Gov. Brown signs bills regulating medical marijuana industry

Co-founder and executive director Ryan Hudson (far right) talks with customer Beau Freshour (brown sweater) at The Apothecarium, a medical marijuana dispensary in San Francisco, Calif., on Thursday, October 1, 2015. Governor Jerry Brown is expected to sign bills to regulate the medicinal weed industry today. less Co-founder and executive director Ryan Hudson (far right) talks with customer Beau Freshour (brown sweater) at The Apothecarium, a medical marijuana dispensary in San Francisco, Calif., on Thursday, October 1, ... more Photo: Liz Hafalia, The Chronicle Photo: Liz Hafalia, The Chronicle Image 1 of / 10 Caption Close Gov. Brown signs bills regulating medical marijuana industry 1 / 10 Back to Gallery

Nearly 20 years after voters made California the first state in the nation to legalize the medical use of marijuana, Gov. Jerry Brown on Friday signed a package of bills to regulate the multibillion-dollar medicinal-cannabis industry.

The stringent and comprehensive regulations create an enforceable framework for governing virtually every aspect of the business in California — from licensing and taxation to quality control, shipping, packaging and pesticide standards.

The lack of regulations for the booming medical pot business has been frustrating to growers, dispensary operators, local governments, law enforcement and patient groups since 1996 when California voters approved Proposition 215, the law that made it legal for doctors to recommend pot to their patients.

In the void, what has emerged is a hazy, semi-legitimate industry with no uniformity between jurisdictions. The regulations seek to change that.

“This new structure will make sure patients have access to medical marijuana, while ensuring a robust tracking system,” the governor said in his signing message. “This sends a clear and certain signal to our federal counterparts that California is implementing robust controls not only on paper, but in practice.”

He was referring to federal laws that don’t recognize the legitimacy of state medicinal marijuana laws.

While some aspects of the legislation have been criticized, most involved in the industry say the benefits of having regulations more than outweigh any of the downsides.

“This is going to allow the industry to come out of the shadows and into the light,” said Nate Bradley, executive director of the California Cannabis Industry Association, a trade group that pushed for amendments on the bills.

3 bills signed

The package of laws signed by Brown consists of three bills — Assembly Bill 266, Assembly Bill 243 and Senate Bill 643 — which together create the structure to license, tax and regulate the industry as well as the funding mechanisms for the agencies that oversee the operations. The laws are scheduled to go into effect in 2018, although some provisions may be phased in earlier.

Known as the Medical Marijuana Regulation and Safety Act, the bills were passed by the Legislature in September in a down-to-the-wire push before the end of the regular session. Lawmakers considered the action crucial, considering that one or more measures to legalize the recreational use of marijuana will likely be on the 2016 ballot.

AB266 establishes a new agency, the Bureau of Medical Marijuana Regulation, to oversee the licensing rules for medical pot growers, the makers of the products and retailers. The agency will be assisted by the California Department of Food and Agriculture, the Department of Public Health and other state agencies.

SB643, authored by Sen. Mike McGuire, D-Healdsburg, clamps down on clinics that capitalized on the lack of regulation by issuing medical marijuana prescriptions to patients who lacked valid health needs. It also creates licensing and other regulations to oversee the industry.

AB243, authored by Assemblyman Jim Wood, D-Healdsburg, establishes guidelines and regulations for medical pot cultivators, but takes an environmental approach. It gives the nine regional water quality boards in the state the authority to regulate the discharge of water, chemicals and sediment into the environment.

‘Price to pay’

Wood acknowledged the regulations could increase the cost of doing business, but said if the industry wants to be part of the legitimate marketplace, “there’s a price to pay, and part of that is the regulatory structure that goes along with that.”

Under the new law, cities and counties will retain the right to ban medicinal pot businesses within their jurisdictions, and allows individuals with a doctor’s recommendation to grow marijuana for their own consumption.

Assemblyman Rob Bonta, D-Oakland, one of four co-authors of AB266, said the governor’s approval of the Medical Marijuana Regulation and Safety Act ushers in a new era in California by providing protections for patients, law enforcement and the environment.

“The medical marijuana industry itself will ... receive the same protections under the law as other state-licensed businesses, creating jobs and contributing to the economy,” Bonta said in a statement.

Another co-author, Assemblyman Tom Lackey, R-Palmdale (Los Angeles County), lauded a provision of AB266 that commissions an academic study under the new Bureau of Medical Marijuana Regulation to determine exactly how marijuana use impairs motor skills to assist in enforcing drugged driving laws.

Stoned driving

“As a 28-year veteran of the California Highway Patrol, I personally observed an increase in stoned driving with the passage of Proposition 215 — no question about it,” Lackey said in a statement before the bill’s signing.

Business owners and others involved in the medical pot industry welcomed the new regulations. But they expressed some reservations, namely that the additional costs that come from complying with the regulations could push out some growers, raise prices and even send consumers into the black market.

But Steve DeAngelo, co-founder and executive director of Oakland’s Harborside Health Center, the nation's largest licensed pot dispensary, said the overall benefits of having statewide regulations outweigh his qualms with this set of bills.

Still, DeAngelo said there is room for improvement and expressed hope that the Legislature will revise them next session.

“The first time you do something, you rarely get it right,” he said.

Victoria Colliver and Rachel Swan are San Francisco Chronicle staff writers. E-mail: vcolliver@sfchronicle.com, rswan@sfchronicle.com. Twitter: @vcolliver, @rachelswan