In order for a business to succeed, it has to create a connection with customers. This is especially true if the product sold is one that customers consume. Think about the importance of tasting rooms for wineries, or of tap rooms for breweries (especially craft brewers). These venues allow customers to connect with a product in a social setting, giving those businesses a valuable marketing platform.
When the California state legislature passed the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), it granted local jurisdictions authority to regulate on-site marijuana consumption for retailers and microbusinesses, and temporary cannabis events. The focus of this post is on temporary events, but first, a quick refresher on the microbusiness license type is in order. A microbusiness is a cannabis licensee that must engage in at least three of the following commercial cannabis activities:
- Cultivation (up to 10,000 square feet);
- Manufacturing (Type 6 only);
- Distribution; or
- Retail.
All three (or four) of the commercial cannabis activities need to take place on the same premises. If a microbusiness chooses to cultivate, manufacture, and conduct sales, it would give that business a great opportunity to directly connect with its customers and tell a story. This is even truer if the local jurisdiction allows for on-site consumption. (For additional information on the microbusiness license type, see my thoughts here for Leafly Magazine.)
Now, back to temporary cannabis events. The Bureau of Cannabis Control (BCC) is the agency in charge of regulating and issuing temporary cannabis event licenses. If done right, participating in a cannabis event is another great way to connect and build up your consumer base and brand. There are a number of regulations that cover what is allowed at temporary cannabis events. Here are just a couple of highlights:
- A temporary cannabis event license can only be issued to a cannabis event organizer.
- A cannabis event organizer licensee is not authorized or licensed to cultivate, distribute, manufacture, or retail cannabis or cannabis products without first obtaining the appropriate licenses or authorizations to engage in such commercial cannabis activities.
- No temporary cannabis event license will be issued for more than 4 days. Temporary cannabis event licenses will not be issued separately for consecutive days for the same event.
- An application for a temporary cannabis event license shall be submitted to the BCC no less than 60 days before the first day of the cannabis event.
- Cannabis sales at the event can only be conducted by a licensed cannabis retailer or microbusiness license holder.
- Cannabis goods sold on site must be transported to the site by a licensed cannabis distributor.
- Cannabis consumption is allowed but access to the consumption area shall be restricted to persons 21 years of age or older.
- All cannabis goods at a cannabis event shall be in compliance with the state’s testing, labeling, packaging, and track and trace requirements.
- Sale or consumption of alcohol or tobacco shall not be allowed on the premises.
What I didn’t mention is where these cannabis special events can take place. Under MAUCRSA, cannabis special events can only take place at a county fair or district agricultural association event. Restricting cannabis events to these locales eliminates California’s largest cities from hosting them. State Assemblyman Bill Quirk is seeking to rectify this through Assembly Bill 2020 (AB 2020). This bill was introduced last week and its most important provision can be found in Section 26200 (a)(1)(e), which provides:
“This division does not prohibit the issuance of a state temporary event license to a licensee authorizing onsite cannabis sales to, and consumption by, persons 21 years of age or older at a county fair or fair event, district agricultural association event, or at another venue expressly approved by a local jurisdiction for the purpose of holding temporary events of this nature, provided that the activities, at a minimum, comply with the requirements of paragraphs (1) to (3), inclusive, of subdivision (g), that all participants are licensed under this division, and that the activities are otherwise consistent with regulations promulgated and adopted by the bureau governing state temporary event licenses. These temporary event licenses shall only be issued in local jurisdictions that authorize such events.”
The goal of AB 2020 is to give ALL local jurisdictions the flexibility to determine when, where, or if they want to hold a cannabis special event within their borders. One of the first supporters of AB 2020 is the city of Oakland, which has shown an interest in adding cannabis sales at its Art and Soul Festival. If Oakland is able to add cannabis to an already popular festival – which might prove difficult, since Art and Soul is an all ages event – other cities are sure to follow.
AB 2020 is eligible to be heard in committee next month. We will be sure to keep you posted on its progress.
