Since Californians legalized adult cannabis use and sales 10 years ago in 2016, our state and its citizens have seen many benefits from the laws that Prop. 64 put in place.

CRIMINAL JUSTICE BENEFITS

• Prop. 64 has lead to reduced cannabis arrests and imprisonments. The CA DOJ reported 7,949 felony and 5,861 misdemeanor arrests in 2016 vs. 440 felony and 1,929 misdemeanors in 2024. Unfortunately, racial disparities in arrests remain.
• Over 215,000 past cannabis crimes have been expunged or reduced from people’s records, opening up job and other opportunities for Californians.

ECONOMIC BENEFITS

• The California cannabis industry has created 80,000+ legal jobs in what was previously a criminal enterprise (Source.) Many of these are union jobs, and equity businesses are supported in many jurisdictions.
• Cannabis brings in over $4 billion in legal sales yearly.
• Cannabis sales generate $1 billion/year in tax revenues ($600M in state excise taxes and $400M in sales taxes) that fund programs across the state supporting law enforcement, environmental clean up, and youth substance abuse prevention. Since 2018, California has collected more than $7 billion in cannabis tax revenue supporting research, enforcement, and community programs.
• Local jurisdictions that allow legal cannabis businesses across California have also benefited from sales and payroll taxes, funding local programs.
• Cannabis events and tourism are bringing people to cannabis-producing regions of California, boosting spending on hotels and restaurants. Cannabis lounges and cafes are opening across the state, re-building community and educating consumers.

HEALTH AND SAFETY

• California cannabis consumers can now enjoy products that are tested for contaminants and labeled for potency, purchased in safe environments. Crime rates have dropped in communities with legal cannabis retailers.
• Medical marijuana offers safe legal alternatives to opioids and other prescription drugs in the treatment of chronic pain and other medical conditions.
• Parents who are medical marijuana patients have their child custody rights protected under Prop. 64.
• Licensed cannabis businesses must meet CEQA requirements, including strong environmental protections for noise, air quality, cultural resources, protected species, energy use, hydrology and water quality etc.
• Cannabis farms must have biological reports prepared by licensed professionals before licensure, to ensure protection of species and habitat. Cannabis cultivation is overseen by CDFW, CalFire, State Water Resources Control Board etc. – making it one of the most highly regulated forms of agriculture. Due to strict testing requirements, legal cannabis is often grown without harsh pesticides.
• Contrary to the prediction of critics, there has been no surge in auto fatalities since cannabis legalization. DUI arrests are down 21% from 2016 to 2024 (from 131,157 to 104,057). California has followed a general national trend, which was toward lower overall auto fatalities, until jumping up during the pandemic.  As of latest data in 2023, California had a lower rate of auto fatalities than the national average (10.4 deaths/100,000 CA vs 12.2 for US).
• There has been no increase in cannabis use by school children post legalization. Licensed retailers don’t sell to minors, and Prop. 64 banned advertising directed at children and required child-proof packaging. A Kaiser study found significant increase in teen use in early years post-64, but the trend reversed with COVID. Adolescent use is down to 6.5% in 2024, slightly below 2016 rate of 6.8%. CA youth had lower cannabis use than national average as of 2019. Source: CDPH 2019. There has also been “No Significant Uptick in CA Adult Use After Legalization” (CA Health Interview Survey 2018-23; however CA has high rate of daily adult use of cannabis.
• Studies have shown decreased binge drinking by young adults. “Binge drinking down among young adults 18-25:   LA County.”  There is no clear trend in overall alcohol consumption following legalization – beer and wine consumption are down, but hard liquor is up.
• There has been an increased reported incidence of emergency room visits, cannabis use disorder and psychotic reactions, especially among young users, but Prop 64 is funding ongoing research and evaluation of cannabis and legalization. Cal NORML advocates for better education and labeling of cannabis products to reverse these trends, which may be bolstered by increased self-reporting and evaluation. We also advocate for increased research on vaporization and other safety measures.

A well-attended event in Berkeley on Saturday, May 16 presented the Budist 2025 California Cannabis Harvest Report, with outdoor farmers represented from the report’s covered counties: Humboldt, Trinity, Mendocino, Sonoma, Lake, Nevada and Santa Cruz. Starting from DCC dashboard numbers and adding in the number of licensees producing outdoor crops, the report highlights farmers and cultivars in each region, and looks at statewide trends.

The 2025 outdoor cannabis harvest was the largest since 2022; however all counties in the report except Mendocino lost market share in California’s outdoor market in 2025 vs. 2024, as counties like Santa Barbara and Kings came onboard with large, multi-licensed farms, with much of the output going straight to distillate. There was quite a difference between counties, with Sonoma and Santa Cruz only licensing a handfull of outdoor farmers, with other counties producing millions of pounds at hundreds of farms. Local control, real estate prices, and weather variations impacted each county differently: counties saw a colder summer in 2025, with twice to 6x as much rain during harvest months.

Budist hopes to bring marketing methods from the wine industry’s appellations, terroirs, and vintages to the cannabis space, comparing cannabis-growing regions with the Champagne and Bordeaux valleys of France. Both flower and hash/rosin change year to year, depending on growing conditions and methods of curing or preserving. “Appellations tell the story of the season, and the relationship to variability, which has value in the marketplace,” it was said. Each farm reported its best-performing cultivar in the harvest report.

Caleb Chen of Budist, who presented the data, highlighted regional events such as the Trinity County Fair cannabis competition, open to homegrowers and licensed farmers, and to flower and hash. Also mentioned were the the Sonoma County Harvest Festival, the inspiration for the High Times Cannabis Cup; the Humboldt Showdown, also open to home growers and licensees; Lake County clone swaps; and this year’s Mendo Cup, which donated profits back to farmers.

On a panel on Appellations with Genine Coleman of Origins Council and Zoe Schreiber of CCIA (who also works for both a cannabis provider and a wine producer in Livermore), Hannah Whyte of the Humboldt County Grower’s Association noted that, “Appellations develop a relationship with land” and that legitimization fo the indstry provides the opportunity for keeping records and of “healing a lot of the wounds of hiding.” Working together with other farmers and educating the consumer are goals.

Schreiber, perhaps alluding to a pending bill in the CA legislature that would severly restrict regional elements on cannabis packaging, spoke of “running into a wall of limitations at the state level,” and said the industry needs to be “heard and present in face of new legislation, as a movement.”

Asked by an audience member about how small farmers can combat the attempt to file patents and corner the market in genetics likely to follow the recent federal rescheduling announcement, Coleman said that educating farmers about intellectual property rights is part of Legacy Genetics, a project involving Cal Poly Humboldt and UC Berkeley that will be holding a seminar on the topic in Sacramento on June 26.

Claudio Miranda from Budist spoke of the Medieval Dark Age when “ecclesiastical hierarchies suppressed knowledge, medicine, and light.” He called for a new Renaissance to spread all three. The event was held at the Berkeley Chapel of the Flowers event space, which seems to be part of that Renaissance.

Also present at the Oaksterdam University booth at the event were representatives from the new Oakland Legendary Cannabis Certified Equity Label, the nation’s first initiative to promote city-verified equity businesses in the cannabis industry. The label lets buyers know they are supporting businesses that are invested in creating high-quality products with a priority on equity. “Oakland continues to lead with courage and conviction. During my time in Congress, I co-chaired the Cannabis Caucus and introduced the first bill calling for the establishment of cannabis equity programs to repair the harm done to Black and Brown communities,” commented Oakland Mayor Barbara Lee. “The Oakland Legendary label puts power back where it belongs, helping consumers make informed choices and ensuring those most impacted are leading and thriving in today’s economy. Oakland is proud to lead the way!”

Also see: Sungrown tells a story: Harvest Report shows California’s cannabis shift

Coming events:

Tuesday, May 26 • 12PM – 1 PM
Preparing for Schedule III: A Webinar for Cannabis Producers
National Craft Cannabis Coalition
Register

Thursday, May 28 • 10 AM
Schedule III in Adult Use States
Oaksterdam University
REGISTER NOW

Friday, June 26
Legacy Cannabis Genetics Research Dissemination Event
Capital Events Center, 1020 11th St., Sacramento

by  The Law Office of Shay Aaron Gilmore

On April 22, 2026, Acting Attorney General Todd Blanche signed the most consequential federal cannabis order in more than five decades. The order immediately moves both FDA-approved cannabis products and state-regulated medical cannabis products from Schedule I to Schedule III of the Controlled Substances Act (CSA). At the same time, it launches an expedited administrative hearing — beginning June 29, 2026 — to determine whether broader rescheduling of all marijuana, including adult-use products, should follow.

For California medical cannabis licensees and investors, this is not an abstract federal development. It is a live, operational event with immediate legal, tax, corporate, and compliance consequences. This post breaks down what changed, what did not, what is still unresolved — and specifically what California M-license operators and their advisors need to do right now.

As discussed in our prior post Marijuana Rescheduling, If It Happens, Will Be Incremental Progress — Still Not the Answer, and followed up in California Cannabis M&A in 2026: Rescheduling Momentum, Hemp Bans, and State Integration Collide, rescheduling was never going to be a cure-all. What April 22, 2026 delivered is real but narrow — and the narrowness is exactly what California operators need to understand.

How We Got Here

The rescheduling process dates back to October 2022, when President Biden directed HHS and the DEA to review marijuana’s CSA scheduling. In August 2023, HHS recommended Schedule III, finding that marijuana has a currently accepted medical use and a lower abuse potential than Schedule I or II substances. The DEA published a Notice of Proposed Rulemaking in May 2024, attracting more than 42,000 public comments. Hearings were postponed multiple times — first due to procedural challenges, then due to a stay pending interlocutory appeal.

The process appeared stalled until December 18, 2025, when President Trump signed Executive Order 14370 directing the Attorney General to “expedite and complete” the rescheduling process. Rather than restart the cumbersome notice-and-comment rulemaking, Acting AG Blanche invoked 21 U.S.C. § 811(d)(1), which permits the Attorney General to schedule substances by order when necessary to comply with U.S. obligations under the 1961 Single Convention on Narcotic Drugs — without the full procedural requirements otherwise imposed by the CSA. This treaty-based authority allowed the administration to act immediately.

Critically, the order does not cover all marijuana. It covers two categories only: FDA-approved drug products containing delta-9-THC, and marijuana handled under a qualifying state-issued medical marijuana license. All other marijuana — including adult-use cannabis sold under a state recreational license — remains Schedule I pending the outcome of the June 29 hearing. Hemp and synthetically derived THC are expressly excluded.

California’s Dual-License Structure: The Essential Starting Point

To appreciate what this order does and does not do for California operators, the state’s parallel license structure under the Medicinal and Adult Use Cannabis Regulation and Safety Act (MAUCRSA) is the essential starting point.

Under MAUCRSA, the Department of Cannabis Control (DCC) issues two parallel license designations across all activity categories — cultivation, manufacturing, distribution, retail, testing, and event organizers. An M-license (medicinal designation) authorizes a licensee to engage only in medicinal commercial cannabis activity. An A-license (adult-use designation) authorizes activity only in the adult-use market. A business may hold both designations on the same licensed premises, provided it holds both designations for the identical type of activity.

This bifurcation — maintained since MAUCRSA’s 2017 enactment — turns out to be precisely the distinction that determines who receives federal relief under the April 22 order. The federal order tracks state-licensing categories: it reschedules marijuana products subject to a qualifying state-issued medical marijuana license, and a California M-license fits squarely within that definition. A California A-license does not.

Pure M-license operators — those holding only medical designations across their operations — are unambiguously covered. Dual-license operators, sometimes referred to as mixed-use or MSO-affiliated entities, occupy far more complicated ground, addressed in detail below.

The Tax Transformation: Section 280E Relief Is Real and Effective January 1, 2026

The single largest immediate benefit of rescheduling for California M-license operators is the elimination of the Section 280E deduction disallowance.

Internal Revenue Code § 280E prohibits any deduction or credit for ordinary and necessary business expenses incurred in the “trafficking” of a Schedule I or II controlled substance. Because the IRS treated state-licensed cannabis businesses as traffickers in a Schedule I substance, California operators could not deduct payroll, rent, utilities, marketing, professional services, or any other standard operating expense at the federal level — only cost of goods sold (COGS) remained deductible. The result was effective federal tax rates commonly exceeding 70% for California dispensaries and supply-chain operators.

California partially addressed this disparity through Assembly Bill 37 in 2019, which decoupled state tax law from IRC § 280E, allowing MAUCRSA licensees to take ordinary deductions on their California returns. But the federal burden remained crushing — particularly for California operators who also face some of the highest combined state and local cannabis taxes in the country.

The April 22 order eliminates 280E’s reach over qualifying medical operators. The Treasury Department and IRS confirmed the same day that rescheduling “removes section 280E as a bar to claiming deductions and credits” for qualifying businesses and announced forthcoming guidance. Treasury further confirmed that for § 280E purposes, rescheduling applies for a business’s full taxable year that includes the effective date — meaning January 1, 2026 for calendar-year filers.

This is not a future benefit contingent on further rulemaking. For California M-license operators, the 280E burden has been lifted for the full 2026 tax year. The practical cash-flow impact is substantial: the broader industry is estimated to have been absorbing $2.3 billion in excess federal taxes annually above what it would pay as an ordinary business.

Retroactive Relief: Possible but Not Guaranteed

The order also includes precatory language encouraging — though not mandating — the Secretary of the Treasury to consider retrospective relief from § 280E for taxable years in which a state licensee operated under a state medical marijuana license. This language is aspirational, not legally binding. As one detailed analysis notes, the IRS is not obligated to comply, and operators should not amend prior returns or book corresponding assets until the IRS formally confirms the availability, scope, and mechanics of any look-back period. That said, California M-license operators should begin documenting prior-year expenses now to move quickly if Treasury guidance confirms retroactive applicability.

DEA Registration: A New Federal Compliance Obligation with Teeth

The DEA registration requirement is where this order becomes both the most operationally transformative and the most legally technical for California operators. It is not a benefit layered on top of existing operations. It is a new federal compliance obligation that determines whether an operator can legitimately access Schedule III status — and all of the benefits that accompany it.

What the Requirement Actually Means

The CSA has always required registration with the DEA Diversion Control Division for manufacturers, distributors, and dispensers of any controlled substance, including those in Schedule III. Before April 22, 2026, this requirement had no practical enforcement path against state-licensed medical cannabis operators — their activity was federally illegal under Schedule I, and the DEA’s accommodation of state cannabis markets was purely a matter of prosecutorial discretion. Rescheduling changes the legal architecture fundamentally: state-licensed medical operators are now engaged in a federally recognized activity, and federal law requires that recognized activity to be registered.

The order codifies a new registration pathway under 21 C.F.R. § 1301.13(k) — titled “Medical marijuana registrations” — which directs the DEA to establish an expedited review process for entities holding state medical marijuana licenses seeking registration as manufacturers, distributors, or dispensers. This is not aspirational guidance. It is now codified in the Code of Federal Regulations. And critically, the order is explicit: operating without DEA registration while handling Schedule III-controlled substances is a federal violation.

The practical implication for California operators is significant: to be entitled to the benefits of Schedule III status — most importantly, 280E relief — an M-license operator must obtain and maintain federal DEA registration. An operator who continues business-as-usual under their DCC M-license without filing for DEA registration is not simply missing an optional federal benefit; they are operating outside federal law in a newly codified way.

The 60-Day Window: Why It Is Critical

State-licensed medical marijuana licensees that submit DEA registration applications within 60 days of Federal Register publication — by approximately June 22, 2026 — may continue operating under their state license while the DEA processes the application. This “interim operating authority” provision protects operators from the disruption of having to cease operations while awaiting federal processing. Operators who miss this window forfeit the protection and face the risk that their Schedule III activity may be federally unauthorized during any gap between application and approval.

The DEA has committed to processing applications filed within the 60-day window within six months of receipt. For applications filed after that window, no such processing timeline commitment applies. The practical message: file within 60 days, or accept the risk of an uncertain processing timeline during which your federal compliance status is ambiguous.

Why a California M-License Is Uniquely Valuable — and the Public-Interest Factors That Can Still Block You

The new regulation provides that a state medical marijuana license “shall constitute conclusive evidence that the applicant is authorized under state law to engage in the activity for which registration is sought.” This is a significant legal accommodation. Under standard DEA registration procedures, an applicant must independently establish state-law authorization, and the DEA has substantial discretion to investigate and question that showing. The April 22 order eliminates that ambiguity for California M-license holders: the license is, by regulation, conclusive.

However, conclusive state authorization does not guarantee federal registration. The DEA must register the applicant unless doing so would be inconsistent with the public interest under 21 U.S.C. § 823 or with the requirements of the Single Convention. The § 823 public interest factors include:

• Maintenance of effective controls against diversion of controlled substances;
• Compliance with applicable state and local laws;
• Prior conviction record relating to manufacture, distribution, or dispensing of controlled substances;
• Lack of experience in the distribution of controlled substances; and
• Other factors relevant to and consistent with public health and safety.

For California operators, the most significant factor is compliance with applicable state and local laws. A DCC license with a clean compliance history — no suspensions, no enforcement actions, no unresolved violations — satisfies this factor readily. But operators with prior DCC disciplinary history, unresolved local permit violations, or any federal criminal exposure should carefully assess their § 823 posture before filing, not after. A denial triggered by public-interest concerns creates a federal record that is substantially more damaging than simply not filing.

Historical DEA precedent on this point is sobering: when the DEA reviewed manufacturer registrations for research cannabis in 2021, it noted that conducting cannabis activities compliant with state law but in violation of the CSA “may constitute grounds to deny an applicant’s registration” under the public-interest factors — citing such activity as relevant to the “promotion and protection of public health and safety.” While the new framework is designed to accommodate qualifying state licensees, the public interest factors remain live legal criteria that operators must treat as such.

Registration Is Location-Specific

A frequently overlooked aspect of DEA registration mechanics is that registration is tied to each principal place of business — each licensed premises where controlled substances are stored, administered, or dispensed requires a separate DEA registration. For California operators with multiple licensed locations — a common structure among vertically integrated businesses and those holding cultivator and retailer licenses at separate premises — this means a separate DEA registration application for each location.

This has direct compliance budget implications. A California operator with a licensed cultivation facility in Humboldt County and two licensed retail dispensaries in the Bay Area must file three separate DEA registration applications, each tied to the DCC license for that specific premises. Operators with multi-site portfolios need to inventory their licensed locations and plan registration filings accordingly — and within the 60-day window.

The Automatic Suspension Linkage: A New Federal Risk Tied to DCC Compliance

The April 22 order includes a provision that the DEA registration issued under the § 1301.13(k) expedited pathway is automatically suspended if the underlying California M-license is suspended, revoked, or expires. This is one of the most practically significant provisions in the entire order for California operators and their compliance counsel.

Before rescheduling, a DCC enforcement action — a license suspension, a notice of violation, or even an administrative lapse in renewal — was a purely state-level event. Federal law provided no corresponding benefit to suspend; the operator was already in a legally ambiguous federal position regardless of state compliance status. After rescheduling, the calculus is fundamentally different. A California M-license holder who obtains DEA registration now has a federal benefit that tracks DCC license status in real time. A state enforcement action that results in even a temporary DCC suspension triggers automatic federal registration suspension — meaning the operator’s Schedule III status and entitlement to 280E relief are simultaneously interrupted.

The implications for DCC regulatory compliance are substantial:

• License renewals must be timely. A DCC license that lapses due to a missed renewal filing, a bond coverage gap, or a delayed local permit renewal can trigger automatic federal suspension of the DEA registration. California operators are accustomed to state license renewals as administrative calendar items. They are now federal compliance events.
• DCC enforcement actions have federal consequences. An operator facing a DCC notice of proposed action, a license suspension, or a regulatory investigation must now assess the potential federal fallout in addition to the state consequences. Regulatory compliance counsel must communicate the federal suspension risk to clients engaged in DCC proceedings.
• Ownership change compliance has heightened stakes. DCC regulations require notification of ownership changes within 14 days and impose compliance obligations throughout the change process. If a change-of-ownership process creates a lapse or ambiguity in the DCC license during which the license could be deemed suspended, the DEA registration may be affected. Operators and counsel should structure ownership transitions to avoid any gap in DCC license status.

The automatic suspension linkage makes DCC license compliance not just a state business-preservation issue, but a federal one. For California M-license operators who have obtained DEA registration, the quality and currency of their DCC compliance program is now directly tied to their federal regulatory status.

Schedule III Compliance Obligations That Come with Registration

Obtaining DEA registration does not simply confer federal authorization — it subjects registrants to Schedule III compliance requirements under the CSA and DEA regulations. The April 22 order incorporates state compliance systems where possible, but federal requirements are additive, not displaced. Under the order, registered California M-license operators must comply with:

• Recordkeeping: Schedule III registrants are subject to DEA recordkeeping requirements, though the order directs the Administrator to accept state-required records, forms, and reports to the maximum extent permissible under federal law. California DCC recordkeeping systems — track-and-trace via Metrc — should substantially satisfy federal requirements, but operators should verify that their Metrc records are current and audit-ready before filing.
• Security standards: Registrants may generally rely on state-law physical-security requirements in lieu of otherwise applicable federal standards, subject to limited qualifications. California DCC security regulations are generally consistent with CSA Schedule III standards, but operators should confirm that any pending security upgrades or DCC compliance notices are resolved.
• Labeling and packaging: Registered operators must include the federal warning required by 21 U.S.C. § 825(c) where applicable, in addition to California DCC labeling requirements. Review of product labels for compliance with both state and federal requirements is now required for all M-licensed products.
• Disposal: State-authorized disposal procedures generally suffice under the order, but operators should document their disposal protocols to demonstrate compliance with both DCC and federal standards.
• Import/export permits: The order amends 21 C.F.R. Part 1312 to add an import/export permit requirement for Schedule III marijuana. Any California operator currently contemplating international product movement must account for this permit requirement.
• The Single Convention nominal-price mechanism: State-licensed registrants are subject to a nominal-price purchase-and-resale arrangement designed to satisfy Article 23 of the Single Convention on Narcotic Drugs. Cultivators registering as manufacturers should understand this mechanism and its operational implications before completing registration.

The “Practitioner” Registration Category for Dispensaries

The order introduces an additional registration category relevant to California dispensaries. Entities that transfer Schedule III marijuana to patients — including California M-licensed retail dispensaries — must register with the DEA as “practitioners” under 21 U.S.C. § 823(g). This is a distinct registration category from the manufacturer or distributor registration, and the order makes clear that a practitioner registration does not authorize possession or dispensing of Schedule I controlled substances — meaning it does not extend to the adult-use inventory a dual-license dispensary also holds.

For California dual-license retail operators, this creates a layered registration question: the dispensary entity needs a practitioner DEA registration to cover its M-license dispensing activity, and continued state-only authorization (with no DEA registration) for its A-license adult-use activity. Inventory, recordkeeping, and physical custody of product must be maintained consistent with these different legal statuses simultaneously.

The Dual-License Problem: California’s Most Complex Compliance Challenge

Perhaps the most practically urgent compliance question in California concerns operators who hold both M-license and A-license designations. Many California dispensaries, cultivators, manufacturers, and distributors operate in exactly this structure — serving both medical patients and adult-use consumers, often on the same licensed premises.

The April 22 order creates a bifurcated federal schedule for these operators’ activities. Their M-licensed operations are now Schedule III. Their A-licensed operations remain Schedule I. They operate across two federal schedules simultaneously, with no precedent for this kind of split classification at the entity level.

Treasury has announced that forthcoming guidance will address expense apportionment — allocating costs between medical and adult-use activities, with only the former eligible for § 280E relief. From a regulatory compliance standpoint, dual operators need to examine their accounting systems immediately to determine:

• Whether revenue, payroll, inventory, and overhead are tracked separately by license type or commingled;
• Whether existing management agreements, intercompany allocations, or shared-service arrangements satisfy the “genuine separation” standard applied by the IRS and U.S. Tax Court;
• Whether entity structures put in place under prior 280E-minimization strategies remain optimal in a bifurcated Schedule III/Schedule I world;
• What additional documentation and accounting controls should be implemented now, before Treasury guidance issues, to ensure maximum defensibility.

Many California MSO structures were specifically architected to reduce 280E exposure through entity separation. Some of those structures may be redundant for the medical side of the business, or could inadvertently complicate expense allocation for the adult-use side. A comprehensive structural review — the kind of analysis that lives at the intersection of corporate law and regulatory compliance counsel — is not optional for California dual operators. It is urgent.

Capital Markets and Investment: What Investors Need to Know

The order has immediate implications for investors in California medical cannabis operations — both in ongoing cannabis M&A transactions and for those evaluating new positions.

Valuation and Cash Flow

The elimination of 280E for medical operators is the most direct valuation lever. For any California operator with meaningful M-license revenue, 280E removal translates directly to improved cash flow, stronger EBITDA, and lower effective tax rates. Verano Holdings, a major MSO, estimated that rescheduling would save it approximately $80 million annually in 280E expenses. California-specific operators and single-state businesses operate at different scale, but the directional impact is consistent: M-designated revenue streams are materially more valuable post-order than they were on April 21, 2026.

M&A Due Diligence Has Changed

The order “draws a line through the middle of the industry.” For California buyers and sellers in ongoing M&A processes, the regulatory compliance picture is fundamentally different for M-license positions than for A-license positions. Diligence on a California target that holds both designation types now requires separate analysis of each license category. As reflected in our Cannabis M&A Transactions practice, deals must now account for:

• The adequacy of the target’s M-license compliance infrastructure, since that license is now the gateway to DEA registration and 280E relief;
• Whether the target’s DCC license history is clean enough to support federal registration under the § 823 public-interest factors — a clean enforcement record is now a material deal term, not just a background diligence item;
• The DEA registration gap in change-of-control transactions. When a California cannabis business changes ownership, the DCC requires the new owner to submit all information under 4 CCR § 15003, including a background check, and the business may continue operating during the approval process. However, a change of ownership may affect the underlying state license status in ways that trigger the automatic DEA registration suspension provision — particularly if there is any period during which the DCC treats the existing license as having undergone a material change. Buyers and sellers must structure change-of-control provisions to address this risk, including whether responsibility for maintaining uninterrupted DEA registration vests with the seller, buyer, or is addressed through escrow or closing condition mechanics;
• Indemnification structures that explicitly address which party bears the risk if retroactive § 280E relief is or is not granted, and for which license categories.

Representations and warranties in cannabis M&A agreements must now be license-type-specific. A blanket representation that the company is in “regulatory compliance” is insufficient — it must distinguish M-license and A-license compliance postures, address DEA registration status, and account for the automatic suspension risk going forward.

Diligence Matrix for California Cannabis M&A Post-April 22

Banking: Improvement at the Margins

The cannabis banking problem has not been solved by rescheduling. Financial institutions remain subject to the Bank Secrecy Act and the 2014 FinCEN guidance, neither of which is eliminated by Schedule III status. Major banks are unlikely to fundamentally change their posture until the SAFER Banking Act passes or explicit federal safe harbors are legislated. For California cannabis investors and venture capital advisors evaluating debt-financed transactions, the practical takeaway is improved debt service capacity for medical operators and a somewhat more favorable lending environment at cannabis-specialist lenders — but not a transformed one.

Legal Risks: What Could Unwind This

The April 22 order is consequential, but not legally bulletproof. California operators and counsel should understand the primary vulnerabilities.

The Treaty Authority Question

The DOJ bypassed ordinary notice-and-comment rulemaking by invoking 21 U.S.C. § 811(d)(1). Legal commentators have noted that the order relies heavily on a 2024 Office of Legal Counsel opinion regarding treaty compliance — an interpretation not beyond challenge, particularly under the Supreme Court’s Loper Bright framework, which has increased judicial scrutiny of agency statutory interpretations. Whether the treaty-implementation authority extends to the full range of regulatory amendments accompanying the order — including new DEA registration requirements under 21 C.F.R. § 1301.13(k) — is a narrower but potentially significant legal question.

The order includes an express severability clause, acknowledging that individual provisions might be struck down without invalidating the whole. A registered operator who has affirmatively integrated into the federal framework is better positioned to argue for preservation of their status under a severability analysis than an operator who has not yet filed — another reason to act within the 60-day window.

The Ongoing Administrative Hearing

The expedited DEA hearing beginning June 29, 2026 will consider broader rescheduling of all marijuana. If that process results in comprehensive rescheduling, the adult-use gap closes and the current bifurcated structure becomes transitional. If the hearing produces delays — as the prior Biden-era process did — the two-tier system could persist for years, embedding competitive asymmetry between medical and adult-use operators. As analyzed in A Spring 2026 Field Report for California Cannabis Operators and Investors, the legal and market landscape is in genuine flux, and strategic decisions should be made with that uncertainty priced in.

Competitive Dynamics and the Illicit Market

One under-discussed consequence of partial rescheduling is its effect on California’s persistent illicit market problem. Licensed cultivators in California produced approximately 1.4 million pounds in 2024, while unlicensed operations produced an estimated 11.4 million pounds — a ratio that reflects the illicit market’s continued dominance, according to the DCC-commissioned ERA Economics report. The DCC’s head of enforcement has acknowledged the black market remains “very pervasive, and definitely larger than the legal market.”

By eliminating the 280E burden from licensed medical operators, rescheduling directly reduces one of the largest structural cost disadvantages that licensed operators face relative to the illicit market. The limitation, however, is that adult-use operators serve the far larger share of California’s consumer market and remain subject to 280E, limiting the aggregate competitive effect until broader rescheduling follows.

What California M-License Operators Must Do Now

This section is directed at California operators who hold active M-license designations — either as pure medical operators or as part of a dual M/A-license structure.

Immediate Actions (Next 60 Days):

1. File your DEA registration application — by approximately June 22, 2026. This is the most time-sensitive action item. The 60-day window is the critical window for securing interim operating authority and a committed six-month DEA processing timeline. File a separate application for each licensed premises. Work with regulatory compliance counsel to assemble your DCC license documentation, confirm your license is current and in good standing, and assess your § 823 public-interest factor exposure before filing.
2. Engage your tax counsel on 280E planning now. The effective date is January 1, 2026. Your accountant and tax attorney should immediately assess whether your entity structure, cost accounting systems, and expense tracking are positioned to capture the full benefit of post-280E deductibility. If you are a dual operator, this analysis must address expense apportionment between your medical and adult-use activities before Treasury guidance issues.
3. Audit your DCC license compliance status. Federal registration automatically suspends if your California DCC license is suspended, revoked, or expires. Ensure all renewal filings, bond requirements, local permit renewals, and DCC compliance obligations are current. This is now a federal issue.

Near-Term Strategic Actions (Next 90–180 Days):

1. Review your corporate structure. Many California operators built multi-entity structures specifically to mitigate 280E exposure — separating plant-touching and non-plant-touching entities, establishing management companies, and structuring brand licensing arrangements to shift deductible expenses upstream. Some of those structures may be redundant for the medical side of the business and may create unnecessary complexity in the new environment. A corporate restructuring review with both corporate counsel and regulatory compliance counsel is warranted.
2. Revisit existing transaction documents. If you are party to a pending acquisition, earn-out, management agreement, or lease that was negotiated under the prior 280E economics, review it for provisions that need updating. Allocation of retroactive § 280E relief, representations about regulatory compliance, change-of-control triggers affecting DEA registration, and indemnification carve-outs are live issues in every California cannabis M&A transaction being negotiated today.
3. Monitor the June 29 hearing. The outcome of the expedited DEA administrative hearing on broader rescheduling has direct implications for your competitive position, corporate structure, and transaction strategy. If adult-use cannabis moves to Schedule III through the hearing process, the calculus for restructuring and deal-making changes substantially.

The Bigger Picture for California

California was the first state to legalize medical cannabis in 1996 under the Compassionate Use Act, and it has operated the world’s largest legal cannabis market for nearly a decade. The state’s MAUCRSA framework, which created parallel M and A designation categories, inadvertently positioned California’s medical-designated operators as the first beneficiaries of federal rescheduling — provided they hold M-licenses and take the compliance steps required by the April 22 order.

The irony is not lost that adult-use operators — who serve by far the larger consumer segment in California — are excluded from the immediate order and continue under the crushing weight of Schedule I federal treatment. This creates a bifurcated competitive environment within the California market itself, with medical operators potentially achieving sustainable economics while adult-use operators continue under structurally punitive tax treatment. As anticipated in Marijuana Rescheduling, If It Happens, Will Be Incremental Progress — Still Not the Answer, rescheduling was never going to resolve every structural problem the California cannabis industry faces. But for California M-license operators who act quickly and competently, it is the most significant shift in federal cannabis law in a generation — and the compliance window is narrow.

This post is for informational purposes only and does not constitute legal advice or create an attorney-client relationship. If you hold a California cannabis license and have questions about how the DOJ’s rescheduling order affects your regulatory compliance obligations, corporate structure, or any pending transaction, contact the Law Office of Shay Aaron Gilmore for a consultation.

Shay Aaron Gilmore is a member of California NORML’s Board and Legal Committee. See his Cannabis Marketplace listing for more information 

Join Cal NORML now through the end of April with a discounted $42 Gold Membership and get a free thank-you gift: Our popular gold lapel pin in the shape of a pot leaf (shown). It’s a great way to represent your support for Cal NORML and cannabis!

Join Cal NORML through 4/30 and we will send your gift to you by mail. Membership renewals qualify; email here if you are unsure of your membership status. Members receive our printed newsletter and discounts on events and items throughout the year.

As another special offer, Cal NORML Business or Legal Committee Memberships, usually $500/year, are discounted to $420 through the end of the month.  Get your discounted membership today!

Business memberships include a listing in our online cannabis marketplace and guest blog post on the high-authority CaNORML.org, plus other great promotional benefits and discounts. Contact kharla@canorml.org, 707-337-9747 for more info. Sign up by 4/30 for this $80 discount.

Cal NORML is completely funded by personal and business memberships and donations from within California. We are the only organization advocating for the rights of all cannabis consumers in our state.

Read more about Cal NORML and Our 50 Years of Progress.

July 9, 2025 marks the 50^th anniversary of California’s landmark marijuana decriminalization law, the Moscone Act, which reduced the penalty for possessing an ounce or less of marijuana from a felony to a citable misdemeanor punishable by a $100 fine and no jail.

The Moscone Act resulted in an 80% reduction in felony marijuana arrests, saving the state an estimated $100 million per year in enforcement costs, and saving well over a million users from a criminal record over the years. The act also allowed prior offenders to clear their records. Prior to the Moscone Act, the possession of a couple of joints was punishable by up to 2 to 10 years in prison.

Passage of the Moscone Act will be celebrated at the California State Fair cannabis exhibit in Sacramento on the afternoon of Saturday, July 19. For the second year in a row, the Fair will feature an on-site cannabis consumption area.

THE HISTORY OF THE MOSCONE ACT
Sen. Moscone was approached to sponsor the decriminalization bill by leaders of the California Marijuana Initiative of 1972, the world’s first ballot initiative to legalize the personal use and cultivation of marijuana. Among them were Gordon Brownell, the director of California NORML, and Michael Aldrich, co-founder of Amorphia, which financed the 1972 CMI by selling rolling papers.

Though CMI failed 33%-66%, it got 2,733,120 votes, much better than expected. “Every county had a coordinator gathering volunteers. We had 20,000 people circulating the initiative – no paid signatures,” recalls Aldrich. “No one ever recognized there was such an electoral group out there. That was so astonishing that Moscone took up the idea.”

“The CMI formed the basis for a statewide reform movement that has existed ever since,” says former Cal NORML director Gordon Brownell, who went on to lobby for the Moscone Act in the legislature. In order to win passage, proponents were forced to drop cultivation from the bill and to lower the possession limit from three ounces to one ounce.

“We got the bill through the legislature because of Moscone’s leadership,” says Brownell. Assembly proponents included the late Alan Sieroty, who had sponsored a previous marijuana reform bill that was vetoed by Gov. Reagan, and Willie Brown, who went on to sponsor an unsuccessful bill to decriminalize cultivation for personal use. Gov. Brown signed the Moscone Act late at night on 7/9/1975, just before the legislative deadline.

Interviews with Gordon Brownell and Michael Aldrich will be featured at the historic California State Fair cannabis exhibit in Sacramento on the afternoon of Saturday, July 19. Also, felony marijuana arrestees will speak about the impact of their arrests on their lives and their families. The panel will be moderated by the current Cal NORML director Dale Gieringer. Cal NORML and the California Cannabis Historical Society will co-host a booth at the Fair from July 18-20. Join us!

MARIJUANA REFORM AFTER MOSCONE
California NORML went on to successfully fight off later bills to recriminalize marijuana, and require driver’s license suspensions for marijuana possession. Cal NORML was a co-sponsor of Prop. 215, which legalized the possession and cultivation for medical use in 1996. Adult use was finally legalized in California by Prop. 64 in 2016. Since then, Cal NORML has successfully sponsored bills to end discrimination against cannabis users by employers and doctors, among other reform battles, like last year’s cannabis cafe bill.

California NORML continues to fight for affordable consumer access to marijuana in Sacramento, currently as a sponsor of Asm. Matt Haney’s bill, AB 564, to repeal an increase in the state excise tax from 15% to 19% that took effect on July 1. Cannabis is currently taxed far more heavily than alcohol and other consumer products, sending consumers to untested and untaxed sellers. Coincidentally, AB 564 will be heard by the Senate Revenue and Tax Committee on July 9^th, the 50^th anniversary of the signing of the Moscone Act.

$50 FOR 50 YEARS OF ADVOCACY

Can you make a $50 donation today to Cal NORML to celebrate our 50 years of advocacy for cannabis consumers in California? Your membership contribution will help us fight for cannabis tax fairness and other reforms. Together we can show our collective strength and make a difference. (Donations of any amount are accepted and appreciated.)

Our business memberships start at $50 monthly and include a website listing, blog post opportunities, and other perks. Join today and know that your contribution will advance sensible and fair cannabis laws in California.

All Californians are invited to attend the California NORML/Americans for Safe Access Citizen Lobby Day on Monday, March 24 in Sacramento. The event will bring supporters from across the state to meet with their state representatives and make our voices heard on pending legislation affecting the rights of cannabis consumers in California.

We have moved up our annual lobby day from May to March this year so that we can better influence California’s budget process. The California cannabis industry is facing an automatic excise tax INCREASE from 15% to 19% in July of this year unless the legislature acts. Cal NORML is sponsoring AB 564 (Haney) to stop higher taxes on cannabis in California.

It’s an ALL HANDS ON DECK YEAR for cannabis consumers and businesses. Please join us in Sacramento to show our strength and make our voices heard!

PLEASE SIGN UP TO ATTEND LOBBY DAY SO THAT WE MAY BEGIN TO MAKE APPOINTMENTS WITH YOUR LEGISLATORS FOR YOU.

SPONSOR LOBBY DAY

Lobby Day 2025 Schedule

Monday, March 24, 2025

MORNING

10 AM – 11:30 AM; doors open at 9:15 AM serving coffee, donuts and snacks
Capitol Event Center
1020 11th St., (between J and K Streets), Sacramento
Gather for training/legislative overview; pick up your afternoon appointment information

AFTERNOON
12 PM – 1 PM Group Photo and Press Conference with Asm. Haney on Capitol Steps West
10th and Capitol Mall – (approximately 1330 10th St. Sacramento)
Join us for a show of force in favor of cannabis tax reform

1:30 PM – 5 PM
Attendees will go to the Capitol for appointments or drop-in meetings with your elected representatives or their staffs.
Capitol “Swing Space,” 1021 O. St, Sacramento 

EVENING
5 PM – 7 PM
Afterparty / Reception – food, drinks and fun!
Cafeteria 15L
1116 15th St, Sacramento, California 95814-4011

OUR LOBBY DAY HISTORY

Last year’s California NORML/Americans for Safe Access Citizen Lobby Day on Monday, May 6, 2024 in Sacramento brought dozens of supporters from across the state to meet with their state representatives and make our voices heard on pending legislation affecting the rights of cannabis consumers in California.

Many of the bills we lobbied on, including the Cal NORML-sponsored cannabis café bill, were signed into law and have now taken effect. Another bill we worked on extended cannabis compassion programs for needy patients.

A survey sent to lobby day participants found that 81% of respondents found the experience “empowering”; 88% found it “educational/interesting” and 77% thought it was “enjoyable/fun.” Of the respondents, who were adult use and/or medical marijuana consumers and/or cannabis business people, 69% responded yes to, “I felt my voice was heard regarding cannabis legislation in California” and 77% agreed, “Cal NORML made it easy for me to be a citizen lobbyist.”

Among attendees—60% of whom were returning citizen lobbyists—77% agreed, “I re-connected with friends and/or colleagues,” with 81% saying, “I met new friends/activists.” Some 92% of respondents said they would return for another Lobby Day (only 8% were “unsure” and no one answered “no”).

“Despite cannabis legalization in California, enacted by the voters with Prop. 64 in 2016, obstacles remain to consumer access to safe, affordable cannabis products, and to the experience of enjoying it in public spaces,” said Ellen Komp, Deputy Director of Cal NORML. “Citizen Lobby Days go a long way towards building relationships with lawmakers, and erasing lingering stigmas against cannabis consumers. And they’re lots of fun!”

“It’s important to realize how important Lobby Day is, because more bills that have come to fruition in California have come from a Lobby Day,” said Richard Miller of Americans for Safe Access California Advisory Committee, pointing to a 2015 bill to end discrimination against medical marijuana patients who need organ transplants. “Past lobby days have helped bring about reforms such as employment rights for cannabis consumers, and medical rights for pain patients and others who use cannabis,” Miller added.

“Participating in Lobby Day is pivotal for civic engagement, as it empowers citizens to amplify their voices in legislative processes,” said Jakki Hernandez of Orange County NORML. “This event offers an inspiring environment for training, pairing newcomers with experienced attendees to foster camaraderie and guidance. Through this collaborative approach, advocacy efforts are strengthened, enhancing the community’s influence in shaping laws that impact them. By the conclusion of the day, newcomers become proficient in discussing the relevant bills, underscoring the importance of fighting for one’s beliefs through education and activation. Every individual should experience a lobby day to witness firsthand the significance of advocating for what they believe in.

 

On Tuesday, November 12 the Oakland City Council will vote on a nonsmoking ordinance. The proposed ordinance would ban smoking or vaping of tobacco or cannabis at outdoor bars in the city, and also ban smoking/vaping in multiunit apartment dwellings with (as written) an exemption for cannabis.

The Council will consider two options:

We must show support to make sure that cannabis consumers can be protected in their apartments in Oakland. YOU MUST SEND IN COMMENTS AND/OR REGISTER TO SPEAK VIA ZOOM BY 24 HOURS BEFORE THE START OF THE MEETING, SO BY 3:30 PM ON MONDAY 11/11.

Here are some ways you can register your support:

1. Send an email to all members of City Council using Cal NORML’s Action Alert
You can also find your city councilperson and write or call them directly.
You must do this by 24 hours before the meeting next Tuesday.

2. Attend the November 12 City Council meeting in person to comment
WHERE: City Council Chambers, 1 Frank Ogawa Plaza, 3rd Floor
WHEN: Tuesday, Nov. 12 at 3:30 pm

3. Please share this notice with fellow Oakland residents and urge them to take action! Over 30 anti-tobacco activists showed up at last month’s committee meeting on the topic, many of them asking for the cannabis exemption to be removed.

POINTS TO MAKE:

• A ban on residential cannabis smoking would constitute a de facto ban on marijuana for many Oakland residents. Unlike tobacco or alcohol, cannabis is illegal to consume in ANY PUBLIC PLACE. Therefore it’s very difficult for Oaklanders to legally medicate or socialize with marijuana outside their homes.

• Unlike tobacco, marijuana smoke has been shown NOT to cause lung cancer [National Academy of Sciences, “Health Effects of Cannabis and Cannabinoids,” pp. 142-3]; nor has second-hand marijuana smoke been proven to cause other serious diseases in any human studies.

• Unlike tobacco, smoked cannabis also has proven medical value for patients with nausea, appetite loss, chronic pain, muscle spasticity, and other conditions.

• No one disagrees that non-smokers should be protected from smoke that invades their space. Otherwise, however, adults should have the right to use marijuana at their residences or in designated social spaces that don’t expose outsiders to unwanted smoke, as authorized under Oakland Measure Z (2004).

• Under the proposed ordinance, any property owner may still ban smoking of any substance (such as the smoking of cannabis) at their property. The decision would be better left to property owners or HOAs, not imposed by the city.

• Any residential smoking ban would inequitably impact low-income and minority residents who can’t afford their own homes. Oakland has long been a leader on human rights and cannabis issues. To reverse this legacy now would be a blot on the city’s record of social tolerance. Other cities, including West Hollywood, San Jose, and San Francisco have rightly rejected proposed bans on residential cannabis smoking. Oakland should follow their example.

THANK YOU FOR TAKING ACTION!

California NORML
Fighting for the Rights of Cannabis Consumers Since 1972
www.CaNORML.org

BACKGROUND

Cal NORML got late word that the City of Oakland’s Community and Economic Development committee would be holding a hearing on October 12 on a nonsmoking ordinance that would ban smoking or vaping of tobacco or cannabis at outdoor bars in the city, and also ban smoking/vaping in multiunit apartment dwellings, with (as written) an exemption for cannabis. About 35 people spoke at the hearing, only 3 in favor of leaving the cannabis exemption in, and many more asking for it to be removed. Watch the hearing, starting about 90 minutes in.

Opposition to the cannabis exemption seemed to be organized by the Alameda County Tobacco Control Coalition and represented various anti-tobacco groups, physicians, and the American Cancer Society. Speakers also came from San Francisco, including from the group LGBTQ Minus Tobacco, which was thanked by Councilmember and ordinance author Dan Kalb, including for adding vaping language to the ordinance.

As reported by Oaklandside, Nicole Redler, founder of the cannabis compassion company ReCompass spoke representing her business and California NORML, saying, “This is an issue of healthcare equity. For many, especially those in low-income and marginalized communities, banning cannabis smoke at home effectively bans their access to medicine.” She explained that the Bay Area was on the forefront of the medical cannabis movement at the height of the AIDS epidemic in the 1980s and 1990s. Redler mentioned that San Francisco, West Hollywood, and San Jose have rejected residential anti-smoking bans that included cannabis.

A few speakers argued that excluding cannabis would make the ordinance unenforceable (because enforcers would need to distinguish cigarette from cannabis smoke—two things that smell very different). Several speakers equated the harms of cannabis smoke with tobacco, and said there is no safe level of second-hand smoke of any kind.

Tony Bowles of Americans for Safe Access spoke, saying that unlike tobacco, marijuana smoke has been shown NOT to cause lung cancer, and that unlike tobacco, smoked cannabis also has proven medical value for patients with nausea, appetite loss, chronic pain, muscle spasticity, and other conditions. He pointed out that most patients no longer go to the expense of getting the state medical marijuana ID card or a recommendation from their doctor since recreational marijuana was made legal. Afterwards, Paul Cummings, who heads the Alameda County Health Department Tobacco Control program, heatedly countered with the often-heard statement that “all smoke is harmful.” He apologized to the committee for his outburst.

It was clarified that under current state and Oakland laws, landlords and HOAs can already ban smoking or vaping of any kind in rental units or condominiums, including cannabis. This ordinance would make such bans mandatory city-wide, and possibly involve the city in enforcing them. Unless someone is causing a nuisance with repeat offenses, the ordinance would not affect current tenants, Kalb said, only new ones as they lease apartments. A maximum fine of $50 could be imposed on smokers, after an initial warning.

Faced with such strong and lock-step opposition, Councilmember Kalb proposed passing the matter onto City Council with three options:

First: Passing the ordinance as is with cannabis exemption (but still allowing property owners to ban cannabis);
Second: Taking out the cannabis exemption to a citywide ban;
Third: Modifying the ordinance to exempt only medical cannabis.

This motion passed with yes votes from Councilmembers Fife and Gallo; Councilmember Jenkins was excused; he had brought up a medical exemption.

The next hearing is scheduled for November 12 beginning at 3:30 PM as a nonconsent item before Oakland City Council. Because proposed amendments will be in the agenda in packet for the meetings, amendments can be taken on the floor.

Oakland residents are encourage to attend the meeting, and also write to their city councilpersons. 

IS SCIENCE SETTLED ON THE HARMS OF SECOND-HAND SMOKE? 

In November 1988, Californians approved a 25-cent tax on cigarettes via The Tobacco Tax and Health Protection Act (Proposition 99), which dedicated 5 cents of the 25-cent tax to fund California’s tobacco control efforts. In November 2016, Californians overwhelmingly voted for Proposition 56, The California Healthcare, Research and Prevention Tobacco Tax Act, increasing the state’s tobacco tax by $2 per pack and an equivalent amount on e-cigarettes and other tobacco products, vastly increasing the amount of tax funding available for local health departments and community organizations, plus a media campaign, tobacco-related evaluation and surveillance, and school-based prevention programs.

The California Tobacco Control Program (CTCP), a program of the California Department of Public Health provides funding to more than 100 local health departments and nonprofit agencies in every county in California. Included among those funded groups are LGBTQ Minus Tobacco and the Alameda County Health Department Tobacco Control Program (TCP), which names among its objectives “at least one city in Alameda County (Oakland or Hayward) will adopt and implement a policy that eliminates smoking within multi-unit housing units.”

Using tax money earmarked for preventing tobacco use, the California Department of Public Health has been working outside their mandate to also fight against cannabis smoking and vaping, and so have local anti-tobacco groups.

At issue is the concentration of microscopic particulates, called PM2.5 (microns) that are present in second-hand tobacco and cannabis smoke at high levels. These data have been used by anti-smoking groups and the EPA to crack down on second-hand smoke and industrial pollution. However, some doubt the correlation between PM2.5 particles and lung cancer or mortality.

HEPA filters very efficiently remove PM2.5 particles (at a rate of over 99%), provided they have access to the air they need to filter; that’s where ratings like CFM (cubit feet for minute), CADR (Clean Air Delivery Rate) and ACH (Air Changes per Hour) come in.

A recent study from the American Cancer Society found that second-hand tobacco smoke presents a negligible health risk, about the same cancer risk as eating red meat or having low dietary fiber – 41 times less than the risk of first-hand tobacco smoking. Researcher Dr. James Enstrom of UCLA saw funding withdrawn in 1999 from the CA Tobacco-Related Disease Research Program, a University of California research organization funded by the Proposition 99 cigarette surtax, after publishing a study finding little correlation between second-hand tobacco smoke and mortality in Californians. The risk would presumably be even less for cannabis smoking, which has so far shown no evidence of causing lung cancer in epidemiological studies (National Academy of Sciences, “Health Effects of Cannabis and Cannabinoids,” pp. 142-3.)

These issues came up during hearings in Sacramento this year on the Cal NORML-sponsored bill AB 1775, the cannabis café bill, allowing licensed cannabis lounges to prepare and serve food and beverages. The law requires local governments to consider “whether to require adequate ventilation and filtration systems,” defined as adequate “if they prevent smoke and odors from migrating to any other part of the building hosting the consumption lounge or any neighboring building or grounds.” A 2022 study found that PM2.5 particles decreased when further away from the source; levels from indoor vaping decreased more rapidly with distance (e.g., 77% reduction for vaping versus 33% for smoking from 1 to 2 m).

The Governor’ signing statement on AB 1775 contained some cautionary words to local governments about making sure workers are protected. “If adequate protections are not established at the local level, it could necessitate reconsideration of this limited expansion [of the law],” the Governor warned. Jim Knox of the ACA, whose oped on AB 1775 was published by the Sacramento Bee (while Cal NORML’s was rejected), has pledged his organization would fight AB 1775’s implementation at the local level. No doubt the rest of California’s well-funded anti-tobacco coalition will try to do the same.

Below are candidates who, because of their past record and/or stance on cannabis reform, are endorsed by Cal NORML. Other candidates may be added as we gather more information.

In Cal NORML’s 2023 Membership Survey, 47% of respondents said their vote is “Always” strongly influenced by a candidate’s position on marijuana, and another 34% said it “Usually” is. Also, 63% said they consulted our 2022 voter guide before voting.

If you appreciate getting voting information from Cal NORML, please consider supporting us with a personal or business membership​ or donation.​ Read more about Cal NORML.​

Congressional Endorsements

State Senate Endorsements

State Assembly Endorsements

Also see NORML’s Smoke the Vote Guide to Officeholders and Candidates, and Cal NORML’s guide to key California races, local races, and ballot measures. 

The bills in the following tables are:
• SB 700 (Bradford) – ban employers from asking about prior use of cannabis
• AB 1207 (Irwin) – impose restrictive labeling requirements on cannabis products
• AB 374 (Haney) and AB 1775 (Haney) – allow cannabis cafés
• AB 1111 (Pellerin) – allow small farmers to sell directly to consumers
• SB 1059 (Bradford) – to end double taxation of cannabis

CALIFORNIA SENATE CANNABIS VOTING RECORDS

CALIFORNIA ASSEMBLY CANNABIS VOTING RECORDS