California wants to require a lot of stuff on cannabis labels

California Cannabis Warning SymbolDepending on how quickly the California Bureau of Marijuana Control (BMC) gets their final regulations and licensing system in place, you may see the first products on the shelf under the new medical cannabis regs as soon as January 1st. Based on the initial dump of proposed regulations by three different agencies in California, you’re going to see a lot of words on those labels.
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Vermont may not be the first state to legalize cannabis through the legislature after all

Cannabis advocate were hopeful that Vermont would become the first state to pass a recreational cannabis bill when the legislature passed S 22 on May 10th. The New York Times Editorial Board even weighed in this morning encouraging Scott to sign the “DIY approach.” But, today, Governor Phil Scott (R) decided to veto the bill and “send it back to the legislature”.

Citing the last-minute rush to pass S 22 in the final days of the session as well as shortcomings in the bill related to access for minors, tougher penalties for impaired driving, and the structure and timing of the commission created by the bill, Scott held a press conference to announce he will veto the bill today. He did, however, express willingness to work with the legislature during the summer veto session to possibly get a bill passed with his recommended changes by July, assuming lawmakers are willing to work with him on a compromise.

Given the specific nature of his recommended changes, and the expressed willingness, it seems very possible that a compromise bill will get through this summer and take effect July 2018. This would put Vermont in line with several neighbors including Massachusetts, Maine, and Canada to implement cannabis bills for the summer of 2018.

California’s proposed medical cannabis regulations give a glimpse of what’s to come

header-organizationAll eyes are on California right now as the state moves aggressively to take the extraordinary steps to reconcile two sets of laws (one for medical cannabis and one for recreational, or “adult use” cannabis), draft and approve regulations for laws that are probably not final yet, create regulatory, licensing, and “track and trace” systems, and review and approve applications to allow licensed businesses to operate by January 1st, 2018.

Sound challenging? A California legislator likened it to “flying an airplane while it is still being built.”

The California Bureau of Marijuana Control (BMC) took two major initial steps last month to move these multiple tasks forward by releasing proposed “trailer” legislation to be included in the budget bill as well as proposed regulations for the medical marijuana system. To help you understand how all of these pieces fit together, below is a high-level timeline on cannabis laws and regulations in California.

  • 1996: Voters approve Prop 215, legalizing the use of medicinal cannabis. Since then, little regulation was established, and most of that was done by local governments.
  • 2015: Legislature enacts three bills – AB243, AB266, ad SB643. These bills became known collectively as the Medical Cannabis Regulation and Safety Act, or MCRSA.
  • 2016: Legislature enacts SB 837, which builds on the MCRSA framework to add environmental safeguards to protect streams and rivers.
  • 2016: Voters approve Prop 64, other wise known as Adult Use of Marijuana Act, or AUMA.
  • April, 2017: Department of Consumer Affairs, Bureau of Cannabis Control introduces Proposed Trailer Bill Legislation. This proposed language is meant to consolidate the differences between AUMA and MCRSA by combining the two laws into a single code that would regulate both medical and adult-use cannabis.
  • April, 2017: Department of Public Health, through their new Office of Manufactured Cannabis Safety, drops regulations for medical cannabis manufacturers.
  • April, 2017: Bureau of Marijuana Control sends out a Notice of Proposed Rulemaking with proposed regulations for medical cannabis use for distributors, transporters, and dispensaries.
  • April, 2017: Department of Food & Agriculture’s (CDFA) CalCannabis Cultivation Licensing division, which is responsible for regulating cannabis cultivation, introduces proposed regulations for medical cannabis cultivation.

The proposed regulations for medical cannabis are the first glimpse into the details of what the Bureau of Marijuana Control (BMC) has in mind for regulating cannabis in California. However, it’s important to note that these regulations are very likely subject to change, so therefore should be used primarily as a guide for what is to come. If the legislature passes the proposed trailer legislation either as-is or with modifications, the law would change and the various departments would have to issue new regulations for the consolidated system. So, although you should expect changes coming from the legislature, the medical regulations are helpful for now as a roadmap for what’s to come for California’s cannabis regulatory system.

In future posts, we’ll break down the 58-page medical cannabis regulations (as well as the “trailer” legislation) for distributors, transporters, and dispensaries. These regulations create the rules under which businesses can operate, including details about how to get licensed (get ready to open the kimono!), what details are required for the track and trace system, which information is required for labeling, and generally which activities are permitted and which are prohibited.

One thing to keep an eye on here in particular is the issue of “vertical integration”. In the world of beverage alcohol, most states enforce a “three tier” system that prohibits businesses from owning licenses in multiple tiers (production, wholesale distribution, and retail). AUMA (full integration) and MCRSA (limits on integration) are at odds on whether to allow full vertical integration for cannabis businesses in California. Advocates on both sides of this issue are debating it furiously.

The bottom line here is that things are moving extremely quickly in California right now and it’s time to pay attention and provide feedback to the regulatory authorities before bills are codified and regulations are finalized. We’ll be keeping up with the changes here and breaking down the different parts to help you better understand what’s going on.

Vermont legislature clears the path for recreational cannabis

Cannabis advocates are celebrating this week as the first recreational cannabis bill passed through a state legislature. Lawmakers in Vermont cleared the way for adult-use cannabis sales by passing a compromise bill that now heads to Governor Phil Scott’s desk.

Eight states plus the District of Columbia have legalized recreational cannabis use, but all of them have done it through a voter ballot initiative. If Governor Scott signs S. 22, Vermont would become the first state to adopt a recreational cannabis bill through the legislature.

The compromise bill does not create a full-blown retail cannabis system. Instead, it does the following:

  • Decriminalizes possession of less than one ounce
  • Allows home cultivation for up to two mature plants and four immature plants
  • Creates a study commission that would identify the best way to regulate retail cannabis sales in Vermont. The commission would draft legislation to be introduced at the start of the next legislative session
  • Sets the effective date to July 1st, 2018

It’s unclear at this point whether Governor Scott will sign the bill into law. Although the bill has strong support among the citizens of Vermont, Scott indicated that the bill is not a high priority for the state. The first-term republican governor has the option to veto the bill, sign it, or allow it to become law without signing.

 

 

62% of Americans now have access to medical cannabis

Following significant success at the ballot box in the 2016 elections, cannabis activists hoped that 2017 would be the year where both medical and recreational use cannabis bills would get major traction in the state legislatures.1200px-Seal_of_West_Virginia.svg However, so far only one state has passed a successful bill in 2017. Governor Jim Justice signed into law in April Senate Bill 386, the “West Virginia Medical Cannabis Act“, making West Virginia the 29th state (plus the District of Columbia) to adopt a medical cannabis law. 62% of the US population now lives in a state that offers some form of cannabis for medicinal purposes.

Although the legislation technically takes effect ninety days after passage, or July 5th 2017, experts are predicting that sales will not start until the middle of 2019. The state issue a very small number of licenses to ten growers, ten processors, and thirty dispensaries. The bill does not allow for smoking of cannabis but does allow for the sale and consumption of pills, oils, topical forms including gels, creams or ointments, vaporization or nebulization of non-leaf or plant forms, tinctures, liquids, or dermal patches.

 

Medical marijuana states wait in limbo as Congress passes one-week spending bill

The Rohrabacher-Farr Amendment (RFA), which was set to expire today (April 28th, 2017), lives on for at least another week. By passing a one-week temporary spending bill that effectively just changes the date of the previous spending resolution to May 5th, 2017, Congress also kept alive the RFA. However, states with medical marijuana laws now wait in limbo, hoping that Congress finds compromise and passes a spending bill that covers the rest of the fiscal year in September and includes RFA.

Originally passed in 2014 after at least six failed attempts, the RFA ties the hands of the Department of Justice (DOJ) by prohibiting DOJ from using federal funds to prevent the implementation of state laws. As long as Congress keeps renewing it, RFA is established law that has also withstood court challenges.

None of the funds made available in this Act to the Department of Justice may be used, with respect to the States of Alabama, Alaska, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, Oregon, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Washington, and Wisconsin, to prevent such States from implementing their own State laws that authorize the use, distribution, possession, or cultivation of medical marijuana.

When the Congressional Cannabis Caucus held their kickoff press-conference a few months ago, they identified the renewal of RFA as one of their top priorities as they want to give states the freedom to pass and implement cannabis laws without being subject to the whims of any President or DOJ. Recently, Jared Polis expressed optimism that RFA will be included in any spending bill that is passed. But, lawmakers continue to be at odds about key components and spending priorities of the budget, thus extending the threat of a government shutdown for another week. In the event that Congress fails to pass a spending bill, RFA would expire and the DOJ could initiate enforcement actions against individuals or businesses operating in medical states.

Of course, it’s worth noting that RFA does not include recreational cannabis laws. Those states that have adopted recreational laws continue to be at risk unless a similar amendment or bill is introduced to protect the recreational industry. The Congressional Cannabis Caucus does not plan to add recreational use to the RFA language in this current spending debate because of the risk of losing votes in support of the original medical language.

The elephant in the room here is whether Jeff Sessions plans on enforcing federal law, where marijuana is listed as a “schedule 1” drug on the Controlled Substances Act (CSA). Throughout his career, and especially recently, Sessions has made it clear that he is not a fan of permissive marijuana laws and intends to enforce the current federal laws. RFA ties his hands in medical states, but recreational states are currently unprotected.

Assuming Congress gets its act together next week and passes a spending bill that includes RFA through the end of the fiscal year, medical states will be safe through September. The Congressional Cannabis Caucus will then look to introduce legislation to protect recreational states, a task that will be significantly tougher sledding than extending the renewal of RFA.

Jared Polis would like to tie Jeff Sessions’ hands on cannabis enforcement

c6242db3-df3a-42e4-91c4-d6e28f222d2dThe cannabis industry has felt tremendous amount of uncertainty ever since Jeff Sessions was nominated for Attorney General. Sessions’ multiple negative comments about cannabis, both in the past and over the last few months, have led to nonstop speculation as to what the Department of Justice (DoJ) will do to businesses in states that allow for the legal use of medical and/or recreational cannabis.

Jared Polis (D-Colorado), who is also a founding member of the Congressional Cannabis Caucus, would like to protect the industry from the whims of Sessions, and future Attorneys General, by removing the purse strings from the DoJ. According to the Denverite, Polis made comments last week announcing plans to attach an amendment to Congress’ annual spending bill to prevent DoJ from using any federal funds to go after businesses operating legally in states that have existing medical or recreational cannabis laws.

If we successfully attach it and it becomes law, no Attorney General — despite what they might want to do — would be able to use the funds that Congress gave them to crack down on activities that are legal under state law with regard to marijuana. – Jared Polis

The proposed amendment would be similar to the Rohrabacher-Farr amendment, from 2014, that prevents DoJ form using federal funds to interfere in the implementation of state medical  cannabis laws. The current extension of Rohrabacher-Farr is scheduled to expire next month on April 28th. Rohrabacher-Farr does not prevent DoJ from spending on the enforcement of any recreational laws. Presumably, Polis’ new amendment would fix that loophole.

Our Take: Because cannabis remains illegal on the list of “Schedule 1” drugs on the Controlled Substances Act (CSA), state laws are in conflict with federal laws. The Obama administration issued the “Cole Memo“, which provided guidance to all US attorneys regarding enforcement of cannabis laws and allowed states to implement their existing laws. However, Sessions is not bound by that memo and has not offered any guidance other than to hint that he is OK with medical cannabis laws.

Until Congress actually takes action to deschedule cannabis from the CSA, this is probably the next-best alternative. Preventing spending does tie the hands of DoJ and allows the state experiments to continue, even while the manufacture and sale of cannabis remain illegal under federal law.