What’s Happening in Cali?

Having earned its moniker of Golden State within the cannabis realm, California was one of the first states to legalize both medicinal and recreational cannabis use. This long-standing spot in the market means ups and downs, which the California cannabis industry and associated governing bodies have worked hard to address. Do you approve of these actions? Continue reading for the latest news and let us know your thoughts on what’s happening in California cannabis.

Cafes coming to the California cannabis market

The State Assembly has approved Assembly Bill 1775, permitting licensed cannabis cafes to serve food and non-alcoholic beverages to patrons as well as host live events such as music and comedy acts. The legislation does require the sale and display of non-infused food and beverages to be handled separately from cannabis sales. Bill sponsor Assemblymember Matt Haney (D) said in the report his goal was “fairness” for cannabis operators, who face obstacles such as strict regulations, competition from the illicit market and nearby states having more lenient laws.

“It’s really about fairness and supporting businesses that follow the rules. If we keep allowing unnecessary regulations to strangle California’s legal cannabis businesses, we’re just encouraging illegal drug sales and all of the problems that come with that.” Next, the bill must pass the Senate before the governor’s review.

Grants for the California cannabis industry

The robust California cannabis market has made way for officials to award a sixth round of community reinvestment grants to nonprofits and local health departments. The Governor’s Office of Business and Economic Development (GO-Biz) granted organizations a range of amounts from $600,000 to $3 million to support job placement, legal assistance, treatment of mental health and substance use disorders, referrals to medical care and other services for communities disproportionately affected by the drug war. Applications for the next round of grants will be accepted in August 2024; eligible nonprofits must be:

• At least six months old
• Have a physical address in California
• Tax-exempt at the state and federal levels
• Registered as active with the Secretary of state
• Appropriately certified to provide the proposed services

DEA California cannabis and federal reclassification

As recently highlighted in CannaCon news, the U.S. Drug Enforcement Administration (DEA) has recommended reclassifying cannabis from Schedule I to Schedule III. This would lighten the tax burden for the whole industry.

This DEA California cannabis connection could be a saving grace for many businesses, according to industry insiders, as removal of Section 280E would mean standard tax deductions are permissible and only profits are taxed, instead of taxing every dollar collected as before. Every cent saved from legal companies helps fight against the black market, which consistently has cheaper prices for consumers due to lacking fees and taxes.

“The California cannabis industry needs that right now,” said Amy Jenkins, legislative advocate for the California Cannabis Industry Assn. “The industry has a significant number of challenges with our existing taxation framework.” Reclassification, Jenkins said, “would provide greater stability to the legal cannabis industry.”

Product recalls affecting the California cannabis market

Those in the industry know diligence is necessary for success. Regulators are rolling out more California marijuana documents for product recalls and consumer health warnings. Recently, the Department of Cannabis Control (DCC) issued six product recalls and the California Department of Public Health (CDPH) issued a consumer warning regarding Mary Jones hemp-infused beverages because they are “mislabeled and contain specific ingredients prohibited under state law.” By early June 2024, regulators had issued more than 20 cannabis product recalls, easily surpassing the three recalls issued in both 2023 and 2022. “These recalls are the result of increased inspections and product testing,” DCC spokesperson Moorea Warren said.

Although industrial hemp products are legal in California, they are banned under state law from containing THC isolates. Regulators confirmed several soda stock-keeping units (SKUs) violated state law by containing hemp-derived delta-9 THC isolate. The beverages were manufactured in the state of Michigan and distributed to retailers across the California cannabis market as well as to consumers through direct online purchases. The CDPH said it is working with other state agencies to locate, test and remove said products from shelves. The CDPH also noted it is partnering with local health departments to educate the public about the products and appropriate action.

Follow the latest in California cannabis industry news at CannaCon

California marijuana documents and rulings are ever-present in the news. Stay on top of them by following CannaCon on social media and attending the nation’s leading business-to-business cannabis conference. We’re here to grow the cannabis industry by educating cannabis business owners on all things related to cannabis and CBD through trade shows featuring exhibitors from around the country as well as seminars delivered by industry experts. Register for CannaCon today!

This article was originally published on October 13, 2020 and updated on June 14, 2024.