California Cannabis Regulations: Navigating The Turbulent Waters


Cannabis companies in California are topic to one particular of the most strict bodies of cannabis regulations in the globe. And due to the fact regulations right here have been in a state of perpetual flux for quite a few years, navigating the state’s regulatory waters can be treacherous for each veterans and newcomers alike.

The existing status of California cannabis regulations as of the time of writing is that they are in a purgatory among initially instituted “emergency regulations” and promised permanent regulations. A set of proposed regulations are outlined in this 160-web page PDF document published by the California Bureau of Cannabis Manage, nevertheless, they have but to obtain final approval.

For very some time now detractors of the BCC’s method to regulation have warned that more than-regulation and higher taxes would strangle quite a few of the tiny companies that try to play by the guidelines although generating it tough for them to compete with black market place sources.

That prediction proved accurate when it was lately announced that the state really sold about $500 million significantly less marijuana in 2018 with a recreational market place in spot than was sold in 2017 when only health-related cannabis was permitted. And the quantity of taxes collected by the state are projected to come in at significantly less than half what officials anticipated.

And matters appear to be having worse, not greater.


On Jan. 9, 2019, the grandfather period for health-related marijuana collectives and cooperatives ended. As a outcome, these dispensaries, some of which have been operating in the state for more than two decades, will be forced to either get a valid license, close up shop, or operate in noncompliance. Quite a few of these operations will select the latter, risking getting raided and shuttered by law enforcement and facing attainable criminal charges and hefty fines. With roughly two-thirds of California’s cities and counties possessing banned retail cannabis companies, quite a few of these issues — most of them tiny companies — will obtain it not possible to get a license.

Some of these companies have received short-term permits beneath emergency guidelines, but it will be tough for quite a few of these operators to safe complete annual permits. Even though officials predicted there would be as quite a few as six,000 cannabis licenses awarded in the initially couple of years, at the time of writing significantly less than 1/10th of these have been handed out.

In order to get a state license, cannabis producers ought to submit applications to as quite a few as 5 state agencies. And it is not only the state that these companies have to deal with.  In addition to state guidelines, cannabis companies ought to play by county and municipal guidelines which can be just as stifling if not worse.

Just 89 of California’s 482 cities let retail sales. And in Los Angeles, “the biggest Marijuana market place in the globe,” just six of 88 municipalities have authorized retail sales. Even though state law permits residence delivery, the Bureau of Cannabis Manage has but to finalize proposed guidelines which could let dispensaries to provide their goods to towns exactly where retail sales are banned.


Following input from the public regulators finalized a set of proposed permanent guidelines in early December. The proposed regulations created beneath the Medicinal and Adult-Use Cannabis Regulation and Security Act come from 3 agencies — the Bureau of Cannabis Manage, Division of Meals and Agriculture and Division of Public Well being — and touch on all elements of the cannabis market from seed to sale which includes advertising.

Right here are some of the a lot more certain modifications proposed by regulators in the most current draft of market guidelines.

  • Cannabis delivery by third-celebration businesses that do not have state MJ industrial licenses will be prohibited.

  • The quantity of inventory a single delivery automobile is permitted to carry will be decreased from $10,000 to $five,000.

  • Licensed applications will necessary applicants to disclose far a lot more data about men and women and businesses that hold ownership stakes.

  • Licensing and branding agreements with legacy operators that have been expanding or manufacturing with out a state permit would be expressly prohibited.

These are just a couple of of the regulations outlined in this 160-web page document. But, like we mentioned, these guidelines have not been totally authorized but. So like it or not, if you are in the cannabis market in California, you will have to have to be cautiously tuned into additional developments in order to stay in compliance.


What are the greatest complications that California cannabis companies are experiencing when it comes to regulatory compliance? According to IndicaOnline, a publication focused on cannabis retailers, as of January 2018, the 5 most widespread violations committed by California dispensaries have been:

  1. Operating with out a license

  2. Failing to report inventory

  3. Exceeding patient acquire limits

  4. Sales to minors

  5. Lack of documentation for deliveries.

According to the article’s author, “If cannabis compliance violations are committed, the offending cannabis retailer will initially be sent a notice to comply. If the violation is not addressed inside 15 days of getting the notice, the marijuana dispensary could be topic to citations and administrative charges up to $five,000.”

The ideal way to prevent these and other regulatory violations is to implement a robust seed-to-sale tracking application such as the one particular constructed into Viridian Science’s cannabis ERP technique. Our seed-to-sale tracking technique has up-to-date regulatory needs constructed proper in, as properly as auditing and reporting tools which make it effortless to comply with regulations.

Viridian Sciences ERP has been created to integrate with any necessary compliance technique to allow tracking and reporting. It is made to manage numerous areas as properly as numerous market verticals which includes growers, processors, labs, distributors, and dispensaries, as properly as to be versatile and scalable to develop with your company.

The California Cannabis market is in a state of fast modify. Inside this evolving atmosphere, it is reassuring to know you are operating a trusted seed-to-sale trace-capacity technique. One particular that will assistance hold you up-to-date with regulations and needs for every single nation, state or city.




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