2022 policy advocacy

FEDERAL ADVOCACY - THE SHIP ACT

The Small and Homestead Independent Producers (SHIP) Act would allow small famers and producers to operate their agricultural businesses within and across state lines. The legislation is specifically targeted to support the smallest family farmers and provide them the certainty to sustain their businesses under a larger federal legalization law. 

“The direct-to-consumer model is a necessary resource for any small-scale craft-producing community that is deeply tied to the land on which it creates — whether it produces wine, whiskey, cheese, beer, cannabis, or honey,” said Genine Coleman, Executive Director of Origins Council. “The legacy cannabis community that has worked so long in the shadows should have the opportunity to join the ranks of other artisan producers across the United States and enjoy the privilege of connecting personally with their adult customers. As is always true with each step cannabis takes towards legality, the greater community stands to reap enormous benefit in the process.”

 The OC Regional Council Government Affairs Program 

Our Government Affairs Program utilizes a representative democracy model, whereby OC partners with membership-based, regional trade associations representing the legacy cannabis producing regions of California to form the OC Regional Council, which collectively governs the policy initiatives of Origins Council on behalf of all of our collective members.

We are proud to be partnered with: Trinity County Agriculture Alliance; Humboldt County Growers Alliance; Mendocino Cannabis Alliance; Sonoma County Growers Association; Nevada County Cannabis Alliance; and Big Sur Farmers Association. Collectively these associations represent 900 members, including ancillary businesses and licensees from all sectors of the regulated supply chain. The vast majority of our members are homestead legacy farmers who have been producing small-batch sun-grown cannabis for over a decade, and in many cases for multiple generations. 

Executive level leadership from our Regional Partner organizations serve as the Regional Chairs on the OC Regional Council, which meets weekly with OC staff and advisors to advance our advocacy in the State and Federal Capitals. Regional Council meetings are also a forum for Regional Chairs to exchange mutual support and encouragement, critical to the sustainability of cannabis advocacy work.

2022 OC Policy Platform 

The primary scope of work for this program is developed through the annual strategic planning of the OC Regional Council and defined in the annual OC policy platform, linked below.

Throughout this page you will find detailed, up-to-date information about our current policy work, with links to all of our officially submitted comment letters, position letters and white papers. OC values transparency and public education as fundamental pillars of our advocacy work. 

AB 2691 - featured COALITION ADVOCACY

Assemblymember Jim Wood (D-Santa Rosa), representing the world-renowned Emerald Triangle, introduced AB 2691 which would authorize the Department of Cannabis Control to issue temporary cultivator event retail licenses that would allow small-scale producers to market and sell their cannabis products direct to consumers at licensed cannabis events in the state.

“Assemblymember Wood’s bill is a lifeline for thousands of small family cannabis farms across California struggling to bring their products to market and achieve profitability,” said Genine Coleman, Executive Director of Origins Council. “This legislation will also advance destination tourism for heritage cannabis producing regions and expand consumer access to regulated craft cannabis products.”

This legislation would specify that the temporary cultivator event retail license would be valid only for the specific cannabis event for which it was issued, and would limit the number of temporary cultivator event retail licenses issued to each licensee to 8 per calendar year.  Origins Council strongly supports this measure and has lead the formation of a coalition of over 40 organizations in support of this bill. 

From the Coalition Support Letter linked below: “As independently owned and operated small businesses and allies of legacy farmers, BIPOC and social equity operators, craft producers, consumer and patient rights advocates, we are collectively working to ensure that the pioneers who fought for decades to establish the legendary medical cannabis movement of California have an equal opportunity to participate within a viable regulated industry, and to ensure that patients and consumers have safe, affordable access to fresh, high quality craft cannabis products and medicines.”

CA Legislative Affairs 

In late 2014 California legislators and stakeholders set out to build a comprehensive regulatory system for commercial medical marijuana in California. Three separate bills comprised the Medical Marijuana Regulation and Safety Act of 2015 (MMRSA) – AB 243, AB 266, and SB 643. Each dealt with different aspects of licensing and regulating commercial medical marijuana cultivation, manufacturing, distribution, transportation, sales, and testing. In June of 2016 the State legislature amended the MMRSA with the passage of the Medical Cannabis Regulation and Safety Act (MCRSA). This marked the historic shift away from using the term marijuana and adopting the term cannabis within California law, and added comprehensive environmental regulations for the commercial production of medical cannabis. In November of 2016 California voters passed Proposition 64 – The Control, Regulate and Tax Adult Use of Marijuana Act (AUMA), which set forth regulatory provisions for adult use cannabis. In 2017 Governor Jerry Brown released the proposed budget in January and set out to unify the two laws (AUMA & MCRSA). After more than 6 months of focused work from the governor’s administration, the state legislature and stakeholders, SB 94—the Medical and Adult Use Cannabis Regulation and Safety Act (MAUCRSA) was enacted.

The complex, prescriptive statutory nature of the California cannabis licensing and regulatory framework, and the inclusion of AUMA – which requires a 2/3 vote of the legislature to amend – has created a landscape wherein reforms to the system require significant and ongoing legislative efforts. Below are the leading cannabis bills that Origins Council is tracking and engaging on this year.

AB-2691 Cannabis: temporary event cultivator retail license (Wood)

  • For more information, see the Featured Coalition Advocacy section above. 

SB-1074 Cannabis: excise tax: cultivation tax (McGuire)

SB-1281 Cannabis taxes (Bradford)

SB-1293 Income taxation: credits: cannabis: equity applicants and licensees (Bradford)

SB-1336 Income taxes: credit: cannabis businesses: qualified expenses (Weiner)

SB-1148 Cannabis: licenses: California Environmental Quality Act (Laird)

SB-1326 Cannabis: interstate agreements (Caballero)

AB-2568 Cannabis: insurance providers (Cooley)

AB-1954 Physicians and surgeons: treatment and medication of patients using cannabis (Quirk)

AB-2188 Discrimination in employment: use of cannabis (Quirk)

AB-1076 Cannabis convictions: resentencing (Bonta)

AB-1725 Illegal cultivation of cannabis (Smith)

CANNABIS BUDGET TRAILER BILLS

The state’s fiscal year is from July 1st through June 30th. The California Constitution requires the Governor to submit a proposal for a balanced budget to the Legislature each year by January 10th. Budget committees in both the Senate and Assembly analyze the proposed budget separately. The Senate and Assembly committees then each present a budget bill to their own house for passage. A Budget Conference Committee works out differences between the Senate and Assembly versions of the budget and sends it back to the two houses for approval. The Legislature’s approved budget is due by law by June 15th. Once approved, the budget is sent to the Governor to sign. The Governor has the ability to veto particular spending line items in the budget.

Here is a resource from the California Senate that explains the California budget process: The Budget Process, A Citizen’s Guide to Participation.

Under the Administrations of both former Governor Jerry Brown and current Governor Gavin Newsom, the annual budget process has served as robust policy process for the introduction, negotiation and adoption of cannabis legislation in California, via cannabis budget trailer bills. Budget trailer bills can be introduced and passed into law at any time, and go into effect in law immediately upon being signed by the Governor.

This year Governor Newsom has introduced budget proposals for cannabis tax reform, as well as a statewide grant program to support more local jurisdictions in stepping forward to regulate retail cannabis businesses.

At the beginning of June, the California State Legislature released the The Legislative Version of the 2022-23 State Budget, representing an agreement between the leaders and budget committee chairs of the Assembly and the Senate, which is being presented to the Governor’s Administration for negotiations. 

The proposal offered a counter proposal to the Governor’s cannabis tax reform trailer bill: Adopts cannabis tax reform with legislative amendments as follows: (1) sets cannabis cultivation tax rate to zero; (2) keeps the cannabis excise rate at 15 percent for three years; (3) allows the California Department of Tax and Fee Administration, in consultation with the Department of Finance and the Department of Cannabis Control, to adjust the cannabis excise tax rate that takes into consideration additional revenues received by December 31, 2025; (4) require an economic study that measures the impacts of tax reform on revenues; (5) sets the minimum baseline for Allocation 3 at $670 million; (6) additional relief for equity operators; (7) adds additional enforcement tools against the illicit cannabis market and worker protections, including enforcement of labor peace agreements; (8) sets aside $150 million General Fund to backfill any revenue loss and counts existing balances that departments are carrying to meet the minimum $670 million baseline, and (9) adds reporting requirements for the Cannabis Tax Fund.

On June 26th, 2022 AB/SB 195 were introduced into print. These bills mirror one another, and represent the efforts of the Legislature, the Governor’s Office and stakeholder groups to compromise on a legislative package for cannabis. 

On June 29th the State Legislature passed AB/SB 195, and advanced the bill onto the Governor for consideration. On June 30th, 2022 The Governor signed the cannabis budget trailer bill, SB/AB 195, into law. This bill makes the following reforms to California’s commercial cannabis tax structure: 

1. Permanently eliminates the state cultivation tax beginning on July 1, 2022. 

2. Shifts the collection of the excise tax from distributors to retailers on January 1 2023. 

3. Retains the cannabis excise tax rate at 15% until July 1, 2025.

4. Excise tax will be increased after July 1, 2025 to a rate to be determined to make up for lost revenue from the elimination of the cultivation tax.

5. 3% excise tax rate reduction for social equity retail operators. 

6. $10,000 tax credit for social equity operators. 

7. Tax credit of up to $250,000 for retailers and micro-businesses that offer health and retirement benefits.

Origins Council is working in coalition with the Cannabis Distribution Association, California Cannabis Manufacturers Association and the Cannabis Equity Policy Council to get immediate clarification from CDTFA regarding the applicability of the cannabis cultivation tax to product that was transferred from a farmer to a distributor, manufacturer or a micro-business prior to July 1, 2022 –  BUT that has NOT YET – undergone testing and received a Certificate of Analysis (COA). See the coalition letter that was submitted to CDTFA below: 

CA Regulatory Affairs 

California cannabis businesses are regulated by multiple state agencies: Department of Cannabis Control; Department of Fish and Wildlife; State Water Resources Control Board; CalFire; Board of Forestry; Department of Food and Agriculture; Department of Pesticide Regulation, Department of Tax and Fee Administration, Secretary of State.

The Department of Cannabis Control (DCC) is California’s newly consolidated cannabis licensing and regulatory agency, established in 2021. In March, the DCC released a comprehensive regulatory proposal to make changes to streamline and simplify the cannabis regulations, enhance consumer protections and make permanent changes that are currently in effect as emergency regulations. In anticipation of this rule-making, Origins Council developed a comprehensive regulatory platform for 2022, and submitted extensive comments in response to the initial and revised draft of the proposed regulations. Those documents are linked below: 

The DCC provides an Equity Fee Waiver Program for licensees and applicants impacted by the War on Drugs. In 2019, Senator Steven Bradford (D-Gardena) authored SB 595, which passed the Legislature and created the cannabis equity fee waiver program. The cannabis equity fee waiver program was contingent on funding and Senator Bradford successfully obtained $30 million for its implementation in the Budget Act of 2021. In April, the Department of Cannabis Control (DCC) requested stakeholder input and feedback on the development of equity fee waiver and deferral regulations. Origins Council submitted the below comments on May 2nd. On May 25th, the DCC issued a notification to readopt its emergency regulations for Equity Fee Waiver regulations, with amendments. On May 31st, Origins Council submitted comments in response, which are linked below. On The Department of Cannabis Control (DCC) is providing notice to the public of its intent to permanently adopt its emergency regulations to provide license fee waivers and to implement fee deferrals under the Department’s equity fee relief program.

In 2021, AB 45 was signed into law in California, which requires the DCC to issue a report on the incorporation of hemp into the cannabis supply chain by July 1, 2022. We believe the outcome of the DCC’s report, and subsequent regulatory promulgation, will have substantial effects on the cannabis industry as a whole, and small and independent cannabis producers in particular. OC has submitted comments comments, ahead of the DCC publication of their hemp report, and we look forward to working with the DCC to establish a thoughtful and equitable system that acknowledges the complex relationship between hemp and cannabis.
 

The California Department of Food and Agriculture regulated commercial cannabis cultivation activity prior to the establishment of the DCC in 2021. In 2021 CDFA launched the OCal Program, a statewide certification program with comparable-to-organic cannabis standards. Presently, CDFA is developing two additional programs for commercial cannabis cultivators, the California Cannabis Appellations Program (CAP) – more information is provided below – and the Sustainable California Grown Cannabis Pilot Program (SCGC Pilot Program). The SCGC Program is being created to improve the state’s access to data related to outdoor cannabis cultivation to formulate standards and best management practices that can be used by cultivators statewide. CDFA hosted an informational webinar to provide an overview of program guidelines and application materials on April 12, 2022. The webinar also provided an opportunity for the public to provide comments on the draft application materials, Origins Council submitted the below comments:  

In 2021, the State Board of Forestry and Fire Protection initiated a rule making to establish State Minimum Fire Safe Regulations. Pursuant to Public Resources Code 4290, the Board is required to “…adopt regulations implementing minimum fire safety standards related to defensible space” applicable to “the perimeters and access to all residential, commercial, and industrial building construction. In 2018, the Legislature passed and the Governor signed SB 901 (Dodd), which expanded the applicability of the regulations promulgated under PRC 4290 to land in the Local Responsibility Area Very High Fire Hazard Severity Zone (VHFHSZ). SB 901 also revised PRC 4290 to require the Board to more frequently update regulations relating to fuel breaks and greenbelts near communities, and to preserve undeveloped ridge lines to reduce fire risk and improve fire protection. These proposed regulations could have significant impacts on California’s rural communities, particularly the cottage industry businesses of our membership. Origins Council’s comments on the proposed regulations are linked below:

NEW! Department of Cannabis Control announces Disaster Relief available to licensees impacted by the drought!

As California’s drought continues to worsen, the DCC is encouraging cannabis licensees impacted by the drought, including cultivators who are seeking to conserve water, to request disaster relief.  State and local agencies across California are already working to promote water conservation — including, for example, programs in certain local jurisdictions in which cultivators may conserve water by fallowing their crops. If relief from DCC licensing requirements would make it economically feasible to participate in local fallowing programs, or would otherwise support California’s water conservation efforts, DCC encourages licensees to request disaster relief.

Disaster relief may be offered to licensees who are unable to comply with DCC licensing requirements due to a disaster, such as the ongoing statewide drought emergency. Licensees should be prepared to identify the specific DCC regulations from which they are requesting relief and to explain why the relief is needed in light of the relevant disaster. Licensees seeking disaster relief are encouraged to submit a Request for Disaster Relief (Form DCC-8101) to DisasterRelief@cannabis.ca.gov. You can read more about DCC disaster relief here. Additional information can also be found on the DCC website under the disaster relief webpage.

Origins Council has been advocating to the DCC to adopt a formal fallowing policy for cannabis farms since the beginning of the year. Below is our memo submitted to the DCC on February 2nd, 2022: 

The Department of Cannabis Control (DCC) is working to develop and adopt regulations for obtaining a Large Cultivation License, known as. Type 5 License, which was first introduced in Proposition 64. These regulations will provide a pathway for existing licensees to convert to a Large Type 5 Cultivation License once the license type becomes available on January 1, 2023. Additionally, the regulations provide a pathway for existing licensees to convert to Medium Cultivation Licenses once the limitation on the number of such licenses that may be held by the same owner expires on January 1, 2023. Origins Council’s comments on the proposed regulations are linked below:

CANNABIS Appellations Program

Pursuant to the advocacy of the legacy farming community, in 2015 California enacted the first law, SB 643 (McGuire), to establish appellation of origin protections for cannabis. Since then, six additional bills have been signed into law that collectively make up the statutory framework for the world’s first legal appellation of origin program for cannabis, which will be administered by the California Department of Food and Agriculture and known as the Cannabis Appellations Program (CAP). 

An appellation of origin is a special kind of geographical indication generally consisting of a geographical designation used on products which have a specific quality or characteristics that are essentially due to the geographical environment in which they are produced. California’s cannabis appellations will include producer specified product standards, production practices and cultivar specifications, which will be defined within petitions will be submitted to CDFA as a part of the process to apply for a cannabis appellation. 

Origins Council and our predecessor organizations, the Mendocino Appellations Project and the California Growers Association have invested heavily into community organizing and education, policy analysis and advocacy efforts in support of the California cannabis appellations movement since 2015. Our organizations have been closely engaged with CDFA since 2018, when the agency began stakeholder outreach and engagement on the development of the program. CDFA initiated their rulemaking for CAP in 2020. After 5 revisions of the package based on robust stakeholder input and engagement, CDFA adopted their final regulatory package for the program in late 2021. 

Pursuant to the consolidation of California’s licensing agencies for cannabis and the establishment of the Department of Cannabis Control in 2021, the regulatory package for CAP was split between CDFA and the DCC as per each agency’s respective authority over commercial cannabis cultivators. While the CDFA regulations for CAP have been finalized and adopted, the DCC is currently undergoing a rulemaking that includes proposed regulations related to CAP. The Cannabis Appellations Program is anticipated to launch later this year or early next year. Below are all of Origins Council’s formal comment submissions to CDFA and the DCC pursuant to their respective rulemakings for CAP.

NEW! STAKEHOLDER WORKSHOP – CANNABIS APPELLATIONS PROGRAM (CAP)

On June 16, 2022 at 10:00am, the California Department of Food and Agriculture (CDFA) will host a webinar to discuss program status and receive stakeholder input on the Cannabis Appellations Program (CAP). Prior to accepting petitions to establish an appellation, CDFA is developing the administrative structure for the appellations program and establishing a review structure to support the fair and thorough evaluation of petitions.

Workshop Topics: 
Purpose, Program History and Status, Petitions for Appellations of Origin, Petitioning Process, Petition Review, Accepting Petitions, and Questions and Comments. To sign up for the webinar, please register at – https://www.cdfa.ca.gov/oefi/cap/

 

THE 2021 OC CEQA REPORT

In the fall of 2020 Origins Council convened a team of subject matter and legal experts to support an in-depth analysis of the California statutes, regulations and environmental documents related to commercial cannabis licensing, CEQA, local land use regulation and permitting systems in rural legacy producing regions.

In the spring of 2021, the OC Regional Council and our Collaborating Partner HCGA worked with the resulting situational and legal analysis to develop a comprehensive set of policy recommendations regarding state licensing reforms.

This report is intended to support public education and awareness as well as the engagement and input of local and state policy makers, the cannabis industry and other key stakeholder groups regarding proposed policy reforms.

REPORT DOCUMENTS: