For a state that took 22 years to get from medical marijuana legalization to recreational adult-use sales, California is making significant strides with the state’s cannabis industry. On Sept. 29, California Governor Gavin Newsom (D) signed several cannabis-related bills into law. This is effectively paving the way for much-anticipated (and sorely needed) banking and financial services. However, before we get too jubilant, the governor noted that proposals that would effectively overhaul the state’s regulatory structure will be on the back burner until 2021. But the big one starts with a B. And it’s something that industry players have been clamoring for across the country.
One of the most impactful changes to the industry includes revisions to banking. Gov. Newsom signed AB 1525, which effectively takes away any state penalties that might be assessed against banks working with cannabis clientele. This aligns with the democrats in Congress, who have been working tirelessly to take away nonsensical barriers to business (specifically federal financial services). Most legislation proposed recently includes cannabis banking provisions and protections. These efforts have generally been squashed by Senate Republicans. “This bill has the potential to increase the provisions of financial services to the legal cannabis industry,” Newsom wrote in a signing statement, “and for that reason, I support it.”
On the topic of money and banking, there’s more. Earlier in the month, Newsom signed into law AB 1872. This measure is intended to give cannabis businesses in the state some stability. It freezes state cannabis cultivation and excise taxes for all of 2021. That’s a big deal in a state where taxes on cannabis are just about the country’s highest. Newsom needs tax revenue from the cannabis industry for years to come. This move means that more businesses will weather the pandemic and economic bumps in the future.
That’s not all. You know how vintners talk about ‘terroir’ when they discuss winegrowing regions? Governor Newsom signed another bill (SB67) that effectively creates a cannabis appellation program, which would help direct where cannabis is grown and how those environments can affect the plants. Now here’s where it gets interesting, ala Champagne or Burgundy: under this new law, cultivators (and processors, too) aren’t allowed to use the name of the city or designated region when marketing their product unless all — yes, all — of the product is grown in that region. Outdoor growers will capitalize on their own unique combination of sun, soil properties, and the environment. Indoor growers will be able to participate, too, representing their region by their product offerings.
All of the bills signed by Newsom had the support of California’s leading cannabis trade group, the California Cannabis Industry Association (CCIA).