§ 5032. Commercial Cannabis Activity Between Licensees
The requirements – transactions among Commercial Licensees
(a) All commercial cannabis activity shall be conducted between licensees. Retail licensees may conduct commercial cannabis activity with customers in accordance with chapter 3 of this division.
(b) Beginning July 1, 2018, A-licensees shall only conduct business with A-licensees and M licenses shall only conduct business with M-licensees, except for testing laboratories.
Proposed Regs. – October 19, 2018
The title of this section has been changed from “Designated M and A Commercial Cannabis Activity” to “Commercial Cannabis Activity” as it has been amended to encompass more than just A-designated and M-designated license activity.
Subsection (a) has been amended to clarify that licensed retailers or licensed microbusinesses authorized to engage in retail sales may conduct commercial cannabis activity in accordance with Chapter 3. This clarification is necessary for consistency of terminology throughout the regulations. This clarification also recognizes that only certain microbusinesses may engage in retail activities. Also, “chapter” was amended to “Chapter” for consistency throughout the regulations.
Subsection (b) was added to the regulations to clarify that commercial cannabis activity can only be engaged in by licensees as required by the Act. It specifies that a licensee shall not conduct commercial cannabis activities on behalf of, at the request of, or pursuant to a contract with an unlicensed person. Subsections (b)(1) through (4) provide examples of prohibited activity to guide licensees. The examples include procuring or purchasing cannabis goods from a licensed cultivator or licensed manufacturer, manufacturing cannabis goods in accordance with the specification of a non-licensee, packaging or labeling cannabis goods under a non-licensee’s brand or specifications, and distributing cannabis goods for a non-licensee. The Bureau has received information that licensees may be engaging in such conduct; therefore, this clarification is necessary to assist licensees with determining what activity is allowed.
Subsection (c) has been renumbered from subsection (b).
Subsections (d) and (e) of this section has been amended to clarify that licensed distributors or licensed microbusinesses authorized to engage in distribution shall only transport and sell cannabis goods designated as “For Medical Use Only,” pursuant to the requirements prescribed by the State Department of Public Health in regulation, to M-designated retailers or M-designated microbusinesses authorized to engage in retail. This clarification is necessary for consistency of terminology throughout the regulations. This clarification also recognizes that only certain microbusinesses may engage in distribution and/or retail activities. These subsections were also renumbered based on other amendments to the section.