On August 5, 2022, the third edition of the Department of Consumer Protection’s (DCP) policies and procedures concerning the regulation of adult-use cannabis became effective. The regulations are extensive and cover everything from security procedures, to testing, to transportation. We have summarized some of the key features of the regulations that cannabis businesses need to know now to successfully begin operations in the coming months:
- Seed-to-Sale Tracking. Licensees must register with a vendor system to track cannabis from seed to sale (or disposal) at least one week before commencing sale or operations. Licensees will need to enter the following information into the system: (1) the unique identifier for each cannabis batch; (2) the product, brand name or type of cannabis; (3) the amount of cannabis by weight; (4) the date and time of activity; (5) the name and license number of licensees; (6) the name and license/registration number of all employees conducting the activity; (7) the address where the activity occurred; and (8) other information the DCP Commissioner may require.
- Security. Cannabis businesses must implement the following security measures:
- Have a security system that includes (1) a perimeter alarm; (2) at least one motion detector; (3) video surveillance cameras recording at all times in areas that contain cannabis and at all entrances and exits; (4) a silent duress alarm; (5) an audible panic alarm; (6) a silent holdup alarm; (7) an automatic voice dialer programmed to send a pre-recorded voice message requesting emergency dispatch; (8) a system that provides notification of any security system failure; (9) the ability to remain operational during a power outage; and (10) a back-up alarm system.
- Store cannabis in an approved safe or vault, and lock cannabis still in the process of being produced or manufactured at the end of the business day. Hybrid retailers, retailers and dispensaries may store a reasonable daily amount in a locked cabinet or drawer during regular business hours.
- Have a fence at least 12 feet in height surrounding the perimeter of an outdoor grow operation.
- Notification of Changes. Cannabis businesses must notify DCP within 24 hours of its designation of a key employee with the name and contact information of such key employee, and within 5 days after a backer or employee ceases to work for or be affiliated with the business. Before a change in ownership can occur, cannabis businesses are required to notify DCP of such change. Cannabis businesses must submit an application and obtain approval from the DCP Commissioner before changing their name or location, or making any other physical, non-cosmetic alteration.
- Marketing. Advertisements for cannabis cannot contain (1) any statement that is false, misleading, deceptive, obscene or indecent; (2) any statement, design, representation, picture or illustration that relates to the safety, effectiveness, curative or therapeutic properties of cannabis, unless supported by substantial evidence or clinical data; (3) a portrayal of someone under the age of 21; or (4) a statement that indicates that the cannabis product or business being advertised has been approved or endorsed by DCP or the government. Cannabis businesses must maintain a log of all advertisements with which it has collaborated, and provide DCP with access to inspect all social media platforms used by the licensee.
- Packaging & Labeling. Hybrid retailers and retailers can only sell cannabis in their original child-, tamper- and light-resistant containers or packaging. A single package cannot contain more than 5 ounces of cannabis or the equivalent thereof. A cannabis package must be clearly labeled with a unique identifier generated by the Tracking System and (1) the name of the cannabis, as registered with the department; (2) the expiration date, which shall not account for refrigeration after sale; (3) the net weight or volume in metric and imperial units; (4) the standard serving size in customary units and number of servings included in the package; (5) directions for use and storage; (6) the active ingredients comprising at least 1% of the cannabis, and all quantities in metric units and as a percentage of volume; (7) a list of all known allergens identified by the FDA; and (8) certain warning information regarding intoxication and health effects of cannabis.
- Laboratory Testing. A sample of each cannabis batch must be analyzed to determine the cannabinoid and terpene profiles, as well as each active ingredient that constitutes at least 1% of the batch. Each sample must undergo microbiological testing, mycotoxin testing, heavy metal testing, pesticide chemical residue testing, total THC testing, solvent and biological control testing (for cannabis produced using a solvent or biological control), moisture content and water activity testing (for dried cannabis plant material and non-liquid edible cannabis products), and ingredient testing (for cannabis intended for inhalation). The sample must achieve a satisfactory result for all required tests before being sold, transferred, transported or conveyed.
- Brand Name Registration. In order to register as a brand name, cannabis businesses must submit to DCP all laboratory testing and results; all information regarding ingredients, processing techniques and solvents; and a proposed brand name for the cannabis or cannabis product. Cannabis or cannabis product will only be labeled with a brand name if (1) it contains the same ingredients and is produced in the same manner as registered with DCP, and (2) the laboratory results confirm that it is has the same cannabinoid and terpene profiles as registered, as well as active ingredients that constitute at least 1% of the product within a range of 90-100%.
- Hybrid Retailer Requirements. Hybrid retailers are subject to additional rules and regulations due to their ability to dispense medical cannabis. For example, a hybrid retailer can only be open or operating if a key employee and licensed pharmacist are present and supervising, whereas a retailer can be open or operating so long as a key employee is present and supervising. Only licensed pharmacists employed by a hybrid retailer can dispense cannabis to qualifying patients and their caregivers.
Licensees with questions about the above policies and procedures, or seeking information about policies and procedures not discussed in this alert, including those regarding employee training, delivery and disposal of cannabis, should contact our Cannabis Team.