More California Cannabis Updates

Fox Rothschild LLP

Fox Rothschild LLPLast week, my colleagues wrote about AB 1291, which expanded upon the requirement for California cannabis companies with 20 or more employees to enter into labor peace agreements. A handful of other laws of note have recently been passed in California.

Industrial Hemp

SB 153 sets the stage for compliance with the 2018 Farm Bill by requiring the state to submit its hemp regulatory plan to the USDA by May 1, 2020. The bill also:

  • revises existing laws related to cultivation and testing of hemp to be consistent with the state regulatory plan
  • provides registration requirements, and
  • expands the Industrial Hemp Advisory Board

Universal Symbol for Vape Cartridges and Pens

AB 1529 provides details regarding the “universal symbol” labeling and packaging requirements for vape pens and cartridges. Notably, the minimum size for the required symbol has been reduced to ¼ inch high by ¼ in wide, which will allow for easier placement of the symbol on products. The symbol must be engraved, attached via a sticker, or printed in black and white.

Testing Requirements

AB 404 allows the BCC to authorize retesting of products that failed testing as a result of equipment problems, staff errors or other circumstances that compromised the testing. The bill also allows testing labs to amend certificates of analysis to correct minor errors.

State Tax Deductions

AB 37 will allow California companies to deduct business expenses on their state tax returns. This will be a big help for cannabis businesses, which have historically not been able to deduct those expenses as a result of Internal Revenue Code 280E and California’s policy of treating income in the same manner as it is treated federally.

Equity-Based Developments

SB 595 requires the state licensing agencies to develop and implement a program that allows for deferrals or waivers of fees for certain needs-based applicants. SB 34 allows cannabis products to be provided at no charge for certain low-income patients.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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