ESSENTIAL CALIFORNIA BUSINESSS MARIJUANA LAWS 2018 - POINT BY POINT

 

"New laws emphasize documentation and control.  To exist, marijuana businesses need to get professionally organized.  At any given time, for any cannabis product, each business must have documentation about ... who did what, when, where, how and why, ... and at all times. "

 

While the following rule set is not yet set in stone, here is a summary of the most important rules and regulations coming down the pipe in 2018.
 

Marijuana is now a legal to use substance in California, but it's anything but free.  Everyone in the industry is now under the thumb of the state, which controls literally every aspect of the  business, from seed to puff.   It's all about control.  Seeds must be documented, tested, verified, as do products.  Manufacturer's need to have good manufacturing processes, safety manuals and training in place, we're talking anal retentive processes and procedures.

 

With that downer said, there is a big upside for those that are able to merge these burdensome regulations into an efficient, productive and high quality operation.    

 

CANNABIS TRACKING - CRADLE TO GRAVE

Cultivators are required to send cannabis through a distributor for quality assurance (QA) inspection.

Distributors then send cannabis a lab for batch testing of random samples before any delivery to a dispensary.

Each plant must be assigned a state ID number.  The plant is tied with a zip tie at the base plants and is used for tracking to the point of harvest and sale.

This process can be easily automated and plants that fail quality control can be identified and discarded.

 

CULTIVATION LICENSES - BIG AND SMALL

 

The four types of cultivation are:
 

• Indoor

• Outdoor

• Mixed-light (greenhouse, hoop-house)

• \Nursery (clones, non-flowering)

 

SIZE OF OPERATION

• Specialty size - up to 5,000 square feet of canopy cover

• Small size - 5,001 to 10,000 square feet of canopy cover

• Medium size - 10,001 to 22,000 square feet of canopy cover

• No size limits on outdoor

• Outdoor cultivation may not operate within 600 feet of a school zone
   

 

MANUFACTURING LICENSED

 

• Manufacturing Licenses vary by Extraction Method

• Production of medical cannabis products using non-volatile solvents

• Production of medical cannabis products using volatile solvents, such as butane, hexane, or ethanol

• Volatile solvents licensees are restricted and requires rigorous safety standards

PACKAGING

 

Manufactured cannabis must avoid using packaging that appeals to children and to disclose standardized content information, such as cannabinoid content, test results for residual solvent, mold, etc.

 

MANUFACTURING

 

• Manufacturing licensee may not send product directly to a dispensary

• Manufacturers have to send cannabis to a distributor where a testing licensee, verifies the concentration, purity of product, and contaminants

• Manufacturing licensee may obtain a specialty or small cultivation license

• A Type 10A Dispensary license may also obtain a medium cultivation or nursery license

 

TRANSPORT OF CANNABIS

 

• A Third Party Transporter must transport all cannabis.  In the past, growers transported cannabis to a dispensary, where it tested, in-house or by a third party, before it dispensed to patients

• A transporter’s license is required to transport cannabis from any one licensee to another

• Now, a third party must transport cannabis from a licensed cultivation site to a licensed distributor to the dispensary

• Transporters with an exception for distributors, are prohibited from holding cultivator, manufacturer, or any other license by the state

 

DISTRIBUTORS AND QUALITY CONTROL / QUALITY ASSURANCE

 

This type of license coordinates and tracks the distribution of cannabis.  The purposed is to assure the delivery of quality medical cannabis by channeling all cannabis through a third party, a distributor and certified testing lab.
 

All cultivation and manufacturing licensees send harvested and manufactured cannabis to the  distributor for quality assurance and inspection. The distributor assures that all lots of cannabis receives a “batch test” with certificate of analysis before shipment to a dispensary.

If a dispensary has a cultivation license at the same location, third party testing offside is required before any cannabis product can be dispensed.

 

Under the new laws, a cultivator or dispensary contracted to buy cannabis at a set price and quantity remains obligated to carry out the terms of that agreement, and is authorized to charge a fee for quality control.

 

• A transporter may obtain a distributor license

• A distributor must obtain a transporter license
   

 

MEDICAL MARIJUANA  TESTING LABORATORIES

 

Testing Licensees cannot hold any other licenses; transport, distribution, dispensing, cultivation.   A licensed laboratory tests all cannabis before it's delivered to, and sold at a dispensary.  Laboratory principles may not have any interest in a client's facility or operation that deals in cannabis.  

Each testing lab will have to adopt standard operating procedures using methods that are accepted in the industry.
 

The testing lab must pull samples using a statistically valid sampling method, from each batch of cannabis bound to a dispensary.   

 

Quantification is required for:

 

• THC, TCHA, CBD, CBDA, terpenes, CBG, CBN

• Mold and fungus, herbicides and pesticides  

• Other parameters may be added to this array

• Manufactured cannabis medicines and products should be tested for residual pesticides, while mold and fungus is not normally required

 

Cannabis transported from either a cultivation operation, distributor, tester, or dispensary licensee must be shipped in tamper-evident packaging, containing the chain of custody labeling details.  
 

 

DISPENSARIES CANNOT PURCHASE FROM UNLICENSED GROWERS

Moving forward, from a patient's perspective, there will be little difference in the way dispensaries operate.  However, on the business side, dispensaries are not allowed to purchase or accept product from any unlicensed grower.  All products within a dispensary must be tracked and traced from the moment of reception to the point of sale.
 

A Type 10A dispensary licenses is the most common type.  A Type 10A license allows for one dispensary, one manufacturing, and any number of cultivation licenses, provided that the  canopy coverage is less than four acres.  Even if a dispensary obtains a cultivator and/or manufacturing license, it must first transport all marijuana through a distributor and third party testing licensee before product for sale re-enters the dispensary, even if the grow is located in the same place.

A Type 10 dispensary (but not 10A) is limited to one site, but this could be subject to change. Type 10 dispensaries cannot obtain other licenses, so these companies will rely entirely on third party licensed growers.

 

MOBILE DISPENSARIES BANNED - DELIVER OK FROM PERMANENT DIGS

Legal Taco truck style dispensary is not in the cards.  The new laws require a permanent business location, which eliminate the home-based mobile dispensary.  However, the new law explicitly allows for delivery from an existing  dispensary. This means that mobile dispensaries must partner with "brick and mortar" businesses, or acquire small delivery only licenses.  

Mobile dispensaries that partner with a brick and mortar licensee can supply a list of patients/consumers to the brick and mortar, but they must perform all deliveries for the dispensary.  This is a positive in that the brick and mortar dispensary can gain customers, while focusing on the primary business of serving customers, rather than disperse energies delivering product.

 

Alternatively, a current mobile dispensary may choose to operate and deliver from of a secured, physical location, but they cannot dispense publicly from a storefront. This type of operation functions as a small sized private clearinghouse, and has to send their cannabis to a distributor, with a third party testing license.  

 

PATIENT'S CAN GROW BUT NO SELLING
 

Patients have to get a Marijuana State ID to grow marijuana in a collective or by themselves.

A patient's plot size is set at 100 sq. ft. and the cannabis produced there may not enter the stream of commerce.  The good news is that the growing protocol is left up to the patient and a  unique identifier tag from the state is not required.   Patients are prohibited from selling to a distributor or dispensary.

 

DOCTORS CANNOT PARTICIPATE IN OTHER PARTS OF THE CANNABIS INDUSTRY

 

Doctor's are designated to administer recommendations to patients for cannabis, which allows them to access State ID, with the rights to grow marijuana at home or at a licensed cooperative.  A doctor cannot own any shares in a dispensary, delivery service, grow operation or other non-medical related cannabis business.  A recommendation needs to be free of financial gain related to other transactions, such as the purchase of marijuana from a dispensary.  Doctor's need to comply with record keeping requirements set by the California Medical Board.

CERTIFICATE OF ANALYSIS

 

Documentation requirements  for Guaranteed Compliance
 

PRODUCT TYPES

• Flowers

• Extracts

• Edibles
   

SOP

Standard Operating Procedures for Production documentation must be in place.

 

HYGIENE TRAINING AND POLICY

Employees trained in clean and safe product production

Training in chemical pesticide/fungicide alternatives
Edibles should adhere to chef standards in the hospitality industry
 

BATCH CODING

Producers must implement a unique batch coding system for plants. This system is used for the chain of custody - to trace each batch of finished product. The batch that goes to each client must be recorded.

 

QUALITY CONTROL

Raw Marijuana Batches should be sampled at a rate of 1 part in 200, or 0.5%.  Employees need to be trained to provide a representative sample for third party testing.   Each batch is submitted for third party testing, in addition to in house testing.  The third party testing lab must be certified to perform cannabinoid testing, for THC, THCA, CBD, CBDA, other cannabinoids, pesticide, residual solvents, herbicides, mold and fungus.  Provided that the sample test results meet in house and state standards for active and potentially toxic ingredients, the batch may be packaged and labeled, and then dispensed.


CERTIFICATE OF ANALYSIS - PRODUCT LABELING - REMEDIATION - CORRECTIVE ACTION
 

If a sample falls outside the stipulated in-house and or state quality specifications, then.the batch should be re-sampled and retested.

If the second sample also fails, then the batch must be destroyed and documented as so.

Corrective action must ensue, for example, if a sample failed due to mold content, then the production procedure for the batch must be studied, and corrective action concluded if possible.

Corrective action might be to increase air flow, add a dehumidifier, or do nothing at all if the quality failure is assumed to be a "once off".

 

DOCUMENTATION SOFTWARE

To conform to the new laws, organization, good manufacturing practices, trained employees and above all else, documentation is required to keep your license.  It is highly recommended that every marijuana business use spreadsheets or commercial software the keeps track of your records, so that you know exactly where you stand on a DAILY basis.   When someone comes knocking on your door, as in an inspector, you'll both be mighty happy that all is in order.

 

FURTHER READING

 

"Certificate of Guaranteed Compliance"

A professional marijuana consultat's version of quality control procedures, to comply with the new laws and guidelines for the production of cannabis.

 

Standards for Cannabis Testing Laboratories Cannabis Safety Institute December, 2014

The BOTEC report indicated - in error-  that it can take 2-3 years for labs to attain ISO 17025 accreditation.  Though this might be a rough average, it is certainly not the case. Laboratories that are functional and well-run can jump into the accreditation process and complete in 6 months, and most certainly within a year. Multiple resources are also available to laboratories in preparation for accreditation.  ISO 17025 consultants can be hired to perform a gap-analysis on their quality system.  Training courses are offered by various Accreditation Bodies on fundamentals of internal auditing, root cause analysis, etc.  

 

Perry Johnson Laboratory Accreditation, Inc. (PJLA) now accredits Medical Marijuana Testing Laboratories

Third-party assessment of ISO/IEC 17025:2005 for the relevant medical marijuana testing standard protocols to detect potency and contaminant levels in marijuana.  

Many states have legalized medical marijuana, and the market demand for testing laboratories will be crucial to the industry.  Laboratories need to be prepared to accommodate specific state requirements for testing.

 

California Issues Historic Medical-Marijuana Rules

 

“It’s a very big deal. All of the nitty gritty details about how folks will operate and what things they’ll need to do to become compliant and stay compliant - that all comes out in the rules.  This is the next step in having a more regulated marke-tplace in Cal, which is by far the largest cannabis market in the United States. It’s super-important.” - Nicole Neubert,cannabis attorney, San Francisco.

The regulations are detailed, i.e. limiting dispensaries’ hours of operation from 6 a.m. to 9 p.m., and requires that 42 percent of indoor pot farm electricity come from renewable-sources.

The rule set also stipulates that edible-marijuana-products must contain not more than ten milligrams of THC per serving, and not more than 100 milligrams per pack. THC ( tetrahydrocannabinol),which is the psychoactive ingredient of cannabis.

Medical pot business owners can expect compliance costs to increase by $524 per pound, according to the new regulators. Cannabis that sells wholesale could jump up $800 to $2,500 per pound. Overall, medical-marijuana businesses should see compliance costs jump by $125,000 per year for a small business and up to $310,000 per year for an average business, regulators estimated in detailed financial impact analysis.

 

MMJDOCTORONLINE NOTES:

In 2018, citizens of Nevada and California want to get MMJ ID for several reasons.  Patients with a doctor's recommendation will pay 15% less (no tax) for their herb of choice.  Citizens cannot grow marijuana legally without a Cannabis ID card.   Medical Marijuana dispensaries won't be allowed to serve people without a MMJ ID.  Our online process allows patients quick access to 420 evaluations, in minutes, quickly and affordably.  Patient's don't pay unless they're approved.  We also provide grower's permits and renewals, all same day, all 100% online.