Week in Review: Cannabis Industry Extinction Events, Lead Contamination, Equity Programs and USDA Hemp Regulation Feedback Session

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Photo Credit: NomadiCam – http://www.nomadicam.com

Here’s a quick rundown of state, local and federal actions that we’re following this week.

Cannabis Extinction Events

Is California’s cannabis industry in danger of not one, but two “extinction events” in 2019? – Two weeks ago, the Senate Committee on Business, Professions and Economic Development heard a bill that would extend temporary cannabis licenses in California until December 31, 2019. Supporters of the bill argued that if Senate Bill 67 is not passed, thousands of cultivators, manufacturers, distributors and retailers will go out of business in the coming months. The bill passed the committee on a unanimous 8-0 vote and is now in the Senate Appropriations Committee.

In addition to the expiration of thousands of temporary cannabis licenses, testing of disposable e-cigarette devices, known as “vaporizer cartridges” or “vape carts” have revealed dangerous amounts of lead contamination. This has level of contamination has caused California regulators to reject a higher number of vape cartridges and has left many manufacturers scrambling to find compliant devices.

Equity Programs

On Monday, members of the Minority Cannabis Business Association (MCBA) unveiled a model ordinance package to be used by local and state governments that are seeking to create cannabis equity programs. With cities across the country exploring the creation of an equity program in their own jurisdictions, this ordinance can serve as a resource to help maximize the ability for communities of color that were disproportionately impacted by cannabis prohibition to benefit from the new industry as owners, investors, managers and employees.

On the equity front, the San Diego city council member Chris Ward announced that he plans to propose an equity program later this spring. Ward made the announcement as the council considers loosening city regulations and expanding the number of dispensaries within city limits. If San Diego creates an equity program, they will the 5th city in the state to do so – following Los Angeles, Oakland, Sacramento and San Francisco.

Local Public Interest Banks

California legislators introduce a bill that would allow local governments to create a public bank – Assembly Members Miguel Santiago and David Chiu recently announced a bill that would allow local governments to charter their own public banks. In introducing Assembly Bill 857, the authors of the bill hope that a local public interest bank would better serve the interest of low- and moderate-income households. Last year, former State Treasurer John Chiang floated the idea of creating a state-owned bank to provide basic banking services to the cannabis industry. Under AB 857, could local governments serve the cannabis industry? Would a local jurisdiction that offered banking services attract more economic activity if they offered these services?

USDA Seeks Comment on Hemp Regulations

On Wednesday, March 13, the United States Department of Agriculture hold a stakeholder meeting to receive comments and feedback on the regulations of domestic hemp production. To register for the online webinar, click this link.


If you have any questions regarding the topics discussed above, please contact Ashley Martinez at ashley@ampublicaffairs.com

Cannabis Related Issues to Be Considered by the California State Legislature in 2019

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The first major deadline of the 2019 California legislative session has passed and almost 2,600 bills were introduced in the Legislature. While many of these bills are in “spot bill” form (bills containing intent language to serve as placeholders), advocates and stakeholders should have a fairly clear sense on the issues that the legislature will confront in 2019. Here’s a quick summary of some of the cannabis-related bills that were introduced by the February 22 deadline.

Proposal to Temporarily Reduce Cannabis Taxes

The push to temporarily lower the cannabis tax rate is back for the 2019 legislative year. Last year, the bill was held in the Appropriations Committee over concerns that the proposed reduction was premature. Now that adult-use has been legal for over a year, proponents are hoping that the legislature will be open to helping small and medium cannabis businesses compete against the illicit market.

AB 286 (Bonta) Taxation: cannabis – This bill would eliminate California’s cannabis cultivation tax and reduce the excise tax from 15% to 11% through 2022. The measure is a reintroduction of a similar bill from last year, AB 3157, which would have also temporarily reduced California’s cannabis tax rate. Click here to read my brief summary of AB 3157 from 2018.

Banking and Financial Services Proposals

One of the more important pieces of legislation reintroduced this year is SB 51 (Hertzberg) which would create a state-chartered banking system for banks to offer basic services to the cannabis industry. Unlike the state-owned bank proposal considered in the State Treasure’s Cannabis Banking Working Group paper released in November 2017, Senator Hertzberg’s proposal is seen by some in the industry as a potentially workable fix in lieu of a federal solution.

SB 51 (Hertzberg) Financial institutions: cannabis – This bill establishes a state-chartered banking system to allow financial institutions to offer basic banking services to businesses in the cannabis industry. This bill is a reintroduction of SB 931 (Hertzberg) from 2018 that did not make it through the legislative process.

AB 717 (Nazarian) Public contracts: armored courier services – This bill would require state agencies to use armored car services to pickup, count, and transport to a bank or financial institution the cash remits of any state-imposed taxes and fees that are administered by that state agency. The bill also allow the state agency to charge cannabis businesses for the service.

AB 1525 (Jones-Sawyer) Cannabis: financial institutions – This bill would allow basic financial services transactions such as deposits, credits, fund transfers, etc., to be legal under California law. This bill appears to be another attempt, short of creating a statewide banking system to allow cannabis businesses to access banking and financial services.

Cannabis Equity Programs

SB 595 (Bradford) Cannabis: local equity programs – This bill is a placeholder to provide financial support to local cannabis equity applicants and licensees. Last year, Governor Brown signed SB 1294 and the legislature approved $10 million to support equity programs across California. This bill appears to build on that progress.

SB 658 (Bradford) The California Cannabis Equity Act – This bill is another placeholder bill to provide support and funding to local jurisdictions with established cannabis equity programs.

Cannabinoids and Hemp Related Products

AB 228 (Aguiar-Curry) Food, beverage, and cosmetic adulterants: industrial hemp products – This bill would narrow California regulators’ ability to penalize companies for selling Hemp CBD beverages or foods on the grounds that they are “adulterated” under California law.

Labor and Employment

AB 882 (McCarty) Termination of employment: drug testing: medication-assisted treatment – This bill would prohibit an employer from terminating an employee if the sole reason for termination is that the employee tested positive on a drug test for a drug that is being used as a medication-assisted treatment under the care of a physician or pursuant to a licensed narcotics treatment program. This bill is similar, but much broader than a bill last year, AB 2069 (Bonta) which would have provided reasonable accomodations for employees that use medical cannabis.

AB 1291 (Jones-Sawyer) Adult-use cannabis and medicinal cannabis: license application: labor peace agreements – This bill requires a licensed cannabis business to enter into a labor peace agreement within 60 days of employing 20 workers or more. If the business does not employ 20 or more employees, then they must provide a notarized statement saying they will enter into a labor peace agreement within 60 days of employing 20 people or more.

Substance Use and Youth Programs

AB 1031 (Nazarian) Youth Substance Use Disorder Treatment and Recovery Program Act of 2019 – This bill requires the state, in partnership with counties to establish community-based nonresidential and residential treatment and recovery programs to intervene and treat the problems of alcohol and drug use among youth under 21 years of age.

AB 1085 (McCarty) After school programs: substance use prevention: funding: cannabis revenue – This bill includes additional educational activities that promote healthy choices and behaviors in order to prevent and reduce substance use and improve school retention and performance to before and after school programs. The bill also encourages schools to develop programs that are designed to educate about and prevent substance use disorders or to prevent harm from substance abuse.

AB 1098 (O’Donnell) Substance use disorders: youth programs – This bill would set forth procedures for the implementation and administration of substance use youth programs funded by Proposition 64.

Track and Trace

AB 1288 (Cooley) Cannabis: track and trace – This bill would require the information captured by the track and trace program to additionally include the date of retail sale to a customer and whether the sale is on the retail premises or by delivery.

Additional Cannabis Proposals for 2019

SB 67 (McGuire) Cannabis: temporary and provisional licenses – This bill would extend temporary licenses through December 31, 2019, and extend provisional licenses through July 1, 2020. Under current law, the issuance of temporary licenses expired January 1, 2019, and provisional licenses are valid until January 1, 2020. This bill seeks to extend both time periods.

SB 185 (McGuire) Cannabis: marketing – This bill would allow cannabis trademarks, organic certifications, and appelation designations, among other provisions for cannabis related products.

SB 283 (Bates) and AB 551 (Brough) Fatal vehicular accidents: chemical test results – Currently law requires the cornor to perform alcohol and chemical tests in vehicle accidents that result in fatalities. These two bills extend this requirement to medical examiners, and makes other requirements.

SB 305 (Hueso) Access to Cannabis in Healthcare Facilities Act – This bill, the Compassionate Access to Medical Cannabis Act or Ryan’s Law,  requires a healthcare facility to allow a patient who is receiving palliative care to use medical cannabis within the healthcare facility.

AB 420 (Lackey) The California Cannabis Research Program – This bill would allow the Center for Medicinal Cannabis Research to cultivate cannabis for its use in research and to include the study of naturally occurring constituents of cannabis and synthetic compounds, including the examination of the effects of cannabis, cannabinoids, and related constituents, and other behavioral health outcomes.

SB 475 (Skinner) Cannabis: trade samples: cultivation tax: exemption – This bill would allow a licensee to designate a cannabis product as a trade sample and would exempt these samples from cultivation and sales taxes.

SB 527 (Caballero) Local government: Williamson Act: cultivation of cannabis – This bill includes the cultivation of cannabis under the Williamson Act Program.

SB 581 (Caballero) Cannabis: licensing: public records – This bill would require the state’s licensing authorities to publish online information related to disciplinary actions taken against a cannabis business in another state or jursidiction.

SB 625 (Hill) Party buses: cannabis – This bill would allow the ingestion of cannabis products by a passenger in bus, taxicab, or limousine only if there are no passengers under 21 years of age present and the driver is sealed off from the passenger compartment.

SB 627 (Galgiani) Medicinal cannabis and medicinal cannabis products: veterinary medicine – This bill would allow a veterinarian to discuss the use of, and issue a recommendation for the use of, medicinal cannabis or medicinal cannabis products on an animal patient for any condition for which cannabis or cannabis products provide relief.

AB 404 (Stone) Commercial cannabis activity: testing laboratories – This bill would allow a testing laboratory to amend a certificate of analysis to correct minor errors, with such parameters defined by the Bureau of Cannabis Control.

AB 953 (Ting) Cannabis: state and local taxes: payment by digital asset – This bill allows local and state governments to accept fee and tax payments by stablecoins which are a type of cryptocurrency that can be pegged to a currency.

AB 1296 (Gonzalez) Tax Recovery in the Underground Economy Criminal Enforcement Program – This bill creates a multi-state agency enforcement team to go after businesses that operate illegally and that do not pay taxes. Similar versions of this bill have been introduced in the legislature, but this team appears to be more comprehensive and includes a representative from the Bureau of Cannabis Control.

AB 1420 (Obernolte) Cannabis: licensing fees – This bill would set cannabis application and licensing fees that are consistent with the fee schedule adopted by state regulations as of January 1, 2019.

AB 1530 (Cooley) Unauthorized cannabis activity reduction grants: local jurisdiction restrictions on cannabis delivery – This bill creates a grant program administered by the state to provide grants to local jurisdictions to create and expand enforcement programs against illegal cannabis activity. The bill also creates a funding source for educational programs to help the public determine the difference between legal and illegal cannabis activity.

AB 1710 (Wood) Cannabis – This bill states the intent of the Legislature to enact legislation to create more accessible pathways for compliance with cannabis laws by small-scaled cannabis businesses.

Reintroduced Bills

SB 34 (Wiener) Cannabis: donations – This bill would exempt qualifying compassion care programs from the cultivation and excise tax enacted by Proposition 64. This bill is nearly identical to SB 829 (Wiener) from last year that was vetoed by Governor Brown.

SB 223 (Hill) Pupil health: administration of medicinal cannabis: schoolsites – This bill would enable K-12 school districts and county boards of education to choose whether to allow a student’s parent or guardian to administer medical cannabis to the child on campus under strict conditions. This bill is almost identical to SB 1127 (Hill) from last year that was vetoed by Governor Brown.

AB 37 (Jones-Sawyer) Personal income taxes: deductions: business expenses: commercial cannabis activity – This bill would allow businesses to deduct cannabis-related businesses expenses on their state income tax form. This bill is similar to AB 1863 (Jones-Sawyer) from 2018.

AB 141 (Cooper D) Cannabis: informational, educational, or training events – This bill would allow licensed retailers, cultivators, and manufacturers to participate in educational or informational events held for state and local government officials and their employees without having to obtain a temporary cannabis event license. This bill is similar to AB 3069 (Cooper) that was vetoed by Governor Brown.

AB 858 (Levine) Cannabis: cultivation – This bill creates an Emerald Triangle Sun-Grown Cannabis Commission for the purpose of conducting research, examining the impact of local and state regulations on the cannabis products industries, and tracking market price information to prevent unfair trade practices. This bill was introduced last year as AB 2810 and covered all of California. The bill died in its second policy committee as it was double-referred.

In addition to the bills discussed above, there are several “spot bills” that were introduced as placeholders for the time being. These bills could later be amended to include substantive language on issues related to cannabis. We will continue to monitor these proposals as the legislative session moves forward.


If you have any questions related to any of these proposals, contact Ashley Martinez at ashley@ampublicaffairs.com to discuss.

Bill to Reduce California Cannabis Taxes Reintroduced in State Legislature

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Last week, Assembly Bill 286 was introduced by Assembly Member Rob Bonta which would eliminate California’s cannabis cultivation tax and reduce the excise tax from 15% to 11% through 2022. The measure is a reintroduction of a similar bill from last year, AB 3157, which would have also temporarily reduced California’s cannabis tax rate.

Supporters of the temporary tax reduction argue that California’s high tax rate on cannabis makes it almost impossible for legal operators to compete against illicit operations. Opponents of the reduction say that it is premature and that the real problem lies at the local level where more than half of the state’s local jurisdictions have refused to allow cannabis business activity. In addition, education and mental health groups believe that the tax reduction will delay and/or reduce much need funding to support youth drug prevention and equity programs in communities that were impacted the most by the war on drugs. Discussions on funding these vital programs will heat up in May after the Department of Finance has a clearer picture of tax revenues generated from cannabis.

In a committee hearing on AB 3157 last year, committee members expressed concern over the state’s ability to repay the outstanding loan of $135 million that was provided to state agencies to fund enforcement and oversight. In Governor Newsom’s first budget released in January, more than $200 million was allocated to cannabis enforcement and oversight. How much of that is a General Fund loan that will need to be repaid and how much pressure this creates to maintain the current tax rate is to be seen. Stay tuned.


If you have questions about the budget process or AB 286, please contact me at ashley@ampublicaffairs.com.

California Governor Gavin Newsom’s First Budget Estimates $514 Million in Cannabis Tax Revenue and Includes Millions in Enforcement

On Thursday, Gavin Newsom released his first budget as California’s Governor. The budget – totaled at $209 billion including special funds – estimates California’s cannabis excise tax will generate $514 million in revenues for 2019-20. This estimate is significantly lower than the $630 million anticipated in last year’s budget.

Governor Newsom’s budget includes $200 million for statewide enforcement, licensing and oversight over the industry. During the Q&A session, the Governor said that this budget allocation would support expedited licensing to ensure businesses are able to enter the legal market in a timely manner. In addition, the Governor stated that his Administration would be very engaged in cannabis-related policy, including policies that impact licensing at the local level.

The budget also includes $2.9 million in additional funds for California’s tax collection agency to increase tax compliance within the cannabis industry. This should come as welcomed news for licensed businesses that are struggling to compete against non-licensed and compliant entities.

Although the budget anticipates nearly half a billion in revenues, funding for Proposition 64 related programs is put on hold until the May Revise. The budget also acknowledges that the outstanding loan made by the state to establish California’s enforcement and oversight capabilities would be paid first in addition to funding the various programs required by the proposition.

In the coming weeks, the Legislature will review the Governor’s budget in greater detail.


The release of the Governor’s budget sets in motion the Legislature’s detailed review over the coming months. If you have questions related to the 2019-20 budget, or want to learn more about California’s budget process, please contact ashley@ampublicaffairs.com.

Governor Signs Two Bills to Expand Where Cannabis Events Can Be Held and to Provide Equity and Diversity in the Industry

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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.

Quick Guide to Pending California Cannabis Bills on Governor Jerry Brown’s Desk

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In 2018, industry advocates and businesses witnessed a flurry of activity in the California State Legislature involving cannabis related legislation. By the end of April this year, over 40 different bills had been introduced and were weaving their way through the legislative process.

While not all bills made it through the process, a substantial amount of proposals did and many are currently on the Governor’s desk awaiting his signature or veto.

I’ve prepared this quick reference guide that highlights several bills that are awaiting action, and I have also included bills that were recently signed or vetoed as of late August. Click the link below to review the bills currently on the Governor’s desk or to review the ones he recently approved or disapproved.

Pending and Recently Signed California Cannabis Bills 2018

The Governor has until September 30, to sign or veto bills, and while he has taken action on some early on, I expect him to decide the fate of the most controversial bills closer towards the deadline.

Any bill that the Governor does sign, goes into effect January 1, 2019, unless the bill specifically states otherwise. I will keep you posted as the Governor takes action on these bills, and in the meantime, if you have any questions about how these pending measures may impact your business, please contact me at info@thecannabisfile.com.

California Cannabis Banking Bill Shelved for the Year and Other Legislative Highlights from the Appropriations Committee Hearings

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Today, the Assembly and Senate Appropriations Committees met and decided the fate of hundreds of bills including several that directly impact the cannabis industry. Here’s a run down of the most watched cannabis-related bills in the California State Legislature that were heard in one of today’s hearings:

Key Terms

  • Held in Committee – this means the bill is done for the year.
  • Passed to Assembly/Senate Floor – this means that the bill will be heard and potentially voted on before the full Assembly or Senate membership. I say “potentially voted on” because bills can still be placed on the “inactive file”, sent back to a policy or fiscal committee for review, etc., depending on a variety of reasons.

SB 829 (Weiner)Passed to the Assembly Floor

This bill would exempt qualifying compassion care programs from the cultivation and excise tax enacted by Proposition 64.

SB 930 (Hertzberg) – Held in Committee

This bill would have established a state-chartered banking system to allow financial institutions to offer basic banking services to businesses in the cannabis industry.

SB 1294 (Bradford) – Passed to the Assembly Floor

This bill was recently amended to establish the Cannabis Collaboration and Inclusion Act, which will require the Bureau of Cannabis Control (BCC) to establish an equity program beginning January 1, 2020, and requires the Bureau to provide technical support to state and local equity applicants and licensees.

SB 1409 (Wilk) – Passed to the Assembly Floor

This bill updates current law related to the production and cultivation of industrial hemp, and allows the California Department of Food and Agriculture (CDFA) to establish and implement an agricultural pilot program.

AB 1863 (Jones-Sawyer) – Passed to the Senate Floor

This bill amends California’s personal income tax law to allow taxpayers to deduct ordinary and necessary business expenses related to commercial cannabis activity.

AB 2641 (Wood) – Held in Committee

This would have allowed the BCC to issue a temporary retailer license for cultivators and manufacturers to sell their products directly to consumers at events.

Friendly Reminder: Public Comments on Proposed Statewide Cannabis Regulations Due by August 27.

Information regarding the regulations proposed by the BCC, CDFA, and the Department of Public Health can be found by clicking here on this link.


If you are interested in submitting comments on the proposed statewide regulations and need help, or have questions about any of the bills mentioned above, please contact us at info@thecannabisfile.com or by clicking here.

Legislative Update – July 4, 2018

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Upcoming at the State Capitol

Senate Floor Schedule

The Senate will be in session on July 5, at noon. The Senate goes on Summer recess July 6 and will return on Monday, August 6.

Assembly Floor Schedule

The Assembly will be in session on July 5, at noon. The Senate goes on Summer recess July 6 and will return on Monday, August 6.

Committee Hearings

Fiscal and policy committee hearings will resume after the Summer recess.

Other Events

Happy Independence Day!

On Tuesday, July 10, the National Cannabis Industry Association (NCIA) will hold their third Northern California Quarterly Cannabis Caucus in San Francisco, CA.

On Thursday, July 12, the NCIA will head down south and hold their Southern California Quarterly Cannabis Caucus in sunny San Diego, CA.


Week in Review: July 1st Packaging and Testing Requirement Deadline Leaves Dispensary Shelves Bare

On July 1, the temporary grace period for cannabis dispensaries to offer untested cannabis products ended, forcing an estimated $90 million+ worth of products to be destroyed. The new rules require all cannabis products be tested and meet all regulatory and statutory packaging standards before it can be offered by a retailer.

Prior to the implementation of the permanent rules, a group of cannabis businesses and trade associations made a last minute plea to Governor Jerry Brown to extend the temporary grace period. Chief among their concerns was the limited availability of state licensed testing facilities; creating a bottleneck that would force legal operators to destroy a significant part of their inventory. Once the legal untested supply was destroyed, the group argued, consumers would turn to the illicit market to meet their cannabis needs. Several online pictures and videos emerged of cannabis retailers with empty shelves on July 1. The fallout of the transition should become clearer over the next few months.

The Mercury News: “California pot shops struggle to keep shelves stocked as new state rules roll out”

Marijuana Business Daily: “Last-minute California cannabis industry ‘Hail Mary’ to delay July 1 transition”

California Bureau of Cannabis Control: Transition Fact Sheet

California Department of Public Health: Packaging Requirements Fact Sheet


Week Ahead: The Legislature Goes on Recess for Some R&R and the Industry Prepares for the Final Leg of the 2018 Legislative Session

With legislators are out on recess, many in the industry will use this time to catch up on their own rest while also shoring up support for any remaining bills that are still alive. Among the top bills that are moving through the legislative process include:

SB 829 (Wiener), would exempt qualifying compassion care programs from the cultivation and excise tax enacted by Proposition 64. Supporters argue that the new taxes have forced compassionate use programs to close their doors because they can no longer afford to donate the cannabis and cover the tax liability. The bill is currently in the Assembly Appropriations Committee and will be heard in mid-August as a part of the final Suspense File hearing.

SB 930 (Hertzberg), would establish a state-chartered banking system to allow financial institutions to offer basic banking services. The bill has passed several significant legislative hurdles and may be facing its toughest challenge yet. The bill will be heard in the Assembly Appropriations Committee mid-August as a part of the final Suspense File hearing.

SB 1294 (Bradford), would require the Bureau of Cannabis Control to create a statewide cannabis equity program taskforce, and offer assistance to state and local cannabis entities that have been disproportionately impacted by the War on Drugs. Many in the industry believed that Proposition 64 would create new opportunities for all 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 cannabis industry leaving many of the disadvantaged individuals without resources or an opportunity to enter the market. The bill will be heard in the Assembly Appropriations Committee mid-August as a part of the final Suspense File hearing.

AB 2020 (Quirk), would expand where cannabis events could be held, as long as the local governing entity approves. Current law limits cannabis events to the state’s 23 county fairgrounds or 52 active district agricultural associations, and many in the industry argue that these limits have stifled economic opportunities for both cannabis businesses and the local governments that support commercial cannabis activities in their communities.The bill will be heard in the Senate Appropriations Committee mid-August as a part of the final Suspense File hearing.

AB 2641 (Wood), similar to AB 2020, would also allow the Bureau of Cannabis Control to issue a temporary retailer license for cultivators and manufacturers to sell their products at events. The bill will be heard in the Senate Appropriations Committee mid-August as a part of the final Suspense File hearing.


Questions about any of the bills or events mentioned above? Contact us at info@thecannabisfile.com or here.

Legislative Alert – Results from the Assembly and Senate Appropriations Suspense File Hearing – May 25, 2018

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Photo by John Jennings on Unsplash

Today, the California Assembly and Senate Appropriations Committees decided the fate of hundreds of bills in the current legislative cycle. The Appropriations Committee in general is considered a significant hurdle in the legislative process, and bills that are passed from these Committees live to fight another day. The bills that are held on the Suspense File are, for most intents and purposes, dead for the remainder of the legislative session. While there is a process to reintroduce a proposal that is held in the Appropriations Committee (called a “gut and amend”), this process is rarely used and usually comes at great political cost to the organization or interest group that uses this option.

Here’s an update on the most commonly tracked bills in the industry that were heard in Committee today:

AB 1793 (Bonta) which seeks to streamline the judicial process of expunging or reducing criminal convictions and sentences due to Proposition 64 passed out of Committee and now heads to the Assembly Floor.

AB 1863 (Jones-Sawyer) which would allow cannabis businesses to deduct businesses expenses passed out of Committee and now heads to the Assembly Floor.

AB 2058 (Chau) which requires law enforcement agencies to submit annual reports with the number of cannabis-related DUI arrests to the Department of Motor Vehicles passed out of Committee and is now headed to the Assembly Floor.

AB 2069 (Bonta) which would have prohibit employers from discriminating against employees who are treating a known physical or mental disability or medical condition with medical cannabis and has a medical marijuana ID card was held in the Appropriations Committee.

AB 2520 (Cooper) which would have created the California Illegal Cannabis Task Force to review and analyze existing statutes to determine if they adequately address illegal cannabis cultivation, manufacturing, distribution, sales, and diversion of cannabis to other states was held in Committee.

AB 2525 (Wood) which required the Department of Fish and Wildlife and Department of Parks and Recreation to survey public lands and surface water sources during outdoor cannabis cultivation season to find unlawful cultivation activity was held in Committee.

AB 2641 (Wood) which would allow the Bureau of Cannabis Control to issue a temporary retailer license for cultivators and manufacturers to sell their products at events was passed out of the Committee with amendments and is now headed to the Assembly Floor.

AB 3157 (Lackey) which would have temporarily suspend the cultivation tax and lower the cannabis excise tax from 15% to 11% until 2021 was held in Committee.

SB 930 (Hertzberg) which would create a statewide-chartered banking system to allow California banks to offer basic services to cannabis businesses was passed out of Committee and now heads to the Senate Floor.

SB 1409 (Wilk) which would delete the requirement that industrial hemp seed cultivars be certified on or before January 1, 2013, in order to be included on the list of approved hemp seed cultivars and would also remove the definition “industrial hemp” from the California Uniform Controlled Substances Act passed out of Committee and now heads to the Senate Floor.


Questions about any of the bills mentioned above? Contact us at info@thecannabisfile.com or here.

Weekly Roundup – May 11, 2018

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Photo by pac bac on Unsplash
  • Tax revenues collected by the state in the first quarter of FY 2018 are far below January estimates
  • A bill to temporarily suspend the cannabis cultivation tax and reduce the excise tax passes its second legislative committee
  • A New York based medical marijuana manufacturer expands its presence into California
  • The Bureau of Cannabis Control Cannabis Advisory Committee holds its next meeting in Oakland

Cannabis Taxes Collected in Q1 of FY2018 Lower than Expected

On Tuesday, the Legislative Analyst Office (LAO) released a cannabis tax updated that showed California collected $34 million in excise tax in the first quarter of 2018. The Governor’s January budget assumed that the state would collect about $175 million in the first two quarters of 2018, far more than what the state has seen so far. For some in the industry, the lower than expected tax revenues reflects the clumsy rollout of a statewide legal system. Primary among the concerns by many in the industry has been 1) the slow process from reviewing and approving licenses at the state level; 2) the high-cost of complying with state regulations; 3) the widespread prohibition of cannabis business activities in many of the state’s cities and counties and; 4) the high tax burden that incentivizes consumers to buy in the illicit market.

Later today, the Governor will release his May Revise with updated estimates and potential funding and policy changes that may directly impact the industry. I will provide a brief recap of the Governor’s May Revision this week.

Does a Temporary Tax Reduction Have Legs?

On Tuesday, the Assembly Business and Professions Committee voted unanimously to temporarily suspend the cannabis cultivation tax and reduce the excise tax for three years. Supporters of AB 3157 say that California’s high tax rate makes it almost impossible for legal operators to compete against illicit operations that do not pay licensing fees or state and local taxes. Opponents of the bill say that the temporary tax reduction is premature, and the real problem lies at the local level where more than half of the state’s local jurisdictions have refused to allow cannabis business activity. In addition, education and mental health groups believe that the tax reduction will reduce much need funding to support youth drug prevention and equity programs in communities that were impacted the most by the war on drugs.

The Committee did express concern over the state’s ability to repay the outstanding loan of $135 million that was provided to state agencies to fund enforcement and oversight. As written in Proposition 64, taxes collected must be first used to cover he administrative costs of state agencies to implement cannabis laws. The next stop for AB 3157 is the Assembly Appropriations Committee. Stay tuned.

New York is Coming to California

Earlier this week, Etain, a women-owned and managed New York based medical cannabis company announced that they have joined forces with delivery company West Sacramento Management and Daily Green to produce and deliver products beginning this month. As one of ten medical dispensaries in Manhattan, Etain’s expansion into the Golden State follows approval in their home state to offer a water-soluble marijuana powder to medical patients. Approval for the water-soluble solution comes after New York regulators search for ways to jumpstart the state’s medical marijuana program in which growth has stalled since its approval in early 2016. Etain’s move to California is another in a series of investments by non-California businesses and investors. Recently, CannaRoyalty, a Canadian-based cannabis company announced several acquisitions of distribution assets throughout Northern California. The recent moves by both of these companies could signal more to come.

The State’s Cannabis Control Advisory Committee Meets in Oakland

Next Thursday, May 17, the Bureau of Cannabis Control’s Advisory Committee meets in Oakland California to discuss possible action on recommendations to modify the state’s licensing application, manufacturing and microbusiness requirements. The discussion will also include potential pathways on how to proceed with approved recommendations that require statutory change. Click here to review the agenda.


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