On September 26, Governor Brown signed two bills of interest to the cannabis industry: AB 2020, which expands the locations where cannabis events can be held and SB 1294, which establishes a cannabis equity program to provide assistance to local equity programs throughout the State. Both bills go into effect January 1, 2019.
Cannabis Events
AB 2020 (Quirk), expands where cannabis events can be held as long as the local governing entity approves. Prior to AB 2020, the law limited cannabis events to county fairgrounds and the State’s active district agricultural associations. Small business owners in the industry argued that these limits stifled economic opportunities for both businesses and the local governments that support commercial cannabis activities in their communities.
Under the bill, all event participants must be licensed retailers and the event organizer must submit a list of all participants at least 60 days in advance of the event to the Bureau of Cannabis Control. If a retailer is not on the final list submitted to BCC, they are prohibit from participating in the event.
In addition, the bill authorizes BCC to issue fines for non-compliance and provides the Bureau with the ultimate authority to cease an event if the Bureau or local law enforcement believe the event has become a threat to the health and safety of community. Moreover, the bill does not allow an event organizer to appeal the Bureau’s decision to cease an event; placing the burden of risk ultimately on the event organizer.
Cannabis Equity Programs
The Governor also signed SB 1294 (Bradford), also known as the Cannabis Cannabis Equity Act of 2018, which authorizes the Bureau of Cannabis Control to provide assistance to local equity programs throughout the State.
This bill was designed to provide some relief and assistance for people, specifically minorities and women, that have been disproportionately impacted by the War on Drugs. The passage of Proposition 64 created an opportunity for Californians to engage in the cannabis industry; including those that been marginalized or criminalized under previous state marijuana laws. However, since January 1, entities with significant financial resources have dominated the legal market; leaving economic and socially disadvantaged individuals without resources or an opportunity to enter the market. SB 1294 seeks to level the playing field so that all Californians can participate in this rapidly growing (no pun intended) industry.
Next Steps
Although AB 2020 was designed to support local economies and small businesses, the challenge of acquiring local approval for events or any type of cannabis business activity across the state is still a major challenge. For localities that have adopted cannabis-friendly policies, AB 2020 can help spur economic growth and jobs in those areas. For cities and counties that continue to ban cannabis business activities in their district, the challenge of holding an event remains.
On the equity front, SB 1294 is a first-step towards equalizing the opportunity for all to participate in the industry as intended by Proposition 64. It remains to be seen how local governments utilize the assistance provided by the State, and what type of resources are needed to ensure the program is a success.
For more information about these two bills, contact me at ashley@ampublicaffairs.