Cannabis Industry Adapts to New Laws and Regulations in 2023
As we enter 2023, cannabis businesses throughout the United States are adjusting their strategies in response to new laws and regulations that may impact sales and overall operations.
Major changes in 2023 include the expansion of delivery services, the introduction of new packaging and labeling requirements, the launch of loyalty programs, and considerable product discounts.
In California, home to the world’s largest marijuana market, the Department of Cannabis Control and state legislators have approved several business amendments and laws that came into effect in late 2022 or on January 1st.
Key changes in the retail sector include:
- Cannabis delivery vehicles can now carry up to $10,000 worth of product, doubling the previous limit.
- There is no longer a requirement for vehicle inventory to be allocated or pre-purchased, meaning consumers will have more product choices on designated routes, a crucial factor considering California’s traffic issues that slow deliveries and sales.
- All licensed retailers can now offer curbside delivery.
- The responsibility for collecting the 15% excise tax and payment to the state’s Department of Tax and Fee Administration has shifted from cannabis distributors to retailers.
- Hirsh Jain, a California consultant and principal of Los Angeles-based Ananda Strategy, said the delivery regulation changes are the most significant policy development of the year.
Utah’s already restrictive medical marijuana market is likely to face additional retail challenges in the new year. As of January 1st, cannabis product packaging, logos, and brand names must be preapproved by the state’s Department of Agriculture and Food.
In Michigan, the failure of three Republican-sponsored bills aimed at easing regulatory requirements, which had garnered bipartisan support, was a significant setback for the cannabis industry. Democratic Governor Gretchen Whitmer vetoed all three bills, arguing they were “rushed through a lame-duck session,” according to media reports.
In November, the Oregon Liquor and Cannabis Commission adopted several rules aimed at enhancing testing standards and product labeling and packaging.
Fines of up to $500,000 could be levied against marijuana producers if their products pose a threat to public safety, and up to $100,000 if labels contain “untruthful or misleading content.”
Other Markets to Watch
Several states continue to refine their regulations, while others are creating entirely new frameworks. In Colorado, House Bill 1020 would revamp the state’s social equity program. In New York, recreational sales launched in late December, but regulators have yet to finalize several regulatory policies and operational procedures.
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