Clark Howell – Legislative Update Newsletter (July 2022)

In April, we sent you a 2022 legislative update, highlighting 5 bills that help licensees connect with consumers and diversify their offerings. May 27 was the deadline for bills to pass in the house of origin and head to the other legislative chamber. Today’s bulletin is an update on where those 5 stand: which have advanced and which have fallen flat.
Note: “AB” signifies Assembly-originating bills; “SB” signifies Senate-originating bills. A brief, simplified explanation of each bill follows. Click the hyperlink to read the full text, track status, and send comments to your representative(s). As always, don’t hesitate to call us with questions about how these bills could impact your business and the supply chain as a whole.
These 2 bills passed the floor vote in the originating chamber:
Interstate Commerce (SB-1326, Caballero)
SB-1326 would allow cannabis to cross domestic borders in some circumstances, allowing California products to enter other states, and vice versa. Products brought into California must meet or exceed standards that apply to California licensees.
Agreements could only be made with a state (or states) that authorize medicinal and/or adult-use cannabis activity and distributors could not travel through states that do not authorize such transportation. However, as retail sales decline, opening stores in so-called “cannabis deserts” proceeds at a modest pace, and surpluses continue to put a strain on growers from the world-renowned “Emerald Triangle,” not everyone is convinced that interstate commerce is a cure for the regulated market’s illness.
We encourage you to study the nuances of this bill and discuss it with your associates and advisors. What are your expectations of how SB-1326 could impact California operators and consumers?
The bill passed the Senate on May 25 (27-10) and is presently moving through Assembly committees. To keep up with its status, click here.
Alcohol & Cannabis at Events (AB 2210, Quirk)
AB 2210 would allow state temporary event licenses to be issued for events held at a venue that is licensed by the Department of Alcoholic Beverage Control. Early versions of this bill would have also allowed alcohol sales and consumption in a separate and distinct area from cannabis sales and consumption. This allowance was removed as the bill was amended in the Assembly. Per the latest text, alcohol sales and consumption would be suspended for the day of the event and not allowed to resume until 6 a.m. on the day after.
Civil penalties for violating the rules and regulations may be up to three times the amount of the license fee, per violation.
The bill passed the Assembly on May 26 (59-13) and is making its way through the Senate committees. To keep up with its status, click here.
These 3 bills stalled out in the originating chamber:
Curbside Pickup (AB-2824, Bonta; DCC Proposed Regulations)
Bonta’s bill proposed to make permanent the pandemic-prompted curbside pickup option. It was introduced before the Department of Cannabis Control’s (DCC) released its newest set of proposed regulations, with curbside pickup rolled in. Although the bill itself stalled in the legislature, the possibility of permanent curbside delivery is still alive via the regulatory process.
As a reminder, here’s how the proposed regulations treat curbside delivery: a licensed storefront retailer could conduct curbside sales to a “vehicle parked immediately outside the licensed retail premises.” The transaction must be recorded on the retailer’s video surveillance system and follow all relevant regulations, including age verification. Delivery-only retailers would be explicitly prohibited from conducting curbside sales.
Bonta’s bill has not advanced from the house of origin; curbside’s future will be determined by the DCC. The public comment period closed on April 19, and we are awaiting the release of the revised regulations.
D2C for Cultivators (AB-2691, Wood)
We had hoped that California would allow farmers a legal D2C framework. AB-2691, sponsored by Jim Wood of the Emerald Triangle region, proposed a new “temporary cultivator event retail license” under the DCC. Licensed cultivators would sell their own cannabis or cannabis products at a limited number of temporary retail events per calendar year – originally 12, but amended to 8.
Just after the bill had been ordered to third reading, it was ordered to the inactive file at the request of the sponsor, missing the deadline to pass on the Assembly floor and move to the Senate. To see the bill’s vote history, click here.
Cannabis Catering at Private Events (AB-2844, Kalra)
MAUCRSA allows the DCC to issue a state temporary event license for onsite sales at a county fair event, district agricultural association event, or other locally-approved venue. AB-2844 would have created a new state caterer license type for service and consumption of cannabis at a private event, approved by the locals.
The bill stalled in the Assembly Appropriations Committee. To view its history, click here.
What’s Next?
  • August 31 is the last day for each house to pass bills.
  • September 30 is the last day for the Governor to sign or veto bills.

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Ian Stewart – Wilson Elser Moskowitz Edelman & Dicker LLP
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Peter Fendel – CMR Real Estate Network
Nate Reed – CMR Real Estate Network

Matthew Ginder – Greenspoon Marder
David C. Kotler – Cohen Kotler

William Bogot – Fox Rothschild

Valerio Romano, Attorney – VGR Law Firm, PC

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Matthew G. Miller – MG Miller Intellectual Property Law LLC
Daniel T. McKillop – Scarinci Hollenbeck, LLC

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William Roark – Principal Hamburg, Rubin, Mullin, Maxwell & Lupin
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Teddy Eynon – Partner Fox Rothschild