California, Licensing, News

BREAKING NEWS on San Francisco Cannabis

San Francisco cannabis lawyersA couple of months ago we covered San Francisco in our Cannabis Countdown series. All up and down the state of California, local jurisdictions are constantly updating or amending their cannabis regulations and San Francisco is no different. There was also an enormous update on the state level as California’s Bureau of Cannabis Control, along with the state’s other cannabis licensing agencies (the Departments of Public Health and Food and Agriculture), just released their emergency regulations.

There’s a lot to digest in these 278 pages of regulations, but don’t fret as you know you can count on the Canna Law Blog to update you regularly on here with posts from our San Francisco and Los Angeles lawyers  and with our upcoming Los Angeles Cannabis Investment Forum on November 30 (go here to get your tickets for that before it sells out) and with a new webinar specifically on the new rules coming soon.

What hasn’t changed since California promulgated their rules (now withdrawn) under the Medical Cannabis Regulation and Safety Act is that local jurisdictions still control the types of cannabis licenses they are willing to permit inside their boundaries. Local jurisdictions still rule the roost and staying atop of the jurisdiction in which you want to operate your cannabis business is paramount. Just last week as I was meeting with clients at the MJBizCon conference in Las Vegas, the San Francisco Board of Supervisors (“Board”) released a draft of its new cannabis ordinance, which has significant implications for cannabis businesses looking to operate in San Francisco. The Board proposed amendments to San Francisco’s Planning Code (you can find them here) and the Administrative, Business and Tax Regulations, Health, and Police codes (here you go).

And if those are not enough to keep you busy, if you operate a cannabis cultivation, manufacturing, or distribution business in San Francisco you have until November 30th to register your business with San Francisco’s Office of Cannabis. In other words, if your cannabis business is eligible, you need to STOP researching Thanksgiving recipes and REGISTER with the Office of Cannabis here. To say that the phone lines in our San Francisco office have been ringing off the hook since the announcement by the Office of Cannabis would be both a cliché and the truth. Our cannabis lawyers have been representing companies in California, Washington, and Oregon since 2010 and we cannot remember any governmental body providing for such a tight deadline.

The below are some of the more important changes to the Board’s proposed amendments:

  • It creates an equity program that grants priority permit processing for equity applicants and defines an equity applicant as someone who a) lived in San Francisco for at least five years during the time period of 1971-2009; b) lived in a census tract where at least seventeen percent of the households had incomes at or below the federal poverty level; and c) at the time of application, has assets  (excluding non-liquid assets and retirement accounts) that do not exceed asset limits established by the Director (of the Office of Cannabis). For the entire list of criteria that defines an equity applicant look to Section 1604(b).
  • It establishes priority processing for equity incubators. An equity incubator is an applicant that does not qualify as an equity applicant, but that submits with its cannabis business permit application a cannabis equity incubator agreement in which it commits to comply with certain operating requirements (see section 1604(c)) during its first three years in operation as a cannabis business.
  • It creates a process to issue temporary cannabis business permits for all permit categories other than storefront retailers.
  • It allows storefront retailers to operate a compassion program that provides medicinal cannabis and/or medicinal cannabis products at no or nominal cost to low-income individuals qualified under California Health and Safety Code sections 11362.7 et seq. to use medicinal cannabis.
  • It allows for onsite cannabis consumption at dispensaries and microbusinesses so long as they have a valid cannabis consumption permit.
  • It prohibits delivery of cannabis products by businesses outside San Francisco. Only retailers and delivery-only retailers with a license from the Office of Cannabis can deliver cannabis within the city limits of San Francisco.
  • And of utmost importance, it provides that only those who fit into one of the following categories  can receive a permit from the Office of Cannabis in 2018:
    1. You are an equity applicant or an equity incubator.
    2. You possess a valid permit to operate a medical cannabis dispensary.
    3. You were issued a temporary permit.
    4. You can show you operate in compliance the Compassionate Use Act of 1996 and you were forced to discontinue operations as a result of federal prosecution or the threat of federal prosecution.
    5. You applied for a medical cannabis dispensary permit prior to September 26, 2017, that required referral to and approval by the planning commission.
    6. You registered with the Office of Cannabis as a pre-existing non-conforming operator, as set forth in subsection (k) of section 1605.

We previously covered the importance of reaching out to your local legislator when it comes to the implementation of cannabis policy and that holds true whether you live in a small town or a big international city like San Francisco. If you have issues with the Board’s amendments now is the time to speak up as they are expected to vote on them on November 28th, so call your district supervisor now!