Newsom: California marijuana measure has anti-monopoly safeguards

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OAKLAND, California – Smaller farmers, mom-and-pop businesses and existing medical marijuana companies will have a place in California’s recreational cannabis industry if voters pass a legalization measure this fall.

That’s the message California Lt. Gov. Gavin Newsom, a big supporter of the legalization measure, gave marijuana business professionals on Tuesday.

Speaking to roughly 1,000 attendees gathered at a conference here hosted by the National Cannabis Industry Association, Newsom clearly tried to allay fears within California’s cannabis sector, and beyond, that a small number of corporate interests will dominate the state’s market.

“We have got to protect the small cultivators” as well as entrepreneurs who don’t have access to millions of dollars, said Newsom, featured in the photo.

To that end, the Adult Use of Marijuana Act – as the California initiative is called – includes language meant to protect the industry “against monopolistic practices” for five years, noted Newsom, the highest-ranking state politician to support the legalization measure.

For example, any adult-use cultivation business that operates an outdoor facility larger than one acre or an indoor building that exceeds 22,000 square feet would be prohibited from getting a license until January 2023. All legal rec growers prior to that date would have to fall within those limits.

Under the proposed law, state licensing authorities also would be required to consider whether issuing a particular applicant a permit might stifle competition or create a monopoly.

Newsom stressed the need to ensure minorities have a place in the cannabis industry, and he also said existing medical marijuana businesses that have proven they can operate responsibly will have a leg up in obtaining a recreational license

“For those who have been good actors in the state of California, you’re going to be prioritized,” he said.

‘Big Marijuana’ fears

Newsom’s assurances come as both supporters and critics of legalization around the nation have voiced concerns about the possible emergence of “Big Marijuana” that puts profit first, much like Big Tobacco.

But not everyone shares that view. A new study from the Brookings Institution contends those fears are overblown, and that policy makers should instead focus on harmful practices – such as marketing to minors.

Last month, supporters of the California ballot measure handed in more than 600,000 to the state, indicating the initiative is likely to go before voters in November.

The initiative needs 365,880 valid signatures to qualify for the ballot, and all counties in the state must complete a random sampling of the petitions by June 30. After that, the secretary of state will determine whether or not the campaign has formally made the ballot.

While California seems ripe for legalization, Newsom cautioned businesses about the dangers of overestimating the chances of success. Potential headwinds on the horizon could sink the entire effort, he warned.

“It’s not a done deal by any stretch of the imagination,” Newsom said. “Don’t just think that … this is going to be easy. We’ve got work to do.”

Polling shows that support for recreational legalization is lower in California than the country as a whole, though the latest numbers show some improvement, Newsom said.

A May survey by the Public Policy Institute of California found support for rec legalization at 60%, while a March study by the AP-NORC Center for Public Affairs Research found that 61% of Americans think marijuana should be legal.

Opponents, however, also are ramping up efforts to fight the California rec proposal, and some big money from outside the state could come flooding in to help sink the measure, Newsom warned.

“The last few weeks we actually had some good polling, the strongest we’ve seen. But in the last few weeks the opposition has begun to emerge,” Newsom said, adding that rumors are swirling that a big funder will step in to defeat the initiative.

If that happens, it could set back marijuana legalization in California – and the entire country – by years.

Financial support needed

The legalization campaign also needs more financial support, Newsom argued.

The measure has the financial backing of billionaire businessman Sean Parker. But Newsom said a common misconception is that Parker can bankroll the entire campaign by himself, which has made many supporters complacent.

“Sean’s got a lot of money, there’s no doubt about that. But he’s got a budget too, and he’s not going to fund the whole thing. There’s a lot of mythology about that,” Newsom said.

Newsom said backers of the measure listened to the concerns of people around the state, including mothers who expressed fears of how legalization would have an impact on children. Others fear it will lead to a spike in intoxicated drivers or have a broader impact on society.

Newsom urged the industry to take these concerns seriously, adding that the legalization measure is structured in a way that it can incorporate changes going forward.

“It allows us to make fixes without going back through voters,” Newsom said. “We will make fixes, we will adjust, we will address legitimate concerns.”

Photo courtesy of the National Cannabis Industry Association