Changes in California cannabis: what do we see from DCC?

In January 2020, Governor Newsom announced that he intends to merge the Cannabis Control Bureau (BCC), the California Department of Food and Agriculture’s CalCannabis Program (CDFA) and the California Department of Public Health’s Cannabis Manufacturing Safety Bureau (CDPH) into one organization.Single Cannabis Agency: The Cannabis Control Board (DCC) (The Governor’s Summary 2021 budget summary). The merger is planned to be completed in July 2020 to enforce cannabis regulations and monitor licensees in California. The emergence and continuing effects of COVID-19 have brought this work to a halt.

The 2021 budget summary usually covers the measures that the towing bill will take on California cannabis and was filmed in July this year to propose its inclusion in the DCC. Not surprisingly, after the creation of the DCC, all current regulations in the Drug and Adult Cannabis Management and Safety Act will automatically be adopted by the DCC unless and until they are repealed, replaced, modified, etc. The current MAUCRSA regulations need to be carefully revised to ensure that the licensee succeeds, and the regulations are actually clear.Therefore, when DCC was put into use, no one really knew what was about to happen (even though we recently wrote at least Marijuana contract Will be affected by the merger), which is what we believe to be some of our regulatory amendments (not statutory) may Look:

  1. License transfer. Currently, California does not allow the transfer of state licenses. On the contrary, if the cannabis license is to be fully transferred, the BCC, CDPH and CDFA will force the holder of the cannabis license to engage in commercial purchases. These business purchases are tortured by regulatory ambiguities surrounding concepts and definitions. “Owner” and “Financial Interest Owner” The original owner must remain in the entity to maintain “business continuity.” It seems that every time you interact with one of these agencies, you get a different response from each analyst regarding what is allowed and what is not allowed in the final acquisition document. If DCC is wise, it will remove a page from the Oregon and Washington State books, cancel the current ownership change rules, and allow direct license transfers.The ability of third parties to obtain only state licenses will reduce the burden on cannabis companies and regulators, and will prevent back and forth supervision, and often in this case Bad trading behavior We see changes in ownership.
  2. Better enforcement and consistency of interpretation. Fortunately, we are bound to see consistent enforcement priorities and explanations from individual agencies. The licensee is annoyed that all three agencies currently seem to adopt seemingly identical rules in multiple ways in terms of enforcement and interpretation. Perhaps it is not just a complete regulatory fix, but the emphasis on this “possible insight” is that a regulatory agency will definitely limit the number of crazy legal and regulatory measures we have seen. Of course, different DCC analysts may also give different interpretations of various DCC regulations, but at least we know that between cultivators, manufacturers, distributors, laboratories, and retailers, the definitions permitted by laws and regulations are all All aspects are the same.
  3. IP licensing clarity. With the final adoption of current regulations, BCC does Muddy water To a certain extent, the parties involved in the relevant intellectual property licensing agreements (before that, the agency created an industry Terrified Around the theme). To solve the problem, we have a lonely”Fact SheetThe BCC in “tells us the following: “The licensee can sign an intellectual property license agreement with an unlicensed entity. However, intellectual property holders cannot control the licensee’s commercial cannabis business. If the intellectual property holder is controlling the licensee’s commercial cannabis business, the intellectual property holder must be disclosed as the owner of the license. “Interestingly, there is no definition of “control”. Therefore, there is a lot of confusion as to whether it is necessary to disclose the “owner” when using the IP licensing agreement in California. Of course, IP licensors implement cannabis businesses relative to licensees. A certain degree of control, in which the IP licensing agreement will stipulate that the licensee can and cannot use the licensed intellectual property. As a result, DCC should really solve this problem, once it starts operating, it can solve this problem because of the establishment of the California hemp brand It’s a big business, and it’s getting more and more serious all the time.
  4. Deliver solutions without boundaries. Another disaster for California cannabis is the borderless delivery rule adopted by the BCC as part of the final rule. When the BCC defended its borderless delivery regulations in the Fresno County Superior Court in 2020, it was a highly sought-after lawsuit.See Here. The end result of this fight is that even if the BCC maintains a regulation that retailers can ship cannabis to any city or county in California, in any case, cities and counties are still free to ban the delivery of cannabis (because California places Sex is very strong, so this is already the case). Restrictions on cannabis control). Conversely, although BCC will not disrupt retailers by engaging in distribution in jurisdictions where the product is prohibited, these retailers may still get into major trouble in these cities and counties. If DCC tries to re-examine this issue through rulemaking, then retailers will definitely benefit from being able to deliver to any place without legal consequences. I will not be shocked.
  5. billboard. I recently accepted an interview Kowloon-Canton Railway Billboard bill about the duel in Sacramento. In 2020, a judge in San Luis Obispo County ruled that Proposition 64 prohibits advertising of marijuana billboards on California interstate highways (below BCC Mandatory notice Give the licensee the result of the case). right now, From 273 (Failed in the session recently, but can be reconsidered) All marijuana billboards will be banned, and From 1302 They will be allowed certain restrictions on interstate highways and around the California border. Regardless of this change, the future may see DCC respond to the corresponding regulations, which will affect the marketing decisions of hundreds of licensees.
  6. Restrictions on type 3 farming permits and later restrictions. The CDFA exercised its power to limit the number of cultivators at each site to one category 3 permit. To solve this problem, large tillers will be unlimited, and smaller permit types will be stacked in multiple sites to gather several acres of canopy. As a result, DCC may eliminate a current Type 3 restriction and achieve reality. In addition, Type 5s will be available in 2023, and our supervision of these license types is zero. Therefore, once the DCC is powered on, it is likely to fall into Type 5 restrictions.

There is no doubt that with the realization of this large-scale integration, we must remain concerned.

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