California Cannabis Market

Changes in the California Cannabis Industry

With new legislation passing and updated regulations going into place, there are a considerable number of changes coming to the adult-use and medical cannabis markets in the State of California. The California Department of Cannabis Control announced that they have adopted a package that both streamlines and simplifies cannabis regulatory burdens in the state. Among these changes are new opportunities for licensing thanks to local-level resolutions that passed during the recent midterm elections. There will also be enhanced safety regulations regarding marketing towards minors. Overall, these new California cannabis businesses regulations will ease burdens on cannabis businesses and licensees. 

Changes Regarding Safety 

The State of California has introduced new regulations along with updating existing regulations that are meant to keep Californians reasonably safe when interacting with cannabis. Among the most notable changes are those surrounding youth protections and measures that are in place to reduce the risk of children mistakenly consuming cannabis products. For instance, California has further restricted youth-friendly flavoring in inhalable products that might otherwise make cannabis more appealing to kids. Like many other states, California has also expanded prohibitions on marketing and colorful packaging that might otherwise be attractive to children. Beyond younger kids, California has also clarified that employees must be 21 years or older to be on the premises of a cannabis business.

Thanks to the changes and adaptations that were brought upon by the COVID19 Pandemic, the state has opted to permanently allow curbside delivery to customers. The state hopes that this allows customers and patients to feel safe while minimizing contact with others if they so choose regardless of the status of viral illnesses at the time. 

Finally, in terms of the quality of the product and the testing that goes into ensuring that patients and customers in California are well-informed about the cannabis they are consuming, several education-related regulations are now in place. First and foremost, the state has emphasized that testing laboratories must be independent and free from conflicts of interest to ensure unbiased results are produced. California also wants to ensure packaging accurately reflects the cannabinoid content of flowers by mandating that all intoxicating forms of THC are measured and reported. Finally, in the interest of providing safe and tested cannabis to Californians, the state has approved of expanded access to cannabis products through delivery into regions of California that have limited access to legal cannabis products.

Changes Regarding Business

In addition to measures introduced to ensure consumers are informed and consume cannabis safely, California has also revised regulations in several areas for current and future cannabis businesses. As a whole, the state has undone some of the more tedious steps and regulations that contribute to slower processing times and unnecessary bureaucracy. These changes can be seen in various cannabis business types from retail to cultivation. 

Concerning licensing, California has removed requirements mandating that applicants provide extensive financial documentation when applying for a new license. Through doing this, applicants no longer need to provide continuously updated lists of low-level investors. Additionally, California clarifies who must disclose themselves as owners of their business, while also taking steps to make it easier for businesses to provide information to CEQA for review. 

In addition to these changes in licensing regulations, California has introduced regulations to allow cannabis businesses to be more flexible with their operations. For example, the state now supports a more efficient distribution of cannabis statewide while also offering businesses the flexibility to quickly expand their vehicle fleets to meet demand. In doing this, the state has scaled back its requirements for retrofitting delivery vehicles, saving the state time and businesses money. California also wants to be less strict with licensing types and the requirements surrounding the need for new licenses by reducing the number of qualifying conditions that demand a new license type. 

Finally, the state now allows consumption lounges to sell prepackaged food and beverages and allow customers to bring their food into the premises if the business chooses to allow this. These new regulations also expand the opportunities for farmers and manufacturers to participate in events and showcase their products to customers and potential business partners. 

The state has in-depth information published on its website surrounding these changes and has made it easy for various business types to understand how these changes affect them. 

New Licenses 

Following the recent 2022 midterm elections, Californians have approved 12 local ballot measures that will allow for a significant number of new cannabis business opportunities. Most of these opportunities come in the form of municipalities either expanding their cannabis operations or allowing cannabis businesses to operate in the area for the first time. This, in turn, will give established and/or prospective cannabis business owners the opportunity to move into areas of new and untapped markets within California.

Resolutions in the San Diego and Los Angeles areas could create between 40 and 50 retail opportunities alone. Because of new tax measures passed in these areas, the state anticipates allowing additional businesses to open. More notably, conservative areas like Orange County have also voted to approve tax measures that would allow for dispensaries to finally open up in what is referred to as a marijuana desert. 

With these new local measures, California cannabis business owners can expect accelerated growth within the upcoming months. Business owners may be excited about new opportunities up ahead, but it is imperative to consult a licensed security consultant company or professional. This is true for most owners partaking in this opportunity, especially those new or inexperienced in the industry. Not only can security consultants help applicants pass their application process, but they can implement long-term security solutions to mitigate external and internal risk factors.

How Can Sapphire Risk Help?

Tony Gallo and the team of experts and consultants at Sapphire Risk Advisory Group have worked to secure medical marijuana and recreational cannabis businesses in 37 states. Follow us on social media to stay up to date with more security best practices and cannabis industry updates!