Cannabis Industry Updates: August Brings New Rules, Regulations and Uncertainty

California’s legal adult-use cannabis market has certainly hit some snags since its much-anticipated launch at the start of the year. In just a few months, there has been a slew of regulatory challenges, licensing delays and product sales are scraping by at just 50 percent of what had been predicted prior to legalization.

For cannabis professionals, trying to keep up with the latest updates and constant shifts can be a challenge. Here’s a roundup of the latest news and developments this month that are shaping the cannabis industry.


Second Voluntary Cannabis Product Recall Issued in California

Just days after the first marijuana product recall was issued in California’s newly regulated market, a second recall was already underway. As Marijuana Business Daily reports in this story, David Elias, CEO of Los Angeles-based Lowell Herb Co., confirmed that his pre-roll-production business had issued a voluntary recall beginning July 27 after a testing lab reversed its initial finding that a specific batch passed and was cleared for retail sale. The recall involved two stock-keeping units (SKUs) and the company has decided to destroy all the recalled pre-rolls instead of trying to remediate the product and get it back to market.

California Bureau Of Cannabis Control Crafting Rules For Marijuana Businesses

The State Bureau of Cannabis Control is working to finalize the state’s rules on growing and selling recreational cannabis. The department issued nearly 4,000 temporary licenses to growers when recreational pot became legal. Now those permits are expiring and growers must apply for permanent permits. As ABC 7 News reports in this story, the biggest change since recreational cannabis became legal this year was requiring that all cannabis on dispensary shelves be tested for safety.

Los Angeles Scraps Marijuana Tax Ballot Measure

The Los Angeles City Council recently changed course and pulled a proposed cannabis tax ballot measure that was planned to go before voters in November. As Marijuana Business Daily reveals, the tax measure—named the Cannabis Reinvestment Act—would have established a further 1 percent tax on all gross receipts for commercial marijuana activity, a $5 surcharge for tickets to cannabis events and a $5 surcharge on cannabis tests performed by labs. There’s currently an order for city staff to report back in 45 days on how the city could fund its Department of Cannabis Regulation and efforts to combat the illegal cannabis market.

Los Angeles: Commercial Cannabis Signage Ordinance Now in Effect

The Los Angeles’ Commercial Cannabis Signage Ordinance is now officially in effect as of July 23. As MMLG writes, the ordinance was adopted by the Los Angeles City Council in early June, and the intent is to limit the exposure of children and minors to advertising of cannabis and cannabis products while outdoors, where they can be easily subjected to involuntary and unavoidable forms of marketing and solicitation. All impacted Los Angeles cannabis businesses need to be aware of these changes and be sure that their signage is meeting these new requirements.

Hemp-Derived CBD Not Allowed in Food (or Pretty Much Anything Else) in California

The California Department of Public Health’s Food and Drug Branch (CDPH-FDB) revised its FAQ on cannabidiol (CBD) in food products. As Canna Law Blog suggests, the move will likely block the sale of hemp-derived CBD products in California—which are currently widely available. CDPH-FDB determined that CBD sourced from industrial hemp cannot be added to food (including drinks) for either humans or pets.

California Marijuana Notebook: More industry shrinkage may be on the way

Marijuana Business Daily Senior Reporter John Schroyer provides the first installment of his new column that delves into the widely varied and complicated issues surrounding California’s immense cannabis market. In his article, Schroyer says one of the major regulatory issues that will hit every licensed company in the California supply chain will be when the state’s Metrc traceability program is implemented. This will be triggered by the issuance of full annual business permits that will replace the temporary licenses that every fully legal business has been operating under—but there’s still no firm date for that to happen.

That’s it for this roundup of cannabis industry news. If you have questions about any of these updates or anything related to your cannabis business, please contact me or call me at (626) 703-1556. I’m eager to help cannabis professionals find the right resources and coverage for their business. 

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About Corey Tobin

With close to a decade of industry experience, Corey has worked with a number of small and medium-sized businesses and is knowledgeable about property and casualty, life and health insurance. Corey specializes in working with elevator contractors, manufacturing, distributing, healthcare and construction. Additionally, he is focused on the unique needs and challenges facing cannabis related business, including dispensaries, cultivators, extractors, developers and much more.

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