New Proposed State Regulations (Part 1)

Last Friday, state agencies released proposed amendments to the current emergency regulations governing cannabis commercial operations. Most of the amendments simply clean up wording or correct spelling and grammar mistakes; however, there are a few key changes that will be discussed further below.

The three California agencies - Department of Food and Agriculture (cultivation), Department of Public Health (manufacturing), and Bureau of Cannabis Control (all other license types) - originally released their emergency regulations in November 2017. After receiving community feedback, they decided to re-adopt the emergency regulations, with some edits, for another 120 days. As per Prop 64 and MCRSA, the agencies are required to adopt permanent regulations later this year, though it is anyone's guess as to when.

Most amendments are linked to specific license types and we will go through them accordingly; however, the following two changes span all three agencies:

  • Licensees will be able to do business with any cannabis license holder regardless of M or A designation
  •  Small changes in requirements will be made to the state annual license applications (i.e. additional guidelines for those who qualify as persons with financial interest, additional requirements for manufacturer's transportation plans)

Cultivation - There are two major takeaways from the California Department of Food and Agriculture (CDFA) proposed amendments:

  • Canopy Measurements: For indoor and mixed light, canopy will be measured by room boundaries, walls, or ceiling-to-floor partitions and will include the surface area of any shelving system. For outdoor, canopy will mean all the space within physical boundaries where mature plants may be. This means that even if your cultivation only takes up half of a room or half of an enclosed outdoor space, the whole room and the whole enclosed space will be considered as part of your canopy square footage.
  •  Temporary Application: more closely resembles the state annual application. It will require a cultivation plan (which includes a detailed premises diagram, a waste management plan, and a pest management plan), identification of water sources, and evidence of enrollment with water control board or waiver.

Manufacturing – There are three major takeaways from the California Department of Public Health (CDPH) proposed amendments:

  • Shared Use: a new license type, Type S, will be incorporated. As a manufacturer with a Type S license you will be able to rent out part of your space for other manufacturers to use, though the premise may only be in use by one manufacturer at a time and each manufacturer must have a secured storage area.
  •  Tincture Alcohol Exception: cannabis products cannot contain more than 0.5% alcohol, unless cannabis product is tincture as described by the packaging limits and requirements.
  • THC Content Restrictions: only medical cannabis product will be able to contain more than 1,000 mg THC per package (and will not be able to contain more than 2,000 mg). Manufacturers will be required to label said products "FOR MEDICAL USE ONLY" prior to sending to distributor

As the Bureau of Cannabis Control governs many differing license types (7 types) a later post will address the amendments made to their regulations.

The proposed regulations get very particular, and if you need any assistance determining how the amendments effect your cannabis business operation do not hesitate to give Scot Candell & Associates a call (415-441-1776).