California first legalized the use of medical cannabis in 1996 via voter approval of Proposition 215. In 2003, the California Legislature adopted Senate Bill 420, which established a perfunctory set of regulations for medical cannabis in the state. In 2015, the Legislature passed the Medical Cannabis Regulation and Safety Act (“MRSA”) in anticipation of a successful legalization effort the following year. This law provided the state’s first comprehensive regulatory regime for medical cannabis.

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In November 2016, California voters approved the Adult Use of Marijuana Act (“AUMA”) via Proposition 64. The AUMA provided a detailed outline of the future of the adult-use industry – including regulations for cultivation, manufacturing, testing, and retail sale. In June 2017, the Legislature adopted the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”), which consolidated both medical and adult-use regulatory schemes. Recreational sales in California began on January 1, 2018.

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Under federal law, cannabis remains an illegal Schedule 1 narcotic. Schedule 1 narcotics are substances with a high potential for abuse, have no accepted medical value, and cannot be used safely, even under a doctor’s supervision. In recent years, the United States Department of Justice has chosen not to prosecute most cannabis users and businesses that follow state and local laws. Despite stated changes in federal policy toward legal cannabis at the state level, in practice, the federal authorities’ “hands-off” approach persists.

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On November 8, 2016, California voters passed AUMA by a 57% majority. AUMA directly addresses possession of recreational cannabis by legalizing the sale and use of cannabis by adults 21 years of age or older. AUMA also legalizes possession of up to 28.5 grams and recreational cultivation of up to six cannabis plants for personal use. The cannabis plants must not be visible from a public place. AUMA prohibits cities from banning personal indoor cultivation but authorizes cities to impose reasonable regulations on indoor cultivation. There is no statutory guidance to determine what regulations would be reasonable. Cities may still completely ban all outdoor cultivation.

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Cities still have the right to regulate local businesses, enforce zoning rules, impose taxes and penalize unpermitted uses. State law explicitly requires any business to first obtain a local permit before getting a state license.

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Cultivation licenses are issued by the Department of Food and Agriculture. Manufacturing, testing, distribution, and retail licenses are issued by the Bureau of Cannabis Control (“BCC”). Both the AUMA and MAUCRSA delegate rulemaking authority to various state agencies charged with regulating the cannabis industry.