On July 13, California’s marijuana regulatory agency, the Bureau of Cannabis Control (BCC), published the proposed set of regulations that it plans to adopt for the long term. When California legalized recreational marijuana in January, the state applied emergency regulations for the new market. These emergency regulations will continue to apply for at least a year until the non-emergency regulations are approved.

The non-emergency regulations are approved after a process that invites public comment and allows for changes after public comments have been heard. Once the public has had its say, the regulations go to California’s Office of Administrative Law, which may also make changes to the regulations before implementation.

Three Agencies

Three agencies are involved in California’s marijuana market. One is the BCC, the second is the Department of Food and Agriculture, and the third is the Department of Public Health. Those wishing to review the regulations and, if desired, offer comment may view them at the BCC’s website, which includes instructions for submitting a comment. The web page also includes a summary and the full text of the proposed regulations.

California is a state with highly regulated markets, so it is not a surprise that the marijuana market will be regulated like any other. Since cannabis is an edible crop, the Department of Food and Agriculture is involved, and since marijuana and CBD are drugs, the Department of Public Health is also involved. But the areas under regulation do not stop there. Dispensaries are retail establishments with workers, so labor regulations apply, along with the public safety regulations that apply to California retailers. The short summary of the proposed regulations is four pages long.

As often happens, the regulations begin with definitions. The new regulations adopt many previously issued definitions but add definitions of “cannabis accessories,” “kief,” and “preroll.” The new regulations go on to require marijuana businesses to comply with California’s labor rules, which for businesses that employ 20 or more people may include a signed “labor peace agreement,” which, true to its name, indicates that the employer and the employees’ union have reached an agreement.

The regulations also require a significant amount of documentation. A California marijuana business may soon be required to have “specific forms” that lay out the business’ operating procedures for “transportation, inventory, nonlaboratory quality control procedures, security procedures, cannabis waste management procedures, and delivery procedures.”

California also has environmental laws. The California Environmental Quality Act (CEQA) applies to businesses that have “the potential to generate significant adverse environmental impacts.” Businesses may need to document that they do not generate a significant environmental impact, or, if they do, undergo the process of obtaining a permit under CEQA.

The proposed regulations also address licensing, with provisions for declarations of “ownership, financial interest, license designations, microbusiness activities, and location of licensed Premises,” along with provisions for record-keeping and inventory control. Advertising is also considered, with proposed rules against advertising that is attractive to children, placement of signs, up-to-date “audience composition data,” and a prohibition of advertising of free giveaways. The regulations require that retailers use exit packaging that is “resealable, child-resistant, and opaque.” Delivery service may be allowed, along with the transfer of inventory from one location to another.

Micro-Businesses and Events

An entire chapter of the regulations deal with microbusinesses. Cultivators of less than 10,000 square feet of flowering plants may be eligible for a microbusiness license, as well as smaller manufacturers, distributors, and/or retail establishments. Microbusinesses do not escape paperwork. Just as with their larger cousins, they may be required to provide documentation of the right to occupy and use the proposed premises, business formation, premises compliance with the local jurisdiction, a labor peace agreement, evidence of exemption from or compliance with CEQA, proof of insurance and a surety bond, financial disclosures, inventory and quality control procedures, and security procedures.

The proposed regulations also address cannabis events, which may need a detailed map of the layout of the event that includes the locations of the retailers’ stalls or areas along with the consumption areas.

Now that California has legalized marijuana, marijuana businesses are facing the same set of regulatory requirements that other businesses in California do. California regulators have reportedly been sending warning letters to unlicensed cannabis businesses. While compliance may be frustrating and expensive, it does ensure that California businesses follow the laws that protect California’s environment, workers, and consumers.

What do you think? Will cannabis businesses soon be complaining about regulatory burdens? Leave a comment below.

About the Author: Eric Howard

Eric Howard, who lives in Los Angeles, is a staff writer for Marijuana and the Law. His most recent book, Taliban Beach Party, appeared in 2017.

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