Our SoCal Cannabis Investment Forum is TONIGHT

TOMORROW: SoCal Cannabis Investment Forum

Don’t miss tomorrow night’s Southern California Cannabis Investment Forum, a discussion on investing in Southern California’s newly regulated cannabis industry. Hosted by Harris Bricken’s from our Los Angeles office, the Southern California Cannabis Investment Forum will connect top investors and leading companies in Southern California’s cannabis and ancillary industries.

The Forum will begin at 6:30 p.m. on Thursday with a keynote from Hilary Bricken that addresses the many recent changes to California’s medical and adult use cannabis laws under MAUCRSA. From 6:45 to 8 p.m., I will moderate a panel comprised of Alex Fang, Founder of Sublime CO2; Paul Henderson, CEO of Grupo Flor; Stephen Kaye, COO of Big Rock; Kenneth Berke, President of PayQwick; and Carlton Willey, our own San Francisco-based securities and equity financing attorney.

Panelists will cover:

• Cannabis industry investing and fundraising and the outlook for the future
• Deal structures (i.e., investment rounds, debt versus equity deals, hybrid structures forced by volatile regulations, and reverse mergers)
• Business and financing concerns tied to investing in cannabis
• Investor red flags in Southern California’s cannabis industry

Audience questions will be taken throughout the presentation. A cocktail networking session will follow the panel and last until 9:30 pm. Food and drink will be provided.

The Southern California Cannabis Investment Forum will be held at Wanderlust Hollywood. Doors open at 5:30 pm. We’ll have a few tickets at the door, but we expect this event to sell out just as we did a similar event in San Francisco so it’s best to register in advance!

source https://www.cannalawblog.com/tomorrow-socal-cannabis-investment-forum/

Cannabis Home Delivery Matures in Oregon

Wage and Hour Laws for Cannabis Businesses Because it Really Matters

Emergency MAUCRSA Regulations: Manufacturing in California

We wrote last week about the California Bureau of Cannabis Control’s (BCC) issuance of their much-anticipated emergency rules to fully implement the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) in California. These emergency regulations, including those issued by the Departments of Public Health and Food and Agriculture, can be found here, here, and here.

The emergency rules are similar to the withdrawn rules under the Medical Cannabis Regulation and Safety Act (MCRSA), but there are some important additions and gap-fillers with which applicants need to familiarize themselves. In the coming weeks, we’ll be summarizing some of the key rules with respect to each category of license, beginning with manufacturing. We will be discussing these regulations a bit at our Southern California Cannabis Investment Forum on November 30 in Los Angeles and it would also behoove you to stay tuned for an announcement setting the date for our next webinar, which will delve into the new regulations in detail.

The California Department of Public Health (CDPH) regulates cannabis manufacturing through its Manufactured Cannabis Safety Branch. The CDPH will issue temporary licenses allowing manufacturers to engage in commercial cannabis activity, effective January 1^st. These temporary licenses will be valid for 120 days and may be extended for additional periods of 90 days if the business has submitted an annual license application.

For manufacturers, there are two license categories and four license types, a departure from the categories specified in SB 94. The two license categories are the A-License for the adult-use market and the M-License for the medicinal market. A single business may hold both an M- and an A- license at the same premises, so long as they submit separate applications for each.

The four license types are as follows:

• Type 7: Extraction using volatile solvents (i.e. butane, hexane, pentane).
• Type 6: Extraction using non-volatile solvents or mechanical methods (i.e. food-grade butter, oil, water, carbon dioxide). The rules also clarified the definition of “volatile” by expressly excluding ethanol, which is now deemed “non-volatile.”
• Type N: Infusions (i.e. using pre-extracted oils to create edibles, beverages, capsules, vape cartridges, tinctures or topicals).
• Type P: Packaging and labeling only

*Note that both the Type N and Type P licenses had been eliminated in SB 94, but have been reintroduced.

Each licensee will need to have written SOPs for inventory control, quality control, transportation, security, and cannabis waste disposal and must submit these SOPs with their license application. Extractions using CO2 or any volatile solvent must be conducted with a closed-loop system that has been certified by a California-licensed engineer, and volatile, hydrocarbon-based solvents must have at least 99% purity. Certification by the local fire code official will be required for volatile solvent, CO2, and ethanol extractions.

Many of the product standards from the repealed MCRSA rules have also made their way into the new MAUCRSA regulations. For example, products cannot be infused with nicotine or alcohol, or have added caffeine. Edibles cannot be shaped like a human, animal, insect, or fruit, and potentially hazardous foods like meat, seafood and other products requiring refrigeration are prohibited.

The potency requirements have changed slightly, although edibles are still limited to a maximum of 10 mg of THC per serving and 100 mg of THC per package. Other cannabis products, including tinctures, capsules, and topicals, may contain up to 1,000 mg of THC per package for adult-use products and 2,000 mg per package for medicinal-use products.

The MAUCRSA packaging and labeling regulations will require a significant departure from current practices for many existing manufacturers. Cannabis product packaging cannot resemble traditionally available food packages, and all edibles packaging must be opaque. Cannabis products and their packaging cannot be attractive to children, and packaging must be tamper-evident and child-resistant. Labels must include an ingredient list, nutritional facts, and the CDPH-issued universal symbol. Products cannot be referred to as “candy,” and must include mandated warning statements and the THC content.

Perhaps most promising to many small-scale manufacturers is CDPH’s statement that it is currently developing an additional license type, Type S, which would allow businesses to share facility space. Currently, the rules require a separate and distinct premises for each license, with the exception being that a licensee can hold both an M- and A- license of the same type on one premises. The Type S license would open the door to co-sharing of manufacturing facilities and possibly equipment, which would greatly reduce the barriers to entry for many small companies struggling to secure and build out their own manufacturing facility.

In the coming days, we’ll be delving into the new regulations for cultivation, retail, and distribution as well, so stay tuned.

 

 

 

source https://www.cannalawblog.com/emergency-maucrsa-regulations-manufacturing-in-california/

California Commercial Cannabis Real Estate and the New MAUCRSA Rules

California just released nearly 300 pages of new regulations for medicinal and adult-use commercial cannabis businesses. These long-awaited rules follow months of public comment, a substantial environmental impact report on cultivation, and a report from the state Water Resources Control Board on diversion and discharge relating to cannabis cultivation. Though the new regulations do not include wholly unanticipated changes, it does include the following that will impact cannabis businesses when it comes to real estate and land use:

1. Cultivation aggregate size limits. Though there remains a 5-year prohibition on large (type 5) cultivation licenses for grows of more than 1 acre, and a 5-year limit of one medium grow license (10,001-22,000 sq ft) per person, there is no 1-acre aggregate limit on cultivation, which had been recommended in the environmental report. In other words, there is effectively no limit, other than a company’s monetary resources for license fees, that would prevent a large cultivator from converting an existing mega-farm into a cannabis farm by simply aggregating an unlimited amount of specialty (0-5,000 sq ft) and/or small grow (5,001-10,000 sq ft) licenses. This is a troubling development for small and medium-sized operators, as they had lobbied hard for an aggregate grow limit of one acre.
2. Premises boundary demarcation. MAUCRSA allows for a person to apply for and obtain more than one cannabis license, provided the licensed premises are “separate and distinct.” We had hoped to get more guidance on this term through the regulations (e.g. does it require a wall? Nominal boundary demarcations? Something in between?), but no explanation appears in the new regulations. This means what does and does not qualify as “separate and distinct” may have to be determined through the licensing process on a case-by-case basis, since applicants all need to submit a premises plan laying out the details of their proposed operation. This could mean many indoor operators in open warehouse spaces may end up having to build extra walls and entrances.
3. Subletting and Storage. Though we already knew from MAURCSA that California would require each “premises” to be contiguous and occupied by only one licensee, the new rules go slightly further by forbidding a licensee from subletting any portion of its licensed premises and by requiring each location where cannabis goods are stored be separately licensed. This means any licensee subletting a portion of their space must plan out a proper demarcation of their premises and think carefully about using that old garage next door to store product without an additional license.
4. Concurrent adult-use and medicinal operations. Under the new rules, one licensee can concurrently operate under both an “M” license and an “A” license on the same premises, if certain conditions are met—mainly that there is one licensee that conducts a single type of operation on the premises but keeps labeling and records separate for medicinal and adult-use. Though this seems like a common-sense regulation (why would someone need two licenses to make the same product in the same place?), it was not clear until issuance of the new rules how adult-use and medicinal licenses would interact, and whether they would be treated as truly separate licenses requiring separate premises.
5. Renewable energy requirements. The prior proposed MCRSA (medicinal) regulations had required 42% of the energy used by indoor or mixed-light grow licensees come from renewable sources. The new cultivation rules require only that the licensee meets the “average electricity greenhouse gas emissions intensity required of their local utility provider” under California’s existing Renewables Portfolio Standard Program. This means that rather than having indoor grows become leaders in renewable energy standards, licensees now only need to fit in with existing requirements, and even if they don’t, they can purchase allowances and offsets under California’s cap-and-trade programs. There had even been talk of increasing the percentage requirement for renewable energy, but that seems to have fizzled out.

Though the new cannabis rules contain some business-friendly updates, some disfavor small operators. It remains to be seen what effect the licensing process and the state’s enforcement of the new rules will have on the market for cannabis and cannabis real estate. We will be discussing these new regulations a bit at our Southern California Cannabis Investment Forum on November 30 in Los Angeles and it would also behoove you to stay tuned for an announcement setting the date for our next webinar, which will delve into the new regulations in detail.

source https://www.cannalawblog.com/california-commercial-cannabis-real-estate-and-the-new-maucrsa-rules/

The Cannabis Laws of Los Angeles County: The San Gabriel Valley

Our Los Angeles cannabis lawyers (of which I am one) are constantly being asked about the cannabis laws of various of the 88 incorporated cities in Los Angeles County.

Because it is both important and difficult to decipher each individual city’s local laws, we thought it would be helpful to provide you with charts to help. We divided the county into 4 regions and we will over the next few weeks trickle out the charts for each of these regions to keep you updated on each of the cities and their current laws. Part 1 was The Cannabis Laws of Los Angeles County: The 24 Cities in the Westside/South Bay Region (310).

This week’s post highlights the cities located in and around the San Gabriel Valley. Here is the chart showing the laws pertaining to cultivation, dispensing, distribution, and manufacturing in San Gabriel Valley Cities.

Before you can receive a California cannabis license you must have proof of local approval. Our charts in this series are intended to help you figure out whether such local approval is possible and, if so, what it takes to get it. Look for additional blog posts on remaining LA incorporated cities over the next few weeks.

 

source https://www.cannalawblog.com/the-cannabis-laws-of-los-angeles-county-the-san-gabriel-valley/