Nesteggg Accounting

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;§ 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;§ 5804. Citation Compliance

Cannabis Compliance

(a) The time to abate or correct a violation as provided for in an order of abatement may be extended for good cause. If a cited licensee or person who has been issued an order of abatement is unable to complete the correction within the time set forth in the citation because of conditions beyond his or her control after the exercise of reasonable diligence, the licensee or person cited may request an extension of time from the Bureau in which to complete the correction. Such a request shall be in writing and shall be made within the time set forth for abatement. (b) When a citation is not contested, or if it is appealed and the person cited does not prevail, failure to abate the violation within the time allowed or pay a fine that was imposed shall constitute a violation and a failure to comply with the citation or order of abatement. (c) Failure to timely comply with an order of abatement or pay a fine that was imposed may result in further action being taken by the Bureau, including, but not limited to, suspension or revocation of a license, or further administrative or civil proceedings. Authority: Section 26013, Business and Professions Code. Reference: Sections 125.9 and 26012, Business and Professions Code

BUREAU OF CANNABIS CONTROL;§ 5728. Post Testing Sample Retention

(a) The laboratory shall retain the reserve sample, consisting of any portion of a sample that was not used in the testing process. The reserve sample shall be kept, at minimum, for 45 business days after the analyses, after which time it may be destroyed and denatured to the point the material is rendered unrecognizable. (b) The laboratory shall securely store the reserve sample in a manner that prohibits sample degradation, contamination, and tampering. (c) The laboratory shall provide the reserve sample to the Bureau upon request. Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104 and 26110, Business and Professions Code .

BUREAU OF CANNABIS CONTROL;§ 5725. Terpenoid Testing

(a) The laboratory shall analyze a sample of cannabis or cannabis product to determine whether the terpenoid profile of the sample conforms to the labeled content of terpenoids. (b) The laboratory shall report the result of the terpenoid testing on the COA both as a percentage and in milligrams per gram (mg/g) and indicate “pass” or “fail” on the COA. (c) A sample shall be deemed to have passed the terpenoid testing if the concentration of terpenoids does not exceed the labeled content of total terpenoids, plus or minus 10 percent. (d) If a sample fails terpenoid testing, the batch from which the sample was collected fails terpenoid testing and shall not be released for retail sale. Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104 and 26110, Business and Professions Code.

New cannabis regulations task force takes aim at unregulated pot shops

New cannabis regulations task force takes aim at unregulated pot shops

The task force served their first search warrant

See Video

Cannabis Regulations Task Force

RIVERSIDE, Calif.- – Riverside County’s new cannabis regulations task force is now in action, shutting down unlicensed marijuana shops and grow operations, and enforcing industry regulations throughout the county.

The task force served a search warrant Thursday at an unregulated dispensary in the City of Jurupa Valley, filing into a trailer and seizing several pounds of pot products and hundreds of dollars in cash.

District Attorney Mike Hestrin said it’s the first of several operations throughout the county.

“Someone’s got to enforce those laws otherwise we’re not going to have a legal cannabis industry,” Hestrin said. “We’re just going to continue to have different levels of illegality.”

Here in the valley, there are shops that don’t have their city or state license, an employee of a legal pot shop said. Employees at compliant cannabis businesses said they’re excited to see these unregulated shops weeded out.

“When you’re dealing with an illegal or not licensed dispensary, they’re not paying sales tax, they’re not paying a city tax, they’re certainly not paying a state tax,” said Josh Starer at Atomic Budz in Cathedral City. “When we have to mark our prices accordingly, they’re free to charge whatever they want.”

He said it “absolutely” hurts not only his business, but every licensed and legal dispensary in the Coachella Valley.

“So if they go into an unlicensed, unregulated dispensary and buy something, how do they know what they’re getting? What recourse do they have?” Starer said.

The task force is aimed at ensuring fair business and protecting cannabis consumers.

“What I would say to the unregulated businesses is … you should be getting legal in a very short period of time,” Hestrin said. “Comply with the law, get licensed, do all the things that you’re required to do and you won’t have a problem with the DA’s office.”

Cannabis Retailers: Cannabis Excise Tax Paid to Your Distributor Must be Collected on Your Discounted Retail Sales

Cannabis Retailers: Cannabis Excise Tax Paid to Your Distributor Must be Collected on Your Discounted Retail Sales

As a retailer, when you sell cannabis or cannabis products, the law requires the purchaser to pay the excise tax at the time of the sale. Therefore, you must collect from your customer the same amount of cannabis excise tax that you paid to your distributor.

Discounted cannabis – arm’s length transaction
For example, you purchase two items of cannabis products for $100 ($50 each) and your distributor calculates the average market price of these two items as $160 (your wholesale cost of $100 plus the current predetermined CDTFA markup of 60 percent*). The distributor collects $24 in cannabis excise tax from you on this purchase ($160 x 15 percent).

If your regular selling price of these items is $100 each, when you offer your customers a “two for one promotion” on these items, that is, get two for the price of one, you are required to collect from your customer the $24 in cannabis excise tax paid to your distributor on these two items. Therefore, you should factor the excise tax you paid to your distributor into your discounted or promotional price.

You are not required to separately state the amount of cannabis excise tax collected from your customer on the receipt, but the receipt must state, “The cannabis excise taxes are included in the total amount of this invoice.”

* This example assumes a mark-up rate of 60 percent (0.60). Your distributor will use the rate in effect at the time of sale. The current rate can be found on our website.

Discounted cannabis – nonarm’s length transaction
The cannabis excise tax due in a nonarm’s length transaction is based on the retail selling price of the cannabis or cannabis products. For example, if you sell cannabis for a discounted price of $100 to your retail customer, the cannabis excise tax due is $15 ($100 x 15%), regardless of your wholesale cost.

You are not required to separately state the amount of cannabis excise tax collected from your customer on the receipt, but the receipt must state, “The cannabis excise taxes are included in the total amount of this invoice.”

This email is intended to give you an overview of some of the requirements for cannabis retailers and does not address all requirements for the cannabis industry. For more information, we encourage you to read our online Tax Guide for Cannabis Businesses, or contact us.

Cannabis goods that do not meet all statutory and regulatory requirements must be destroyed

The transition period in the licensing authorities’ regulations allowing exceptions from specific regulatory provisions ends on June 30, 2018. Beginning July 1, 2018, cannabis goods must meet all statutory and regulatory requirements. Cannabis goods that do not meet all statutory and regulatory
requirements must be destroyed in accordance with the rules pertaining to destruction.

LABORATORY TESTING REQUIREMENTS

Beginning July 1, 2018, a licensee may only sell cannabis goods that have been tested and passed all testing requirements in effect at the time of testing.

Untested cannabis goods cannot be sold by a  retailer and must be destroyed. A retailer may not send cannabis goods to a distributor for testing.

Untested cannabis goods manufactured or harvested before January 1, 2018, in possession of  a distributor that are owned by the distributor must be destroyed.

Untested cannabis goods manufactured or harvested before January 1, 2018, in the possession of a distributor owned by a manufacturer or cultivator may be returned to the licensee who owns the cannabis goods. If a cultivator or manufacturer chooses to sell the returned cannabis goods, the cannabis goods must be sent to a distributor for testing and must meet all of the testing requirements in effect at the time of testing
before transported to a retailer for sale.

PACKAGING AND LABELING REQUIREMENTS

Beginning July 1, 2018, all packaging and labeling must be performed prior to cannabis goods being transported to a retailer.

A retailer shall not accept cannabis goods that are not properly packaged and labeled. A retailer shall not package or label cannabis goods, even
if the cannabis goods were in inventory before July 1, 2018. However, for medicinal sales, retailers will place a sticker on cannabis goods stating,
“FOR MEDICAL USE ONLY” upon sale to a qualified medicinal consumer, unless the statement is already printed on the package.

A retailer may not send unpackaged cannabis goods to another licensee for packaging or labeling. Cannabis goods in possession of a retailer that do not meet packaging and labeling requirements must be destroyed.

Exit packaging is not required to be child-resistant and can no longer be used to satisfy the childresistant packaging requirements. All cannabis
goods must be in child-resistant packaging prior to delivery to a retailer.

THC LIMITS FOR EDIBLE CANNABIS PRODUCTS

Beginning July 1, 2018, edible cannabis goods may not exceed 10 milligrams of THC per serving and may not exceed 100 milligrams of THC per package.

THC LIMITS FOR NON-EDIBLE CANNABIS PRODUCTS 

Beginning July 1, 2018, non-edible cannabis products must meet package THC restrictions.

Non-edible cannabis products shall not contain more than 1,000 milligrams of THC per package if intended for sale only in the adult-use market.

Non-edible cannabis products shall not contain more than 2,000 milligrams of THC per package if intended for sale only in the medicinal market.

INGREDIENTS AND APPEARANCE OF CANNABIS PRODUCTS

Beginning July 1, 2018, a retailer may only sell cannabis products that meet the requirements set by the California Department of Public Health for
ingredients or appearance.

CDA Co-Sponsors Bill to Fix Distributor Transfers for Cannabis Industry

CDA Co-Sponsors Bill to Fix Distributor Transfers for Cannabis Industry

 

Thanks to our working relationship with the Bureau of Cannabis Control and policymakers in State Legislature, CDA learned that existing law would prohibit the movement of compliance tested cannabis goods between more than one distribution facility prior to being delivered to a retailer.

 

In order to ensure distributors can transfer tested cannabis goods to multiple distribution facilities throughout the state to meet market demands, CDA is co-sponsoring SB 311 by Senator Pan (D-Sacramento) to authorize distributor-to-distributor transfers after the point of testing.

 

The cannabis supply chain depends on multiple points of distribution to efficiently bring products to market. Licensed operators are conducting these transfers today, however many are unaware of a section in the Business & Professions Code that prohibits distributor-to-distributor transfers after the point of testing.

 

CDA has built a coalition of stakeholders, including co-sponsors the California Growers Association, the California Cannabis Industry Association and supporters including the Teamsters Public Affairs Council and several licensed industry stakeholders. CDA’s advocacy team has been working behind the scenes over the past several weeks to garner support for the policy and we expect SB 311 to be heard in the Assembly Business & Professions Committee next week.

 

This is CDA’s top legislative priority and will work to get this bill on the Governor’s desk in the next 45 days.  If you support CDA’s efforts to protect the diversity of licensed distribution businesses, support the regulated market, and ensure tested products can be transferred between distributors, please join our ranks by helping us pass SB 311 (Pan). 

Transition Period Requirements

Transition Period Requirements

The transition period in the licensing authorities’ regulations allowing exceptions from specific regulatory provisions ends on June 30, 2018. Beginning July 1, 2018, cannabis goods must meet all statutory and regulatory requirements. Cannabis goods that do not meet all statutory and regulatory requirements must be destroyed in accordance with the rules pertaining to destruction.

LABORATORY TESTING REQUIREMENTS:

Beginning July 1, 2018, a licensee may only sell cannabis goods that have been tested and passed all testing requirements in effect at the time of testing.

  • Untested cannabis goods cannot be sold by a retailer and must be destroyed. A retailer may not send cannabis goods to a distributor for testing.
  • Untested cannabis goods manufactured or harvested before January 1, 2018, in possession of a distributor that are owned by the distributor must be destroyed.
  • Untested cannabis goods manufactured or harvested before January 1, 2018, in the possession of a distributor owned by a manufacturer or cultivator may be returned to the licensee who owns the cannabis goods. If a cultivator or manufacturer chooses to sell the returned cannabis goods, the cannabis goods must be sent to a distributor for testing and must meet all of the testing requirements in effect at the time of testing before transported to a retailer for sale.

PACKAGING AND LABELING REQUIREMENTS:

Beginning July 1, 2018, all packaging and labeling must be performed prior to cannabis goods being transported to a retailer.

  • A retailer shall not accept cannabis goods that are not properly packaged and labeled. A retailer shall not package or label cannabis goods, even if the cannabis goods were in inventory before July 1, 2018. However, for medicinal sales, retailers will place a sticker on cannabis goods stating, “FOR MEDICAL USE ONLY” upon sale to a qualified medicinal consumer, unless the statement is already printed on the package.
  • A retailer may not send unpackaged cannabis goods to another licensee for packaging or labeling. Cannabis goods in possession of a retailer that do not meet packaging and labeling requirements must be destroyed.
  • Exit packaging is not required to be child-resistant and can no longer be used to satisfy the child-resistant packaging requirements. All cannabis goods must be in child-resistant packaging prior to delivery to a retailer.

THC LIMITS FOR EDIBLE CANNABIS PRODUCTS:

Beginning July 1, 2018, edible cannabis goods may not exceed 10 milligrams of THC per serving and may not exceed 100 milligrams of THC per package.

THC LIMITS FOR NON-EDIBLE CANNABIS PRODUCTS:

Beginning July 1, 2018, non-edible cannabis products must meet package THC restrictions.

  • Non-edible cannabis products shall not contain more than 1,000 milligrams of THC per package if intended for sale only in the adult-use market.
  • Non-edible cannabis products shall not contain more than 2,000 milligrams of THC per package if intended for sale only in the medicinal market.

INGREDIENTS AND APPEARANCE OF CANNABIS PRODUCTS:

Beginning July 1, 2018, a retailer may only sell cannabis products that meet the requirements set by the California Department of Public Health for ingredients or appearance.

For additional information about the transition period requirements, or to subscribe to email alerts to hear about updates as they become available, please visit the Bureau’s website at http://www.bcc.ca.gov/. For information on all three state licensing authorities, please visit the state’s California Cannabis Portal at https://cannabis.ca.gov/. Follow the Bureau on Facebook, Twitter and Instagram for daily news and updates.

Those looking to get in touch with the Bureau of Cannabis Control can call our Call Center at (833) 768-5880, or send an email to bcc@dca.ca.gov.

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