It deals a major blow to small craft producers
This past week, the Bureau of Cannabis Control (BCC) published a new Branded Merchandise Fact Sheet that has created some confusion and backlash within California’s cannabis industry. While the document mostly reiterates what is contained in Sections 5000 and 5041.1 which discuss the definition of “branded merchandise” and the process for having branded merch approved by the BCC, it also makes the following claim:
“A licensed retailer may sell their own branded merchandise to retail customers. Retailers are not authorized to sell the branded merchandise of other licensees.”
The second sentence in particular is what has caused the stir. This is because neither the Medicinal and Adult Use Cannabis Regulation and Safety Act (MAUCRSA) nor the BCC’s regulations contain a clear prohibition on licensed retailers selling other licensees’ branded merchandise, as long as the merch is approved by the Bureau. Indeed, this practice is not uncommon at dispensaries across the state. However, the BCC’s interpretation in the recent fact sheet would mean that any operators who are unable to obtain a retail license (which are few and far between in much of California) would not be able to sell their branded merchandise at the very stores that sell their cannabis products, losing out on an important source of direct-to-consumer advertising. This would deal a major blow to small craft producers at the expense of larger, vertically-integrated businesses.
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