DISTRIBUTION UNDER MEDICINAL & ADULT-USE CANNABIS REGULATIONS

The distribution and transportation of cannabis goods in the state of California between cultivator, manufacturer and retainer is through a licensed Distributor.  A cultivator / manufacturer / retailer may self-distribute under a separate distribution license or use a Distributor licensee who acts as a distributor for multiple licensees.  A Distributor may purchase cannabis goods wholesale and sell directly to a manufacturer or retailer. A Distributor may take title to and possession of cannabis after harvest but prior to manufacturing. A distributor may sell the cannabis to a manufacturer or enter into a contract with a manufacturer for manufacturing the cannabis into medical cannabis products.  No consignment of cannabis goods is allowed.  Once cannabis goods are received by a dispensary, a distributor shall not maintain title after transfer of the cannabis goods to the dispensary.  A distributor licensee may also sell cannabis goods to another distributor licensee.

A licensee is not required to sell cannabis or cannabis products to a distributor and may directly contract for sale with a licensee authorized to sell cannabis and cannabis products to purchasers.  A Cultivator and/or a Manufacturer may directly contract with a Retailer or with each other for wholesale transactions of cannabis and cannabis products which must be exchanged / transported through a licensed Distributor.  A distributor performing services may collect a fee from the licensee for the services provided. The fee may include, but is not limited to, the costs incurred for laboratory testing.

The Distributor can repackage and relabel cannabis flower but not cannabis manufactured goods.  A distributor may package and label cannabis in the form of dried flower on behalf of a cultivator or another distributor or while holding title. A distributor may re-package and re-label cannabis in the form of dried flower on behalf of a cultivator or another distributor or while holding title.  A distributor may have another licensee or nonlicensee package and label on the distributor’s premises. A distributor shall not package, re-package, label, or re-label manufactured cannabis goods.

The Distributor is responsible for collecting the Cultivation tax from the Cultivator at the time possession of cannabis goods is taken.  The Distributor is responsible for working with the Testing Laboratory to obtain a certificate of clearance so that the cannabis goods can enter the retail marketplace.

The Distributor can also act waste the management destroyer of cannabis goods as required by the state regulations for other segments of the industry for compensation.  A distributor may destroy medical cannabis goods on the distributor’s licensed premises, in the manner required by the state regulations, for another licensee. The distributor is requried to enter the destruction occurrence into the track and trace system.

A distributor may provide cannabis goods storage only services to a cultivator, manufacturer, transporter, or other distributor, unrelated to the quality assurance and laboratory testing processes.

 

 

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