California Cannabis Banking, Labeling Laws Updated

California’s marijuana banking and labeling laws were updated recently, with Gov. Gavin Newsome (D) signing off on several laws to enact a series of adjustments to the biggest legal cannabis system in the U.S. The governor said California marijuana businesses should will need to wait until next year for bigger changes.

The most significant changes in this latest series are to marijuana advertising and banking laws.

Governor Approves Marijuana Business Regulation Changes

As our Los Angeles marijuana business lawyers know, finding legal banking services is still a challenge for many cannabis companies. AB 1525 will have the effect of removing the state-level penalties against banks that provide services to operations that profit from marijuana sales.

Another measure, SB 67, establishes a program for marijuana labeling that is similar to how California labels wines, by indicating where the plant is grown and how it might influence the character of the product. This is called and appellation program. The provisions prohibit cultivators and processors from using the name of a designated region or city in marketing the product unless all the cannabis from the region is grown there. Several counties already have such protections in place.

The main benefit of this for outdoor growers is the recognition of something called terrior. As most cannabis cultivators understand, this refers to a combination of unique environmental environments such as sun and soil that can alter the quality and properties of a marijuana product. Indoor growers will have the opportunity to claim representation of a certain region or hometown.

Yet another measure, AB 1872, pauses state cultivation and excise taxes on marijuana for all of next year, something proponents hope will give cannabis companies the stability of financing they need to pull through next year. It should be noted that as a state, California’s marijuana taxes are the highest in the country.

As to the other marijuana law changes, most are minor enough as to likely be unnoted by Los Angeles marijuana business owners and their clientele. For instance, one of the other laws allows a bit more TLC in certain edible cannabis products, while another gives state-licensed marijuana testing laboratories the ability to provide services to law enforcement agencies.

There were, however, several proposed marijuana laws that cleared the legislature but not the governor’s desk.

Pot Proposals the Governor Vetoed

One of those, AB 1470, would have given pot processors the ability to send prepackaged pot products to testing labs for analysis, something some industry insiders advocated to reduce costs. Newsome, however, said the proposal isn’t aligned with existing regulations, which require the products submitted for testing to be sent in their completed, packaged form – something he said is imperative to prevent products that may be unsafe or uncontaminated from entering the retail market. He added that while the proposal might have cut down on packaging waste, allowing products to be tested in their less-than-final-form would only help some smaller operators but could have an outsized impact on consumers as a whole.

That said, the governor indicated there is likely to be some changes to pot testing next year when lawmakers consider a pending plan to streamline the state’s regulatory and licensing agencies.

Similarly, while the governor vetoed a measure to dissolve the state’s Bureau of Cannabis Control, the entity that oversees the state-legal pot industry. In a statement, Newsome said the proposal was premature, considering that there are plans in the works for broader reform. Specifically, the governor wants to consolidate the state’s three marijuana regulation entities into just one department. The goal will be to reduce business time and costs incurred by red tape and unnecessary packaging, while still enforcing state pot product standards.

Ongoing Push for Federal Changes to Cannabis Law

Meanwhile, Congressional Democrats have continued to push for a cannabis law overhaul at the federal level. One of those measure from representatives in the House is a coronavirus relief bill that would incorporate protections for marijuana banking. In the past, such measures have been axed by Republicans in the Senate.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

California Governor Approves Changes To Marijuana Banking And Labeling Laws, Sept. 30, 2020, By Ben Adlin, Marijuana Moment