New legislation will regulate home delivery, organics standards, and allow free samples at the county fair.
SACRAMENTO–California lawmakers approved legislation on Thursday that will establish guidelines for home delivery, rules and standards for organic cannabis growers, and allow vendors to offer free samples at county fairs across the state.
After approval in the House and Senate, Senate Bill 94 now moves to Governor Jerry Brown’s desk and is expected to be signed into law.
California Senator Mike McGuire (D–2nd District) was quoted by Associated Press and said, “One of the biggest challenges we have is taking a multi-billion-dollar industry out of the dark and now into the light.”
Proponents of personal home delivery successfully cited up to fifteen percent of medical marijuana patients that are immobile, without transportation or ability to access traditional dispensaries.
Organic growers would be held to a regulatory structure similar to that of craft wineries. The state will create “appellations,” which will designate varietal, regional and unique strains.
The new legislation also would permit vendors to obtain a temporary license that allows sales of cannabis products at county fairs, agricultural events, and cannabis festivals.
Since California voters approved Prop 64 in October, both state and local legislators have been tasked with the creation and implementation of adult-use regulations, while negotiating already existing laws for medical marijuana patients. The passage of SB 94 will create the Medicinal and Adult-Use Cannabis Regulation and Safety Act.
Seattle-based legal firm Harris-Bricken and attorney Alison Malsbury gave this ten-point round-up of the newly-approved bill on their CannaLawBlog:
- The governing bureau will now be the Bureau of Cannabis Control (“the Bureau”).
- The types of licenses available for commercial adult-use cannabis activity and commercial medicinal cannabis activity will be the same. The licenses available under both the MCRSA and the AUMA will continue to be available for both kinds of activity, and for specialty cottage cultivation licenses and micro business licenses, and, commencing on January 1, 2023, licenses for large outdoor, indoor, and mixed-light cultivation will also be available for both medicinal and adult-use cannabis activity.
- Producing dispensary and transporter licenses will not be available.
- Quality assurance, inspection, and testing requirements of cannabis and cannabis products prior to retail sale will change. Distributors will be required to store cannabis batches on their premises during testing, testing lab employees will be required to obtain samples for testing and transport those samples to testing labs, and distributors will be required to conduct a quality assurance review to ensure compliance with labeling and packing requirements, among other things.
- Though the MCRSA limited the combinations of medicinal cannabis licenses a person may hold until January 1, 2026, the MAUCRSA will not apply these limits (other than that testing laboratory licensees are prohibited from obtaining licenses to engage in any other commercial cannabis activity);
- The residency requirements of the AUMA are repealed. In other words, out-of-staters and even residents of other countries can freely participate.
- Additional advertising requirements, including regulation of online advertising and the creation of a universal symbol for edible cannabis products, will be implemented.
- The cannabis excise tax will be measured by the average market price (as defined) of the retail sale, instead of by the gross receipts of the retail sale.
- Applicants for cultivation licenses will need to identify the source of water supply.
- The Bureau will no longer have the authority to regulate and control industrial hemp.
According to media reports, Governor Brown and legislators had been in negotiations for months with cannabis industry companies and interested parties, to develop the content of SB 94.
Officials have until 2018, and a $118 million budget to implement the regulatory infrastructure for the legal cannabis industry in California. The state’s strategy for adult-use cannabis is expected to be similar to standards and practices for the retail alcohol industry.
State tax revenue from cannabis sales is estimated to be up to $1 billion annually, once the adult-use market is established. Overall annual revenue for the California cannabis industry has been projected at between $5 and $7 billion.
