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OVERVIEW OF PROPOSED PERMANENT REGULATIONS for CA
On Friday, July 13, 2018, California’s three cannabis licensing agencies (the Bureau of Cannabis Control, or “BCC”; the Department of Food and Agriculture, or “CDFA”; and the Department of Public Health, or “CDPH”) released their much-anticipated proposed permanent regulations for cannabis businesses pursuant to the Medicinal and Adult Use Cannabis Regulation and Safety Act. This began the 45-day public comment period of the regular rulemaking process, during which time the public has a chance to review and comment on the proposed regulations, and the agencies must consider these comments and may make changes based on this feedback.
Overview of the Regulatory Process
Currently, cannabis businesses in California are operating under emergency regulations that were originally adopted in December 2017 and re-adopted in June 2018. The emergency regulations will stay in effect until the regular rulemaking process is complete and the final regulations have been formally adopted at the end of this year.
In addition to publishing the proposed regulations, the agencies also each published a Notice of Proposed Rulemaking Action (NPRM), which contains various information about the proposed rules such as a summary of existing law and who to contact with questions and comments. The agencies were also each required to publish an Initial Statement of Reasons (ISOR), which contains the agencies’ reasoning and basis behind why they crafted a rule the way they did.
Highlights from the Proposed Regulations
The proposed permanent cannabis regulations contain a number of changes from the emergency regulations which the cannabis industry is currently operating under. There are also many emergency rules that the agencies are proposing to keep in place. We’ve gone through to gather some of the highlights of these proposals by agency. Please note that this list is not comprehensive, and does not purport to be legal advice. Please schedule a legal consultation with us at info@omarfigueroa.com and we would be happy to provide custom-tailored legal advice.
All Licensees
No more temporary licenses will be issued after December 31, 2018.
Additional application requirements have been added.
“M” and “A” licensees may conduct business with each other regardless of their “M” or “A” designation.
BCC Licensees (Retailers, Distributors, Testing Laboratories, Microbusinesses, Event Organizers)
Child-resistant, re-sealable, opaque exit bags would once again be required at retailers.
Retail drivers could deliver to any jurisdiction in the State of California, effectively nullifying the bans imposed on delivery in several local jurisdictions.
Each premises would require a distinct street address or suite number.
New restrictions would be imposed on advertising.
Cannabis retailers would only be able to sell cannabis goods, cannabis accessories, and licensees’ branded merchandise or promotional materials, and could not sell any other types of live plants besides immature cannabis plants.
Would reduce action levels for Category II residual solvents.
CDPH Licensees (Manufacturers)
In a major shift, child-resistant packaging would no longer be required on all packaging. Rather, retailers would be required to place all items in a child-resistant exit bag at the time of sale.
Edible products that dissolve orally can contain up to 500mg THC per package for the medical market.
Weight would have to be listed in both U.S. customary and metric units.
Would allow products containing less than 2 milligrams of THC or CBD to be labeled “<2mg THC” or <2mg CBD”.
Would increase the maximum gross revenue under which a Type S license could be held from $500,000 to $1 million.
CDFA Licensees (Cultivators)
Would make changes to the definition of “nursery.”
Outdoor licensees would be prohibited from using light deprivation.
Lots of immature plants would have to be uniform in strain.
Moratoriums on licensing in impacted watersheds would not be permanent.
As noted above, this is just a partial list of highlights from the proposed regulations. Please schedule a legal consultation with us at info@omarfigueroa.com and we would be happy to provide custom-tailored legal advice.
