HCGA 2020 Cannabis Legislative Recap


HCGA 2020 Cannabis Legislative Recap

After a year of legislative work in California, the deadline for Governor Newsom to sign or veto legislation was today, September 30. On September 29, the Governor made a decision on several cannabis-related bills. Four cannabis-related bills (SB 67, AB 1458, AB 1872, and AB 1525) were signed into law. Another bill (AB 1470) was vetoed by the Governor.

SB 67 (McGuire) – appellations of origin – SIGNED.

HCGA supported and helped drive this bill to reserve appellations of origin specifically for cannabis plants grown in the ground, under full sun, without the use of artificial lights or structures. Setting an in-ground, full-sun baseline for cannabis appellations ensures that appellations are based in the terroir of a region, and that California’s origin regulations will meet established international standards for appellation recognition.


In addition to establishing a terroir baseline for appellations, SB 67 also creates a “city of origin” program, modelled off California’s existing county of origin program, which ensures that cannabis cannot be labeled with the name of a city unless 100% of the cannabis in the product was produced in that city.


Following the signature of SB 67, California cannabis law has now set a new and global precedent-setting bar for the legal protection of origin-based craft agricultural products. The combination of terroir-based appellations of origin, county of origin protections, and city of origin protections creates an integrated legal system that provides all California producers with legal standing to protect and promote origin-based products, establishing a critical tool against the consolidation and commoditization of cannabis.


SB 67’s baseline standard for in-ground, full-sun cannabis cultivation only applies to appellation regions that will be developed by petition process starting on January 1, 2021. All cannabis 100% produced in Humboldt County – regardless of production method – will continue to be able to use the Humboldt County name.

AB 1458 (Quirk) – testing parameters for edibles – SIGNED.

This legislation increases the acceptable testing error for THC per serving in edible products from 10% to 12% until January 1, 2022. In other words, edible products may pass testing if they contain up to 11.2mg THC per serving until January 1, 2022, after which they can pass testing if they contain up to 11.0mg THC per serving.

AB 1872 (trailer bill) – cannabis taxes – SIGNED.

This legislation prevents increases to the cannabis wholesale mark-up tax rate (currently set at 80%) through 2021, and also prevents inflation-adjusted increases in the cannabis cultivation tax through 2021. In January 2020, the California Department of Tax and Fee Administration (CDTFA) adjusted its wholesale mark-up rate from 60% to 80%, effectively increasing taxes on cannabis products. This legislation would prohibit any similar increases for the next year.

AB 1525 (Jones-Sawyer) – cannabis banking – SIGNED.

HCGA joined a coalition of cannabis organizations in opposing this legislation, which enables licensing authorities and state joint powers authorities to share licensing, track-and-trace, and financial information with banks if licensees provide a waiver of confidentiality to that information. HCGA’s opposition was motivated by concerns about data security, confidentiality, and the possibility that banks may “raise the bar” for providing banking services by effectively requiring the disclosure of sensitive data to obtain a bank account.

AB 1525 is complex legislation and HCGA will continue to track its implementation following the Governor’s signature, including how this legislation will impact confidentiality and banking access for cannabis businesses. When signing the legislation, the Governor issued a signing statement where he directed regulatory agencies to develop further regulations to protect licensee’s data and privacy.

AB 1470 (Quirk) – definition of “final form” in testing – VETOED.

The Governor vetoed this legislation, which would have allowed cannabis products to be tested in their unpackaged final form. For example, if this legislation were signed, it would have been possible to test an edible before it’s placed into final packaging.

In the Governor’s veto message, he suggests that issues relating to packaging and packaging waste are better addressed in the regulatory process as part of upcoming proposed agency consolidation.

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The Humboldt County Growers Alliance is a California mutual benefit, not-for-profit, trade association that is funded and owned by, and for its members

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