Commercial Cannabis Business Licensing Program Regulations

Transcription

1 C A L I F O R N I A D E P A R T M E N T O F C O N S U M E R A F F A I R S Bureau of Cannabis Control September 6, 2017 Commercial Cannabis Business Licensing Program Regulations Bureau of Cannabis Control 1625 North Market Boulevard, Suite S-202 Sacramento, CA Contact: Sara Gardner Sara.Gardner@dca.ca.gov

2 2. Proposed Program Description proficiency testing must take and document corrective actions. Failure to participate in a proficiency test may result in disciplinary action. 2.2 Summary of Expected Emergency MAUCRSA Regulations Cont Testing laboratories will conduct an internal audit at least annually, or as required by the ISO accrediting body. Audit results must be submitted to the Bureau Laboratories Microbusiness are required to maintain records relating to the following categories for a minimum of seven years: personnel qualifications; method verification and validation; quality A microbusiness control and license quality allows assurance; the licensee chain of to custody; cultivate purchasing cannabis and in an supply; area of installation, less than maintenance, 10,000 square and feet calibration and to act of laboratory as a licensed equipment; distributor, customer Level service; 1 (nonvolatile nonconforming solvent) work manufacturer, and corrective and retailer. action; (Bus. internal & Prof. and Code external ) audits; For management both medicinal review; and laboratory adult-use data cannabis reports, operations, data review, CDFA and is data the approval; licensing proficiency authority for testing; stand-alone electronic cannabis data and cultivation security; data activities on traceability, and CDPH raw is data, the licensing calibration, authority and log for books; stand-alone laboratory cannabis contamination manufacturing and cleaning. activities. With regard to distribution and retail sale, the regulations applicable to those activities are Employee anticipated Education to be the same and for Experience a microbusiness Requirements as for a standalone business. For cultivation activities, it is expected that applicants will be required to follow applicable provisions of the The cultivation regulations regulations will outline that will the be minimum adopted qualifications by CDFA for cannabis and training cultivation, required and for CDFA specific is employment anticipated to positions provide at assistance testing laboratories. the Bureau The related regulations to cultivation will require by a that microbusiness. laboratories verify Similarly, and maintain it is expected documentation that microbusiness of employees applicants qualifications. conducting manufacturing activities will be required to follow CDPH manufacturing regulations, and CDPH is anticipated to provide assistance to the Bureau related to manufacturing by a microbusiness. Premises Security Certain security requirements will be imposed on testing laboratories. Security provisions applying to all licensed commercial cannabis business premises are described above in Section 2.2.2; the regulations will detail additional security provisions that apply specifically to testing laboratories. In addition to the security provisions applicable to all licensed cannabis businesses, the regulations will provide that laboratories must implement an access control card system through all access control points that records the transaction history of entrants. Laboratories must also maintain a log of visitors. Laboratories must have secured storage for test samples; cannabis waste; reference standards for analysis of cannabinoids; controlled Section substances left related blank. to cannabinoids; Scroll Down and records for of Content. analytical tests, including certificates of analysis and data packages. Additionally, laboratories must implement password protection for electronically stored data. Laboratories must notify the Bureau in the event of unexplained losses of cannabis or cannabis product samples Microbusiness A microbusiness license allows the licensee to cultivate cannabis in an area of less than 10,000 square feet and to act as a licensed distributor, Level 1 (nonvolatile solvent) manufacturer, and retailer. (Bus. & Prof. Code ) For both medicinal and adult use cannabis operations, CDFA is the licensing authority for stand alone cannabis cultivation activities and CDPH is the licensing authority for stand alone cannabis manufacturing activities. With regard to distribution and retail sale, the regulations applicable to those activities are anticipated to be the same for a microbusiness as for a standalone business. For cultivation activities, it is expected that applicants will be required to follow applicable provisions of the cultivation regulations that will be adopted by CDFA for cannabis cultivation, and CDFA is Bureau of Cannabis Control Commercial Cannabis Business Licensing Program 2-13 September 2017 Project No

3 Chemicals 3.1 Overview of Licensed Cannabis Business Operations Various chemicals, such as compressed gases, acids, bases, buffers, and salts, are stored and used in the laboratory to prepare and analyze samples. Reference standards are also used to Cont calibrate and perform quality assurance and quality control of instrumentation. Safety Data Sheets (SDS) for each chemical are present on site and available to laboratory personnel. Safety Equipment Extractions with solvents are typically completed under a fume hood to allow proper ventilation of the laboratory and prevent inhalation. Laboratory personnel wear lab coats with safety glasses. Hand protection is used as needed. Eye wash stations and fire extinguishers are present. 3.6 Cannabis Microbusiness Operations MAUCRSA s microbusiness license type allows for vertical integration of commercial cannabis cultivation, manufacturing with nonvolatile solvents, distribution, and retail sales under a single license to be issued by the Bureau. For the purposes of this analysis, it is assumed that, for each activity a licensed microbusiness plans to operate, the licensee will conduct operations as described under the relevant section in this chapter and that the regulations applicable to that license type will apply to those activities conducted by the microbusiness. Because they have not been described elsewhere in this chapter, cultivation and manufacturing are described in more detail below General Operational Activities A cannabis microbusiness under MAUCRSA will be a business that conducts several types of commercial cannabis activities under a single license. First, microbusinesses would be able to cultivate cannabis plants, with a total canopy of less than 10,000 square feet. Cannabis cultivation activities are described below in Cultivation Operations, Section Second, a microbusiness would be permitted to conduct manufacturing activities using nonvolatile solvents. Manufacturing activities are described in Manufacturing, Section 3.6.3, below. These manufacturing activities may include agitation, pressure, infusion, or CO 2 extraction. Third, a microbusiness may conduct distribution activities, including arranging for product testing or transporting cannabis or cannabis products. Distribution activities are described above in Section 3.3. Finally, the microbusiness may conduct retail sale activities, including delivery and on site consumption where allowed by the local jurisdiction. Retail sale activities are described above in Section Cultivation Operations Cannabis cultivation begins with the selection and planting of cannabis cuttings or seeds. Where possible, male seeds are separated from female seeds or, if not identified in the seed stage, male plants would be removed later in the cultivation process, prior to becoming mature. The cuttings or seeds are typically planted in pots with either a growing medium, soil, or an inert material used in hydroponic cultivation methods. Cuttings are preferred over Bureau of Cannabis Control 3-21 September 2017

4 seeds when the cultivator wishes to better guarantee the genetics of a plant and ensure the consistency of the cannabis product. After the plants have developed their first leaves and a root system that extends through the bottom of the growth medium, the cannabis plants are transplanted or repotted to larger pots, where they continue to grow in a vegetative stage (i.e., the period of growth between germination and flowering during which the plant has no observable flowers or buds). During this stage, the plants are given water and nutrients through compost teas, which are created by steeping compost material in water, or other amendments, and are exposed to natural and/or artificial light to maintain the vegetative stage. If using artificial light or a combination of natural and artificial light, the photoperiod is typically 18 hours of daylight and 6 hours of darkness. Other climate conditions (e.g., temperature, humidity, air flow) are often controlled to meet the plant s various growth needs. In addition, once the plants have a healthy root system, older leaves identified by their pale green or yellow coloring can be selectively removed (pruned) from the plants to improve airflow, decrease shading, increase light penetration, and allow plants to focus valuable energy on new leaves, rather than on the removed older leaves. Pest monitoring and, if necessary, pest management activities occur throughout the cultivation period. Under the Proposed Program, such activities would be detailed in the cultivator s cultivation plan, submitted as part of the application process. Once plants reach a desirable size, they are transitioned to the flowering phase either as a result of natural changes in the period of light (photoperiod) for outdoor cultivation or by altering the light pattern so that the plants are exposed to 12 hours of light and 12 hours of darkness for indoor or mixed light cultivation. In approximately 6 14 weeks, the flowers are ready for harvesting (Marijuana Growers Headquarters 2012). Harvesting is the next step in producing the raw cannabis material and occurs when most of the plant s trichomes have changed from clear to either a light amber or cloudy white color. The primary portion of the plant that is harvested is the cannabis flowers, which are generally located at the top of the plant. Flowers are typically removed using a sharp pair of pruners. Since flowers at the top of the plant may be more mature than those lower on the plant, harvesting of the top flowers may precede harvest of the lower flowers. Three main categories of cannabis cultivation are practiced, differentiated by the location and lighting requirements: outdoor, indoor, and mixed light. Outdoor cannabis cultivation uses natural lighting for plant growth. It may be grown in fabric pots, 8 grow bags, 9 planters, or raised beds; directly in the ground (natural soils); or in greenhouses. Indoor cultivation is conducted within buildings without the use of any natural light. The goal of indoor cultivation is to create an environment that maximizes the quantity and quality of marijuana flower 8 Fabric pots, also known as smart pots, are made from a geotextile fabric that is very durable and allows the pots to last for approximately 5 7 years. The pots are typically black or tan. The geotextile fabric allows for increased aeration and retain less heat than regular/plastic pots or grow bags (Marijuana Growers Headquarters 2012). 9 Grow bags are semi perforated, flexible plastic bags. Challenges associated with use of grow bags include difficulty in moving large bags, and they are difficult to water properly once torn (Marijuana Growers Headquarters 2012). Bureau of Cannabis Control 3-22 September 2017

5 buds produced (Arnold 2013). High intensity lighting is used to stimulate photosynthetic activity and plant growth, and the photoperiod is changed each day to simulate the seasonal changes in daylight that trigger various growth stages of the plant. Mixed light cultivation is typically conducted within greenhouses. The photoperiod in the greenhouses is manipulated using a variety of lighting and shading techniques, including a combination of natural and artificial light. Cultivation Regulations License Types Table 3 1 describes the various license types identified in CDFA s anticipated regulations. Cultivation Requirements While the Bureau is responsible for issuing licenses to microbusinesses, which may include cultivation operations, CDFA is the licensing authority for standalone commercial cultivation licenses. It is expected that, although the Bureau has discretion over issuing a microbusiness license to allow cultivation activity, CDFA will review and make recommendations to the Bureau regarding the cultivation activity contemplated by the microbusiness license. Under MAUCRSA, an applicant for a microbusiness license must be able to demonstrate compliance for all activities it intends to carry out under the license, including cultivation. Applicants for cultivation licenses must provide a premises diagram that identifies various specific spaces, some of which are specific to certain license types and cultivation practices (e.g., lighting diagrams for indoor and mixed light cultivators); a pest management plan; the proposed water source and/or irrigation methods; a waste disposal plan; and defined propagation areas. In addition, licensees must comply with environmental protection measures contained in the CDFA regulations, which are expected to include requirements related to water use, lighting, generators, pesticides, provisions for accidental discovery of human remains, and renewable energy requirements for nurseries, mixed light cultivators, and indoor cultivators. Section left blank. Scroll Down for Content. Bureau of Cannabis Control 3-23 September 2017

6 Table 3 1. CDFA Proposed License Types Cultivation License Type Specialty Cottage Outdoor Specialty Cottage Indoor Specialty Cottage Mixed Light Description Outdoor cultivation site with up to 25 mature plants Indoor cultivation site with 500 square feet or less of total canopy. Mixed light cultivation site with 2,500 square feet or less of Specialty Outdoor Outdoor cultivation site with less than or equal to 5,000 square feet of total canopy, or up to 50 mature plants on noncontiguous plots. Specialty Indoor Specialty Mixed Light Small Outdoor Small Indoor Small Mixed Light Medium Outdoor Medium Indoor Medium Mixed Light Indoor cultivation site with 501 to 5,000 square feet of total canopy. Mixed light cultivation site with 2,501 to 5,000 square feet of Outdoor cultivation site with 5,001 to 10,000 square feet of total canopy Indoor cultivation site with 5,001 to 10,000 square feet of Mixed light cultivation site with 5,001 to 10,000 square feet of Outdoor cultivation site with 10,001 square feet to one acre of Indoor cultivation site with 10,001 to 22,000 square feet of total canopy Mixed light cultivation site with 10,001 to 22,000 square feet of Allowed under Microbusiness License? Nursery Cultivation of cannabis solely as a nursery, up to 10,000 square feet Processor Site that conducts only activities associated with drying, curing, grading, trimming, storing, packaging, and labeling of nonmanufactured cannabis products. No No No Manufacturing Under MAUCRSA, CDPH is tasked with the licensing of manufacturers. CDPH is developing regulations that will apply to the manufacture of cannabis products. MAUCRSA creates two license types for manufacturers: Type 6 manufacturers extract using nonvolatile solvents, and Type 7 manufacturers extract using volatile solvents. Under MAUCRSA, CDPH is expected to create two additional license categories: Type N for manufacturers that produce edible products, topical products, or other types of cannabis products (infusion) and that do not Bureau of Cannabis Control 3-24 September 2017

7 extract oils; and another license type for manufacturers that do not manufacture the actual product, but only package and label those products. Under the anticipated MAUCRSA regulations, a Type 6 licensee may also conduct infusion operations and/or packaging on the licensed premises without needing an additional license. The Bureau, as part of its authority under MAUCRSA, is responsible for issuing licenses to microbusinesses, one activity under which is manufacture. A microbusiness under MAUCRSA may only conduct Type 6 (nonvolatile solvent) manufacturing under the microbusiness license. Under MAUCRSA, an applicant for a microbusiness license must be able to demonstrate compliance for all activities it intends to carry out under the license, including manufacture. It is expected that, although the Bureau has discretion over issuing a microbusiness license to allow manufacturing activity, CDPH will review and make recommendations to the Bureau regarding the manufacturing activity contemplated by the microbusiness license. Extraction is a process by which cannabinoids are separated from cannabis plant material through chemical or physical means. The microbusiness license allows licensees only to conduct manufacturing using nonvolatile solvents, other nonvolatile substances, or mechanical extractions. Under the microbusiness license, licensees would also be able to create products using nonvolatile solvent extractions (including carbon dioxide extraction), distillation, infusion, or mechanical extractions, including pressure, agitation, or sifting techniques. These processes are described below. Carbon dioxide (CO 2 ) extractions. The CDPH regulations require manufacturers to use professional closed loop extraction systems for all CO 2 extractions. The closed loop system is required for CO 2 extractions because CO 2 can also build up, posing a risk of asphyxiation to personnel and bystanders. Closed loop systems are designed to mitigate these risks. Mechanical extractions. This may include sifting cannabis products with a screen or pressing them in a press. Chemical extraction using a nonvolatile solvent. This technique involves use of water, vegetable glycerin, vegetable oils, animal fats, or food grade glycerin. Infusion. Infusion is a process by which cannabis, cannabinoids, cannabis concentrates, or manufactured cannabis are directly incorporated into a product formulation to produce a cannabis product. Manufacturing Regulations CDPH expects to begin issuing licenses on January 1, The CDPH manufacturing regulations are anticipated to cover labeling, packaging, background checks, license fees, bonding, local permitting requirements, infrastructure standards, closed loop extraction systems, standard operating procedures, general licensing requirements, limits on additives, and track and trace requirements. Bureau of Cannabis Control 3-25 September 2017

8 License Types As described above, CDPH s regulations will likely include four license types for manufacturing activities. A separate license type will be for entities that only package or repackage cannabis products, or that label or relabel the cannabis product container. Manufacturers that hold other types of manufacturing licenses would not be required to hold a separate license if they are labeling and/or packaging their own manufactured products. Manufacturers that do not conduct extractions, but rather produce edible or topical products using infusion processes or cannabis products other than extracts or concentrates, will be Type N licensees. Type 6 licensees may conduct extractions using mechanical methods or nonvolatile solvents, and may conduct infusion operations. A Type 7 manufacturing licensee may conduct all of the same activities as a Type 6 manufacturer, but may also conduct extractions using volatile solvents. Table 3 2 summarizes the activities permitted for each manufacturing license type. Table 3 2. Activities Permitted in CDPH Proposed Regulations Manufacturing License Type Activities Type 6 Extractions using mechanical methods (such as presses or screens) Extractions using nonvolatile solvents Infusion operations (must be designated on application) Packaging and labeling of own products Type 7 Extractions using volatile solvents Packaging and Labeling Only* Extractions using mechanical methods (such as presses of screens) (must be designated on application) Extractions using nonvolatile solvents (must be designated on application) Infusion operations (must be designated on application) Packaging and labeling of own products Packaging and repackaging of cannabis products Labeling and re labeling of cannabis products Type N Production of edible or topical cannabis products using infusion Production of cannabis products other than extracts or concentrates (no extractions permitted) Packaging and labeling of own products * The name of this license type has not yet been determined by CDPH. Allowed under Microbusiness License? No Bureau of Cannabis Control 3-26 September 2017

9 Labeling and Packaging CDPH s anticipated regulations will require a primary and an informational panel on product labels. The primary panel would likely to be required to identify the product as being cannabis infused, contain a cannabis product symbol, and list THC and CBD content in milligrams per serving and milligrams per package. The informational panel would likely identify manufacture dates; list required warnings such as For medical use only ; list ingredients and allergens; and identify the expiration date or best by date of the product, among other requirements. Label font size would be specified, and the proposed regulations will likely contain a list of label restrictions. MAUCRSA requires tamper resistant and childresistant packaging. Facility Compliance and Video Surveillance Manufacturing will be required to take place in facilities that meet sanitation, safety, and security standards. Sanitation standards may include such requirements as using food grade equipment and surfaces and maintaining dressing and locker rooms. Manufacturers will be required to take steps to ensure that equipment, work spaces, and utensils are designed to protect against allergen cross contact and contamination. Licensees will be required to conduct a hazard analysis to identify known or foreseeable biological, chemical, and physical hazards, and then implement preventive controls to minimize or prevent such hazards. Safety standards will include complying with local and state requirements. Security standards will include maintaining electronically secure records and a security alarm. Security cameras will be required and must allow for remote access, high definition recordings, video capture in low light settings, and camera placement in a number of rooms, among other requirements. Surveillance recordings will be required to be kept for a minimum of 30 days on the licensee s recording device. Adulterated and Potentially Hazardous Products and THC Limits CDPH regulations will prohibit additives, such as nicotine, alcohol, caffeine, and chemicals that increase potency, toxicity or addictive potential, or that would create an unsafe combination with other psychoactive substances when combined with cannabis products. CDPH will also prohibit potentially hazardous food, which largely means that the product has an unstable shelf life; this essentially limits the size and scope of products manufactured. Manufacturers will be prohibited from making cannabis products from dairy products, meat products, juices, or any perishable bakery product that must be held at temperatures below 41 degrees Fahrenheit ( F). CDPH regulations are expected to prohibit edible cannabis products that contain more than 10 mg of THC per serving or more than 100 mg of THC per finished product. Edible products containing more than a single serving will be required to be scored, delineated, or otherwise marked to indicate serving size. Edible cannabis products will be required to be homogenized to ensure uniform distribution of cannabinoids throughout the product. Manufactured cannabis products that are not edible will be allowed to contain no more than 1,000 mg of THC per finished product. Bureau of Cannabis Control 3-27 September 2017