Special Report: New Agency Created to Regulate California’s Marijuana Industry

By Signal Contributor

Last update: Tuesday, June 14th, 2016

Medical marijuana has been legal in California for 20 years, and now there’s a new agency that will help oversee the industry that produces cannabis, one of the state’s leading cash crops.

Lori Ajax was appointed chief of the Bureau of Medical Marijuana Regulation in February, and as head of the new state agency, Ajax will set up California’s first system to license, regulate and tax the state’s burgeoning medical marijuana industry.

For Ajax, the new job, which earns a $150,636 salary, follows the Sacramento-area Republican’s 21-year career with the Department of Alcohol and Beverage Control, where she rose through the ranks to chief deputy director in Jan. 2014.

Both the bureau and Ajax’s position were created last October when Gov. Jerry Brown signed the Medical Marijuana Regulation and Safety Act into law.

By some estimates, California accounts for half of the nation’s marijuana industry, and the new bureau, which is under the Dept. of Consumer Affairs, will likely have its work cut out for it.

Reining in the Industry
The new bureau and regulations passed in October are intended to control an industry that has at time struggled to maintain legitimacy ever since the state legalized medical marijuana 20 years ago. Although the state permits the sale and use of medical marijuana, the federal government still prohibits it. The state continues to classify the recreational use of marijuana as illegal.

According to the new state regulations, the agency can be transformed into a Bureau of Marijuana Control, regulating non-medical marijuana as well. If the state approves recreational marijuana on the November ballot, the number of marijuana businesses is likely to increase, as will Ajax’s responsibilities.

Preparing to Issue Licenses
The state has provided $10 million to the new agency, and Ajax’s mandate is to set up a 25-person bureau that can begin issuing licenses on Jan. 1, 2018. Between now and then, the agency is tasked with creating 17 different licenses that must be in place when regulations are slated to begin.

Amid the race to get all of the pieces of the regulatory agency in place, Ajax took time out to answer some questions we posed about the new bureau and the outlook for the marijuana industry in California:

SCVBJ: What components of the marijuana industry is the state now working to regulate?
Lori Ajax: The Medical Marijuana Regulation and Safety Act, enacted on Jan. 1, 2016, establishes a statutory framework for the regulation of medical cannabis. Under the new law, the Bureau of Medical Marijuana Regulation is required to issue licenses and develop regulations for distributors, dispensaries, and transporters. The California Department of Food and Agriculture is the agency responsible for licenses and regulations related to cultivation. It is also responsible for implementing the state’s track and trace program. The State Department of Public Health is the agency responsible for licenses and regulations related to manufacturers and testing laboratories.

SCVBJ: Will new regulations be drafted with an eye toward accommodating recreational marijuana, assuming that it becomes legal?
Ajax: Right now, the Bureau is only charged with drafting regulations to implement the Medical Marijuana Regulation and Safety Act and the work to be done between now and Jan. 1, 2018 will focus on medical marijuana.

SCVBJ: If recreational use becomes legal, what differences, if any, would there be between regulations for medical vs. recreational marijuana?
Ajax: It’s really too early to tell – If the voters of California pass an initiative to legalize the use of recreational marijuana, all related regulations will be based on the language of that initiative.

SCVBJ: Will municipalities be able to regulate the amounts of marijuana that are cultivated and possessed for recreational use? Will communities have the right to opt out of allowing the legal use of recreational marijuana?
Ajax: Again, we really don’t know what will happen in the future and this information is unknown at this time. The Bureau will work with local jurisdictions and work to educate them on the Medical Marijuana Regulation and Safety Act.

SCVBJ: What factors might be considered when the state begins evaluating candidates for recreational marijuana licenses?
Ajax: The only statutory requirements for the state relate to the medicinal use of marijuana, so that is our focus now and we have a lot of work to do to be ready to accept applications by our target date of Jan. 1, 2018.

SCVBJ: Will the state regulate marijuana’s strength, as it does alcohol, or its purity to ensure that it’s free from pesticides or other drugs being introduced today such as Fentanyl?
Ajax: The licensing authorities will be determining those details through the regulatory process. There are a lot of aspects when developing protocol for this, and this early in the regulations development process there is really nothing to report yet.

SCVBJ: How will you go about drafting regulations, and when would they take effect?
Ajax: In California, regulations must go through a specific process called the Administrative Procedures Act. We anticipate holding pre-regulatory meetings with stakeholders, conducting research, and consulting with experts, to assist with drafting our regulations. Once proposed regulations have been drafted, there will be a public comment period before the regulations are finally adopted. We anticipate our regulations being effective Jan. 1, 2018.

SCVBJ: Do you anticipate any resistance from Washington, D.C., over marijuana productions and distributions, which could bleed into other states where it’s not legal?
Ajax: The Bureau is focused on implementing its responsibilities under the Medical Marijuana Regulation and Safety Act. We can’t predict the future, but having comprehensive, clear and strong regulations should help prevent diversion to other states.

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Special Report: New Agency Created to Regulate California’s Marijuana Industry

Lori Ajax photo - valencia ca news
Lori Ajax, Chief of the Bureau of Medical Marijuana Regulation.

Medical marijuana has been legal in California for 20 years, and now there’s a new agency that will help oversee the industry that produces cannabis, one of the state’s leading cash crops.

Lori Ajax was appointed chief of the Bureau of Medical Marijuana Regulation in February, and as head of the new state agency, Ajax will set up California’s first system to license, regulate and tax the state’s burgeoning medical marijuana industry.

For Ajax, the new job, which earns a $150,636 salary, follows the Sacramento-area Republican’s 21-year career with the Department of Alcohol and Beverage Control, where she rose through the ranks to chief deputy director in Jan. 2014.

Both the bureau and Ajax’s position were created last October when Gov. Jerry Brown signed the Medical Marijuana Regulation and Safety Act into law.

By some estimates, California accounts for half of the nation’s marijuana industry, and the new bureau, which is under the Dept. of Consumer Affairs, will likely have its work cut out for it.

Reining in the Industry
The new bureau and regulations passed in October are intended to control an industry that has at time struggled to maintain legitimacy ever since the state legalized medical marijuana 20 years ago. Although the state permits the sale and use of medical marijuana, the federal government still prohibits it. The state continues to classify the recreational use of marijuana as illegal.

According to the new state regulations, the agency can be transformed into a Bureau of Marijuana Control, regulating non-medical marijuana as well. If the state approves recreational marijuana on the November ballot, the number of marijuana businesses is likely to increase, as will Ajax’s responsibilities.

Preparing to Issue Licenses
The state has provided $10 million to the new agency, and Ajax’s mandate is to set up a 25-person bureau that can begin issuing licenses on Jan. 1, 2018. Between now and then, the agency is tasked with creating 17 different licenses that must be in place when regulations are slated to begin.

Amid the race to get all of the pieces of the regulatory agency in place, Ajax took time out to answer some questions we posed about the new bureau and the outlook for the marijuana industry in California:

SCVBJ: What components of the marijuana industry is the state now working to regulate?
Lori Ajax: The Medical Marijuana Regulation and Safety Act, enacted on Jan. 1, 2016, establishes a statutory framework for the regulation of medical cannabis. Under the new law, the Bureau of Medical Marijuana Regulation is required to issue licenses and develop regulations for distributors, dispensaries, and transporters. The California Department of Food and Agriculture is the agency responsible for licenses and regulations related to cultivation. It is also responsible for implementing the state’s track and trace program. The State Department of Public Health is the agency responsible for licenses and regulations related to manufacturers and testing laboratories.

SCVBJ: Will new regulations be drafted with an eye toward accommodating recreational marijuana, assuming that it becomes legal?
Ajax: Right now, the Bureau is only charged with drafting regulations to implement the Medical Marijuana Regulation and Safety Act and the work to be done between now and Jan. 1, 2018 will focus on medical marijuana.

SCVBJ: If recreational use becomes legal, what differences, if any, would there be between regulations for medical vs. recreational marijuana?
Ajax: It’s really too early to tell – If the voters of California pass an initiative to legalize the use of recreational marijuana, all related regulations will be based on the language of that initiative.

SCVBJ: Will municipalities be able to regulate the amounts of marijuana that are cultivated and possessed for recreational use? Will communities have the right to opt out of allowing the legal use of recreational marijuana?
Ajax: Again, we really don’t know what will happen in the future and this information is unknown at this time. The Bureau will work with local jurisdictions and work to educate them on the Medical Marijuana Regulation and Safety Act.

SCVBJ: What factors might be considered when the state begins evaluating candidates for recreational marijuana licenses?
Ajax: The only statutory requirements for the state relate to the medicinal use of marijuana, so that is our focus now and we have a lot of work to do to be ready to accept applications by our target date of Jan. 1, 2018.

SCVBJ: Will the state regulate marijuana’s strength, as it does alcohol, or its purity to ensure that it’s free from pesticides or other drugs being introduced today such as Fentanyl?
Ajax: The licensing authorities will be determining those details through the regulatory process. There are a lot of aspects when developing protocol for this, and this early in the regulations development process there is really nothing to report yet.

SCVBJ: How will you go about drafting regulations, and when would they take effect?
Ajax: In California, regulations must go through a specific process called the Administrative Procedures Act. We anticipate holding pre-regulatory meetings with stakeholders, conducting research, and consulting with experts, to assist with drafting our regulations. Once proposed regulations have been drafted, there will be a public comment period before the regulations are finally adopted. We anticipate our regulations being effective Jan. 1, 2018.

SCVBJ: Do you anticipate any resistance from Washington, D.C., over marijuana productions and distributions, which could bleed into other states where it’s not legal?
Ajax: The Bureau is focused on implementing its responsibilities under the Medical Marijuana Regulation and Safety Act. We can’t predict the future, but having comprehensive, clear and strong regulations should help prevent diversion to other states.