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Cannabis Industry Pummeled

The road after legalization for recreational use of cannabis in California has not been paved with gold. Strangling excise taxes, license uncertainty, vape crisis…

Already uncertain industry manages through uncertain times

When California decided that dispensaries could remain open as an essential business there was, no doubt, a collective sigh of relief in the already fragile industry. With the stay at home order in mid-March there was an initial spike of sales, and there have been bumps since but overall sales are down. Reduced hours undoubtedly have had an impact. But the industry is surviving.

Even though Gov. Gavin Newsom declared marijuana an essential business, the State has been deferring to local governments to determine the restrictions needed to enforce social distancing. Meaning, some localities have made sales permissible curbside only or via delivery, which, if a dispensary does not have a relationship with an entity that has a license to deliver, or possess their own, it could take months to be approved.

In counties where the “delivery only” order has come down, like Santa Clara, the industry has been able to rally and get reversal. The Bureau of Cannabis Control is currently backing the new rules local governments are putting out but that brings uncertainty, in a time of great uncertainty, to a industry that was already filled with uncertainty.

California Cannabis Track and Trace Reporting Requirement

Legal Weed

All California License Holders,

All license holders are required to conduct the commercial cannabis activity pursuant to their license within the California Cannabis Track-and-Trace (CCTT-Metrc) System. Failure to conduct your commercial cannabis activity within the CCTT system by January 6, 2020 will result in the suspension of your license.

If you have not yet completed the required Account Manager training, please register for training by visiting: California Cannabis Track and Trace Account Manager Training. Please reference your annual application number. 

If you have completed the required Account Manager training, please contact Metrc support at support@metrc.com to complete the credentialing process.  

If you are credentialed, but not yet tag enabled, please forward your existing inventory to bcctrackandtrace@dca.ca.gov. Your inventory should contain the following information:

  • Item Name
  • Product Type (i.e. vape cartridge, tincture, edible)
  • Weight Per Unit (i.e. 3.5 grams, 300ml, 10mg)
  • Quantity
  • Batch ID

Upon receipt and review of your inventory, the Bureau will increase your tag allotment, at which time you can log into your portal to initiate your tag order. 

If you are currently credentialed and tag enabled, you are required to immediately begin working within the California Cannabis Track and Trace (CCTT) system, as well as with those annual/provisional license holders who are also working within the CCTT system.

Failure to conduct your commercial cannabis activity within the CCTT system may be grounds for disciplinary action and the suspension of your license.

BCC Advisory Committee meeting: report on Vaping Illness

Vaping

The CA State Dept of Health delivered a report to the BCC Advisory Committee at 10am today, so we’re sharing notes from this report:

Charity Dean, the Assistant Director of the CA Dept of Public Health, provided an update on “Vaping Related Illnesses”. The report provided some new detail but re-iterated much that is already known. Ms. Dean shared the fact that 133 confirmed cases have been identified in CA, with 3 deaths, and the vast majority of cases vape-related illness have coming from vaping illicit products — products which include THC (81%), CBD (36%), and others with nicotine added. The State Health department, along with Federal (CDC) and other state Health departments, have not located any common variable, but they’re looking at the ongoing outbreak as something “new”, given people have been vaping THC for years — “Why now? What’s new? And what changed in devices or additives?” are all questions being looked into. The CDPH is investigating different additives, but have also not ruled out toxicity by chemicals caused by heating or device-specific causes. They’ve identified not only lipid-driven cases (caused by vitamin E and other additives), but also chemical pneumonitis, caused by toxicity of chemicals inhaled.

The most important takeaway for the industry is the fact that the BCC subcommittees did not bundle the nicotine vaping epidemic among youth, or dangers of illicit THC products, together with legal THC vape products. Ms. Dean noted only a single case may have been caused by products bought from regulated sources. Ms. Dean also noted this outbreak was largely a US-issue, with few known cases in Canada and none reported internationally.

The CDPH is continuing to investigate, and until more is known, it will maintain its public advisory that all vaping is unsafe. The BCC website posts this warning: “Although CDPH regulates manufacturers of cannabis vaping products to ensure they are as safe as possible for those who choose to vape, CDPH warns that individuals put themselves at risk any time they inhale a foreign substance into their lungs. The risk of vaping now includes death. CDPH urges everyone to quit vaping altogether, no matter the substance or source.”

Marijuana Media is inviting industry to join our Lunch & Learn event on 11/6, in downtown LA, to discuss product safety, additives, heating temperatures and devices in vape products. Tickets to this event are FREE to Licensed Industry, but must be reserved in advance. Lunch will be provided. For details, and to register, please use this link: https://marijuanamedia.safechkout.net/Product-safety-register

BUREAU OF CANNABIS CONTROL;§ 5813. Enforcement Costs

Enforcement Penalties

(a) In any order in resolution of a disciplinary proceeding for suspension or revocation of a license, the Bureau may request the administrative law judge to direct a licensee found to have committed a violation or violations of the Act, or any regulation adopted pursuant to the Act, to pay a sum not to exceed the reasonable costs of the investigation and enforcement of the case. (b) A certified copy of the actual costs, or a good faith estimate of costs where actual costs are not available, signed by the Bureau’s designated representative shall be prima facie evidence of reasonable costs of investigation and prosecution of the case. The costs shall include the amount of investigative and enforcement costs up to the date of the hearing, including, but not limited to, charges imposed by the Attorney General. (c) The administrative law judge shall make a proposed finding of the amount of reasonable costs of investigation and prosecution of the case when requested pursuant to subsection (a). The Bureau may reduce or eliminate the cost award, or remand to the administrative law judge where the proposed decision fails to make a finding on costs requested pursuant to subsection (a). (d) Where an order for recovery of costs is made and timely payment is not made as directed in the decision, the Bureau may enforce the order for repayment in any appropriate court. This right of enforcement shall be in addition to any other rights the Bureau may have as to any licensee to pay costs. (e) In any action for recovery of costs, proof of the decision shall be conclusive proof of the validity of the order of payment and the terms for payment. (f) Except as provided in subsection (g) of this section, the Bureau shall not renew or reinstate any license of any licensee who has failed to pay all of the costs ordered under this division. (g) Notwithstanding subsection (f) of this section, the Bureau may, in its discretion, conditionally renew or reinstate for a maximum of one year the license of any licensee who demonstrates financial hardship and who enters into a formal agreement with the Bureau for reimbursement within that one-year period for the unpaid costs. (h) Nothing in this section shall preclude the Bureau from including the recovery of the costs of investigation and enforcement of a case in any stipulated settlement. Authority: Section 26013, Business and Professions Code; Reference: Sections 125.3 and 26031, Business and Professions Code

BUREAU OF CANNABIS CONTROL;§ 5813. Enforcement Costs

Cannabis Enforcement

(a) In any order in resolution of a disciplinary proceeding for suspension or revocation of a license, the Bureau may request the administrative law judge to direct a licensee found to have committed a violation or violations of the Act, or any regulation adopted pursuant to the Act, to pay a sum not to exceed the reasonable costs of the investigation and enforcement of the case. (b) A certified copy of the actual costs, or a good faith estimate of costs where actual costs are not available, signed by the Bureau’s designated representative shall be prima facie evidence of reasonable costs of investigation and prosecution of the case. The costs shall include the amount of investigative and enforcement costs up to the date of the hearing, including, but not limited to, charges imposed by the Attorney General. (c) The administrative law judge shall make a proposed finding of the amount of reasonable costs of investigation and prosecution of the case when requested pursuant to subsection (a). The Bureau may reduce or eliminate the cost award, or remand to the administrative law judge where the proposed decision fails to make a finding on costs requested pursuant to subsection (a). (d) Where an order for recovery of costs is made and timely payment is not made as directed in the decision, the Bureau may enforce the order for repayment in any appropriate court. This right of enforcement shall be in addition to any other rights the Bureau may have as to any licensee to pay costs. (e) In any action for recovery of costs, proof of the decision shall be conclusive proof of the validity of the order of payment and the terms for payment. (f) Except as provided in subsection (g) of this section, the Bureau shall not renew or reinstate any license of any licensee who has failed to pay all of the costs ordered under this division. (g) Notwithstanding subsection (f) of this section, the Bureau may, in its discretion, conditionally renew or reinstate for a maximum of one year the license of any licensee who demonstrates financial hardship and who enters into a formal agreement with the Bureau for reimbursement within that one-year period for the unpaid costs. (h) Nothing in this section shall preclude the Bureau from including the recovery of the costs of investigation and enforcement of a case in any stipulated settlement. Authority: Section 26013, Business and Professions Code; Reference: Sections 125.3 and 26031, Business and Professions Code

BUREAU OF CANNABIS CONTROL;§ 5811. Posting of Notice of Suspension

Business Suspended

(a) A licensee whose license has been suspended shall conspicuously and continuously display a notice on the exterior of the licensee’s premises for the duration of the suspension. (b) The notice shall be two feet in length and 14 inches in width. The notice shall read: NOTICE OF SUSPENSION The Bureau of Cannabis Control License(s) Issued For This Premises Has Been Suspended For Violation of State Law (c) Advertising or posting signs to the effect that the premises have been closed or that business has been suspended for any reason other than the reason provided in the decision suspending the license, shall be deemed a violation of this section. (d) Failure to display the notice as required in this section or removal of the notice prior to the expiration of the suspension shall be a violation of this section and may result in additional disciplinary action. (e) A licensee shall notify the Bureau within 24 hours of discovering that the notice under subsection (b) of this section has been removed or damaged to an extent that makes the notice illegible. Authority: Section 26013, Business and Professions Code. Reference: Sections 26011.5 and 26012, Business and Professions Code.

BUREAU OF CANNABIS CONTROL;§ 5805. Minor Decoys

Under Cover Cannabis

(a) Peace officers may use a person under 21 years of age to attempt to purchase cannabis goods, for the purposes of enforcing the Act, and to apprehend licensees, employees, or agents of licensees who sell cannabis goods to minors. For purposes of this section, a “minor” is a person under 21 years of age. (b) The following minimum standards shall apply to the use of a minor decoy: (1) At the time of the operation, the decoy shall be less than 20 years of age. (2) A decoy shall either carry his or her own identification showing the decoy’s correct date of birth, or carry no identification. A decoy who carries identification shall present it upon request to any seller of cannabis goods. (3) A decoy shall answer truthfully any questions about his or her age. (4) Following any completed sale, but not later than the time a citation, if any, is issued, the peace officer directing the decoy shall make a reasonable attempt to enter the licensed premises or respond to the location where the licensee is located and have the minor decoy who purchased cannabis goods identify the alleged seller of the cannabis goods. Authority: Sections 26013 and 26140, Business and Professions Code. Reference: Section 26140, Business and Professions Code.

BUREAU OF CANNABIS CONTROL;§ 5730. Laboratory Quality Control (LQC) Sample

CDFA

(a) The laboratory shall use LQC samples in the performance of each analysis according to the following specifications. (b) The laboratory shall analyze LQC samples in the same manner as the laboratory analyzes cannabis and cannabis product samples. (c) The laboratory shall use negative and positive controls for microbial testing. (d) The laboratory shall prepare and analyze at least one of each of the following LQC samples for each analytical batch within each set of 20 samples for the following LQC samples: (1) Method blank; (2) Continuing calibration verification (CCV); (3) Laboratory replicate sample; and (4) Matrix spike sample or matrix spike duplicate sample. (e) If the result of the analyses is outside the specified acceptance criteria in the following table, the laboratory shall determine the cause and take steps to remedy the problem until the result is within the specified acceptance criteria.

Quality Control Sample

(f) The laboratory shall generate a LQC sample report for each analytical batch that includes LQC parameters, measurements, analysis date, and matrix. Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104 and 26110, Business and Professions Code.

BUREAU OF CANNABIS CONTROL; Laboratory Testing and Reporting § 5715. Phase-In of Required Laboratory Testing

§ 5715. Phase-In of Required Laboratory Testing

(a) Cannabis and cannabis products shall not be sold or transferred to a retailer, or released for retail sale, unless a representative sample of the cannabis or cannabis product has undergone and passed all testing as required by this section. (b) All cannabis harvested on or after January 1, 2018, and all cannabis products manufactured on or after January 1, 2018, shall be tested for the following analytes, if applicable: (1) Cannabinoids as required in section 5724 of this division; (2) Moisture content as required in section 5717 of this division; (3) Category II Residual Solvents and Processing Chemicals as required in section 5718 of this division; (4) Category I Residual Pesticides as required in section 5719 of this division; (5) Microbial Impurities as required in section 5720 of this division; and (6) Homogeneity as required in section 5716 of this division. (c) In addition to the requirements of subsection (b) of this section, all cannabis harvested on or after July 1, 2018, and all cannabis products manufactured on or after July 1, 2018, shall be tested for the following analytes, if applicable: (1) Category I Residual Solvents and Processing Chemicals as required in section 5718 of this division; (2) Category II Residual Pesticides as required in section 5719 of this division; and (3) Foreign Material as required in section 5722 of this division. (d) In addition to the requirements in subsections (b) and (c) of this section, all cannabis harvested on or after December 31, 2018, and all cannabis products manufactured on or after December 31, 2018, shall be tested for the following analytes, if applicable: (1) Terpenoids as required in section 5725 of this division; (2) Mycotoxins as required in section 5721 of this division; (3) Heavy Metals as required in section 5723 of this division; and (4) Water Activity as required in section 5717 of this division. (e) Licensees may have a sample of cannabis or cannabis products tested for analytes that are not yet required to be tested. However, if the sample fails any additional test(s) not required pursuant to this section on the date of testing, the batch from which the sample was collected fails testing and shall not be released for retail sale. Authority: Section 26013, Business and Professions Code. Reference: Sections 26100 and 26104, Business and Professions Code.

How to check on a California Cannabis License

How to check on a California Cannabis License; You can check the expiration dates of licenses using the link below:

 

The Bureau is the state licensing authority for commercial cannabis retailers, distributors, testing laboratories, microbusinesses, and temporary cannabis events. You may search for Bureau licensees here: https://aca5.accela.com/bcc/customization/bcc/cap/licenseSearch.aspx.

 

The Manufactured Cannabis Safety Branch (MCSB) of the California Department of Public Health is the state licensing authority for commercial cannabis manufacturing  You may search for manufacturing licenses issued by the MCSB here: https://www.cdph.ca.gov/Programs/CEH/DFDCS/MCSB/Pages/LicenseeLookup.aspx.

 

CalCannabis Cultivation Licensing within the California Department of Food and Agriculture is the state licensing authority for commercial cannabis cultivation. You may search for cultivation licenses issued by the CalCannabis here: https://aca6.accela.com/CALCANNABIS/Cap/CapHome.aspx?module=Licenses.

 

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