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California’s Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”) requires commercial cannabis entities to obtain a license from California’s Department of Cannabis Control (“DCC”) to cultivate, distribute, transport, store, manufacture, process, and sell cannabis in the state of California. Since its enactment, MAUCRSA required licensees with 20 or more employees to enter into Labor Peace Agreements (“LPAs”) with “bona fide” labor organizations to receive and renew a license from the DCC, as previously outlined here. LPAs require commercial cannabis licensees and labor organizations to agree to not engage in conduct that would disrupt or interfere with the other’s dealings. In 2022, AB 195 reduced the employee threshold requirement by half, effective July 1, 2024. That means, effective July 1, 2024, all license applicants with 10 or more employees must comply with the LPA requirement to obtain a license, and all current licensees with 10 or more employees must so comply to renew their license. Continue Reading July 1 Deadline Looms for Cannabis Operators to Maintain and Renew Their Licenses by Entering into Labor Peace Agreements

On October 7, 2023, Governor Gavin Newsom signed SB 700 into law, amending the California Fair Employment and Housing Act (FEHA). SB 700, effective January 1, 2024, expressly prohibits employers from requesting information from job applicants relating to their prior cannabis use.Continue Reading High Protections on Information Relating to Employees’ Cannabis Use

On June 13, 2023, the Second Appellate District affirmed the City of Pomona’s use of a statutory exemption for its Commercial Cannabis Overlay Permit Program under California Environmental Quality Act (CEQA) Guidelines section 15183, finding that the program required no additional environmental review. The decision in Lucas v. City of Pomona is noteworthy for the appellate court’s broad interpretation of the statutory exemption,[1] holding that (i) the City’s zoning ordinance, General Plan Update, and environmental impact report (EIR) that do not address “density” may be exempt under CEQA Guidelines section 15183, and (ii) uses, including cannabis-related uses, that are not literally included in land use plan documents, may be determined to be sufficiently similar to existing and defined land uses allowed by underlying zoning.Continue Reading Commercial Cannabis Permit Program and Overlay District Statutorily Exempt Under CEQA Guideline Section 15183

California Safe Drinking Water and Toxic Enforcement Act of 1986 (Health & Safety Code § 25249.5 et seq.) (“Prop 65”) is a California law that prohibits any person in the course of doing business from “knowingly and intentionally expos[ing]” individuals to listed carcinogens and reproductive toxins without adequate warning. Recently, in Environmental Health Advocates, Inc. v. Sream, Inc., 83 Cal. App. 5th 721 (2022), the First District Court of Appeal had the opportunity to interpret the word “expose” as used in Health & Safety Code § 25249.6, concluding that possible indirect contact with a listed Prop 65 chemical, depending on how a consumer chooses to use a product, is insufficient to constitute a cause of action under Prop 65. Continue Reading Up In Smoke – CA Court of Appeal Dismisses Prop 65 Case Against Water Pipe Manufacturer Narrowly Construing The Term “Expose”

Acting in one fell swoop, on September 18, 2022, California Governor Gavin Newsom signed 10 cannabis-related legislative bills into law. These bills, which touch on issues that run the gamut of the cannabis industry, are intended to “strengthen California’s cannabis laws, expand the legal cannabis market and redress the harms of cannabis prohibition.” Senate Bill 1326 is the most widely recognized bill of the group, and authorizes the Governor the power to sign cannabis trade agreements with other states where cannabis is legal. Other bills address employment protection, labelling, use of cannabis in veterinary medicine and taxation. In his press release, Governor Newsom said: “For too many Californians, the promise of cannabis legalization remains out of reach. These measures build on the important strides our state has made toward this goal, but much work remains to build an equitable, safe and sustainable legal cannabis industry.”Continue Reading In One Day, California Governor Signs Into Law Ten Cannabis Bills, Including Authorization for Interstate Commerce

Virtually all California employers with five or more employees are covered by the Fair Employment and Housing Act (FEHA), the state’s most noteworthy civil rights law. FEHA protects and safeguards the right and opportunity of all persons to seek, obtain, and hold employment free from discrimination by establishing a comprehensive scheme to combat employment discrimination.Continue Reading California Expands FEHA to Include Off The Job Cannabis Use

Help for California’s fledgling cannabis industry finally appears to be on the way. For years, the industry has shouldered heavy taxes – a 15% state-wide excise tax, sales and use taxes up to 10.75%, and local business licenses taxes up to 15% in some jurisdictions. And, to top it off, California imposed a cultivation tax on cannabis flowers of $161.28 per dry-weight pound. While growers could sustain this tax burden when business was good, wholesale prices plummeted in the fall of 2021 and left growers unable to turn a profit.Continue Reading California Governor Signs into Law Cannabis Tax Relief Bill

Residents of California often complain about high taxes, but no one pays higher taxes than the cannabis industry.  In addition to the Federal 280E penalties, the cannabis industry in California is subject to a 15% state-wide excise tax, sales and use taxes that can reach up to 10.75%, and local business licenses taxes which are as high as 15% in some jurisdictions.  On top of these excise taxes, which combined can approach 40%, there is a state cultivation tax currently imposed on cannabis flowers at a rate of $161.28/dry-weight pound (and some local jurisdictions impose additional cultivation taxes).
Continue Reading California Cannabis Farmers May Finally Get Some Relief

For many in the cannabis industry, April 1, 2022 is seen as a day of reckoning following the July 2021 passage of Assembly Bill 141 and Senate Bill 160 (collectively, the Cannabis Trailer Bill).  In an attempt to transition to an annual licensure program, April 1st marked the beginning of the end for provisional cannabis licensure.  It also ushered in significant changes to renewal process for previously granted provisional licenses.  These modifications now require applicants to comply with the California Environmental Quality Act (Pub. Res. Code §§ 21000 et seq.) (CEQA), a complex statewide policy of environmental protection fraught with potential traps for those unversed in the law, before an operator is eligible to be awarded a cannabis state license.  This requirement alone carries the potential to create a much higher barrier to entrance into the cannabis market.
Continue Reading No April Fools: Starting April 1st, Cannabis Operators Face CEQA Compliance Requirements for State Licenses

In a win for much of the booming hemp products industry, on October 6, 2021, California Governor Gavin Newsom signed AB-45 into law.  AB-45 is comprehensive legislation that regulates and legitimizes many industrial hemp products. The law excludes from the list of permissible products inhalable hemp products. The law takes effect immediately and supersedes the California Department of Public Health’s (CDPH) 2018 “FAQ” guidance on hemp-derived CBD in food, beverages, dietary supplements, and pet food. The new law allows for the inclusion of hemp and cannabinoids (e.g., CBD), extracts, or derivatives of hemp in food and beverages, dietary supplements, cosmetics, and pet food.
Continue Reading AB-45: California Finally Welcomes Hemp Products To The Marketplace