FEBRUARY 2018 - Capitol Corner

With one more week before the bill introduction deadline, the Legislature, as we predicted, is restraining themselves when it comes to cannabis and adhering to the Governor’s demand that the regulatory agencies fix the kinks this year.  The following are the cannabis-related bills that have been introduced since the last newsletter:

AB 1996 (Lackey) - Would conform the name of the Cannabis Research Program, also sometimes referred to as the California Marijuana Research Program or the Center for Medicinal Cannabis Research, throughout the code, including for purposes of the appropriation made by AUMA, as the California Cannabis Research Program and would specify that the program is hosted by the Center for Cannabis Research.

AB 2020 (Lackey) - Would authorize a local jurisdiction to apply for a temporary event license, and would generally require that local jurisdiction to comply with all existing licensure requirements that apply to any other applicant, except for specified provisions relating to background checks and prior convictions. The bill would also authorize a state temporary event license to be issued to a licensee for an event to be held at any other venue expressly approved by the local jurisdiction for events, as specified.

AB 2058 (Chau) - Would require any law enforcement agency, as specified, to annually report to the Department of Motor Vehicles the number of arrests made for driving under the influence and the number of those arrests in which cannabis was suspected to be the substance, or one of the substances, of which the person was under the influence. This bill contains other related provisions and other existing laws


AB 2069 (Bonta) - Would prohibit an employer from engaging in employment discrimination against a person on the basis of his or her status as, or positive drug test for cannabis by, a qualified patient or person with an identification card. The bill would provide that it does not prohibit an employer from refusing to hire an individual or discharging an employee who is a qualified or person with an identification card if hiring or failing to discharge an employee would cause the employer to lose a monetary or licensing-related benefit under federal law.

SB 930 (Hertzberg) - Current law, the Financial Institutions Law, regulates the activities of various financial entities, including commercial banks, industrial banks, trust companies, credit unions, and savings and loan associations.This bill would state the intent of the Legislature to enact subsequent legislation that would establish a state-chartered bank that would allow a person licensed to engage in commercial cannabis activity under MAUCRSA to engage in banking activities in California.

Regulatory Issues:

  • CA's Chief Cannabis Regulator Predicts More Issues with Supply (SF Chron) - California’s top cannabis regulator said the state deserves credit for a successful rollout of retail marijuana sales, but acknowledged that significant issues loom in the near future. One month after the start of recreational marijuana sales, Lori Ajax, chief of the state Bureau of Cannabis Control, gave an assessment of the state’s performance for a few hundred people at the International Cannabis Business Conference. She praised her employees, who worked through the weekend before the Monday, Jan. 1 beginning of legal sales, granting licenses to dispensaries eager to start. Employees continued to work on Jan. 1, expecting to receive complaints from license applicants and holders, but they never came, Ajax said. The bureau has granted about 2,400 temporary licenses for retail sales, delivery, distribution, testing and other parts of the cannabis supply system. The bureau is one of three state agencies licensing marijuana businesses, with the Department of Public Health permitting manufacturers and the Department of Food and Agriculture handling growers. While dispensaries are selling marijuana in many parts of the state, Ajax cautioned that the system is still under construction. “The supply chain has not been completely tested,” she said. “At some point, we’re going to see the supply depleted.” Anticipating possible shortages under the new regulated system, many retailers stocked up on cannabis and cannabis-infused products late last year, she said. Once that supply runs out, things could get tight. The bureau had issued 214 retail licenses as of Feb. 2. Those stores can only do business with other permitted businesses, including growers and distributors. One pinch point in the system is distribution. Cannabis products can only be shipped from growers and manufacturers to retailers through licensed distributors. But there are only 129 licensed distributors in the state, not enough to meet demand, Ajax said. Another problem – there are only 21 licensed testing facilities in California. Starting in July, marijuana will have to be tested for pesticides and other materials before it can be sold. “We always knew there would be pinch points,” Ajax said. One reason more distributors and testing companies haven’t gotten into the business is because many parts of California are not open for the retail cannabis market, she said. Ajax said the bureau has worked closely with local governments to inform them about the industry and regulations. But ultimately it’s up to the cities to decide if they want to enter the market or not, she said. She said the bureau’s approach to the problem is simple. “We are licensing as many businesses as quickly as possible,” she said.

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