Category: Public Policy

Marijuana Public Policy

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California Cannabis Regulations

California Cannabis Law

[Update: In July 2021, the three state licensing authorities were consolidated into a single California Department of Cannabis Control (DCC).  The DCC is taking steps to consolidate the regulations from the three licensing agencies into one set of regulations.  The consolidated emergency regulations have been approved and are now in effect.  The three existing sets of cannabis regulations have been moved into one title in the California Code of Regulations – Title 4, Division 19.]

The Office of Administrative Law (OAL) has officially approved the new final California cannabis regulations for cannabis businesses.  The California cannabis industry has been operating under emergency regulations adopted by the three state cannabis licensing authorities – the California Bureau of Cannabis Control (BCC), the Department of Food and Agriculture (CDFA), and the Department of Public Health (CDPH).  The new permanent California cannabis regulations take effect immediately and the prior California cannabis emergency regulations are no longer in effect.

The new permanent California cannabis regulations include the final cannabis regulations issued by the Bureau of Cannabis Control, the cannabis cultivation regulations issued by the Department of Food and Agriculture, and the manufactured cannabis regulations issued by the Department of Public Health (Manufactured Cannabis Safety Branch).  Changes to the cannabis regulations are indicated by strikeout and underline.  The permanent California cannabis regulations have been issued pursuant to the California Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) – read more about California cannabis law.

Many of the changes from the emergency cannabis regulations to the permanent cannabis regulations are more clerical than substantive, while other changes are significant.  One of the more significant changes relates to the boundaries for licensed cannabis delivery businesses.  Under the new permanent California cannabis regulations, licensed cannabis delivery businesses are not limited by local jurisdictional restrictions.  Read more at BCC to Permit California Cannabis Delivery Statewide.

Another significant change is the addition of § 5032 (b) which states that “Licensees shall not conduct commercial cannabis activities on behalf of, at the request of, or pursuant to a contract with any person that is not licensed under the Act.”  Many in the cannabis industry have referred to this as the “White Label Prohibition.”  The BCC explained that the change was necessary because it has received information, and observed, that some cannabis licensees may be engaging in commercial cannabis activity with non-licensees, or conducting commercial cannabis business at the direction of non-licensees.

In the October version of the proposed final BCC cannabis regulations, the BCC included examples of activity that would fall under this prohibition including: (1) procuring or purchasing cannabis goods from a licensed cultivator or licensed manufacturer, (2) manufacturing cannabis goods according to the specifications of a non-licensee, (3) packaging and labeling cannabis goods under a non-licensee’s brand or according to the specifications of a non-licensee, and (4) distributing cannabis goods for a non-licensee.  The BCC found that these examples caused more confusion and removed the examples from the final cannabis regulations.  The addition of § 5032 (b), however, remains in the final cannabis regulations.  Read more about the BCC Statement of Reasons for the cannabis regulation modifications.

Another significant change relates to cannabis product labeling for THC and CBD content.  California Cannabis regulations previously required cannabis products be labeled with the THC and CBD content prior to final testing.  Cannabis products can now be labeled after the final testing.

There are other substantial changes which we will discuss in future cannabis news articles.  Also, keep an eye on our California Cannabis Law Legislative Update for news about new cannabis laws being considered, or enacted, by the California legislature.

[Update: On November 17, 2020, a California court determined that BCC Regulations § 5040(b)(3) regarding cannabis billboard advertising is invalid in that it is inconsistent with the statute that the regulation was intended to implement (i.e., the statute’s cannabis billboard prohibition on Interstate Highways or on State Highways which cross the California border is not limited to just a 15-mile radius of the California border).]

Contact us to learn more about California state or local cannabis regulations, cannabis regulatory compliance, and cannabis litigation.

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BCC Regulations to Permit California Cannabis Delivery Statewide

Bureau Cannabis Control

[Update at end of article.]

The California Bureau of Cannabis Control (BCC), the Department of Food and Agriculture (CDFA), and the Department of Public Health (CDPH) recently announced the much-anticipated permanent California cannabis regulations under the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA).

The California Office of Administrative Law (OAL), which ensures that the regulations are clear, necessary, legally valid and available to the public, has thirty working days (ending January 16, 2019) to issue a Certificate of Compliance.  Many of the changes from the emergency cannabis regulations to the permanent cannabis regulations are more clerical than substantive, while other changes are significant.  The Bureau of Cannabis Control has provided the text of the permanent final BCC Cannabis Regulations with the new language underlined and the language to be deleted stricken through.  The existing California cannabis emergency regulations remain in effect until the OAL has completed its review.

[Update January 16, 2019 – The OAL has now completed its review and officially approved the final state cannabis regulations issued by the BCC, CDFA, and CDPH – see California Cannabis Regulations for more info.]

A controversial and significant change relates to the boundaries for licensed cannabis delivery businesses.  Pursuant to California Business and Professions Code §26200, local jurisdictions are expressly permitted to regulate and/or ban cannabis businesses.  However, under California Business and Professions Code §26090(e), a local jurisdiction cannot prevent delivery of cannabis or cannabis products on public roads by a California cannabis licensee acting in compliance with California state laws, as well as local laws that are authorized under the Control, Regulate, and Tax Adult Use of Marijuana Act (AUMA).  The proposed permanent cannabis regulations, California Code of Regulations, Title 16, Division 42, § 5416(d) state that “[a] delivery employee may deliver to any jurisdiction within the State of California provided that such delivery is conducted in compliance with all delivery provisions of this division.”  (See the final BCC Cannabis Regulations, page 76).

The delivery provisions of the new permanent California cannabis regulations received opposition from local jurisdictions as reflected in the California League of Cities letter in opposition to the cannabis delivery regulations.

Despite opposition from the California League of Cities to the cannabis delivery regulations, the proposed permanent cannabis regulations provide greater clarity and opportunity for success for cannabis delivery businesses.

Under the current California cannabis emergency regulations, cannabis delivery businesses, specifically those without a storefront, face a number of obstacles with the myriad of different regulations among the local jurisdictions.  Several jurisdictions, such as the City of Huntington Beach, ban adult-use deliveries completely (see Huntington Beach code cannabis delivery ban).  The majority of the cities in San Diego County specifically ban all cannabis deliveries, medical or adult use; however, the County of San Diego is silent on the issue of deliveries while banning all other cannabis businesses (see San Diego County marijuana code).  Other counties, such as Merced, have adopted ordinances banning cannabis businesses within their jurisdiction, but permitting delivery of medical cannabis within the County from businesses outside of their jurisdiction (see Merced County cannabis code).  A few jurisdictions, such as the City of Oakland, have embraced not only cannabis delivery within their jurisdiction, but permitted cannabis delivery businesses to establish locations within their jurisdiction consistent with State law (see Oakland cannabis code).

Interestingly, the California State Legislature raised the issue of local cannabis delivery with Senate Bill 1302 (Senator Ricardo Lara) considered last legislative session but not adopted (ordered inactive at Senator Lara’s request where it died), which would have specifically prohibited a local government from adopting or enforcing any ordinance that would prohibit a licensee from delivering cannabis within or outside of the jurisdictional boundaries of the local jurisdiction.  (See the complete California Cannabis Law Legislative Update.)  The California League of Cities, California State Association of Counties, and the California Police Chiefs Association, among others, wrote a May 31, 2018, letter opposing the cannabis delivery law.

Supporters of SB 1302 noted that voters overwhelmingly approved Proposition 64, the Control, Regulate, and Tax Adult Use of Marijuana Act (AUMA), the intent of which was to provide for a regulated market for cannabis, and local bans on cannabis delivery only frustrate that intent by encouraging black market activity and hindering the ability of individuals to use cannabis.  Supporters also recognized the harm to the California state cannabis licensing system, and to public safety, caused by local bans on cannabis delivery.  (Read more about California state cannabis law at California Cannabis Law.)

**Update: On April 4, 2019, some California local jurisdictions (county/city) filed a lawsuit challenging the BCC California cannabis delivery regulations.  On November 17, 2020, a California court dismissed the cannabis delivery lawsuit finding that the matter was not yet ripe for adjudication.  It was not, however, the win the cannabis industry was looking for.

Contact us to learn more about California state or local cannabis regulations, cannabis regulatory compliance, and cannabis litigation.