serve as a gathering point for people attending SF Weed Week events

CA Cannabis Tax Fund Monies Diverted from Prop. 64 Mandates

As the California cannabis industry, already overburdened by overtaxation, faces a raise in the state excise tax from 15% to as much as 19% in order to fund programs that benefit from cannabis taxes, a sizeable chunk of the Cannabis Tax Fund is being diverted into programs not mandated for funding by Prop. 64.
By Ellen Komp, Deputy Director, Cal NORML
Proposition 64, the voter-approved measure that legalized the adult recreational use of cannabis in California in 2016,  required taxes collected on state-licensed cannabis to be disbursed to a number of specific programs.
At issue in past and coming years is so-called “Tier-3” funding, which is to be disbursed as follows, via grant programs:
– 60% to Youth Education, Prevention, Early Intervention and Treatment
– 20% to Environmental Restoration and Protection
– 20% to State and Local Government Law Enforcement
Prop. 64’s cannabis tax funding mandates are enshrined until 2028, when some changes can be made, but only if they don’t reduce the amount of Tier 3 funding mandated in the measure.
 
Cannabis Tax Reform Efforts
Cal NORML and other groups have been working for years to reduce the tax burden on cannabis businesses in California, currently at 15% state excise tax, plus state sales tax and oftentimes, “special” local taxes on top, bringing total taxes as high as 40% and much higher than taxes on comparable and more dangerous consumer goods like alcohol or cigarettes.
The state excise tax on a bottle of wine is 4 cents. The state excise tax on an ⅛ ounce of cannabis is $4.90 or over 100 times more. At Cal NORML, we witnessed a mass exodus from the legal medical marijuana market back to the well-established illicit one just after Prop. 64 taxes took effect in 2018. “Pop up” sales of unlicensed and untested products lead to the only instances of cannabis products known to cause deaths during the EVALI crisis of 2019.
California is falling short of other states in per capital cannabis sales:

State
Per Capita Cannabis Sales in 2023

Michigan
$295.39

Montana
$288.96

New Mexico
$254.43

Oregon
$221.67

Missouri
$218.62

California
$98.40

Source: https://www.cannabisbusinesstimes.com/news/state-cannabis-sales-trends-august-2023/
Michigan, with its 10% state excise tax that is shared with local jurisdictions (which have no taxes of their own), is pointed to as a model for a successful roll-out of marijuana legalization. Missouri has a 6% state excise tax and caps local taxes at 3% (California has no such cap). Other states like Oregon with its 17% state excise tax has seen business failures; their numbers are boosted by sales from customers from bordering states without legal cannabis. If California were on par in per capita sales with Michigan or Montana, it would be generating $13 billion in annual sales, and the state would be collecting substantially more tax revenue, concludes Cal NORML board member Hirsh Jain of Ananda Strategy.
Some measure of tax reform was gained in California with last year’s budget bill AB 195, which eliminated the cannabis cultivation tax but, in a compromise with groups receiving cannabis tax monies, set a bar of $670 million for Tier 3 programs and directed the legislature to raise the cannabis excise tax to as much as 19% next year should tax revenues fall below the $670-million mark.
Reform groups and tax recipients are gearing up for a battle on taxation in the coming years, and it’s already begun. Meanwhile, little noticed is the fact that the bulk of the 60% cannabis tax allotment for youth education and prevention programs has been diverted to pay for child care, something not mandated by Prop. 64 or approved by California voters.
 
How Cannabis Tax Funds Have Been Misdirected
Governor Newsom’s budget proposal for 2019 directed, after $12 million to the Department of Public Health, a whopping 75% ($80.5 million) of the 60% of cannabis tax funds earmarked for education, prevention, and treatment of youth substance use disorders to the Department of Education to “subsidize child care for school-aged children of income-eligible families.”
Only a remaining 20 percent ($21.5 million) was directed to the Department of Health Care Services for “competitive grants to develop and implement new youth programs in the areas of education, prevention and treatment of substance use disorders along with preventing harm from substance use.” The remaining 5 percent ($5.3 million) was earmarked for the California Natural Resources Agency to support youth community access grants.
Reporter Brooke Staggs explained in a 2019 Orange County Register article how surprising it was that Prop. 64 tax funding was being directed away away from after-school programs and into child care. The article states:
When Prop. 64 was approved by voters, officials projected more than $1 billion a year would come to the state in new cannabis-related revenue, and at least some of that would be directed for after-school programs for lower-income families.
Now, 19 months later, the numbers are very different. Cannabis has generated much less than projected in sales taxes, and after school programs haven’t seen a single dollar from legalized marijuana.
In May, Gov. Gavin Newsom, who campaigned as a supporter of both Prop. 64 and expanded after school programs, surprised many insiders when he opted to dedicate $80.5 million in cannabis taxes available this fiscal year — plus $130.5 million expected to be available each year going forward — to finance vouchers for child care, money that would go to more than 11,000 families in need. His administration says giving parents vouchers offers more flexibility than direct funding for After School Education and Safety (ASES) programs, because the vouchers can be used by parents who work non-traditional work schedules.
Supporters of ASES have nothing but praise for the programs. But many also said Newsom’s move amounted to a “bait and switch” for voters, who were told marijuana tax revenue would specifically support “after school programs,” which poll consistently higher with voters of all demographics than “subsidized child care.”
After school programs are also backed by data that show students who participate are less likely to use drugs or become victims of crime and more likely to do better in school. Supporters argue that those results align with the mission of Prop. 64 funding.
Assemblymember Kevin McCarty (D-Sacramento) authored a bill, Assembly Bill 1085, to redirect cannabis tax revenue to ASES programs and federally funded 21st Century Community Learning Centers, which offer after school programs for high school students. McCarty’s bill passed through the legislature but was vetoed by Newsom.
The legislature has fallen in line with the Governor’s suggestion on funding child care with cannabis taxes in subsequent years. This year’s budget bill also contains an allotment of 601,000  to support the State Department of Public Health and $1,801,000 for the Dept. of Food and Agriculture.
 
Grantees  Lead the Charge Against Cannabis Tax Reform
At the November 16, 2023 meeting of the Department of Health Care Services (DHCS) Prop. 64 advisory group, whose purpose in part is to provide feedback on Youth Education, Prevention, Early Intervention and Treatment Account (YEPEITA)-funded programs, Lynn Silver of the Oakland-based Public Health Institute (PHI), who is on the board of the group, made a pitch for all of the groups present to lobby against tax reductions for cannabis, since they are funded by those taxes. Silver acknowledged at the meeting that the bulk of the funding was going to education, not to YEPEITA programs. Her group continually uses the need for child care funding as a reason to keep cannabis taxes high.
PHI took the lead on a letter sent by various groups last week to legislative leadership proposing increasing the cannabis excise tax and/or re-instituting the cultivation tax in order to ensure that Tier 3 funding continues at needed levels. Their rallying cry has been picked up by the San Francisco Chronicle, among other outlets.
Arguably PHI’s activities have crippled the California cannabis market at the local level, where still over half of the state’s municipalities don’t license cannabis businesses. The Oakland-based group has contacted every city and county in California, encouraging them to pass restrictive measures with high local taxes, levied on top of the state excise tax. Their “Getting It Right from the Start” project has released its fifth annual scorecard of California’s cities and counties, ranking localities according to how well they limit the number of legal cannabis retail outlets, how high they tax cannabis, and whether they ban cannabis at events and lounges:
The institute is funded by the Conrad N. Hilton Foundation, the National Institute on Drug Abuse (NIDA), and the CA Tobacco-Related Disease Research Program (which arguably has no business addressing cannabis).  PHI’s director Silver testified last year against a bill, SB 512, that would have ended double taxation on cannabis, since local taxes are currently included in the gross receipts total that must pay the 15% excise tax (as a new video from CDTFA jauntily reminds retailers). The bill failed.
 
Hearing Reveals Budget Surplus of $260 Million in Tier 3 Fund
At a March 12 hearing of the Assembly Budget Subcommittee #5, representatives from the Legislative Analyst’s Office (LAO) and (Department of Finance) DOF said they expect future tax revenues will just about meet their $670 million mark in coming years, though they seemed to think the excise tax would be automatically adjusted up per AB 195.
Katie Howard from Board of State and Community Corrections (BSCC) testified that not all grant monies were being distributed to cities and counties for law enforcement activities, since there were not enough applicants for the grants. Under Prop. 64, only local jurisdictions that license cannabis businesses can apply for the grants, as an incentive for locals to license. A pending two-year bill from Assemblymember Lackey, AB 1616, would open grants up to cities and counties that have not licensed, but so far has stalled in the legislature over conflicts with Prop. 64.
Some $260 million in unspent funds have accumulated in the Tier 3 law enforcement account, and those funds are being used on loan to backfill deficits in the Tier 3 accounts, to the tune of $100-$150 million a year, to be paid back at some unspecified date at $50 million yearly. Asked by Committee member Christopher Ward if cannabis tax funds overlapped with other general-fund-supported programs, Andrew Hoang of DOF replied that DSS (Dept. of Social Services) provides childcare funding but, “the department is looking to utilize that Prop. 64 excess for child care.”
So it seems that even more cannabis tax funds could be going to child care, even though that funding stream was not approved by the voters in Prop. 64, and the cannabis industry continues to struggle to bring in adequate tax revenue in a scheme that already overtaxes their product, and may increase taxes very soon.
 
Conclusions
Governor Newsom signed AB 2925  (Cooper), requiring DHCS to provide to the Legislature a spending report of funds from the YEPEITA paid for by the Cannabis Tax Fund for the 2021–22 and 2022–23 fiscal years by July 10, 2023. Cal NORML has requested this report from DHCS and DOF, but has not yet received it.
Before we talk about raising taxes on cannabis to try and fund YEPEITA programs, we should look at how cannabis taxes are currently being spent, and how they are being diverted away from Prop. 64-mandated programs.
Rather than continuing to hamstring the legal cannabis market with overly high taxation and overregulation, California should be looking to more progressive and successful cannabis tax models that will help the legal, licensed industry thrive and provide more tax income for all, while ensuring consumers have more access to safe cannabis products, and squelching the illicit cannabis industry instead.