California Trailer Bill Update: Impact on Cannabis Businesses
Jul 22, 2021
California's 2021-2022 state budget and trailer bill contains several significant regulatory changes affecting the cannabis industry. Below is a brief overview of the most significant provisions of the trailer bill impacting cannabis.
Agency Consolidation
Gov. Newsom signed the Cannabis Trailer Bill on July 12, consolidating the three regulatory authorities (the Bureau of Cannabis Control, the CalCannabis Cultivation Licensing division, and the Manufactured Cannabis Safety Branch) into one agency known as the Department of Cannabis Control. The “DCC” unveiled its new website on July 13.
Additionally, the three existing sets of regulations have been renumbered and moved into one title in the California Code of Regulations, Title 4, Division 19. The link to the renumbered regulations is available here. The DCC’s stated goal is to update the combined regulations to eliminate duplicative language and resolve conflicts between the current three sets of regs.
“Harvest Batch” Definition
The bill revises the “Harvest Batch” definition by removing the requirement that the batch be uniform in strain.
Packaging and Labeling
Resealable packaging will only be required if the cannabis or cannabis product contains multiple servings. The bill also removes the requirement that labels and inserts include the source and date of cultivation and the date of manufacture.
Trade Samples
Trade samples will be allowed between licensees, provided they have completed regulatory testing, are recorded in Metrc and labeled. Trade Samples would not be subject to excise tax or cultivation tax.
Provisional Licensing
The bill extends provisional licensing to June 30, 2022, provided that the application is submitted by March 31, 2022 for non-social equity applicants. Provisional licensing is extended for one additional year (until June 30, 2023) for social equity applicants, provided that the application is submitted by March 31, 2023.
CEQA
Beginning July 2, 2022, for non-social equity applicants (and for July 2, 2023, for social equity applicants), all state cannabis licenses issued must be annuals, meaning CEQA review by the locality must be completed prior to commencing operations. Further, provisional licensees must transition to annuals by January 1, 2025.
For those seeking local licensure now, particularly in localities without a developed CEQA review process, we encourage you to prepare your state applications and submit as soon as possible to obtain a state provisional license before the upcoming state deadlines. Please reach out to Amanda Kilroe (amanda@vicentesederberg.com) or Emily Hackman (emily@vicentesederberg.com) from our California Licensing Team
Cultivation Licenses
Beginning January 1, 2022, the DCC will not issue a provisional license to a person, if issuing the provisional license would cause the licensee to hold multiple cultivation licenses on contiguous premises that exceed one acre of total canopy for outdoor or 22,000 square feet for mixed-light or indoor.
Beginning January 1, 2023, the larger Type 5, 5A, and 5B license types will become available. After January 1, 2024, the DCC will not allow the issuance of any provisional license that would cause the licensee to hold multiple cultivation licenses on contiguous premises that exceed one acre of total canopy for outdoor or 22,000 square feet for mixed-light or indoor.
In the coming weeks, we will highlight several other changes as another trailer bill is expected. This bill may include additional changes. Our California team is here to keep you updated. Please contact Andrea Golan at a.golan@vicentesederberg.com with questions.