California cannabis events
California cannabis events. So far, so good.

In case you missed it, on June 27, 2017, California Governor Jerry Brown signed into law the Medicinal and Adult Use Cannabis Regulation and Safety Act (“MAUCRSA”). MAUCRSA repealed the Medical Cannabis Regulation and Safety Act (“MCRSA”) while consolidating some of the MCRSA’s provisions with the licensing provisions of the Adult Use of Marijuana Act (“AUMA”). Our firm just recently held a webinar on the major changes between the MCRSA and MAUCRSA and what California cannabis businesses can expect from California’s Bureau of Cannabis Control (be sure to check in regularly as we’ll be posting the webinar on our site in the next couple of days). During the webinar we addressed a whole host of questions but due to the number of attendees (nearly 1,500 of you signed up) and the volume of questions, we couldn’t get to all of them. Fret not though my friends, as over the coming days we’ll be answering many of your questions here on the Canna Law Blog. As a matter of fact, how about I start now and discuss a topic on which we received a lot of questions: onsite consumption at cannabis events (where such events have slowly started to fade because of robust state cannabis regulations–see here and here).

The AUMA granted local jurisdictions the authority to decide whether smoking, vaporizing, and ingesting cannabis would be allowed by a retailer or a microbusiness. Ultimately, the ability to provide a unique and personal experience via onsite consumption will enhance California cannabis retailers and microbusinesses abilities to differentiate themselves in the marketplace. Onsite consumption will also prove to be a big advantage for California cannabis businesses bordering Nevada, as state regulators there grapple with the issue of onsite consumption.

The MAUCRSA also built on the AUMA’s concept of onsite consumption by allowing for temporary event licenses for onsite cannabis sales and consumption at district agricultural association events and your local county fair–just when you thought churros couldn’t get any better! Does that sound too good to be true? Well that’s because I haven’t mentioned the following caveats:

  • Only a licensee can receive the temporary event license;
  • Your local jurisdiction has to authorize such events in the first place;
  • Access to the area where cannabis consumption is allowed is restricted to persons 21 years of age and older;
  • Cannabis consumption is not visible from any public place or nonage-restricted area; and
  • Sale or consumption of alcohol or tobacco is not allowed on the premises. Sorry, but no jamming out to Phish with a beer and a pre-roll in your future.

The MAUCRSA also states the activities at such events must be “otherwise consistent with regulations promulgated and adopted by the Bureau [of Cannabis Control] governing state temporary event licenses.” What are these regulations you ask? Unfortunately we won’t know until the Bureau releases them in the fall. Normally we’d look to the draft medical regulations the Bureau released this past April for guidance but those regulations didn’t cover onsite consumption and they only apply to MCRSA (and have been withdrawn because of MAUCRSA). What we do know is there’s a lot of interest in how the Bureau will interpret the definition of premises. Premises is currently defined in the MAUCRSA as follows:

The designated structure or structures and land specified in the application that is owned, leased, or otherwise held under the control of the applicant or licensee where the commercial cannabis activity will be or is conducted. The premises shall be a contiguous area and shall only be occupied by one licensee.

If the area “held under the control of the applicant and licensee” is separate and distinct from the rest of the fairground, will that constitute separate premises and satisfy the alcohol restriction? At most county fairs you’ll find a great selection of local wines and craft beers and that’s not going to be changing any time soon. However we foresee county fairs will not want to miss out on the revenue and foot traffic a well-cultivated list (pun definitely intended) of cannabis businesses can attract.

Will the Bureau propose reasonable regulations (perhaps restricting cannabis consumption to evening hours?) to allow county fairs to provide for reasonable consumption of alcohol and cannabis on county fairgrounds? Will the one licensee restriction apply to temporary events? That seems unlikely, but until the State of California releases its cannabis regulations we won’t know for certain. What we do know is that these temporary event licenses will be a great way for entrepreneurial cannabis businesses to market themselves – let’s just hope the Bureau issues business friendly and reasonable regulations.

 

  • Kris

    This is exciting stuff. I’m curious to see how this will carry over to other states that have recreational marijuana i.e. Nevada. I think that this will allow states to take in additional tax revenue from events, so it should be a no brainier for this to happen. However, how will the federal government respond to this since it is still considered a schedule 1 drug?