California: Advisory Committee Approves Cannabis Industry Changes

On December 9, the California Cannabis Advisory Committee held its final meeting of 2020, a year that brought unprecedented threats to the state’s cannabis industry, from wildfires to COVID-19. The committee, which advises the state’s Bureau of Cannabis Control, approved its annual report, which contains an overview of its deliberations of key issues throughout the year, including tallies of its final votes on each action item. 

Cannabis Wire has covered the committee’s conversations this year, which commenced virtually in August. Some of the votes that drew the most robust debate were those in favor of expanding the amount of cannabis that delivery drivers could carry as well as allowing cannabis lounges to sell non-cannabis food and beverages, and against banning flavored vapes. 

The final report has not yet been published, but it will be mostly unchanged from the available draft. The draft report opens with a letter from the committee acknowledging that “the state has faced unprecedented circumstances in 2020: the global COVID-19 pandemic and resulting recession, a record-breaking wildfire season, and the nationwide fight for racial justice and equality.”

While cannabis businesses were deemed essential, the letter notes that the coronavirus pandemic delayed proposals in Governor Gavin Newsom’s pre-pandemic budget that would have bolstered the regulated cannabis market. Those policies included tax reform and the merging of three regulatory entities into one single licensing agency: The Department of Cannabis Control. (The tax reform ultimately made it through the state legislature, as Cannabis Wire reported.)

Additionally, the letter referenced the record-breaking wildfire season in California. The largest fire in the state’s history, the August Complex fire, blazed “through the middle of Northern California’s Emerald Triangle,” a region composed of three counties which together produce more cannabis than anywhere else in the U.S. This led to “some licensees reporting the complete loss of structures and crops.”

The letter detailed how the state adapted to challenges throughout 2020. For example, expiration dates of medicinal cannabis cards were pushed into 2021 and about one-fourth of license holders had their renewal fees postponed.

And, referencing both the protests and the disproportionate harm the war on drugs has inflicted upon communities of color, the letter shared how the state granted millions of dollars toward social equity programs.

The report then dives into the recommendations the committee made (or turned down) throughout the year, which include, in chronological order:

 Recommendation Related to State Licensing Requirements

 • The state’s three licensing agencies each had varying definitions of a cannabis owner and “financial interest holder.” Plus, each one had its own requirements for documents required for matters including business formation. In a strong majority vote, the committee recommended for the three agencies to collaborate to make the requirements “consistent across license types and streamlined.”

Recommendations Related to Cultivation

 • The committee unanimously agreed to allow individuals with multiple cultivator licenses to merge the properties where they grow and process their products. It also suggested adjusting the pricing of such licenses “in relationship to the square footage they cultivate and the number of harvests they actually achieve,” and that license holders of Mixed Light Tier 1 cultivation “be allowed to conduct open air cultivation.”

 • The committee once again voted unanimously, to suggest allowing outdoor cultivation licensees to utilize light deprivation, a procedure that reduces the crops’ exposure to light, to mimic a seasonal change.

 • It was also recommended that cultivators and nurseries should be able to share and sell products with and to each other. The committee also said that cultivators should be allowed to sell their products if they “relocate or for some reason become insolvent.”

Recommendation Related to Manufacturers

 • On a more contested topic, the committee turned down, in a narrow 6 to 7 vote (with one abstention), a recommendation to only allow cannabis derived ingredients in inhalable products such as vape cartridges.

Recommendations Related to Distributors

 • The committee recommended “allowing a licensed distributor to pick up product from a storage-only facility and continue it up the supply chain.”

 • The committee voiced support for regulations that would allow retailers to obtain product samples.

 • The committee suggested loosening restrictions on how cannabis is stored while being transported.

Recommendations Related to Track-and-Trace System

 • Cannabis products in the regulated market are monitored from seed to sale under the state’s tracking system. Originally, no transfers could occur when connectivity to the system was lost, but the committee recommended looser restrictions, so business owners could continue transfers in the event of power outages or other factors interrupting connectivity.

Recommendations Related to Retailers

 • The committee did not recommend forming a new “licensed category for commercial cannabis consumption lounges.”

 • The committee recommended that customers could be provided food and non-alcoholic drinks at venues that can serve cannabis on-site. Such businesses would also require approval from local authorities.

 • The committee suggested raising the $5,000 cap imposed on cannabis transported by retail delivery operators.

o   In response to COVID-19, curbside delivery of cannabis was temporarily approved. When asked if the service should be made permanent, the committee advised against it.

Recommendations Related to Microbusinesses

 • Microbusinesses are entities that carry out multiple operations simultaneously such as cultivation, retail and distribution. The committee recommended allowing “processing as one of the three permissible activities under a microbusiness license.”

 • It was also recommended that microbusinesses to be exempted from having to separate each of their procedures with walls.

Recommendations Related to Testing Laboratories

 • The committee agreed that cannabis should be tested for chemicals such as Vitamin E acetate, the culprit behind the 2019 lung illness health crisis linked to vaping.

 • Laboratories ought to be permitted to test non-cannabis goods, such as chocolate ingredients in edibles, the committee said.

Recommendation Related to the Impacts of High-THC Consumption Research

 • The committee asked the state’s Department of Public Health to solicit the University of California to assemble a team of experts to review scientific literature about high-THC cannabis and present policy recommendations based on their findings.

Recommendation Related to Permissible Ingredients for Inhaled Cannabis Products

 • The committee debated whether flavored inhalable cannabis products should be banned in an effort to mitigate youth consumption. The committee chose not to recommend it.

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