Manufacturing Cannabis Products in California has a New Set Of Regulations

Manufacturing cannabis products is a big business in every state that has legalized cannabis either for medical, and in particular, for states that have legalized recreational marijuana. California will see recreational marijuana retail sales begin January 1st, 2018 and the state is making adjustments to the rules currently set in place to prepare for what is likely to be a very big business in one of the largest economies in the world.

California rules and regulations are very embracing of the legal cannabis business to come, and are designed to make life easier for business navigating the marijuana industry. If a state legalized cannabis, why wouldn’t it want to do what it could to reap the economic benefits of the industry?

With the passage of SB94 (Senate Bill 94 or MAUCRSA), California has merged the oversight of the 2015 Medical Cannabis Regulation and Safety Act (MCRSA) and the 2016 Adult Use of Marijuana Act (AUMA) into a master regulatory system that will make it much more business friendly.

As part of this reconciliation, MAUCRSA is releasing rules that overhaul some of the rules originally proposed as part of MCRSA and continuing to evolve them in the coming months. This post highlights some of the proposed rules that entrepreneurs and existing operators should be mindful of as 2018 approaches.

A few months ago, California’s Department of Health proposed a set of rules outlining what kind of products would be prohibited for manufacturers. This is also when MCRSA began to more properly define what ‘manufacturing’ means and spell out the differences between nonvolatile and volatile solvents, which would impact the type of manufacturing license you can get (Type 6 = nonvolatile, and Type 7 = volatile).

New license types were also introduced. One is the Type P license, which allows for packaging or repackaging medical cannabis products. This includes labeling or relabeling the cannabis product containers that go to retail – although if you package or label your own products as part of manufacturing, you do not need a separate Type P license. Another new option is the Type N license, which is for manufacturers looking to produce edibles or topicals using infusion processes or other products that do not require extraction. Both of these are subject to similar restrictions as a Type 6 license.

License application requirements are not changing too much; however the definition of “owner” is, hinting at increased scrutiny during the vetting process for both owners and non-owners. Anyone dealing with or interested in these license types is strongly advised to review what the proposed rules say regarding these license types and their restrictions.

Some matters that were released with MCRSA are most likely to remain with MAUCRSA, and cannabis entrepreneurs in California should keep these in mind moving forward.

(a) The State Department of Public Health shall promulgate regulations governing the licensing of cannabis manufacturers and standards for the manufacturing, packaging, and labeling of all manufactured cannabis products. Licenses to be issued are as follows:

(1) “Manufacturing Level 1,” for sites that manufacture cannabis products using nonvolatile solvents, or no solvents. A Manufacturing Level 1 M-Type 6 licensee shall only manufacture cannabis products for sale by a retailer with an M-Type 10 license. (2) “Manufacturing Level 2,” for sites that manufacture cannabis products using volatile solvents. A Manufacturing Level 2 M-Type 7 licensee shall only manufacture cannabis products for sale by a retailer with an M-Type 10 license.

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Source: MJFeed

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