California Bill Seeks to Establish Interstate Commerce Among Cannabis Legalized States

A California bill introduced by Senator Anna Caballero will provide the state with the opportunity to engage in marijuana transactions with other states. Under existing laws, authorization of commercial marijuana activities is applied to licensees within the state’s jurisdiction. Such laws prohibit them from distributing or transporting cannabis and cannabis derivatives across state borders.

The bill turned into legislation is the latest addition to the state’s Business and Professions code and will allow the California governor to enter an agreement with other US states on recreational and medicinal marijuana commercial activities. After some amendments, it passed through the House of Assembly and Senate.

However, California businesses and residents that wish to engage in interstate marijuana transactions must possess the appropriate licenses. Out-of-state companies or persons must have the necessary California licenses before transacting within California jurisdiction. Moreover, the state will not recognize any license issued in another jurisdiction. They must also adhere to California commercial cannabis laws and regulations.

California’s usual standards concerning cannabis and cannabis products must be adhered to by other states that it enters an agreement with. For instance, the state’s public health and safety standards are enforceable on foreign partners, likewise the criteria for testing products in laboratories.

A significant problem with the new legislation is that marijuana remains illegal at the federal level. Although dozens of states, including California, have made cannabis legal, federal laws still prohibit cannabis products. Therefore, cannabis and cannabis products grown or manufactured cannot go beyond the borders of the originating state.

The federal prohibition of cannabis is a troubling setback to interstate commerce among cannabis-legalized states. However, the bill addresses this issue by stating the criteria that will foster an agreement between California and another state. An agreement can only take effect under any of the following criteria:

  • Amendment of federal laws to allow interstate transport of cannabis.

  • The United States Department of Justice issues an opinion or memorandum that supports the transportation and distribution of cannabis between states.

  • The federal government approved a new law that stops the allocation of federal funds intended to prevent the transfer of cannabis and derivative products among cannabis legalized states.

  • The Attorney General issues a written opinion, through the appropriate means, that supports the new legislation and also prevents California from facing legal sanctions under the federal Controlled Substances Act or other applicable laws.

If one or more of the above criteria occurs, the appropriate department must inform the Governor and legislature committee. The department must also put out a public notice on its website.

After signing the bill into law, Gov. Gavin Newsom mentioned in his press statement that the new policy, alongside other signed cannabis bills, will further improve the state’s cannabis legalization framework.

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