On Nov. 8, 2016, California voters approved Proposition 64, the California Marijuana Legalization Initiative also known as the Adult Use of Marijuana Act. Under Prop 64 the legalized use and growing of marijuana for personal use became effective the very next day, Nov. 9, 2016. The effective date for the sale and taxation of recreational marijuana is Jan. 1, 2018.

Much of the last year has been spent developing the regulations that will govern the new adult use cannabis industry. Understandably, this new landscape which touches many areas, has led to some confusion. In the year since Prop 64 passed, many people have found themselves wondering how it will be implemented and exactly what is and is not permitted. The purpose of this article is to address some of that confusion by examining seven questions.

Question 1: Is recreational or adult use cannabis now legal in California?

Answer: Yes, but with an important caveat. Effective Nov. 9, 2017, Prop 64 legalized possession by adults over the age of 21 up to 28.5 grams of marijuana (or up to 8 grams of concentrates) and the personal use and cultivation of up to six plants per residence by adults over 21. Prop 64 also reduced the penalties for most illegal cultivation, sales, and transport of marijuana downgrading these offenses from felonies to misdemeanors.

However, it is imperative to understand that this legalization applies only to California and that under federal law marijuana remains a Schedule I drug under the Controlled Substances Act of 1990. Schedule I drugs are those with “no currently accepted medical use and a high potential for abuse.” Examples of other Schedule I drugs include LSD and heroin. What this means is that while an adult may legally possess and cultivate marijuana in California, that possession and cultivation is not legal under federal law. How federal law and state laws legalizing marijuana ultimately will be reconciled is the big overarching question for the cannabis industry.

Question 2: Can marijuana be used in public?

Answer: No. Smoking or consuming marijuana in public is prohibited unless authorized by a local ordinance. Additionally, Prop 64 does not apply to federal lands meaning that possession and use on federal lands in California is not legal, even if not in public.

Question 3: Can I use marijuana in my car?

Answer: No. One may not possess an open container of marijuana or consume marijuana in a vehicle either as a driver or passenger.

Question 4: What is the DUI standard for marijuana?

Answer: There isn't one at this time. California Vehicle Code §23152 makes it unlawful to drive while under the influence of drugs and/or alcohol. Under Vehicle Code §23612, an arrestee must submit to a blood or urine test or forfeit their license. One issue with marijuana is that marijuana metabolites stay in the body long after impairment has passed and thus may be present in urine or hair long after any impairment has passed. Blood testing is more precise in terms of measuring levels of THC in the blood stream, but unlike alcohol, there is no legal threshold at which to measure impairment. In other words, there is nothing like the 0.08% threshold that California has for blood alcohol. Recent attention is turning to the use of a mouth swab device, but this time drivers cannot be forced to submit to a mouth swab.

Question 5: Can cities refuse to license adult use cannabis sales?

Answer: Yes. Prop 64 left it to individual cities to decide how to regulate marijuana sales. For example, some cities may allow sales while others may only allow deliveries. Some cities may permit nothing at all.

Question 6: Can marijuana be used at work?

Answer: It is up to the employer. Prop 64 did not “amend, repeal, affect, restrict, or preempt” public and private employers from maintaining a drug and alcohol free workplace. It also does not “require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale, or growth of cannabis in the workplace, or affect the ability of employers to have policies prohibiting the use of cannabis by employees and prospective employees, or prevent employers from complying with state or federal law.”

Question 7: Is marijuana a cash only business?

Answer: Largely yes. Because marijuana remains illegal under federal law, marijuana has largely remained a cash only business. Since Prop 64 passed in Nov. 2016, California has been studying ways to address this. On Nov. 7, 2017, California's State Treasurer, John Chiang, released “Banking Access Strategies for Cannabis-Related Business.” Mr. Chiang's report notes that it is estimated that legal cannabis will generate more than $7 billion in annual sales in its first few years. The report goes on to outline four recommended actions, while noting that any definitive solution will “remain elusive” until cannabis is de-scheduled or Congress approves safe harbor legislation for financial institutions

The four recommended actions are: (1) the implementation of safer and more effective ways to handle the payment of taxes and fees; (2) development by the State of California and local governments of compliance and regulatory data to be made available to financial institutions that do business with cannabis entities; (3) conduct a feasibility study of a public bank or other state backed financial institution to provide banking to the cannabis industry; and (4) establish a multistate consortium of state government representatives and other stakeholders to pursue changes to federal law to remove barriers to cannabis banking. While each of these actions sounds intriguing, as Mr. Chiang notes, a real solution likely will remain out of reach so long as federal law and state law are at odds.

As we rapidly approach the end of the year, the cannabis landscape remains in flux. On Nov. 16, 2017, California's state cannabis licensing authorities publicly noticed proposed emergency regulations for both medicinal and adult use cannabis signaling the continued evolving and changing state of affairs in this new industry.

Amy B. Alderfer is a member of Cozen O'Connor, based in the firm's Los Angeles office. Her practice encompasses cannabis law, products liability, false advertising, consumer protection, pharmaceutical and medical device, California Proposition 65 compliance and litigation, securities, arbitration and commercial lease litigation, and major commercial disputes.