fbpx
Interstate cannabis commerce bill introduced in California

Interstate cannabis commerce bill introduced in California

California interstate cannabis commerce bill introduced

California has always been at the forefront of cannabis legalization. As one of the first states to legalize medical and recreational cannabis, other states looked to California for the outline of legal cannabis.

But despite its progressive policies regarding cannabis, California has not been able to develop and maintain a strong legal cannabis industry. This is for a wide range of reasons, from strict and expansive regulations to exorbitant application and licensing fees. Not to mention the massive illicit market that still operates within the state, in part due to the current barriers to entry into the legal market.

Some would argue that the solution to California’s cannabis industry woes is to simplify the application process, lessen the cost of licensing and give cultivators and retail owners the resources they need to stay within regulation. However the state is taking a different approach to profiting off an industry with an oversupply of cannabis.

SB1326 has been introduced to approve interstate commercial transactions for cannabis products. This means that if passed, California would be able to import and export cannabis products from other legal cannabis states. For example a state that recently legalized cannabis but does not yet have enough supply to meet demand could import products from California to fill the gaps.

If this bill sounds familiar, it may be because Oregon passed something similar in 2019. However since they were the only state with a law allowing export of cannabis, and no states have a law allowing imports, the law is basically moot.

The interstate cannabis commerce bill wouldn’t just be restricted to recreational cannabis either. California also has one of the country’s oldest medical cannabis programs and would be able to provide medical cannabis to neighboring states as well.

Even with the largest illicit market of cannabis production in the country, California’s legal recreational market is still oversupplied. The hope with SB 1326 is that some of that supply can be sent to other states to make the industry more profitable for those participating legally.

Critics of the bill have shown concern however over wording that could remove the opt-out clause currently in place in the state.

Most states with legal cannabis programs will have opt-out clauses that permit municipalities to opt-out of legal cannabis business in their localities. Those criticizing SB 1326 believe that the new bill will overshadow the opt-out clause, but lawmakers believe that it will actually give the municipalities more options than the opt-out clause itself provides.

The interstate cannabis commerce bill also places restrictions on who can enter the new market if it passes.

“The bill would prohibit an entity with a commercial cannabis license issued under the laws of another state from engaging in commercial cannabis activity within the boundaries of this state without a state license, or within a local jurisdiction without a license, permit, or other authorization issued by the local jurisdiction,” the bill’s text reads.

This line should reassure smaller towns and local businesses that multi-state operators won’t be able to just storm in and take over. And at this time, officials in the cannabis industry want to focus on leveling out the supply in California before they begin accepting any imports.

Despite legalization, California black market still thriving

Despite legalization, California black market still thriving

Californa black market cannabis

Lake County has some of the largest acreages in permitted cannabis grows in California. Yet, despite a legal market, illegal grows are unfairly undermining the profitability of lawful cultivators.

This illegal market that voters sought to eradicate with cannabis legalization is quickly eroding the permitted industry and threatening public safety. Amounting to an estimated 80% of all cannabis sales in California, the market is saturated with low-cost illicit product. Cannabis cultivators are unable to compete.

As the underground economy thrives, so does criminal activity and environmental harm.

Rural counties with land and industry prime for cannabis cultivation are at the front lines of this battle, including those in the Sacramento region. During a time of limited staffing and competing priorities, local governments require increased state funding for enforcement.

The path for the legal industry is already challenging. Growers face a long permit process, including extensive state-mandated environmental review and higher taxes intended to help monitor and ensure public health and safety.

Distribution is also affected by the struggles of the state’s licensed retail outlets, which must compete with illegal retailers that similarly flourish due to limited enforcement resources.

Unencumbered by these obstacles, illicit growers and suppliers can sell product at half the cost and distribute them nationally. The negative impact to residents and the environment from this activity is significant.

A 2020 raid on illegal cannabis grows in Lake County resulted in the seizure of over 51,000 plants and the discovery of 40 state Fish and Wildlife violations. This included storage of chemical pollutants near waterways and usage of underage labor. Stories like these are echoed across the state, with illegal grows linked to violent crime, environmental damage and wildfire.

Three in four California cannabis companies aren’t licensed

Three in four California cannabis companies aren’t licensed

Only 1 in 4 California cannabis companies have a permanent business license

State will give 17 cities and counties grants to help license cannabis businesses. But many say bigger problems remain.

Nearly four years after California started regulating its cannabis industry, three in four businesses still operate on provisional licenses.

As temporary license holders, 75% of the state’s cannabis industry lacks protections and privileges that come with holding full licenses — a situation that worries some in the business. Those temporary operators also haven’t passed extensive environmental reviews required of full licensing — a fact that concerns environmental groups.

Cannabis licensing is slow for a number of reasons, ranging from the sometimes dizzying complexity of California’s environmental rules to conflicting language between state and local cannabis laws to the high costs for permits and a shortage of government workers needed to process the paperwork.

The weed licensing glitch also isn’t new. For several years, state legislators have extended the permitting process so that thousands of businesses don’t become unlicensed overnight.

But now, California is pushing to change the situation. The state has set aside $100 million to help 17 cities and counties transition their cannabis businesses from temporary to full licensees. Los Angeles is eligible for $22.3 million of that money, while five other Southern California cities — Long Beach, San Diego, Commerce, Adelanto and Desert Hot Springs — are in the running for a combined $6.9 million. Applications are due by Nov. 15.

Eligible cities say they’ll use the money to hire staff and, in some cases, to offer direct support to businesses. They’re confident that over the next few months they can make a significant dent in the problem.

“I know it will help,” said Edgar Cisneros, city manager for Commerce, which has seven fully licensed cannabis businesses and 12 others waiting to get through the process.

“There is a real need for staff and also consultants…  to get these permits to permanent licensing at a much faster pace.”

Still, while business owners and others applaud the one-time state funding, they say it doesn’t go far enough. Many cities and counties remain left out of the applicant pool, and there is no statewide plan to ease the business hurdles that caused the backlog in the first place.

 

“No amount of money is going to change the significant amount of time it takes to come up to speed for local approval,” said Hilary Bricken, a cannabis industry attorney out of Los Angeles who said some businesses have failed during the multi-year wait to get licensed.

California cannabis regulators issue new, consolidated industry rules

California cannabis regulators issue new, consolidated industry rules

California department of cannabis control

The newly merged California Department of Cannabis Control (DCC) on Wednesday released a 197-page draft of cannabis industry regulations, including allowing broader sales of branded merchandise and sharing product samples among those in the supply chain.

The release of the new draft regulations kicks off a new public comment period before the rules are expected to be formally adopted around the end of September. 

The DCC is a brand-new state agency in California, created in July from the original framework of three separate bureaucracies that oversaw legal marijuana businesses in the state. Combining the regulations from the three former regulators was one of the new agency’s first tasks.

The new rules are expected to be finalized and adopted around the end of the month.

Among the highlights in the changing rules:

  • New parameters for how industry trade-sample sharing can work, allowing manufacturers, growers and distributors to share product samples free of charge with others in the legal supply chain.

  • New and more narrowly tailored definitions for marijuana company owners and those who own a financial stake in a business.

  • Allowances for non-vertically integrated cannabis companies to sell branded merchandise from other licensed businesses.

Contact Greener Consulting Group for assistance with adjusting to the new agency and regulatory changes.

 

Read Full Story on MJ Biz Daily

Humboldt County announces more than $2 million in grant funding for cannabis farmers

Humboldt County announces more than $2 million in grant funding for cannabis farmers

humboldt county gives out cannabis grant to farmers
Many Humboldt County growers are struggling this season as the price of cannabis falls in California.

Humboldt County announced more than $2 million in grant funding available through Project Trellis, the county’s cannabis micro-grant, marketing and local equity program, to help the local cannabis community enter into the commercial cannabis marketplace. Those eligible can apply for up to $10,000 “per service” in accordance with Humboldt County’s eligibility requirements for Project Trellis.

“All applications and supporting documents will be reviewed by Economic Development staff to ensure the applicant meets eligibility criteria. Some projects may receive a lower amount than what was requested, based on the availability of funds or needs of service,” a news release from the county stated.

“A typical approval process can take 60 or more days from when the application is received. Upon approval, the applicant will receive a notice of award, contract, fund request form and a W9 form.”

Project Trellis was built as a three-tier program to redirect cannabis tax revenue back into the local economy. In September 2019, the county sought proposals for cannabis branding and marketing.

The goal of the program is to “implement the recommendations set forth in the Humboldt County Cannabis Equity Assessment” and “to further equity among those impacted by the criminalization of cannabis, by providing services to individuals in Humboldt County’s cannabis community, particularly small growers who were adversely affected by the criminalization of cannabis.”

While $2 million may seem like a big chunk of change, Humboldt County Growers Alliance executive director Natalynne DeLapp said the county’s “independent cannabis farmers are in crisis.”

“It is great that the county developed Project Trellis…and (has) secured nearly $5 million in funding from the state to support communities most impacted by the War on Drugs in entering the regulated cannabis market, but now it is time to get serious,” she said. “…Perhaps 200 of Humboldt County’s 900-plus cultivation operators, who can prove the War on Drugs has negatively impacted them, could receive up to $10,000 in fee waivers for professional services like fee waivers, technical assistance or installing solar or water storage systems.”