California panel proposes guidelines for legalizing marijuana

A jar of medical marijuana is displayed at the medical marijuana farmers market at the California Heritage Market in Los Angeles, California July 11, 2014. REUTERS/David McNew

By Alex Dobuzinskis

LOS ANGELES (Reuters) - California should set clear guidelines for legalizing marijuana to stop the pot trade being dominated by powerful interests similar to Big Tobacco, a report from a panel overseen by the state's lieutenant governor said on Wednesday.

California voters blazed a new trail in 1996 when they approved a ballot measure that made the most populous U.S. state the first to allow medical marijuana.

But California has not legalized recreational use of the drug, even as Washington state, Colorado, Alaska and Oregon have taken that step in the last three years. Marijuana remains illegal under federal law.

The report from the panel chaired by Lieutenant Governor Gavin Newsom, a Democrat, represents an effort to set a clear path for regulating marijuana before voters consider at least one legalization ballot measure in November 2016.

The panel recommended controlling the potential power and size of players in the industry by limiting the number and types of licenses to be issued to any one group, while also setting fees low enough to admit small businesses.

"The goal should be to prevent the growth of a large, corporate marijuana industry dominated by a small number of players, as we see with Big Tobacco or the alcohol industry," the 93-page report said.

It also said California should abandon the idea of collecting the maximum possible tax proceeds from recreational marijuana, because that carries the risk of increasing usage.

"If this is about money, then I'm not going to be supporting it," Newsom said in a phone interview. "If this is about acknowledging our failure on the war on drugs and protecting our kids and public safety, then I'm going to be enthusiastically supportive of it."

Newsom, a former San Francisco mayor who plans to run for governor in 2018, became the highest state official in 2012 to support the idea of legalizing pot.

Kevin Sabet, founder of the anti-legalization group Smart Approaches to Marijuana, said he welcomed the panel's work, but expressed skepticism it would have a lasting effect.

"I think the report will be easily disregarded by those who wish to make a buck, rather than protect public health," Sabet said.

(Editing by Daniel Wallis and Eric Walsh)