Editor's note: we originally ran this piece February 11, 2016. California voters will vote on legalizing recreational marijuana after Secretary of State Alex Padilla said Tuesday that the Sean Parker-backed initiative would appear on the November ballot.
Having done his part to thoroughly disrupt both file sharing and social media, billionaire Sean Parker has now set his sights on marijuana legalization – and his gamble, if successful, will return his home state of California to the lead of pot policy reforms worldwide.
This is because the ballot initiative Parker sponsors, the Adult Use of Marijuana Act of 2016 (AUMA), is not content to merely legalize all responsible use of marijuana for adults; far more than that, it sets the stage for the Golden State to become the global hub of cannabis technology and culture.
California ceded the mantle to Colorado in 2012, but its systemic advantages have not gone away – the state still produces more cannabis than any other by a wide margin, and enjoys a reputation for quality on par with Vancouver's famous "BC Bud." California also draws more tourists than Colorado and has the powerhouse influence of Silicon Valley. You have all the ingredients for global cannabis dominance.
No legalization proposal understands this better than AUMA, which takes the essential steps of downgrading criminal penalties and creating new regulations (and taxes) – then adds the Silicon Valley secret sauce.
Digital tracking system a game-changer for businesses, consumers
Echoing Colorado's pioneering "seed to sale" cannabis tracking system, AUMA sets up a similar "track and trace" system which is run, like Colorado's, out of a state bureaucracy tasked with overseeing the industry; but then adds game-changing language which would open up that anonymized data to the coding public through state-released API code, in essence creating a data-driven technology platform which any coder with a joint and a dream can use to design the next "Uber of pot."
Using this open-source computer database, innovative software companies will be able to track consumer preferences - broken down by strain, cannabinoid and terpene profile, cultivation technique and more - and offer this information to growers in real time. This will create unprecedented opportunities for cannabis entrepreneurs to adjust their production to the very latest in market trends.
It's a bold effort to empower the burgeoning field of cannabis technology (and write a blank check to Silicon Valley), and one to be expected from a tech giant like Parker.
It's all part of promoting the brand of California cannabis. Software code, unlike controlled substances, is legal to transfer across state lines – assuming that it's put to a use which is legal where it's going. Thus, while software to run the cannabis market more efficiently will initially benefit only Californians, in time Silicon Valley will help to run markets worldwide, if AUMA passes.
Parker initiative is tourist friendly
But AUMA's greater impact on global cannabis markets will come in the form of its progressive policy toward cannabis tourism, one which builds on Colorado's laws allowing out-of-state visitors to buy cannabis by also providing innovative options for where and how to consume it.
Whereas Colorado visitors have no legal place to consume their store-bought cannabis in their hotel, rental car or on the ski slopes, AUMA provides for optional on-site consumption licenses for the hundreds of Amsterdam-style "coffee shops," which will probably spring up all around the state. (Local governments will be empowered to keep such businesses out, so the coffee shops will likely be clustered around progressive, tax-focused cities like San Francisco and Los Angeles.) And if you like that, you'll love this: AUMA even anticipates on-site consumption licenses for limos and buses. Toke tour, anyone?
Tax breaks for small, innovative cannabis companies
Yet for all this, AUMA's most exciting platform for innovation comes in the form of its agile "microbusiness" license, which offers tax and fee breaks for cannabis businesses with under 10,000 square feet in cultivation. These small businesses will enjoy unprecedented flexibility to innovate new solutions in a nascent market, as they would be empowered to conduct cultivation, processing, extraction, transport and retail sales all under the auspices of a single license (larger enterprises will need a separate license for each activity).
So if AUMA passes this November, California's cannabis industry will be poised to adopt the same pattern which has led to explosive growth in Silicon Valley – wherein small, agile companies innovate new solutions to old problems – solutions which can be easily exported to other companies in California and beyond.
AUMA isn't perfect; the taxes are too high and some of the regulations are too onerous. But none of that will stop California, with all its systemic advantages, from re-taking the lead after it passes. The state's culture of agile entrepreneurship, when applied to cannabis through AUMA, will bring the industry behind one of the state's top crops to a roiling boil, to the benefit of cannabis consumers everywhere. After all, if you wish to see the face of a toker whose life will be affected by how Californians vote this November, just look in the mirror.
Author Jeremy Daw is the editor of the cannabis legalization news and analysis web site, TheLeafOnline.com. He is also the co-author (with Chris Conrad) of The Newbie's Guide to Cannabis and the Industry, available this spring from Reset.me, an imprint of Whitman Books.
banner image: LeWeb14 / Flickr