December 16, 2019

As people prepare for 2020, it’s important to remember that new cannabis laws will go into effect beginning January 1. A couple of notable ones are Jojo’s law (SB 223, authorizes local education authorities to adopt policies that allow a student’s parent or guardian to administer certain types of medical cannabis on school grounds) and AB 404 (allows testing labs to amend a certificate of analysis for minor errors under certain conditions). But right now, since we’re in the middle of the holiday season, let’s dive into some of the details of the Dennis Peron and Brownie Mary Act (SB 34), which focuses on compassionate care.

After two years of work, the Dennis Peron and Brownie Mary Act will soon allow licensees to donate cannabis to medical patients who face challenges accessing their medicine and will exempt these products from the state’s cultivation, excise, and sales and use taxes. It will also allow for the free use of equipment in compliance with any compassionate use program that exists in a local jurisdiction. But who does it include and how will it work?

Under SB 34, cannabis donations may only be provided to medical cannabis patients or their primary caregivers. “Medical cannabis patients” only include an individual with a valid ID card provided by the California Department of Public Health’s Medical Marijuana Identification Card Program, or a qualified patient under Prop 215. The law also requires retailers to meet specific requirements prior to providing the donation:

  1. The licensed retailer must verify that the physician’s recommendation is valid and from a physician in good standing (see the Medical Board of California’s license search to check a physician’s status);
  2. All products must comply with all applicable laws;
  3. Donations must be tracked in the California Cannabis Track and Trace (CCTT) system, Metrc, by both the licensee intending to donate the product, and the licensed retailer that physically provides it to the patient or caregiver;
  4. The number of products donated to a patient in a single day may not exceed the state’s daily possession limits; and,
  5. The donation must be tracked in the retailer’s inventory records and noted in the sales receipt or invoice.

The law is flexible in terms of how the donations can be made. Licensed retailers can provide donations at storefronts or through their delivery services. Alternatively, they can contract with an individual or organization to have them manage donations to qualified recipients on their licensed premises. Licensed cultivators may also donate cannabis to licensed retailers for them to subsequently donate that product to a qualified recipient. Regardless of which licensee sources the product, the one that is physically donating the product to the recipient must certify in writing that the product will be used as intended. If a licensee then does not use a product as intended, they could be liable for the tax payment and other penalties, and their license could be subject to suspension.

While the new law becomes effective on January 1, consumers probably won’t be able to take advantage of it immediately. This because of the requirement that all donations be tracked in CCTT. At the time that this article was written, CalCannabis, the state agency responsible for CCTT, had not yet determined a date for when the system will be updated to track these transactions. The agency also did not respond to requests for information on estimated timing. According to SB 34, they only have until March 1, 2020 to update the system to accommodate the new law. Staff from the office of Senator Wiener, the author of SB 34, stated that CalCannabis contends it will inform licensees throughout the supply chain regarding the implementation timeline and details as soon as they have them. It is definitely worth subscribing to the CalCannabis mailing list if you have not done so already to make sure you stay updated. Can’t wait until the new law is implemented? Senator Wiener’s office encouraged people to take advantage of the existing regulations under the Bureau of Cannabis Control, which allow for donations under certain conditions (see regulation §5411 here), but still require all applicable taxes to be collected on the product.

Finally, it’s important to note that as currently written, this law will not last forever. It is set to expire five years after it is implemented, so people should make sure to take advantage of the program early and do so compliantly. The more people who participate in compassionate care programs in a compliant manner, the more data the state and other stakeholders will have to demonstrate that the law is working as it was intended to and helping those individuals in true need. If convinced, the Legislature could then take action to remove the expiration date of SB 34 so that people can benefit from compassionate care programs in perpetuity.

Disclaimer: This article has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice.