New Cannabis Laws go into effect
Earlier this spring, the Department of Consumer Affairs’ Bureau of Cannabis Control, Department of Public Health and Department of Food and Agriculture released proposed regulations for the Medical Cannabis Regulation and Safety Act. These licensing authorities held public hearings and accepted written comments regarding the proposed regulations.
The Legislature passed and the Governor signed into law, the Medicinal and Adult-Use Cannabis Regulation and Safety Act in mid-2017, which creates one regulatory system for both medicinal and adult-use cannabis.
The three cannabis licensing authorities are each developing new cannabis laws go into effect under proposed regulations based on the new law for the commercial medicinal and adult-use cannabis industries. During this process, the licensing authorities will consider the robust and valuable public comment received regarding the proposed medical cannabis regulations.
The licensing authorities will use the emergency rulemaking process for the new proposed regulations. The emergency regulations are expected to be published in fall 2017. The implementation date for the issuance of new cannabis dispensary laws go into effect for commercial cannabis licenses remains the same: January 2, 2018.
Medical Marijuana Licensing: At the state level, MCRSA establishes the legislative framework for state licenses, but California agencies still need to develop regulations to actually implement the law. January 2016: priority registration to demonstrate local compliance If your business is demonstrably “in operation and in good standing with [its] local jurisdiction by January 1, 2016” (AB 266, 19321), it will receive “priority” treatment during license applications. Note: “priority” is not defined. Even though this date has passed, establishing compliance remains important. September 2016: priority registration under AUMA Adult Use of Marijuana Act (Proposition 64) passed in November 2016, businesses that can demonstrate “that the applicant operated in compliance with the Compassionate Use Act and its implementing laws before September 1, 2016” shall receive priority in license issuance (Article 4, section 26045.2(a)) Again, “priority” is not defined.
Grower/Cultivator: This license is for entities that wish to grow medical marijuana plants from seed or clone to flower and finish. Growers wishing to provide clones, but who do not intend to flower or finish plants, may apply for a specialty nursery license.
To apply to grow cannabis in California, you will need to select a license based on your grow size and lighting source:
Tier 1: Specialty
• License 1: Specialty Outdoor. Up to 5,000 sq ft of canopy OR up to 50 mature plants on non-contiguous plots.
• License 1A: Specialty Indoor. Up to 5,000 sq ft using exclusively artificial lighting.
• License 1B: Specialty Mixed-Light. Up to 5,000 sq ft using a combination of natural and supplemental artificial lighting.
Tier 2: Small
• License 2: Small Outdoor. Between 5,001 and 10,000 sq ft of a canopy.
• License 2A: Small Indoor. Between 5,001 and 10,000 sq ft of canopy using exclusively artificial lighting.
• License 2B: Small Mixed-Light. Between 5,001 and 10,000 sq ft of canopy using a combination of natural and supplemental artificial lighting.
Tier 3: These licenses are limited in their access to vertical integration.
• License 3: Outdoor. Between 10,001 sq ft to one acre of canopy.
• License 3A: Indoor. Between 10,001 sq ft to one acre of canopy using exclusively artificial lighting.
• License 3B: Mixed Light. Between 10,001 sq ft to one acre of canopy using a combination of natural and supplemental artificial lighting.
License 4: Nursery.
Processor: This license allows business entities to process raw medical marijuana plant matter into a variety of medicinal products.
Processor licenses are sub-divided into two categories based on the types of solvent being used.
• License 6: Manufacturer 1. Not using volatile solvents.
◦ Legislators have stated License 6 was not intended for use by edibles manufacturers. This may be subject to cleanup language.
• License 7: Manufacturer 2. Using volatile solvents.
Additional license types currently in the law include:
Tester: Laboratories intending to test medical marijuana products for quality and potency will be required to apply for a tester license
• License 8
Dispensing: Businesses that intend to retail medical cannabis to qualifying patients will require a dispensing license under the new cannabis laws go into effect in 2018.
• License 10: one retail location
• License 10A: up to three retail locations and the potential for full vertical integration
Distributor: The MMRSA requires that—while business agreements can be made directly between any licensed entities—a third-party distributor be responsible for overseeing and officially conducting any business transaction that occurs. Distributors are required track all products received, and to have them tested for quality.
• License 11. All distributors must also apply for a Transporter License (12).
• From the legislative perspective, the inclusion of the “distributor” model was a necessary compromise to address the trust deficit with people who do not believe the cannabis industry is effectively and consistently self-regulating.
Transporter: Business intending to transport medical marijuana from one licensed facility to another.
• License 12
Contact us for marijuana or cannabis licensing information or for legal help. As new cannabis laws go into effect, we will have updates on our website, and can also help you obtain licenses for your business.