6 Ways SB94 Will Change The Medical Cannabis Industry In California

6 Ways SB94 Will Change The Medical Cannabis Industry In California

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Last week, California’s lawmakers signed on a state budget with additional legislations that will officially mark this year as the first for the Golden State to be recognized as a fully regulated cannabis business sector. Known as the SB94, or the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) which is a joint law combining Prop64 and the Medical Cannabis Regulation and Safety Act, will have its own set of guidelines overseeing recreational and medical cannabis use in California.

While the bill and budget are waiting for the governor’s signature, will clear up much of the smoke surrounding how both recreational and medical cannabis markets will work in a state through an established framework. SB94, despite the fact that the final regulations are still being written, will transform California’s cannabis industry and here are 6 things you need to know about it:

The Bureau of Cannabis Control will govern the entire industry. The CBC is in charge of everything to do with licensing including the issuance, denial, renewal disciplining, revoking, and suspending licenses for distribution, storage, sale, and testing of cannabis as well as any cannabis products. SB94 will turn over regulation of industrial hemp fiber, used in clothing and building material as well as rope, to the Department of Food and Agriculture.
Allows dispensaries to sell both recreational and medical cannabis products. Retailers will need to get a separate license to sell both recreational and medical cannabis products to users although testing for both categories will only need one testing lab license, which will be governed by the Bureau of Cannabis Control.
SB94 will repeal some of the residency requirements of Prop 64. This means that residents of other countries, as well as those who live out of state, can participate in California’s newly regulated medical and recreational cannabis market. However the new residency requirements won’t apply for certain cities in the Bay Area like Oakland, which has rescinded its own requirements due to resistance from business owners. In Oakland, those who wish to participate in the cannabis industry will need to have lived in the city for a minimum of 3 years.
The new legislation will determine which taxes will be needed, and how they will be calculated. All cannabis products are subject to two taxes as dictated by Prop64. This includes a $9.35 cultivation tax per 1 ounce of flower for growers, which will be collected during harvest. It also includes a 15% excise tax that will be determined based on the average market price instead of the gross receipts of sales. Revenue from taxes will be used to pay for regulating the industry, while some of it will also be allocated to school grants, substance abuse programs, behavioral health programs, and developing youth treatment facilities as well as other types of social services to benefit the community.
New cannabis advertising standards and cannabis categories will be created. The Department of Food and Agriculture will make have an organic designation come 2021. It will also imitate the food industry, particularly the cheese and wine business, when it comes to how they market their products based on origin regions and varieties. When it comes to marketing, this will have to be determined if at least 71.6% of the targeted audience is 21 years or older; only then can businesses market to mass media. SB94 will also require that edibles will need to be marked with a universal symbol.
Law enforcement will develop legal guidelines for consumption. With SB94 there were many concerns about how law enforcers would oversee consumption, and it was done by limiting legal consumption of the product only in designated private areas. The new legislation will also include penalties for open containers if recreational consumers are caught, while allocating $3 million so that the California Highway Patrol will be trained with the help of drug recognition experts for enforcing what exactly “driving under the influence” laws will translate to.

California’s government officials are given the deadline of 2019 to work with the $118 million budget to put these regulatory infrastructures and changes in place to the state’s legal cannabis industry. Once these changes are in place, adult-use cannabis is expected to be monitored in the same way the retail alcohol industry is. State tax revenues from sales of the plant are expected to reach as much as $1 billion annually once this market has been established, while the overall annual revenue for the state industry is foreseen between $5 to $7 million.