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California Cannabis Rules Officially Finalized

Rules and Regulations

The California cannabis industry has had its share of ups and downs as regulating cannabis commerce in the world’s sixth-largest economy has proven to be rather difficult and complicated. However, some relief may be on the horizon as licensed businesses, and those about to be licensed, can at least have some certainty in the rules and regulations that will need to be followed.

The finalization of California’s rules makes for great timing for the upcoming International Cannabis Business Conference in San Francisco this February 7-8.  (Early-bird discounted tickets go up after January 18th when the clock strikes midnight, so get your tickets now, folks!). Attendees of the ICBC in San Francisco will have the opportunity to ask questions of Cannabis Czar Lori Ajax directly and get insight into what rules may change in the upcoming months and years.

California State Cannabis Licensing Authorities issued a press release announcing the finalization of the rules:

California’s three state cannabis licensing authorities today announced that the Office of Administrative Law (OAL) has officially approved state regulations for cannabis businesses across the supply chain from cultivation to retail. These new regulations take effect immediately.

The previous emergency regulations, adopted by the Bureau of Cannabis Control, California Department of Public Health and California Department of Food and Agriculture in December 2017 and readopted in June 2018, were originally issued through the emergency rulemaking process to meet the legislative mandate to open California’s regulated cannabis market on January 1, 2018. With today’s action, these emergency regulations are no longer in effect.

“These approved regulations are the culmination of more than two years of hard work by California’s cannabis licensing authorities,” Bureau Chief Lori Ajax said. “Public feedback was invaluable in helping us develop clear regulations for cannabis businesses and ensuring public safety.”

Each licensing authority’s final regulations and rulemaking documents have been posted to the California Cannabis Portal and can be viewed by clicking the following link:

The three licensing authorities submitted these regulations to OAL on December 3, 2018, which was the start of their 30-working day review process. This review process ended Wednesday.

One rule that regulators got right is the ability of cannabis retailers to deliver anywhere in the state, even in localities that have banned sales. Statewide deliveries are good for the industry, but also the state as they help bring in more tax dollars and curtail the unregulated market. The Press Democrat reported:

Cannabis companies and consumers had pushed for the change, since vast stretches of the state have banned commercial pot activity or not set up rules to allow legal sales. That means residents in those areas were effectively cut off from legal marijuana purchases, even though sales are permitted for adults in California.

“The public spoke loud and clear in favor of statewide delivery,” cannabis bureau spokesman Alex Traverso said in a statement.

The rule cleared by state lawyers sought to clarify what had been apparently conflicting law and regulations about where marijuana can be delivered in California, which kicked off broad legal sales last year.

Of course, if California follows in the footsteps of other states, we can expect there to be some more changes along the way. I look forward to hearing directly from Lori Ajax about the new rules as well as the many entrepreneurs and investors that will be in attendance at the ICBC in San Francisco. The Golden State has the potential to be the worldwide leader in cannabis, hopefully, these new regulations, with a few tweaks (maybe a lower tax rate) and changes at the federal level on banking, taxes, and exports will set the stage for the California cannabis industry to maximize its vast potential.

Alex Traverso, Bureau of Cannabis Control, California State Cannabis Licensing Authorities, Cannabis Czar, Lori Ajax