California Department of Cannabis Control Insight

July 23, 2021 Cannabis Business, Entrepreneurs, Investors

California has been known for its complexities for those operating in the cannabis space. However, with the state’s creation of the Department of Cannabis Control, this is expected to change.

After passing Assembly Bill 141, the DCC now consolidates the state’s three cannabis programs.

That’s right.

The Bureau of Cannabis Control (BCC), the California Department of Food and Agriculture’s (CDFA) CalCannabis Cultivation Licensing Division, and the California Department of Public Health’s (CDPH) Manufactured Cannabis Safety Branch will now all be in one department.

So what does this mean for your cannabis business?

Keep reading to find out.

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california department of cannabis control regulating dispensaries and more

Why Does Cali Need More Cannabis Control?

Think about it this way. Cannabis control supports the industry by ensuring businesses serve consumers safely and properly – even if they’re operating under provisional licenses.

But it goes further than consumer affairs and public health.

What will cannabis control do?

Cannabis control ensures the provisional licensing program allows cannabis businesses to thrive in a regulated cannabis space.

As the Cali cannaspace continues to grow, the state needed a centralized regulatory housing agency for the multiple agencies the state has already created. The purpose here is to make the system more navigable. It’s about becoming more efficient and effective.

Now that the DCC is in place, this new department stands to provide resources and more information regarding the processes that come with being a cannabusiness owner and operator in Cali.

Governor Gavin Newsom signed legislature AB-141 into law on July 12, 2021 to form the agency. He appointed Nicole Elliott to serve as the DCC’s first Executive Director.

What Should We Expect with the DCC Agency?

After the signing of this law in July, the regulations in place should be a boon for both entrepreneurs and cannabusiness operators. This is especially the case for those who have found themselves unable to handle rules from multiple agencies.

The past complexities around knowing which regulatory agency offices or departments to work with are now things of the past as the DCC’s services facilitate vertical integration. No longer must cannabusiness operators worry about keeping track of the frequent regulatory updates that have plagued the industry.

From cannabis agriculture to infused food products and beyond, all medical and adult-use cannabusiness operations will look to the DCC for insight and enforcement. Since the new law transfers all of the “powers, duties, purposes, functions, responsibilities, and jurisdiction” of the Bureau of Cannabis Control, CDFA, and CDPH, the new July law aims to facilitate cannabis business operations immensely.

But what were the powers, duties, purposes, functions, responsibilities, and jurisdictions of these agencies?

the bureau of cannabis control

The Bureau of Cannabis Control

The Bureau of Cannabis Control, or BCC, was the lead agency responsible for regulating commercial cannabis licenses for both medical and adult-use cannabis in Cali.

This state agency had the broad authority that allowed it to regulate all aspects of commercial marijuana activity in Cali. Of course, this involved seed-to-sale transactions.

If you’ve been operating a medical or recreational cannabusiness in Cali, you’ve likely worked with the bureau’s regulations. This includes all operators in retail, distribution, testing labs, microbusinesses, and temporary marijuana events.

Mainly, this involved getting the right licensing. But now, you’ll go to the new Cali department.

California Department of Food and Agriculture

California Department of Food and Agriculture

The CDFA has a division called CalCannabis Cultivation Licensing. Its goal is to ensure public safety and environmental protection through its licensing and regulation of commercial cannabis cultivation in Cali.

The proposed regulations for the appellations of origin for marijuana were released by the CDFA on February 20, 2020. But now that the DCC is taking over, it will maintain responsibility for upholding and updating these regulations, among others.

California Department of Public Health

California Department of Public Health

The CDPH is the manufactured marijuana safety branch in Cali. Through this agency, public safety was protected as it promoted product and workplace safety.

The DCC will take over these responsibilities, as well. This is evident when visiting the CDPH’s site, which directs web traffic to the DCC’s new site for more information.

California Cannabis Industry Association

California Cannabis Industry Association

The DCC will also work alongside the California Cannabis Industry Association (CCIA).

But what does this agency offer as far as business and consumer services?

The CCIA’s Mission

The CCIA’s mission is to “promote the growth of a responsible and legitimate cannabis industry and work for a favorable social, economic, and legal environment” for the cannabis industry in Cali. Founded on the idea of strength in numbers, this agency works to represent the cannabis sector professionally with coordination at the state level.

AB-141 & SB-160

The passage of the two bills, AB-141 and SB-160, were critical policy objectives for the CCIA. With a purpose to ensure existing provisional license holders can continue legally operating as their applications go through the environmental review process, the idea here was to give additional opportunities to new equity applicants and legacy farmers interested in applying for and obtaining cannabis provisional licenses. These bills also pushed an additional CCIA objective – to create a legal pathway cannabis businesses can utilize to issue business to business trade samples.

The CCIA’s Team

The CCIA’s Legislative advocacy team will continue to work for improvements to the California cannabis industry as the DCC takes on the roles of the three other agencies.

What Else Changes with the DCC?

“The state’s consolidation effort delivers on the commitment made by the Newsom Administration to listen to and work with California’s legal cannabis industry to streamline participation in the legal market by offering a central point of contact for licensed operators,” Lourdes Castro Ramirez, secretary of the Business, Consumer Services and Housing (BCSH) Agency, is quoted saying.

Besides consolidating Cali’s cannabis regulatory agencies, the DCC also stands to increase licensing transparency in the cannabis space. According to AB-141, the DCC will need to give information on its site showing the status of each license issued. This, of course, includes the county of each licensee’s address of record.

Starting on January 1, 2022, AB-141 will also demand this information include all license suspensions and revocations, as well as any final decisions from the DCC. But AB-141 also bans the DCC from sharing personally identifying information. This includes social security numbers, home telephone numbers and addresses, and dates of birth.

Other Changes Implemented with AB-141

Now that AB-141 passed, the DCC has a new deadline to issue and renew provisional licenses. The extension is moving from January 1, 2022 to June 30, 2022. The DCC can issue provisional licenses to applicants who have submitted and completed a license application. However, the applicant must meet these requirements:

  • Applicant is able to prove compliance with the California Environmental Quality Act (CEQA) or is able to give evidence that their compliance is in process.
  • Applicant is able to show compliance with local ordinances or give evidence showing that their compliance is in process.
  • In cases during which the license application includes cultivation, the applicant offers any of these documents:
  • a draft streambed alteration agreement is given by the Department of Fish and Wildlife (DFW) and signed and returned to the DFW;
  • written verification by the DFW that a streambed alteration agreement is not necessary;
  • a final streambed alteration agreement;
  • written verification from the DFW showing the applicant has already submitted a 1602 notice, submitted payment of applicable fees, and is “responsive” to the DFW.

For cultivation license applications submitted on or after January 1, 2022, the DCC cannot issue provisional licenses if the issuance of the license will result in the licensee holding multiple cultivation licenses on contiguous premises to exceed an acre of total canopy for outdoor cultivation activities, or 22,000 square feet of mixed-light or indoor cultivation operations.

The “commercial cannabis” definition has also been changed to include acting as a cannabis event organizer for temporary cannabis events. With this bill, the definition of “manufacture” would also include packaging or labeling cannabis products. The bill also stands to remove the current “manufacturer” definition.

Navigating the Department of Cannabis Control

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