NCIA CCIA Conference Report: Day 2

BCC chief Lori Ajax kicked off Day 2 of the NCIA/CCIA conference and trade show in Anaheim by reminding the crowd that everything the Bureau does affects the cannabis consumer and the public, as well as licensees.

Speaking of the 152-page regulatory document released with revisions following thousands of comments last Friday, Ajax noted, “A change in regulations is a good thing because we’re listening.” Following another public comment period ending November 5, Ajax expects the final regulatory package will be sent to the Office of Administrative Law by December 3. OAL then will have 30 days to approve the regulations, by mid January 2019. Until then, the emergency regulations are still in place.

The Bureau has changed the licensing fee structure; it’s now based on gross revenue. BCC also added more licensing tiers so that growth is not penalized if companies make a leap to a higher bracket. Other changes she highlighted: Child Resistant Packaging is now solely on manufacturers and cultivators who will have year to transition, and distributors can roll pre-rolls.

Delivery regulations “changed a little bit” but will still allow deliveries to be made anywhere in the state by licensed vendors. The new regulations clarify that deliveries can’t be made on school grounds and also define internet platforms often used to make deliveries. To the hot topic of white labeling (IPs), Ajax said the Bureau would be coming out with guidelines soon.

Ajax said the Bureau has reviewed 17,000 COAs for testing and label verification. About 20% are failing, and 80% of those for labeling. It’s now on distributors to do label verification, which should minimize mistakes.

The Bureau is still issuing temporary licenses; has issued 4500 plus 3500 annuals and 5 event licenses. New applicants should still apply for temporary licenses until the end of the year, and those with temp licenses can get provisional ones under a new law. Her staff will be working nights and weekends to get licenses issued, and BCC will be issuing guidelines on getting provisionals. Since they must give local jurisdictions 10 days to respond to license requests, she urged people not to wait until the last minute.

On the enforcement side, the Bureau has done 800 inspections of licensed operators, issuing notices to comply. The Cannabis Enforcement Unit, working with locals law enforcement, is also enforcing daily against unlicensed businesses. The Bureau will soon put out to bid a public awareness campaign aimed at educating businesses about the necessity to license, and to the public about where to find licensed businesses. It will be adding four positions to provide technical assistance to equity applicants, as mandated in SB 1294.

BCC has offices in Rancho Cordova and Eureka offices and currently has 79 employees. “We need to hire 1100,” Ajax said.

A panel moderated by Juli Crockett of MMLG with Steve DeAngelo of Harborside and rock star Melissa Etheridge followed. It began with background on the War on Marijuana, starting with the founding of NORML in 1970 and President Carter calling for nationwide decriminalization in 1978. Then Reagan took office and “you couldn’t turn on TV without seeing a sizzling egg that was supposed to be your brain,” recalled DeAngelo.

Etheridge spoke of becoming an LGBT activist in the 1980s, coming “out” in 1993 after Bill Clinton was elected. “I always equate [marijuana rights] to LGBT because it’s about people coming out, changing hearts and minds about stoners,” she said. She has started speaking out about her marijuana use, first as a breast cancer patient. “I think anyone using cannabis is using medicinally whether they know or not,” she said. “It’s going to relax you and raise your consciousness. Exploring your consciousness is a civil right.” Etheridge will address the issue in her new album New album The Medicine Show.

An afternoon session covered new delivery regulations where the “ice cream truck model” (aka “dynamic delivery”) cash-on-hand has been reduced from $10K to $5K, $2K of which must be pre-orders; drivers can’t be idle for more than 30 minutes. A well-attended panel on Intellectual Property focused on protecting one’s brand, especially for companies wanting to go national or international, or taking their companies public. “Spend money protecting your brand,” advised attorney Tom Zuber, “or you’ll pay for it later.” One top brand name from California has been filed for by a Canadian company, said attorney Mary Shapiro. Other California brands have had problems in other states.

During a panel on policy enforcement, it was noted that even product that does not pass testing needs to pay cultivation tax. But attorney Khurshid Khoja pointed out that CDTFA has FAQ for each tier which includes how to get refund on taxes paid on products that did not enter commercial market. Jordan Wellington of Simplifya talked about high-profile enforcement actions in CO, which has a transaction limit, but constitutionally, retailers can’t take more information on customers than during a liquor transaction. People were buying ounces several times a day to take back East, and in between were loitering and causing neighborhood complaints to police. A sting operation pressured budtenders to flip on bosses during 2-4 hour interviews.

The next NCIA show will be next July in San Jose; the next CCIA is set for October 2019 in Long Beach.

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