Posts

RE: WINTER LLP Update – Newly signed Cannabis Laws; and Bureau of Cannabis Control Publishes New Distributor Fact Sheets

/0 Comments/in /by

Dear WINTER LLP Clients and Friends,

Please see the following summaries on new laws going into effect in 2020.  This was a very favorable legislative sessions for the cannabis and hemp industries.

Additionally, further below these new laws you can find two new fact sheets published by the BCC related to Distribution.

As always, please let us know if you have any questions, or need any assistance with anything and everything!

 

SB-34 allows cannabis licensees to donate cannabis and cannabis products to medicinal cannabis patients who have difficulty accessing such products.  The purpose of this is to enable ill, low-income individuals to have better access to medical cannabis.  Prior law prohibited licensees from donating any amount of cannabis as a business promotion or other commercial activity.  SB-34 was passed on October 12, 2019 and allows licensees to give medicinal cannabis products away to compassionate care patients.  SB-34 provides for such donations to be excluded from taxes but specifies that if a donation-intended cannabis product is not donated, then the taxes will have to be paid on it subsequently.  It will become operative when necessary changes are made to the state’s track-and-trace system or on March 1, 2020, whichever comes first.

 

SB-153 aims to bring California’s hemp regulations in line with the 2018 Farm Bill.  Prior law established the California Industrial Hemp Farming Act and the Industrial Hemp Advisory Board, but this framework existed before the passage of the 2018 Farm Bill and thus is somewhat non-compliant.  SB-153 was passed on October 12, 2019 and revises the Farming Act to better conform to the Farm Bill through the following: enhancing county agricultural commission reporting requirements, standardizing THC-level testing procedures, establishing violation consequences, placing temporary bans on individuals who have been convicted of a controlled substance-related felony and permanent bans on those who lied on their applications from participating in the industrial hemp program, and California to develop and submit a state plan for industrial hemp regulations to the federal government by May 1, 2020.  SB-153 will go into effect on January 1, 2020.

 

SB-185 closes a loophole within the current cannabis appellation marketing laws.  Prior law aimed to prevent companies from stating or eluding that their product is derived from one place when, in fact, it’s not by requiring that only produced which are 100% produced within the county can bear its name.  An example of this would be a cannabis product named “Humboldt’s Finest” when it is not from Humboldt County.  Prior law also requires the California Department of Food and Agriculture to establish appellation standards by January 1, 2021.  SB-185 was passed on October 12, 2019 and builds on these foundations through various changes aimed to ensure that only products that are grown or produced within a defined boundary can be labeled with a name that includes the territory or any wording that is likely to mislead a customer for this purpose.  SB-185 will go into effect on January 1, 2020.

 

SB-595 requires a cannabis licensing authority to develop and implement a fee deferral or waiver plan by July 1, 2020, to create a path for low-income individuals to apply for and receive cannabis licenses.  Prior law authorized licensing authorities to collect fees for cannabis license applications.   SB-595 passed on October 12, 2019 and requires them to create a fee waiver program for local equity applicants by January 1, 2021, and to allocate at least 60% of the dollar amount of waiver or deferral fees to equity those applicants. SB-595 will go into effect on January 1, 2020.

 

AB-1529 changes the requirements of labels on cannabis cartridges and vaporizers so that the labeling requirements would be easier to meet for the industry.  Prior law required that a cannabis cartridge or integrated cannabis vaporizer have a black symbol on it that is, at minimum, one-half inch by one-half inch in size that denotes it as a cannabis item.  This marking requirement has proved difficult to accomplish for technical reasons.  AB-1529 passed on October 12, 2019 and changes this requirement by allowing the symbol to be either in black or white, a minimum of a one-quarter inch by one-quarter inch in size, and affixed by way of either engravement, adhesive, or printing.  AB-1529 is classified as an urgency matter and thus goes into effect immediately.

 

AB-420 authorizes the California Cannabis Research Program (CCRP) to cultivate its own cannabis for the research project that is conducted on the grounds of UC San Diego, and expand what studies may examine, including mold, bacteria, and mycotoxins.  Prior law required the CCRP to acquire cannabis from other sources, and to limit the breadth of its studies.  AB-420 passed on October 12, 2019 and allows the program to cultivate its own cannabis, subject to federal regulations, to decrease research and supply chain issues that have previously presented themselves.  AB-420 will go into effect on January 1, 2020.

 

AB-404 authorizes a cannabis testing laboratory to amend a certificate of analysis to correct minor errors and retest samples, as specified.  Prior law requires a testing laboratory to issue a certificate of analysis for selected lots of each batch tested.  AB-404 passed on October 12, 2019 and allows the lab to amend the certificate of analysis once it is issued to correct minor errors and to retest a sample whose test results fall outside of the normal parameters if the lab notifies the bureau that the previous test was compromised and the bureau approves the re-testing.  AB-404 will go into effect on January 1, 2020.

 

AB-37 makes licensees who are engaged in commercial cannabis activities to be eligible to take business deductions for those activities.  Prior law disallowed those who engage in commercial cannabis activity from deducting any ordinary and necessary business expenses related commercial cannabis activity on their tax returns due to the federally illegal status of cannabis.  AB-37 passed on October 12, 2019 and equalizes the treatment of such taxpayers by allowing them to do so if applicable.  AB-37 will go into effect on January 1, 2020.

 

AB-858 adds to the CDFA’s type 1C cultivation a limit of 2,500 square feet for outdoor grow space.  Prior law did not place a canopy size limit on this type of license, also known as a “specialty cottage.”  AB 858 corrects this oversight by limiting the growing space to 2,500 square feet. AB-858 will go into effect on January 1, 2020.

 

AB-1291 requires an applicant for a cannabis license who has 20 or fewer employees to provide a statement that the applicant will enter into a labor peace agreement within 60 days of employing 20 or more employees, and requires applicants who currently have 20 or more employees to provide a statement that they will or already have entered into such an agreement.  Prior law required applicants with greater than 20 employees to submit similar statements but placed no timeline restrictions on the submittal, and did not require anything of the like from applicants with fewer than 20 employees.  AB-1291 passed on October 12, 2019 and includes a time-line specification and a statement requirement for applicants with less than 20 employees for the purpose of preventing and limiting the possibility of arbitrary employment law enforcement.  AB-1291 will go into effect on January 1, 2020.

 

To All Interested Parties,

The Bureau of Cannabis Control (Bureau) recently published two new fact sheets as a resource for those seeking information about the cannabis distributor and distributor transport only license types. These documents include lists of required procedures and guidelines for various distribution activities such as transportation, storage, transfer of cannabis goods, packaging, labeling, and more.

Both distributor fact sheets have been uploaded to the California Cannabis Portal and are located on the “General Resources” page under the “Resources” section. The fact sheets may also be accessed by clicking the links listed below.

Cannabis Distributor (Type 11) Fact Sheet:

https://cannabis.ca.gov/wp-content/uploads/sites/13/2019/08/BCC_Distributor_Fact_Sheet.pdf

Cannabis Distributor Transport Only (Type 13) Fact Sheet:

https://cannabis.ca.gov/wp-content/uploads/sites/13/2019/08/BCC_Distributor_Transport_Only_Fact_Sheet.pdf

Those looking to get in touch with the Bureau of Cannabis Control may contact us directly through email at bcc@dca.ca.gov.

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: 2018 Cannabis Legislation

/0 Comments/in /by

2018 CANNABIS LEGISLATION

The California State Legislature has passed numerous cannabis-related bills this legislative session. Several of these bills were signed into law by Governor Brown in the final moments of the session. Many take effect immediately, while others take effect January 1, 2019. We will be closely tracking additional cannabis-related bills as they wind their way through both houses of State Congress next year.

The new laws that affect the cannabis industry in California include the following:

ALL CANNABIS LICENSE TYPES

SB 1459 – Provisional Cannabis License:

Effective immediately, all licensing authorities (BCC, MCSB, CalCannabis) may issue “provisional cannabis licenses,” as a bridge between temporary and annual licenses. A provisional license will act in the same manner as an annual license, except that it is not renewable.

To qualify for a provisional commercial cannabis cultivation license, an annual applicant must:

  • Hold, or have held, a temporary cannabis cultivation license for the same premises and the same commercial cannabis activity for which the provisional license will be issued; and
  • Submit a completed state annual cultivation license application (all applicable requirements pursuant to California Code of Regulations section 8102 still apply), including evidence that compliance with the California Environmental Quality Act (CEQA) is underway; and
  • Pay the application fee for the associated license type.

AB 1741 – Payment of State Taxes by Means Other than Electronic Funds Transfer:

Effective immediately, state taxing authorities must temporarily accept money for cultivation, sales and excise taxes by means other than electronic funds transfer. This law temporarily waives the current 10% penalty for paying taxes in cash.

AB 2799, CalOSHA Requirements:

Effective January 1, 2019, licensed cannabis business that have at least one employee and manager must complete a 30-hour course from the California Occupational Safety and Health Administration (CalOSHA) to ensure compliance with job-related safety and health hazards.

AB 2899, No Advertising During License Suspension:

Effective January 1, 2019, the new law prohibits a cannabis licensee from publishing or disseminating advertising or marketing (including web sites) while the licensee’s license is suspended.

CULTIVATION LICENSES

AB 873, CalCannabis Peace Officer Duties:

Effective January 1, 2009, investigators with the California Department of Food and Agriculture to have arrest and search warrant powers with regard to enforcement of cannabis laws.

DISTRIBUTION LICENSES

SB 311, Distribution to Other Licensed Distributors:

Effective immediately, all licensed distributors are able to transport to other licensed distributors after the required cannabis testing.

RETAIL LICENSES / SPECIAL EVENTS

AB 2020, Temporary Event Licenses:

Effective January 1, 2019, provides that a state temporary event license can be issued in places other than county fairgrounds or district agricultural association events by the local authority, including the retail sale and consumption of cannabis, with the appropriate licenses by its participants. Starting January 1, 2019, cannabis special events can be held at any other venue approved by a city or county.

WINTER LLP UPDATE: U.S. Senate Votes To Legalize Hemp After Decades-Long Ban Under Marijuana Prohibition

/0 Comments/in /by

The non-psychoactive cannabis cousin of marijuana would finally become legal to grow in the United States under a bill overwhelmingly approved by the Senate.

Photo by Chris Wallis // Side Pocket Images

The wide-ranging agriculture and food policy legislation known as the Farm Bill, passed by a vote of 86 – 11 on Thursday, contains provisions to legalize the cultivation, processing and sale of industrial hemp.

The move, championed by Senate Majority Leader Mitch McConnell (R-KY), would also make hemp plants eligible for crop insurance.

“Consumers across America buy hundreds of millions in retail products every year that contain hemp,” McConnell said in a floor speech on Thursday. “But due to outdated federal regulations that do not sufficiently distinguish this industrial crop from its illicit cousin, American farmers have been mostly unable to meet that demand themselves. It’s left consumers with little choice but to buy imported hemp products from foreign-produced hemp.”

McConnell also took to the Senate floor on Tuesday and Wednesday to tout the bill’s hemp legalization provisions in separate speeches.

In April, the GOP leader introduced standalone legislation to legalize hemp, the Hemp Farming Act, the provisions of which were included in the larger Farm Bill when it was unveiled earlier this month.

The Senate Committee on Agriculture, Nutrition and Forestry approved the bill by a vote of 20-1 two weeks ago.

During that committee markup, Sen. Charles Grassley (R-IA), one of Congress’s most ardent opponents of marijuana law reform, threatened to pursue serious changes to the bill’s hemp provisions on the floor. Namely, he wanted to remove the legalization of derivatives of the cannabis plant, such as cannabidiol (CBD), which is used by many people for medical purposes. But Grassley never ended up filing a floor amendment, allowing hemp supporters to avoid a contentious debate and potentially devastating changes to the bill.

Hemp legalization enjoys broad bipartisan support.

“Legalizing hemp nationwide ends decades of bad policymaking and opens up untold economic opportunity for farmers in Oregon and across the country,” Sen. Ron Wyden (D-OR) said upon passage of the Farm Bill on Thursday. “Our bipartisan legislation will spur economic growth in rural communities by creating much-needed red, white and blue jobs that pay well. I’m proud to have worked with my colleagues to get the bipartisan Hemp Farming Act through the Senate. Today marks a long-overdue, huge step forward for American-grown hemp.”

BIG news for industrial hemp farming! Today, the Senate passed my bipartisan #HempFarmingAct, legislation that would lift a decades-old ban on growing industrial hemp on American soil. #RonReport

— Ron Wyden (@RonWyden) 3:09 PM – Jun 28, 2018

Earlier this month, the Senate approved a nonbinding resolution recognizing hemp’s “growing economic potential.”

“For the first time in 80 years, this bill legalizes hemp. We forget, but hemp was widely grown in the United States throughout the mid-1800s,” Sen. Michael Bennet (D-CO) said in a floor speech on Wednesday. “Americans used hemp in fabrics, wine, and paper. Our government treated industrial hemp like any other farm commodity until the early 20th century, when a 1937 law defined it as a narcotic drug, dramatically limiting its growth. This became even worse in 1970 when hemp became a schedule I controlled substance. In Colorado, as is true across the country–I have talked to a lot of colleagues about this–we see hemp as a great opportunity to diversify our farms and manufacture high-margin products for the American people.”

McConnell’s standalone hemp bill currently has 29 cosponsors signed on—17 Democrats, nine Republicans and two independents.

A Congressional Research Service report released last week says that the “global market for hemp consists of more than 25,000 products.”

House Republican leaders blocked a vote to make hemp legalization part of that chamber’s version of the Farm Bill. But now that the language is included in the version approved by the Senate, it will be part of discussions by the bicameral conference committee that will merge both chambers’ bills into a single piece of legislation to be send to President Trump’s desk. All indications are that McConnell, as the most powerful senator, will fight hard for the survival of his hemp proposal.

A White House statement of administration policy released this week outlining concerns with the Farm Bill does not mention its hemp legalization provisions.

In 2014, McConnell included provisions to allow limited state-authorized hemp research programs in that year’s version of the Farm Bill.

Kentucky’s agriculture commissioner cheered the passage of the new hemp provisions on Thursday..

For farmers across KY, there is no piece of legislation more important than the #FarmBill. I am excited that @SenateMajLdr’s #HempFarmingAct made it into this measure, which will allow states to unleash the full economic potential of our industrial hemp pilot programs. #KyAg365

— Commissioner Quarles (@KYAgCommish) 3:17 PM – Jun 28, 2018

Tom Angell publishes Marijuana Moment news and founded the nonprofit Marijuana Majority. Follow Tom on Twitter for breaking news and subscribe to his daily newsletter.

WINTER LLP UPDATE: FDA approves first drug derived from marijuana

/0 Comments/in /by

The Food and Drug Administration (FDA) on Monday gave a green light to the country’s first drug derived from marijuana.

Epidiolex, manufactured by GW Pharmaceuticals, is intended to treat seizures associated with two rare and severe forms of epilepsy that begin in childhood. The drug is made of cannabidiol (CBD), a component of marijuana that doesn’t give users a high.

The approval could spur more research into marijuana products, though marijuana itself remains illegal.

“This approval serves as a reminder that advancing sound development programs that properly evaluate active ingredients contained in marijuana can lead to important medical therapies,” FDA Commissioner Scott Gottlieb said in a statement.

In a separate statement, Gottlieb stressed the importance of using proper research on the medical uses of marijuana and noted the approval doesn’t mean the agency will be lowering its approval standards for marijuana.

“This is an important medical advance. But it’s also important to note that this is not an approval of marijuana or all of its components,” he said. “This is the approval of one specific CBD medication for a specific use.”

Medical marijuana is available in about half of states. But federal regulations classify CBD as a Schedule 1 drug, which means it has no medical value and a high potential for abuse, because it is a chemical component of the cannabis plant.

This means the Drug Enforcement Administration (DEA) will have to reclassify it before GW can begin marketing Epidiolex.

The FDA said it is providing medical and scientific information and recommendations to the DEA about CBD.

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: CCIA SUBMITS TESTIMONY AT HISTORIC HOUSE HEARING ON CANNABIS BANKING

/0 Comments/in /by

CCIA PREPARES TESTIMONY FOR HISTORIC HOUSE HEARING ON CANNABIS BANKING

Sacramento,CA – The California Cannabis Industry Association (“CCIA”), which is the leading cannabis trade association in the state of California, has strengthened its advocacy in Washington by submitting testimony to the House Financial Services Committee hearing “Challenges and Solutions: Access to Banking Services for Cannabis-Related Businesses,” scheduled for February 13. As home to the country’s oldest medical cannabis market, established in 1996 by the Compassionate Care Act, and home to the country’s largest legal adult use market, the expert testimony of CCIA Executive Director, Lindsay Robinson, addresses the safety, social, and economic risks and realities experienced with an all cash industry. CCIA’s federal advocacy is in support of the Secure and Fair Enforcement (SAFE) Banking Act, providing the cannabis industry access to banking and to capital markets that they desperately need.
The country’s legal cannabis market has grown to 33 states plus the District of Columbia with legalized medical cannabis and over ten states with legalized adult use cannabis, reaching over $10.4 billion in sales in 2018. Most of this revenue being cash as cannabis businesses do not have access to banks due to Federal illegality.
CCIA Executive Director, Lindsay Robinson, says that “legalization of cannabis is not a partisan issue. We have seen the legalization of cannabis across the political spectrum, and public support is at an all-time high.”
But what does that mean? Robinson says that “Due to the federal government’s continued classification of cannabis as a Schedule I drug under the Controlled Substances Act, the multi-billion dollar U.S. cannabis industry is denied access to banking and capital markets, which are basic necessities for any legitimate industry.”
Robinson’s testimony goes on to explain that “The ability to use U.S. financial institutions for banking is essential to ensure the safety of the cannabis industry and cannabis consumers. Without access to banking, companies are forced to maintain large amounts of cash on hand, pay employees and vendors in cash, and use cash to pay taxes. All of this creates an untenable situation where the safety of consumers, employees, and companies is at risk.”
The lack of access to capital markets by the cannabis industry adds a barrier to social equity applicants attempting to access funding to enter the legal market. Robinson explains that “The lack of access to capital markets, however, means that federal cannabis prohibition continues to place women and minorities at a disadvantage. Although some states have sought to address the issue of diversity in the cannabis space, the costs associated with starting a cannabis company are prohibitively high for those without easy access to capital. Banks’ inability to lend to cannabis entrepreneurs perpetuates the exclusion of women and minorities from the cannabis industry and concentrates opportunities in the hands of a predominantly white, male segment of society who traditionally has more access to capital.”
The many challenges and unintended consequences that are experienced by the legal cannabis industry’s lack of access to banking and capital have been challenging in California, which is why CCIA’s Executive Director is taking her advocacy to the Federal government to find solutions. “For these reasons, CCIA supports the Secure and Fair Enforcement (SAFE) Banking Act. This bill will provide our membership with the access to banking and capital markets that they desperately need. It will increase the safety of the industry by eliminating the need to operate on a cash basis and will help to ensure that women and minorities have access to the capital needed to enter the cannabis industry.

WINTER LLP Update: Guidance On Commercial Cannabis Activity

/0 Comments/in /by

You will note some very important clarifications on interactions between LICENSEES and NON-LICENSEES. One of the most noteworthy clarifications in our opinion, is the ability to license intellectual property to a LICENSEE from a NON-LICENSEE. As many of you who use our corporate structures know, this is a huge break and departure from the written regs, and one we thought would be the case all along. Now, it appears to be settled in our favor.There are many other important clarifications, so please review carefully. And, as always, please let us know if you have questions or need assistance with anything.

Take good care out there, WINTER LLP

GUIDANCE ON COMMERCIAL CANNABIS ACTIVITY

• Under the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), all commercial cannabis activity shall be conducted between licensees. The employees of a licensee may engage in commercial cannabis activity on behalf of the licensee.
• Commercial cannabis activity includes activities that are plant touching such as cultivating, manufacturing, and transporting cannabis, as well as activities that are not plant touching such as procuring and selling cannabis.
• Below are examples of activities that are provided for informational purposes only to assist licensees by providing some general, generic examples. However, whether or not an activity is compliant with statute and regulation requires a case-by-case analysis and is determined by the specific facts and circumstances of the unique situation. Therefore, the examples below are not automatically allowable but rather provide a sampling of potentially allowable activities based on information derived from inquiries submitted to the Bureau.
Examples of Potentially Allowable Activities:
• Licensees may enter into intellectual property licensing agreements with unlicensed entities. However, the intellectual property holder cannot exert control over the licensee’s commercial cannabis operations. If the intellectual property holder is exerting control over the licensee’s commercial cannabis operation, then the intellectual property holder must be disclosed as an owner on the license.
GUIDANCE ON COMMERCIAL CANNABIS ACTIVITY
• Licensees may use the services of unlicensed entities such as consultants and brokers to conduct non-commercial cannabis activity such as renting property, purchasing packaging, or leasing equipment for use by the commercial cannabis business. Consultants or brokers that are engaged in commercial cannabis activity for a licensee, such as procuring or purchasing cannabis for a licensee, must be included as either an owner or financial interest holder on the license.
• Licensees may package and label cannabis with another licensee’s brand. For example, a licensed distributor may package and label cannabis with a licensed retailer’s brand on behalf of the licensed retailer.
• Licensees may use a referral service or agency to find a licensed distributor to distribute cannabis goods. The referral service or agency is not permitted to share in any profits or revenue from the agreement or have any direction or control over a license, unless the referral service or agency is disclosed as an owner or financial interest holder of the license.
• Licensees may procure or purchase cannabis on behalf of or at the request of another licensee, such as a licensed distributor procuring cannabis for a licensed manufacturer. Licensees may not procure or purchase cannabis on behalf of any person that is not licensed under MAUCRSA.
• Licensees may enter into rental agreement where the landlord takes a percentage of a licensee’s profits if the landlord is disclosed as an owner or financial interest holder of the license.
• Licensed retailers and licensed microbusinesses may contract with a service that provides a technology platform to facilitate delivery of cannabis goods to customers if the service does not share in the licensee’s profits.
• Licensees may hire an advertising agency or marketing firm to build and/or promote the licensee’s brand. The advertising agency is not permitted to share in any royalties or a percentage of profits or revenue of the licensee unless disclosed as an owner or financial interest holder of the license.
• Licensees may purchase the right to use a patent for cannabis extraction. The patentholder is not permitted to share in any royalties or a percentage of profits of the licensee unless the patent-holder is disclosed as an owner or financial interest holder on the license.
• Licensees may purchase non-cannabis materials such as empty cartridges, batteries, packaging, extraction equipment, grow lights, and transportation and delivery vehicles, from unlicensed businesses.
• Licensed cannabis event organizers may only coordinate cannabis events. Licensed cannabis event organizers are not authorized or licensed to engage in commercial cannabis activity governed by manufacturing licenses, cultivation licenses, distribution licenses, or retail licenses.
This informational document is not meant to implement, interpret, or make specific any existing laws or regulations.
REVISED: 03/19
Bureau of Cannabis Control
2920 Kilgore Road
Rancho Cordova, CA 95670
E bcc@dca.ca.gov | P (833) 768-5880
For the latest updates, follow the Bureau on social media
WWW. B C C . C A . G OV

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.