5 Cannabis Bills Proposed by the California Legislature
1. Cannabis Packaging, Labeling and Advertising Restrictions
So far this year there are already 32 bills that have been introduced that if passed would affect operating a legal cannabis business in California. I have selected five bills that many industry insiders believe are most likely to make it to a full legislative vote. Click on the bill number to read the actual text of the bill.
AB 1207 (Irwin) Cannabis Packaging, Labeling, and Advertising. Current cannabis regulations prohibit packaging, labeling, and advertising that is “attractive to children.” This new bill codifies into California law what is “attractive to children” and adds additional prohibitions and requirements. If this passes as currently proposed, the bill prohibits the following:
a) Cartoons, toys, or robots.
b) Any real or fictional humans.
c) Any fictional animals or
d) Fruits or vegetables, except when used to accurately describe ingredients or flavors contained in a product.
e) Any likeness to images, characters, or phrases that are popularly used to advertise to children.
f) Any imitation of candy packaging or labeling, other packaging and labeling of cereals, sweets, chips, or other food products typically marketed to children.
g) The terms “candy” or “candies” or variants in spelling such as “kandy” or “kandee.”
h) Brand names or close imitations of brand names of candies, cereals, sweets, chips, or other food products typically marketed to children.
i) Any other image or packaging that is easily confused with commercially available foods that do not contain cannabis and are typically marketed to children.
This bill would also make changes to what is allowable related smoking or vaping cannabis products by specifically prohibiting “cannabis or cannabis products intended for use by inhalation or combustion form containing any natural or synthetic flavors or descriptors of flavors.” This wording is concerning because it means that natural terpenes found in cannabis could not be added back to distillate if it is removed during the extraction process. It also means that even if one of the following aromas or flavors is naturally occurring in the cannabis, those aromas or flavors could not be used to describe a cannabis product: “menthol, mint, mango, strawberry, grape, orange, clove, cinnamon, pineapple, vanilla, coconut, licorice, cocoa, chocolate, cherry, coffee, popcorn, and bubblegum.” For example, even if the cannabis has natural flavors of “pineapple,” the word “pineapple” would not be allowed to be used on the packaging, labeling, or any advertising.
2. Industrial Hemp and Intoxicating Hemp
AB 420 (Aguiar-Curry) Industrial Hemp and Intoxicating Hemp. This bill does two things. First, provides a framework to integrate hemp and hemp CDB products in to the licensed cannabis supply chain. Second, the bill requires stricter enforcement of industrial-hemp derived cannabinoids and adds additional requirements for industrial-hemp derived products that are intoxicating. Highlights of the bill include the following:
a) Bans synthetic intoxicating cannabinoids.
b) Requires out-of-state hemp manufacturers to register with the CDPH prior to manufacturing and selling industrial-hemp products in California.
c) Prohibits industrial-hemp product sales in California until the CDPH develops regulations.
d) Requires industrial-hemp derived products to meet product standards like maximum THC content, serving sizes, batch testing, and other important restrictions similar to those imposed on the cannabis industry.
e) Requires the CDPH to develop educational materials for retailers regarding what “hemp” products they are legally allowed to sell.
3. Credit Protections Law
AB 766 (Ting) Credit Protection Laws for Cannabis Licensees. Many cannabis licensees, especially distributors, are experiencing crisis-level non-payment of invoices for cannabis products that they have “sold” on credit and transferred to other licensees. This bill would give the DCC authority as follows:
a) Establishes that invoices must be paid within 15 days of the date set on the invoice for cannabis products and services sold or transferred on credit to another licensee with a total value of at least $5,000 by another licensee.
b) Establishes a reporting requirement to the DCC if the invoice has not been paid per a) above.
c) Allows the DCC to establish a range of discretionary actions–from a warning to further disciplinary action–if the invoice is not paid within 30 days of the DCC notification and increasing disciplinary action for repeat violations.
d) If an outstanding invoice is not paid in full, the non-paying licensee can be prohibited from purchasing additional cannabis goods on credit from other licensees.
e) Prohibits invoice payment terms of more than 30 calendar days.
4. Individual Plant Tags
SB 622 (Allen) Removes requirement to place a MetrC plant tag on every plant. Individual plant tags and zip ties create a very large amount of plastic waste going into landfills. There is no evidence that individual plant tags curb diversion or theft of cannabis plants. This bill would remove the requirement that a plastic plant tag be placed at the base of each cannabis plant. If this bill passes, it’s a big win for cannabis cultivators.
5. License Transfers
AB 351 (Chen) Cannabis: license transfers. Currently, cannabis licenses are not “transferrable.” This bill would allow the DCC to “transfer, assign, or reassign” cannabis licenses.