California Cannabis Regulators Release New Rules
The newly merged California Department of Cannabis Control (DCC) has released a 197-page draft of their regulations that are sure to spark conversations and controversy among those in the industry.
The first part allows for broader sales, while also making it easier for businesses by allowing them to share product samples with each other within supply chains as well as outside parties such as retailers or distributors when necessary at an event attended only by licensed professionals from different companies who will be able to sell branded merchandise on-site if present during one designated timeslot throughout these events.
The new draft regulations are set to be formally adopted around the end of September. But first, they’ll go through another round of feedback from both industry experts and consumers before being finalized!
The DCC is a brand-new agency in California that came about from the merging of three separate regulatory bodies, all with their own pieces on overseeing weed businesses. It’s tasked with unifying these regulations and better protecting our state’s consumers.
The rule changes will include the following:
- A new way to share product samples will allow manufacturers and growers to give out free samples for free. This could benefit those in the supply chain all along its length as they will be able to get their hands on some great goods!
- New, more precise definitions for cannabis company owners and the people who have a financial stake in a cannabusiness.
- Allowances for non-vertically integrated cannabis companies to sell branded merchandise obtained from other licensed businesses.
The release of the new proposed rules starts a clock on how and when stakeholders can give feedback about DCC’s marijuana industry regulations, agency spokeswoman Christina Dempsey said.
“Today is the first step of the emergency rulemaking process,” Dempsey explained. “Today (the emergency proposed rules are) out for public notice.”
“They’ll be out for public notice for five business days, then they will be filed with (the Office of Administrative Law) and then they’ll have five calendar days of public comment.”
Dempsey claimed that the new rules highlight several potential “big wins for regulated businesses.” These include the trade-sample allowance, which is progress that the industry has been waiting on for years now.
Under these proposed regulations, manufacturers, cultivators, and full distributors can designate some cannabis goods as trade samples in the California track-and-trace system. Then, they can share these samples with other businesses to market their products.
On the other hand, retailers, testing labs, transport-only distributors, and event organizers will not be allowed to give trade samples out for free. However, these operations can receive them.
“Hopefully this will make it easier for small businesses to show their products to other potential business partners and compete in the marketplace,” Dempsey said.
She also covered the changes regarding how businesses must identify their owners and “financial-interest holders.” This is because those disclosure requirements used to differentiate between the three agency regulators.
“If you’re a business owner and you were applying for multiple licenses, it was different information you’d be sharing … about your owners and financial-interest holders, and to some degree, even different interpretations of who was an owner or financial-interest holder,” Dempsey highlighted. “So we’ve created consistent definitions for those.”
Another change in the new rules that Dempsey outlined is how non-vertically-integrated companies operating in cannabis will be given permission to sell branded merchandise other than their own. This has the potential to offer more small companies a competitive advantage.
“The change here is that the restriction that a retailer can only sell their own branded merchandise was removed. So they can sell any licensee’s branded merchandise,” Dempsey explained. “The goal is to not penalize someone who’s not vertically integrated.”
Dempsey also discussed that this is only the start of what we can expect. The DCC will be enacting many other regulatory changes during the years and months to come.
“The intention of the DCC is to have more efforts at regulation, through the regular rulemaking process, to continue to streamline this,” Dempsey said. “This is not the end.”