moss law advises cannabis clients on Medical and adult-use cannabis Regulation and Safety Act compliance.

Medical and Adult-Use Cannabis Regulation and Safety Act

The Medical Cannabis Regulation and Safety Act ("MCRSA") took effect on January 1, 2016.  MCRSA creates a new regulatory framework for the California medical marijuana industry.  MCRSA establishes a system for regulating and reducing the environmental impacts of cultivating marijuana; authorizes state and local tax provisions; institutes standards for packaging, labeling, and testing medical marijuana; creates new classes and categories of medical marijuana licenses for cultivating, manufacturing, testing, distributing, transporting, and dispensing medical marijuana; and creates the Bureau of Medical Cannabis Regulation, which will license and regulate medical marijuana dispensaries, transporters, and distributors. 

*On June 27, 2016, SB 837 renamed MMRSA to the Medical Cannabis Regulation and Safety Act.



The Medical Cannabis Regulation and Safety Act created six classes of licenses divided into twelve license types.  

  • 10 types of Cultivation licenses classified by size, indoor, outdoor, or mixed-light.

  • 2 Manufacturing licenses.

  • 1 Testing license.

  • 2 Dispensary licenses determined by the number of retail sites.

  • 1 Distribution license.

  • 1 Transporter license.

The Medical Cannabis Regulation and Safety Act places limits on vertical integration. A licensee may only hold a state license in two separate classes.  There are some exceptions to this rule. 

prop 64 (The adult use of marijuana act)

Prop 64 limits any advertising or marketing placed in broadcast, cable, radio, print and digital communications to only be displayed where at least 71.6% of the audience is reasonably expected to be 21 years or oder, as determined by reliable, up to date audience composition data. 

*Prop 64 is on the California November 2016 ballot.


Section 2525.5 of the Medical Cannabis Regulation and Safety Act reads:

(a) A person shall not distribute any form of advertising for physician recommendations for medical cannabis in California unless the advertisement bears the following notice to consumers:

NOTICE TO CONSUMERS: The Compassionate Use Act of 1996 ensures that seriously ill Californians have the right to obtain and use cannabis for medical purposes where medical use is deemed appropriate and has been recommended by a physician who has determined that the person’s health would benefit from the use of medical cannabis. Recommendations must come from an attending physician as defined in Section 11362.7 of the Health and Safety Code. Cannabis is a Schedule I drug according to the federal Controlled Substances Act. Activity related to cannabis use is subject to federal prosecution, regardless of the protections provided by state law.

(b) Advertising for attending physician recommendations for medical cannabis shall meet all of the requirements in Section 651. Price advertising shall not be fraudulent, deceitful, or misleading, including statements or advertisements of bait, discounts, premiums, gifts, or statements of a similar nature.

seed to sale tracking 

MCRSA establishes a track and trace program for reporting the movement of medical cannabis items throughout the distribution chain that utilizes a unique identifier, secure packaging, and is capable of providing information that captures:

  • The licensee receiving the product;
  • The transaction date; and
  • The cultivator from which the product originates.

MCRSA also requires an electronic database containing electronic shipping manifests that must include:

  • The quality, or weight, and variety of products shipped and received;
  • the estimated and actual times of departure and arrival;
  • A categorization of the product;
  • The license number and the unique identifier of the product.

operating for-profit  

MCRSA will phase out medical marijuana cooperatives and allow for-profit entities to operate in the medical marijuana space. MCRSA includes corporations, LLCs, and other business entity types in its definition of "person."  A "person" is an eligible applicant for a medical marijuana license.