California Cannabis: What to Watch for in 2021

It goes without saying, but 2020 was a pretty wild year for the California cannabis and hemp industries. We think 2021 will be a pretty active year and want to list out some things to watch out for as we kick off the new year.

Agency Consolidation: It was announced in January 2020 that California’s three cannabis agencies’ regulatory authority would be consolidated into a single, new agency, the Department of Cannabis Control. We expect that there will be significant efforts in 2021 to make this happen, which will be a big shake-up for California’s regulated cannabis industry.

Hemp Production Plan Adoption: California submitted a hemp production plan to the U.S. Department for Agriculture recently, and it’s still under review. The plan will eventually be approved (though USDA may require some changes) in early 2021, necessitating changes for the regulation of California’s hemp industry.

Enforcement: We predicted at the end of 2019 that 2020 would be the year where California’s cannabis agencies began enforcement actions and efforts in earnest. In large part, that was delayed due to COVID-19, but we still saw some enforcement efforts (i.e., the BCC’s lawsuit for civil penalties). We expect that enforcement efforts and actions will increase significantly in 2021.

Prop. 65 Litigation: With the expansion of Prop. 65 to cover additional cannabis and hemp products, we expect to see more and more lawsuits and demand letters going out to businesses that allegedly fail to comply with these requirements.

Trade Samples: One of the biggest holes in California law relative to cannabis is the failure to provide an efficient mechanism to deal with trade samples. Efforts were undertaken in 2019 to pass a law that would allow for trade sampling, but those efforts failed. We expect there to be additional efforts in 2021 to regulate trade samples.

CBD Legislation: For the last few years, the state has tried (and failed) to pass legislation that would “legalize” CBD. Most recently, the state attempted in the eleventh hour to pass a CBD bill, AB-2028, but failed. Part of this was again due to COVID-19–the bill wasn’t really debated until the end of the legislative session. We expect CBD legislation to be introduced in early 2021. Hopefully this time, something works out.

Local Control Debates: The last few years have seen a lot of debates between the state agencies and local jurisdictions relative to local control. Basically, state law gives cities and counties a lot of latitude to decide whether to allow cannabis operations within their borders, which has led to many localities opting not to allow them. This recently culminated in the BCC backing down in a lawsuit by cities challenging a rule that allowed delivery operators to deliver anywhere in the state (even in cities that didn’t allow deliveries), effectively providing a win for local control. Given that there are still so many cities in which cannabis activities are forbidden or restricted, we expect to see the local control debate continue, and possibly even introduction of statewide legislation geared at paring back local control.

Psychedelics Decriminalization: Okay, okay, this has nothing to do with cannabis or hemp. But, California may be the next state to adopt some kind of statewide psychedelics decriminalization measure, as state senator Scott Wiener previously announced he would introduce legislation in the next legislative session.

While 2020 was a busy year, we expect that to continue in 2021. Please stay tuned to the Canna Law Blog to see how things turn out in the new year.

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