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The Department of Cannabis Control (DCC) is looking for feedback from the cannabis community about proposed changes to California’s cannabis regulatory framework.

The proposal seeks to simplify and clarify emergency regulations that were adopted by the DCC in September 2021 after the state consolidated cannabis regulation into a single agency. 

Previously, cannabis oversight was split among three state agencies. The California Department of Food and Agriculture regulated cultivation, the Department of Public Health regulated manufacturing, and the Bureau of Cannabis Control regulated retail, distribution and testing.

During an informational webinar last week, Christina Dempsey, Deputy Director of Policy and Research for the DCC, said there are two types of changes in the proposal.

“The first is the regulation package which incorporates, through the regular rulemaking process, any changes that we made during the emergency regulation process in the fall,” she said. “The regulation package that the department adopted as emergency in September needs to be adopted through the regular rulemaking process so that it doesn’t expire. …There are also additional changes that we’ve incorporated that serve to simplify, streamline and further strengthen the cannabis regulatory framework in California.”

The newly released regulatory modifications focus on cannabis cultivation, distribution, manufacturing, retail, events and testing laboratories.

“I think probably the biggest thing that jumped out to me in the DCC’s proposal are some of the changes to track and trace,” Ross Gordon, policy director at the Humboldt County Growers Alliance (HCGA) and policy chair at the Origins Council, told the Outpost. “The way track and trace has been implemented is definitely a big thorn in the side for a lot of farmers, particularly the requirement to tag every single cannabis plant. …On average, we think it probably takes five people three to four days of labor to tag a half an acre farm.”

The proposal would allow the weight of the total harvest batch to be entered in track and trace rather than requiring individual plant weights.

“Rather than having to weigh every single plant individually, they can now weigh those plants collectively which is something that a lot of people are going to be happy to see,” Gordon said. “We’re glad to see that but we’d like to see it go further.”

He also raised concern for plastic waste associated with track and trace. “Putting a plastic tag on every plant [generates] about 71 tons of plastic waste per year and that’s effectively non-recyclable.”

The proposal would also loosen up rules surrounding cannabis events by allowing cannabis goods to be displayed by all participating licensees and removing the requirement for specific retail employees to be identified prior to the event, according to the DCC.

“We were pretty happy to see some change to the regulatory rules around events and clarifying that farmers are able to display their own product at events and able to show those directly to consumers,” Gordon said. “The regulations don’t allow farmers to sell their product directly to consumers at events. We’re still working on legislation to address that…but at the very least there are improvements to clarify that it’s possible to display those products.”

AB 2691, introduced by North Coast Assemblymember Jim Wood (D-Santa Rosa) in February, would authorize the DCC to issue temporary event retail licenses that would open the door for cannabis cultivators to sell their product directly to consumers at cannabis events like the Emerald Cup. As it stands, small-scale cultivators can participate in such events, but they cannot sell directly to the buyer.

“It’s important to keep in mind that there are certain things which can be addressed through regulation by the DCC, and then there are other things that have to be addressed by the state legislature,” Gordon noted. “The DCC doesn’t have the power, for example, to change tax rates. The legislature needs to take leadership on that.”

State Senator Mike McGuire (D-Healdsburg) introduced legislation last month to eliminate the state cannabis cultivation tax which increased from $154.40 per flower per dry-weight pound to $161.28 at the beginning of this year, according to the state Department of Tax and Fee Administration. 

SB 1074 would discontinue the cultivation tax and, instead, increase the state excise tax – a 15% tax imposed upon retail purchasers of cannabis or cannabis products – in an attempt to reduce the disproportionate impact to small farmers. “The bill would increase, from July 1, 2025, until July 1, 2026, the excise tax by an additional percentage that the Department of Finance estimates will generate half the amount of revenue that would have been collected pursuant to the cultivation tax…” according to the text of the bill.

While this is good news for struggling cannabis farmers, Gordon said he had hoped the proposed regulations would offer more leniency for farmers looking to temporarily scale back their crop or take a year off of farming altogether.

“That’s something that in any other form of agriculture is very common when you have a market crash like we have in cannabis or when you have drought conditions which we’re likely to continue to see in 2022,” he said. “…Farmers either have to renew their license for a year and pay their full licensing fee or, if they don’t renew their license, they essentially permanently forfeit their license and if they want to get it back they have to reapply from square one.”

All comments on the proposed regulations must be received by April 19, 2022, at 5 p.m. It is anticipated that the proposed regulations will become effective in fall 2022 if approved. 

“Please be specific and share a suggestion or alternative,” Dempsey said. “Often we hear people say they don’t like what we’ve proposed, but they then don’t go on to tell us what another option would be. That information is really important for us.”

Comments can be emailed to publiccomment@cannabis.ca.gov or sent by mail to DCC Legal Affairs Division, 2920 Kilgore Road, Rancho Cordova, CA 95670.

More information on the proposed regulations can be found here.