Cannabis Regulations: The End of the Transition Period and What it Means for California’s Cannabis Industry

Cannabis Regulations

The full text of the state’s readopted emergency regulations is available here.

To ease the transition from California’s old non-profit model for the cannabis industry to the current model, the Medical and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), which went into effect on January 1, 2018, allowed for a transition period where a number of regulations, such as packaging and labeling requirements, were relaxed.

The primary intent of the transition period was to provide businesses ample time wind down their prior practices and make necessary adjustments so that the shift would not cause major disruption to the industry.

The transition period is now officially at its end. Beginning July 1, 2018, cannabis products sold in California must meet all of the state’s statutory and regulatory requirements.

Below we explain the significance of these changes and how they impact commercial cannabis businesses.

What Is Now Required?

Beginning July 1, 2018, cannabis products must be comprehensively lab tested, appropriately packaged and labeled, and must not exceed the THC limits established by law, amongst other requirements.

Products that do not meet these requirements must be brought into conformance before they can be sold; products that cannot meet these requirements cannot be lawfully sold, and must be destroyed.

Laboratory Testing

Licensees may only sell cannabis goods that have been tested by a licensed laboratory and have passed all statutory and regulatory testing requirements.

Previously, retailers were able to procure cannabis products and have them sent to a laboratory for testing. Effective July 1, retailers in possession of untested or inadequately tested cannabis products cannot send such products to distributors to have them tested— however the distributor may return them to the cultivator or manufacturer, who can send them back for testing.

Additionally, cannabis products sent to testing labs must be analyzed in accordance with the Bureau of Cannabis Control’s (BCC’s) adopted emergency regulations, which contain a list of all testing requirements. Cannabis products that fully comply with these testing requirements need not be retested.

Packaging and Labeling

Previously, retailers were not prohibited from packaging and labeling cannabis product obtained from cultivators or manufacturers. Now all packaging and labeling must be performed prior to a retailer’s receipt of the product. Cannabis goods packaged or labeled by the retailer may not be sold.

The state now mandates that a retailer shall not accept cannabis products that are not properly packaged and labeled, and shall not package or label cannabis goods, even if the cannabis goods were in inventory before July 1, 2018.

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

All cannabis products must now be in child-resistant packaging prior to delivery to a retailer.

With regard to exit packaging, which must be opaque and hold the cannabis product that a customer leaves the retailer’s premises with,2 the BCC has clarified that such packaging is not required to be child-resistant, and that it can no longer be used to satisfy the child-resistant packaging requirements.

THC Limits

Previously, the amount of THC contained in cannabis products, whether per serving or per package, was not capped.

Now edible cannabis products must not exceed 10 milligrams of THC per serving and may not exceed 100 milligrams of THC per package.

Non-edible adult-use cannabis products must not contain more than 1,000 milligrams of THC per package but medicinal cannabis may contain up to 2,000 milligrams of THC per package.

Additional Requirements

As this is not intended to be an exhaustive list of all requirements borne out of the end of the transition period, there are additional statutory and regulatory requirements that cannabis businesses must be aware of.

We strongly advise prospective and existing licensees to consult with a qualified attorney who can assist in ensuring compliance with these new requirements. The last thing any business owner would want is to fall afoul of the law and be declared an unlawful operation.

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