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Industry Bristles at California Regs on Potency, Closing Hours

SACRAMENTO — California regulators released sweeping draft proposals Friday governing the way medical cannabis is grown, processed, tested, distributed, sold and consumed in the nation’s largest market. The proposed regulations, outlined in 211 pages issued by three separate state agencies, are scheduled to go into effect in early 2018. Members of the public have until June 13 of this year to comment and propose revisions to the draft regs.

Leafly has a comprehensive guide to the proposed regulations here. We’ll be updating that guide as the state releases its final rules later this year.

Reaction from California dispensary operators and edibles manufacturers, who learned of the proposed regulations over the weekend, was mixed. Some business owners found the proposed regulations overreaching. In other cases, they voiced concern that the regs could be potentially harmful to medical cannabis patients.

“It reads as if there weren’t industry experts advising the final draft, because the regulations don’t make sense as a whole,” said Debby Goldsberry, director of Magnolia Wellness, a dispensary and community center in Oakland. “There are too many problems.”

Limits on Edibles

High among Goldsberry’s concerns: a proposed 100-mg-per-unit cap on edibles, and a similar limit on full-extract ingestible cannabis oil.

“It is kind of offensive and a punishment to our most seriously ill patients who have very high tolerances and need a high dose,” Goldsberry said. “I think regulators didn’t spend enough time looking at the needs of the most critically ill members, because this regulation is going to harm them. We need regulations that are going to support them. We need to flip this regulation completely.”

Goldsberry said the industry has made strides in consumer education regarding consumption of potent edibles.

“This is a vestigial part of prohibition, where people are using fear-based feelings rather than science and the true needs of medical marijuana patients,” Goldsberry said.

Joe Gerlach, founder of Oakland-based Korova Edibles, said 60% of his company’s sales in 765 California dispensaries come from high-potency products, including a 1,000-mg brownie and a 500-mg blondie.

Gerlach said if potency is limited to 10 mg per dose and 100 per packaged unit, patients who need higher doses would be forced to purchase and consume more products. That raises the cost of their medicine as well as their caloric intake.

“People aren’t going to want to buy five brownies to get the same effect,” Gerlach said. “First of all, it’s going to cost them more. And from a health standpoint, you don’t want to have to eat 5,000 calories to get the same relief you were getting from 200 calories.”

“If you’re really sick, you can’t eat 10 cookies,” Goldsberry agreed. “You need to have a really concentrated dose where you can eat one cookie and get your entire dose of medical cannabis for the day.”

Gerlach questioned why the draft regulations allow for up to 1,000 of THC in other manufactured cannabis products.

“If you have a 1,000-mg tincture, you could down that in one shot,” he said. “Why would it be allowable to have a 1,000-mg tincture but not a 1,000-mg brownie? You can buy a half pound of flower in a day but you can only buy a 100-mg brownie? It seems more based on emotions than fact and what’s needed in the medical cannabis community.”

Gerlach said he doesn’t fear the proposed regulations would put Korova out of business.

“We’re interested in talking with the state about what kind of compromise we can come to that keeps the public safety in mind but also doesn’t screw over the patients who need more than 100 mg,” he said.

Kristi Knoblich, chief operating officer of Oakland-based Kiva Confections, said her company can reformulate its chocolate bars, currently 120 mg and 180 mg per unit.

“From a consumer safety perspective, I think a cap is a good idea,” Knoblich said. “But I don’t think it should be 100 mg. I think it should be more like 200 mg.”

So Long, Free Samples

Knoblich and Goldsberry objected to the proposed ban on dispensaries and manufacturers providing free samples. Knoblich said sampling is a vital part of marketing. She said Kiva does approximately a hundred in-dispensary sample events per month, passing out 10-mg THC chocolate squares for free.

“They’re pretty effective for getting new customers to try our product, especially since cannabis products can be kind of expensive,” Knoblich said. “Patients can try something for the first time, and if they like it, it often converts to a sale.”

Goldsberry said providing samples of edibles, flowers and other cannabis products “is a really important part of getting medicine to patients that we can’t overlook.”

“Our members depend on the samples,” Goldsberry said. “We have a lot of low-income members who can’t afford their medicine and get their daily dose by coming into the dispensary and getting a 10-mg sample.”

Clamping Down on Packaging

Knoblich said the proposal to require child-resistant packaging is “a scary proposition.”

“Child-resistant packaging for every unit is expensive, which means prices go up,” she said. “That makes it harder for small operators to get started and begins to de-incentivize companies from participating in the market. It also contributes to landfills as child-resistant packaging requires more plastic and more paper.”

Knoblich said she expects Kiva, whose products are sold in 960 dispensaries, will have to hire more employees to perform quality-quality control and compliance in order to keep up with the proposed regulations.

“There’s a certain level of professionalism that comes with a well-regulated industry,” Knoblich said. “Some people will not be able to rise to that occasion and make the transition. That happens when regulations come to any unregulated industry.”

Dispensary Changes

Another proposed regulation would ban the latest practice in dispensaries: an open layout that places cannabis products on shelves within reach of consumers rather than behind the counter, exemplified by the posh retail design of San Francisco’s Harvest dispensaries. Goldsberry said Magnolia has recently considered following Harvest’s lead.

“It’s really beautiful and it takes away some of the stigma,” Goldsberry said. “This isn’t a dangerous product that needs to be under lock and key. But it’s a seed-to-sale tracking issue where we have to know where the medicine goes. You have to do everything you can for loss prevention. I think we’re going to have to keep it under lock and key so we can do the seed-to-sale tracking appropriately.”

Goldsberry also questioned a proposed regulation that would require dispensaries to close at 9 p.m. Some dispensaries, she noted, operate on-site consumption lounges that function as social centers. Three San Francisco dispensaries with on-site consumption lounges currently close at 10 p.m. Magnolia Wellness had planned to ask the City of Oakland to extend its closing time from 9 p.m to 10 p.m. in preparation for the opening of Magnolia’s dab bar and lounge this summer.

“Our members want to get out at night, go some place where they can gather, and they don’t want to go to a bar,” Goldsberry said.

On the bright side, there’s good news for cannabis consumers who like to wake and bake: Dispensaries would be allowed to open at 6 a.m.

“The early bird gets the cannabis,” Goldsberry said.

Ed Murrieta's Bio Image
Ed Murrieta

Ed Murrieta is a veteran lifestyle journalist and multimedia producer based in the San Francisco Bay Area. His work has appeared in the San Francisco Chronicle, The Cannabist, Wired.com, Leafly, and broadcast on the syndicated public radio show The Splendid Table.

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