Clark Howell Update On California Cannabis Legislation In Play – April 2022

Year 2 of the legislative session is in full swing in Sacramento, with an assortment of cannabis bills on taxes, water pollution crimes, employment, enforcement, events, and access. As we’ve come to expect each year, many bills are introduced in January and February. Some of them survive committee hearings and full floor votes in order to make it to the Governor’s desk for signature or veto.

This bulletin unpacks five of the most interesting market-access related bills – bills that help licensees connect with consumers and diversify their offerings – that the California Senate and Assembly will hear and vote on over the next several months. We’ve also included a list of milestone dates from now through fall.

Note: A brief, simplified explanation of each bill follows. Click the hyperlink to read up on the bills that pique your interest and send your comments to your representative(s). Call us with questions and to discuss the implications for your business.

Curbside Pickup (AB-2824, Bonta; DCC Proposed Regulations)

Good news for retailers and customers who have gotten used to curbside pickup. The pandemic-prompted curbside pickup option may be here to stay, either through AB-2824 or through the Department of Cannabis Control’s (DCC’s) newest set of proposed regulations.

In Assemblymember Bonta’s bill, “a retailer” would be allowed to conduct sales by curbside pickup to a customer in a vehicle “located on the property of the licensed premises.” Bonta’s bill requires that sales occur under video surveillance, and does not explicitly exclude delivery-only retailers from offering a curbside option.

The bill is currently in the Assembly Business & Professions Committee. Although the bill is still active in the legislature, it’s likely that curbside delivery will be made permanent via the DCC’s regulations, which came out after AB-2824 had been introduced.

Per the DCC’s newest set of proposed regulations, a licensed storefront retailer could conduct curbside sales to a “vehicle parked immediately outside the licensed retail premises.” The transaction must be recorded on the retailer’s video surveillance system and follow all relevant regulations, including age verification. Delivery-only retailers would be explicitly prohibited from conducting curbside sales.

You can comment on this and other regulations until 5 p.m. on April 19, 2022 by mail, email, or at the next public comment hearing. Click here to find out more about regulations and commenting options.

D2C for Cultivators (AB-2691, Wood)

California may soon allow farmers a legal D2C avenue within a temporary event framework. AB-2691, sponsored by Jim Wood of the Emerald Triangle region, creates a new “temporary cultivator event retail license” under the DCC. Licensed cultivators could sell their own cannabis or cannabis products at up to 12 temporary retail events per calendar year.

Cultivators who hold a valid state cultivation (and authorized by the local jurisdiction) with up to 1 acre of canopy across all licensed premises could apply for this license type. Hopefully the application will be relatively simple: Wood’s bill specifies that the DCC shall not require resubmission of information already provided via the state cultivation license.

The bad news: A new license application is required per event and per cultivator, a distributor must transport product to and from the event venue, and licensees will be required to comply with requirements imposed on retailers.

The bill is currently in the Assembly Business & Professions Committee. To keep up with its status, click here.

Interstate Commerce (SB-1326, Caballero)

SB-1326 would allow cannabis to cross domestic borders in some circumstances, allowing California products to enter other states, and vice versa. This is a fascinating workaround to the federal conundrum that prevents legal distribution of California’s renowned products throughout the country. Consumers could also gain access to new products developed in other state markets. We encourage you to study the nuances of this bill and follow it over the coming months. For now, here are 3 points we think you should know:

The Governor may only enter into agreement with a state (or states) that authorize medicinal and/or adult-use commercial cannabis activity.

Products must be transported by manned motor vehicle, and could only go through states that authorize such transportation.

Products brought into California must meet or exceed tracking, testing, labeling, and other standards that apply to California licensees.

The bill is currently in the Senate Business, Professions, & Economic Development Committee. To keep up with its status, click here.

Cannabis Catering at Private Events (AB-2844, Kalra)

MAUCRSA allows the DCC to issue a state temporary event license for onsite sales at a county fair event, district agricultural association event, or other locally-approved venue. AB-2844 creates a new state caterer license type for service and consumption of cannabis at a private event. As with other licensed cannabis events, a local jurisdiction must approve the private event. Alcohol and/or tobacco may be consumed on the event premises.

Wake, Bake, and Bubbly Brunch, anyone?

The bill is currently in the Assembly Business & Professions Committee. To keep up with its status, click here.

Alcohol & Cannabis at Events (AB 2210, Quirk)

AB 2210 would allow state temporary event licenses to be issued for events held at a venue that is licensed by the Department of Alcoholic Beverage Control. Alcohol sales and consumption could occur at the same event as cannabis sales and consumption, but they must be in separate and distinct areas. The DCC will require an accurate list of all licensees providing onsite sales at the event.

Civil penalties for violating the rules and regulations may be up to three times the amount of the license fee, per violation.

The bill is currently in the Assembly Business & Professions Committee. To keep up with its status, click here.

What’s Next?

Did this legislative briefing spark new creative business ideas?

Which are most exciting to you?

The bills discussed above require a ⅔ vote threshold to pass. Make sure you get involved if you support or want to propose changes to these or other bills under consideration by the California State Legislature this year.