California Department of Public Health’s Re-Adopted Emergency Regulations

The California Department of Public Health (CDPH) is the state agency designated under the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) as responsible for regulating cannabis manufacturing.

The CDPH issued emergency regulations for manufacturers in November 2017, and has now proposed readopting those regulations for another 180 days. Based on feedback from the public and stakeholders in the industry, the CDPH has proposed some changes to these regulations.

This blog post will highlight the changes to the CDPH emergency regulations and identify key issues for manufacturers. In separate posts, we will be describing the changes made by the California Department of Food and Agriculture and the California Bureau of Cannabis Control.

Changes to Emergency Regulations:

  • The CDPH has removed the distinction of A and M Licenses and now only requires one application and applicants will only have to pay one licensing fee. Previously you had to submit two applications and pay two separate licensing fees if you wanted to operate in the medicinal and adult-use market.
  • The readopted regulations have now incorporated the previously released shared-use facility regulations, which allow a manufacturing premises to be used my multiple businesses that take turns utilizing the space and equipment. This allows for operations similar to a commercial kitchen or agreements in which larger manufacturers offer space and use of equipment to smaller manufacturers.
  • The CDPH has removed tinctures from the definition of a product containing more than 0.5% alcohol by volume. However, tinctures cannot be sold in a package larger than two fluid ounces and shall include a calibrated dropper or other measuring device

The change to only a single application for both medical and adult-use is a welcome change for manufacturing businesses. Overall, the CDPH did not make significant changes to its regulations.

If you have any questions about the regulations, please contact Justin Santarosa in our Los Angeles office.

 

Cannabis Banking Concerns a Focus of Proposed States’ Rights Bill

Seth Goldberg
Seth A. Goldberg

On Wednesday, an article I wrote describing the public safety concerns that result from the lack of banking in the cannabis industry due to the federal prohibition of marijuana was published in the National Law Journal.

Yesterday, Senators Elizabeth Warren (D-Mass) and Cory Gardner introduced bipartisan legislation that, if passed, would make the regulation of marijuana a state issue. Comments by Senator Gardner show public safety issues resulting from the dearth of banking providing services to the industry are a focus of the newly-proposed legislation. The Hill reports Gardner stating when introducing the legislation:

“This city of Denver, the state of Colorado, can collect taxes … they can take it to the bank,” Gardner said. “But if you’re in the business, if you work for the business, you can’t get a bank loan or set up a bank account because of the concern over the conflict between the state and federal law. We need to fix this public hypocrisy.”

It was widely reported on April 13, 2018, that President Trump promised to Senator Gardner that he would support a states’ rights approach to marijuana, which promise appears to have resulted in this proposed legislation.  A lot has to happen before this bill reaches Trump, but if it does, a veto may be unlikely.  Such states’ rights legislation could then pave the way for more banks to service the industry.

Bureau of Cannabis Control’s Re-Adopted Emergency Regulations

The Bureau of Cannabis Control is the state agency designated under the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) as responsible for issuing licenses to and regulating distributors, retailers, delivery-only retailers, microbusinesses, and testing labs.

The BCC issued emergency regulations in November 2017, and has now proposed readopting those regulations for another 180 days. Based on feedback from the public and stakeholders in the industry, the BCC has proposed some changes to these regulations.

This blog post will highlight the changes to the BCC emergency regulations and identify key issues for distributors, retailers, delivery-only retailers, microbusinesses, and testing labs. In separate posts, we will be describing the changes made by the California Department of Food and Agriculture and the California Department of Public Health. Those posts can be found here and here.

Changes to Emergency Regulations:

  • The BCC has removed the distinction of A and M Licenses and now only requires one application and applicants will only have to pay one licensing fee. Additionally, license fees have been reduced. Previously you had to submit two applications and pay two separate licensing fees if you wanted to operate in the medicinal and adult-use market.
  • A delivery employee may now complete multiple deliveries of cannabis goods if they are prepared by the retailer prior to the delivery employee leaving the licensed premises. The total amount of cannabis goods in the delivery vehicle may be up to $10,000, the previous limit was set at $3,000.
  • The definition of owner has been amended to specify that the chief executive officer and/or the members of the board of directors of any entity that own 20% or more of a commercial cannabis business will be considered “owners.”
  • The definition of financial interests has been amended to include “an agreement to receive a portion of the profits of a commercial cannabis business.” Commercial cannabis business and service providers will have to review their agreements and applications to determine if certain amendments will need to be made to include other people or businesses as having a “financial interest” in a commercial cannabis business. Interestingly, this change was not made in the definition of “financial interest” under the CDFA and CDPH regulations.
  • Retail stores may not sell or deliver cannabis goods through a drive-through or pass-out window and sales cannot be made to people within motor vehicles.
  • License applications must now include:
    • Cannabis waste procedures; and
    • Delivery procedures, if applicable.

These changes show that the BCC and the other regulatory agencies are being responsive to their stakeholders and while not all changes are positive, we believe this is a step in the right direction for cannabis businesses in California.If you have any questions about the regulations, please contact Justin Santarosa in our Los Angeles office.

California Attempts to Address Public Safety with Cannabis Banking Legislation

Seth Goldberg
Seth A. Goldberg

I have previously written about the public safety concerns resulting from the lack of banking in the cannabis industry.  As I noted in that article, the elimination of the Cole Priorities in January 2018 has left federally-regulated banks wondering how they can follow FinCen’s guidance for banking cannabis issued in February 2014, which was explicitly dependent on the Cole Priorities.

While the Cole Priorities were in place, that guidance provided a clear path for banking cannabis industry participants adhering to the Cole Priorities.  FinCen’s guidance is still in place, and banking cannabis is still possible, but confusion about how to do so without the Cole Priorities as guideposts has caused greater reluctance on the part of banks.

Enter proposed legislation in California, SB-930,  which passed in the California Senate yesterday.  Not a complete solution to the banking problem by a long shot, but progress nonetheless.  If it becomes law SB-930, would result in the establishment of a California-chartered bank that would permit California cannabis industry participants to deposit the proceeds of their state-lawful cannabis activities, and would provide to them limited banking services that would allow for payment of taxes and vendors by check.

As reported in the Sacramento Business Journal, the Bill’s sponsor, Sen. Bob Hertzberg (D-Van Nuys), characterized SB-930 as an attempt alleviate the public safety concerns resulting from the federal government’s current hands off approach to banking cannabis.  As Herzog stated, “It’s not only impractical from an accounting perspective, but it also presents a tremendous public safety problem. This bill takes a limited approach to provide all parties with a safe and reliable way to move forward on this urgent issue.”

California’s Re-Adopted Emergency Regulations – What Cannabis Cultivators Need to Know

The California Department of Food and Agriculture (CDFA), through its CalCannabis Cultivation Licensing division, is the state agency designated under the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) as responsible for issuing licenses to commercial cannabis cultivators in California.

The CDFA issued emergency regulations for cannabis cultivators in November 2017, and has now proposed readopting those regulations for another 180 days. Based on feedback from the public and stakeholders in the industry, the CDFA has proposed some changes to these regulations.

This blog post will highlight the changes to the CDFA emergency regulations and identify key issues for cannabis cultivators. In separate posts, we will be describing the changes made by the Bureau of Cannabis Control and the California Department of Public Health. Click here for those updates. Continue reading “California’s Re-Adopted Emergency Regulations – What Cannabis Cultivators Need to Know”

California Cannabis Licensing Authorities To Readopt Emergency Regulations with Proposed Changes

California’s three cannabis licensing authorities, the Bureau of Cannabis Control, California Department of Public Health and California Department of Food and Agriculture, have proposed readopting their emergency regulations currently in effect for another 180 days.  Since the original regulations were released in November 2017, representatives from the three agencies have been soliciting feedback from stakeholders and the public.  As a result of that process, some changes are being made to the emergency regulations.  Continue reading “California Cannabis Licensing Authorities To Readopt Emergency Regulations with Proposed Changes”

FDA to Consider Approval of Botanical (not synthetic) CBD Drug

Authored by Robert Prince, Ph.D, https://www.duanemorris.com/attorneys/robertwprince.html

On Thursday April 18, 2018, at 8:00AM-12:30PM EST, an FDA advisory panel will consider whether to recommend or not recommend approval of GW Pharmaceutical’s cannabis-based drug Epidiolex ® for use in treating two rare types of epilepsy in children- Dravet syndrome and Lennox-Gastaut syndrome. Epidiolex is an oral formulation of a purified form of cannabidiol (CBD) a component found in cannabis. CBD does not have any psychoactive effects as compared to another component of cannabis tetrahydocannabinol (THC). Epidiolex has less than 0.1 percent of THC.

If approved, Epidiolex would be the first botanical cannabis product approved in the U.S. for any indication. The FDA has approved Marinol® and Syndros® for uses in the U.S. for the treatment of anorexia associated with weight loss in AIDS patients. Both products contain dronabinol, a synthetic delta-9-tetrahydrocannabinol. Another FDA approved drug Cesamet® contains nabilone, which is a synthetic drug with a structure similar to THC that is used to treat nausea and vomiting.

The FDA released briefing documents on April 17, 2018, which did not seem to raise any major issues with Epidiolex, resulting in the share price of GW Pharmaceuticals to rise sharply- up 2.27%. The Center for Drug for Drug Evaluation and Research (CDER) indicates that it plans to provide a free of charge, live webcast of the April 19, 2018 meeting of the Peripheral and Central Nervous System Drugs Advisory Committee. Information regarding the webcast, including the web address for the webcast, will be made available at the following website: http://www.fda.gov/AdvisoryCommittees/Calendar/default.htm. At the time of writing this note, the FDA has not provided any login information for the webcast.

© 2009- Duane Morris LLP. Duane Morris is a registered service mark of Duane Morris LLP.

The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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