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California is gearing up for the launch of a state-regulated cannabis industry, with sales set to begin on Jan. 1, despite a slew of unanswered questions.
This Thursday, with only a month and half before the program is set to begin, state regulators revealed a long awaited list of emergency rules that will guide the industry through the impending transition.
“They just rolled out today,” California’s cannabis regulation chief Lori Ajax said on Thursday. “They are the state requirements for medicinal and adult use cannabis.”
Regulators have said they’ll begin issuing temporary licenses to qualifying businesses on Jan. 1. These licenses will allow operators to engage in commercial cannabis activity for 120 days, and they may be extended.
The key to obtaining a temporary license is demonstrating local authorization. That means holding a valid license, permit, or “other authorization” issued by the jurisdiction where the business operates. Lori Ajax, the state’s chief cannabis regulator, said that the state “is being very flexible” on what that authorization looks like.
“I feel a big sigh of relief. It’s a big milestone for us to release these regulations,” said Lori Ajax, “But there’s still a lot of work to be done. No rest for the weary.”
The Bureau said that if the applicant provides proof of that authorization, state officials will contact local jurisdiction to verify the information and will give at least 10 days for the jurisdiction to respond before issuing any licenses. If the applicant does not provide authorization, state officials will still contact the local jurisdiction to verify. If they don’t hear back in 60 days, “the Bureau shall presume the applicant is in compliance and may issue a license.”
Annual License Fees
Buying into California’s legal cannabis market definitely isn’t cheap. Annual fees for some licenses start as low as $800, meanwhile others can run as high as $120,000.
The “Operations” column is a bit tricky to determine. The rules tell the applicant to “estimate the maximum dollar value of its planned operation in terms of the value of the product expected to be tested, distributed, transported, retailed, and/or manufactured.”
The state will also charge fees to license events involving cannabis.
In addition to those license fees, there are also license application fees—small fees that allow you to apply to pay the larger fee:
- Annual license application fee: $1,000
- Cannabis event organizer license: $1,000
- Temporary cannabis event license: $1,000
Cannabis businesses in California can’t be within 600 feet of schools. Shops have to close by 10 p.m., and they need 24-hour video surveillance.
The three sets of rules released Thursday by each agency include expected rules for strict testing and tracking all products from seed to sale. They also added dozens of pages of rules regarding fees, enforcement and new license types. And they kept controversial limits from the proposed rules on how much THC, the compound that makes consumers high, can be in edibles. Here are some specific regulations laid out for businesses:
- Edible products must be produced in serving sizes that have no more than 10 milligrams of THC and no more than 100 milligrams of THC for the total package.
- Shops will only be allowed to give free cannabis products to medical patients or their caregivers.
- Scaled fees are spelled out, with costs for annual licenses ranging from $800 for businesses transporting cannabis up to $120,000 for a business doing multiple activities and making more than $4.5 million a year.
- Businesses will be able to apply for a special license to host cannabis events, such as festivals at fairgrounds.
- There’s a six-month grace period for some rules. Through July 1, licensed businesses will still be able to sell products in their inventory that haven’t been tested (with a label saying that) or put in child-resistant packaging. And they’ll be able to work with other licensed businesses without worrying about whether their permits are for medical and recreational activities.
- Rules for advertising are laid out, including only allowing cannabis ads in outlets where at least 71.6 percent of the audience “is reasonably expected to be 21 years of age or older.”
- A controversial cap on how many small farms people can own was removed, with some conditions.
Emergency Medicinal and Adult-Use Cannabis Regulations
The Bureau of Cannabis Control released the following package of documents on its website:
- Notice – Emergency Rulemaking Action Medicinal and Adult-Use Cannabis Regulation
- Finding of Emergency Medicinal and Adult-Use Cannabis Regulation
- Bureau Proposed Text of Regulations Medicinal and Adult-Use Cannabis Regulation
- Bureau of Cannabis Control Disciplinary Guidelines November 2017
- Bureau Emergency Medicinal and Adult-Use Regulation Fact Sheet
- Department of Food and Agriculture Text of Proposed Emergency Regulations
- Department of Food and Agriculture Medicinal and Adult-Use Regulation Fact Sheet
- Department of Public Health Proposed Text of Regulations
- Department of Public Health Medicinal and Adult-Use Regulation Fact Sheet