Great Expectations

[dropcap class=”kp-dropcap”]I[/dropcap]t’s not a normal day in California if there aren’t around 50 cannabis bills floating around assembly halls. The most recent legislative session did not disappoint in getting certain much-needed cannabis legislation passed that will directly affect the Southern California cannabis marketplace. We are still in an emergency rule period under The Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) with permanent regulations probably taking full shape and adoption in early 2019. Many cities and counties are still grappling with changes to their own local cannabis laws, so it’s comforting to see the legislature fill some of the gaps left over from state and local legislation. The following are the impactful bills from this session:

Senate Bill 1459: Provisional Licenses

Without a doubt, the entire industry would have gone into a tailspin and then come to a screeching halt after Dec. 31 of this year without the advent of provisional licenses. SB-1459 mandates that if your business holds or has held a temporary license and you’ve file for your annual license, you’re going to get a provisional license (which is good for only one year) in order to keep operating while you pursue your annual license. Temporary licenses will not be issued after Dec. 31 of this year, so this is the new vehicle for continued operation in California while you wait on your annual license (which are taking months to secure). Notably, this has huge effects in the SoCal cannabis market where would-be licensees will have to scramble to secure local approval from their cities and counties prior to Dec. 31, so that they can safely get a temporary license and ultimately their provisional license.

“Yes, the nail is now officially in the coffin for hemp-derived CBD alcoholic beverages, which hemp-CBD products are all over SoCal in all different kinds of retail and food establishments.”

Senate Bill 1294: Social Equity

It is possible that any meaningful social equity programs on the local level (like the one in Los Angeles) likely wouldn’t survive unless supported by the state. Thankfully, California is on board with the success of local social equity regimes via SB-1294, also now known as the California Cannabis Equity Act of 2018 (the CCEA). The CCEA basically sets up the state to provide “technical assistance” not to social equity applicants directly, but to the local programs that govern them. The Bureau of Cannabis Control (BCC) “may, upon request by a local jurisdiction, provide technical assistance to a local equity program that helps local equity applicants or local equity licensees.” “Technical assistance” includes “providing training and educational sessions regarding state cannabis licensing processes and requirements to equity applicants or equity licensees that are coordinated with the local equity program.” Cities and counties will have to petition the BCC for a grant of assistance to get things going under the CCEA, and whether the BCC assists or not depends on various merit-based criteria set forth in the CCEA regarding the nature of the local social equity program.

Assembly Bill 2020: Events

Finally, the legislature got on board with expanding the venues at which cannabis events can be held. AB-2020 now allows cannabis events to take place at “a county fair event, district agricultural association event, or at another venue expressly approved by a local jurisdiction for the purpose of holding temporary events of this nature . . .” Of course, local jurisdictions still have to approve of these events and only licensees can throw them, but this is a big move for the increased normalization of cannabis in California, and especially in Southern California, where, before, licensees could only have temporary events at just county fairs and district agricultural association ground locations. In turn, we may be able to see cannabis temporary events at venues like the Coachella music festivals so long as the applicable local government approves it.

Assembly Bill 1793: Cannabis Convictions

AB-1793 mandates that the State of California Department of Justice/Office of the Attorney General, before July 1, 2019, review all existing criminal records in the state’s database to identify past convictions that are eligible for recall, dismissal and sealing, resentencing and/or redesignation. The State Department of Justice then must notify all local prosecutors about the foregoing eligibility. The prosecutors must then, on or before July 1, 2020, review all of their eligible criminal cases to decide whether to challenge the recall, resentence, dismiss and seal or redesignation. If no such challenge is made by that date, the subject court must automatically reduce or dismiss the conviction. Without a doubt, many people in California will have their lives and futures changed for the better due to the passage of this bill. Given that L.A. has a social equity program that seeks to bolster up those most affected by the “War on Drugs,” AB-1793 is a nice compliment to that program (and others like it).

Assembly Bill 2914: No CBD in your Booze

For anyone who had dreams of making a cannabis-infused wine, cocktail or beer, AB-2914 “prohibit[s] a licensee from selling, offering, or providing a cannabis product that is an alcoholic beverage, including, but not limited to, an infusion of cannabis or cannabinoids derived from industrial hemp into an alcoholic beverage.” Yes, the nail is now officially in the coffin for hemp-derived CBD alcoholic beverages, and hemp-CBD products are all over SoCal in all different kinds of retail and food establishments. And this doesn’t just apply to cannabis licensees—it also now applies to alcoholic beverage licensees licensed under the Alcoholic Beverage Control Act. Given that California Department of Health – Food and Drug Branch recently prohibited hemp-derived CBD in all food and regular drinks (via an FAQ), it was really only a matter of time until the state government extended that prohibition to alcohol, too.