There are bound to be a few old timers in the Bureau of Cannabis Control who are sticklers for detail. Hence, we judged it wise to summarize the situation now in force.

Laboratory Testing Is Now Mandatory

A licensed dealer may only sell cannabis goods that passed all legal and regulatory standards in a licensed laboratory. This applies retrospectively to old stock. If you have merchandise you acquired before 1 July 2018, you must destroy it. The law prohibits you from having it tested now.

However, if you are holding disqualified consignment stock you may return it to your supplier. In terms of the convoluted set of rules, the supplier may send the stock on to the manufacturer, and they may then ask a laboratory to test it. As Charles Dickens wrote into Mr. Brumble’s role, “the law is an ass” but a remarkably persistent one we add!

Packaging and Labeling Requirements

The Bureau of Cannabis Control requires all cannabis goods to have appropriate labels before they reach retailers. The latter must, therefore, refuse any erroneously labeled or non-labeled consignments. Furthermore, “A retailer shall not package or label cannabis goods, even if the cannabis goods were in inventory before July 1, 2018”.

The onus is on the retailer to return incorrectly labeled goods, and destroy any in stock prior to 1 July 2018. Moreover, they may not send the product to another licensee for packaging or labeling. The only relief is exit packaging no longer needs to be child resistant. Although the restriction still applies to merchandise on route to the retailer.

THC Limits For Edible and Non-Edible Products

Edible Products

“Beginning July 1, 2018, edible cannabis goods may not exceed 10 milligrams of THC per serving, and may not exceed 100 milligrams of THC per package.”

Non-Edible Products

“Beginning July 1, 2018, non-edible cannabis products must meet package THC restrictions. Non-edible cannabis products shall not contain more than 1,000 milligrams of THC per package if intended for sale only in the adult-use market.

Non-edible cannabis products shall not contain more than 2,000 milligrams of THC per package if intended for sale only in the medicinal market.”

Further Advice and Information Readily Available

California Dispensary Information offers expertise on everything from business formation and structure, licensing, city permits, and grow room design, to production methods, concentrates, and seed-to-sale tracking.

Virtually everything you need to know on how to start a collective in California. And for that matter, supplying medicinal and recreational cannabis goods in ways that keep the Bureau of Cannabis Control smiling.

The post California Cannabis Regulation Clocks In Finally appeared first on California Medical Marijuana Information.

This week, the California Bureau of Cannabis Control announced plans for interim commercial cannabis licenses effective 1 January 2018. We note these are under the Medicinal and Adult Use Cannabis Regulation and Safety Act AKA MAUCRSA. Hence, we are still waiting for news of plans for cultivator and manufacturer licenses that will follow.

In mid-November, we expect the California Bureau of Cannabis Control to start accepting applications for commercial cannabis licenses. These will permit legitimate operations to commence on 1 January 2018, and continue for 120 days. During this period, commercial operators must apply for regular state licenses, and be able to provide the information we list below. If a situation beyond their control prevents this happening, they may apply for an extension(s).

For purposes of clarity, we post the preamble to the Bureau’s notice first, in full herewith:

“TEMPORARY LICENSE APPLICATION INFORMATION

Business and Professions Code section 26050.1 allows the Bureau to issue temporary licenses. A temporary license is a conditional license that allows a business to engage in commercial cannabis activity for a period of 120 days. The Bureau can only issue a temporary license if the applicant has valid license, permit, or other authorization issued by the local jurisdiction.

The Bureau intends to start issuing temporary licenses January 1, 2018 and expects to begin accepting applications prior to that date.

NO TEMPORARY LICENSE WILL BE EFFECTIVE PRIOR TO JANUARY 1, 2018”

Information Required of Applicants for Temporary Licenses

• A valid business license, authorization or permit from the local authority agreeing they may engage in commercial cannabis
• Whether they wish to trade in adult use, or medical cannabis: In other words, whether they want A or B-license type approval
• The name of the individual or business applicant, plus whether they require a retailer, micro business, or distributor, etc. license
• Comprehensive details of both the applicant and the business owner(s) – An ‘owner’ is a CEO, director, 20%-plus shareholder, or a person who exercises ‘direction, control, or management’.
• The physical address of the business, plus a title deed or consent of the premises owner, proving right to occupy and trade
• A diagram of the business layout at the premises, showing the subdivision of the space and the purposes thereof

Without local approval, all else is for naught. We recommend starting at this point, and chasing it down as fast as possible. We are available to assist with further information and advice as necessary. We wish you every success in your commercial cannabis endeavors.

The post Things are Moving Fast in California Cannabis Circles appeared first on California Medical Marijuana Information.

Other unintended consequences included

• Consumption continued at 60% of the pre-prohibition rate, rising to 80% by the end of the failed experiment.
• Within one week, ‘grow your own’ stills were on sale throughout the country so people could make their own moonshine.
• In the first year, total crime increased by 23%, homicide by 12%, and drug addiction by a staggering 44%.
• Americans became accustomed to consuming stronger liquor because smugglers found it easier to conceal
• The exercise failed miserably in its primary goal of producing a generation believing in temperance.

The U.S. Government subsequently introduced a more rational program to regulate manufacture, import, transport, and sale of alcoholic beverages. It has however never managed to rein in the organized crime syndicates it inspired.

John D. Rockefeller Jr., who has supported prohibition later wrote, “… drinking has generally increased; the speakeasy has replaced the saloon; a vast army of lawbreakers has appeared; many of our best citizens have openly ignored prohibition; respect for the law has been greatly lessened; and crime has increased to a level never seen before.”

Recent attempts by the San Diego County Board of Supervisors to extend its ban on medical marijuana dispensaries in unincorporated areas is irrational given lessons learned during prohibition. While we support the basis of controlling marijuana access to children, there are already adequate regulations in place to achieve this.

The San Diego ban has had little success in constricting the supply chain. Illegal ‘dispensary’ numbers skyrocketed in the past year. They are in it for a quick buck. They show little reticence to sell marijuana to anybody, including minors. They don’t do health and safety checks, and they don’t pay taxes either.

This is a small sample of what will happen if San Diego continues with its policy, if the Attorney General cracks down, or both. Close to a century of marijuana prohibition has not even begun to achieve marijuana abolition. We agree wholeheartedly with the San Diego Union-Tribune that the Board of Supervisors should, “Accept the responsibility of honoring the will of the county’s voters.”

The post Marijuana Regulation and Control are Better than Prohibition appeared first on California Medical Marijuana Information.

The Term ‘Collective’ Does Not Appear in the Legal Lexicon

The situation dates back to 2008, when the California Attorney General stated that making profit from selling medical marijuana was illegal. Setting aside that quaint mind-set, this meant that medical marijuana dispensaries had to be non-profits. This left medical marijuana patients with only one legal workaround. They had to form collectives that barely covered costs.

California law treats these collectives as non-profit mutual benefit corporations, or NPMBC’s. By definition, these have no equity or stock to sell. Any intelligent buyer will run miles from that situation. This is because there is nothing to pay for. Except a quasi-right to a grow-your-own, in a situation that is, at best, somewhat fluid. The only workaround is transfer of rights and obligations of membership.

How Membership Transfer Works with California Non-profit Mutual Benefit Corporations’s

The legislators clearly never intended this to happen easily. Section 7230 of the Corporations Code states:

• All rights accruing from membership of an NPMBC terminate on death
• In the interim, no member may transfer a right or membership in an NPMBC

However, the legislation does allow one loophole. If the NPMBC’s articles allow for it, and the local bylaws permit it, its board may allow membership transfers without limitation. This includes when a member dies, or the non-profit undergoes restructuring. The board may however only change its position on approval of all the members.

This legacy of history means few medical marijuana collectives are set up to operate this way. Hilary Bricken thinks this is because criminal lawyers structured them with a view to averting prosecution. We agree with her conclusion that marijuana NPMBC’s may not be purchased, because there is no substance over which to take title.

Hence, be careful if you have your eye on a California medical marijuana collective, and want to become the sole member in exchange for sweeteners. The local bylaws and the founding statements of the NPMBC must permit this. Or else you could lose your money, and fall foul of the California Corporations Code while you do.

The post Can You Buy a California Medical Marijuana Collective? appeared first on California Medical Marijuana Information.

What follows is a summary of the most relevant points, including opinions expressed by Los Angeles Times and our own thoughts. Here is a link to the official document if you would like to study the long and detailed report.

• We currently have two official approaches towards regulating marijuana in California. These are (a) the Medical Cannabis Regulation and Safety Act of 2015, and (b) Proposition 64 of 2016 for Legalized Nonmedical Cannabis.
• Few doubt the eventual logic of combining the legislation as Gov. Jerry Brown suggests. However many are beginning to question whether there is time to do so before Proposition 64’s deadline of December 30, 2017 runs out.
• The State Legislative Analyst’s Office is urging cash flow restraint. While it agrees with Gov. Jerry Brown, is believes there is ‘significant uncertainty regarding the resource needs for departments to regulate and tax medical and nonmedical cannabis.’
• Its two main concerns are whether the Trump Administration will clamp down on the industry as it legally may do, and how many marijuana businesses will emerge, register, and contribute to their administrative cost by paying taxes. The Catch 22 is that merging the two systems will delay this benefit.
• According to Los Angeles Times, “the State Board of Equalization estimates there will be 1,700 dispensaries and retailers paying taxes, while the Department of Consumer Affairs, which will oversee the businesses, expects 6,000 pot shops, based on experience in Colorado.’
• In the light of this, the California Legislative Analyst’s Office reticence to support borrowing large sums of money becomes understandable. At this stage, we do not even know whether a method to license and tax sales will be in position on January 1, 2018 per proposition 64.

This puts us in the unfortunate position of being between a rock and a hard place. Do we put the cart before the horse, trust the industry will come to the party, and give the Department of Consumer Affairs the money it needs for the job?

Or should we do what the California Legislative Analyst’s Office suggests. It wants the state to borrow only what it needs to fund the 2017 / 2018 program. Its rationale is requirements in subsequent years might be less.

The post Legislative Analyst’s Office Casts Doubt on Marijuana Viability appeared first on California Medical Marijuana Information.

And what about the mom-and-pop businesses that rely on the income? They need certainty big business with corporate advantage is not going to lever them out. Behind the scenes, recreational marijuana is selling well as it always seems to have done in the Golden State. We are trying legalize a reality not embargo it in perpetuity.

One might have thought that with two decades of regulated medical marijuana under our belt we would have at least learned something. Although granted there is still some confusion regarding what is legitimate at city and country level. The holdup is an apparent obsession with tidying these details up at the same time. For the life of me, I can’t see the problem with having two different systems for a while. Surely, this is what the population envisaged?

I am inclined to agree with the news website Salon that the differences would be a challenge to reconcile. For example, Assembly Bill 266 provides for just a few medical marijuana distributors, and they have to oversee pesticide contamination too. This runs counter to free enterprise insofar as recreational cannabis goes. And presumably the deregulated business direction in which the country is moving?

However, I don’t agree that the diverse tax and inventory regimes are an unsurmountable problem. While it is true authorities need to be able to track and trace the two medical marijuana varieties, they could treat them as two separate businesses in the early stages and leapfrog over their self-imposed indecision.

This happens all the time with big corporates and multi-nationals. They toe the line because the penalties for not doing so are harsh enough to make them. There is nothing to prevent a medical dispensary from applying for a recreational license. They would just need to keep the stock in different premises, and manage properly.

Thus I do not agree medical marijuana dispensers will necessarily be at a disadvantage by not controlling production up the line. They are making good money or they would not be in business.  And as I wrote previously, they always have the option to diversify. Free enterprise has a habit of singling out the fittest.

The post Time to Line up Legal Marihuana for 2018 appeared first on California Medical Marijuana Information.

It is a shame really. California has a great dealt to benefit in terms of taxes. Yet our lawmakers insist on following a single-level approach. First, they draft a proposition that was bound to get through. Then they hold a ballot the result of which was virtually certain. Then and only then do they put administrative structures in place. These are currently drafting regulations that should have started years ago.

This is no way to begin a profitable business, as I am confident Patrick McGreevy writing in Los Angeles Times will agree. He confirms a stir at the California Capitol on Monday, when lawmakers challenged the ability of state agencies to come in on time.

The Smoking Pot Bomb California Faces

To recap, Proposition 64 wants licenses in place by January 1, 2018. The regulations and system may yet be. However, there will still be numerous license applications in the pipeline. To avoid prejudice and unfair practice there are going to have to be numerous provisional licenses at first.

Jerry Hill, chair of the Senate Business, Professions and Economic Development Committee opened Monday’s meeting by commenting they were skeptical that Proposition 64 would come in on time.

To this, the head of the Bureau of Medical Cannabis Regulation Lori Ajax acknowledged “a lot of challenges” especially as her bureau was now also in charge of licenses for recreational marijuana traders.

The Road Ahead for California’s Recreational Marijuana

Give or take a few distractions from the Trump administration, the beautifully simple lines of Proposition 64 will be elaborated by a flurry of legal band-aid and temporary regulations. Whereas Lori Ajax has promised ‘an emergency regulation’ by January 1, 2018, she admits months of organized chaos ahead.

“We are not going to be able to grant everyone a license on Jan. 1, 2018,” she told the Business, Professions and Economic Development Committee. “Some may get temporary licenses while the tens of thousands of applications are being processed.” It will likely take months after that to tidy up the details.

Comment

Our government had ample time to influence the wording of Proposition 64 administratively, but its officials did not. It now finds itself in an awkward position of not being able to implement the will of the people within the people’s deadline. I should be interested to know how much extra time the Courts consider fair and reasonable, if someone whose plans are disadvantaged asks.

The post California Prop 64 & MMRSA Deadlines Go Up in Smoke appeared first on California Medical Marijuana Information.

Your First Step: Do You Really Need the MMJ….(Um – Yes.)

Clinical cannabis is typically not for treating flu or acne. However, nowadays that is probably sufficient to get a doctor’s recommendation. A decade ago, many doctors required more serious medical conditions along the lines of cancer, HIV, epilepsy, or multiple sclerosis for example. Prop 215 also lists depression (which is difficult to diagnose) and “any other condition for which medical marijuana may provide relief”. That statement is the key to providing flexibility to doctors in providing scripts. Given HIPAA laws, law enforcement is not allowed to inquire about your medical condition. As such, once you get your card you are golden! Your next step is to find a doctor to write a recommendation.

Any doctor with a California Medical Board license can do this. However, you may have more sympathy from a ‘Class 420 Doctor’ who already knows the ropes. As you probably know, most ‘420 Doctors’ go “all in” and make marijuana their main focus. These doctor’s specialize in matching your condition with the benefits of medical marijuana.

Your Next Step is Getting a Medical Marijuana Card

In theory, you could step into any marijuana dispensary in California armed with a recommendation, identify yourself, and pay for and collect your medicine. However, you could potentially save yourself a hassle down the line by applying for, and obtaining a voluntary State issued medical marijuana card.

Provided you apply within a California county you reside in, you just pop by in person to the appropriate office with the following:

– The doctor’s MMJ recommendation

– A driver license or other government photo card

– A completed and signed application form

– Proof of residence in the county

– The application fee your county requires

– A photo (likely taken onsite at the county office). 

Proof of residence could be your motor vehicle registration, rental or mortgage agreement, or a utility bill. If you are on Medi-Cal assistance, prove it and get 50% off your application fee. The only information on your photo card is your unique number in the system.

Your name, address and social security number are private on the California medical marijuana system. They should issue your card within 35 days if you are successful. In the interim you can still get your medicine.

Do I Need a Consultant to Obtain a Medical Marijuana Card?

If your case is straightforward, and you can figure out the regulations and the FAQ, then probably you can do it solo. However, if you are concerned they might turn your application down because you are borderline, or something happened in the past consider consulting with an expert. Of course, appealing a rejection will cost you more than applying for a card.

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This creates a legal logjam. Deputy Attorney James M Cole tried unsuccessfully to break this on August 29, 2013. He pleaded for prosecutorial discretion and the ‘efficient use’ of federal resources when deploying law enforcement. Thus far, we have limped along in an elaborately choreographed legal pas de deux. Now California state treasurer John Chiang has made his move.

The Marijuana Money Problem We Need to Solve

“We need quick action and practical solutions,” he told reporters including Orange County Register late December. “California is willing to assume a leadership role nationally to effectively achieve this goal.”

Chiang set up the Cannabis Banking Working Group. He knows when marijuana sales leap forward in 2017, a significant amount of marijuana money is going to leave the formal economy. This is since the only thing the industry can do is stash it somewhere else.

Chair of California State Board of Equalization Fiona Ma pulled the threads together. She said, “The cannabis industry is the largest shadow economy in California. Allowing them banking access would facilitate [taxation] compliance and bring millions of dollars into our economy.” 

This is not to say that all banks and credit unions are blind to the possibilities. In 2015, American Banker reported that 266 out of America’s 6,200 financial institutions were already trading with businesses connected to marijuana.

However, a 2014 effort to create a California State Marijuana Bank crashed when a U.S. District Court supported the Federal Reserve’s rebuttal. In so doing, it relied on marijuana “remaining illegal under federal law”.

California State Treasurer John Chiang’s Move

John Chiang seems determined to take the lead on opening commercial banking to the marijuana industry. His Cannabis Banking Working Group met the first time on December 19, 2016 and attracted around one hundred banking and cannabis stakeholders. Disappointingly, there was no Federal, State Capitol, or Trump representation.

“Defining the problem is our first objective,” Chiang told the working group. “As we continue to hold meetings around the state and compile information, I think we will continue to gain ever more clarity on precisely what should be done and how.”

Four more meeting are set to follow throughout California. John Chiang could be in a position to gain traction on this one. Forty-five U.S. states already allow some form of marijuana consumption. This amounts to a large pile of marijuana money to bring back into the formal economy.

The post California’s John Chiang Moves to Normalize Marijuana Money appeared first on California Medical Marijuana Information.

Well not quite, because now we have to follow standard business practices which will be a pain for some. Instead of the feds breathing down our necks, we have AUMA (The Control, Regulate, and Tax Adult Use of Marijuana Act of California) on its way to passage. Our phones are ringing off the hook. Here are the hot FAQ’s we are currently answering.

Question: Who Is Regulating the California Cannabis Business Now?

AUMA established a Bureau of Marijuana Control in the Department of Consumer Affairs. Its job is to license and regulate the industry although it is still finding its feet. Note that this is not the same as the Bureau of Medical Marijuana Regulation. The Bureau of Marijuana Control should supersede it but this will not happen right away.

These bureaus are not the only regulators we may have to placate. Marijuana retailers, distributors, and micro businesses still have to deal with the Department of Consumer Affairs. The Department of Food and Agriculture will continue to license and oversee marijuana cultivation, with the Department of Public Health taking care manufacturing and testing. Finally, the State Board of Equalization will collect marijuana taxes. Well we did want government to treat us like a business.

Question: To What Time Line We are Working?

Licenses are supposed to be issued starting January 2018. Law enforcement is already stirring the pot and bureaucracy inevitably spins the simple into something complex. Experience in other states suggests the possibility of burning cash flow while waiting for a license. Don’t over-extend yourself and be patient.

Question: Must I Live in California to Get a License?

Yes, you have to, because that’s what the law says at least through to 2019, even though this may not make sense to you from where you sit. The law is clear. No licensing authority shall issue or renew a license to any person that cannot demonstrate continuous California residency from or before January 1, 2015.

There is an outside possibility of out-of-staters with a 50%-plus stake becoming involved in the business. Those in other states considering investing in California cannabis now do so in muddy waters.

Question: I Have a Criminal Record. Can I Get Around It

AUMA gives California the right to deny a license to anyone who has been convicted of an offense that is substantially related to the qualifications, functions, or duties of the business or profession for which the application is made. Traditionally, these may include violence, fraud, deceit, or embezzlement. If you have a marijuana conviction, join the queue to have it uplifted.

Question: I Have Heard There Are Different Types of Licenses

There are nineteen different types of licenses. Don’t shoot blind. Ask your adviser which of these relate to you.

1. Type 1 = Cultivation; Specialty outdoor; Small
2. Type 1A = Cultivation; Specialty indoor; Small
3. Type 1B = Cultivation; Specialty mixed-light; Small
4. Type 2 = Cultivation; Outdoor; Small
5. Type 2A = Cultivation; Indoor; Small
6. Type 2B = Cultivation; Mixed-light; Small
7. Type 3 = Cultivation; Outdoor; Medium
8. Type 3A = Cultivation; Indoor; Medium
9. Type 3B = Cultivation; Mixed-light; Medium
10. Type 4 = Cultivation; Nursery
11. Type 5 = Cultivation; Outdoor; Large
12. Type 5A =Cultivation; Indoor; Large
13. Type 5B = Cultivation; Mixed-light; Large
14. Type 6 = Manufacturer 1
15. Type 7 = Manufacturer 2
16. Type 8 = Testing
17. Type 10 = Retailer
18. Type 11 = Distributor
19. Type 12 =Microbusiness

AUMA gives priority to those already in the business before January 1, 2016. It makes a deal of sense to align your application to a previous activity if you have one.

Question: Are There Any Local Differences

There most definitely are. Individual states and cities can set their own rules regarding where trading and consumption may take place. Find out what other people in your district are doing. Cannabis businesses must be at least 600 feet from schools and youth centers. There are also rules preventing too many licenses in the same area. Get to know your local limitations.

Question: Please Tell Me More about Local Limitations

Local government still holds the overriding key. AUMA has the following to say about this, which boils down to a local community having the right to say ‘no’.

Nothing in this division shall be interpreted to supersede or limit the authority of a local jurisdiction to adopt and enforce local ordinances to regulate businesses licensed under this division, including, but not limited to, local zoning and land use requirements, business license requirements, and requirements related to reducing exposure to second hand smoke, or to completely prohibit the establishment or operation of one or more types of businesses licensed under this division within the local jurisdiction.

There are a number of changes on the way for California marijuana businesses. We urge you to follow the business developments of AUMA. Take care out there

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