Understanding California’s Cannabis Laws

What Cannabis Retailers in California Need to Know

As a cannabis retailer in California, there are many laws you’ll need to understand. California cannabis laws are unique, and Rukli Distribution is here to help you get a better handle on everything from packaging and labeling, purchasing, taxes, marketing, delivery, and more. Since the passage of the “Compassionate Use Act” in 1996, which legalized medical marijuana use, California’s cannabis laws have undergone several modifications, including the Adult Use of Marijuana Act (AUMA) in 2016, also known as Proposition 64, which legalized recreational marijuana. Given the fast pace of regulatory changes, we have compiled a list of California cannabis laws that dispensaries must be aware of to remain compliant. Learn more and get in touch with us today for assistance with your cannabis company.

California’s Marijuana Laws at a Glance

California cannabis regulations are unique to our state. California marijuana laws relate to cannabis packaging, cannabis delivery, and more. Check out these California marijuana laws at a glance:

  • In California, the state track-and-trace system used is Metrc.
  • The Department of Cannabis Control has the responsibility of regulating the legal cannabis market in the state.
  • For recreational use, adults in California are allowed to purchase up to 28.5 grams of non-concentrated cannabis, 8 grams of concentrated cannabis, and six immature cannabis plants per day.
  • Medical marijuana patients can buy up to 8 ounces of medical cannabis per day.
  • The labels on cannabis products in California must have a primary panel for the most critical information and an information panel for all other necessary details.
  • Medical marijuana cards are available to both in-state and out-of-state patients who meet the qualifying conditions.
  • Recreational marijuana users are required to pay a 15% excise tax.
  • Only licensed retailers, licensed micro-businesses with a non-store front retail license, or licensed nonprofits are allowed to make deliveries.

Cannabis Track & Trace Requirements

The regulatory agency responsible for licensing and overseeing cannabis businesses in California is the Department of Cannabis Control (DCC). To monitor and report on cannabis activities, the DCC partners with Metrc, the state’s track and trace system. To adhere to California’s tracking and reporting rules, cannabis retailers must utilize Metrc. The following are the track and trace guidelines that California cannabis businesses must follow:

  • State-licensed companies must identify and educate their track and trace system users and compile a complete and accurate list of these users.
  • Data entry mistakes must be rectified within three days.
  • All inventory must be labeled and recorded in the track and trace system.
  • Inventory must be reconciled at least every 30 days.
  • Unused package tags are not transferable, and tags that have been utilized must be disposed of when no longer in use.

All cannabis activities listed below must be recorded in the track and trace system within 24 hours of occurring:

  • The receipt of cannabis or cannabis products.
  • The rejection of transferred cannabis or cannabis products.
  • The manufacturing of cannabis or cannabis products.
  • The use of cannabis or cannabis products for internal quality control testing or product research and development.
  • The destruction or disposal of cannabis or cannabis products.
  • The packaging or repackaging of cannabis or cannabis products.
  • Laboratory testing, including testing results.
  • The sale or donation of cannabis or cannabis products.

The following details must be recorded in the track and trace system for each of the activities mentioned above:

  • The type of cannabis or cannabis products.
  • The volume, weight, or count of the cannabis or cannabis products.
  • The date of activity.
  • The UID assigned to the cannabis or cannabis products.
  • The brand name of the cannabis goods or products.

Note: The earlier regulations did not require licensees to inform the licensing authority if they did not receive ordered plant or package tags. However, current regulations mandate that the receipt of tags be recorded in METRC within three calendar days of receipt. If the tags ordered are not received, the licensee must inform the DCC.

Cannabis Packaging & Labeling Laws

To comply with California’s regulations, packaging for cannabis products must be child-resistant, tamper-evident, and not appeal to children. Additionally, cannabis labels must have a primary panel, which contains essential information, and an information panel which contains other mandatory details.

Here are the requirements for labeling cannabis flower and non-infused pre-rolls. The primary panel must show the following:

  • The product’s name or description.
  • The net weight in both metric and U.S. customary units.
  • The black or white California universal symbol with a contrasting background that measures at least 0.5″ by 0.5.”

The information panel must include the following:

  • The UID number, a tracking number issued by the state’s track-and-trace system
  • The licensee’s name listed on the license certificate (legal business name or DBA)
  • The licensee’s phone number or website
  • The date (month, day, and year) the product was packaged for retail sale
  • The government warning statement printed in bold capital letters

Moreover, the labels must list the cannabinoid content in percentages and provide information on THC, CBD, and other cannabinoids present in concentrations exceeding 5%, which can be on either panel.

Cannabis Purchase Limits in California

California residents who are 21 years of age or older and possess a valid government-issued identification can purchase and carry the following quantities of cannabis under the Adult Use of Marijuana Act (AUMA):

  • 5 grams of non-concentrated cannabis
  • 8 grams of concentrated cannabis
  • 6 immature cannabis plants per day

In California’s medical marijuana program, patients and primary caregivers are allowed to purchase and possess up to 8 ounces of medical marijuana per day.

California Cannabis Tax Laws

Governor Newsom signed AB 195, which aims to provide tax relief to the California cannabis industry. The bill brings about the following changes:

  • Cultivation tax will be discontinued starting July 1, 2022.
  • Retailers are now responsible for collecting and submitting the 15% excise tax, and there is a calculation change.
  • For 2023 only, 15% of a retailer’s gross receipts from retail sales (formerly “non-arms length”) will be used to calculate the tax instead of the average market price. This may increase to 19% in 2024.
  • Non-cannabis sales are not subject to an excise tax.

Additional information about cannabis retail taxes in California: recreational marijuana users must pay a 15% excise tax. Starting on January 1, 2023, retailers will collect and directly charge purchasers as part of the order’s total cost. California imposes state sales tax and business tax on recreational sales, with specific rates varying by location.

Laws About Advertising & Marketing of Cannabis in California

There are specific laws in California relating to advertising and marketing your cannabis products. These laws differ from California medical marijuana laws, and Rukli Distribution can help you understand the differences. Learn more about CA’s cannabis advertising and marketing laws:

  • Advertising for cannabis must be aimed exclusively at individuals aged 21 and older.
  • As of January 2021, any billboards or signs located on an Interstate Highway or a State Highway that crosses the California border are illegal.
  • Advertising for cannabis within 1,000 feet of a daycare, kindergarten, school teaching any grades from 1 to 12, playground, or youth center is prohibited.
  • Advertisements may not contain false or deceptive statements.
  • Businesses may not offer cannabis products or accessories as free giveaways or promotional items except for legal cannabis donations to patients.

Rules Regarding Cannabis Delivery Services

Delivering cannabis is legal in California, but you must follow strict regulations, including the following:

  • Licensed retailers, microbusinesses, or nonprofits are allowed to provide delivery services.
  • Delivery personnel must carry a valid copy of the licensee’s current license and a government-issued photo ID. They must present both documents to law enforcement, regulatory authorities, and state and local agencies upon request.
  • The licensee must retain a copy of the delivery request during the delivery and make it available to the licensing authority and law enforcement officers. This delivery request must comply with state and federal law to protect confidential medical information.
  • If delivery personnel have no unsold cannabis goods in the delivery vehicle, they are not required to return to the licensed premises at the end of their shift.
  • The customer requesting delivery must keep a copy of the delivery request to present to requesting licensing authority and law enforcement officers.
  • Local jurisdictions are not allowed to prohibit compliant licensees from delivering cannabis or cannabis products on public roads.
  • Delivery personnel are allowed to carry up to $10,000 worth of goods.
  • Taxes are assessed based on the customer’s delivery location, not the dispensary location.

Furthermore, storefront retailers are now allowed to offer curbside delivery. Customers may purchase cannabis from the retailer and receive it in their vehicle parked outside the licensed premises.

Helping You Understand California’s Cannabis Laws

The team at Rukli Distribution is here to help you understand California’s cannabis laws, statutes, regulations, and ordinances. We can help you get on board with equity ordinances and laws regarding possession, purchasing limits, qualifying conditions, consumption, driving under the influence, transporting and exporting marijuana, cultivation, reciprocity, and more. We offer warehouse services, order fulfillment, inventory planning, and pick and pack services. Contact us today to learn more and get the help you need to succeed.

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