Legal Alerts Sep 27, 2017

CEQA Compliance for Commercial Cannabis Business Licensing under MAUCRSA

Proposal Open to Comments

CEQA Compliance for Commercial Cannabis Business Licensing under MAUCRSA

The Bureau of Cannabis Control proposes to adopt a Negative Declaration related to its regulatory licensing and enforcement program for commercial cannabis distributors, retailers, testing laboratories, and microbusinesses under the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA). The document, prepared under the California Environmental Quality Act, is available for public comment until Oct. 6 at 5 p.m.
MAUCRSA, passed in June 2017 as a budget trailer bill (Senate Bill 94), integrated the Medical Cannabis Regulation and Safety Act (MCRSA) and the Adult Use of Marijuana Act (AUMA), resulting in one regulatory system for California’s cannabis businesses. The Bureau will begin issuing licenses on Jan. 1. The California Department of Food and Agriculture is responsible for licensing for commercial cannabis cultivation, while the California Department of Public Health has licensing authority for commercial cannabis manufacturers.
The Bureau is no longer pursuing proposed regulations under MCRSA, published earlier this year, and instead intends to adopt emergency regulations for medicinal and adult-use commercial cannabis business licensing under MAUCRSA. The regulations will include, for example, a “trace and track” system for reporting the movement of cannabis product throughout the distribution chain. The Bureau has concluded the proposed program would not result in any significant effects on the environment and no mitigation is required.
Recognizing the efforts of local governments to adopt cannabis business ordinances, including zoning and land use requirements, the Negative Declaration and accompanying Initial Study may be used by cities and counties “to support their issuance of permits or approvals in relation to cannabis business activities or other aspects of cannabis licensing.” MAUCRSA requires local standards to be at least as protective as those of the proposed program when it comes to licensing.
Notably, the Bureau states that its MAUCRSA regulations will exclude site development activities and that the determination of potential environmental impacts in areas such as aesthetics, land use, noise, odor, and connections to public utilities will be “most appropriately evaluated at a local and, in some cases, site-specific level.” SB 94 amends the Business and Professions Code to exempt from CEQA review the adoption of an ordinance, rule, or regulation by a local jurisdiction requiring discretionary review and approval of permits and licenses for commercial cannabis activity (until July 1, 2019). But it could also be interpreted to require that such permits and licenses be treated as discretionary actions subject to CEQA.   
For more information on how Best Best & Krieger could assist you with preparation of comments on the Bureau’s Draft Negative Declaration or with CEQA compliance issues related to local agency regulation of cannabis, please contact the author of this Legal Alert listed to the right in the firm’s Environmental Law & Natural Resources practice group, or your BB&K attorney.
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Disclaimer: BB&K Legal Alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.

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