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.