California Governor Signs Four Bills Affecting Cannabis Industry

October 1, 2020

California Gov. Gavin Newsom signed into law four bills affecting the cannabis industry, and vetoed one.

The cannabis-related bills Newsom signed are:

  • Assembly Bill 1458: Raises the label variance threshold for edible products from plus or minus 10% to plus or minus 12% until Jan. 1, 2022, giving edible manufacturers some breathing room as production technology catches up to California’s rigorous testing standards.
  • Assembly Bill 1525: Authorizes the state or a local government to share certain financial information with the consent of a cannabis licensee. AB 1525 is aimed at helping financial institutions better comply with federal reporting requirements and avoid the time and expense of having to file reports believed by some to discourage these entities from providing services to cannabis licensees altogether.
  • Senate Bill 67: Ensures that cannabis and cannabis products produced from a recognized “appellation of origin,” as defined by the California Department of Food and Agriculture, came from cannabis plants cultivated in the ground, and grown without the use of a structure, and without the use of artificial lighting in the canopy area. The bill also authorizes the CDFA to establish a “city of origin” designation.
  • Senate Bill 1244: Aids local agencies in enforcing against illicit cannabis activities by making clear that cannabis testing laboratories may receive and test samples from any local or state law enforcement agency or regulatory body.

Newsom vetoed Assembly Bill, which sought to amend the definition of “final form” as it relates to cannabis testing to cut back on waste produced in the supply chain. In his veto message, the governor suggested this bill was premature in advance of the administration plans to consolidate the three licensing entities into a single Department of Cannabis Control.

All five bills were supported by the California Cannabis Industry Association.

“We thank Governor Newsom for prioritizing these bills, which seek to reduce regulatory burdens, improve enforcement, expand financial services and enhance the state’s cannabis appellation’s program,” CCIA Executive Director Lindsay Robinson said in a statement. “Like so many, the cannabis industry has faced a series of unexpected challenges and setbacks in 2020. We look forward to continuing to work with the Newsom Administration, and the Legislature, as we pursue a robust policy agenda in 2021,” she added.

Newsom recently signed Assembly Bill 1872, which will suspend for one year, beginning Jan. 1, 2021, the California Department of Tax and Fee Administration’s authority to raise the cannabis cultivation tax and the wholesale mark-up rate for purposes of calculating the excise tax.

Topics California Cannabis

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