Lori Ajax On Listening Tour in California

SacInsider CALegislature EDITORIAL shutterstock 20
SacInsider CALegislature EDITORIAL shutterstock 20

Every newly appointed, senior level public official in California knows the first chore after signing the employment contract is a listening tour.

North to south, east to west, nothing can happen until the newbie has traversed the territory with staff in tow. They hold public meetings, nod and smile, and offer friendly assurances while the public has its say.

So it’s been no surprise in recent weeks to see Lori Ajax, newly appointed director of the state’s Bureau of Medical Marijuana Regulation, bounding around California for a series of constituency meetings under the banner “Informational Sessions.” She hosted two in Sacramento alongside her boss, Department of Consumer Affairs Director Awet Kidane, and newly hired staffers.


“We need to know your industry so we get things right,” Kidane said.

Medical cannabis is a multi-headed regulatory beast in California, with various agencies carving out turf. Agricultural, health, fish and game, and tax departments all will have their fingers in the pie. Consumer Affairs has been designated as the lead agency, thanks to its omnipotent licensing authority. Ajax will be the public face of California cannabis regulations.

On her listening tour, Ajax left most of the heavy lifting to a subordinate, An-Che Tsou, who formerly worked for Assemblyman Rob Bonta (D-Oakland) and was deeply involved in the drafting of last year’s breakthrough legislative package, the Medical Marijuana Regulation and Safety Act. Tsou knows more about cannabis legislation that any other staffer in Sacramento. Ajax was smart to hire her.

Ajax established herself as a solid bureaucrat with the state Alcoholic Beverage Control department. She makes no claims about cannabis competency, but she seems like a quick study. On the listening tour, she did exactly what the tour’s moniker implies: She listened.

The two Sacramento audiences were filled with experts: old-school cultivators and dispensary operators, long-time industry leaders, cannabis defense attorneys, and a few legislative staff people.

The issues raised were provocative and relevant: how to make the licensing process inclusive, how to get the federal ban lifted and banks on board, how to protect legacy cultivators against predatory market invaders, and how not to drive people into the black market with excessive regulation.

“Our wish is not to over-regulate,” Kidane said. “The banking issue is the elephant in the room. The main push point is how cannabis is classified.”

There were actually two elephants, the other being local control. Several audience members noted more than 300 cities and counties across California have recently orchestrated bans of cannabis products and cultivation, from partial restrictions to zero tolerance.

Under the state’s new laws, Consumer Affairs and other agencies can’t issue licenses and permits unless an applicant first gets a permit from a local jurisdiction.

“Locals do have control,” Tsou said. “If they choose to ban, they do have the right.”

Left unsaid was that so far, the state has done very little to help persuade local communities to back away from the flood of ban ordinances approved this past winter.

Ajax and Tsou suggested the industry itself will have to organize patients and employees on the local level and apply political pressure to city councils and county supervisors to adopt equitable rules. After all, that’s how democracy works.

Consumer Affairs will be speaking to local officials, along with law enforcement. “We want to get on the same page and make sure they know what the law is,” Tsou said.

Ultimately, the Bureau of Medical Marijuana Regulation is a work in progress. New regulations are being drafted now, but the process takes many months. As Ajax said, “those are details that are fleshed out in the regulatory process.”

The regulation-writing process will take place between now and January 2018. Ajax and team promise to listen in the meantime.

Adult use moves forward

With a voter initiative to allow adult use destined for the California ballot in November, Lt. Gov. Gavin Newsom has been making the rounds in Sacramento, emphasizing the time has come for acceptance.

Newsom lately has focused on two themes: protecting independent cultivators against predatory corporations and protecting children.

“We always have to fight back against capitalistic urgings and instincts that are a problem generally in society,” he said. “But there are all kinds of things that none of us can anticipate, and you need to have the (regulatory) flexibility to deal with that.”

As for young people being exposed to cannabis, Newsom said, “There’s a reason doctors prescribe marijuana. There’s nothing about tobacco that has any medicinal value. That said, this is a terrible drug for kids. We’ve got to keep it out of the hands of children, and we are failing today to do that, and failing horribly.”

Mixed messaging

There are still more than a dozen cannabis-related bills making their way through the California legislature. But surprisingly, there’s near-silence on an issue that’s certain to create controversy and dominate future discussions: cannabis marketing.

Only one of the bills currently under consideration, Assembly Bill 1575 by Rob Bonta (D-Oakland) touches on cannabis marketing. And the touch is light. While AB 1575 is comprehensive in many regards, serving as a general clean-up of loose ends left behind from last year’s legislative package, it doesn’t say much about advertising.

Essentially, the proposed law requires cannabis advertisers to have a valid seller’s license from the State Board of Equalization before they market the product. Industry insiders understand the issue of advertising will be far more important and intense than the basic licensing question.

The advertising question—especially as it relates to platforms easily accessible to children—will be a critical concern as California moves toward complete legalization and comprehensive regulation. A barrage of bills dealing with marketing matters can be expected in next year’s legislative session, especially if adult use succeeds on the November statewide ballot.

Tax amnesty stalls

A 2015 bill to give tax amnesty to cannabis industry businesses is still kicking around the state legislature, but going nowhere in a hurry. Assembly Bill 567 by Mike Gipson (D-Carson) would give cannabis businesses an amnesty period before owing state sales taxes, on the theory that many business owners ducked their sales taxes to avoid federal prosecution. The bill has been referred back to committee, where it sits and waits.