New Proposed State Regulations (Part 2: BCC)

At the end of May 2018 the state released proposed revisions to the emergency regulations originally codified in November of 2017. While a majority of the amendments proposed are minor, a few have the capacity to affect the operation and licensing of cannabis businesses quite a bit. In a previous post we discussed the key takeaways from the proposed regulations governing cultivation and manufacturing. This post will focus on the modified regulations released by the Bureau of Cannabis Control (BCC), who is responsible for cannabis advertising, laboratories, retailers (storefront and non-storefront), distributors, microbusinesses, transporters, and events. 

It is important to note that, as discussed in the previous post, the BCC allows for business activity between licensees regardless of M or A designation and has slightly modify the state annual application (I.e. additional security requirements, cannabis waste procedures, and delivery procedures)

Below we will outline the biggest changes. Most amendments are linked to specific license types and we will go through them accordingly; however, the following span all license types governed by the BCC: 

  • Annual Fees: there are changes to the annual license fee you pay, based on the dollar value of your cannabis operation (i.e. previously distributor operations estimated at $3 million had an annual fee of $5,000, it is now $1,200 and retailer operations estimated at $4 million had an annual fee of $36,000, it is now $$64,000);
  • Premises Restrictions: premises cannot be within a private residence or where the only access to the premises is through a private residence. Any BCC licensed premises has to be separated from any adjacent premises engaging in manufacturing and/or cultivation by walls and doors;  
  • No Alcohol: no person can consume or store alcohol on a BCC licensed premise; 
  • Advertising: depictions or images of minors under 18 years of age cannot be used in cannabis advertisements or marketing;
  • Security: the BCC now allows premises contained within the same building to share security and provides requirements for said security.

Retail

  • Medicinal Cannabis: products with greater than 1000mg THC per package can only be sold to medicinal customers by M-designated retailers (such products require a “For Medical Use Only” label prior to delivery at a retail location);  
  • Security Personnel: it is required to hire or contract security personnel to provide security services for the premises 24/7. Security personnel must be 21 or older and licensed by the Bureau of Security and Investigative Services.

Retail Delivery

  • Customer Restrictions: cannabis deliveries cannot be delivered to persons in motor vehicles and employees must verify identity and age of customer at time of delivery;
  • Prior Preparation: any request for delivery of cannabis goods must to be received and prepared (i.e. complete order placed in opaque package) prior to leaving the licensed premises;
  • Restrictions on Cannabis Goods in Delivery Vehicle: Up to $10,000 of cannabis goods can be in a delivery vehicle at any one time and employees cannot carry any other cannabis goods in the vehicle besides those to be delivered while conducting deliveries;
  • Security: non-storefront retailers are not required to hire or contact security personnel.

Microbusiness

  • Premises Separation: any distribution or retail areas must be separated from cultivation or manufacturing areas by walls and doors;
  • Security Personnel: if retail component, required to hire or contract security personnel to provide security services for the premises 24/7. Security personnel must be 21 or older and licensed by the Bureau of Security and Investigative Services.

Distribution

  • Security: security personnel, in addition to employees, are now allowed inside transportation vehicles;
  • Within Building: BCC provides exemptions from specific regulations for distributors transporting within the same building;
  • Shipment Verification: BCC provides minimum verification steps for shipments of cannabis goods;
  • Labeling: distributors can now relabel packages to accurately reflect lab tests on amounts of cannabinoids and terpenoids, if prior labeling is deemed inaccurate by tests;
  • Remediation: after a failed lab test, a batch can be returned for corrections only to manufacturers.

  Lab

  • Duplicate Field Samples: labs are no longer required to collect duplicate field sample;
  • Testing Clarifications: BCC provides expanded guidelines for testing and certification: of note are the changes in testing residual pesticides – specifies limits and requires testing of malathion.

Events – temporary event licenses

  • Location: event must take place at a county fair or district agricultural association event whose premises is not licensed for sale of alcohol or tobacco;
  • Participation List: instead of 5 days, applicant can now provide list of participating licensees to the BCC only 72 hours prior to the event (those not on the list cannot participate);
  • Security: it is required to hire or contract security personnel to provide security services for the premises at all times consumption or sale of cannabis goods are allowed. Security personnel must be 21 or older and licensed by the Bureau of Security and Investigative Services;
  • Entrance Signs: BCC provides specific guidelines for entrance signs to areas allowing consumption or sale of cannabis goods;
  • Operating Requirements: BCC provides increased requirements on generated waste, cannabis sales, cannabis storage, and participation compensation.

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). 

BCC website 

Announcement of New Regulations