ARTICLE TAKEAWAYS

• Section 5038(h) of the BCC regulations provides licensees with temporary relief from specific licensing and regulatory requirements in order to prevent loss, theft, or degradation of cannabis goods from a disaster.  We believe the current environment in Los Angeles qualifies as a “disaster” under the BCC regulations.
• Licensee rights may include the option to secure product at an alternate premises.  Exercising these rights must be balanced against other commercial concerns, including whether relocated product will no longer be covered under insurance policy(ies).
• BCC and LADCR have taken action to protect licensees from further targeted looting by removing all licensee information from their public license searches.  Of course, licensee locations are still known via Google, Weedmaps, etc. 

THE KVK PERSPECTIVE

2020 has been a harsh reminder that disasters do happen.  Disasters come in many shapes and sizes:  fires, pandemics, civil unrest, murderous law enforcement, and others.  For those of us who are lucky enough to be privileged, we have learned and are saddened that African-Americans and people of color live in a perpetual state of disaster with respect to the disproportionate use of force by law enforcement and disregard for black and brown lives.  Those of us who were not lucky enough to be born with such privilege — Trayvon Martin, Michael Brown, Alton Sterling, Botham Jean, Atatiana Jefferson, Ahmaud Arbery, George Floyd, and countless others – unfairly paid the ultimate price to place this issue in the spotlight where it belongs.  

KVK sides with those fighting for justice in these cases.  Black. Lives. Matter.  To still be fighting this battle after so long – and for it to still be an uphill fight – is a disaster in and of itself.

DISASTERS AND THE CALIFORNIA REGULATORY INDUSTRY

Disasters affecting the California cannabis industry are addressed by the Bureau of Cannabis Control regulations.  Section 5038 of the Bureau of Cannabis Control regulations defines a “disaster” at subsection (f) generally as a “…condition of extreme peril to the safety of persons and property within the state…”.  Cited examples within the statute include “…fire…epidemic, riot…state of emergency…”. 

California state legislators, lawyers, lobbyists, and drafters envisioned a time when disaster might affect a cannabis licensee’s ability to comply with regulations.  Section 5038(c) allows a licensee to obtain “[t]emporary relief from specific licensing requirements…in order to allow the licensee to recover from the disaster” and assures that “[a] licensee shall not be subject to an enforcement action for a violation of a licensing requirement in which the licensee has received temporary relief.” Such relief is subject to the discretion of the Bureau of Cannabis Control.  Section 5038(b).

We are confident that the current circumstances in Los Angeles affecting many cannabis businesses qualify as “disasters” sufficient to invoke the relief afforded by Section 5038.  Recalling that such relief is discretionary under Section 5038(b), licensees should submit written requests to the Bureau of Cannabis Control which cite specific facts and events preventing compliance. 

For example, a licensee may be unable to comply with obligations to secure cannabis from theft and diversion in the face of real threats of break-ins and looting occasioned by civil unrest.  Relief for such threats can include the temporary right to move cannabis to an alternate location. Seeking this form of relief should be balanced against the possibility that your insurer may not cover product which is relocated off site. Consult with your insurance provider.

A REMINDER TO EMPLOYERS

Issues of police brutality and unequal protection in law enforcement affect African-Americans and people of color every day.  These issues are now front-and-center where they belong, and where they can be addressed rather than ignored.  But change is slow to take place, as evidenced by our 200+ year history. 

Activism requires momentum, numbers, and sometimes disobedience.  To that end, we encourage businesses to allow permitted absences for employees seeking to peacefully demonstrate against police brutality and unequal protection. 

Is it required?  No.

Is it the right thing to do?  Absolutely.

By GianDominic Vitiello & Twylla Vennum, June 4, 2020

Please contact us for assistance with your petition for “temporary relief” under Section 5038, or for assistance drafting employee policies.