New Reefer Rules for 2019

Those white bags could come back to dispensaries, and all of California could get weed delivery too, as the state overhauls its marijuana laws — again.

Remember what happened on June 30, when dispensaries had blowout sales and lines around the block because their products no longer met the legal standards that went into effect July 1? Dispensaries don’t choose to have these everything-must-go sales. They’re forced to when California passes strict new cannabis regulations that render much of their stock out of compliance with the law.

Another one of those days is looming.

A second tectonic shift will hit the marijuana industry when California approves a revised batch of new regulations in mid-January. This comes after a frantic and bizarre month when the California Bureau of Cannabis Control (BCC) claimed it would announce the new rules in early December, delayed that announcement until January, and then unexpectedly backtracked and released the proposed regulations anyway. 

The new rules are currently under review by the state Office of Administrative Law, which has not given any indication which regulations it will approve, nor when the laws will go into effect.

All of this rollercoaster uncertainty creates a massive headache for dispensaries and other marijuana businesses who will have to comply with laws that haven’t even been confirmed yet.

The regulatory changes that kicked in July 1 led to dispensaries eliminating those bizarre, white zip-loc exit bags, and budtenders no longer weighing out your weed with tongs. But those regulations were considered temporary “emergency” rules, just like the previous set of emergency regulations from the six months of 2018

The new 2019 regs will be intended to be permanent — and ironically, they may lead to the return of those white zipper exit bags.

The burden of childproof packaging may go from manufacturers back to dispensaries. That’s a huge relief for smaller cannabis companies that struggle with the costs of expensive childproof shrink-wrapping, but a pain for shoppers who again have to pay an extra dollar or so for those superfluous bags.

For California cannabis consumers, the most significant new rule gives the green light for marijuana delivery to towns where dispensaries are still illegal. It’s easy to forget that much of the Bay Area is still under a complete marijuana sales ban. Neighboring towns like Burlingame, Mill Valley, Tiburon, and many others do not allow cannabis dispensaries, a prohibition that extends to communities all across the state.

“We are still operating with only about a third of the state being open to cannabis businesses,” California Cannabis Industry Association spokesperson Josh Drayton tells SF Weekly. “That means consumers in 65 percent of the state have no access, whether they’re a medical patient or an adult-use consumer.”

But the latest version of the proposed new rules explicitly says, “A delivery employee may deliver to any jurisdiction within the State of California,” as long as the company complies with all the other state laws governing cannabis delivery.

Police organizations that oppose marijuana are up in arms over these relaxed proposals.

“It’s unfortunate the Bureau of Cannabis Control made the decision to undermine the authority of local officials,” California Police Chiefs Association President David Swing said in a statement. “The proposed regulations give unrestricted access to the cannabis delivery industry and open the floodgates to a number of public-safety risks.” 

The BCC is holding firm, despite pushback from police. “It is our view that delivery services licensed by the state can deliver statewide,” BCC spokesperson Alex Traverso tells SF Weekly.

These may sound like cool new changes to state marijuana laws. But many of the new regulations would make licensing a whole lot stricter for cannabis businesses, leading to another “extinction event” that made dispensaries empty their shelves of non-compliant product in fire sales this summer.

“We will see a lot of businesses that exist now go out of business or be subject to fines,” says Zeta Ceti, founder of Green Rush Consulting. “This is a much broader extinction event than July 1, which just focused on testing, packaging, and labeling requirements.”

Ceti points out that cannabis companies in towns without local regulations will be immediately forced out of business. Other new licensing hurdles will hurt local, craft cannabis businesses, and provide indirect advantages to big, well-funded corporate brands.

And just like the July 1 regulations, these new rules will make everything on the shelf more expensive.

“Consumer pricing will jump up a bit because of the constraining of the supply in all facets of the supply chain,” Ceti tells SF Weekly. “Long-term, as things stabilize, pricing should go down and remain at a very stable level. But that’s not going to happen for a couple of years, at least.”

There are tons of other regulations in the new package of proposals, most of which are licensing and labeling provisions that everyday pot consumers are unlikely to notice. But you’ll probably notice a price bump once the new rules kick in, and you’re likely to see more smaller, local cannabis companies go up in smoke.