June 4, 2021 marked the deadline for California’s legislature to pass Assembly and Senate bills. About twenty (20) bills related to cannabis passed that threshold to qualify for further legislative consideration.  

Below are summaries of select bills passed by the Assembly, based on information provided by California Legislative Information. A similar summary of bills passed by the Senate will follow in a future post.

AB-1034 Cannabis: retail preparation, sale, or consumption of non-cannabis food and beverage products

AB-1034 would amend the California Business and Professions Code (“BPC”) to allow expanded activities by licensed retailers and microbusinesses on their respective premises so long as certain conditions are met.  

Activities proposed for authorization include the “smoking, vaporizing, and ingesting of cannabis or cannabis products” on the licensee’s premises, and the “[p]reparation or sale of non-cannabis food or beverage products”—in compliance with relevant regulations—where cannabis consumption is allowed.

Local jurisdictions may authorize the activities above so long as (1) the area where cannabis consumption is allowed is restricted to persons 21 years old or older, (2) cannabis consumption is not visible from any public place or non-age-restricted area, and (3) alcohol or tobacco sale or consumption is not allowed on the premises.

AB-1138 Unlawful cannabis activity: civil enforcement

AB-1138 would amend the BPC to include a civil penalty of up to $30,000 for anyone aiding and abetting unlicensed commercial cannabis activity.

As it stands, each day of aiding and abetting unlicensed commercial cannabis activity would stand as a separate violation. Further, in assessing the fine amount, courts would consider (1) the gravity of the individual’s violation, (2) the individual’s good faith, and (3) the individual’s previous violation history. To be valid, an action as described above must occur within three (3) years of discovery of a violation by a licensing authority or participating agency.

To determine if individuals actually aided and abetted, those individuals must have (1) been in a position to make command or control decisions about the operations and management of the activity or property where the activity was taking place, (2) had actual knowledge their actions constituted unlicensed cannabis activity, (3) provided substantial assistance or encouragement to the activity, and (4) engaged in conduct that substantially factored into furthering the activity.

Finally, this bill would allow reimbursement to the Attorney General for costs of investigation and prosecution undertaken by that office, with the remaining penalty amount deposited into the state’s General Fund.

AB-1302 Commercial cannabis billboards: placement restrictions

AB-1032 would amend the BPC to expand the area cannabis licensees can advertise their products.

Current law prevents commercial cannabis advertising on billboards located on interstate highways or state highways that cross the state border. This bill would soften that restriction by limiting the prohibition on billboard advertising to a buffer zone fifteen (15) miles from the state border, allowing highway billboard advertising outside that area.

AB-45 Industrial hemp products

AB-45 would amend the California Health and Safety Code (“HSC”) with a series of provisions related to industrial hemp.

Manufacturers of industrial-hemp-containing dietary supplements and food would be required to (1) demonstrate all parts of the plant used come from a state or country with a legitimate industrial hemp program that oversees hemp under a food safety program or equivalent criteria to ensure safe consumption, and (2) the industrial hemp cultivator or grower is in good standing and compliance with the governing laws of the state or country of origin.

A dietary supplement, food, beverage, cosmetic, or pet food would not be considered adulterated for simply including industrial hemp or cannabinoids, extracts, or derivatives therefrom if those substances meet specified requirements.

Restrictions on the sale of dietary supplements, food, beverages, cosmetics, or pet food that include industrial hemp or cannabinoids, extracts, or derivatives therefrom, based solely on the inclusion of those substances, would be prohibited.

Manufacturers, distributors, or sellers of industrial hemp products would be prohibited from including on the label, or including in advertising or marketing, health-related statements that are untrue as to the health effects of consuming products containing industrial hemp or cannabinoids, extracts, or derivatives therefrom.

The bill also creates an authorization process for hemp manufacturers who produce (1) specified products that include industrial hemp or (2) raw hemp extract, including requirements for product testing and labeling.  The program would be funded by fees the department would be authorized to collect.

The bill  would also mandate the California Department of Food and Agriculture (“CDFA”) and California Department of Public Health (“CDPH”), consulting with the Bureau of Cannabis Control (BCC) if necessary, to develop an information-sharing process to counteract unlicensed manufacturers or the unauthorized sale of hemp.  Communications between these agencies and local law enforcement to this end would be exempt from the California Public Records Act.

Further, the bill would amend the Control, Regulate, and Tax Adult Use of Marijuana Act (AUMA) by changing the definition of “industrial hemp” to include cannabis plants and any part thereof, including the seeds and all derivatives, extracts, the resin extracted from any part of the plant, cannabinoids, isomers, acids, salts, and salts of isomers, with a delta-9 tetrahydrocannabinol (THC) concentration of no more than 0.3% on a dry-weight basis.

Unsure of how the new bills may affect your business? Contact KVK.

By Patrick Babajanian, June 25, 2021

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