Here is what you need to know about (1) AB 1470 that amends the definition of “final form” in relation to testing cannabis and cannabis products and (2) SB 67 which dives into the California Department of Food and Agriculture’s development of an appellation of origin program. Learn how they apply to your cannabis business.

AB 1470

Prior to the passage of Assembly Bill 1470, so-called “batch testing” of cannabis products was disallowed. A licensed distributor could not coordinate with a licensed testing laboratory for regulatory compliance testing unless the cannabis product to be tested was in its “final form.” “Final form” meant that the product was packaged and labeled for retail sale. 

As of its effective date, AB 1470 will change the definition of “final form” to mean “the unpackaged product as it will be consumed.” In other words, the cannabis product is no longer required to be delivered to the testing laboratory in the final retail packaging to be considered in its final form.  This opens the door for batch testing of manufactured cannabis products. 

This change is important as it will reduce needless spending on costly packaging, while increasing efficiency along the cannabis distribution chain. Gone are the days when a cannabis distributor was obligated to procure packaging, package products, test them, and then undergo the pain and expense of repackaging products after remediation. 

In short, this bill (1) allows businesses to test manufactured products, such as vape cartridges, prior to being packaged in the final retail packaging, and (2) clarifies that distributors are permitted to arrange for testing of  bulk flower and manufactured products. 

However, the California Department of Public Health (“CDPH”) must provide further clarification to the industry and likely amend their regulations in relation to this bill. Since only manufacturers are permitted to package manufactured cannabis products, distributors would have to transport the cannabis products back to the manufacturer for packaging after passing regulatory testing. A further amendment to the bill that allows for distributors to package manufactured products  would alleviate this lingering issue.

Lastly, AB 1470 also amends the reporting requirements related to Certificates of Analysis by requiring for a smaller margin of error for THC concentration in edible cannabis products. Currently, for each edible serving of 10 milligrams of THC, the margin of error for THC concentration is plus or minus 12 percent. After January 1, 2022, “the milligrams of THC per serving shall not deviate from 10 milligrams by more than 10 percent.” 

SB 67

Under the California Medical and Adult-Use Cannabis Regulatory and Safety Act (“MAUCRSA”) Section 26063, the California Department of Food and Agriculture (“CDFA”) is required to set up an appellations program by January 2021, wherein licensed cultivators “may establish appellations of origin, including standards, practices, and cultivars applicable to cannabis produced in a certain geographical area in California.” 

Once CDFA establishes the appellation program, an appellation of origin will only be approved if the resulting flower was produced from cannabis planted in the ground, in open air, with no artificial light in the canopy area during the flowering stage of cultivation until harvest. 

With the passage of SB 67, California has become the first region in the world to establish a legal geographical indications system for cannabis. California has the largest cannabis market in the world and – to connoisseurs – is synonymous with producing the best cannabis in the world. It makes sense that California now leads the way for developing an appellation of origin system for cannabis. 

If you have questions about AB 1470 or SB 67, please do not hesitate to reach one of the attorneys at Katchko, Vitiello & Karikomi, PC.

By Nellie Niakossary, September 17, 2020.