Overview of Proposed Permanent Regulations
On Friday, July 13, 2018, California’s three cannabis licensing agencies (the Bureau of Cannabis Control, or “BCC”; the Department of Food and Agriculture, or “CDFA”; and the Department of Public Health, or “CDPH”) released their much-anticipated proposed permanent regulations for cannabis businesses pursuant to the Medicinal and Adult Use Cannabis Regulation and Safety Act. This began the 45-day public comment period of the regular rulemaking process, during which time the public has a chance to review and comment on the proposed regulations, and the agencies must consider these comments and may make changes based on this feedback.
Below are links to the proposed regulations and the summary sheets released by the agencies:
Bureau of Cannabis Control Proposed Regulations
Bureau of Cannabis Control Summary of Proposed Changes
Department of Food and Agriculture Proposed Regulations
Department of Food and Agriculture Highlights of Proposed Regulations
Department of Public Health Proposed Regulations
Department of Public Health Summary of Proposed Regulations
Overview of the Regulatory Process
Currently, cannabis businesses in California are operating under emergency regulations that were originally adopted in December 2017 and re-adopted in June 2018. The emergency regulations will stay in effect until the regular rulemaking process is complete and the final regulations have been formally adopted at the end of this year.
In addition to publishing the proposed regulations, the agencies also each published a Notice of Proposed Rulemaking Action (NPRM), which contains various information about the proposed rules such as a summary of existing law and who to contact with questions and comments. The agencies were also each required to publish an Initial Statement of Reasons (ISOR), which contains the agencies’ reasoning and basis behind why they crafted a rule the way they did.
You can find the agencies’ NPRMs and ISORs below:
Bureau of Cannabis Control NPRM
Bureau of Cannabis Control ISOR
Department of Food and Agriculture NPRM
Department of Food and Agriculture ISOR
Department of Public Health NPRM
Department of Public Health ISOR
There are six (6) standards in the Administrative Procedures Act (APA) that agencies including the BCC, CDPH and CDFA must follow when conducting rulemaking actions. They are:
- Authority – The agency must be permitted or obligated by law to craft a particular regulation. (Gov. Code § 11349(b))
- Reference – The agency must refer to the provision of law that the agency is implementing or interpreting via the regulation. (Gov. Code § 11349(e))
- Consistency – The regulation cannot be inconsistent with other laws and/or regulations, and needs to be harmonious with existing provisions of law. (Gov. Code § 11349(d))
- Clarity – The regulation must be easily displayed or written so that it will be easily understood by the people affected. (Gov. Code § 11349(c))
- Nonduplication – The regulation cannot serve the same purpose as another existing state or federal law or regulation. (Gov. Code § 11349(f))
- Necessity – There must be substantial evidence in the record for needing the regulation in order to fulfil the purpose of the statute or other provision of law that the regulation implements or interprets. (Gov. Code § 11349(a))
Since the BCC, CDFA and CDPH must comply with the standards above, it’s a good idea to focus your comments around one or more of those specific areas, as opposed to just making a comment that you dislike a particular proposed regulation without giving any reason why. That way, it is more likely that the agency will respond to your comment by making an adjustment to the proposed regulation(s) in question. For more on this topic, check out our previous blog post on Challenging Proposed Regulations for Lack of Necessity, which discusses the necessity standard.
Highlights from the Proposed Regulations
The proposed permanent cannabis regulations contain a number of changes from the emergency regulations which the cannabis industry is currently operating under. There are also many emergency rules that the agencies are proposing to keep in place. We’ve gone through to gather some of the highlights of these proposals by agency. Please note that this list is not comprehensive, and does not purport to be legal advice. Please schedule a legal consultation with us at info@omarfigueroa.com and we would be happy to provide custom-tailored legal advice.
All Licensees
- No more temporary licenses will be issued after December 31, 2018.
- Additional application requirements have been added.
- “M” and “A” licensees may conduct business with each other regardless of their “M” or “A” designation.
BCC Licensees (Retailers, Distributors, Testing Laboratories, Microbusinesses, Event Organizers)
- Child-resistant, re-sealable, opaque exit bags would once again be required at retailers.
- Retail drivers could deliver to any jurisdiction in the State of California, effectively nullifying the bans imposed on delivery in several local jurisdictions.
- Each premises would require a distinct street address or suite number.
- New restrictions would be imposed on advertising.
- Cannabis retailers would only be able to sell cannabis goods, cannabis accessories, and licensees’ branded merchandise or promotional materials, and could not sell any other types of live plants besides immature cannabis plants.
- Would reduce action levels for Category II residual solvents.
CDPH Licensees (Manufacturers)
- In a major shift, child-resistant packaging would no longer be required on all packaging. Rather, retailers would be required to place all items in a child-resistant exit bag at the time of sale.
- Edible products that dissolve orally can contain up to 500mg THC per package for the medical market.
- Weight would have to be listed in both U.S. customary and metric units.
- Would allow products containing less than 2 milligrams of THC or CBD to be labeled “<2mg THC” or <2mg CBD”.
- Would increase the maximum gross revenue under which a Type S license could be held from $500,000 to $1 million.
CDFA Licensees (Cultivators)
- Would make changes to the definition of “nursery.”
- Outdoor licensees would be prohibited from using light deprivation.
- Lots of immature plants would have to be uniform in strain.
- Moratoriums on licensing in impacted watersheds would not be permanent.
As noted above, this is just a partial list of highlights from the proposed regulations. Please schedule a legal consultation with us at info@omarfigueroa.com and we would be happy to provide custom-tailored legal advice.
How to Submit Comments
Comments on the proposed regulations can be submitted to the agencies by mail or email, or offered in-person at one of the agencies’ scheduled public hearings. Your comment must include the following: (1) the subject title of the proposed regulation; and (2) specific concerns regarding the proposed regulation, which the agencies deem most helpful if they identify the section number in question, discuss the issue, suggest changes to the text, and explain why any desired modifications address the issue.
Please note that all comments received during the public comment process become part of the official record which is public information. Thus, you may not want to include any confidential or identifying information in your comments.
All comments must be submitted to the respective agencies by 5:00pm on August 27, 2018 or provided at one of the scheduled public hearings. Below are the locations of the public hearings, which will take place throughout the state during the months of July and August. (This information is subject to change; please check for updates at the California Cannabis Portal.)
Bureau of Cannabis Control Hearing Dates and Locations
August 7, 2018, 10:00 a.m. to 12:00 p.m., Hilton Oakland Airport, One Hegenberger Road, Oakland, CA 94621
August 14, 2018, 10:00 a.m. to 12:00 p.m., Millennium Biltmore Hotel, 506 South Grand Avenue, Los Angeles, CA 90071
August 27, 2018, 10:00 a.m. to 12:00 p.m., Tsakopoulos Library Galleria, 828 I Street, Sacramento, CA 95814
California Department of Public Health Hearing Dates and Locations
July 30, 2018, 10:00 a.m., 900 E. Birch Street, Valencia Room, Brea, CA 92821
August 20, 2018, 10:00 a.m., 901 Myrtle Avenue, Eureka, CA 95501
August 27, 2018, 10:00 a.m., 8400 Edes Avenue, Oakland, CA 94621
California Department of Food & Agriculture Hearing Dates and Locations
July 24, 2018, 1:00 p.m. to 3:00 p.m., Adorni Center, 1011 Waterfront Drive, Eureka, CA 95501
July 26, 2018, 1:00 p.m. to 3:00 p.m., Mission Inn Hotel and Spa, 3649 Mission Inn Avenue, Riverside, CA 92501
July 31, 2018, 1:00 p.m. to 3:00 p.m., Hilton Santa Barbara, 633 East Cabrillo Boulevard, Santa Barbara, CA 93103
August 28, 2018, 1:00 p.m. to 3:00 p.m., California Department of Food & Agriculture, Auditorium, 1220 N Street, Sacramento, CA 95814
Additional Resources
How to Get Involved in the Regulatory Process (BCC)
How to Submit Your Comments (CDFA)
Instructions on Submitting Public Comment (CDPH)
Office of Administrative Law (OAL) information about the rulemaking process
This information is offered as a public service and is not intended as legal advice. For specific legal advice, answers to your questions about California’s proposed cannabis regulations or assistance advocating for changes to the proposed regulations, please contact the Law Offices of Omar Figueroa at (707) 829-0215 to schedule a confidential legal consultation.