Cannabis Manufacturing Regulations in California: How do they affect you?
Back in October California Governor Jerry Brown signed into law the three bills that comprise the California Medical Marijuana Regulation and Safety Act (MMRSA). This was big news California and its medical cannabis operators. These bills mean California will be moving away from an unregulated gray cannabis marketplace to a state-law-regulated medical cannabis regime.
These bills also mean that California will be getting the all the robust regulations the federal government requires from the states for the Department of Justice to be even slightly disengaged from what goes on with cannabis within the state. We also hope that bills might also mean that California will be moving toward a new era where the Department of Justice finally eases up on the Golden State when it comes to the Cannabis industry.
How Will The Regulations Work?
Every person and every company that is involved in the commercial medical marijuana trade will be required to obtain both a local operating permit and an annual state license beginning Jan. 1, 2018. That will include marijuana growers, all retail operations (think storefront dispensaries) and delivery services, and makers of processed pot products like edibles.
The system is modeled after the one the state uses for regulating the sale of alcohol. It also creates smee new industry players that will have to carry licenses as well such as wholesale distribution centers that do pre-sale tracking and inspections, transporters that will be taking pot from the distributors to the point of sale, and product safety testing labs.
What Will Be The Overseeing Department?
The State of California will be creating a new Bureau of Marijuana Regulation within the Department of Consumer Affairs. This new entity will oversee the work of several existing state agencies. The new bureau will be led by a director that will appointed by the governor and then confirmed by the state Legislature. In the beginning the department will be financed by a $10 million advance from a dedicated fund where licensing fees will go.
Who Will Issue The Licence?
The authority to license indoor and outdoor marijuana growers will reside with the Department of Food and Agriculture. It will also be the Department of Food and Agriculture that will be responsible for enforcing strict acreage and square footage limits for commercial cultivation sites. However the Department of Pesticide Regulation has been given responsibility for developing standards on the use of pesticides in growing pot. So it’s clear that if you want to get something done, you’ll not be able to go to just one department.
In addition, Consumer affairs will issue licenses to dispensaries, distributors and transporters to do business. The Department of Public Health will be in charge of product testing labs and manufacturers, a task that will include creating packaging and labeling rules. It will be vital that you know which department will handle which part of the process or you’ll find yourself quickly frustrated.
What about Taxes?
If you have a Pot dispensary, you are supposed to pay state sales taxes, but the state has not had a way of tracking the businesses so right now many officials suspect that many vendors either underreport their sales or skip the step altogether.
The bills that the governor signed did not include any other specific information on taxing for the state. The bill does however, authorize counties to tax cannabis cultivation and sales with voter approval.
What About Marijuana Gardens?
The true impact on cannabis also remains unclear for growers. The bills generally seek to protect small farms by restricting most license holders to 10,000 square feet or less of “total canopy” at one site and experts note that California likely produces way more cannabis than is needed to meet in-state demand.
As of now, since no one really knows how many growers, retail outlets or even medical cannabis users California now has and with many thinking voters will consider legalizing recreational cannabis use next, the full impact of the regulations may always remain unclear. So stay tuned.