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California seeks control of unruly medical pot industry

Jars of marijuana are on display for sale at the Cali Gold Genetics booth during the High Times Cannabis Cup in San Bernardino on April 23, 2017. Richard Vogel/AP

California is trying to get control of its unruly medical marijuana industry.

State regulators released draft regulations Friday intended to impose order on the loosely organized marketplace created over two decades ago.

The proposal would establish the first comprehensive rules for growing, testing, transporting and selling medical pot in the state that is home to 1 in 8 Americans.

Voters last year agreed to legalize recreational marijuana use for adults in 2018. The state is faced with the challenging task of trying to govern a vast, emerging cannabis industry with a projected value of $7 billion.

Similar rules are being created for the recreational industry. There are differences, and a bill in the Legislature backed by Democratic Gov. Jerry Brown seeks to square the recreational pot law with the rules for medical marijuana.

Hezekiah Allen, president of the California Growers Association, an industry group, called the draft rules "a major step toward a well-regulated cannabis industry."

However, he added in a statement that "there is still a lot of uncertainty" as the Legislature works to balance the various proposals.

Ariel Clark, an attorney who chairs the Los Angeles Cannabis Task Force, said in an email that much works remains to be done. But "for the first time we have a clear idea how the world's largest cannabis market will be regulated and licensed," Clark said.

For medical marijuana users in California, the proposed rules will have no immediate impact. The draft regulations are expected to take months to review and refine.

They do not go into effect until Jan. 1, when recreational marijuana use also becomes legal.

The 58 pages of draft rules provide insight into the massive job ahead, as the state creates what will be a multibillion-dollar marijuana economy.

There have been questions about how the state could quickly review and issue licenses for tens of thousands of growers, sellers, manufacturers and distributors after the regulations for medical and recreational marijuana kick in next January.

The answer: The state will need some time. Applicants can stay in business indefinitely while the review is underway, providing they were operating prior to Jan. 2, 2018, and submit a completed license application no later than July 2, 2018.

The proposed rules vary widely, from the obvious to arcane. A commercial vehicle containing medical pot cannot be left in a residential neighborhood overnight, and dispensaries must shut down by 9 p.m. Packaging must be difficult for toddlers to open.

Meanwhile, the banking dilemma remains unresolved. Because marijuana remains illegal on the federal level, many dispensaries and growers are in effect locked out of the banking industry, so much of the business is conducted in cash. A state study is underway.

A system that would track the sticky, fragrant buds from seed to sale is also under development.

The Bureau of Marijuana Control said in a statement that it's attempting to establish a "coherent regulatory framework for an established industry that has not been comprehensively regulated by the state."