BUREAU OF CANNABIS CONTROL CALIFORNIA RE-ADOPTION SUMMARY OF CHANGES

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The Bureau of Cannabis Control’s (bureau’s)emergency regulations were re-adopted on June 4,2018 and will go into effect on June 6, 2018. The re-adoption of the emergency regulations will extend the effective period for an additional 180 days. The bureau made changes to the proposed text during the Office of Administrative Law comment period to improve clarity and in response to comments. The following is a summary of the key changes:

DEFINITIONS

• Thedefinitionforcannabiswastewasmodified to include that it is an organic waste, as defined in Public Resources Code section 42649.8.

LICENSING

  • The subsections regarding the type of license and designation of the license (A and M) in the application sections have been amended for clarity; however, the substance has not changed.(California Code of Regulations (CCR) § 5001(c)(5), § 5002(c) and (c)(3))
  • Labor peace agreements shall be entered into
    as soon as reasonably practicable after licensure or after the business employs 20 or more employees. (CCR § 5002, § 5023 and § 5600)
  • Clarifies that the annual license fee shall be
    paid after the applicant has been approved for licensure and that the bureau shall not issue a license until the fee has been paid. (CCR § 5014(b))PREMISES

• Provides an exemption to the prohibition on having a drive-in or drive-through. Applicants that received a license or permit from the local jurisdiction prior to June 1, 2018, for a premise, including a drive-in or drive-through that was

disclosed on the application, or that submitted an application to the local jurisdiction prior to June
1, 2018, that included information that a drive-in or drive-through was already part of or proposed to be part of, the premises and after June 1, 2018, the local jurisdiction approves the premises. (CCR § 5025(f))

• Clarifiesthatifthebureauisdeniedaccesstoonelicensee’s premises because of another licensee’s refusal to grant access when the only access
to the first premises is through the second, then both licensees shall be held responsible. Clarifies that if the bureau is denied access to a licensee’s premises because of a licensee’s refusal

to grant access when the only access to the licensed premises is through the licensee’s property, then the licensee shall be held responsible. (CCR § 5026(e))

SECURITY MEASURES

• Securitypersonnelmustbeatleast21years of age and licensed by the Bureau of Security and Investigative Services; however, the 24/7 language has been removed. (CCR § 5045)

TRANSPORT

• Clarifies that the inside of the vehicle includes the trunk. (CCR § 5311(e))

• Removestherequirementstokeepmedicinaland adult-use cannabis goods separate in the transport vehicle. (CCR § 5311(k))

RETAIL

• Removestherequirementthatretailersnotdisplay cannabis goods in a place visible from outside the licensed premises. (CCR § 5405)

DELIVERY

  • Clarifiesthatadeliveryemployeemaynotengage in any activities except for cannabis goods delivery and necessary rest, fuel, or vehicle repair stops. (CCR § 5415(d))
  • Clarifiesthatadeliveryemployeeshallconfirmthe age and identity of the customer. (CCR
    § 5415(g))
  • Clarifiesthatonlythelicenseeoranemployeeof the licensee shall be in a delivery vehicle.(CCR § 5417(a))
  • Clarifiesthatcannabisgoodsshallbelockedin
    a box, container, or cage that is secured to the inside of the vehicle and that inside of the vehicle includes the trunk. (CCR § 5417(b))
  • Permitsadeliveryemployeetocarryupto$10,000 in cannabis goods and complete multiple deliveries, but the driver shall not leave the retailer premises without at least one delivery order that has been received and processed. (CCR § 5418)
  • Providesthatthedrivermayonlycarrycannabisgoods in the delivery vehicle and may only perform deliveries for one retailer at a time. (CCR § 5418)
  • Thedrivermusthaveadeliveryinventoryledgerthat includes the type of good, the brand, the retail value, the track and trace identifier, and the weight, volume, or other measures of the cannabis good. After each customer delivery, the ledger must be updated. (CCR § 5418)
  • Requiresthedeliverydrivertomaintainalogthatincludes all stops from the time the driver leaves the retail premises to the time the driver returns to the premises. If a delivery driver does not have any delivery requests to be performed for the a30-minute period, then the driver shall return to the premises. (CCR § 5418)

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  • Operating Without a License

    Unfortunately, there are some marijuana businesses out there who completely disregard the licensing process and sell cannabis on their own terms. This type of blatant violations will most likely result in an immediate shutdown and very possible prosecution.

    Operating without a license is a slap in the face to all of the cannabis retailers who have worked hard to abide by new mandates and legitimize the industry. Once temporary licenses expire, dispensaries that have not been issued an annual license will be forced to shut their doors. There is zero tolerance policy for these types of cannabis compliance violations so it’s more than worth submitting an application to become a licensed retailer.

  • Failing To Report Inventory

    Part of cannabis compliance is seed-to-sale tracking. Reporting inventory counts and sales figures is required by the State of California and failing to do so will definitely result in a violation. Using dispensers software to automate reporting will allow retailers to avoid a costly infraction.

    Marijuana dispensaries will need to reconcile their inventory every 14-days with the METRC. The Bureau of Cannabis Control requires cannabis retailers to contact them and law enforcement if there are significant inventories discrepancies, product loss, or theft. Submitting compliance inventory reports that contain inaccuracies could also incur fines or fees.

    Patient Purchase Limits

    Another area of compliance that has troubled several marijuana dispensaries is the daily purchase limits for medical patients and adult-use customers. Each category of the customer has different purchase limits and calculating these during a transaction is often overlooked to conserve time.

    There have already been crackdowns on cannabis retailers in Colorado who have failed to accurately enforce the daily sales limit. Fortunately, smart dispensary POS software can alert budtenders during the transaction when a customer has met or exceeded their daily limit. Preventing overages will save your marijuana business from exorbitant citations.

    Sales to Minors

    Selling cannabis to minors is one of the more severe violations and one that is deeply frowned upon by the Bureau of Cannabis Control. New cannabis regulations authorize peace officers to use minor decoys to test marijuana dispensaries. If allowed to enter or purchase cannabis the owner, manager or budtender could be apprehended or issued a citation on the spot.

    While this may seem like entrapment to some, the minor decoy is required to answer truthfully about his age. Minor decoys will either have no identification, or identification with their real birth date so dispensary staff will need to stay diligent and validate every customer’s age.

    Delivery Documentation

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  • When it comes to delivery there are several areas of compliance that needs to be met to avoid cannabis compliance violations. Every delivery driver must be at least 21 years of age and carry a copy of the cannabis business license. All couriers must also use an enclosed vehicle meaning motorcycles do not qualify as a means of delivery transportation.

    Dispensary owners must submit all vehicle documentation including the VIN number, license plate number, and DMV registration to the Bureau of Cannabis Control before any deliveries can be made. Use of cannabis by couriers in route to their destination is strictly prohibited and drivers are not allowed to carry more than $3000 worth of product on board at any one time.

    Failing to meet new compliance statues can have some irreversible negative effects on your cannabis retailer. Installing compliance based POS software will allow dispensaries to automate many of the compliance requirements and focus on running a successful business. TO understand all the compliance benefits associated with India online.

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