In anticipation of the cannabis industry’s celebration of 4/20, the following are tips and reminders for cannabis retailers to remain compliant:

Marketing / Advertising

• BRANDED MERCHANDISE 

If you are preparing to sell, donate, or give away Branded merchandise on 4/20, please do not forget that any Branded Merchandise that is sold or given to customers must identify the licensee responsible for its content by displaying the license holder’s license number in a manner that is permanently affixed to the merchandise, legible, and clearly visible from the outside of the merchandise. 

“Branded Merchandise” is defined as non-consumable consumer goods utilized by a licensee for advertising and marketing purposes.  Examples of branded merchandise include clothing, bags, pens, keychains, mugs, water bottles, lanyards, stickers, pins and posters.

THE BREAKDOWN

Make sure all Branded Merchandise bears a license number and that the license number is permanently affixed and visible from the outside of the merchandise.

• NO FREE REGULATORY GOODS (except medicinal donations)

Licensed retailers shall not provide free cannabis goods to any person. A licensed retailer shall not allow individuals who are not employed by the licensed retailer to provide free cannabis goods to any person on the licensed premises (i.e., any brand CAD or PAD representatives shall not provide cannabis goods or cannabis accessories to anyone on your premises). 

A licensed retailer “shall not advertise free cannabis goods or cannabis accessories. This includes promotions such as:

1. Buy one product, get one product free;
2. Free product with any donation; and
3. Contests, sweepstakes, or raffles.” 

In other words, retailers or non-storefront deliveries must not advertise any promotions offering FREE cannabis goods and/or cannabis accessories (ex. brand apparel, lighters, and smoking devices).

THE BREAKDOWN

Licensed retailers may advertise giveaways of non-cannabis products but shall not advertise or giveaway cannabis or cannabis products. Licensed retailers may giveaway cannabis accessories, but cannot advertise specific giveaways of cannabis accessories.

NO IMAGES ATTRACTIVE TO CHILDREN

Licensed Retailers shall not use any depictions or images of minors or anyone under 21 years of age or any images that are attractive to children, including, but not limited to: 

• Cartoons; 
• Any likeness to images, characters, or phrases that are popularly used to advertise to children; 
• Any imitation of candy packaging or labeling; or
• The terms “candy” or “candies” or variants in spelling such as “kandy” or “kandeez.”

THE BREAKDOWN

Licensed retailers should carefully review all of its advertising and promotion materials to make sure that these materials do not contain images that are attractive to children.

No “EVENTS” or “PARTIES”

Many cannabis businesses host food vendors, DJs, and other fun activities at their business premises in celebration of 4/20, but need to take extra precaution to not use the term “event” or “party” when advertising their 4/20 celebrations.  

The Department of Cannabis Control regulations require cannabis event organizers to obtain:

1. a cannabis event organizer license and
2. a temporary cannabis license event

Thus, the use of the term “event” in a licensed retailer’s advertisements may result in a direct violation of the DCC regulations. 

Further, applicable regulations provide,

“No special events or parties of any type shall be held at the Business Premises, including, but not limited to, events for which a Temporary Special Event Permit has been issued by the Building and Safety Commission or any other city Department. (Violation Type – Moderate)” 

According to Los Angeles Municipal Code Section 104.13, the administrative fine for a moderate violation type is the amount equal to 150% of the current cannabis license fee for each and every violation.

THE BREAKDOWN

Never use the words “event” or “party”  or host an event at your cannabis business premises.

Medicinal Donations

A licensed retailer (or non-storefront retailer) who holds an M-Retailer license may provide free medicinal cannabis goods if the following criteria are met:

1. Free cannabis goods are only provided to a medicinal cannabis patient or primary caregiver for the patient in possession of an identification card under Section 11362.71 of the Health and Safety Code;
2. Cannabis goods pass regulatory compliance laboratory testing;
3. Cannabis goods have been properly recorded in the track and trace system utilized by licensee;
4. Cannabis goods shall be placed in proper opaque packaging and comply with all packaging and labeling requirements applicable to cannabis goods for sale by a licensed retailer;
5. The cannabis goods shall be applied toward the daily purchase limit for a medicinal cannabis customer;
6. The transaction shall be properly recorded in the licensee’s inventory records and track and trace system.

THE BREAKDOWN

Licensed retailers may offer free medical cannabis to qualified patients provided they comply with all applicable requirements.

Daily Limits

Licensed retailers must ensure that adult-use customers and medicinal cannabis patients do not exceed their daily limits when purchasing cannabis or cannabis products, goody bags and promotional/discounted items. Licensed retailers are required to train their employees on the maximum daily limits allowed. Employees should review a customer’s complete purchase history prior to completing a transaction to ensure that the customer is not “double dipping” (making two separate visits to purchase as an adult-use customer and medicinal cannabis patient) or obtaining two goody bags in one day which would exceed daily limits. Licensed retailer should also be aware of potential failures of their POS software to adequately track daily limits. 

As a reminder, the daily limits for adult-use customers and medicinal patients are as follows: 

Adult-Use

• 28.5 grams of non-concentrated cannabis (aka cannabis flower)
• 8 grams of cannabis concentrate, including cannabis concentrate contained in cannabis products (vape cartridges, edibles, shatter, wax, kief, budder, etc.) 
• 6 immature cannabis plants

Medicinal

• 8 ounces (224 grams) of medicinal cannabis in the form of dried mature flowers or the plant conversion
• 6 mature cannabis plants OR 12 immature cannabis plants
• An amount of medicinal cannabis consistent with the patient’s needs as recommended by a physician – meaning if the medical recommendation allows for more than the daily limits provided in the regulations, then the patient may purchase the amount prescribed in the medical recommendation. 

Daily purchase limits also apply to donated cannabis and cannabis products provided to a medicinal patient and must be tracked.

THE BREAKDOWN

Goody bags and promotional items must be included in each customer’s daily purchase limit calculation.

Have questions or concerns regarding compliance in California? Email KVK.

Blog by Tatyana Brenner, April 8, 2022