How Questionable Cannabis Regulations Get Made

I’ve been writing about the overregulation and over taxation of the cannabis industry. Regulations are supposed to be used to mitigate actual or potential harm.  Deaths and serious illnesses.  But are the regulations even necessary or are they overkill- something that just imposes an unfair burden on the operator? Do the regulations mitigate anything or are they arbitrary margin destroyers?

Recently California passed a bill – Assembly Bill 2249 (AB 2249), that strengthens state regulations on cannabis packaging, labeling, and advertising to prevent products from appealing to children.

That sounds great!  Protecting children.  Who doesn’t want to protect children? Only monsters. But does AB 2249 protect children? And why did they feel the need to pass it in the first place? Was there a problem they were trying to solve? Or was it arbitrary?  Lets go to the video.

I read the report that this legislation was based on:

https://www.auditor.ca.gov/reports/2024-105/#6ec79e0f-8278-4d77-9874-7e4ec5c4d88f

“Since 2016, there has been a 469 percent increase in the total number of calls to the California Poison Control System related to cannabis ingestion among children age five and younger, from 148 calls in 2016 to 842 calls in 2023”

Let’s just admit that children cannot get into dispensaries.  So this is really about adults that bring home cannabis and don’t store it securely from their children.  Also 842 calls in a state of 40 million means 0% of Californians called.  Not exactly widespread.

My first question would be is how did calls increase 469%?  Something sounds off if calls increased that much.  Guess what? I dug into all the data, so you didn’t have to.  And it is as bad as you would suspect.

First issue, from the report, buried deep in the notes: “In 2016, only dried plant, edible preparation, and unknown or other mode data were available. Starting in 2017, other modes were added.”

So part of the spike is just because they changed their methodology to include new items that they didn’t count in 2016.  Bogus.

Speaking of 2016, what happened that year? Adult use was legalized in CA (Prop 64).  Another thing that happened is that CA passed a new Child Welfare Law that treats cannabis use by parents just like alcohol and legally prescribed medication.  This reduced the fear of parents that they would lose their kids because of their cannabis use. So that might also be a cause of why calls increased.  Adults felt more comfortable admitting they consumed cannabis.

But the most egregious error in their methodology is with their study on packaging they claim appeals to children.  The study was the reason why they passed this law.  I read the study.  Here is the link:

https://www.tandfonline.com/doi/full/10.1080/10826084.2022.2069268

Here is what their “research” is based on.

Abstract

Background

There is a lack of consistent regulation of cannabis edibles packaging to restrict youth-appealing content in the United States.

Objective

To describe content appealing to youth on U.S. cannabis-infused edibles packaging.

Methods

“We analyzed 256 photos of cannabis-infused edibles packaging collected from U.S. adults from 25 states, District of Columbia, and Puerto Rico between May 2020 to August 2021. We coded the presence of product knockoffs, human and non-human creatures, images indicating flavor, text indicating flavor, and the number of colors. We compared these codes across states’ legalization status (medical and non-medical cannabis, medical cannabis only, or limited cannabis legalization).”


Do you see the issue here?  They claim that they passed the law because packaging makes children want to consume cannabis and that has resulted in a spike of calls to CA Poison Control.  The second part of this argument has been shown to be bogus numbers.  What about the first part of the claim?  Did they prove that the packaging is attractive to kids? Well, did they even ask children? No.  They just randomly picked fruity images and colors and compared them to codes and then declared that the spikes were related to cannabis packaging.  But how do you prove that packaging is attractive to children, if you don’t even ask them?  The study doesn’t prove what it says it proves.  If Nike or Kellogg did market research on their products, they would bring the children in and ask them questions and film their reaction. The DCC research did neither.  So their conclusions are bogus. This new law is going to cost operators money to comply, but there is no evidence that the law will protect children, or that there was a widespread problem in the first place.

But they are not finished doing the damage. They also believe strain names should be changed as well, because those appeal to children. 


From the report: “DCC’s Regulations Do Not Adequately Prohibit Flavors nor Strain Names Attractive to Children in Cannabis Inhalant Packaging”

https://www.auditor.ca.gov/reports/2024-105/

Do they have any evidence that certain strain names appeal to children?  I haven’t seen any.  They just make an assertion, hope that nobody will notice, or dig into the data and then pass laws that create an undue burden on cannabis operators.  No other industry is regulated this way. I think the regulators really DO believe that they are protecting children, but they are going about it the wrong way. 

The bill’s main sponsor, Jacqui Irwin, doesn’t seem to really like cannabis being fully legal.  So she is doing her part to make it as hard as possible on cannabis operators to make a profit. She also wants to ban billboards too and was behind the vape ban.  Did she vote to curb alcohol advertisements? Lolz, no.  Has she voted to solve an actual problem instead of imaginary ones? No.  Here is her record on cannabis:

https://vote.norml.org/politicians/70919

Does she want CA cannabis operators to thrive.  I don’t think so.  She seems to want to crush them with more useless, unscientific regulations.

Meanwhile, the alcohol industry somehow doesn’t have these issues even though 2,200 Americans die annually from alcohol poisoning. As in the cover picture above, there are colors, fruits, and even pirates! I hear children love pirates. Why the discrepancy?”


Keith Domingo

Prior to starting up cuetip, Keith worked in Finance at Tech and Gaming organizations such as Oracle, Activision, eHarmony, and Riot Games. He also was in the Mergers and Acquisition space with VCA and Greenstar North America, where he managed buy and sell-side deals. Keith has a BS in Economics from University of Florida, an MBA from Rice University, and serves on the Board of Satsong. In his new role, he is saving the world from bad cannabis decisions. He loves the ocean and is currently living the California Dream.

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