April 19, 2018

In anticipation of this week’s 4/20 festivities, the California Bureau of Cannabis Control (the “Bureau”) issued a warning Tuesday that businesses holding retail licenses to sell cannabis could face strict penalties if they get caught participating in an unlicensed temporary cannabis event.

So, what does the Bureau’s warning mean for the hundreds and thousands of 4/20 events that will be happening across California this weekend? Does this mean that all those events are considered illegal despite the fact that cannabis is now legalized in California?  The answer is – it depends.  Cannabis laws are still uncertain and constantly in flux, and the legal analysis of whether a cannabis event requires a state license is intensively fact-specific.

If you plan on hosting or participating in a 4/20 event this weekend (or a cannabis event of any kind in the future), here is the bare minimum you need to know:

You do not need a cannabis event license for any cannabis event that is private.

BCC regulations generally require that event organizers obtain a state license before cannabis can be sold, served or consumed at an event open to the public. If you plan on doing any of the activities below, then the event is not private and requires a license from the Bureau:

  • Advertising the event to the public (i.e. no strict “invite only” policy or anyone can learn about the event online using a quick Google search)
  • Charging cover, selling tickets or accepting donations
  • Directly or indirectly selling cannabis goods
  • Holding the event on the premises of a licensed cannabis business

Aside from the above activites, private events do not require state licenses of any kind.  Though state cannabis laws do not currently define “private events,” we can use California’s Alcohol Beverage Commission (“ABC”) rules as a guideline.  Thereunder, an event is not required if ALL of the following are true[1]:

  • The event is private, i.e. a bona fide guest list restricts access to invited guests ONLY.
  • There are no direct or indirect sales of cannabis, i.e. no ticket sales, donations, door charges, or weed costs – all cannabis must be complimentary and provided ONLY by the host.
  • The event venue does not require a BCC license or permit, i.e., the venue is not an establishment that regularly sells cannabis such as a dispensary or distributor.

Therefore, if we apply the ABC rules to a private 4/20 party, then you can “serve” your guests for free at a private location without having to obtain a state license. 

What is/is not allowed at a cannabis event open to the public?

  • Only licensed retailers and microbusinesses may sell cannabis goods at a temporary cannabis event. (This means that state-licensed cultivators, manufacturers and distributors will not be allowed to sell products directly to consumers at cannabis events unless they also hold a retailer license.)
  • All cannabis goods must adhere to retailer requirements pertaining to displays, exit packaging, customer returns, and daily sales limits.
  • All cannabis goods must be tested prior to retail sale and must comply with applicable labeling and track and trace requirements.
  • All cannabis goods must be transported to the event site by a licensed distributor.
  • All sales of cannabis goods must be limited to persons age 21+.
  • Onsite consumption of cannabis goods is allowed only if there is no consumption of alcohol or tobacco allowed on the cannabis event premises.
  • Access to the area where cannabis consumption is allowed shall be restricted to persons age 21+ and shall not be visible from any public place or non-age-restricted area.
  • No sales of alcohol or tobacco shall be allowed on a cannabis event premises.
  • No gifting or sampling cannabis allowed, unless it is to a qualified medical patient with a valid identification card issued by the Department of Health & Safety. Note: Some vendors and event organizers may circumvent this rule by selling product “samples” for 1 cent plus tax.
  • Exhibiting plants: This legal analysis is very fact-specific. If you wish to display cannabis plants at your event, it is highly recommended that you contact a legal professional for guidance

Where Can a Public Cannabis Event be Held?

Bummer Alert – For now, cannabis events can only take place at county fairs and district agricultural associations (“DAA’s”), provided that certain other requirements are met.  No other venue is allowed.  (Unfortunately, this means that there won’t be any licensed cannabis events in Los Angeles anytime soon since there are no county fairs or DAA’s located anywhere within the city or county.)

The Bureau also requires that event licensees obtain “written approval from the local jurisdiction authorizing the applicant to engage in onsite cannabis sales to, and onsite consumption by, persons 21 years of age or older at the event.”[2]   This effectively means that locals will have the power to “veto” cannabis events by refusing to provide applicants with the requisite local approval to hold a temporary event.  We saw this most recently with the 4/20 High Times event in San Bernardino where the city council voted 6-0 to decline the company a permit in time to get a state license.

Thus far, the Bureau has issued 47 temporary event licenses throughout California to groups limited to holding events on county fairgrounds that have authorized such events with city approval.  If you are interested in obtaining a cannabis event license, you can locate the application here and contact us if you need further guidance: Cannabis Event Organizer License Application

As with all cannabis legal developments, the state is playing catch up with the industry. In the meantime, the BCC has come out and said emphatically that Prop-215 4/20 events are not allowed. In other words, don’t expect leeway if you’re having an event without a license.

Pending Bills – Looking Ahead

  • Introduced in February, AB 220 would lift the restrictions on the location of temporary cannabis events. If passed, AB 2020 would make it legal to hold cannabis events on all sorts of properties (i.e. not just county fairs or DAA’s), as long as local government approves.
  • AB 2641 is a similar bill – also introduced in February – that would also expand the locations where temporary cannabis events can be held.For instance, AB 2641 would authorize the Bureau to issue a temporary event license for “an event to be held at any other venueexpressly approved by the local jurisdiction.”
  • Additionally, AB 2641 would authorize the Bureau to issue “Temporary Cannabis Retailer” licenses to licensed cultivators and manufacturer, which would allow for “farmer’s market”-type events where growers and manufacturers can have a valuable opportunity to sell their products directly to the consumer.

The potential consequences for throwing an event without a license? Besides fines and a misdemeanor charge, “Any bureau licensee participating in an unlicensed cannabis event may be subject to disciplinary action,” the BCC email warning said, adding that “lawful participation by bureau licensees in any temporary cannabis events that allows sales and/or consumption” requires the issuance of appropriate state licenses.

All that being said – the way to go for 4/20 now seems a private party – (Private) Party On!

[1]California Business & Professions Code (“B&P”) § 2399.1

[2]B&P § 5601(d)(8).

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

Contact one of our cannabis law firm specialists today by phone at 310-912-2960 or online.