New Cannabis Regulations for California

At Medicine Man Technologies, we’ve been keeping a close eye on the west coast and were pleased to hear that the California Senate replaced the Medical Cannabis Regulation and Safety Act (MCRSA) with SB 94.

The latest and greatest evolution of the state’s laws, SB 94 essentially repeals MCRSA while incorporating certain policies into the licensing provisions set forth by the Adult Use of Marijuana Act (AUMA), also known as Proposition 64, which was passed by voters in November of last year.

Under the new bill, the hybrid program of consolidated provisions is known as the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA). The outcome is a regulatory structure that’s intended to be more operator-friendly.

The California Growers Association remarked that the bill was “a thoughtful and robust foundation for a well-regulated cannabis marketplace in California.”

What SB 94 Means for California Cannabis

The new MAUCRSA structure generally imposes the same requirements on both commercial medicinal and adult-use cannabis activities, with specific exceptions.

Highlights of the changes include the following:

• The Bureau of Cannabis Control is now the governing regulatory agency. Control of industrial hemp fibers will be transferred to the Department of Food and Agriculture.
• The available licenses remain the same. “M-licenses” for medicinal operators and “A-licenses” for commercial adult-use operators. If someone holds both types of licenses, he or she is required to keep the premises separate and distinct; however, this might only require a physical barrier versus a separate location.
• Micro-business licenses, specialty cottage cultivation licenses, and indoor, outdoor, and mixed-light cultivation licenses will be offered for both recreational and medicinal marijuana operators and made available on or by January 1, 2023.
• Vertical integration prohibitions that were part of MCRSA have been removed, while the ban on large-scale cultivators remains. Other cultivators can now apply and be approved for multiple licenses in different categories, including acting as their own distributor.
• Transporter and producing dispensary licenses are not available under MAUCRSA.
• Retailers are now allowed to have a brick-and-mortar store that is not open to the public and only sells cannabis through delivery.
• With MAUCRSA, applicants may show prior compliance with local laws prior to obtaining state licenses. The city or county now is responsible for alerting the state within 60 days if the applicant is not in compliance with local laws.
• Changes to testing, inspection, and quality assurance are also part of SB 94. Distributors must store cannabis on their premises during testing and will be responsible for quality assurance reviews for labeling and packaging compliance.
• The residency requirement has now been removed. This means that foreign and out-of-state companies are now allowed to sell both medicinal and recreational marijuana. This will not stop some cities counties from creating their own residency requirements.
• Advertising requirements that regulate online advertisements and create a universal edible cannabis symbol have been added.
• 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.

Overall, the team at Medicine Man Technologies sees this bill as a positive and comprehensive step towards creating a sensible framework for California’s expanding cannabis market.

What’s Next for AUMA in California

Now that the California Senate has replaced MCRSA with SB 94 and the bill was signed by Governor Jerry Brown at the end of June, the state can more easily move towards establishing a system for adult-use, recreational cannabis.

Several license types should be made available in January of 2018, at which point retail sales may commence. For now, adults who are 21 years of age and over can consume and possess up to an ounce of flowers or eight grams of concentrate. They can also grow up to six plants in an enclosed area hidden from view or in their homes.

If you are considering entering California’s cannabis industry, our experts at Medicine Man Technologies can help you understand and navigate the new rules implemented by SB 94. Our consultants will ensure you’re able to set up a compliant and successful venture.