July 2018 Transition Period

What is the transition period?

Until July 1, 2018, state regulators have established a “transition period” during which cannabis products are exempt from certain requirements. The transition period is narrowly defined and applies only to a few issues:

  • Allowing adult-use and medicinal cannabis licensees to do business with each other, regardless of their license designation.
  • Allowing cannabis products to be sold without state-required testing if they are harvested or produced prior to January 1, 2018, and include a sticker clarifying that the product is not tested.
  • Allowing retailers to package loose flower in their inventory.
  • Exemption from many packaging and labeling requirements.
  • Exemption of some manufactured products from limitations on potency.

What’s not covered under the transition period?

State law and regulation include certain policies that will change over time. These policies are sometimes confused with “transition period” deadlines, but they’re distinct and won’t be affected by the July 1 deadline.

  • The collective defense for medicinal cannabis activity, established in 2003 by SB 420, will expire on January 9, 2019. For more information, check out the BCC factsheet on collectives.
  • The ability of licensed businesses to buy from unlicensed businesses is unaffected by the transition period. Since January 1, 2018, licensed businesses have only been legally able to purchase product from other licensed businesses, and that requirement will continue permanently.
  • Annual licensees are required to participate in state track-and-trace (METRC), while temporary licensees are exempt. While the first state annual licenses are likely to be issued around July 1, this is mostly a coincidence, and the July 1 deadline itself doesn’t affect whether track and trace is required.
  • Other state laws or regulations are unaffected by the July 1 deadline.

Will the transition period be extended past July 1?

In June, state regulators decided to allow adult-use and medicinal licensees to conduct business with each other permanently. Other components of the transition period, including exemptions for to testing, packaging, and labeling, will continue to expire after July 1.

How will testing be affected by the end of the transition period?

After July 1, untested product cannot be sold by a licensed retailer under any circumstance.  Products must be tested to the standards in Section 5715 of the BCC’s regulations, which require different testing standards depending on when cannabis is produced.

What standard do products need to be tested to?

Testing requirements vary based on when a product is harvested or manufactured. Products harvested or manufactured between 1/1/2018 and 7/1/2018 are subjected to looser "Phase 1" testing standards, while products harvested or manufactured between 7/1/2018 and 12/31/2018 are accountable to more stringent "Phrase 2" testing standards.

For products harvested or manufactured after January 1, 2018, the date on which the product is tested or sold does not affect which testing requirements it's held to. In other words, cannabis harvested in May 2018 that's tested or sold in August 2018 is accountable to looser "Phase 1" testing standards.

For products harvested or manufactured before January 1, 2018, testing standards are determined based on when a product is collected by the testing lab. Pre-2018 product collected in May 2018 is accountable to "Phase 1" testing standards, while product collected in August 2018 is accountable to "Phase 2" testing standards.

If cannabis was harvested in 2017, and also tested in 2017, does it need to be retested in order to be sold after July 1?

Yes. Testing conducted prior to January 1, 2018, cannot be used to satisfy any state testing requirements because it was not carried out by a licensed lab. From the perspective of state regulators, products tested prior to January 1, 2018 are effectively “untested product” and must be either retested or destroyed following July 1.

What if I have untested product in my inventory after July 1?

Depending on where you are in the supply chain, you may be able to get untested 2017 product tested after July 1 rather than destroying it.

  • Cultivators and manufacturers with untested 2017 product in their inventory may have that product tested after July 1.
  • Distributors may return untested 2017 product to producers for testing if the distributor does not hold title to the product.
  • Distributors that hold title to 2017 product, or retailers holding 2017 product, must destroy it.

The BCC has created a fact sheet with more information.

When does product need to be destroyed?

Untested product that is in the possession of a retailer, or in the possession of a distributor who holds title to the product, is required to be destroyed after July 1. Cannabis products that are not in compliant packaging and labeling must also be destroyed if they’re in the possession of a retailer after July 1.