Legislative Setback for Small Cannabis Cultivators & Manufacturers

If you are a consumer or patient looking to legally purchase cannabis flower or cannabis products in California, the method of purchase is severely restricted. That’s because under the Medicinal and Adult Use Regulation and Safety Act (“MAUCRSA”), only retailers and delivery-only retailers licensed by the Bureau of Cannabis Control (“BCC”) can sell cannabis and cannabis products to the public. Unfortunately, you are not able to purchase cannabis products directly from the people that grow the flower or manufacture the products. Big cannabis companies that are vertically integrated (meaning they hold cannabis licenses covering seed to sale) are able to connect with their customers in ways that smaller operators cannot.

 Assembly Bill 2641, introduced by Assembly Member Jim Wood, would have opened up opportunities for small cultivators and cannabis manufacturers to sell their products directly to the consumer. AB 2641 can best be characterized as a farmer’s market type of bill, it would have allowed cultivators and manufacturers to sell their products directly to their customers at temporary special events. Equally as important, AB 2641 would have opened up another potential revenue stream for small cultivators and manufacturers that are already facing tight margins. Unfortunately, I’m using the past tense to describe AB 2641, because although the bill passed the State Assembly, it was held up in the Senate appropriations committee.

 At the most recent quarterly meeting of the California Growers Association, the setback to AB 2641 was lamented, but there was also a resolve to press on and to make sure the bill is a legislative priority for 2019. Even though the Compassionate Use Act was enacted in 1996, California is moving in fits and starts trying to find the right balance of regulation and open commerce. Right now, the scales are tilted towards over-regulation. California’s legislators and cannabis regulators must address and alleviate the burdens that excessive regulation is placing on cannabis operators. Let’s hope the California State Senate reverses course on AB 2641 in 2019.