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Proposition 64: Marijuana Legalization. Initiative Statute.

The California Labor Federation does not take a stance on this measure.

Click here to download California Labor’s 2016 Endorsements & Ballot Measures Analyses

A YES vote on this measure means:

Marijuana would be legalized in California, with a state structure of licensing, regulation, and taxation.

A NO vote on this measure means:

Marijuana would remain illegal in California.  Medical marijuana, established under Proposition 215 and statute, would remain legal.

Official Secretary of State Ballot Summary:

  • Legalizes marijuana and hemp under state law.
  • Designates state agencies to license and regulate marijuana industry.
  • Imposes state excise tax on retail sales of marijuana equal to 15% of sales price, and state cultivation taxes on marijuana of $9.25 per ounce of flowers and $2.75 per ounce of leaves.
  • Exempts medical marijuana from some taxation.
  • Establishes packaging, labeling, advertising, and marketing standards and restrictions for marijuana products.
  • Allows local regulation and taxation of marijuana.
  • Prohibits marketing and advertising marijuana to minors.
  • Authorizes resentencing and destruction of records for prior marijuana convictions.

Background:

Under current law, the possession, cultivation, or distribution of non-medical marijuana is illegal in California. Penalties for unlawful marijuana-related activities vary depending on the offense. For example, possession of less than one ounce of marijuana without proper medical verification is an infraction punishable by a fine, while selling marijuana outside of medical marijuana is a felony and may result in a jail or prison sentence.

In November 1996, voters approved Proposition 215, which made it legal under state law for individuals of nay age to cultivate and possess marijuana in California for medical purposes only, specifically with a recommendation from a licensed physician. In 2003, the Legislature authorized the formation of medical marijuana cooperatives, which are nonprofit organizations of medical marijuana users that cultivate and distribute marijuana to their members through outlets known as dispensaries. State law also gives cities and counties the discretion to regulate the location and operation of such facilities. State and local governments currently collect sales tax on medical marijuana.

In 2015, the Legislature passed, and the Governor signed, AB 243 (Wood), AB 266 (Bonta) and SB 643 (McGuire), known as the Medical Marijuana Regulation and Safety Act (MMRSA) to regulate the commercial medical marijuana industry. The legislation created a new Bureau of Medical Marijuana Regulation within the Department of Consumer Affairs as the lead enforcement agency. Under the legislation (effective January 2016), medical marijuana cooperatives will be phased out within a few years and replaced by state-licensed businesses. Various aspects of the medical marijuana industry will be regulated by different agencies. Businesses cultivating marijuana will be licensed by the Department of Food and Agriculture (DFA); businesses testing and processing marijuana will be licensed by the Department of Public Health (DPH); and businesses transporting, distributing, and retailing marijuana will be licensed by the Bureau. Local governments will continue to have the authority to regulate the location and operation of such businesses. The legislation also requires the state to set standards for labelling, testing, and packaging medical marijuana products and to develop a system to track such products throughout the supply chain.

Federal laws classify marijuana as an illegal substance and provide criminal penalties for various activities relating to its use. These laws are enforced by federal agencies. The U.S. Supreme Court ruled in 2005 that federal authorities could continue under federal law to prosecute California patients and providers engaged in the cultivation and use of marijuana for medical purposes. Despite having this authority, the current policy of the U.S. Department of Justice (DOJ) is not to prosecute marijuana users and businesses that act in compliance with state and local marijuana laws so long as those laws are written and enforced in a manner that upholds federal priorities, such as ensuring that marijuana is not distributed to minors or diverted to states without legalized marijuana. Currently, California contends that MMRSA meets that standard for medical marijuana.

This measure would legalize the possession, use, and cultivation of marijuana by adults over the age of 21. Marijuana use would be limited to private homes and licensed businesses and prohibited in public or in private motor vehicles. Cities and counties would be permitted to ban marijuana-related businesses from their boundaries. The measure imposes a number of new taxes on commercial marijuana, but eliminates the sales tax on medical marijuana. The measure states that revenues from the taxes imposed on marijuana are not considered part of the General Fund.

Legislative Analyst and Director of Finance estimate of fiscal impact: 

Net reduced costs ranging from tens of millions of dollars to potentially exceeding $100 million annually to state and local governments related to enforcing certain marijuana-related offenses, handling the related criminal cases in the court system, and incarcerating and supervising certain marijuana offenders. Net additional state and local tax revenues potentially ranging from the high hundreds of millions of dollars to over $1 billion annually related to the production and sale of marijuana. Most of these funds would be required to be spent for specific purposes such as substance use disorder education, prevention, and treatment.

Support and Opposition:

Supporters include the California Medical Association, Californians for Sensible Reform and Lt. Governor Gavin Newsom. They argue that currently, in California, nonmedical marijuana use is unregulated, untaxed, and occurs without any consumer or environmental protections.  This initiative will legalize marijuana for those over 21 years old, protect children, and establish laws to regulate marijuana cultivation, distribution, sale and use, and will protect Californians and the environment from potential dangers. The initiative decriminalizes carrying less than one ounce of marijuana and allows for people already convicted to adjust their records.

Opponents, including the California Public Safety Initiative, a coalition of law enforcement organizations, argue that marijuana is a dangerous drug and its usage can harm communities and our youth.  Opponents also argue that the initiative allows entities to hold licenses in more than one segment of the marijuana market, thus allowing for some vertical integration and large corporate players to dominate the market.

Prior Positions:

The Labor Federation was neutral on Proposition 19 in 2010, a prior marijuana legalization initiative that failed.


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