Legal Alerts Aug 14, 2018

Coming to Your Town Soon: Cannabis (Maybe)

State’s Proposed Permanent Marijuana Regulations Limit Local Authority

Coming to Your Town Soon: Cannabis (Maybe)

The State of California has unveiled new proposed permanent regulations for the licensing of commercial cannabis businesses. One of the most controversial provisions affecting local agencies is California Code of Regulations Section 5416(d). Section 5416(d) states that deliveries can occur in “any jurisdiction within the State of California.”  If adopted, this regulation would apply even if local agencies passed ordinances prohibiting cannabis deliveries in their communities.

Based on the possibility of potential conflicts with local regulations, local agencies are encouraged to provide comments to the three cannabis regulatory agencies prior to the comment deadline of Aug. 27. For information on how to submit written comments click here.  

How We Got Here
As a refresher, California’s history with legalized cannabis goes back to 1996 when the State first legalized medical cannabis for personal use. In October 2015, the Legislature took the first step toward establishing a comprehensive, state-wide licensing scheme for commercial medical cannabis businesses. In November 2016, California voters approved the legalization of personal and commercial non-medical use of cannabis (referred to as “adult-use”). Then, in the summer of 2017, Gov. Jerry Brown signed SB 94 into law as part of the annual budget. SB 94, also known as the Medical and Adult-Use Cannabis Regulation and Safety Act, combined the State’s medical and adult-use commercial licensing schemes into a single regulatory scheme overseen by three separate licensing entities.

State Efforts to Regulate the Industry
On Jan. 1, the sale of adult-use cannabis became legal in California. In anticipation of the legalization of adult-use cannabis, the Bureau of Cannabis Control, California Department of Public Health and California Department of Food and Agriculture adopted emergency regulations in December 2017 to help regulate the cannabis market. The emergency regulations were readopted in June 2018 as a stop-gap measure until the State could formulate non-emergency regulations for cannabis. Recently, all three of the State’s cannabis licensing authorities announced the publication of proposed regulations. This is the first step in formulating  non-emergency regulations.

In addition to authorizing the delivery of cannabis in any jurisdiction within the State, other changes in the proposed permanent regulations include:

  • Prohibiting the use of certain advertisement techniques that may be attractive to minors; Prohibiting the advertisement of free cannabis goods or giveaways of any type of product; 
  • Prohibiting the transfer, donation, sale and giving away of cannabis waste; 
  • Allowing a retailer who holds multiple retailer licenses to transfer cannabis goods from one licensed retail premise to another; 
  • Stricter enforcement of cannabis events, requiring detailed premise diagrams; 
  • Clarifying that the California Department of Food and Agriculture shall not issue any temporary licenses or extensions of temporary licenses after Dec. 31; and 
  • Allowing orally-dissolving edibles in the medical market to contain up to 500 mg of THC per package, provided that each serving have no more than 10 mg of THC.

Resources and Public Hearing Dates
To view the Summary of Proposed Regulatory Changes from the Bureau of Cannabis Control, click here. For the California Department of Food and Agriculture’s Highlights of Proposed Changes, click here. And to view the California Department of Public Health Summary of Proposed Changes, click here. Finally, a redline version comparing the current emergency regulations to the proposed changes can be found here.
In addition to taking written comments concerning the proposed non-emergency regulations, the three cannabis licensing authorities will also be taking public comment during public hearings throughout the state. The dates and locations are as follows:

Bureau of Cannabis Control Hearing Date and Location:
Aug. 27, 10 a.m. to Noon
Tsakopoulos Library Galleria, 828 I St., Sacramento, CA 95814
More information can be found here.
California Department of Public Health Hearing Dates and Locations:
Aug. 20, 10 a.m.
901 Myrtle Ave., Eureka, CA 95501
Aug. 27, 10 a.m.
8400 Edes Ave., Oakland, CA 94621
More information can be found here.
California Department of Food & Agriculture Hearing Date and Location:
Aug. 28, 1 to 3 p.m.
California Department of Food & Agriculture, Auditorium, 1220 N St., Sacramento, CA 95814
If you have any questions about these proposed changes or how they may impact your agency’s current cannabis regulations, please contact the authors of this Legal Alert listed to the right in the firm’s Municipal Law practice group, or your BB&K attorney.
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Disclaimer: BB&K Legal Alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.

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