California has an existing medical marijuana law and voted to approve the "Adult Use of Marijuana Act" ("AUMA") to tax and regulate for all adults 21 years of age and older on November 8, 2016. California was the first state to pass medical marijuana in 1996, allowing for a not-for-profit patient/caregiver system, but there was no state licensing authority to oversee businesses that emerged. In September of 2015, the California legislature passed three bills collectively known as the "Medical Cannabis Regulation and Safety Act" ("MCRSA"). The MCRSA establishes a licensing and regulatory framework for medical marijuana businesses in California. The system has multiple license types for dispensaries, infused products manufacturers, cultivation facilities, testing laboratories, transportation companies, and distributors. Edible infused product manufacturers will require either volatile solvent or nonvolatile solvent manufacturing licenses depending on their specific extraction methodology. Multiple agencies will oversee different aspects of the program and businesses will require a state license and local approval to operate. California will begin licensing medical marijuana businesses at the state level under MCRSA in 2018. Until that time, political movement and medical marijuana business licensing will predominately occur at the local level.

There are no residency requirements for the current not-for-profit system under the MCRSA. However, the adultuse law, AUMA, requires the persons controlling licensed businesses to be residents of California before January 1, 2015. Existing medical marijuana collectives acting in compliance with local zoning ordinances and other state and local requirements on or before January 1, 2018 may continue their operations until licensed under MCRSA. An applicant under the MCRSA must obtain local approval and a state license. The state license approval process is not competitive, and localities are accepting licenses based on timelines within their individual ordinances. Localities may prohibit medical marijuana business or limit the number of licenses offered in their jurisdiction. The Department of Food and Agriculture, Bureau of Marijuana Regulation, and Department of Public Health are still developing statewide rules for the Medical Marijuana Regulation and Safety Act. Since AUMA was successfully passed by voter initiative, it appears probable that several bills in the 2017 California legislative session will be introduced to conform the MCRSA and AUMA regulatory structures. At the same time, cities and counties across the state will begin adopting local licensing and regulations around both medical and adult-use cannabis.

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