Alison Malsbury of the Canna Law Group notes that investors are stepping up their interest in front of potential legalization in California.  She cautions that the ability for companies to evolve into larger organizations could be limited.

The new rules, Medical Marijuana Regulation and Safety Act (MMRSA), won’t be implemented until 2018.  Three separate laws create the Bureau of Medical Marijuana Regulation (BMMR), which will oversee a process of detailing licenses in 17 different categories.  The rules are very stringent with respect to vertical integration and designed to protect smaller growers.

The leading potential legalization ballot initiative, Control, Regulate and Tax Adult Use of Marijuana Act (AUMA), on the other hand, is much friendlier.  There are 19 sub-licenses, and companies can hold up to 18 (testing labs are limited to only that license). Under AUMA, companies could scale into large organizations.

The bottom-line is that the current medical cannabis rules are not especially friendly to investors seeking to build large businesses.  Without the passage of AUMA, investors may not reap the big gains they envision.

Read Alison Malsbury’s “California Cannabis: Vertical Integration and Big Cannabis”: http://www.cannalawblog.com/california-cannabis-vertical-integration-and-big-cannabis

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