California legislators shelve state licensing for medical pot shops

State Sen. Hannah-Beth Jackson hugs Assemblyman Chris Holden after the Assembly approved her measure tightening rules for terminating franchise agreements.
(Rich Pedroncelli, Associated Press)

Lawmakers on Thursday shelved plans to require state licenses for medical marijuana shops and condom use by adult film actors, among dozens of other measures.

They also halted a plan that would have closed a loophole in Proposition 13, the state’s decades-old property tax law.

The proposal on marijuana dispensaries faced opposition from the industry and questions about how to pay for a new state agency to oversee a licensing operation.

Licenses would have cost up to $8,000 each, which dispensaries said was too expensive. Legislative analysts said it was unclear whether the fees would be enough to cover the $20-million cost of setting up a Bureau of Medical Marijuana Regulation.


State Sen. Lou Correa (D-Santa Ana) said he made the proposal to mitigate the effects of “conflicting authorities, regulatory uncertainty, intermittent federal enforcement action and a series of lawsuits.”

He expressed surprise and disappointment over the demise of his bill, SB 1262.

“Those folks in California who want to preserve the Wild West, which means no regulation whatsoever of medical marijuana, those are the people who won today,” he said.

The condom bill attracted fierce opposition from the adult-film industry. Detractors said the proposed law could hurt the state’s economy, noting that production in Los Angeles County has plummeted in the two years since voters there passed a similar law.


“We’re grateful to the members of the Senate who saw this bill for what it was — a bald-faced attempt to exploit performers for political gain,” Diane Duke, head of the adult-entertainment industry group Free Speech Coalition, said in a statement.

Assemblyman Isadore Hall III (D-Compton), author of the measure, AB 1576, had argued that his bill would provide essential workplace safety protection for performers. Protecting California’s film business, he said in a statement, “should include keeping California actors safe while they are at work.”

The Proposition 13-related measure would have curbed businesses’ ability to divvy up ownership stakes in commercial real estate purchases. Under Proposition 13, that tactic does not trigger a property reassessment, thus avoiding higher taxes.

The bill had early support from a rare alliance of business groups and liberal opponents of the tax law, positioning it to be the first tweak of the landmark measure since its passage in 1978. The law’s staunchest defender, the Howard Jarvis Taxpayers Assn., gave the measure its tacit blessing by withholding opposition.


But some backers, including Lenny Goldberg of the California Tax Reform Assn., ultimately soured on the bill, AB 2372, arguing that companies would still be able to use sophisticated tax maneuvers to exploit the loophole.

“I’m disappointed that we came so close to finally closing one of the worst loopholes of Prop. 13,” said Assemblyman Tom Ammiano (D-San Francisco), a coauthor of the bill. “We finally had some business interests agreeing that the structure was unfair.”

Another bill tabled Thursday would have required political campaigns’ mail and TV ads to be posted on a state website so voters could see what candidates say. State officials said it would have cost $2.7 million to upgrade state databases for the program and $500,000 annually to maintain them.

That bill, SB 1104, was by Sen. Alex Padilla (D-Pacoima), who is running for secretary of state, California’s highest elections office.


The Legislature’s key financial panels voted Thursday on hundreds of bills in rapid-fire hearings, acting one day before a deadline to advance bills for full votes in their respective houses.

The measures left behind are effectively dead for the legislative session, which ends in two weeks.


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