On October 19, 2018, the California Bureau of Cannabis Control (“BCC”), the California Department of Food and Agriculture (“CDFA”), and the California Department of Public Health (“CDPH”) released new proposed regulations regarding cannabis in response to public comments. This is the next step in the procedure to implement final regulations governing cannabis use in California, which are estimated to be finalized in December 2018.
Important Proposed Changes made by the BCC
The BCC has made numerous changes to its previous version of proposed regulations. Notably, the BCC is no longer accepting new temporary license applications, although the BCC may still grant extensions for 90-day periods for existing temporary licenses. Additionally, the new proposed regulations grant local law enforcement agencies the discretion to force cannabis event organizers to cease operations without delay if the agency determines it is necessary to protect the immediate health and safety of the public.
The BCC’s new regulations would require applicants to follow certain protocol in the event a license is terminated and cannabis goods remain on the premises. For example, the provider might need to destroy the goods or be able to sell the goods to a licensed distributor or microbusiness upon approval from the BCC.
Licensed cannabis businesses are required to report more information regarding ownership stakes; the regulations now define “owner” to include anyone holding at least a 20% share in the business. The new regulations would also require a licensee’s premises to be permanently affixed to one location, with no ability for the premises to be readily moved. The previous restriction prohibiting advertisements appealing to anyone 18 or under has been increased to 21 years of age, and advertisements cannot be marketed as alcoholic products.
The BCC has also proposed greater restrictions on the use of technology platforms to deliver cannabis products. While clarifying that the use of a technology platform to market is permitted, providers could not use that platform deliver the cannabis products on behalf of the cannabis business, or share in any of the profits with the cannabis business. For example, a customer would not be able to order products from a technology platform.
The BCC’s new regulations remove the restrictions on waste management; standard laws regarding waste management are now applicable to cannabis businesses. The new regulations would also permit transfers from one cannabis distributor to another, provided that all products over 12 months old are disposed.
Important Proposed Changes Made by the CDFA
The CDFA regulates commercial cannabis cultivators. The key changes in the CDFA’s newest edition of proposed regulations include:
- A requirement to disclose a licensee’s entire business entity structure;
- A requirement that licensees with more than one employee have at least one supervisor and one employee who completes a Department of Occupational Safety and Health (“OSHA”) training course;
- New restrictions on shared areas for cultivators with multiple licenses; and
- New, more robust, record-keeping requirements and corresponding penalties for violations.
Important Proposed Changes Made by the CDPH
The CDPH is the agency responsible for regulating manufacturers of cannabis products. The new regulations relax labeling requirements so that either the distributor or the manufacturer can label cannabinoid content after regulatory compliance testing. The proposed regulations require product packaging to be child resistant beginning on January 1, 2020. Finally, the new proposed regulations permit edible cannabis products to be repackaged if they are found to be compliant with regulatory requirements, as long as the actual cannabis product is not altered in any way.
Questions
If you have any questions concerning this Legal Alert, please contact the following from our office, or the attorney with whom you normally consult.
mebrahimi@kmtg.com | 916.321.4597