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California Tobacco and Cannabis Retail Rules

August 9, 2018

Thanks to both the growth of vaping and the legalization of adult-use cannabis, new smoke shops have been popping up across the Golden State in recent years like strictly-regulated weeds. This article surveys some of the rules that California imposes on the sale of both tobacco and cannabis products.
 

Tobacco
 

The major statute regulating tobacco retail sales in California is the Stop Tobacco Access to Kids Enforcement (STAKE) Act. Under the STAKE Act, “tobacco products” include not just tobacco-derived consumables like cigarettes and cigars but also electronic smoking devices and components (i.e. vapes). Non-electronic smoking gear like pipes and hookahs are, oddly, considered “tobacco paraphernalia” under the Act, which subjects them to some but not all of the regulations.

 

Here are a few notable rules that tobacco retailers should be aware of:
 

  • Sales to anyone under 21 are prohibited. However, there’s an exception for members of the military over the age of 18 with USAF identification.

  • Businesses must obtain a license from the California Tax and Fee Administration. License fees are currently $265/year.

  • Businesses must display a warning sign with certain mandated language, including a statement that they won’t sell to anyone under 21.

  • All products must be kept behind the counter.

  • No billboards advertising tobacco products can be placed within 1,000 feet of a school or playground
     

In addition to the STAKE Act, California’s Clean Indoor Air Law regulates smoking tobacco in enclosed workplaces. There is an exception for “private smokers’ lounges” within smoke shops. However, the definition of such lounges is relatively narrow. For example, businesses serving food or beverages don’t qualify, effectively prohibiting indoor hookah bars and the like.
 

Cannabis

 

In 2016, California voters approved what would enter the state’s Business as Professions Code as the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA for lack of a more pleasing acronym). The Act legalized sale of cannabis but simultaneously introduced an extensive body of regulatory law, with additional rulemaking authority spread among the Department of Food and Agriculture, the Department of Public Health, and the Bureau of Cannabis Control.

 

In addition to its complicated licensing regime (which we’ll look at in more detail in a subsequent post), MAUCRSA sets forth a number of specific restrictions on retail cannabis sales. Here are some of the rules:
 

  • Cannabis retailers can’t sell alcohol or tobacco.

  • Sales to anyone under 21 are prohibited (no exception for servicemembers here).

  • Products must have a unique identification number that can be traced back to the cultivator.

  • Packaging must be tamper-resistant, and products must leave the store in an opaque, child-proof container.

  • Labels must include a verbatim warning prescribed by the Act, as well as litany of specific information, including active ingredients (e.g. THC and CBD), source and date of cultivation, date of manufacturing and packaging, type of product, weight of flower, and appellation if any.

  • No freebies or giveaways.

  • Marketing materials must display the business’s license number, and advertisements are banned from platforms aimed at children.

  • Billboard ads can’t be placed on interstate highways or within 1,000 feet of a school or playground.

  • Products must be behind the counter, and businesses must institute security measures such as limiting access to their sales areas and locking up their inventory.
     

In addition to the rules specifically set forth in the statute, the three state agencies involved in cannabis licensing have discretion to apply the law through more detailed regulation. Although, as of August 2018, these regulations have not been finalized, temporary measures are in effect and proposed regulations have been published, placing limitations on everything from hours of operation (currently 6:00 am to 10:00 pm) to how many grams of concentrate a customer can by in a day (currently 8).

 

Knowmad Law advises businesses in a variety of industries on regulatory compliance. If you have questions about how to make sure your your smoke shop is up to snuff, drop us a line at info@knowmad.law or give us a call at 831-275-1401.

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