Posts

RE: WINTER LLP Update (COMMENTS SUBMITTED RE DRAFT REGULATIONS)

/0 Comments/in /by

Hello all,

We wanted to share with you the formal comments we submitted to the BCC re the recent draft regulations. These comments were submitted prior to the deadline Monday.

In our opinion and experience in this industry, the draconian approach the state has taken on each of these two issues (addressed below) will be catastrophic if approved. Not only to many of our clients, but the entire industry. We are hopeful the state receives many similar comments and backlash from other cannabis professionals, and responds favorably to our comments below.

We will keep you posted as we learn more. And regardless of the outcome, we will figure out a path forward for each of you. We’ve had to retool our legal/business approaches many times over the last 11 years, so that’s nothing new. We will always get you to the finish line in the end.

Here are our comments on these two particular draft regulations:

Letter to BCC re IP Licenses / While Labelling:

Dear BCC,

Please see comments regarding Section 5032(b), Commercial Cannabis Activity.

We do not believe that licensees should be prohibited from (1) manufacturing cannabis goods according to the specifications of a non-licensee (IP licensing); (2) packaging and labeling cannabis goods under a non-licensee’s brand (white-labeling), or (3) distributing cannabis goods for a non-licensee.

The authority upon which Section 5032 is based, BPC Section 26013(c) states: “Regulations issued under this division shall be necessary to achieve the purposes of this division, based on best available evidence, and shall mandate only commercially feasible procedures, technology, or other requirements, and shall not unreasonably restrain or inhibit the development of alternative procedures or technology to achieve the same substantive requirements, nor shall such regulations make compliance so onerous that the operation under a cannabis license is not worthy of being carried out in practice by a reasonably prudent businessperson.” (emphasis added.)

Section 5032(b) unreasonably restrains or inhibits the development of alternative procedures to achieve the same substantive requirements. There are already hundreds of pages of regulations in place to ensure that cannabis products are grown, manufactured, tested, transported, and sold in a manner that will promote public peace, health, safety, and general welfare. Section 5032, which restricts a licensee’s ability to accept IP licensing contracts or white-labeling contracts does not increase the health, safety or welfare of the public. All products that are manufactured or packaged for a non-licensee must still comply with all testing, packaging and labeling regulations. Labels are already required to contain the name and contact information of the manufacturer. Products are not more dangerous to society merely because there is different IP/branding.

Moreover, IP licensing and white-labeling are well-established business practices in almost every goods and services industry in the U.S. and abroad, and have been successfully utilized by the cannabis industry for years. If a manufacturer has sufficient equipment, materials, and employees in place to produce goods for others and achieve economies of scale, the BCC should not limit that manufacturer’s ability to produce goods with different IP. Requiring each brand/company to manufacture goods under their own license dramatically drives up costs (license fees, equipment, employees), slows time to market, while wasting natural and environmental resources to build out these additional facilities. It also creates a monopoly for the limited manufacturers that have obtained licensing to date. This draft regulation will significantly damage the California cannabis industry and put long-standing companies out of business through an immediate devaluation.

If the issue is disclosure of participants in the legal market, the BCC should implement something similar to the Beer Brand Registration model, in which the ABC requires beer brands to register and disclose whether beer is “contract brewed.” Licensees that contract with IP companies or white label companies may be required to fill out a simple disclosure form each year. This would resolve the disclosure issue, while allowing manufacturing licensees, IP companies, and brands opportunities to continue to manufacture safe cannabis products in an efficient and cost-effective manner. Whatever the solution, it cannot be this draft regulation, which if passed will have immediate and catastrophic consequences, including loss of thousands of jobs, bankrupt businesses, and loss of industry leaders, to name a few.

Letter to BCC re Designation of Owner:

Dear BCC,

Please see comments regarding Section 5003(b)(6)(D), Designation of Owner, which states:

Owner means any of the following:

An individual who will be participating in the direction, control, or management of the person applying for a license. Such an individual includes any of the following:

Any individual who assumes responsibility for the license. Such an individual includes but is not limited to, the following:

(i) An individual who is managing or directing the commercial cannabis business in exchange for a portion of the profits.

(ii) An individual who assumes responsibility for the debts of the commercial cannabis business.

(iii) An individual who is determining how a portion of the cannabis business is run, including non-plant-touching portions of the commercial cannabis business such as branding or marketing.

(iv) An individual who is determining what cannabis goods the commercial cannabis business will cultivate, manufacture, distribute, purchase, or sale.

As we disagree with the addition of Section 5032(b), we cannot agree that individuals who determine how non-plant touching portions of the commercial cannabis business is run, such as branding or marketing, should be considered owners.

The authority upon which Section 5032 is based, BPC Section 26013(c) states: “Regulations issued under this division shall be necessary to achieve the purposes of this division, based on best available evidence, and shall mandate only commercially feasible procedures, technology, or other requirements, and shall not unreasonably restrain or inhibit the development of alternative procedures or technology to achieve the same substantive requirements, nor shall such regulations make compliance so onerous that the operation under a cannabis license is not worthy of being carried out in practice by a reasonably prudent businessperson.” (emphasis added.)

Requiring independent consultants and advisors to register as “owners” is onerous and impractical for a reasonable businessperson. The BCC is overreaching by defining an owner as individuals who determine how “non-plant touching portions of the commercial business” are run, because this could potentially include almost all advisors (attorneys, CPAs) and ancillary business consultants (equipment manufacturers, marketing companies, IP companies, etc.) who provide guidance to permitted licensees. Seeking the professional guidance of independent consultants and advisors is a well-established business practice that does not rise to the level of involvement as an “owner” in any other industry. It does not make sense that they are required to register as “owners” when these ancillary individuals are not required by State law to be on any corporate formation documents, such as Statements of Information, Bylaws, or Operating Agreements. Requiring the registration of these ancillary individuals not only complicates corporate documents and structures, it could potentially lead to unnecessary and frivolous litigation between and against all of the “owners” of a license, especially those with “deep pockets.”

Instead of defining these individuals as “owners,” it should be sufficient that IP companies and brands are disclosed as having financial interests in the business. This would still allow the BCC to track the involvement of these companies, while not further complicating business structures and “ownership” obligations.

WINTER LLP Update: Final Cannabis Regulations Approved

/0 Comments/in /by

Dear All,

On January 16, 2019, California’s three state cannabis licensing authorities announced that the Office of Administrative Law (OAL) officially approved state regulations for cannabis businesses across the supply chain. Please note, these new cannabis regulations take effect immediately, meaning the previous emergency regulations are no longer in effect.

First, we would like to address the sections that we previously commented on during the 15-day comment period back in October.

Section 5032(b), Commercial Cannabis Activity.

(b) Licensees shall not conduct commercial cannabis activities on behalf of, at the request of, or pursuant to a contract with any person that is not licensed under the Act.

Such prohibited commercial cannabis activities include, but are not limited to, the following:

(1) Procuring or purchasing cannabis goods from a licensed cultivator or licensed manufacturer.

(2) Manufacturing cannabis goods according to the specifications of a non-licensee.

(3) Packaging and labeling cannabis goods under a non-licensee’s brand or according to the specifications of a non-licensee.

(4) Distributing cannabis goods for a non-licensee.

The Bureau has removed the specific examples of “prohibited commercial cannabis activity,” such as “packaging and labeling cannabis goods under a non-licensee’s brand or according to the specifications of a non-licensee. However, this does not mean that the State is authorizing white labeling/branding for unlicensed brand owners; in fact the opposite holds true. Practically, this means that (1) the operating company (licensed/permitted entity) needs to hold the IP (trademarks, copyrights, brands) instead of the management company; and (2) companies that do not hold a permit/license cannot get their products made by permitted manufacturers (white-labeling) unless they are included as an owner of the license.

The Bureau provided a few examples of an authorized brand owner/licensee relationship:

  • “if a licensee includes as one of their owners a brand owner, the licensee can produce the branded products because in this case the licensee is not engaged in commercial cannabis activity on behalf of an unlicensed person. Because the owner of the brand is an owner of the licensee, there is no unlicensed person involved.”
  • “Generally, where a brand-owner may be dictating the standards and specifications of a product (i.e. providing direction or control), they would likely be considered an owner that would need to be disclosed under section 5003. Where ownership is properly disclosed, such persons would not be considered non-licensees, and would be able to conduct business under their license.”

We understand there is a lot of confusion/debate surrounding this issue. We are reviewing angles and alternatives to work through these vague/troubling rules. Additionally, we are seeking further clarification from the State regarding how IP licensors/licensees may be classified (as owners, financial interest holders, etc.). Please stay tuned.

Section 5003(b)(6)(D), Designation of Owner.

(b)Owner means any of the following:

(6) An individual who will be participating in the direction, control, or management of the person applying for a license. Such an individual includes any of the following:

(1) A person with an aggregate ownership interest of 20 percent or more in the person applying for a license or a licensee, unless the interest is solely a security, lien, or encumbrance.

(2) The chief executive officer of a nonprofit or other entity.

(3) A member of the board of directors of a nonprofit.

(4) The trustee(s) and all persons who have control of the trust and/or the commercial cannabis business that is held in trust.

(5) An individual entitled to a share of at least 20 percent of the profits of the commercial cannabis business.

(6) An individual who will be participating in the direction, control, or management of the person applying for a license. Such an individual includes any of the following:

(A) A general partner of a commercial cannabis business that is organized as a partnership.

(B) A non-member manager or managing member of a commercial cannabis business that is organized as a limited liability company.

(C) An officer or director of a commercial cannabis business that is organized as a corporation.

(D)Any individual who assumes responsibility for the license. Such an individual includes but is not limited to, the following:

(i) An individual who is managing or directing the commercial cannabis business in exchange for a portion of the profits.

(ii) An individual who assumes responsibility for the debts of the commercial cannabis business.

(iii) An individual who is determining how a portion of the cannabis business is run, including non-plant-touching portions of the commercial cannabis business such as branding or marketing.

(iv) An individual who is determining what cannabis goods the commercial cannabis business will cultivate, manufacture, distribute, purchase, or sale.

The Bureau has removed section D, “any individual who assumes responsibility for the license” completely. The Bureau addressed comments as follows: “A salesperson earning a fractional share in profits would not be considered an owner under this section but would be a financial interest holder. Commenter’s comment demonstrates that rather than providing clarification, subsection (b)(6)(D) created more confusion. Therefore, the Bureau has determined that it is necessary to withdraw the subsection.”

Therefore, consultants, Marketing Managers, etc. will not have to be disclosed as “owners” unless they fulfill one of the other definitions of an owner (20% or more profits, 20% or more ownership interest, board of directors, etc.)

Second, please find a brief summation of some important regulatory changes for each license type. Please note that this is not a comprehensive summary and we advise you to contact us with any questions regarding your specific operation.

BCC Regulations (Retail, Delivery, Microbusiness, Distribution, Testing)

  1. Annual License Application Forms. All BCC applicants will be required to use the applicable forms supplied by the Bureau to submit Transportation Procedures, Inventory Procedures, Non-Laboratory Quality Control Procedures, Security Procedures, and Delivery Procedures.
  2. Cal-OSHA training. Businesses with more than 1 employee must complete a Cal-OSHA 30-hour general industry outreach course within one year of receiving a license.
  3. Business/Owner Modifications. If one or more of the owners of a license change, the new owners shall submit their required information within 14 calendar days of the effective date of the ownership change, but may not need to submit a new license application if at least one existing owner is not transferring his ownership interest.

Distributors

  1. Pre-rolls. Distributors may package and label pre-rolls that consist exclusively of any combination of flower, shake, leaf, or kief for retail sale.
  2. Exit Packaging. Until January 1, 2020, the child-resistant packaging requirement may be met through the use of a child-resistant exit package at retail.
  3. Distributor to distributor transfer. After a batch passes testing, the goods packaged as they will be sold at retail, may be transported to one or more licensed retailers, distributors, or microbusinesses (previously was only retailers). However, cannabis goods that have not been transported to retail within 12 months of the date on the Certificate of Analysis must be destroyed or re-tested.
  4. Ownership of Vehicles. All vehicles used to transport cannabis goods must be owned or leased by the licensee.

Delivery

  1. Delivery to prohibited cities. A delivery employee may deliver to any jurisdiction within the State of California.
  2. Value of Goods. A delivery vehicle may not carry cannabis goods in excess of $5,000 at any time.

Testing

  1. Sampling. Once a representative sample has been obtained for compliance testing, the testing laboratory that obtained the sample must complete the regulatory compliance testing.
  2. Final Form. All testing of the samples shall be performed on the final form in which the cannabis or cannabis products will be consumed or used.

Temporary Cannabis Event

  1. Other venues allowed. Temporary cannabis event may be held at county fair event, district agricultural association event, or at another venue expressly approved by a local jurisdiction for the purpose of holding a temporary cannabis event.

MCSB Regulations (Manufacturing)

  1. Cal-OSHA training. Businesses with more than 1 employee must complete a Cal-OSHA 30-hour general industry outreach course within one year of receiving a license.
  2. Cannot use CBD from hemp. Manufacturers may only use cannabinoid concentrates and extracts that are manufactured or processed from cannabis obtained from a licensed cannabis cultivator (and not from hemp cultivators).
  3. Retail Food/ABC Premises. A manufacturer shall not manufacture, prepare, package, or label cannabis products in a location that is operating as a retail food establishment, or that is licensed by the Department of Alcoholic and Beverage Control.
  4. Requirements of Operating Procedures and Policies have changed (new written protocols required).
  5. Final Form. Cannabinoid content may be included on the product label or added to the product at the distribution premises after issuance of the regulatory compliance testing Certificate of Analysis.
  6. Child-Resistant Packaging. Until January 1, 2020, the child-resistant packaging requirement may be met through the use of a child-resistant exit package at retail.
  7. Edible cannabis product label may not contain a picture of the edible product.
  8. New Labeling and Packaging Requirements. We strongly encourage you to contact us with any questions regarding the new comprehensive packaging and labeling checklist and/or to have us review your packaging and labeling for compliance with the new regulations.

CalCannabis Regulations (Cultivation)

  1. Cal-OSHA training. Businesses with more than 1 employee must complete a Cal-OSHA 30-hour general industry outreach course within one year of receiving a license.
  2. Separate processing areas for each license type. Processing areas, packaging areas, and storage of cannabis subject to administrative hold areas may not be shared among multiple licenses held by one licensee (need to identify separate areas for each license)
  3. Common areas. Pesticide and chemical storage areas, composting areas, and secured waste areas may be shared between licenses held by one licensee.
  4. Light deprivation. Outdoor licensees may not use light deprivation.
  5. Processing. Cultivators may process cannabis, which includes all activities associated with the drying, curing, grading, trimming, rolling, storing, packaging, and labeling of flower, shake, leaf, pre-rolls, and kief that is obtained from accumulation in containers or sifted from loose flower with a mesh screen.
  6. New Labeling and Packaging Requirements. We strongly encourage you to contact us with any questions regarding the new comprehensive packaging and labeling checklist and/or to have us review your packaging and labeling for compliance with the new regulations.

As always, we hope that you find the above useful in navigating this rapidly-evolving landscape. This is by no means a comprehensive summary of all of the changes that were implemented; it is simply a quick overview of relevant rules that may be applicable to our Clients.

Please do not hesitate to contact us if you have further questions or need clarification regarding any of the new regulations.

WINTER LLP Update: In Truckee, Cannabis Businesses Are Still Coming Out Of The Shadows

/0 Comments/in /by
TRUCKEE, Calif. — Though the town of Truckee has allowed commercial cannabis delivery for a year now with no cap on the number of permits issued, there’s only one operating delivery service fully permitted by the town and the state.
While the town has seemingly strict regulations, working with town staff to obtain a use permit was a relatively smooth process, said Todd Winter, owner of Winter Greens Delivery.
“This is a brand new industry,” said Winter. “It’s always going to seem harsh at the very beginning.”
Winter has also worked as an attorney representing clients in the cannabis industry for the past 10 years.
“In dealing with municipalities all over the state, the Town of Truckee was amazingly receptive in the process,” he said. “The business license process was shorter than anywhere else we’ve dealt with for a client.”
In order to operate legally, businesses must obtain a use permit from both their local municipality and the state. As a veteran of the industry, Winter said licensing his delivery business may have been a smoother process because he was familiar with the regulations.
“I do permits and licenses and everything related to cannabis businesses all over the state of California with my team,” said Winter. “It’s much easier for me than other delivery businesses in town that were faced with challenges that I didn’t have because I have this expertise.”
Truckee’s regulations allow businesses to only deliver to a private physical addresses. However each delivery service must have a fixed location to run operations, at which direct sales cannot take place.
The businesses cannot exceed 3,000 square feet or have a retail storefront. They must maintain at least 600 feet of distance from schools, daycares and youth centers and will be limited to areas zoned for manufacturing, downtown manufacturing, service commercial and general commercial.
Businesses in the general commercial zone may not be located on the ground floor.
Starting a legal cannabis business takes more money and resources than most other businesses, Winter said.
“It’s expensive. You have to find property. You have to talk to landlords that will see eye-to-eye with you and be OK with cannabis in their space.”
In December the Truckee Planning Commission granted Tahoe Herbal Care a use permit, a delivery service attempting to operate out of a second-story suite in Donner Lake Village. The planning commission’s decision was appealed, however, and the owners later withdrew their application due to regulations within the home owners association, according to Jenna Gatto, Truckee planning manager.
“A lot of landowners don’t want cannabis in their space,” said Winter.
As cannabis is still federally illegal, businesses face another hurdle with federal regulations banning them from using bank services.
“It makes it very difficult for cannabis companies to handle simple things like payroll or paying bills,” said Winter. “Fortunately a lot of the industry still works on a cash basis.”
Ultimately Winter said there are no drawbacks to being a legalized cannabis business “because we’re finally coming out of the shadows now.”
Hannah Jones is a reporter for the Sierra Sun. She can be reached at hjones@sierrasun.com or 503-550-2652.

WINTER LLP UPDATE: California Cannabis Ballot Measure Results Are Now Available!

/0 Comments/in /by

The following local jurisdiction ballot measures authorizing cannabis taxes were approved by the voters on the November 6, 2018 election:

City/County

Passed Cannabis Tax Measure

Comments

City of Atascadero

(San Luis Obispo County)

 Measure E-18 passed with 73% of the vote. Only testing and delivery has been previously allowed. The new tax measure taxes cannabis businesses, but no ordinances have been drafted. The passage of the ballot measure authorizing taxes for cultivation, retail, testing, distribution and all other cannabis businesses may indicate forthcoming commercial cannabis ordinances and a newly permitted area.

City of Atwater

(County of Merced)

 Ballot measure A passed with 64.75% of the vote. Cannabis regulated since May 2018 under a Cannabis Business Pilot Program. Requires a CUP. This is a newer market for cannabis businesses.

City of Banning

(County of Riverside)

 Measure N passed with 60.64% of the vote: imposes maximum tax rates on cannabis cultivation, manufacturing, and testing.

Measure O passed with 61.22% of the vote: imposes a 10% tax on gross receipts on cannabis dispensaries.

 All commercial cannabis activities are currently banned and declared a nuisance. However, cannabis ordinances have been adopted by the city council but have not been codified and will take effect January 1, 2019. All commercial cannabis activities require a CUP. No certificate of occupancy will be issued prior to receiving a state license. Ordinance No. 1523 allows, regulates, and zones for cannabis cultivation (indoor cultivation Type 3A only (10,001-22,000 s.f.) in a fully enclosed and secure structure, only in industrial zones), manufacturing (nonvolatile only), and testing. Ordinance No. 1524 establishes application procedures and requirements for Cannabis Regulatory Permits. The ordinances will only take effect if the voters approve Measure N on November 6, 2018.

City of Capitola

(Santa Cruz County)

 Measure I – Cannabis Business Tax (Passed with 75.45% of the vote). Cannabis currently banned except for testing. New tax measures passed the ballot, but no ordinances have been drafted. The passage of a ballot measure authorizing taxes on cannabis businesses is indicative of ordinances that may be forthcoming.

City of Ceres

(County of Stanislaus)

 Measure W — The measure PASSED with 66.03% of the vote. Currently, commercial cannabis activities limited to a case-by-case basis. Ordinances are not drafted. Established a Cannabis Business Pilot Program since May, 2018. Current ordinances are silent as to commercial cannabis activities; however, the passage of a ballot measure authorizing taxes is indicative of ordinances that may be forthcoming.

City of Chula Vista

(County of San Diego)

 Measure Q – PASSED WITH 63.46% OF THE VOTE Cannabis currently banned. The city anticipates that it will be accepting applications for cannabis business licenses sometime on or after January 1, 2019.

A Commercial Cannabis Regulations Application Forum will be held December 13, 2018, from 4 to 6 p.m., to provide information on cannabis regulations and the implementation of recreational sales, manufacturing, cultivation and delivery services in Chula Vista. The forum will be held at Chula Vista City Hall, Council Chambers, 276 Fourth Ave., Chula Vista, 91910.

Cannabis Business License Types

Storefront and Non-Storefront Retailers: Up to three (3) Retailer licenses per Council District. Of the three (3) Retailer licenses per District, no more than two (2) may be Storefront Retailer Licenses. Storefront Retailers are open to the public; they are prohibited from providing delivery services. Non-Storefront Retailers are closed to the public; they are prohibited from making on-site sales and can only conduct deliveries.

Cultivation: Up to ten (10) Indoor Cultivation licenses city-wide. Indoor cultivation sites are limited to twenty thousand (20,000) square feet.

Distribution, Manufacturing, and Testing Laboratories: There are no limits on the number of licenses.

City of Colfax

(Placer County)

 Measure C PASSED with 65.78% of the vote. Cannabis regulated since February, 2018. Indoor and outdoor cultivation are codified. Manufacturing and dispensaries are prohibited. Current regulations authorize only 4 retail commercial cannabis businesses (2 M-type and 2 A-type). The passage of a ballot measure authorizing taxes is indicative of ordinances that may be forthcoming.

County of Contra Costa

 Measure R PASSED with 71.7% of the vote. Cannabis currently banned. Cannabis taxes for cultivation, manufacturing, distribution, testing, retail and microbusinesses codified on November 6, 2018. Permit application requirements are codified. The passage of a ballot measure authorizing taxes is indicative of ordinances that may be forthcoming.

City of Daly City

(San Mateo County)

 Measure UU PASSED with 76.8% of the vote. All cannabis activities currently banned. Ordinances have not been drafted. The passage of a ballot measure authorizing taxes on all cannabis businesses is indicative of ordinances that may be forthcoming.

County of Del Norte

 Measure B PASSED with 62.75% of the vote. All medical cannabis activities currently banned. All commercial cannabis activities currently silent. Ordinances have not been drafted. The passage of a ballot measure authorizing taxes on adult use indoor and outdoor cultivation, manufacturing and retail is indicative of ordinances that may be forthcoming.

City of Dunsmuir

(Siskyou County)

 Ballot measure “T” passed with 71.34% of the vote. Past ordinances silent as to cannabis, except for medical co-ops. Ordinances have not been drafted. The passage of a ballot measure authorizing taxes for cultivation, processing and other cannabis businesses is indicative of ordinances that may be forthcoming.

County of El Dorado

 Measure P – Outdoor and Mixed Light Cultivation (Medical) PASSED

Measure Q – Outdoor and Mixed Light Cultivation (Recreational) PASSED

Measure R – Indoor Medical Cannabis Activities Measure PASSED

Measure S – Indoor Recreational Commercial Cannabis Measure PASSED

 Cannabis currently banned under a temporary moratorium for two years to December 12, 2019, except for medical distribution. Ordinances have not been drafted. The passage of a ballot measure authorizing taxes for cultivation and other cannabis activities is indicative of ordinances that may be forthcoming.

City of Goleta

(Santa Barbara County)

 Measure Z – PASSED WITH 81.92% OF THE VOTE Cannabis regulated since approximately June, 2018, including nursery, cultivation, manufacturing, testing, distribution and delivery. The passage of a ballot measure authorizing taxes is indicative of ordinances that may be forthcoming.

City of Half Moon Bay

(San Mateo County)

 The Measure GG PASSED with 51.2% of the vote. Currently, all cannabis activity prohibited.

Measure passed allowing greenhouse nursery cultivation of immature cannabis plants on existing greenhouse sites in the City’s A-1 (Agricultural/Exclusive Floriculture) Zoning District for cannabis nurseries that receive a license from the City Council and comply with specified standards.

Measure authorizing tax on all cannabis activities passed. The passage of a ballot measure authorizing taxes is indicative of ordinances that may be forthcoming.

City of Hesperia

(San Bernardino County)

 Measure T – PASSED WITH 60.83% OF THE VOTE All non-medical cannabis activities currently banned. However, cannabis tax measure passed. Ordinances have not been drafted. The passage of a ballot measure authorizing taxes for cultivation and other cannabis businesses is indicative of cultivation ordinances that may be forthcoming.

City of Imperial

(Imperial County)

 The measure PASSED with 74.7% of the vote. Adult use cannabis currently banned. January 17, 2018 – With a 3-2 vote the City Council approved Ordinance No. 795, allowing for some medical cannabis businesses, and banning all other commercial cannabis businesses, including all adult use businesses. Ordinances have not been drafted regarding licensure, and zoning ordinances are unavailable. The passage of a ballot measure authorizing taxes for cultivation, retail and other cannabis businesses is indicative of ordinances that may be forthcoming.

City of Jurupa Valley

(Riverside County)

 Measure L – PASSED WITH 51.94% OF THE VOTE Cannabis currently banned except for delivery. Ordinances have not been drafted. The passage of a ballot measure authorizing taxes on adult use indoor cultivation, nursery, manufacturing, testing, distribution, microbusinesses and retail is indicative of ordinances that may be forthcoming.

City of La Mesa

(San Diego County)

 Measure V – PASSED WITH 72.52% OF THE VOTE Adult use cannabis currently banned. Only medical cultivation and manufacturing currently allowed. Ordinances for adult use have not been drafted. The passage of a ballot measure authorizing taxes on cultivation and other cannabis businesses is indicative of ordinances that may be forthcoming.

County of Lake

 Measure K PASSED with 69.4% of the vote. Cannabis cultivation regulated since March, 2018, but all other activities are silent in ordinance code. On March 20, 2018, the Board passed an ordinance regulating commercial and personal use cultivation. However, current ordinances only address cannabis cultivation taxation and no ordinances are codified. The passage of a ballot measure authorizing taxes for activities other than cultivation is indicative of ordinances that may be forthcoming.

County of Lassen

 MEASURE M – CANNABIS TAX BALLOT MEASURE (PASSED) All cannabis currently banned and declared a public nuisance. Ordinances have not been drafted. The passage of a ballot measure authorizing taxes on cultivation and other cannabis businesses is indicative of ordinances that may be forthcoming.

City of Lindsay

(Tulare County)

 Measure G – PASSED WITH 66.80% OF THE VOTE All cannabis currently banned. Municipal code not available. The passage of a ballot measure authorizing taxes on cannabis businesses is indicative of ordinances that may be forthcoming.

City of Malibu

(County of Los Angeles)

 This measure PASSED with 68.54% of the vote. Cannabis currently banned except for medical dispensaries. Ordinances for adult use cannabis have not been drafted. The passage of a ballot measure authorizing taxes on adult use cannabis businesses is indicative of ordinances that may be forthcoming.

City of Marina

(Monterey County)

 Measure V passed with 64.10% of the vote. Cannabis currently banned. The Mayor of Marina (Bruce Delgado) led the petition drive and citizen ballot initiative that passed. Ordinances have not been drafted. The passage of a ballot measure authorizing taxes on medical and adult use cultivation, manufacturing, testing, distribution and retail is indicative of ordinances that may be forthcoming.

City of Morgan Hill

(Santa Clara County)

 Measure I passed with 78.58% of the vote. All cannabis activities currently banned and declared a public nuisance. Ordinances have not been drafted. The passage of a ballot measure authorizing taxes on cultivation, manufacturing, testing, distribution, and retail is indicative of ordinances that may be forthcoming.

City of Moreno Valley

(Riverside County)

 Measure M – PASSED WITH 72.56% OF THE VOTE Cannabis regulated since April, 2018. Current code prohibits all adult use cannabis. City council has authorized the total number of cannabis businesses is limited to 27. The maximum number of dispensaries is 8, the maximum number of testing facilities is 2, the maximum number of cultivation facilities is 8, the maximum number of manufacturing facilities is 5, the maximum number of microbusinesses is 2, and the maximum number of distribution centers is 2.

City of Morro Bay

(San Luis Obispo County)

 Measure D-18 – PASSED WITH 73.27% OF THE VOTE. All adult use cannabis activities currently banned. Only medical distribution and retail are currently allowed. Current application process allows medical distribution and 2 retail licenses. Ordinances have not been drafted. The passage of a ballot measure authorizing taxes on cultivation is indicative of ordinances that may be forthcoming.

City of Mountain View

(Santa Clara County)

 Measure Q passed with 80.70% of the vote. Cannabis currently banned except for retail and deliveries. Currently, Mountain View does not allow commercial cannabis activity except medical and adult-use deliveries into the city. City Council has stated that if the measure is successful then the City will begin allowing commercial cannabis businesses in 2019.

County of Nevada

 Measure G PASSED with 75.9% of the vote Cannabis currently banned. Cultivation declared a public nuisance. Ordinances have not been drafted. The passage of ballot measure authorizing taxes on nursery, cultivation, manufacturing, testing, distribution and retail is indicative of ordinances that may be forthcoming.

City of Oakdale

(County of Stanislaus)

 The Measure PASSED with 70% of the vote. Cannabis regulated since February 2018. Cultivation, manufacturing, testing, and distribution permitted with a development agreement and CUP. This is a new market for cannabis activities.

City of Oroville

(Butte County)

 RESULTS: Measure T PASSED with 60% of the vote. Cannabis regulated since August, 2018. On August 7, 2018, the City Council adopted an ordinance allowing for commercial cannabis activities. Tax measure includes nursery, cultivation, manufacturing, testing, distribution and retail. This is a new commercial cannabis area.

City of Oxnard

(Ventura County)

 Results – The Measure PASSED with 78.63% of the vote. Cannabis currently banned except for medical delivery. Ordinances have not been drafted. The passage of ballot measure authorizing taxes for cultivation, manufacturing, distribution, testing, retail sales and all other cannabis businesses is indicative of ordinances that may be forthcoming.

City of Paso Robles

(San Luis Obispo County)

 Measure I -18 PASSED WITH 67.5% OF THE VOTE. All cannabis currently banned except for medical delivery. Tax measure passed is for cultivation, manufacturing, testing, distribution and retail. Ordinances have not been drafted. The passage of ballot measure authorizing taxes on cultivation, manufacturing, testing, distribution and retail is indicative of ordinances that may be forthcoming.

City of Perris

(County of Riverside)

 Measure G – PASSED WITH 71.05% OF THE VOTE. Indoor and mixed-light cultivation regulated since November, 2017. January 30, 2018 – The City Council ADOPTED an ordinance that would allow medical and adult-use cannabis limited to manufacturing and distribution. This is a new area for cannabis.

City of Placerville

(El Dorado County)

 Results – The Measure PASSED with 67.17% of the vote. Cannabis currently banned by code, but accepting applications and city council will decide after the elections. Ordinances have not been drafted. The passage of ballot measure authorizing taxes for cultivation, retail and all other cannabis businesses is indicative of ordinances that may be forthcoming.

City of Pomona

(Los Angeles County)

 RESULTS: This measure PASSED with 70.44% of the vote. Cannabis currently banned. The City Council is currently discussing terms and provisions for incorporation into a draft ordinance regulating commercial cannabis activities and businesses. There is a consensus to allow both medicinal and adult-use. Ordinances have not been drafted. The passage of ballot measure authorizing taxes for cultivation and all other cannabis businesses is indicative of ordinances that may be forthcoming.

City of Redding

(Shasta County)

 RESULTS: Measure C PASSED with 73.94% of the vote. Cannabis regulated since March, 2018. On March 20, 2018, the City of Redding adopted an ordinance allowing for and regulating medical and adult use commercial cannabis activities. New taxes for cultivation, manufacturing, testing, distribution and retail now authorized. This is a new commercial cannabis area.

City of Redwood City

(San Mateo County)

 Results – The Measure PASSED with 77.6% of the vote. Cannabis regulated since May, 2018. Only indoor medical cultivation and delivery currently allowed. Commercial cannabis activity is prohibited in all zoning districts.

The passage of ballot measure authorizing taxes for cultivation, manufacturing, testing, distribution and retail is indicative of ordinances that may be forthcoming.

City of San Juan Bautista

(San Benito County)

 A marijuana tax was on the ballot for San Juan Bautista voters in San Benito County, California, on November 6, 2018. It was approved. Cannabis regulated since June, 2018. June 19, 2018 – The City Council adopted Ordinance No. 2018-05, establishing regulations pertaining to recreational and medical cannabis dispensaries, cultivation, testing, distribution, and manufacturing facilities. This is a new cannabis area.

City of San Luis Obispo

(San Luis Obispo County)

 Measure F – PASSED WITH 79.57% OF THE VOTE. The City currently is NOT accepting Cannabis Commercial Business Operator Permit applications at this time. Ordinances have been adopted in May, 2018 but not codified.

On October 16, 2018 the City Council reviewed the Cannabis Operator Permit Draft Evaluation Criteria and provided comments to staff. As a result of these comments, as well as public feedback, the Evaluation Criteria is being revised and will be reviewed on November 27, 2018 by Council.

City of Santa Ana

(Orange County)

 The measure PASSED with 69% of the vote. Cannabis regulated since May, 2018.

May 1, 2018 – The City Council adopted Ordinance NS-2944, which allows commercial cannabis cultivation, manufacturing, and distribution. New taxes passed for cultivation, manufacturing, testing, distribution, and retail. This is a new cannabis area.

City of Santa Clara

(Santa Clara County)

 Results – Measure M PASSED with 75.36% of the vote. All cannabis activities currently banned.

Ordinances have not been drafted. The passage of ballot measure authorizing taxes on nursery, cultivation, manufacturing, testing, distribution and retail is indicative of ordinances that may be forthcoming.

City of Santa Paula

(Ventura County)

 Results – Measure N PASSED with 70.98% of the vote. All commercial cannabis activities currently banned.

Ordinances have not been drafted. The passage of ballot measure authorizing taxes on cultivation and other cannabis businesses is indicative of ordinances that may be forthcoming.

City of Simi Valley

(Ventura County)

 Results – Measure Q PASSED with 65.5% of the vote. All cannabis activities currently banned.

Ordinances have not been drafted. The passage of ballot measure authorizing taxes on cultivation, manufacturing, testing, distribution and retail is indicative of ordinances that may be forthcoming.

City of Solvang

(Santa Barbara County)

 Measure F – PASSED WITH 80.32% OF THE VOTE. Currently, only medical cannabis activities allowed. City Council adopted an ordinance that allows medical cannabis dispensaries, delivery, cultivation (indoor and mixed-light only), manufacturing (volatile and non-volatile), testing, distribution, and transportation facilities that are owned and operated by bona fide nonprofit organizations in the C-3 zoning district. City Council may limit the number of each type of medical cannabis facility by resolution. Adult-use commercial cannabis activities remain prohibited in the City.

City of Sonora

(County of Tuolumne)

 Measure N PASSED with 68.30% of the vote. There are currently no cannabis businesses allowed to operate in the three-square-mile city limits, but the council approved an ordinance earlier this year that could provide an opening for some medical-only cannabis dispensaries, manufacturing facilities and testing laboratories. The passage of ballot measure authorizing taxes is indicative of ordinances that may be forthcoming.

City of South San Francisco

(San Mateo County)

 Measure LL PASSED with 74.4% of the vote. In 2018, the Council ADOPTED an ordinance that allows for indoor commercial cultivation and an ordinance that bans dispensaries and microbusinesses and allows for manufacturing, testing, distribution, and delivery only businesses. Outdoor cultivation and retail remain prohibited.

This is a new cannabis area.

City of Suisun City

(Solano County)

 Measure C passed with 74.78% of the vote. Cannabis regulated since May, 2018.

The City Council adopted Ordinance No. 750 permitting indoor cultivation, mixed-light cultivation, retailers, non-storefront retailers (i.e., sale by delivery of medicinal cannabis and/or medicinal cannabis products to a qualified patient), manufacturers, testing laboratories and distribution. Outdoor cultivation and microbusinesses prohibited.

This is a new cannabis area.

City of Thousand Oaks

(Ventura County)

 The Measure PASSED with 75.88% of the vote. Cannabis currently banned except for testing. Ordinances have not been drafted. The passage of ballot measure authorizing taxes on cultivation and all other cannabis businesses is indicative of cultivation and other cannabis activity ordinances that may be forthcoming.

Tuolumne County

 The measure PASSED with 62.61% of the vote. All cannabis activities currently banned and cultivation declared a public nuisance. Ordinances have not been drafted. The passage of ballot measure authorizing taxes is indicative of ordinances that may be forthcoming.

City of Vista

(County of San Diego)

 MEASURE AA – PASSED WITH 51.52% OF THE VOTE Cannabis currently banned.

2018 – The City Council adopted Resolutions that place a medicinal cannabis business ordinance and a commercial cannabis tax on the November 6, 2018 ballot, which passed.

Ordinances have not been drafted. The passage of ballot measure authorizing taxes on cultivation, manufacturing, testing, distribution and retail is indicative of ordinances that may be forthcoming.

City of Willits

(Mendocino County)

 RESULTS: Measure I PASSED with 74.9% of the vote. Recreational cannabis currently banned. Ordinances have not been drafted. The passage of ballot measure authorizing taxes on cultivation, retail and all other cannabis businesses is indicative of ordinances that may be forthcoming.

WINTER LLP UPDATE: Licensed Weighmaster Q&A

/0 Comments/in /by

Dear All,

Some of you may have received emails from the State requiring you to register as a “licensed weighmaster.” We have prepared the following Q&A which will hopefully answer some of your questions about this requirement. Please review carefully, and do not hesitate to reach out with further questions or if you require assistance in registering as a licensed weighmaster.

  1. What is a licensed Weighmaster?

The Division of Measurement Standards (a division within the CA Dept of Food and Agriculture) administers the Weighmaster Enforcement Program. This program licenses individuals or firms as Weighmasters, who are responsible for weighing, measuring, or counting bulk commodities and issuing certificates of accuracy. Weighmaster certificates are then used as the basis to buy or sell the commodity identified on the certificate.

  1. Do I need to register as a licensed Weighmaster?

Pursuant to the Emergency Regulations released by Manufactured Cannabis Safety Branch (Section 40277) and CalCannabis (Section 8213), “For bulk shipments of cannabis and cannabis products, a licensee shall be licensed as a weighmaster, and a certificate shall be issued by a licensed weighmaster.” Therefore cultivators, manufacturers, distributors, and microbusinesses will all need to register as licensed Weighmasters. Please find further information and the application at https://apps1.cdfa.ca.gov/weighmasterpublic/newapplication. Please additionally note there are also County-specific requirements (see #9 below).

  1. What do I need to weigh? (non-exhaustive list)
    1. Containers/packages of trimmings
    2. Containers/packages of flowers/buds
    3. Dried flower
    4. Edibles
    5. Topicals
    6. Shatter
    7. Oils
    8. Tinctures
    9. Extracts
  1. What needs to be on the Weighmaster Certificate?

Please see your County website for requirements. Samples here and here. Copies of voided certificates, issued certificates, and all records need to be maintained for four years.

  1. When do I issue a Weighmaster Certificate?

Whenever payment for your product is dependent on a written or printed weight, measure, or count (any bulk shipments/sales/transports).

  1. What is a Deputy Weighmaster?

All persons who determine weight, measure, or count and/or will be signing weighmaster certificates must be licensed as Deputy Weighmasters. A weighmaster may employ any person to act for them as a deputy weighmaster and shall be responsible for all acts performed by that person. There is no age limit.

  1. What are the fees for a weighmaster license?

Fixed location $75

Each additional fixed location $30

Location other than fixed $200

Deputy $20

  1. How long is a license good for?

The license is good for one year and must be renewed annually.

  1. What kinds of scales do I need? Do I need to register the scales with the County?

More information about the types of scales suitable for commercial purposes can be found here. You must only use weighing devices that have been approved, tested, sealed, and registered with the County Sealer (please find your County and see requirements).

  1. What will happen if I don’t register as a Weighmaster or fail to issue Weighmaster Certificates?

You may be found to be in violation of BPC 26031 (repeated offenses may result in revocation of your State cannabis license), and the violation is punishable by fines up to $1000 and/or six months in jail.

Again, should you need any assistance with the application process (State or County), please let us know.

Thank you, stay safe, and good luck out there! Todd Winter, WINTER LLP.

WINTER LLP UPDATE: Coastal Zone Ordinance – Effective Date TBD (Not Yet)

/0 Comments/in /by

Hello All,

As I am sure you are all aware by now, last week the Coastal Commission approved Monterey County’s Coastal Ordinance. This is obviously extremely good news. However, there are still a few more steps that need to be taken by the County before the Ordinance goes into effect. Note, some lobbyists are telling clients the Coastal Ordinance is in effect now. That is NOT accurate.

The County still needs to go through the formal adoption process to approve the ordinance, including a formal hearing and vote by the Board of Supervisors. This hearing is currently scheduled for the March 13th Board of Supervisors meeting. After the Board formally adopts the Coastal Ordinance, it must then go back to the Coastal Commission for final certification.

Based on this timeline, it appears as if the Coastal Ordinance may go into effect sometime in April at the earliest, depending on how long it takes for the Coastal Commission to conduct their final review/approval. Once that is completed, the County can accept your full permit applications.

So, we recommend starting on those now with our office so we are as far along as possible (hopefully complete) by the time April/May rolls around.

As always, we will continue to keep you posted with any new developments, and please feel free to reach out to us with any questions.

Thank you. Todd Winter, WINTER LLP.

WINTER LLP UPDATE: California Trademarks (Success); and CBD Trademarks Federally

/0 Comments/in /by

Hello everyone,

As a follow up to our warning email below regarding cannabis trademarks in California, we would like to report that, thanks to the trust of couple of our clients, and with some painful conversations and written arguments with the California Secretary of State, we have now successfully prosecuted a few California state level trademarks for clients.

We still maintain the analysis below w/re to the enforcement and value of state vs. federal trademarks. But I wanted to assure any of you that may be on the fence about filing for California state level trademarks, we believe we have educated the Secretary of State’s office sufficiently to provide you with a positive path forward for In Use Cannabis-specific Trademarks, if you wish to proceed. Please let us know.

Additionally, we are also excited to announce we have overcome the USPTO’s prior objections to clients’ CBD related trademark applications. Previously the USPTO had refused CBD marks based on the FDA/DEA positions. But with only a slight modification to our current filings, we have overcome these objections, and our CBD related trademarks are now moving their way through the USPTO towards full federal registration.

Please let us know if you have any questions. Thank you.

WINTER LLP UPDATE: URGENT – CANNABIS CONSULTANTS / PACKAGING / LOBBYISTS / ETC.

/0 Comments/in /by

Hello Everyone,

It is becoming painfully obvious to us that the so called cannabis consultants, packaging and design companies, lobbyists, and others target marketing cannabis clients in our industry, do not possess the level of knowledge or expertise necessary to legitimately and correctly advise cannabis companies in California w/re to local permitting, state licensing, real estate compliance, trademarks, and most recently packaging. We, as a firm, are spending a tremendous amount of our time fixing problems for clients who have engaged non-experts in these areas.

PLEASE BE ADVISED, 100% of ALL client PACKAGING that HAS been sent to us for COMPLIANCE review HAS FAILED. Every single package we have reviewed has been non-compliant forcing clients to spend 1,000’s to fix. Don’t let this happen to you.

We understand you are all under severe pressure and time constraints to get licensed and get your products out in the market and flowing again. But in doing so, please don’t rely on these companies for legal compliance, permitting, state licensing, trademarks, or packaging. It will cost you much more time and money in the end. We can literally save you 10’s of thousands in design and packaging costs alone, if you just send us your designs/packaging for review first.

Please let us help you on the front end of your projects to avoid unnecessary delays, costs, and/or worse loss of permits and licensing.

WINTER LLP UPDATE: Transition Period FAQ Update – Clarification for MANUFACTURERS re THC Limits on Products prior to 1/1/18

/0 Comments/in /by

Hello all,

As you may recall, there was some confusion regarding the applicable THC limits for cannabis products manufactured prior to January 1, 2018. Specifically, the Manufactured Cannabis Safety Branch (MCSB) required cannabis products that were manufactured prior to January 1, 2018 to meet the applicable THC limits (100 mg for edibles, 1000-2000mg for concentrates). However, the Bureau of Cannabis Control also indicated in their Emergency Regulations that products manufactured prior to January 1, 2018 could only enter the market if basic packaging and labeling requirements were met (no THC limits). These two statements were obviously contradictory and caused a lot of confusion in the industry.

Well, we are pleased to announce that, as a likely result of the comments we submitted, the MCSB has released a new FAQ today which clarifies the above as follows:

“During the transition period, which lasts from January 1 until July 1, 2018, cannabis products may enter the commercial cannabis market if they have child-resistant packaging and the label contains the government warning statement and the amount of THC per serving.”

To be completely clear, there is now no mention of meeting the applicable THC limits for products manufactured prior to January 1, 2018 in this newly released update. This should be welcome news to many of you and your distributors.

Please note, however, products manufactured on or after January 1, 2018 still must meet all of the required packaging and applicable THC limits.

We hope the above is helpful. Please feel free to contact us with any questions. Thank you.

Thank you. Todd Winter, WINTER LLP.

WINTER LLP UPDATE: URGENT – CANNABIS CONSULTANTS / PACKAGING / LOBBYISTS / ETC.

/0 Comments/in /by
WINTER LLP UPDATE: URGENT – CANNABIS CONSULTANTS / PACKAGING / LOBBYISTS / ETC.
Cannabis Enforcement , Cannabis Business Law, California Cannabis Trademarks, Commercial Cannabis, Cannabis Intellectual Property, Cannabis Trademarks, recreational cannabis law, Cannabis Tax, Cannabis Packaging, Bureau of Cannabis Control, Cannabis Business and Licensing, Cannabis Labeling Requirements , Cannabis in California, cannabis licensing , Cannabis Compliance, recreational cannabis law, Cannabis Designs, local cannabis regulations, Cannabis State Permits, state cannabis regulations, MCSB, Commercial Cannabis law, Medicinal Cannabis, Cannabis law, Cannabis local permitting, Cannabis Manufacturing, recreational cannabis, Cannabis Trademarks

Hello Everyone,

It is becoming painfully obvious to us that the so called cannabis consultants, packaging and design companies, lobbyists, and others target marketing cannabis clients in our industry, do not possess the level of knowledge or expertise necessary to legitimately and correctly advise cannabis companies in California w/re to local permitting, state licensing, real estate compliance, trademarks, and most recently packaging. We, as a firm, are spending a tremendous amount of our time fixing problems for clients who have engaged non-experts in these areas.

PLEASE BE ADVISED, 100% of ALL client packaging that HAS been sent to us for COMPLIANCE review HAS FAILED. Every single package we have reviewed has been non-compliant forcing clients to spend 1,000’s to fix. Don’t let this happen to you.

We understand you are all under severe pressure and time constraints to get licensed and get your products out in the market and flowing again. But in doing so, please don’t rely on these companies for legal compliance, permitting, state licensing, trademarks, or packaging. It will cost you much more time and money in the end. We can literally save you 10’s of thousands in design and packaging costs alone, if you just send us your designs/packaging for review first.

Please let us help you on the front end of your projects to avoid unnecessary delays, costs, and/or worse loss of permits and licensing.

For your convenience and reference, I am re-attaching our Packaging and Labeling Compliance Worksheet that we circulated a few weeks ago.

Thank you, stay safe, and good luck out there! Todd Winter, WINTER LLP.