RegTalk: Cannabis Tours And Black Markets In California, Medical Marijuana In Texas

By Susan Ameel, co-founder and partner of Global Regulatory Risk Advisors.

The California state senate will hold a third reading of a bill intended to make cannabis party buses safer for passengers and the public. The bill, SB-625, is intended to support California’s burgeoning cannabis tourism industry.

The bill is designed to close a loophole that currently allows passengers on a cannabis tour bus to smoke pot on a bus where the driver is exposed to the second-hand smoke by requiring smoking buses to have a separate compartment for the driver that is sealed off and has a separate ventilation system. The bill would also limit passengers to those who are older than 21.

Meanwhile, the state assembly has proposed a bill focused on reducing black market cannabis sales by temporarily reducing the excise tax from 15% to 11% until 2022. Analysis shows that the bill would result in a $900 million tax loss for California from 2019 to 2022. This loss would be in addition to the lower-than-expected tax revenues produced by the cannabis industry in fiscal year 2018-2019 ($270 million versus projected $350 million).

The report indicates that several factors allow the black market to offer competitive pricing, including local taxes, licensing and compliance requirements including testing and banking restrictions. The committee may decide to take a longer term wait-and-see approach before slashing tax revenues. Finally, it has been noted that even if the state does lower the excise tax, local municipalities can fill that void by increasing local tax rates.

Can Texas Close On Marijuana Expansion Measures?

Texas took a momentous step on Monday in passing a bill that makes marijuana possession a civil penalty subject to a $250 fine. Currently, individuals charged with marijuana possession face a misdemeanor charge and penalties of up to a year in jail and a $4,000 fine.

This is a tremendous victory given that the bill was filed in November 2018, and read by the House for the first time in February. The problem is that the Texas Legislature has 28 days to get the legislation through the Senate before the legislative session closes on May 27, 2019. If it is not passed, the legislature must wait to reconsider when it reconvenes.

The level of engagement with marijuana legislation is tremendous. Texas is currently considering 30 bills relating to medical marijuana, recreational marijuana and hemp. However, it is not clear whether the many bills introduced by the House will get the same level of attention in the Senate. We are encouraged by recent movement on these issues in Texas, but it may be too little too late for results in this legislative session.

Related Links:

'Can I Use Legal Weed At Work?' How One Company Handles Questions About Cannabis In The Workplace

Will Provisional Licenses Save California's Cannabis Industry?