On September 29, 2020, Governor Newsom signed four cannabis-related bills into law. Though consumers might overlook the impact of the new (or updated) regulations, these bills will bring about some significant changes–big and small–for licensed cannabis businesses in California.
Cannabis Bills Signed by Governor Newsom
The table below summarizes the bills signed by California’s Governor and their impact on the world’s largest legal cannabis regime:
|Assembly Bill 1525||AB 1525 removes state penalties against banks, accounting firms, and other institutions that provide financial services to cannabis industry operators.|
|Senate Bill 67 ||SB 67 further defines permissible appellations of origins, which will be codified by CDFA’s Cannabis Appellation Program no later than January 1, 2021.|
|Assembly Bill 1458||AB 1458 establishes a buffer in the maximum amount of THC permitted per serving in edible cannabis products. The Certificate of analysis will now report that the THC per serving does not exceed 10 milligrams per serving, plus or minus 12% until January 1, 2022, and plus or minus 10% after January 1, 2022.|
|Senate Bill 1244||SB 1244 allows state-licensed cannabis testing labs to test cannabis and cannabis products submitted by law enforcement and prosecuting agencies.|
# 1 Assembly Bill 1525 (AB 1525) – Cannabis: Financial Institutions
Introduced by Assemblymember Reginald Byron Jones-Sawyer, Sr. (D-Los Angeles) – Assembly Bill 1525 removes any state penalties for financial institutions, like banks and accounting firms, that provide services to the legal cannabis industry. The bill also allows cannabis licensees to request state licensing authorities to share specific information about them with the financial institution of their choosing. Governor Newsom’s clarified his support for the legislation with the following signing message:
To the Members of the California State Assembly:
I am signing Assembly Bill 1525, which affirmatively protects certain entities providing financial services to the legal cannabis industry and allows licensees to request that specific information about them be shared with financial institutions. This bill has the potential to increase the provision of financial services to the legal cannabis industry, and for that reason, I support it.
To ensure the State is appropriately protecting all licensee information subject to this bill, I hereby direct state commercial cannabis licensing authorities to promulgate regulations implementing these provisions in a manner that protects the confidential and proprietary nature of licensee data, ensures data is only being used for the provision of financial services to support licensees and further specifies how a licensee may withdraw their authorization.
You can also read more about Assembly Bill 1525 in our blog post here.
# 2 Senate Bill 67 (SB 67) – Cannabis: Marketing: Appellations of Origin: County, City, or City and County of Origin
Senate Bill 67 – Cannabis: marketing: appellations of origin: county, city, or city and county of origin – was introduced by California Senator Mike McGuire (D-Healdsburg).
Senate Bill 67 limits the approval of appellations of origin for cannabis unless it requires the practice of planting in the ground in the canopy area. Per the bill, practices using structures and any artificial light in the canopy area would be excluded from approval of appellations of origin.
SB 67 also requires CDFA to establish standards by which a licensed cultivator may designate a city or city and county of origin for cannabis produced 100% within the designated city or city and county.
You can also read more about Senate Bill 67 in our blog post here.
#3 Assembly Bill 1458 (AB 1458) – Quirk. Cannabis testing laboratories.
Per § 5724 (d)(1), the Bureau of Cannabis Control (“Bureau”), requires the THC per serving in edible cannabis products to not exceed 10 milligrams per serving.
§ 5724. Cannabinoid Testing.
(d) The sample shall be deemed to have passed the cannabinoid testing if the following
conditions are met:
(1) For all edible cannabis products, the milligrams per serving for THC does not exceed 10 milligrams per serving.
Like the Bureau’s requirements, the CDPH regulations also restrict the THC concentration per serving to 10 milligrams.
§40315. THC Concentration Limits.
(a) An edible cannabis product shall not contain more than:
(1) 10 milligrams THC per serving; and
(2) 100 milligrams THC per package.
With the ratification of AB 1458, introduced by Assemblymember Bill Quirk (D-Hayward), edible cannabis products will now require the Certificate of Analysis to report that the milligrams of THC per serving does not exceed 10 milligrams per serving, plus or minus 12% until January 1, 2022, and plus or minus 10% after January 1, 2022.
#4 Senate Bill 1244 (SB 1244) – Bradford. Cannabis Testing Laboratories
SB 1244 by Senator Steven Bradford (D-Gardena) authorizes a licensed cannabis testing laboratory to receive and test samples of cannabis or cannabis products from a state or local law enforcement, or a prosecuting or regulatory agency. Senate Bill 1244 clarifies that testing conducted by a testing laboratory for state or local law enforcement, a prosecuting agency, or a regulatory agency, is not commercial cannabis activity and is not to be arranged or overseen by the Bureau of Cannabis Control.
Cannabis Bills Vetoed by Governor Newsom
In addition to passing these laws, California’s Governor also vetoed Assembly Bill 1470 (AB 1470) on September 29, 2020.
If signed by the Governor, AB 1470 by Assemblymember Bill Quirk (D-Hayward) would have removed the requirement for licensed operators to deliver cannabis or cannabis products to a testing laboratory for compliance testing in their final retail packaging.
As per the current law, cannabis goods must be in their final retail packaging when being tested by laboratories to ensure compliance with current health and safety standards.
You can learn more about Governor Newsom’s decision to veto AB 1470 in the veto message.
If you would like to discuss the ramifications of these bills approved by the California Governor on your cannabis business, please contact the cannabis attorneys at Rogoway Law Group today.