New California Bill Would Allow Cultivators to Sell Cannabis Directly to Consumers

September 29, 2022

By Eric Altstadter

On September 14, 2022, Rep. Jared Huffman (D-CA) introduced new legalization to Congress which would enable cannabis cultivators to sell their products directly to consumers. Titled the Small and Homestead Independent Producers (“SHIP”) Act, the bill aims to keep local and small-family cultivators competitive with growing commercial operations by creating new revenue opportunities both within and, pending federal legalization, across state lines.

Co-sponsored by Rep. Huffman and Rep. Earl Blumenauer (D-OR), this bill will become effective only if cannabis gains legalization at the federal level. Currently, because of cannabis’s classification as a Schedule I Narcotic, the same as heroin or LSD, transport over state lines is barred. This limits cultivators to strictly selling products to in-state dispensaries.

Under the SHIP Act, it is envisioned that the U.S. Postal Service or other commercial interstate carriers could be used to send products from cultivators to their ultimate destination.

The bill defines small cultivators, for this purpose, as those who grow up to one acre of “mature flowering marijuana canopy” for outdoor cultivation, or use up to 22,000 square feet of cannabis canopy using greenhouses or up to 5,000 square feet for indoor cultivation.  From an annual revenue perspective, it also defines small manufacturers as those who produce edibles, concentrates, or tinctures and are generating less than $5 million.

“Too often, the federal government falls behind, and the gears of Congress work too slowly to keep up with the pace of a changing economy,” said Rep. Huffman in a release. “Under my bill, folks in our state will be able to ship their products straight to consumers when the antiquated federal prohibition on cannabis is finally repealed. As large, commercial cannabis operations squeeze out local producers from the market, this legislation is critical for farmers to survive and expand their small businesses. We cannot leave our smallest family-farmers behind under full legalization."

About Eric Altstadter

Eric Altstadter CPA is an Audit Partner and Chair of the firm's Cannabis and Hemp practice with over 30 years of experience working with public companies and privately held businesses