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The Perishables Ecosystem –Food, Wine, Cannabis & More

Let Me Stand Next To Your Fire…Sure, Says California

Lara L. Sowinski · April 2020 ·

California Governor Gavin Newsom exempted cannabis businesses that produce, sell and buy marijuana from the state’s “shelter in place” mandate, providing relief to dispensaries and online retailers who are reporting significant sales spikes in the midst of the COVID-19 outbreak.

“The order identifies certain services as essential, including food, prescriptions, and healthcare. These services can continue despite the stay at home order,” according to California’s Bureau of Cannabis Control (BCC) on March 21. “Because cannabis is an essential medicine for many residents, licensees may continue to operate at this time so long as their operations comply with local rules and regulations.”

Distributors that support the state’s cannabis sector also welcomed the exemption.

The BCC issues two types of licenses for cannabis distributors:

  • Type 11 – Cannabis Distributor. Responsible for transporting cannabis goods between licensees, arranging for testing of cannabis goods, and conducting the quality assurance review of cannabis goods to ensure compliance with all packaging and labeling requirements. A licensed distributor may only distribute cannabis goods, cannabis accessories, and licensees’ branded merchandise or promotional materials. The Type 11 license allows the Cannabis Distributor to package, re-package, label, and re-label cannabis for retail sale. Effective January 1, 2020, the state also requires all packages of cannabis goods to be child-resistant until the package is first opened; and be labeled with the statement, “This package is not child-resistant after opening.”
  • Type 13 – Cannabis Distributor, Transport Only. Responsible for transporting cannabis goods between licensees, but may not transport any cannabis goods, except for immature cannabis plants and/or seeds, to a licensed retailer or to the retailer portion of a licensed microbusiness. The Type 13 license prohibits the Cannabis Distributor, Transport Only licensee from engaging in wholesale, destruction, packaging, labeling, or storing cannabis goods; arranging for testing of cannabis goods; or delivering cannabis goods to a customer. 

Meanwhile, other transportation and logistics interests are getting hit hard from the COVID-19 outbreak, including California’s major container ports.

Gene Seroka, executive director of the Port of Los Angeles, said 41 cargo vessels cancelled port calls that were scheduled between mid-February and early April. 

During a port commissioners meeting on March 5, Seroka added that equipment imbalances are getting worse. When vessels skip a port call, that means empty containers aren’t repositioned to exporters who need them, including exporters of perishable food.

Right now, empty containers are starting to build up at the port as well as inland locations, said Seroka. 

All told, the Port of Los Angeles expects to see cargo volumes fall 15 to 17 percent in the first quarter of 2020 compared to the same period last year.

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Filed Under: Cannabis

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I VOTED (for cannabis)

No matter their political stripe, many Americans are in agreement with efforts to legalize recreational and medical cannabis.

On November 3, voters legalized marijuana for adult use in Arizona, Montana, New Jersey and South Dakota. Initiatives to legalize medical cannabis passed in Mississippi and South Dakota. The rapid expansion of legalized cannabis throughout the U.S. has a direct impact on the supply chain.

Let’s start by considering the food supply chain–a valuable case study with COVID-19 as the backdrop. Early on, Americans experienced food shortages at the retail level. Manufacturers and distributors scrambled to realign networks to supply grocery stores where demand was spiking, while shifting away from restaurants and the hospitality sector where demand was tanking. In a matter of months, online shopping and food delivery to consumers’ homes grew dramatically. As a result, the food supply chain is in the midst of reinventing itself.

The cannabis supply chain faces some similar challenges. Most importantly, there’s an opportunity now to learn and adopt best practices from the food and pharmaceutical supply chains with which it shares key commonalities.

What are the risks to the cannabis supply chain? California’s unprecedented fires this year threatened growers throughout the state. How quickly can infrastructure scale-up to meet demand, and at what cost? Commercial and industrial real estate is currently at a premium with the proliferation of e-commerce. What about transportation, distribution and logistics capabilities, including reverse logistics in the case of product recalls? Facilities, equipment, and skilled workers are in high demand, and as competition for these various assets tightens, what does that mean for the entire perishables sector (food, cannabis, wine, beverages, pharma, etc.) that need them? Collaboration and creativity can provide critical solutions across the board.

On a related note, a small handful of American and European companies are in talks with Rwanda now about exporting cannabis to the country to meet rising pharmaceutical demand. Supply Chain Sparrow has previously identified cannabis exports as a massive opportunity for the U.S., which of course, would require legislative changes at the federal level.

Vote. And keep on voting.

Be Brave. Fly Right. And keep in touch at info@scsparrow.com.

Lara L. Sowinski, Executive Editor

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