While his re-licensure in California remains a work in progress, Nick Diaz is in talks to fight for Dream in October.

Cesar Gracie, Diaz’s longtime trainer and manager, met with Dream Event Producer Keiichi Sasahara at Strikeforce this past weekend in San Jose, Calif., to discuss the possibility of Diaz competing either Oct. 6 or 22. Gracie said Sasahara expressed an interest in the outspoken 28-year-old facing Japanese legend Hayato Sakurai, but that talks were in the preliminary stages.

Strikeforce announced an alliance with the Japanese promotion a few weeks ago, and the two have already begun an open exchange of talent that saw Dream’s Mitsuhiro Ishida compete on Saturday’s card.

Strikeforce CEO Scott Coker said he was “100 percent” open to Diaz competing overseas next, while Gracie said Diaz could return to Strikeforce for one of its November or December events.

Gracie said he’s been told Diaz will fight for the promotion’s welterweight title at that time.

Diaz was pulled from Saturday’s championship bout against Jay Hieron after the Stockton native did not take a pre-fight drug test required for his re-licensure in the state. Gracie said Diaz has a medical prescription for marijuana to treat the hyperactivity disorder ADHD and wasn’t given proper warning that his fighter would be tested per an arrangement he said was made with former CSAC Executive Officer Armando Garcia. Hieron went on to earn a unanimous decision against late replacement Jesse Taylor in a non-title bout on Saturday.

At a post-fight press conference, Coker said Hieron, who turned down a UFC contract to join Strikeforce, will fight Diaz for the title, although the timing of the bout is up in the air.

“It might be that Nick can’t fight (for Strikeforce) till the end of the year and Jay fights in-between there,” said Coker, “but that’s a fight we definitely want to put together because we made a commitment to Jay and we want to keep that commitment.”

Meanwhile, Gracie met with CSAC officials on Friday to discuss Diaz’s re-licensing and the testing procedures he will be placed under moving forward.

Gracie and CSAC Assistant Executive Officer Bill Douglas discussed the possibility of the state agency adopting a “Theraputic Usage Exemption” program, utilized by the World Anti-Doping Agency (WADA). According to the WADA Web site, a TUE would allow an athlete to take medication that appears on the WADA Prohibited list without facing penalties.

Clarifying statements Gracie made to Sherdog.com last week, the trainer said an arrangement to test Diaz only on the night of his scheduled bouts was made between Diaz’ former employer, Pro Elite, and Garcia. Gracie also specified that the promotion relayed the agreement to him, not Garcia.

Both Gracie and Douglas told Sherdog.com that a former Pro Elite employee also attended the meeting to corroborate Gracie’s assertion that an agreement had been in place. Douglas said he had no knowledge of the agreement prior to Gracie telling him.

Gracie said he hopes Diaz will be granted an exemption for marijuana while out of competition, and that the fighter will abide by the testing procedures during competition.

“He does need (marijuana),” said Gracie. “He has ADHD and he’s had a prescription for Ritalin since he was a kid. He doesn’t want to take that. That’s worse than pot.”

Douglas called the meeting “extremely positive.”

“We don’t have a TUE program in California yet, not to say we won’t,” Douglas told Sherdog.com Monday. “I pledged to have the CSAC staff work with Gracie and his reps, because putting a TUE program together to present to the commission will take time and effort, as well as feedback from many parties. We can put the plan together, but ultimately the commission has to vote for it.”

Douglas said the first step will be to secure a date to present the idea to the commission board, but noted that if the commission is receptive, the entire process of incorporating the system could take up to a year.

In the meantime, Gracie said Diaz could be tested for re-licensure as early as in a few weeks. Gracie said Diaz would cease using marijuana during that time in order to pass the necessary testing.

Douglas recommended Diaz be ready for the testing this time around.

“I think that as soon as he finds out he has a fight, he’d need to do what he needs to,” said Douglas.