The PotPlus Guide to California’s Proposed Cannabis Regulations: Part Two

Are these good rules for canna-businesses?


Earlier this week we wrote the first of four posts summarizing and dissecting the new comprehensive rules drafted by the Bureau of Medical Cannabis Regulation’s (BMCR). (You can check out that post here.) The proposed rules are essentially a rough draft for the commercial medical cannabis industry– not recreational– and apply to areas such as dispensaries, patients, business owners, cultivators and lab testing. This post will focus on the rules directed at cannabis business owners.


We’re currently in the midst of a 45-day public comment period where you can send in your thoughts as to why rules need to be changed, why they won’t work and/or what elements will work. You have until June 12th to send them in. If you wish to send by email, send to: bm***********@dc*.gov. Here are some submission guidelines to ensure your comments are received. There’ll also be public hearings to voice your opinions in person as well. You can click here for the hearing dates. The BMCR is really depending on the public to help shape these regulations, so if you read something that doesn’t make sense, is painfully vague or you think will have negative consequences–SEND THEM YOUR THOUGHTS! This is a call to action, people!


Here are the proposed regulations effecting canna-busniess owners:

1. There are three state agencies responsible for handing out six different types of licenses. In other words, you have to know which group is responsible for your area of business.  If you’re cultivating, you’ll be licensed and regulated by the California Department of Food and Agriculture. If you’re manufacturing concentrates and / or edibles, the Department of Public Health will issue your license. If your business is distributing, transporting, retailing or testing cannabis products, the BMCR is responsible for issuing your license. Yes, California’s weed game is complicated. No, it’s not going to get any simpler. Here is an overview of the statutory requirements of the state agencies under the Medical Cannabis Regulation and Safety Act (MCRSA).


2. In the overview linked above, you’ll notice a license type 6 and 7 to the far right. License type 6 is for non-volatile solvent and / or mechanical extractions. License type 7 is for volatile-solvent extractions. These licenses will permit extractions and infusions, and will allow the licensee to package and label their own products.


3. The Department of Public Health is proposing two additional types of manufacturing licenses: Type P for businesses that will only package and/or label another manufacturers products. These types of businesses will only be allowed to package and label other licensed cannabis manufacturers’ goods. The other proposed license is Type N, which is for businesses that conduct infusions (for instance, create topicals, edibles and/or other infused products) using extracts from another manufacturer. This license will allow them to package and label their own products, as well as conduct infusions.


4. The state can issue an infinite number of cannabis-related licenses. This is one of the best aspects of the proposed rules because it’ll somewhat eliminate the ruthless competition (and bribery and corruption) that would inevitably arise if there were a cap on the number of licenses. This is a direct response to avoid what happened in Washington State during their licensing process. Count our lucky stars.


5. For the veterans who are applying for a license, their applications will be expedited. At least there’s that. But if you’re a vet who’s under 21-years-old– you’re still S.O.L because you won’t be able to go to a dispensary by yourself. So you probably won’t be able to apply for a license either, although that isn’t specified.


6. Having a criminal record doesn’t necessarily disqualify you from getting a license. That is, if you haven’t been convicted of a violent felony, a felony involving fraud, deceit, or embezzlement; or a felony involving drugs and minors. The BMCR, however, explains that people should still apply– even if they’ve been convicted– because they’ll consider everything on a case-by-case basis.


Cultivation will be overseen by the Department of Food and Agriculture


7. Dispensaries must be at least 600 feet away from schools. This might seem slightly shocking considering most municipalities require dispensaries to be 1,000 feet away from schools at minimum. Even in Washington, Colorado and Oregon the minimum distance from schools (and playgrounds, preschools, and places of worship) must be 1,000 feet. But, apparently, this zoning prevision has had some unintended consequences in those states, like the clustering of cannabis businesses in some of the few neighborhoods that meet the distance requirement.


8. Cannabis products cannot be infused with nicotine, added caffeine or alcohol. Products can only be made into non-potentially hazardous foods, meaning nothing that requires temperature controls, nothing canned, no meat or seafood products. Only shelf stable products are allowed. This is problematic because shelf-stable products require preservatives to keep them from spoiling. Preservatives are horrific for your health and can lead to cancer…which cannabis is supposed to help fight? Seems a little backwards if you ask us.


Also, no cannabis products with caffeine in them? That means no cannabis teas, coffees and some chocolates. It’s unclear if this applies to only caffeinated THC products, or if it also applies to caffeinated CBD products, too. My question for the BMCR: Do you really think there’s a difference between drinking coffee and smoking a joint? Because that’s essentially the same thing as having a caffeinated THC product– and anyone who does that isn’t going to stop (and a lot of people do it). Why eliminate caffeine from cannabis products? This should be the patients choice.


9. The California Department of Public Health proposes to limit edible products to no more than 10 milligrams of THC per serving and 100mg per package. They’re also proposing to limit other products, like tinctures, capsules and topicals to no more than 1,000mg of THC per package. These rules are absurd. Anyone who uses edibles to medicate for ailments such as PTSD, or to ease the excruciating pain of chemotherapy or MS knows that any dosage under 100mg probably isn’t going to cut it. Also, what if calorie, sugar or sodium intake is an issue? Eating 10 edible pieces to get the 100mg dosage will probably be an issue. And what about those who need high dosages around 500mg, like PTSD patients? Are they going to have to eat 50 edible pieces, or five candy bars (or what ever) in order to get their proper dosage? That’s a lot of extra money, too. This is the worst rule of them all. It’s faulty every way you look at it. The medical cannabis business should be allowed the to make higher content THC products. Recreational edibles should have a THC cap.


Oh, and limiting the THC amount in topicals? I’m sorry, but that makes no sense.


10. Active-duty police officers are not allowed to have cannabis licenses for any cannabis-related business. Unless, of course, that business is in a different county than the one they serve as an officer in. Maybe it’s just us, but this seems like it could lead to some pretty shady police behavior.


11. It’s illegal to hide your canna-business from your landlord. If you don’t own the building or property your cannabis-business is operating in, it’s required to show the state proof that the owner of the property is fully aware and has given you permission to use the land for cannabis-related activities.


12. If your cannabis business was operating prior to Jan. 2, 2018, your company can still legally operate while your license application is pending. That is, as long as you submit the application to the BMCR by July 2, 2018. YES, WE FOUND A LOOP HOLE. So, basically, this means you could start a business on Jan. 1, 2018 (or any time between now and then), and not apply for a license until July 2, 2018, and you’d still be within the boundaries of the law. Sneaky, sneaky.


13. But if your business was operating and in good standing with the local jurisdiction before Jan. 1st, 2016 (and the business hasn’t moved locations), your application will be expedited to the front of the processing line– but you’ll still be behind the veterans, of course.


14. If you’re convicted of a crime, received a civil penalty or judgment, or had their local license or permit revoked you’re required to tell the BMCR within 48-hours of the incident. If you don’t consequences, like revoking your license, will follow.


15. If you’re employed by, or acting for a BMCR licensee, you must display a laminated ID badge issued by the licensee. The employee’s full name, the licensee’s name (business name), and a passport-size photograph of the employee must be visible on the badge.


16. Any returned cannabis products is considered cannabis waste, and must be destroyed in a specific way. The returned ganja must be quarantined for 72 hours minimum. Then you must render it unusable and unrecognizable by grinding it into a mixture of other ground material (at least 50 percent of the mixture must be non-cannabis material by volume). This grinding and rendering must take place within view of the video surveillance system, which everyone is required to have. The waste must then be disposed at a manned and fully permitted solid waste landfill or compost handling facility.


17. Drones, self-driving cars, planes, boats, trains, motorcycles, bikes, or anything aside from regular vehicles are prohibited from transporting cannabis– regardless of transporting cannabis between manufacturer or distributor (which is how a transporter is defined by the BMCR), or delivering cannabis from a dispensary to a patient.


18. The BMCR have yet to release the application fee information, except for cultivators. Those licensing fees are as follows:

  • Specialty cottage outdoor: $65
  • Specialty cottage indoor: $100
  • Specialty cottage mixed-light: $285
  • Specialty outdoor: $130
  • Specialty indoor: $1070
  • Specialty mixed-light: $555
  • Small outdoor: $265
  • Small indoor: $1935
  • Small mixed-light: $1105
  • Medium outdoor: $765
  • Medium indoor: $4260
  • Medium mixed-light: $2435
  • Nursery: $60
  • Processor: $310


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