The California Department of Cannabis Control (DCC) has adopted the final version of cannabis regulations. These regulations went into effect on November 7, 2022. The full text of the regulations can be found here. A summary of the major changes affecting all license types is below. Stay tuned for more – next week’s blog post will cover license-specific changes. Please note that while the summary below includes a number of major changes, it is not a comprehensive list of all of the regulatory changes. We urge you to review the full text of the regulations and consult with us to ensure that you are in compliance with all of the requirements that may be applicable to your business.

In addition to the full text of the regulations, DCC has provided a comparison chart intended to help licensees understand the new requirements.

If you have any questions, please feel free to contact Katchko, Vitiello & Karikomi, PC for more information and a member of the team will be happy to assist.

• Material Changes to Definitions [15000]
  • “Cannabis goods” – means cannabis and cannabis products in final form and packaged and labeled as they will be sold at retail.
  • “Final form” means the form in which the cannabis or cannabis product will be consumed or used.
    • “Packaged and labeled as they will be sold at retail” was deleted from the definition of “Final Form” and moved to the definition of “Cannabis Goods.”
  • “Mixed-light cultivation” definition no longer includes light deprivation.
  • “Outdoor cultivation” definition revised so that the use of light deprivation is no longer prohibited for outdoor cultivation.
  • New definition added for “Terpenes”:
    • “Terpenes” means terpenes, terpenoids, flavonoids, polyphenols, and other naturally occurring phytochemicals and secondary metabolites contributing to the aroma or flavor of cannabis.
  • “Tincture” definition amended to clarify that “vegetable” includes “botanically classified fruits and vegetables and their seeds.”
• Subletting [15000.4]
  • This section was amended to expressly prohibit licensees from allowing another person to conduct operations in any area designated as the licensed premises.
  • This change is not intended to prohibit Management Service Agreements, provided the licensee is acquiring management services for its own business.
• Premises Diagrams [15006]
  • No longer required to be in black and white
  • Harvest storage area cannot be shared by licensees
  • No longer required to have administrative hold area
  • Manufacturer must indicate location of closed-loop extraction system and display the serial number
• Modification of Premises or Operations [15027]
  • DCC revised this section to distinguish between modifications that require prior written approval versus modifications that only require notification via online portal or email.
  • Material or substantial changes, alterations, or modifications to a licensed premises that materially or substantially alter the licensed premises or the use of the licensed premises from the premises diagram originally filed with the license application require prior written approval from DCC.
  • The following modifications require prior written approval for all license types:
    • Any increase/decrease in the total physical size or capacity of the premises.
    • Any physical change that would require a building permit, zoning change, or other approval from the applicable local jurisdiction.
  • The following modifications to manufacturing premises require prior written approval:
    • The addition of any ethanol, carbon dioxide, or volatile extraction method or extraction unit.
  • The following modifications to a microbusiness premises require prior written approval:
    • The addition of any new activity
  • All license types except cultivators must obtain prior written approval for any physical change that would require installations of additional video surveillance cameras, a change in the video surveillance system, or the alarm system.
  • All other modification requests that do not require prior written approval may be submitted through the online licensing system or by submitting a Notification & Request Form (DCC LIC-027).
• Significant Discrepancy in Inventory [15034]
  • A discrepancy is now defined as a change by five percent, not three percent.
  • The difference is simply between physical inventory and inventory registered in METRC, rather than as a percentage of sales.
• Changes to Regulations affecting Access to Licensed Premises and Storage
  • Many restrictions previously applicable only to limited-access areas now apply to the entire licensed premises. [15042]
    This includes:
    • Only employees and “authorized individuals” can access the licensed premises
    • Non-employees must be escorted when on the licensed premises at all times
    • Licensee must maintain a record of all authorized individuals who enter the premises
  • This has in turn loosened storage requirements [15000.7(a)]
    • Previously, all cannabis and cannabis products had to be secured in limited-access area.
    • The regulations have been revised to allow the storage of cannabis and cannabis products within the licensed premises.
• New Regulations Governing Returns Between Licensees [15052]
  • Cannabis can be returned to the originating licensee for any lawful business purpose, as long as:
    • Cannabis and cannabis products are not rebranded, relabeled, physically repackaged, or modified in any way without approval from the Department.
      • To receive approval to modify the cannabis or cannabis product, licenses shall submit a corrective action plan to DCC.
    • After being returned, cannabis and cannabis products undergo laboratory testing and quality assurance review prior to being transported to a retailer.
    • Returns must be recorded in METRC on a return manifest that shall contain the reason for the return.
    • Both the licensee returning the cannabis or cannabis products and the licensee receiving the cannabis or cannabis products must consent to the return.
• Prohibited Business Promotions [15040.2]
  • Licensees shall not give away any amount of cannabis or cannabis products, or any cannabis accessory, as part of a business promotion.
  • Licensees shall not hold raffles or sweepstakes as part of a business promotion.
• Trade Samples [15041.2]
  • Revised to expressly allow licensees to provide trade samples to their employees for the purposes of targeted advertising and product education.
• Marketing Cannabis Goods as Alcoholic Products [15040.1]
  • Licensee shall not market, advertise, sell, or transport cannabis goods that are labeled using terms to describe a type of alcohol or alcoholic beverage.
  • Licensees should exercise caution when labeling, advertising, or marketing cannabis products with flavor-related terms commonly used to describe alcoholic beverages (for example, “strawberry daquiri,” “piña colada,” or “margarita”). To ensure that such terms cannot create a misleading impression that the product is an alcoholic beverage, licensees should consider clearly and prominently describing such flavors as “non-alcoholic.”