New CA Regs: What Cannabis Manufacturers Need to Know

Tyler ElderBusiness, Cannabis Law, ComplianceLeave a Comment

cannabis manufacturers

After a year of confusion and change, The Golden State has finally adopted permanent regulations for the industry. This is a bittersweet victory for many California operators as they now have a stable set of rules to follow; but many are still left wanting more. And in that same vein, making changes to the new rules will now be a longer and more arduous process than before.

If you’re still wondering what the new CDPH regulations have changed for your business, don’t worry. I’ve done the hard work and identified a few things you should know for cannabis manufacturers in California:

Temporary licenses are being phased out

Temporary licenses will soon be a thing of the past. As of January 1, no agency in California will issue temporary licenses to cannabis businesses. Existing temporary licenses will be valid until they expire, generally 120 days after their issuance. Additionally, the Department of Public Health will no longer offer extensions for these licenses.

Current temporary licensees will be able to get a provisional license from the Department, so long as they have already submitted an application for an annual license. Annual license applicants who weren’t able to get a temporary license before the end of 2018, will not be able to qualify for a provisional license. You’ll have to wait until your application is approved to begin operations.

Additionally, while temporary licensees are not required to use the track-and-trace system, annual and provisional licensees are. If you are still operating on a temporary license and are not yet using the track-and-trace system, it might be a good idea to begin the process of transitioning to the system soon.

Contract manufacturing will be allowed

When the agencies dropped an updated version of their proposed regulations back in October, there was a lot of concern about what appeared to be a ban on white labeling, also known as contract manufacturing. This is a common practice that allows manufacturers to produce and package products on behalf of another business, such as an out-of-state company or celebrity brand.

The new rules seem to allow contract manufacturing, but with a few restrictions. Unlicensed brands won’t be allowed to run the show, but will be able to contract the use of their intellectual property to licensed businesses for a share of the profits. White labeling manufacturers will need to disclose contracts with such companies, identifying them as financial interest holders in the business.

Manufacturers can label dried flower and pre-rolls

Along with distributors and cultivators, manufacturers in California are now allowed to roll and package pre-rolls and dried cannabis flower. The products will need to meet the packaging and labeling restrictions the Department has added to the new regulations before being released for distribution.

Child-resistant packaging won’t be required until 2020

The new CDPH regulations made a few changes to the packaging and labeling requirements for cannabis products as well. The most significant change is the delay on requiring products to be packaged in child-resistant packaging before being released to a distributor. Throughout 2019, cannabis products that are not placed in child-resistant packaging can be placed in child-resistant exit packaging when sold to consumers. However, effective Jan. 1, 2020, all products will need to be in child-resistant packaging when released to distributors.

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