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WINTER LLP UPDATE: 2018 Cannabis Legislation

2018 CANNABIS LEGISLATION

The California State Legislature has passed numerous cannabis-related bills this legislative session. Several of these bills were signed into law by Governor Brown in the final moments of the session. Many take effect immediately, while others take effect January 1, 2019. We will be closely tracking additional cannabis-related bills as they wind their way through both houses of State Congress next year.

The new laws that affect the cannabis industry in California include the following:

ALL CANNABIS LICENSE TYPES

SB 1459 - Provisional Cannabis License:

Effective immediately, all licensing authorities (BCC, MCSB, CalCannabis) may issue “provisional cannabis licenses,” as a bridge between temporary and annual licenses. A provisional license will act in the same manner as an annual license, except that it is not renewable.

To qualify for a provisional commercial cannabis cultivation license, an annual applicant must:

  • Hold, or have held, a temporary cannabis cultivation license for the same premises and the same commercial cannabis activity for which the provisional license will be issued; and
  • Submit a completed state annual cultivation license application (all applicable requirements pursuant to California Code of Regulations section 8102 still apply), including evidence that compliance with the California Environmental Quality Act (CEQA) is underway; and
  • Pay the application fee for the associated license type.

AB 1741 - Payment of State Taxes by Means Other than Electronic Funds Transfer:

Effective immediately, state taxing authorities must temporarily accept money for cultivation, sales and excise taxes by means other than electronic funds transfer. This law temporarily waives the current 10% penalty for paying taxes in cash.

AB 2799, CalOSHA Requirements:

Effective January 1, 2019, licensed cannabis business that have at least one employee and manager must complete a 30-hour course from the California Occupational Safety and Health Administration (CalOSHA) to ensure compliance with job-related safety and health hazards.

AB 2899, No Advertising During License Suspension:

Effective January 1, 2019, the new law prohibits a cannabis licensee from publishing or disseminating advertising or marketing (including web sites) while the licensee's license is suspended.

CULTIVATION LICENSES

AB 873, CalCannabis Peace Officer Duties:

Effective January 1, 2009, investigators with the California Department of Food and Agriculture to have arrest and search warrant powers with regard to enforcement of cannabis laws.

DISTRIBUTION LICENSES

SB 311, Distribution to Other Licensed Distributors:

Effective immediately, all licensed distributors are able to transport to other licensed distributors after the required cannabis testing.

RETAIL LICENSES / SPECIAL EVENTS

AB 2020, Temporary Event Licenses:

Effective January 1, 2019, provides that a state temporary event license can be issued in places other than county fairgrounds or district agricultural association events by the local authority, including the retail sale and consumption of cannabis, with the appropriate licenses by its participants. Starting January 1, 2019, cannabis special events can be held at any other venue approved by a city or county.

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