Every year, as new laws and regulations are passed in California, the state’s cannabis industry shapeshifts. But there is one priority that has remained top-of-mind for regulators and lawmakers, and inspires many of their proposals: quashing the unregulated market.
This was true during the first meeting of the new members of the state’s Cannabis Advisory Committee this month. The group exists to represent a wide spectrum of stakeholders, from public health to industry, and to provide recommendations to the state’s Department of Cannabis Control (DCC). The entity last held a meeting, under its former membership, in December. The 17 new members were selected by the DCC from nearly 300 applicants, said Nicole Elliott, DCC’s director, at the start of the meeting.
A lot has changed in California since December. Gov. Gavin Newsom signed a bill to eliminate the cultivation tax – an effort to help legal operators compete with the illegal operators, who obviously do not pay taxes – and currently has a pile of cannabis bills on his desk, as Cannabis Wire recently reported.
And, a lot of change is in motion. The DCC currently has several regulatory proposals open to public comment, including one that is focused on standardizing lab testing of cannabis products, a topic which received robust public comment during the Committee meeting. (Commenters were reminded that those comments should be directed to the specific public comment process for the regulations.)
It is against this backdrop that the Committee met for a full day. At the start of the meeting, the group voted to select a chair and vice chair: Ali Jamalian, the CEO of Kiffen LLC, a cannabis company, and Kristin Nevedal, the director of the County of Mendocino Cannabis Department, respectively.
The group then turned to approval of its bylaws, during which much of the conversation focused on the formation of topic-specific subcommittees. The ones included in the bylaws are: Cultivation; Equity; Laboratory; Licensing; Public Health and Community Impact; and Track-and-Trace.
Members proposed additional subcommittees for consideration at the next meeting, including one on finance, which would focus on areas like access to capital and private-public partnerships, and one on manufacturing.
Later in the meeting, Christina Dempsey, DCC’s deputy director of policy and research, provided an overview of priorities for the remainder of 2022 and for 2023.
For this year, the DCC has several goals, including: finalizing the regulations that are currently in draft form, including the lab standardization rules; submitting a report to Newsom on the inclusion of cannabinoids derived from hemp into cannabis products, which was due on July 1, and drew significant public comment during the Committee’s meeting; updating track-and-trace requirements; implementing renewable energy requirements for cultivators; and releasing an RFP for $20 million in academic research grants for the state’s public schools that will focus on better understanding the cannabis plant’s effects and the effects of legalization.
For next year, DCC’s goals include: regulations to support the state’s “craft and legacy” farmers, and revisions to licensing to support “small and equity operators.”
Dempsey also emphasized the importance of enforcement around unlicensed cannabis activity and getting local governments up to speed with licensing.
This flowed into the next agenda item, which was the Local Jurisdiction Retail Access Grant Program. The state put $20 million toward the effort to get localities on board with licensed sales, because currently, 61% of the state’s cities and counties do not allow cannabis sales, either in storefronts or by delivery. The number of localities opting out of cannabis sales has contributed to the thriving unregulated market.
The DCC posed five questions to the Committee as it crafts guidelines for the grant, including “Should local jurisdictions be eligible for funding if they will permit only medicinal cannabis retail and will not permit adult-use retail?” and “What criteria should be used to evaluate whether a local jurisdiction has failed to demonstrate progress toward permitting retail businesses for purposes of recapturing grant funds?”
The Committee decided not to make any specific recommendations during its first meeting, and instead to put it on the agenda for the next meeting. They did, however, discuss the questions and raise some points for consideration. For example: ensuring equity provisions don’t have loopholes that can be exploited by larger companies, and considering that some localities may need to use the funding to develop plans as opposed to submitting a plan to be funded.