Calif. Cannabis Regulators Face Major Changes in New Year

Major change is coming for California’s top cannabis regulators.

Officials are preparing to merge the state’s three main regulatory agencies into a single Department of Cannabis Control, with the combination widely expected by July. 

That effort comes on the heels of a recent change in leadership atop the Bureau of Cannabis Control (BCC), the state’s primary regulatory agency, which saw Tamara Colson take over this month as acting chief following the resignation of Lori Ajax.

While the next several months are sure to present challenges, they also offer opportunity for important reform, Max Mikalonis, a lobbyist with K Street Consulting, told WeedWeek. The state will have three years of data to reflect on, which should help shape a stronger regulatory framework, he said.

“This is poised to be a real reorganization and a real chance to look at the track record … and use this moment to reflect and improve,” he said.

Changes atop the BCC

• Lori Ajax, who was appointed in 2016, oversaw the rollout of the state’s MED and then REC markets during her nearly five years as the state’s top cannabis regulator. She announced her resignation in November without giving a specific reason. This month she was named executive director of the California Craft Brewers Association.
• Tamara Colson, who had been the BCC’s assistant chief counsel since May 2016, was appointed acting BCC chief, effective Dec. 3.
• Ajax spearheaded much of the state’s cannabis regulations, sometimes drawing criticism from industry operators upset with what they felt were overly burdensome requirements.
• Lindsay Robinson, executive director of the California Cannabis Industry Association (CCIA), called Ajax “a real advocate for legal cannabis … [who] absolutely tried her best to understand the crucial issues from the industry’s perspective.”
• Colson’s experience helping guide the BCC over the past four years should ease the transition in leadership, Robinson said.

What’s next

• The key issues facing Colson include the upcoming agency consolidation, shortcomings in the state’s social equity programs, evaluating tax structures and continuing crackdown efforts against illicit operators.
• A spokesman for the BCC suggested that Gov. Gavin Newsom is likely to appoint a full-time chief regulator after the establishment of the Department of Cannabis Control.

Regulatory consolidation

• The planned consolidation will see the merger of the cannabis licensing entities currently housed in the BCC, the Department of Food and Agriculture (CDFA), and the Department of Public Health (CDPH).
• Under the current framework, the CDFA oversees licensing for cultivators, the CDPH handles licensing for manufacturers of edibles, and the BCC is the lead agency in charge of licensing for retailers, distributors, testing labs, microbusinesses and temporary events. 
• The consolidation aims to streamline and simplify processes and improve the overall industry – for regulators and operators – by providing a single point of contact, according to the state.
• Robinson, with the CCIA, said businesses with multiple license types from different agencies will particularly welcome the merger. “It was such a huge process to tackle all the individual nuances of getting licensing through each of the agencies,” she said.

Federal landscape

• As California merges its regulators, it would be wise to pay close attention to the potentially shifting federal landscape, said Mikalonis, with K Street.
• The U.S. House recently passed the MORE Act, a legalization bill that analysts suggest is likely to get blocked in the Senate, as well as a bill to expand MED research. Further, the vice president-elect, Kamala Harris, is a former California attorney general and U.S. senator whom Mikalonis suggests is “very cognizant of California’s needs.”
• As reform continues at both the state and federal levels, the way the state “reacts and seizes upon these new opportunities” will be critical, Mikalonis said.