06/03/2013 09:26 pm ET Updated Jun 04, 2013

California Medical Marijuana Bill Fails, Leaving Pot Industry Largely Unregulated

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A bill aimed at bringing some clarity to medical marijuana regulation in California has failed to pass the State Assembly in a vote held late last week.

The legislation, which was authored by Assemblyman Tom Ammiano (D-San Francisco), would have created an agency within the state's Department of Alcoholic Beverage Control tasked with managing all medical marijuana in the state from where it is grown all the way through to the point of sale.

While medical marijuana was legalized by California voters in 1996, there's no statewide agency in charge of regulating the state's multi-billion dollar marijuana industry. Instead, that regulation has been left up to individual municipalities--with some creating a robust set of rules and others either leaving the guidelines vague or banning medical marijuana dispensaries entirely.

"I hope cities will allow dispensaries so their residents who need this product can get...[marijuana] safely, instead of illegally," Ammiano said in a statement. "I believe that a Division of Medical Marijuana Regulation and Enforcement will help cities see they can authorize dispensaries. Not only will the division’s oversight ensure there is no increase in crime, more cities will begin to recognize the economic benefits that others have already seen."

The bill fell six votes short of the 41 it needed for passage, although Ammiano partially pinned the failure on a procedural snafu where he wasn't given the customary opportunity to pause in the middle of the voting process and attempt to convince more assemblymembers to vote his way.

Even outside the Assembly chamber, not everyone was so enthused by the bill. The Sacramento Bee reports:

Joining the opposition was the League of California Cities, which was satisfied that the bill wouldn't pre-empt local decision-making but wanted stronger safeguards against pot being readily available to most Californians.

"It seems because the bill was silent on that point, it was silent on enforcement, it would have just allowed that to continue," said the League's lobbyist, Tim Cromartie. "We were in agreement that it was important to get this right on the first attempt."

Additionally, while many in the state's medical pot industry cheered the bill, others were concerned about the message sent by putting something that many use for medicine under the rubric of an agency otherwise tasked with overseeing something largely considered a vice.

Without a regulatory body to manage the medical marijuana industry, it's often left authorities unable to keep up with new developments in the market.

For example, as an increasing number of dispensary storefronts have shut down due to the efforts of federal prosecutors or the blanket bans of local governments, there's been a rise in the number of medical marijuana delivery services.

Last year, a civil grand jury in San Luis Obispo issued a report calling delivery services a "grey market" because the city, much like the vast majority of others in California, had no specific regulations concerning delivery services.

While Ammiano's bill didn't specifically mention delivery operations, they would have likely been covered under the greater medical marijuana umbrella and regulated under its authority--putting an end to the confusing "grey market."

Despite the setback, Ammiano vowed to continue to his push to regulate medial marijuana at the state level. His office is now looking into a number of legislative and administrative options that could theoretically get the approval for a state agency regulating medical marijuana on the governor's desk by the end of this legislative session.



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