California Panel Recommends Regulators Relax Rules for Struggling Cannabis Businesses

The California Cannabis Advisory Committee recommended regulatory changes Dec. 9 that would help licensed cannabis businesses compete with the illicit market and face new challenges related to the ongoing COVID-19 pandemic, according to a Los Angeles Times report.

Recommended changes were included in the committee’s annual report, and include eliminating a $5,000 limit on the amount of cannabis that can be transported by delivery vans to make it easier for small businesses to sell different products, as well as pave the way for food and beverages to eventually be served in cannabis lounges, the news outlet reported.

Other recommendations include expanding the activities allowed under the state’s microbusiness licenses to include the processing of cannabis products, as well as allowing the licensees to conduct sales at licensed events, according to the Los Angeles Times. The committee also recommended eliminating a rule that testing facilities can only test cannabis products, as well as allowing companies to hold multiple cultivation licenses to share propagation and processing areas.

When California voters approved adult-use cannabis legalization in 2016, state officials predicted that 6,000 licensed retail stores would eventually set up shop, but currently, only 715 dispensaries and 315 delivery services are licensed in the state, according to the Los Angeles Times.

RELATED: California’s Grim Outlook: Coronavirus Pandemic Expediting the State’s Existing Cannabis Market Failures

Industry stakeholders have said that high taxes, strict regulations and municipal bans on commercial cannabis activity have slowed the market’s growth, the news outlet reported.

The Cannabis Advisory Committee held public hearings throughout 2020 and made 17 total recommendations for improving the state’s cannabis industry, according to the Los Angeles Times. Gov. Gavin Newsom’s administration must now consider the recommendations.