We wrote last week about the California Bureau of Cannabis Control’s (BCC) issuance of their much-anticipated emergency rules to fully implement the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) in California. These emergency regulations, including those issued by the Departments of Public Health and Food and Agriculture, can be found here, here, and here.
The emergency rules are similar to the withdrawn rules under the Medical Cannabis Regulation and Safety Act (MCRSA), but there are some important additions and gap-fillers with which applicants need to familiarize themselves. In the coming weeks, we’ll be summarizing some of the key rules with respect to each category of license, beginning with manufacturing. We will be discussing these regulations a bit at our Southern California Cannabis Investment Forum on November 30 in Los Angeles and it would also behoove you to stay tuned for an announcement setting the date for our next webinar, which will delve into the new regulations in detail.
The California Department of Public Health (CDPH) regulates cannabis manufacturing through its Manufactured Cannabis Safety Branch. The CDPH will issue temporary licenses allowing manufacturers to engage in commercial cannabis activity, effective January 1st. These temporary licenses will be valid for 120 days and may be extended for additional periods of 90 days if the business has submitted an annual license application.
For manufacturers, there are two license categories and four license types, a departure from the categories specified in SB 94. The two license categories are the A-License for the adult-use market and the M-License for the medicinal market. A single business may hold both an M- and an A- license at the same premises, so long as they submit separate applications for each.
The four license types are as follows:
- Type 7: Extraction using volatile solvents (i.e. butane, hexane, pentane).
- Type 6: Extraction using non-volatile solvents or mechanical methods (i.e. food-grade butter, oil, water, carbon dioxide). The rules also clarified the definition of “volatile” by expressly excluding ethanol, which is now deemed “non-volatile.”
- Type N: Infusions (i.e. using pre-extracted oils to create edibles, beverages, capsules, vape cartridges, tinctures or topicals).
- Type P: Packaging and labeling only
*Note that both the Type N and Type P licenses had been eliminated in SB 94, but have been reintroduced.
Each licensee will need to have written SOPs for inventory control, quality control, transportation, security, and cannabis waste disposal and must submit these SOPs with their license application. Extractions using CO2 or any volatile solvent must be conducted with a closed-loop system that has been certified by a California-licensed engineer, and volatile, hydrocarbon-based solvents must have at least 99% purity. Certification by the local fire code official will be required for volatile solvent, CO2, and ethanol extractions.
Many of the product standards from the repealed MCRSA rules have also made their way into the new MAUCRSA regulations. For example, products cannot be infused with nicotine or alcohol, or have added caffeine. Edibles cannot be shaped like a human, animal, insect, or fruit, and potentially hazardous foods like meat, seafood and other products requiring refrigeration are prohibited.
The potency requirements have changed slightly, although edibles are still limited to a maximum of 10 mg of THC per serving and 100 mg of THC per package. Other cannabis products, including tinctures, capsules, and topicals, may contain up to 1,000 mg of THC per package for adult-use products and 2,000 mg per package for medicinal-use products.
The MAUCRSA packaging and labeling regulations will require a significant departure from current practices for many existing manufacturers. Cannabis product packaging cannot resemble traditionally available food packages, and all edibles packaging must be opaque. Cannabis products and their packaging cannot be attractive to children, and packaging must be tamper-evident and child-resistant. Labels must include an ingredient list, nutritional facts, and the CDPH-issued universal symbol. Products cannot be referred to as “candy,” and must include mandated warning statements and the THC content.
Perhaps most promising to many small-scale manufacturers is CDPH’s statement that it is currently developing an additional license type, Type S, which would allow businesses to share facility space. Currently, the rules require a separate and distinct premises for each license, with the exception being that a licensee can hold both an M- and A- license of the same type on one premises. The Type S license would open the door to co-sharing of manufacturing facilities and possibly equipment, which would greatly reduce the barriers to entry for many small companies struggling to secure and build out their own manufacturing facility.
In the coming days, we’ll be delving into the new regulations for cultivation, retail, and distribution as well, so stay tuned.