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Volume XII, Number 272

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In One Day, California Governor Signs Into Law Ten Cannabis Bills, Including Authorization for Interstate Commerce

Acting in one fell swoop, on September 18, 2022, California Governor Gavin Newsom signed 10 cannabis-related legislative bills into law. These bills, which touch on issues that run the gamut of the cannabis industry, are intended to “strengthen California’s cannabis laws, expand the legal cannabis market and redress the harms of cannabis prohibition.” Senate Bill 1326 is the most widely recognized bill of the group, and authorizes the Governor the power to sign cannabis trade agreements with other states where cannabis is legal. Other bills address employment protection, labelling, use of cannabis in veterinary medicine and taxation. In his press release, Governor Newsom said: “For too many Californians, the promise of cannabis legalization remains out of reach. These measures build on the important strides our state has made toward this goal, but much work remains to build an equitable, safe and sustainable legal cannabis industry.”

Still before Governor Newsom for his signature is SB 1496, which would implement a series of changes to the state’s cannabis tax policy, including authorizing regulators to extend the deadline for tax payments by cannabis businesses located in areas affected by an emergency proclamation by the Governor.

Below is a discussion of the cannabis-centric Senate and Assembly bills adopted during the 2022 Legislative session.

SB 1326 – Cannabis: Interstate Agreements

SB 1326 adds Chapter 25 to the Business and Professions Code and allows for interstate cannabis commerce from California to and from other states that recognize the legality of cannabis cultivation, production, distribution and/or possession. While seemingly revolutionary, SB 1326 is contingent on an official assurance that the activity would not result in federal enforcement action against California – meaning, most likely, that this bill cannot be utilized until cannabis is federally decriminalized.

Historically, California is an industry leader in product quality and innovation, and this bill, according to SB 1326’s author, Senator Anna Caballero, “provides a relief valve for the oversupply of cannabis, an opportunity to grow California’s brand and market share, support job creation, and gives the state a competitive advantage as federal policy develops…SB 1326 is an essential step to ensure that California can fully capitalize on, and remain a leader in, the forthcoming national cannabis market. Furthermore, SB 1326 would allow California to use its own labor, environmental, and product quality standards be adopted in other states.”

SB 1186– Medicinal Cannabis Patients’ Right of Access Act

SB 1186 prohibits a local jurisdiction from adopting or enforcing any regulation that prohibits the delivery of a medicinal cannabis retail sale to medicinal cannabis patients or their primary caregivers by medicinal cannabis businesses, or that has the effect of prohibiting such delivery. The bill’s author, Senator Scott Weiner, states this bill is a victory for seniors living with chronic illness, and will both improve patient access and help fill voids throughout the state where no cannabis license types have been authorized.

AB 1646 – Cannabis Packaging: Beverages.

AB 1646 authorizes cannabis beverages to be packaged in containers of any material that are clear or any color.

AB 1706 – Cannabis Crimes: Resentencing.

If an eligible cannabis conviction was not challenged by July 1, 2020, AB 1706 requires the California court system to process record sealing and other forms of relief for such convictions by March 1, 2023. AB 1706 also requires the Department of Justice to complete an update of the State’s summary criminal history information database, and ensure that inaccurate state summary criminal history is not reported. The Department of Justice is also required to conduct an awareness campaign so that individuals that may be impacted by this process become aware of methods to verify updates to their criminal history. The bill would make a conviction, arrest, or other proceeding that has been sealed pursuant to these provisions deemed never to have occurred.

AB 1885 – Cannabis & Cannabis Products: Animals: Veterinary Medicine

AB 1885 expands the purpose of the comprehensive system established by Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) to include the control and regulation of the cultivation, distribution, transport, storage, manufacturing, processing, and sale of cannabis products intended for use on, or consumption by, animals. The bill makes various related revisions to the definitions under MAUCRSA, would exclude livestock and food animals, as specified, from the definition of “animal,” for these purposes, and would specify that cannabis concentrate and edible cannabis products are not considered processed pet foods as defined under the Pure Pet Food Act of 1969.

AB 1885 would also prohibit the Veterinary Medical Board within the Department of Consumer Affairs from disciplining a veterinarian who recommends the use of cannabis on an animal for potential therapeutic effect or health supplementation purposes, unless the veterinarian is employed by or has an agreement with a cannabis licensee. Under this bill, the Veterinary Medical Board is required to adopt guidelines, by January 1, 2024, for veterinarians to follow when recommending cannabis within the veterinarian-client-patient relationship, and would require the Veterinary Medical Board to post the guidelines on its internet website.

Lastly, AB 1885 would require that cannabis products intended for animals comply with additional concentration and other standards adopted by regulation. These regulations must be promulgated no later than July 1, 2025, and would prohibit the marketing or sale of those products before the regulations take effect.

AB 1894 – Integrated Cannabis Vaporizer: Packaging, Labeling, Advertisement, & Marketing

AB 1894 requires the advertisement and marketing of a cannabis cartridge and an integrated cannabis vaporizer to prominently display a specified message to properly dispose of a cannabis cartridge and an integrated cannabis vaporizer as hazardous waste. This bill also prohibits the package, label, advertisement, and marketing from indicating that the cannabis cartridge or integrated cannabis vaporizer is disposable or implying that it may be thrown in the trash or recycling streams.

AB 2210 – Cannabis: State Temporary Event Licenses: Venues Licensed by the Department of Alcoholic Beverage Control: Unsold Inventory

AB 2210 prohibits Department of Cannabis Control (DCC) from denying an application for a state temporary event license solely on the basis that there is a license issued pursuant to the Alcoholic Beverage Control Act for the proposed premises of the event. It also prohibits the Department of Alcoholic Beverage Control from taking disciplinary action against a person licensed pursuant to the Alcoholic Beverage Control Act on the basis of a state temporary event license issued by the DCC to a licensee that utilizes the same premises.

AB 2210 requires all on- and off-sale privileges of alcoholic beverages at the venue to be suspended for the day of the event until 6 a.m. on the day after the event has ended, and would prohibit all alcohol consumption on the venue premises for the day of the event, until 6 a.m. on the day after the event has ended. All inventory of cannabis or cannabis products to be sold by a state temporary event license to be transported to and from the temporary event by a licensed distributor or licensed microbusiness. A state temporary event licensee, upon completion or cessation of the temporary event, is authorized to reconcile unsold inventory of cannabis or cannabis products and return it to the licensee’s retail premises.

AB 2188 – Discrimination in Employment: Use of Cannabis[1]

AB 2188 makes it unlawful for an employer to discriminate against a person in hiring, termination, or any term or condition of employment, or otherwise penalize a person” solely because of off-duty, off-site cannabis use. The bill will also eliminate employment-based THC testing, with exceptions for certain positions, such as federal employees or those working in the building and construction trades. AB 2188 does not preempt state or federal laws requiring applicants or employees to be tested for controlled substances as a condition of employment, receiving federal funding or federal licensing-related benefits, or entering into a federal contract.

AB 2568 – Cannabis: Insurance Providers.

AB 2568 provides it is not a crime for individuals and firms to provide insurance and related services to persons licensed to engage in commercial cannabis activity.

AB 2925 – California Cannabis Tax Fund: Spending Reports.

AB 2925 requires that the State Department of Health Care Services submit reports to the legislature, starting no later than July 10, 2023, that accounts for cannabis tax revenue that has been distributed to the Youth Education, Prevention, Early Intervention and Treatment Account, as required under MAUCRSA.


FOOTNOTES

[1] AB 2188 is discussed in further detail here.

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XII, Number 264
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About this Author

Whitney Hodges, Attorney, Sheppard Mullin, Real Estate, Natural Resources
Associate

Whitney Hodges is an associate in the Real Estate, Land Use and Natural Resources practice group in the firm's San Diego office.  She also serves on the firm's Diversity and Inclusion Committee, the Recruiting Committee, and the Latin Business Team.

Areas of Practice

Ms. Hodges's practice focuses on general business litigation with an emphasis on land use litigation, real estate litigation, business torts/contracts, intellectual property, and litigation involving internet usage.  Ms. Hodges handles all aspects of litigation, including administrative, trial...

714-424-8257
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