California Cannabis Authorities Publish Proposed Regulations to Facilitate Financial Services for Cannabis Businesses

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CALIFORNIA: The California state cannabis licensing authorities—Bureau of Cannabis Control, California Department of Food and Agriculture and California Department of Public Health—provided notice to the public of proposed emergency regulations to implement the provisions of Assembly Bill 1525 (Jones–Sawyer, 2020). The proposed regulations are intended to facilitate greater access to financial services for licensed cannabis businesses that face challenges obtaining banking, insurance and other financial services commonly available to other businesses.

The proposed regulations create a pathway for licensees to authorize sharing of non-public information with selected financial institutions and provide a mechanism for financial institutions to more readily conduct the federally required reviews of the cannabis business. By reducing the burden of providing financial services to cannabis businesses, more financial institutions may be willing to provide services, thereby reducing the need to keep cash on hand and improving public safety.

The proposed regulatory text and supporting documents can be viewed at the following links:

Following the required minimum five working-day notice to the public, the licensing authorities will file the emergency regulations with the Office of Administrative Law (OAL). The five calendar-day formal public comment period will begin when OAL publishes the proposed regulations as being “under review” on its website.

Cannabis Licensing Authorities Consolidation Part Of Governor’s Proposed State Budget

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CALIFORNIA:  Governor Newsom’s fiscal year 2021-2022 budget proposal released today includes a proposal to consolidate the three state licensing authorities into a single Department of Cannabis Control. This proposal was first announced in January 2020 but was delayed due to the impacts of the COVID-19 pandemic. If approved by the Legislature, the new Department will be created on July 1, 2021.

In an effort to improve access to licensing and simplify and centralize regulatory oversight of commercial cannabis activity, the Governor’s Budget proposes to consolidate licensing and associated regulatory functions into a single state Department. This proposal seeks to better serve stakeholders including cannabis businesses, local governments, and members of the public by acting as a single point of contact as well as leverage existing funding in a more efficient way by reducing redundancies. Further, it seeks to establish uniform operations and procedures that will streamline processes for applicants and licensees and offer better service and coordination.

The three state licensing authorities have begun to prepare and plan for the consolidation and, most importantly, to ensure continuity of operations. We are committed to making this transition in a manner that reduces unnecessary disruption to the marketplace and California businesses. Our team members will remain available to applicants and licensees as they continue their routine business activities.

The Emerald Triangle, Sonoma & Del Norte Participate In First-Ever Research Study Of Northern California’s Cannabis Economy

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HUMBOLDT COMMUNITY BUSINESS DEVELOPMENT CENTER TO ESTABLISH ECONOMIC IMPACT STUDY

THROUGH GRANT FROM THE CALIFORNIA BUREAU OF CANNABIS CONTROL

ECONOMIST ROBERT EYLER OF SONOMA STATE UNIVERSITY TO LEAD RESEARCH IN PARTNERSHIP

WITH THE CALIFORNIA CENTER FOR RURAL POLICY AT HUMBOLDT STATE UNIVERSITY

 

CALIFORNIA:  Northern California’s cannabis industry will become the focus of a pioneering study examining the economic impact of industry upon the region.  The Humboldt Community Business Development Center (HCBDC), has partnered with the California Center for Rural Policy at Humboldt State University, and Sonoma State University for a comprehensive look into the impact of cannabis farming, manufacturing, distribution, and retail sales on the overall economy of a research area which includes the legendary Emerald Triangle (Humboldt, Trinity, and Mendocino counties).  The HCBDC will develop the study through a grant from the California Bureau of Cannabis Control.

“It is widely understood that cannabis is a significant economic driver in rural northern California, yet four years into the regulation, legalization, and taxation of California’s cannabis industry we still do not have real, data-driven research and analysis on what is the true economic impact of the cannabis industry,” says Natalynne DeLapp, HCBDC Executive Director.  “This grant will provide resources to answer long-standing questions, will help establish a baseline by which to measure the economic health of the cannabis industry, and by which public policies can be evaluated for efficacy for years to come.”

A chief cash crop in the area for decades, there has never been a thorough analysis of the role of cannabis to the local economy of rural Northern California. The study which also encompasses Del Norte and Sonoma counties will begin to harvest data in early 2021 on such issues as the impact of cannabis on the private and the public sectors, cannabis prices on the licensed and unlicensed markets, job creation, and taxes and government and administrative costs.  Some of the questions this  study will seek to address include:

  • How much cannabis is produced by the North Coast cannabis community?

  • How much is the region contributing to California’s GDP?

  • How long have businesses been in the community and how much do they contribute to state and local taxes?

  • How many people are employed; how much is paid in wages?

  • How much are cannabis businesses paying in licenses, permits, and fees?

“This proposal helps policymakers, advocates, private business, and local residents understand the economics and business aspects of the cannabis business as a combination of agriculture and manufacturing with supply-chain partners to deliver goods to retail and customers,” says economics professor Robert Eyler, Dean, Sonoma State University’s School of Extended and International Education, who will be leading the study.  “This framing gets us away from the conversation of illegality and about how these businesses (similar to the wine or craft brew industries) harvest a crop that becomes a manufactured product.”

“For decades, rural northern California counties have incorporated the cannabis economy as an unplanned economic development strategy. This research will help these jurisdictions formulate long-term strategies to incorporate a significant, previously illegible, sector of their economies into a more sustainable, resilient future for their communities,” says Dominic Corva, Co-Director, Humboldt Interdisciplinary Institute for Marijuana Research (HIIMR), Humboldt State University.

California: Notice Regarding State Stay-At-Home Order Issued December 3, 2020

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CALIFORNIA:  On Thursday, December 3, 2020, Governor Gavin Newsom issued a new Stay-at-Home Order to protect the health and well-being of all Californians and to continue facilitating a consistent approach across the state to slow the spread of COVID-19. This order goes into effect at 12:59 p.m. on December 5 and will be applied on a regional basis. If a region falls below the 15% ICU threshold, it will have 24 hours to implement the Stay-at-Home Order. The order will remain in effect for at least three weeks. Learn more about this order.

 

The order continues to identify certain services as essential and these services can continue operations while the Stay-at-Home Order is in effect. Cannabis businesses remain essential businesses under the order. To ensure public and employee safety, the order limits the number of people on a cannabis retail premises to 20% of the capacity of the retail location. Cannabis licensees can otherwise continue to operate in the same manner they are now, including activities allowed by approved disaster-relief requests, provided their operations comply with state and local rules and regulations. To determine if your region is subject to the stay-at-home order, please visit: COVID19.CA.GOV.

Any licensee that continues to operate must adopt social-distancing and anti-congregating measures, and must follow the CDC’s Interim Guidance for Businesses and Employers to Plan and Respond to Coronavirus Disease at all times.

The Governor recently announced  programs to provide financial assistance to certain small businesses. This includes immediate tax relief from the California Department of Tax and Fee Administration (CDTFA) in the form of automatic filing extensions, interest-free payment plans, or a hiring tax credit of up to $100,000 to offset income or sales and use taxes. Information about these programs can be found at CDTFA’s COVID-19 web page. You can also learn more about the Small Business COVID-19 Relief Grant, including availability and eligibility, by signing up for updates from the California Office of the Small Business Advocate. Below are resources for employers, employees, and public safety:

California Bureau Of Cannabis Control Announces Public University Research Grant Funding Recipients

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CALIFORNIA: The Bureau of Cannabis Control (Bureau) announced that it has awarded $29,950,494 in public university research grant funding to universities across California.

“The research conducted through these public university grants will provide critical information for evaluating our legal cannabis system and its impacts,” Bureau of Cannabis Control Chief Lori Ajax said. “This research will be a valuable tool to inform future cannabis policy in California.”

Research proposals had to fall within one of the several specified categories, including public health, criminal justice and public safety, economic, environmental impacts, and the cannabis industry. A detailed description of the list of research subjects for grant funding can be found in Revenue and Taxation Code section 34019.

In total, the Bureau received more than 100 applications for grant funds up to $2 million for any specific proposal. After a thorough review process, the nearly $30 million was awarded to the following public universities:

Public University Awarded Funding Research Proposal
UC San Francisco  

$2,000,000.00

 Comprehensive Analysis of Developmental Cannabis Exposure on Brain, Immune, and Sensory Systems
 

UC Santa Barbara

  

$1,999,191.00

 Surface Water Emissions from Cannabis Cultivation Sites: Quantity, Quality, Toxicity, and Relationships to Farmers’ Practices
CSU

Dominguez Hills

  

$1,866,311.00

  

Cannabis Industry in South Bay Los Angeles
UC

Berkeley

 $1,827,596.00 Local Regulation of Cannabis in California
UC Los Angeles  

$1,429,001.00

 Impact of Cannabis Potency on The Properties, Composition, and Toxicity of Inhaled and Second-Hand Smoke
UC San Francisco $1,384,466.00 Effects of Chronic Cannabis Use on Endothelial Function
 

UC Irvine

  

$1,351,556.00

 Exploring Cannabis Policies and Practices That Influence Adolescent Use: Evolution of Local Cannabis Law, Products, Sales, and Marketing
 

UC San Diego

  

$1,321,833.00

 The Public Health Impact of Cannabis Legalization in California: A Comprehensive Qualitative and Quantitative Analysis by Age, Gender, Race/Ethnicity, and Regions
UC Los Angeles  

$1,082,815.00

 Assessing the Feasibility and Consequences of Implementing a Cannabis Potency Tax in California
UC San Francisco  

$1,067,483.00

 The LEAF Study: Lung Effects and Function Associated with Cannabis Use
UC Los Angeles  

$1,048,857.00

 Study of Employment Conditions and Equity in California’s Cannabis Industry
 

UC San Francisco

  

$1,038,782.00

 Public Health Impacts of State Policies Mandating Point-of- Sale Warning Signs Regarding Cannabis Use During Pregnancy
UC Davis $1,034,730.00 Understanding the Impact of Cannabis Use in Early Psychosis
UC San Diego  

$987,738.00

 Evaluating the Impacts of Packaging and Labeling on Cannabis Edible Use among Youth
UC San Francisco $952,540.00 California Cannabis Poisonings Under Proposition 64
 

UC Los Angeles

  

$896,794.00

 Assessing the Impact of Proposition 64 on Cannabis Use, Maladaptive Cannabis Use, Cannabis Use Disorder Treatment, and Public Health
UC San Diego  

$887,101.00

 The Role of Cannabidiol in Anandamide-Related Improvement in Alexithymia and Health Outcomes
UC Los Angeles  

$781,707.00

 A Demographic Analysis of the California Licensed Cannabis Industry and Consumer Market
UC Los Angeles  

$758,517.00

 The Impact of Cannabis Marketing on California’s Youth: Neuro-Behavioral Studies for Informing Policy
 

 

UC Davis

  

 

$726,816.00

 Cannabis Industry: Assessment of the Location, Structure, Function, and Demographics of Licensed Cannabis, Focusing on Geographical Price Differences, and Differential Impacts of Local Prop-64 Related Regulations on the Competitiveness of Licensed Businesses
UC

Berkeley

  

$658,306.00

 Transformation of Unregulated Cannabis Cultivation Under Proposition 64
 

 

UC Davis

  

 

$655,564.00

 Economic Impacts: Market Prices for Licensed and Unlicensed Cannabis and the Effects of the Current and Alternate Cannabis Tax Structures and Tax Rates on the Private and Public Sectors in California, Including Government Administrative Costs and Revenues
 

 

UC Davis

  

 

$562,240.00

 Environmental Impacts of Cannabis Cultivation in California As Affected by the Farm Economics of Licensed and Unlicensed Cannabis Production, Including Effects of Testing Regulations and Compliance with the Criminal Prohibition of Unlicensed Cannabis
 

UC

Berkeley

  

 

$489,762.00

 Assessing Environmental Impacts of Cannabis-Related Noise and Light Disturbance to Inform Management of California Wildlife
UC

Berkeley

  

$465,902.00

 Examining Tribal Sovereignty Over Cannabis Permitting on Native Ancestral Lands
CSU

Humboldt

 $464,997.00 Cannabis Business Entrepreneurs and Jobs
UC Los Angeles  

$414,183.00

 Understanding the Impact of Cannabis Marketing on Cannabis Use Disparities Among Sexual and Gender Minority Youth
UC

Berkeley

  

$328,916.00

 Cultivation Bans, Local Control, and the Effects and Efficacy of Proposition 64
UC

Berkeley

  

$319,091.00

 Cannabis and Wildfire: Current Conditions, Future Threats, and Solutions for Farmers
UC

Berkeley

  

$314,417.00

 Cannabis Water-Use Impacts to Streamflow and Temperature in Salmon-Bearing Streams
UC

Berkeley

 $270,269.00 The Effect of Local Cannabis Regulation on Property Prices
UC San Diego  

$235,039.00

 Evaluating Risks and Benefits of Cannabis Use by Older Adults: A Pilot Study
CSU

Humboldt

  

$183,015.00

 The Economic Impact of Cannabis Legalization in Rural Northern California
 

UC Davis

  

$144,949.00

 California Cannabis Workers: Perceptions, Beliefs, and Knowledge of Occupational Health and Industry Hazards

California Bureau Of Cannabis Control Announces New API For License Search Data

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CALIFORNIA:  The Bureau of Cannabis Control announced the launch of a new Application Programming Interface (API). The API allows stakeholders to obtain license data that can be integrated into their own software. Users may use the API to obtain information for a single license, a list of licenses, or the entire license directory in a single request. The data available through the API mirrors the publicly-available data in the Bureau’s license search and is updated nightly.

“The API was developed to provide stakeholders with an additional tool to access the Bureau’s licensing data and to provide greater flexibility in utilizing that information,” Bureau Chief Lori Ajax said.

This API allows users to access all the publicly-available Bureau licensee data in a convenient comprehensive format. The information available through the API allows the user to confirm with certainty that they are not supporting an illegal cannabis business. Third party software application providers can utilize the API to go ‘straight to the source’ instead of relying on self-reported data from businesses or manually looking up every retailer.

To get started, please consult the API User Guide here – https://bcc.ca.gov/about_us/documents/iservices_api_user_guide.pdf. The guide contains step-by-step instructions about how to receive licensing data from the Bureau through the API.

For questions or issues not addressed by the API User Guide, please contact the DCA iServices API Team at the following email address: iservices@dca.ca.gov.

California: Cannabis Advisory Committee To Hold Virtual Meeting

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CALIFORNIA:  The Bureau of Cannabis Control (Bureau) announced today that the Cannabis Advisory Committee will hold a virtual meeting on Friday, October 30, 2020. The focal point of the meeting will be to discuss and provide recommendations for consolidating the three licensing authorities’ regulations into one comprehensive set of regulations applicable to California’s cannabis industry.

The agenda for these meetings can be found on to the Bureau’s website at the following link: https://bcc.ca.gov/about_us/meetings/agendas/20201030_cac.pdf

To participate in the WebEx Events meeting, please log on to this website the day of the meeting: https://dca-meetings.webex.com/dca-meetings/onstage/g.php?MTID=e8152c577f560f6f009e3720270e2a834

This information will be used as part of the process for the plan announced by Governor Newsom in January to establish one Department of Cannabis Control to serve as the regulator for the cannabis industry and as the single point of contact for licensees and local governments.

The Cannabis Advisory Committee advises the Bureau, the California Department of Food and Agriculture, and the California Department of Public Health on the development of regulations that help protect public health and safety and do not perpetuate the illegal market for cannabis.

California Community Reinvestment Grants Program Update

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CALIFORNIA:  10-27-2020 Important Note: The Governor’s Office of Business and Economic Development is aware that the California Attorney General’s Registry of Charitable Trusts (RCT) Registry Verification Tool is currently down for maintenance and may be unavailable until after the application due date.

In lieu of the screenshot showing eligibility, please upload a Word document stating that you have verified your organization’s RCT status as either “Current” or “Exempt”.  Applicants can visit https://www.oag.ca.gov/charities/reports to check their status using the Charity Registration Reports downloadable Excel files.  GO-Biz will still independently verify the RCT status and all Community-based Nonprofit Organization (CBO) applicants, including all CBO partners in a Collaborative Application, must have a status of “Current” or “Exempt” by the application due date, which is November 2, 2020.  There will be no exceptions to this requirement.

APPLY NOW

Updates

09-28-2020:  The California Community Reinvestment Grants (CalCRG) program Grant Solicitation for Fiscal Year (FY) 2020–21 is now available. The Grant Solicitation includes an overview of the program, eligibility criteria, application components and requirements, and the evaluation process and scoring criteria.

The Online Application Portal is now open and can be accessed by clicking the “Apply Now” button above. The application process is divided into two phases, and Phase 1 applications must be submitted no later than 11:59 pm on Monday, November 2, 2020. Please review the Grant Solicitation for additional details.

Resources

Required Documents

Background

The CalCRG program was included in The Adult Use of Marijuana Act (Proposition 64), which was approved by California voters on November 8, 2016. In accordance with the proposition, GO-Biz will award grants to local health departments and qualified community-based nonprofit organizations to support the following activities for communities disproportionately affected by past federal and state drug policies, also known as the War on Drugs (WoD):

  • Job placement
  • Mental health treatment
  • Substance use disorder treatment
  • System navigation services
  • Legal services to address barriers to reentry
  • Linkages to medical care

The mission of the CalCRG program is to advance health, wellness, and economic justice for populations and communities harmed by the WoD. The CalCRG program’s guiding principles are that its efforts will be:

  1. Responsive to and focused on populations and communities disproportionately impacted by the WoD.
  2. Grounded in science and data, while being receptive to emerging and innovative approaches.
  3. Advancing whole person, trauma-informed care.
  4. Accountable to taxpayers and stakeholders.

Funding

The CalCRG program is funded by the cannabis excise and cultivation taxes imposed by Revenue and Taxation Code sections 34011 and 34012, respectively.  Contingent upon sufficient tax proceeds generated, the funding for the grant program is as follows:

  • $30 million in fiscal year 2020-21 (July 1, 2020 – June 30, 2021)
  • $40 million in fiscal year 2021-22 (July 1, 2021 – June 30, 2022)
  • $50 million in fiscal year 2022-23 (July 1, 2022 – June 30, 2023) and each year thereafter

At least 50 percent of the grant funding will be allocated to qualified community-based nonprofit organizations.

California Cannabis Licensing Authorities File Civil Action Against Vertical Bliss (Kushy Punch) For Unlicensed Activity

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CALIFORNIA:  The Bureau of Cannabis Control and California Department of Public Health (CDPH) announced today the filing of a complaint seeking civil penalties from Vertical Bliss, Inc. also known as Kushy Punch and related people for unlicensed commercial cannabis activity. The complaint was filed on September 23, 2020 by the California Office of the Attorney General in Los Angeles County Superior Court.

The complaint alleges that Vertical Bliss conducted unlicensed operations on an undisclosed premise in Canoga Park, California, and inverted illegally manufactured product back into the regulated market. On October 2, 2019, in response to tips about illegal manufacturing and distribution of cannabis goods, the Division of Investigation executed search warrants at the unlicensed Canoga Park location. The search revealed significant quantities of cannabis concentrates, edibles, vape cartridges and raw materials. Seized records document the production of more than 3.3 million Kushy Punch brand gummies during an 18-month period, with an estimated value of $64 million.

Vertical Bliss simultaneously held cannabis manufacturing and distribution licenses for a premises located in Chatsworth, California. These licenses were revoked, following the discovery of the unlicensed operations.

The Medicinal and Adult-Use Regulation and Safety Act (MAUCRSA) establishes strict requirements for the cannabis market and products, including requiring a state license and local approval for every premises where commercial cannabis activity is conducted. Manufacturing, distributing or selling cannabis goods without a state license or at a location that is not licensed is a violation of state law. A person engaging in commercial cannabis activity without a license is subject to civil penalties of up to three times the amount of the license fee for each day of operation.

To file a complaint regarding illegal cannabis activity, click here – Enforcement Online Services.

CDFA Launches Cannabis Industry Education & Outreach Campaign – “This is California Cannabis”

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CALIFORNIA: The California Department of Food and Agriculture (CDFA) today launched a statewide public education and outreach campaign, “This is California Cannabis,” designed to promote the state’s legal cannabis cultivation market and highlight the support and guidance CDFA provides to help cannabis growers secure and maintain their legal cultivation license. “CDFA is committed to the success of our state’s commercial cannabis cultivators,” said CDFA Secretary Karen Ross. “‘This is California Cannabis’ celebrates the passion and hard work of licensed cannabis growers and highlights how we’re all working together to protect and promote the health, safety and quality of the industry.”

CDFA’s CalCannabis Cultivation Licensing Division is managing the campaign, which profiles the wide range of licensed California cannabis farmers, from legacy outdoor farms in rural Humboldt to high-tech, vertically-integrated operations in urban locations. “This is California Cannabis” will feature comprehensive outreach and education efforts, including community events and workshops to highlight the technical assistance and support that is available year-round to licensed growers and new applicants seeking commercial cannabis cultivation licensure.

“We’re proud of California’s vibrant cannabis cultivator community,” said Richard Parrott, director of CDFA’s CalCannabis Cultivation Licensing Division. “California is known for growing the best cannabis in the world and our licensed cultivators are leading the way with innovative practices and environmental sustainability.” California cultivators who are interested in seeking a license can begin the application process online at calcannabis.cdfa.ca.gov or by contacting a licensing specialist by calling toll-free 1-833-CALGROW (1-833-225-4769) or sending an email to calcannabis@cdfa.ca.gov.

CDFA provides year-round support and technical assistance, including updated services for commercial cultivators during the pandemic. For more information about the campaign, please visit growwithCA.com to view the videos, farmer profiles and other outreach materials.