California Cannabis: Examining the CDPH Permanent Regulations

Permanent cannabis regulations were recently adopted by California. Each agency has its own permanent rules. The changes concern the California Department of Public Health Manufactured Cannabis Safety Branch (“CDPH-MCSB”) regulations. Here is an overview of what the main changes seem to be:

Cannabis Safety Regulations

Eliminating Farm Bill Hemp-CBD Ingredients and Additives

California’s Department of Health Food and Drug Brand (FDB) issued a series of frequently asked questions. One of the questions that arose is whether the FDB prohibits hemp-CBD in human and pet “food.” The FDB responded in the affirmative and as a result, the CDPH-MCSB has done so as well. The new regulation, 40175(c) provides, “a manufacturer licensee shall only use cannabinoid concentrates and extracts that are manufactured or processed from cannabis obtained from a licensed cannabis cultivator.” Essentially, Farm Bill hemp-CBD ingredients or additives are prohibited, unless it is derived from a licensed cannabis cultivator. Otherwise, Farm Bill protections will not apply.

Owners and Interest Holders

Financial interest owners and entity owners have come under scrutiny by the state – that is, the state prefers to vet them before they open shop. The Bureau of Cannabis Control (“BCC”) also has its own rules concerning how the process works. As for the MCBS, the regulations state “if the owner . . . is an entity, then the chief executive officer and members of the board of directors or the entity shall be considered owners.” And financial interest holders “shall be disclosed on the application for licensure.” The BCC’s rules seem to be much stricter for owners and financial interest holders.

Changes in Ownership

Unlike the BCC, the MSBC may be much easier on those who are looking to chance licensee ownership. While the BCC requires that if all owners are being bought-out, the entity cannot operate until the change in ownership is reviewed and verified by the BCC. Dissimilarly, the MCSB does not have such a requirement under the new regs. Rather, the regulations state:

“The licensee shall notify the [MCSB] of the addition or removal of an owner through [the agency’s online system] within 10 calendar days of the change; Any new owner shall submit the information required [by law]; The [MCSB] shall review the qualifications of the new owner in accordance with [state law] and these regulations to determine whether the change would constitute grounds for denial of the license. The [MCSB] may approve the addition of the owner, deny the addition of the owner, or condition the license as appropriate, to be determined on a case-by-case basis; An owner shall notify the [MCSB] through [the state agency’s online system] of any change in their owner information . . . within 10 calendar days of the change; and a licensee shall notify the [MCSB] through [the state’s online system] of any change in the list of financial interest holders . . . within 10 calendar days of the change.”

Labeling

Labeling is not as friendly as other areas under the MSBC. Rather, it is still comprehensive. Manufacturers must ensure that edible cannabis products, concentrates, and topical cannabis products have outer packaging with all of the necessary information for a primary panel. As for inhaled products, they must feature a symbol representing a black triangle, cannabis leaf, and “!” and “CA” beneath. The specific labeling requirements also apply to pre-roll and packaged flowers. The additional technical requirements also include other features, such as the product’s weight in both U.S. units and metric.

Packaging

Retailers must adhere to Child Proof Packaging requirements, and many others to put them into compliance with regulations, such as the Position Prevention Act of 1970.

Keep in mind that this information is meant to be a general guide. It does not identify all of the regulations, the exact wording of the regulations, and how users can adhere to the regulations. Those subject to the regulations should read through them and understand them on their own.