California Governor Vetoes Cannabis Cafe And Marijuana Labeling Bills, But Signs Others Into Law

October 9, 2023 ·

California’s governor has dealt the cannabis industry and marijuana reform supporters a mixed bag of actions on bills.

Gov. Gavin Newsom (D) over the weekend vetoed a measure to legalize cannabis cafes that supporters said would have given consumers new opportunities t0 socialize and allowed businesses to expand their operations. But he also vetoed marijuana packaging legislation that industry operators said would have burdened them with excessive restrictions. Meanwhile, he signed several other bills into law that will make changes to the state’s marijuana laws in areas such as equity, tracking, testing and licensing.

The latest actions by the governor come shortly after he vetoed legislation that would have legalized possession of certain psychedelics and signed a bill to bar employers from asking about prior marijuana use during the hiring process.

The now-vetoed cannabis cafes bill, AB 374 would have allowed local governments to authorize marijuana consumption lounges to prepare and sell non-cannabis foods and soft drinks at their facilities. The legislation would have further explicitly authorized “live musical or other performances on the premises of a retailer or microbusiness…in the area where the consumption of cannabis is allowed, and the sale of tickets for those performances.”

In a veto message, Newsom wrote that while he appreciates that the intent was to “provide cannabis retailers with increased business opportunities and an avenue to attract new customers,” he is “concerned this bill could undermine California’s long-standing smoke-free workplace protections.”

“Protecting the health and safety of workers is paramount,” he said. “I encourage the author to address this concern in subsequent legislation.”

Assemblymember Matt Haney (D), the bill sponsor, said the bill “was really about fairness and supporting businesses that follow the rules.”

“If we keep allowing unnecessary regulations to strangle California’s legal cannabis businesses, we’re just encouraging illegal drug sales and all of the problems that come with that,” he said. “Lots of people want to enjoy legal cannabis in the company of others. There’s absolutely no good reason from an economic, health, or safety standpoint that the state should make that illegal.”

The separate packaging legislation that Newsom vetoed would have created a new definition for marijuana product packaging that is considered “attractive to children” and would therefore be prohibited. It would have specifically banned the use of images such as “cartoons, toys, or robots,” “any real or fictional humans,” “any fictional animals or creatures” and “fruits or vegetables, except when used to accurately describe ingredients or flavors contained in a product.”

The governor wrote in a veto message that while he “deeply” appreciates the intent of the legislation, he is concerned that its definition of “attractive to children” is “overly broad.”

“By prohibiting entire categories of images, this bill would sweep in commonplace designs, and I am not convinced that these additional limits will meaningfully protect children beyond what is required under existing law,” he said. “California must continue to refine and advance its regulation of cannabis to protect the health and safety of children. As such, I am directing the Department of Cannabis Control to strengthen and expand existing youth-related cannabis protections—including measures to enhance enforcement of those protections.”

California Cannabis Industry Association President Pamela Epstein cheered the governor’s move to veto the bill.

“AB 1207 posed a significant threat to the industry with excessive restrictions, inadvertently favoring the illegal market and depleting critical tax revenues earmarked for youth deterrence programs,” she said.

The governor separately signed another bill that changes how marijuana plants must be tracked in a way that supporters say will promote environmental sustainability by eliminating the use of single-use plastic tags.

“Beyond environmental and financial impacts for our local governments, plastic products have become a public health hazard such that we are finding microplastics in bloodstreams. We should act responsibly to curb the unnecessary use of plastics where possible,” Sen. Allen (D), the bill’s sponsor, said. “As the cannabis industry continues to develop in California, it is critical that we support sustainability as a pillar of its growth. SB 622 aims to do just that, and I thank Governor Newsom for signing this common-sense measure.”

Tiffany Devitt, head of regulatory affairs for CannaCraft, also celebrated the bill’s becoming law.

“Over the past 5 years, the state has used between 200 and 250 million plant tags generating over 1 million pounds of plastic waste,” she said. “The price tag on that waste: The state of California spends about $15 million per year buying these tags and providing them to cannabis farms. The biggest tragedy here is that those tags did nothing to prevent diversion, which was the stated intent.”

Here’s the full list of cannabis reform bills that are becoming law with the governor’s signature:

SB 700—Sen. Steven Bradford (D): The legislation will prohibit employers from asking job applicants about prior marijuana use—a policy that would build on existing employment protections enacted last session that bar employers from penalizing most workers for using cannabis in compliance with state law off the job.

SB 622—Sens. Ben Allen (D) and Juan Alanis (R): The bill will change how marijuana plants must be tracked in a way that supporters say will promote environmental sustainability by eliminating the use of single-use plastic tags. While it doesn’t provide specific examples of alternatives to the plastic identifiers that are currently used to track marijuana plants, supporters say that regulators will have discretion to implement ecologically sound policies such as digital tags.

SB 302—Sens. Henry Stern (D), Carlos Villapudua (D), Marie Waldron (R) and Scott Wiener (D): The bill will add people 65 and older who have serious chronic illness to use medical cannabis at health facilities, including “home health agencies. Currently only terminally ill patients are afforded that right. Newsom said in a signing message that he wants lawmakers to send him “clean-up legislation” next year to fix a drafting error. “Specifically, the bill excludes hospitals from its provisions, but could be interpreted to narrow existing law for hospital patients that have both a terminal illness and chronic disease. It is my understanding this was not the intent,” he said. “Many individuals with chronic diseases seek medicinal cannabis as an alternative to opioids for treatment of chronic pain, and their living situation should not be a barrier to access.”

AB 1021—Assemblymembers Buffy Wicks (D), Isaac Bryan (D) and Corey Jackson (D): This new law says that, if the federal government reschedules any Schedule I drug, California health professionals will automatically be able to legally prescribe and dispense it. This could be especially relevant to the psychedelics psilocybin and MDMA, which have been designated as breakthrough therapies by the federal Food and Drug Administration (FDA) and are expected to be approved for medical use as early as next year.

AB 1171—Assemblymembers Blanca Rubio (D) and Matt Haney (D): The measure will give marijuana business licensees the right to pursue legal action against unlicensed cannabis businesses in state superior court if they can prove damages resulting from the operation. Under prior law, regulators and law enforcement were the primary arbitrators of enforcement against the illicit market, so this will give private licensees the means to independently seek intervention.

SB 753—Sens. Anna Caballero (D), Megan Dahle (R), Brian Dahle (R), Melissa Hurtado (D) and Henry Stern (D): This legislation will make it a felony offense for adults who plant, cultivate, harvest or process more than six cannabis plants in a way that intentionally or “with gross negligence” causes “substantial environmental harm to surface or groundwater.”

AB 623—Assemblymember Phillip Chen (R): Prior California law required THC variance testing of cannabis edibles containing 10 mg of THC per serving, and products that contain 10 percent more or 10 percent less THC than 10 mg must be destroyed. That standard means that even lower THC products such as cannabis beverages with 5 mg of THC will fail the variance test, so this measure will require regulators to develop “appropriate testing variances” for low-THC products.

AB 1126—Assemblymembers Tom Lackey (R) and Cecilia Aguiar-Curry (D): The legislation will prohibit the unauthorized use of a universal cannabis symbol for commercial purposes and authorize the California Department of Tax and Fee Administration (CDTFA) to seize products that feature the symbol without authorization as contraband.

AB 1684—Assemblymember Brian Maienschein (D): This will make it so administrative fines and penalties that local officials can impose against certain violations by unlicensed cannabis cultivators can also be applied to unlicensed marijuana manufacturers, processors, distributors and retailers.

SB 51—Sens. Steven Bradford (D) and Michael Gipson (D): The legislation will allow people who qualify as social equity business applicants to continue to apply for and renew provisional retailer licenses through January 2031. Regulators stopped accepting provisional licenses for all business types this summer, but because of the ongoing challenges associated with obtaining an annual license still exist, this measure creates a narrow extension that only applies to equity applicants seeking retail licenses. Newsom said in a signing statement that while he backs the effort, the bill “does not address the fundamental issues that continue to increase costs and uncertainty for those seeking to participate in the legal market.” He said that the temporary extension “may remove pressure to confront local permitting challenges and slow efforts to facilitate the transition of provisional licenses to annual licensure” and to that end wants to work with lawmakers to “consider long-term solutions to streamline licensing requirements and move us beyond short-term fixes.”

SB 540—Sen. John Laird (D): The measure will require the state Department of Cannabis Control (DCC) to work with the Department of Public Health (DPH) to create a “brochure with information about steps for the safer use of cannabis” that will need to be provided to people who shop at a dispensary for the first time. It will also mandate that DCC reevaluate labeling and packaging regulations by July 1, 2025 and every five years thereafter. Laird said in a press release that the new law “will promote responsible and informed cannabis consumption” and that the brochure “will empower individuals with knowledge, promote responsible consumption and minimize potential harm.”

Here’s a list of marijuana bills that the governor vetoed;

SB 58—Sen. Scott Wiener (D): The bill would have legalized the possession and cultivation of small amounts of psilocybin, DMT and mescaline for adults 21 and older. It would also have established a work group under the California Health and Human Services Agency (CHHSA) to study and make recommendations on establishing a regulatory framework to access the substances for therapeutic and facilitated use.

AB 374—Assemblymember Matt Haney (D): This measure would have legalized marijuana cafes, allowing dispensaries to offer non-cannabis food and drinks at their location if they receive local approval. It would have further explicitly authorized “live musical or other performances on the premises of a retailer or microbusiness licensed under this division in the area where the consumption of cannabis is allowed, and the sale of tickets for those performances.”

AB 1207—Assemblymembers Jacqui Irwin (D), Josh Lowenthal (D) and Kevin McCarty (D): The legislation would codified a new definition for marijuana product packaging that is considered “attractive to children” and would therefore be prohibited. It would have specifically banned the use of images such as “cartoons, toys, or robots,” “any real or fictional humans,” “any fictional animals or creatures” and “fruits or vegetables, except when used to accurately describe ingredients or flavors contained in a product.”

These cannabis bills are still pending action on the governor’s desk:

AB 1448—Assemblymember Greg Wallis (R): Under this bill, a portion of civil penalties that are collected following enforcement action against unlicensed marijuana businesses would be transferred from the state general fund to local treasurers in jurisdictions that brought the action against the illegal operators.

SB 833—Sen. Mike McGuire (D): The measure would allow regulators at DCC to approve requests from cannabis cultivators to change their license type to a smaller category or inactive status. As it stands, there’s no pathway for cannabis licensees to do so without going through the entire DCC license application process again. But a variety of situations—including market volatility, drought, oversupply and more—could cause a cultivator to want a smaller license or become temporarily inactive.

AB 993—Assemblymember Blanca Rubio (D): The bill would add representatives of the state Civil Rights Department and Department of Industrial Relations to an existing marijuana task force that is responsible for facilitating communication between state and local cannabis regulators. (Full Story)

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