The Golden State is looking to introduce several changes for marijuana businesses
California regulators are preparing to release a final draft of rule changes for the marijuana industry in the state. Last Friday, the California Bureau of Cannabis Control, in conjunction with the Department of Food and Agriculture and the Department of Public Health, released a set of proposed rules that cover everything from marijuana packaging and delivery to marijuana-focused events. The final language of the rules is expected to be released this December.
According to Omar Figueroa, a marijuana attorney, and Juli Crocket, the compliance director of LA-based consultant company MMLG, the changes are substantial. The duo indicated that some of the biggest changes being addressed are the following:
– Cannabis delivery would be prohibited by third-party companies that do not have state MJ commercial licenses, but the rules do allow for tech platforms to help facilitate deliveries as long as there’s no direct profit-sharing based on sales. The move could undercut business models of companies such as Eaze and Weedmaps when it comes to delivery, both Figueroa and Crockett said.
– The draft rules would reduce the amount of inventory allowed to be carried by a single delivery vehicle, from $10,000 to $5,000. And at least $2,000 of that inventory would have to have existing orders in place from customers before drivers leave a delivery hub.
– Licensed cannabis businesses would be required to disclose far more information about individuals and companies that hold ownership stakes – a move Figueroa said amounts to a “ban on silent partners.” Crockett added that the BCC “wants to know who’s standing to profit and who has a standing in each of these companies.”
– Packaging and labeling provisions would change dramatically, including one that would allow manufacturers to hold off on identifying THC and CBD content before having their products tested through distributors and laboratories. That would let distributors get edibles and concentrates tested for potency and then add that information to labels before products are sent to retailers.
– Child-resistant packaging requirements would shift and not be required for manufacturers until January 2020. That, Crockett said, would mean more onus would be placed on retailers to use child-resistant exit bags at storefronts through 2019.
– Licensed MJ events would no longer be confined to county fairgrounds, which means there would likely be a proliferation of cannabis events of various types.
– Licensing and branding agreements with legacy operators that were growing or manufacturing without a state permit would be expressly prohibited. Figueroa said such a move would likely cut off one more avenue for longtime MJ companies that have had a hard time obtaining the necessary permits to operate in the regulated market.
– Testing requirements would be modified to ease the previously strict mandates that have led to a number of product failures and recalls.
The groups are now accepting public feedback on the proposed changes. Comments will be accepted until November 5, after which the agencies will begin finalizing the rules ahead of their being published, which will happen by December 3.