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California publishes first draft of permanent marijuana industry rules

Much of California’s cannabis industry was consumed Friday with reading and rereading the 315 pages of draft regulations issued by the trio of state agencies that oversees the state’s multibillion-dollar marijuana market.

The proposed rules, issued Friday, shed light on the direction regulators are headed in assembling a final regulatory framework for the largest marijuana market in the world.

Initial analysis by two industry experts suggests that the biggest highlights to an earlier set of emergency rules involve delivery, packaging, edibles and concentrates.

Allow marijuana products to be delivered into any jurisdiction in California, a move that will expand the market for delivery companies and allow MJ businesses to serve more consumers.Among the key changes, the draft rules:

  • Permit an increase in potency for some manufactured edible products.
  • Update the requirements covering child-resistant packaging for products.

“There’s some pretty monumental stuff in there,” said Khurshid Khoja, a veteran industry attorney who had a chance to scan through the Bureau of Cannabis Control’s (BCC) rules.

Legislative advocate Max Mikalonis, of K Street Consulting, echoed Khoja’s sentiment and said the draft regulations – which are the highly anticipated first peek at permanent regulations – are a step forward because they help clarify many questions posed by companies.

“Each set of regulations has tried to be more clear than the previous set,” Mikalonis said.

The entire California industry has been operating under emergency regulations since they were first issued last November; but state law mandates that the rules must be finalized by the end of 2018.

In addition to the BCC, the other two agencies involved in rulemaking are the Department of Public Health and the Department of Food and Agriculture.

Neither Khoja and Mikalonis had time to closely review the Department of Food and Agriculture’s new regulations; however, the agency left in place a controversial loophole allowing for no limits on “small” cultivation licenses for any given business, in essence allowing for huge commercial-scale grow facilities.

There were also a host of clarification changes in the regulations, “tinkering around the edges,” as Mikalonis put it, to help smooth out operations for companies.

Delivery win

The biggest change, according to Mikalonis and Khoja, was an explicit clarification from the Bureau that allows cannabis delivery into any jurisdiction in California.

“That’s a big win,” Mikalonis said.

More than 400 municipalities or counties had banned medical or recreational cannabis companies or both, according to the industry website CannaRegs, essentially forcing consumers from those areas to drive to a region in California that allows for marijuana commerce.

The step will dramatically expand the marketplace and access to consumers for delivery companies, Khoja said.

“It’s also going to do wonders for … businesses that need more of an entry point into the industry,” Khoja said. “They don’t need to have the kind of bankroll you need to have for several cultivation licenses. You can get your foot in the door through these delivery-only retail licenses.”

Potency increase for some products

Mikalonis also pointed to a slight rollback on potency caps for manufactured products from the Department of Public Health, which will now allow some medical cannabis products (but not recreational) to have up to 500 milligrams per package, an increase from the previous limit of 100 milligrams per package.

However, it’s not a complete win for edibles companies. The 500-milligram potency only applies to “orally dissolving products” such as sublingual strips. And the doses still must be in 10 milligram increments.

That means that 1,000-milligram brownies won’t be making a comeback anytime soon.

To Read The Rest Of This Article By John Schroyer on Marijuana Business Daily

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Published: July 13, 2018

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