New California Cannabis Rules Ensure a Safe, Budding Industry for the Long Haul

John Taylor
Founder & President, SMART Cannabis/Next Generation Farming, Inc.

What a difference a half-year makes – especially for the budding California pot industry! This past June, our elected leaders passed Senate Bill 94, laying the foundation of new rules and regulations for cannabis growing, distribution, and sales across the Golden State.

The legislation created the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) which created the California Bureau of Cannabis Control, the entity charged with implementing these rules across the state. Then, about two weeks ago, new and much-anticipated emergency rules were released, just in time for sales of retail cannabis to kick in starting New Year’s Day 2018.

The full and comprehensive emergency rules can be found here, but this is a quick snapshot of the new Green Rules that have come down the pike:

  • Temporary Licensing – existing cannabis business owners, who once feared their licenses would expire before they were able to apply for new ones under the new regulations, can now apply online for a temporary license (good for 120 days) as part of the transition and can renew them for up to 90 days at a time if need be. These will go into effect January 1, 2018.
  • All Politics (and Cannabis Licensure) is Local – getting a cannabis operators license seems to be contingent upon first getting local approval to operate. Operators must receive a local permit/license/authorization before being able to apply for a state license. A majority of California cities and counties have yet to finalize their regulations, which will delay state licensing in some areas.
  • License Distinctions – A-type licenses are for businesses in the adult-use market, while M-type licenses are for the medical market. Laboratory licenses don’t have this particular distinction, as they can test both medical and adult-use products.
  • Distributors – licenses for distributors have various levels of compliance, including product testing, quality assurance packaging and label accuracy, and there is a transport-only distributor license option. Everything must be packaged before it gets to retail, and retailers may not package or label cannabis products on premises.
  • Testing Labs – the State of California will require special accreditation for testing labs, and a provisional license is required for a lab to operate temporarily, expiring after 12 months. There are also specialized requirements for lab personnel (who must go into field and do sampling) as well as rules for documentation, sampling and storage and transportation. There are extremely stringent rules for testing labs to test for various elements, including cannabinoids, heavy metals, toxins, impurities and terpenes, to protect public health and safety. Key certificates of analysis will also be required to be sure batches pass or fail these requirements.

As a longtime small business owner and entrepreneur, I’m not usually prone to cozy up to new rules and regulations – especially when the average “mom and pop” pays 37 percent more to comply with regulations than larger businesses and corporations (according to the National Federation of Independent Business). However, as this new industry starts to take flight, we can’t afford to not have the most comprehensive and strident rules in place to ensure public health and safety. And, I must say, our elected leaders in the State Capitol have done a pretty respectable job of laying the right foundation for keeping this industry on track and within the lanes – appearing to exceed the “Oregon Standard”, which has thus far been hailed as the most aggressive in the nation.

This is an encouraging start – and one that should give industry professionals, community leaders, and taxpayers solace in knowing that the New Year will start off with a cannabis process and system that bears all stakeholders’ interests in mind – and puts our well-being above all else. As the process ensues, we should not “take our foot off the pedal.” By working collectively with the Bureau of Cannabis Control, industry leaders like the California Cannabis Industry Association, and our local business, community, and public service organizations, we will continue to stay ahead of the curve in bringing maximum health, safety and economic success to Main Streets and neighborhoods across our great state.

John Taylor is the President of SMART Cannabis and the founder and President of Next Generation Farming, Inc., a global leader in state-of-the-art agritech, cannabis and advanced organic greenhouse development and farming solutions.

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