On Friday, the three California businesses charged with issuing and imposing guidelines for hashish enterprise licensees issued a stack of proposed modifications to the ultimate guidelines it had beforehand proposed in July. Lots of the most dramatic modifications got here from the BCC and can probably encourage quite a lot of feedback in the course of the rulemaking course of (deadline for feedback on these proposed modifications is Nov. 5, FYI).
The Division of Meals and Agriculture, which administers the hashish cultivation licensing program, issued its personal set of proposed rule modifications that, whereas not as jaw-dropping as a number of the BCC’s proposed modifications, are nonetheless noteworthy.
Most significantly, the principles for cultivation plans simply obtained much more onerous for licensees that plan to “stack” small licenses to be used on one premises. Recall California’s controversial resolution final 12 months to not cap the entire cultivation acreage per licensee to 1 acre, and the ensuing profit to mega farms that have been then free to “stack” a number of smaller licenses to get a bigger whole cultivation space that they might in any other case be prohibited from getting because of the one-per-licensee restrict of 1-acre out of doors licenses and the prohibition on Kind-5 “massive” cultivation licenses till 2023. A key component to that loophole’s profit to massive growers was AB 133, which clarified licensee might keep one huge “premises” upon which to function all of its licenses, and was not required to make every license have its personal “separate and distinct” premises. This might permit for economies of scale, as it could be arbitrary and inefficient to require each single chunk of cover on a parcel to have its personal fencing, safety, and so forth.
Cue the DFA, which via its new proposed rule modifications, now says there are particular classes of a licensed premises that categorically can’t be shared amongst licenses owned by a single licensee. Permissible shared areas should be contiguous, and they’re restricted to areas designated for pesticide storage, composting, hashish waste storage, and harvested hashish storage, along with conventional frequent areas comparable to hallways, toilet, and break rooms. Nonetheless, areas that can’t be shared amongst a number of licenses held by one licensee embody: (i) areas outdoors of the cover the place solely immature vegetation are grown (i.e. nursery-type areas); (ii) processing or packaging areas (i.e. “drying, curing, grading, trimming, rolling, storing, packaging, and labeling”); and (iii) areas designated for bodily segregating hashish throughout an administrative maintain pending decision of a discover of violation from the state. Whereas it isn’t clear precisely how the DFA would interpret this proposed new rule language in apply, a probable consequence may very well be that cultivation licensees holding a number of licenses (both of the identical kind or a spread) to be used on a single premises would not have the ability to benefit from the identical economies of scale for processing and packaging or for cultivation of immature vegetation, and that every separate license would require its personal devoted room for every such exercise. We additionally know that the BCC requires separate partitions and sealed doorways when it requires premises to be separate. Time will inform how this rule will look in a number of months, however because it stands now it might hurt corporations with restricted entry to area and sources for constructing further rooms, and will surely add to prices of compliance.
Different notable small modifications that would add to licensing prices embody necessities that every license applicant should now conform to put one supervisor and one worker via a normal 30-hour Cal-OSHA course for office security; and starting in 2020, all hashish and nonmanufactured hashish merchandise packaged or labeled by a licensed cultivator should are available in child-resistant packaging, which conforms to the necessities of BCC and DPH for packing of different hashish merchandise.
Lastly, one proposed change within the BCC guidelines that will find yourself having extra of an impact on cultivators is that every one buildings included as a part of the licensed premises should now be completely affixed to the land for an indefinite time frame. Off-the-grid kind operations are infamous for utilizing RVs, cell properties, light-weight moveable greenhouses, and so forth., so this rule change may additionally serve to stop what would in any other case be a fast repair to the primary concern recognized above.