AB 8: Cannabis: cannabinoids: industrial hemp.

22980.6.

(a) A person that is engaged in the business of selling cigarettes or tobacco products in this state shall not possess, store, own, or make a retail sale of cannabis, cannabis products, or a product presumed to be a cannabis product pursuant to subdivision (b), or any regulations promulgated pursuant to that chapter, at any site where cigarettes or tobacco products are stored or sold. A person that violates this subdivision is subject to civil penalties and suspension or revocation of their license pursuant to subdivision (d).

(b) For purposes of this section, it shall be presumed that a product that contains or purports to contain a cannabinoid, including a synthetic cannabinoid, is a cannabis product, regardless of the nature or source of the cannabinoid. This presumption may be rebutted by evidence showing that the product does either of the following:

(1) Complies with Chapter 9 (commencing with Section 111920) of Part 5 of Division 104 of the Health and Safety Code and any regulations promulgated pursuant to that chapter.

(2) Meets the definition of industrial hemp, as that term is defined in Section 11018.5 of the Health and Safety Code.

(c) (1) In addition to the authority provided pursuant to Section 34016 of the Revenue and Taxation Code, upon discovery by the department that any person possesses, stores, owns, or has made a retail sale of cannabis or cannabis products in violation of this section, the department is authorized to seize such products at the person’s location. Any cannabis or cannabis products seized by the department pursuant to this subdivision shall be deemed forfeited and the department shall comply with the procedures set forth in Sections 30436 to 30449, inclusive, of the Revenue and Taxation Code.

(2) Any seizures or penalties authorized pursuant to this section are in addition to any criminal or civil penalties that may be imposed by law.

(d) (1) (A) A first violation of subdivision (a) involving the seizure of cannabis or cannabis products shall be punishable as follows:

(i) Cannabis or cannabis products with an aggregate retail value of less than two hundred dollars ($200) shall be punishable by a civil penalty of one thousand dollars ($1,000).

(ii) Cannabis or cannabis product with an aggregate retail value of two hundred dollars ($200) or more shall be punishable by a civil penalty of two thousand dollars ($2,000).

(B) A second violation of subdivision (a) within five years involving a seizure of cannabis or cannabis products shall be punishable as follows:

(i) Cannabis or cannabis products with an aggregate retail value of less than two hundred dollars ($200) shall be punishable by a civil penalty of two thousand dollars ($2,000) and shall also result in a five-day suspension of the license.

(ii) Cannabis or cannabis product with an aggregate retail value of two hundred dollars ($200) or more shall be punishable by a civil penalty of five thousand dollars ($5,000) and shall result in a 10-day suspension of the license.

(C) A third violation of subdivision (a) within five years involving a seizure of cannabis or cannabis products shall be punishable as follows:

(i) Cannabis or cannabis products with an aggregate retail value of less than two hundred dollars ($200) shall be punishable by a civil penalty of five thousand dollars ($5,000) and shall also result in a revocation of the license.

(ii) Cannabis or cannabis products with an aggregate retail value of two hundred dollars ($200) or more shall be punishable by a civil penalty of ten thousand dollars ($10,000) and shall result in a revocation of the license.

(2) The department shall ascertain as best it may the retail value based on any information within the department’s possession or that may come into its possession of the cannabis or cannabis product.

(3) The department shall issue the civil penalty in accordance with the procedures applicable to the civil penalty authorized under Section 22974.7.

(4) The department shall revoke or suspend the license of a person who violates subdivision (a) in accordance with the procedures set forth in Section 22980.3.

(e) For purposes of this section:

(1) “Cannabis” and “cannabis products” shall have the same meaning as provided in Part 14.5 (commencing with Section 34010) of Division 2 of the Revenue and Taxation Code.

(2) “Cannabinoid” and “synthetic cannabinoid” shall have the same meaning as provided in Division 10 (commencing with Section 26000).

(f) Civil penalties collected pursuant to this section shall be deposited into the Cigarette and Tobacco Products Compliance Fund created pursuant to Section 22990.

26000.5.

Until January 1, 2028, both of the following shall apply:

(a) A licensed manufacturer shall only use cannabinoid concentrates and extracts that are manufactured or processed exclusively from cannabis obtained from a licensed cannabis cultivator.

(b) A licensee shall not possess, transport, distribute, manufacture, or sell industrial hemp on or from a licensed premises, except that a licensed testing laboratory may test industrial hemp.

26001.

For purposes of this division, the following definitions apply:

(a) “A-license” means a state license issued under this division for cannabis or cannabis products that are intended for adults who are 21 years of age and older and who do not possess a physician’s recommendation, or are intended for use on, or consumption by, animals.

(b) “A-licensee” means any person holding a license under this division for cannabis or cannabis products that are intended for adults who are 21 years of age and older and who do not possess a physician’s recommendation, or are intended for use on, or consumption by, animals.

(c) “Animal” does not include a food animal as defined in Section 4825.1 or livestock as defined in Section 14205 of the Food and Agricultural Code.

(d) “Applicant” means an owner applying for a state license pursuant to this division.

(e) “Batch” means a specific quantity of homogeneous cannabis, industrial hemp, or cannabis product that is one of the following types:

(1) “Harvest batch” means a specifically identified quantity of dried flower or trim, leaves, and other plant matter from either cannabis or industrial hemp that is harvested at the same time, and, if applicable, cultivated using the same pesticides and other agricultural chemicals.

(2) “Manufactured cannabis batch” means either of the following:

(A) An amount of cannabis concentrate or extract that is produced in one production cycle using the same extraction methods and standard operating procedures.

(B) An amount of a type of manufactured cannabis produced in one production cycle using the same formulation and standard operating procedures.

(f) “Cannabinoid” means a chemical compound found in cannabis and industrial hemp that binds to or otherwise activates cannabinoid receptors in humans and animals. “Cannabinoid” includes, but is not limited to, tetrahydrocannabinol (THC) and cannabidiol (CBD).

(g) “Cannabis” has the same meaning as in Section 11018 of the Health and Safety Code.

(h) “Cannabis accessories” has the same meaning as in Section 11018.2 of the Health and Safety Code.

(i) “Cannabis beverage” means a form of edible cannabis product that is intended to be consumed in its final state as a beverage.

(j) “Cannabis concentrate” has the same meaning as in Section 11006.5 of the Health and Safety Code.

(k) “Cannabis event organizer” means a person authorized to plan and organize temporary cannabis events as authorized in Section 26200.

(l) “Cannabis products” has the same meaning as in Section 11018.1 of the Health and Safety Code.

(m) “CBD isolate” means a compound extracted from cannabis or industrial hemp consisting of cannabidiol (CAS number 13956-29-1), with a purity level greater than 99 percent and that does not contain any form of tetrahydrocannabinol or synthetic cannabinoid.

(n) “CBN isolate” means a compound extracted from cannabis or industrial hemp consisting of cannabinol (CAS number 521-35-7), with a purity level greater than 99 percent, and that does not contain any form of tetrahydrocannabinol or synthetic cannabinoid.

(o) “Child resistant” means designed or constructed to be significantly difficult for children under five years of age to open, and not difficult for normal adults to use properly.

(p) “Combined activities license” means a state license that authorizes two or more commercial cannabis activities at the same premises, with the exception of laboratory testing. A combined activities license shall conform with all requirements imposed by this division to the extent the licensee engages in those activities.

(q) “Commercial cannabis activity” includes the cultivation of cannabis or the possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery, or sale of cannabis and cannabis products as provided for in this division, or acting as a cannabis event organizer for temporary cannabis events.

(r) “Cultivation” means any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of cannabis.

(s) “Cultivation site” means a location where cannabis is planted, grown, harvested, dried, cured, graded, or trimmed, or a location where any combination of those activities occurs.

(t) “Customer” means a natural person 21 years of age or older or a natural person 18 years of age or older who possesses a physician’s recommendation, or a primary caregiver.

(u) “Daycare center” has the same meaning as in Section 1596.76 of the Health and Safety Code.

(v) “Delivery” means the commercial transfer of cannabis or cannabis products to a customer. “Delivery” also includes the use by a retailer of any technology platform.

(w) “Department” means the Department of Cannabis Control within the Business, Consumer Services, and Housing Agency.

(x) “Director” means the Director of the Department of Cannabis Control.

(y) “Distribution” means the procurement, sale, and transport of cannabis and cannabis products between licensees.

(z) “Distributor” means a licensee that is authorized to engage in the distribution of cannabis, industrial hemp, and cannabis products.

(aa) “Dried flower” means all dead cannabis that has been harvested, dried, cured, or otherwise processed, excluding leaves and stems.

(ab) “Edible cannabis product” means a cannabis product that is intended to be used, in whole or in part, for human or animal consumption, including, but not limited to, chewing gum, but excluding products set forth in Division 15 (commencing with Section 32501) of the Food and Agricultural Code. An edible cannabis product is not considered food, as defined by Section 109935 of the Health and Safety Code, a processed pet food, as defined by Section 113025 of the Health and Safety Code, or a drug, as defined by Section 109925 of the Health and Safety Code.

(ac) “Fund” means the Cannabis Control Fund established pursuant to Section 26210.

(ad) “Industrial hemp” has the same meaning as in Section 11018.5 of the Health and Safety Code.

(ae) “Kind” means applicable type or designation regarding a particular cannabis variant, origin, or product type, including, but not limited to, strain name, trademark, or production area designation.

(af) “Labeling” means any label or other written, printed, or graphic matter upon a cannabis or cannabis product, upon its container or wrapper, or that accompanies any cannabis or cannabis product.

(ag) “Labor peace agreement” means an agreement between a licensee and any bona fide labor organization that, at a minimum, protects the state’s proprietary interests by prohibiting labor organizations and members from engaging in picketing, work stoppages, boycotts, and any other economic interference with the applicant’s business. This agreement means that the applicant has agreed not to disrupt efforts by the bona fide labor organization to communicate with, and attempt to organize and represent, the applicant’s employees. The agreement shall provide a bona fide labor organization access at reasonable times to areas in which the applicant’s employees work, for the purpose of meeting with employees to discuss their right to representation, employment rights under state law, and terms and conditions of employment. This type of agreement shall not mandate a particular method of election or certification of the bona fide labor organization.

(ah) “License” means a state license issued under this division, and includes both an A-license and an M-license, as well as a testing laboratory license.

(ai) “Licensed market” means the California licensed market for cannabis, industrial hemp, and cannabis products that is subject to regulation by this division.

(aj) “Licensee” means any person holding a license under this division, regardless of whether the license held is an A-license or an M-license, and includes the holder of a testing laboratory license.

(ak) “Licensing authority” means the department and any state agency currently or formerly responsible for the issuance, renewal, or reinstatement of the license, or the state agency authorized to take disciplinary action against the licensee.

(al) “Live plants” means living cannabis flowers and plants, including seeds, immature plants, and vegetative stage plants.

(am) “Local jurisdiction” means a city, county, or city and county.

(an) “Lot” means a batch or a specifically identified portion of a batch.

(ao) “M-license” means a state license issued under this division for commercial cannabis activity involving medicinal cannabis.

(ap) “M-licensee” means any person holding a license under this division for commercial cannabis activity involving medicinal cannabis.

(aq) “Manufacture” means to compound, blend, extract, infuse, package, label, or otherwise make or prepare a cannabis product.

(ar) “Medicinal cannabis” or “medicinal cannabis product” means cannabis or a cannabis product, respectively, intended to be sold or donated for use pursuant to the Compassionate Use Act of 1996 (Proposition 215), found in Section 11362.5 of the Health and Safety Code, by a medicinal cannabis patient in California who possesses a physician’s recommendation, or in compliance with any compassionate use, equity, or other similar program administered by a local jurisdiction.

(as) “Microbusiness” means a licensee that is authorized to engage in cultivation of cannabis on an area less than 10,000 square feet and to act as a licensed distributor, Level 1 manufacturer, and retailer under this division, provided such licensee can demonstrate compliance with all requirements imposed by this division on licensed cultivators, distributors, Level 1 manufacturers, and retailers to the extent the licensee engages in such activities.

(at) “Nursery” means a licensee that produces only clones, immature plants, seeds, and other agricultural products used specifically for the propagation and cultivation of cannabis.

(au) “Operation” means any act for which licensure is required under the provisions of this division, or any commercial transfer of cannabis or cannabis products.

(av) “Owner” means any of the following:

(1) A person with an aggregate ownership interest of 20 percent or more in the person applying for a license or a licensee, unless the interest is solely a security, lien, or encumbrance.

(2) The chief executive officer of a nonprofit or other entity.

(3) A member of the board of directors of a nonprofit.

(4) An individual who will be participating in the direction, control, or management of the person applying for a license.

(aw) “Package” means any container or receptacle used for holding cannabis or cannabis products.

(ax) “Person” includes any individual, firm, partnership, joint venture, association, corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit, and the plural as well as the singular.

(ay) “Physician’s recommendation” means a recommendation by a physician and surgeon that a patient use cannabis provided in accordance with the Compassionate Use Act of 1996 (Proposition 215), found at Section 11362.5 of the Health and Safety Code.

(az) “Premises” means the designated structure or structures and land specified in the application that is owned, leased, or otherwise held under the control of the applicant or licensee where the commercial cannabis activity will be or is conducted.

(ba) “Primary caregiver” has the same meaning as in Section 11362.7 of the Health and Safety Code.

(bb) “Processor” means a person authorized to engage in only trimming, drying, curing, grading, packaging, and labeling of cannabis and nonmanufactured cannabis products.

(bc) “Purchaser” means the customer who is engaged in a transaction with a licensee for purposes of obtaining cannabis or cannabis products.

(bd) “Retailer” means a person authorized to engage in the retail sale and delivery of cannabis or cannabis products to customers.

(be) “Sell,” “sale,” and “to sell” include any transaction whereby, for any consideration, title to cannabis or cannabis products is transferred from one person to another, and includes the delivery of cannabis or cannabis products pursuant to an order placed for the purchase of the same and soliciting or receiving an order for the same, but does not include the return of cannabis or cannabis products by a licensee to the licensee from whom the cannabis or cannabis product was purchased.

(bf) “Synthetic cannabinoid” means a cannabinoid or cannabinoid-like compound that is produced by using biosynthesis, bioconversion, or chemical synthesis, reaction, modification, conversion, or a similar process. This includes, but is not limited to, any form of tetrahydrocannabinol that was produced by the conversion of cannabidiol (CBD) (CAS number 13956-29-1), or any other chemical substance identified by the department in regulation. Synthetic cannabinoid does not include any of the following:

(1) A cannabinoid produced by the decarboxylation of acidic phytocannabinoids without the use of chemical reagents or chemical catalysts. This includes, but is not limited to, the conversion of cannabidiolic acid (CBDA) into cannabidiol (CBD) without the use of chemical reagents or catalysts.

(2) A cannabinoid that occurs naturally in the Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis plant that was produced with the use of heat, light, or pressure from other phytocannabinoids, and without the use of any chemical reagents or catalysts. This includes, but is not limited to, the conversion of tetrahydrocannabinol into cannabinol (CBN) with the use of heat, light, or pressure, and without the use of any chemical reagents or catalysts.

(3) Any other chemical substance identified by the department in regulation.

(bg) “Testing laboratory” means a laboratory, facility, or entity in the state that offers or performs tests of cannabis or cannabis products and that is both of the following:

(1) Accredited by an accrediting body that is independent from all other persons involved in commercial cannabis activity in the state.

(2) Licensed by the department.

(bh) “Unique identifier” means an alphanumeric code or designation used in reference to a specific quantity of cannabis or cannabis products that is issued pursuant to the track and trace program established by the department.

(bi) “Youth center” has the same meaning as in Section 11353.1 of the Health and Safety Code.

26002.

(a) This division does not apply to any product containing cannabinoids that has been approved by the federal Food and Drug Administration that has either been placed on a schedule of the federal Controlled Substances Act other than Schedule I or has been exempted from one or more provisions of that act, and that is intended for prescribed use for the treatment of a medical condition.

(b) This division does not apply to activity performed pursuant to a registration with the United States Drug Enforcement Administration pursuant to Part 1318 (commencing with Section 1318.01) of Chapter 2 of Title 21 of the Code of Federal Regulations, as it read on January 19, 2021, provided that the person engaging in the activity provides the licensing authority valid documentation of their registration with the United States Drug Enforcement Administration and the location where the activity will be performed prior to engaging in the activity.

(c) This division does not apply to products that are regulated pursuant to and meet the requirements of the Sherman Food, Drug, and Cosmetic Law (Part 5 (commencing with Section 109875) of Division 104 of the Health and Safety Code), including products that do not contain cannabinoids other than CBD isolate.

(d) This division does not permit the introduction into the licensed market of cannabis concentrate or cannabis products derived in whole or in part from industrial hemp that have been manufactured without a cannabis manufacturing license, as required by this division.

(e) Cannabis concentrates and cannabis products are not considered food, as defined by Section 109935 of the Health and Safety Code, a processed pet food, as defined by Section 113025 of the Health and Safety Code, or a drug, as defined by Section 109925 of the Health and Safety Code.

26015.

(a) The department may make or cause to be made such investigation as it deems necessary to carry out its duties under this division.

(b) The chief of enforcement and all investigators, inspectors, and deputies of the department identified by the director have the authority of peace officers while engaged in exercising the powers granted or performing the duties imposed upon them in enforcing the laws of the state or commencing directly or indirectly any criminal prosecution arising from any investigation conducted under these laws. All persons herein referred to shall be deemed to be acting within the scope of employment with respect to all acts and matters set forth in this section.

(c) The department may employ individuals, who are not peace officers, to provide investigative services.

(d) Notwithstanding any other law, the department may employ peace officers and shall be exempt from the requirements of Section 13540 of the Penal Code.

26031.6.

(a) It is a violation of this division for a person to use or possess the universal symbol described in paragraph (7) of subdivision (c) of Section 26130 in connection with commercial activity other than commercial cannabis activity licensed under this division. For purposes of this section, use or possession of the universal symbol in connection with commercial activity includes, but is not limited to, use or possession of any package, label, or advertisement of any kind bearing the universal symbol, or bearing any likeness, simulation, or any representation substantially similar to the universal symbol, whether or not that package, label, or advertisement is affixed to, or otherwise associated with, cannabis or cannabis products.

(b) A person using or possessing the universal symbol in connection with commercial activity shall do both of the following:

(1) Maintain records establishing that the use or possession is in connection with commercial cannabis activity licensed pursuant to this division.

(2) Produce those records upon demand of a peace officer, an employee of the department, or an employee of the California Department of Tax and Fee Administration.

(c) A person shall not alter or crop the universal symbol except in a manner allowed by this Division or permitted by regulation.

(d) Each individual package, label, advertisement, or other document or object of any kind bearing the universal symbol or any likeness or simulation of the universal symbol in violation of this section shall constitute a separate violation of this section.

(e) (1) A package, label, advertisement, or other document or object of any kind bearing the universal symbol or any likeness or simulation of the universal symbol in violation of this section is contraband and shall be seized and summarily forfeited to the state, and may be summarily destroyed by the state, subject to subdivision (f). A peace officer or an employee of the department may summarily seize such contraband.

(2) Failure to maintain or produce records as required pursuant to subdivision (b) in connection with a package, label, advertisement, or other document or object of any kind bearing the universal symbol shall establish that the package, label, advertisement, or other document or object is contraband for purposes of this subdivision.

(f) A person from whom a package, label, advertisement, or other document or object is seized pursuant to subdivision (e) may petition the superior court of the county in which the seizure occurred within 10 days of the seizure to seek the return of the package, label, advertisement, or other document or object. The petitioner shall bear the burden of proving, by a preponderance of the evidence, that the package, label, advertisement, or other document or object was not used or possessed in connection with commercial activity other than commercial cannabis activity licensed pursuant to this division.

(g) This section does not prohibit the educational, informational, or other noncommercial use or possession of the universal symbol.

26036.

Nothing in this division shall be interpreted to supersede or limit the department or other state and local agencies from exercising their existing enforcement authority, including, but not limited to, under this division, the Fish and Game Code, the Food and Agricultural Code, the Government Code, the Health and Safety Code, the Penal Code, the Public Resources Code, the Water Code, or the application of those laws.

26038.

(a) (1) A person engaging in commercial cannabis activity without a license as required by this division shall be subject to civil penalties of up to three times the amount of the license fee for each violation. Each day of operation shall constitute a separate violation of this section.

(2) (A) A person aiding and abetting unlicensed commercial cannabis activity shall be subject to civil penalties of up to three times the amount of the license fee for each violation, but in no case shall the penalty exceed thirty thousand dollars ($30,000) for each violation. Each day of operation of unlicensed commercial cannabis activity that a person is found to have aided and abetted shall constitute a separate violation of this section.

(B) For the purposes of this section, in order to prove that a person aided and abetted an unlicensed cannabis activity, all of the following shall be demonstrated:

(i) The person was an owner, officer, controlling shareholder, or in a similar position of authority allowing them to make command or control decisions regarding the operations and management of the unlicensed cannabis activity or the property in which the activity is taking place.

(ii) The person had actual knowledge that the cannabis activity was unlicensed and that the cannabis activity required a license.

(iii) The person provided substantial assistance or encouragement to the unlicensed cannabis activity.

(iv) The person’s conduct was a substantial factor in furthering the unlicensed cannabis activity.

(3) (A) A person who has management or control of a commercial property, or a commercial building, room, space, or enclosure, either as an owner, lessee, agent, employee, or mortgagee, who knowingly rents, leases, or makes available for use, with or without compensation, the commercial property, building, room, space, or enclosure for the purpose of the unlicensed commercial cultivation, manufacture, storage, sale, or distribution of cannabis shall be subject to civil penalties of up to ten thousand dollars ($10,000) for each violation. Each day of violation shall constitute a separate violation of this section.

(B) For purposes of this paragraph, in order to prove that a person knowingly rented, leased, or made available the commercial property for unlawful commercial cannabis activity, it shall be demonstrated that the person had actual knowledge that the cannabis-related activity was for commercial purposes, required a license, and was unlicensed. The presence of a lawful amount of cannabis, cannabis products, or cannabis plants, subject to Sections 11362.1 and 11362.45 of the Health and Safety Code, shall not be evidence of actual knowledge.

(4) In assessing a penalty, a court shall give due consideration to the appropriateness of the amount of the civil penalty with respect to factors the court determines to be relevant, including the following:

(A) The gravity of the violation by the licensee or person.

(B) The good faith of the licensee or person.

(C) The licensee’s or person’s history of previous violations.

(D) Whether, and to what extent, the licensee or person profited from the unlicensed cannabis activity.

(5) Cannabis or cannabis products associated with a violation described in this subdivision may be destroyed in accordance with Section 11479 of the Health and Safety Code. The person in violation shall be responsible for the cost of the destruction of cannabis or cannabis products associated with their violation.

(b) An action for civil penalties brought against a person pursuant to this division shall not be commenced unless the action is filed within three years from the date of the violation.

(c) (1) Actions for civil penalties pursuant to paragraph (1) of subdivision (a) may be brought by the Attorney General on behalf of the people, on behalf of the department, or on behalf of the participating agency, or by a city or county counsel or city prosecutor.

(2) Actions for civil penalties pursuant to paragraph (2) of subdivision (a) shall be brought exclusively by the Attorney General on behalf of the people, on behalf of the department, or on behalf of the participating agency, or by a city or county counsel or city prosecutor in a city or county having a population in excess of 750,000.

(3) Actions for civil penalties pursuant to paragraph (3) of subdivision (a) shall be brought exclusively by the Attorney General on behalf of the people, on behalf of the department, or on behalf of the participating agency, or by a city or county counsel, or city prosecutor.

(d) (1) All civil penalties imposed and collected pursuant to this section by a court shall be deposited into the General Fund except as provided in this subdivision.

(2) If an action for civil penalties is brought against a person pursuant to this division by the Attorney General on behalf of the people or on behalf of the department or a participating agency, the penalty shall first be used to reimburse the Attorney General and the department or the participating agency for the costs of investigating and prosecuting the action, including expert fees and reasonable attorney’s fees, with the remainder, if any, to be deposited into the General Fund.

(3) If the action is brought by a county counsel, the penalty shall first be used to reimburse the county counsel for the costs of bringing the action for civil penalties, with one-half of the remainder, if any, to be paid to the treasurer of the county in which the judgment was entered and one-half deposited into the General Fund.

(4) If the action is brought by a city attorney or city prosecutor, the penalty collected shall first be used to reimburse the city attorney or city prosecutor for the costs of bringing the action for civil penalties, with one-half of the remainder, if any, to be paid to the treasurer of the city in which the complaining attorney has jurisdiction and one-half deposited into the General Fund.

(e) Notwithstanding subdivision (a), criminal penalties shall continue to apply to an unlicensed person engaging in commercial cannabis activity in violation of this division.

(f) (1) This section does not limit, preempt, or otherwise affect any other state or local law, rule, regulation, or ordinance applicable to the conduct described in subdivision (a), or otherwise relating to commercial cannabis activities.

(2) This section is meant to further the intent of the Control, Regulate and Tax Adult Use of Marijuana Act of 2016 (AUMA), which allows local governments to reasonably regulate the cultivation of nonmedical cannabis for personal use by adults 21 years of age and older through zoning and other local laws.

26039.4.

A peace officer, including a peace officer with the department, may seize cannabis, industrial hemp, and cannabis products in any of the following circumstances:

(a) The cannabis or cannabis product is subject to recall or embargo by the department.

(b) The cannabis or cannabis product is subject to seizure or destruction pursuant to this division.

(c) The cannabis or cannabis product is seized related to an investigation or disciplinary action for violation of this division.

(d) The industrial hemp or cannabis product is subject to seizure under the Sherman Food, Drug, and Cosmetic Law (Part 5 (commencing with Section 109875) of Division 104 of the Health and Safety Code).

(e) The industrial hemp is in violation of United States Domestic Industrial Hemp Program (7 U.S.C. § 990 et seq.), and, if applicable, the California State Regulatory Plan for Hemp Production (Chapter 8 of Division 4 of Title 3 of the California Code of Regulations), or an applicable tribal plan.

26039.6.

(a) Cannabis or a cannabis product is adulterated if it is any of the following:

(1) It has been produced, prepared, packed, or held under unsanitary conditions in which it may have become contaminated with filth or in which it may have been rendered injurious.

(2) It consists, in whole or in part, of any filthy, putrid, or decomposed substance.

(3) It bears or contains any poisonous or deleterious substance that may render it injurious to users under the conditions of use suggested in the labeling or under conditions that are customary or usual.

(4) It bears or contains a substance that is restricted or limited under this division or regulations promulgated pursuant to this division and the level of substance in the product exceeds the limits specified pursuant to this division or in regulation.

(5) Its concentrations differ from, or its purity or quality is below, that which it is represented to possess.

(6) The methods, facilities, or controls used for its cultivation, manufacture, packing, or holding do not conform to, or are not operated or administered in conformity with, practices established by regulations adopted under this division to ensure that the cannabis or cannabis product meets the requirements of this division as to safety and has the concentrations it purports to have and meets the quality and purity characteristics that it purports or is represented to possess.

(7) Its container is composed, in whole or in part, of any poisonous or deleterious substance that may render the contents injurious to health.

(8) It is a cannabis product and a substance has been mixed or packed with it after testing by a testing laboratory so as to reduce its quality or concentration or if a substance has been substituted, wholly or in part, for the cannabis product.

(b) It is unlawful to cultivate, manufacture, distribute, sell, deliver, hold, or offer for sale cannabis or a cannabis product that is adulterated.

(c) It is unlawful to adulterate cannabis or a cannabis product.

(d) It is unlawful to receive in commerce cannabis or a cannabis product that is adulterated or to distribute, deliver, or proffer for delivery any such cannabis or cannabis product.

26051.5.

(a) An applicant for a state license issued pursuant to this division to conduct commercial cannabis activity, as defined in Section 26001, shall do all of the following:

(1) Except as provided in subparagraph (G), require that each owner, as defined in paragraphs (1) to (3), inclusive, of subdivision (ap) of Section 26001, electronically submit to the Department of Justice fingerprint images and related information required by the Department of Justice for the purpose of obtaining information as to the existence and content of a record of state or federal convictions and state and federal arrests, and also information as to the existence and content of a record of state or federal convictions and arrests for which the Department of Justice establishes that the person is free on bail or on their own recognizance pending trial or appeal.

(A) Notwithstanding any other law, the department may obtain criminal history information from the Department of Justice and the Federal Bureau of Investigation for an applicant or its owners, as defined in paragraphs (1) to (3), inclusive, of subdivision (ap) of Section 26001, for any state license, as described in Section 26050, under this division pursuant to subdivision (u) of Section 11105 of the Penal Code.

(B) When received, the Department of Justice shall transmit fingerprint images and related information received pursuant to this section to the Federal Bureau of Investigation for the purpose of obtaining a federal criminal history records check. The Department of Justice shall review the information returned from the Federal Bureau of Investigation and compile and disseminate a response to the licensing authority.

(C) The Department of Justice shall provide a response to the licensing authority pursuant to paragraph (1) of subdivision (p) of Section 11105 of the Penal Code.

(D) The department shall request from the Department of Justice subsequent notification service, as provided pursuant to Section 11105.2 of the Penal Code, for applicants.

(E) The Department of Justice shall charge the applicant a fee sufficient to cover the reasonable cost of processing the requests described in this paragraph.

(F) Notwithstanding any other law, a licensing authority may request and receive from a local or state agency certified records of all arrests and convictions, certified records regarding probation, and any and all other related documentation needed to complete an applicant or licensee investigation. A local or state agency may provide those records to a licensing authority upon request.

(G) If an owner has previously submitted fingerprint images and related information required by the Department of Justice pursuant to this paragraph in connection with a valid state license issued by a licensing authority, all of the following apply:

(i) The owner shall not be required to submit additional fingerprint images and related information pursuant to this paragraph in connection with a subsequent application for a state license.

(ii) The department shall not consider the owner’s criminal history information obtained from the fingerprint images and related information that were previously submitted pursuant to this paragraph when considering whether to issue a subsequent state license.

(iii) An owner shall not be required to resubmit owner-related information previously provided to the department.

(2) Provide evidence of the legal right to occupy and use the proposed location and provide a statement from the landowner of real property or that landowner’s agent where the commercial cannabis activity will occur, as proof to demonstrate the landowner has acknowledged and consented to permit commercial cannabis activities to be conducted on the property by the tenant applicant.

(3) Provide evidence that the proposed location is in compliance with subdivision (b) of Section 26054.

(4) Provide a statement, signed by the applicant under penalty of perjury, that the information provided is complete, true, and accurate.

(5) (A) (i) For an applicant with 20 or more employees, or an applicant with 10 or more employees that submits an application on or after July 1, 2024, provide a notarized statement that the applicant will enter into, or demonstrate that it has already entered into, and will abide by the terms of a labor peace agreement. On and after July 1, 2024, the department shall not renew a license for a licensee with 10 or more employees unless the licensee provides a statement that the licensee has already entered into and will abide by the terms of a labor peace agreement.

(ii) For an applicant with 10 or more employees but less than 20 employees that has not yet entered into a labor peace agreement, provide a notarized statement as a part of its application indicating that the applicant will enter into and abide by the terms of a labor peace agreement within 60 days of employing its 20th employee, or on or before July 1, 2024, whichever is earlier.

(iii) For an applicant with less than 10 employees that has not yet entered into a labor peace agreement, provide a notarized statement as a part of its application indicating that the applicant will enter into and abide by the terms of a labor peace agreement within 60 days of employing its 10th employee, or on or before July 1, 2024, whichever is later.

(iv) Nothing in this paragraph shall be construed to limit the authority of the department to revoke or suspend a license for a violation of this paragraph.

(B) Compliance with the terms of an applicable labor peace agreement is a condition of licensure. A licensee seeking renewal of any license shall attest to the department that it remains in compliance with the terms of any applicable labor peace agreement.

(C) Any labor organization, or any current or former employee of the relevant licensee, may report to the department that a licensee has failed to provide a truthful attestation of compliance with subparagraph (B).

(i) The reporting party shall provide documentation, in a form and manner required by the department, to substantiate their allegation before the department considers it. The department shall collaborate with such agencies as it deems relevant to evaluate the report.

(ii) If the department substantiates the validity of a report made pursuant to this subparagraph, the department may suspend, revoke, place on probation with terms and conditions, or otherwise discipline the license and fine the licensee.

(D) (i) Any labor organization, or any current or former employee of the relevant licensee, may file a complaint with the Agricultural Labor Relations Board that an organization with which a licensee has entered into a labor peace agreement is not a bona fide labor organization.

(ii) The Agricultural Labor Relations Board shall consider all relevant evidence provided or obtained in rendering a decision on whether the entity is a bona fide labor organization and issue a report with its findings no later than 90 days from receiving the complaint.

(iii) If the Agricultural Labor Relations Board determines that the entity is not a bona fide labor organization, the labor peace agreement shall be null and void. The department shall promptly notify all licensees that have signed labor peace agreements with the entity that the entity was found not to be a bona fide labor organization and offer those licensees a reasonable time period, not to exceed 180 days, to enter into a labor peace agreement with a bona fide labor organization. Failure to enter into a labor peace agreement with a bona fide labor organization after that reasonable time period shall be a violation of this section.

(E) For the purposes of this paragraph, all of the following shall apply:

(i) “Employee” does not include a supervisor.

(ii) “Labor organization” means any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists, in whole or in part, for the purpose of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work for employees.

(iii) “Supervisor” means an individual having authority, in the interest of the applicant, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibility to direct them or to adjust their grievances, or effectively to recommend such action, if, in connection with the foregoing, the exercise of that authority is not of a merely routine or clerical nature, but requires the use of independent judgment.

(6) Provide the applicant’s valid seller’s permit number issued pursuant to Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code or indicate that the applicant is currently applying for a seller’s permit.

(7) Provide any other information required by the department.

(8) For an applicant seeking a cultivation license, provide a statement declaring the applicant is an “agricultural employer,” as defined in the Alatorre-Zenovich-Dunlap-Berman Agricultural Labor Relations Act of 1975 (Part 3.5 (commencing with Section 1140) of Division 2 of the Labor Code), to the extent not prohibited by law.

(9) Pay all applicable fees required for licensure by the department.

(10) Provide proof of a bond to cover the costs of destruction of cannabis or cannabis products if necessitated by a violation of this division. The costs of destruction include, but are not limited to, all administrative, investigatory, and enforcement costs incurred by the department.

(11) (A) Provide a statement, upon initial application and application for renewal, that the applicant employs, or will employ within one year of receiving or renewing a license, one supervisor and one employee who have successfully completed a Division of Occupational Safety and Health 30-hour general industry outreach course offered by a training provider that is authorized by an OSHA Training Institute Education Center to provide the course. This paragraph shall not be construed to alter or amend existing requirements for employers to provide occupational safety and health training to employees.

(B) An applicant with only one employee shall not be subject to subparagraph (A).

(C) For purposes of this paragraph “employee” has the same meaning as provided in subparagraph (B) of paragraph (5) and “supervisor” has the same meaning as provided in subparagraph (C) of paragraph (5).

(b) An applicant shall also include in the application a detailed description of the applicant’s operating procedures for all of the following, as required by the department:

(1) Cultivation.

(2) Extraction and infusion methods.

(3) The transportation process.

(4) Inventory procedures.

(5) Quality control procedures.

(6) Security protocols.

(7) For applicants seeking licensure to cultivate, the source or sources of water the applicant will use for cultivation, as provided in subdivisions (a) to (c), inclusive, of Section 26060.1. For purposes of this paragraph, “cultivation” as used in Section 26060.1 shall have the same meaning as defined in Section 26001. The department shall consult with the State Water Resources Control Board and the Department of Fish and Wildlife in the implementation of this paragraph.

(c) The applicant shall also provide a complete detailed diagram of the proposed premises wherein the license privileges will be exercised, with sufficient particularity to enable ready determination of the bounds of the premises, showing all boundaries, dimensions, entrances and exits, interior partitions, walls, rooms, and common or shared entryways, and include a brief statement or description of the principal activity to be conducted therein, and, for licenses permitting cultivation, measurements of the planned canopy, including aggregate square footage and individual square footage of separate cultivation areas, if any, roads, water crossings, points of diversion, water storage, and all other facilities and infrastructure related to the cultivation.

(d) Provide a complete list of every person with a financial interest in the person applying for the license as required by the department. For purposes of this subdivision, “persons with a financial interest” does not include persons whose only interest in a licensee is an interest in a diversified mutual fund, blind trust, or similar instrument.

26051.5.

(a) An applicant for a state license issued pursuant to this division to conduct commercial cannabis activity, as defined in Section 26001, shall do all of the following:

(1) Except as provided in subparagraph (G), require that each owner, as defined in paragraphs (1) to (3), inclusive, of subdivision (aq) of Section 26001, electronically submit to the Department of Justice fingerprint images and related information required by the Department of Justice for the purpose of obtaining information as to the existence and content of a record of state or federal convictions and state and federal arrests, and also information as to the existence and content of a record of state or federal convictions and arrests for which the Department of Justice establishes that the person is free on bail or on their own recognizance pending trial or appeal.

(A) Notwithstanding any other law, the department may obtain criminal history information from the Department of Justice and the Federal Bureau of Investigation for an applicant or its owners, as defined in paragraphs (1) to (3), inclusive, of subdivision (aq) of Section 26001, for any state license, as described in Section 26050, under this division pursuant to subdivision (u) of Section 11105 of the Penal Code.

(B) When received, the Department of Justice shall transmit fingerprint images and related information received pursuant to this section to the Federal Bureau of Investigation for the purpose of obtaining a federal criminal history records check. The Department of Justice shall review the information returned from the Federal Bureau of Investigation and compile and disseminate a response to the licensing authority.

(C) The Department of Justice shall provide a response to the licensing authority pursuant to paragraph (1) of subdivision (p) of Section 11105 of the Penal Code.

(D) The department shall request from the Department of Justice subsequent notification service, as provided pursuant to Section 11105.2 of the Penal Code, for applicants.

(E) The Department of Justice shall charge the applicant a fee sufficient to cover the reasonable cost of processing the requests described in this paragraph.

(F) Notwithstanding any other law, a licensing authority may request and receive from a local or state agency certified records of all arrests and convictions, certified records regarding probation, and any and all other related documentation needed to complete an applicant or licensee investigation. A local or state agency may provide those records to a licensing authority upon request.

(G) If an owner has previously submitted fingerprint images and related information required by the Department of Justice pursuant to this paragraph in connection with a valid state license issued by a licensing authority, all of the following apply:

(i) The owner shall not be required to submit additional fingerprint images and related information pursuant to this paragraph in connection with a subsequent application for a state license.

(ii) The department shall not consider the owner’s criminal history information obtained from the fingerprint images and related information that were previously submitted pursuant to this paragraph when considering whether to issue a subsequent state license.

(iii) An owner shall not be required to resubmit owner-related information previously provided to the department.

(2) Provide evidence of the legal right to occupy and use the proposed location and provide a statement from the landowner of real property or that landowner’s agent where the commercial cannabis activity will occur, as proof to demonstrate the landowner has acknowledged and consented to permit commercial cannabis activities to be conducted on the property by the tenant applicant.

(3) Provide evidence that the proposed location is in compliance with subdivision (b) of Section 26054.

(4) Provide a statement, signed by the applicant under penalty of perjury, that the information provided is complete, true, and accurate.

(5) (A) (i) For an applicant with 20 or more employees, or an applicant with 10 or more employees that submits an application on or after July 1, 2024, provide a notarized statement that the applicant will enter into, or demonstrate that it has already entered into, and will abide by the terms of a labor peace agreement. On and after July 1, 2024, the department shall not renew a license for a licensee with 10 or more employees unless the licensee provides a statement that the licensee has already entered into and will abide by the terms of a labor peace agreement.

(ii) For an applicant with 10 or more employees but less than 20 employees that has not yet entered into a labor peace agreement, provide a notarized statement as a part of its application indicating that the applicant will enter into and abide by the terms of a labor peace agreement within 60 days of employing its 20th employee, or on or before July 1, 2024, whichever is earlier.

(iii) For an applicant with less than 10 employees that has not yet entered into a labor peace agreement, provide a notarized statement as a part of its application indicating that the applicant will enter into and abide by the terms of a labor peace agreement within 60 days of employing its 10th employee, or on or before July 1, 2024, whichever is later.

(iv) Nothing in this paragraph shall be construed to limit the authority of the department to revoke or suspend a license for a violation of this paragraph.

(B) Compliance with the terms of an applicable labor peace agreement is a condition of licensure. A licensee seeking renewal of any license shall attest to the department that it remains in compliance with the terms of any applicable labor peace agreement.

(C) Any labor organization, or any current or former employee of the relevant licensee, may report to the department that a licensee has failed to provide a truthful attestation of compliance with subparagraph (B).

(i) The reporting party shall provide documentation, in a form and manner required by the department, to substantiate their allegation before the department considers it. The department shall collaborate with such agencies as it deems relevant to evaluate the report.

(ii) If the department substantiates the validity of a report made pursuant to this subparagraph, the department may suspend, revoke, place on probation with terms and conditions, or otherwise discipline the license and fine the licensee.

(D) (i) Any labor organization, or any current or former employee of the relevant licensee, may file a complaint with the Agricultural Labor Relations Board that an organization with which a licensee has entered into a labor peace agreement is not a bona fide labor organization.

(ii) The Agricultural Labor Relations Board shall consider all relevant evidence provided or obtained in rendering a decision on whether the entity is a bona fide labor organization and issue a report with its findings no later than 90 days from receiving the complaint.

(iii) If the Agricultural Labor Relations Board determines that the entity is not a bona fide labor organization, the labor peace agreement shall be null and void. The department shall promptly notify all licensees that have signed labor peace agreements with the entity that the entity was found not to be a bona fide labor organization and offer those licensees a reasonable time period, not to exceed 180 days, to enter into a labor peace agreement with a bona fide labor organization. Failure to enter into a labor peace agreement with a bona fide labor organization after that reasonable time period shall be a violation of this section.

(E) For the purposes of this paragraph, all of the following shall apply:

(i) “Employee” does not include a supervisor.

(ii) “Labor organization” means any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists, in whole or in part, for the purpose of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work for employees.

(iii) “Supervisor” means an individual having authority, in the interest of the applicant, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibility to direct them or to adjust their grievances, or effectively to recommend such action, if, in connection with the foregoing, the exercise of that authority is not of a merely routine or clerical nature, but requires the use of independent judgment.

(6) Provide the applicant’s valid seller’s permit number issued pursuant to Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code or indicate that the applicant is currently applying for a seller’s permit.

(7) Provide any other information required by the department.

(8) For an applicant seeking a cultivation license, provide a statement declaring the applicant is an “agricultural employer,” as defined in the Alatorre-Zenovich-Dunlap-Berman Agricultural Labor Relations Act of 1975 (Part 3.5 (commencing with Section 1140) of Division 2 of the Labor Code), to the extent not prohibited by law.

(9) Pay all applicable fees required for licensure by the department.

(10) Provide proof of a bond to cover the costs of destruction of cannabis or cannabis products if necessitated by a violation of this division. The costs of destruction include, but are not limited to, all administrative, investigatory, and enforcement costs incurred by the department.

(11) (A) Provide a statement, upon initial application and application for renewal, that the applicant employs, or will employ within one year of receiving or renewing a license, one supervisor and one employee who have successfully completed a Division of Occupational Safety and Health 30-hour general industry outreach course offered by a training provider that is authorized by an OSHA Training Institute Education Center to provide the course. This paragraph shall not be construed to alter or amend existing requirements for employers to provide occupational safety and health training to employees.

(B) An applicant with only one employee shall not be subject to subparagraph (A).

(C) For purposes of this paragraph “employee” has the same meaning as provided in clause (i) of subparagraph (E) of paragraph (5) and “supervisor” has the same meaning as provided in clause (iii) of subparagraph (E) of paragraph (5).

(b) An applicant shall also include in the application a detailed description of the applicant’s operating procedures for all of the following, as required by the department:

(1) Cultivation.

(2) Extraction and infusion methods.

(3) The transportation process.

(4) Inventory procedures.

(5) Quality control procedures.

(6) Security protocols.

(7) For applicants seeking licensure to cultivate, the source or sources of water the applicant will use for cultivation, as provided in subdivisions (a) to (c), inclusive, of Section 26060.1. For purposes of this paragraph, “cultivation” as used in Section 26060.1 shall have the same meaning as defined in Section 26001. The department shall consult with the State Water Resources Control Board and the Department of Fish and Wildlife in the implementation of this paragraph.

(c) The applicant shall also provide a complete detailed diagram of the proposed premises wherein the license privileges will be exercised, with sufficient particularity to enable ready determination of the bounds of the premises, showing all boundaries, dimensions, entrances and exits, interior partitions, walls, rooms, and common or shared entryways, and include a brief statement or description of the principal activity to be conducted therein, and, for licenses permitting cultivation, measurements of the planned canopy, including aggregate square footage and individual square footage of separate cultivation areas, if any, roads, water crossings, points of diversion, water storage, and all other facilities and infrastructure related to the cultivation.

(d) Provide a complete list of every person with a financial interest in the person applying for the license as required by the department. For purposes of this subdivision, “persons with a financial interest” does not include persons whose only interest in a licensee is an interest in a diversified mutual fund, blind trust, or similar instrument.

26060.

(a) (1) For the purposes of this division, cannabis is an agricultural product.

(2) In issuing cannabis cultivation licenses, the department shall consider issues, including, but not limited to, water use and environmental impacts. If the State Water Resources Control Board or the Department of Fish and Wildlife finds, based on substantial evidence, that cannabis cultivation is causing significant adverse impacts on the environment in a watershed or other geographic area, the department shall not issue new cultivation licenses or authorize increased production within that watershed or area.

(b) The regulations related to cannabis cultivation shall do all of the following:

(1) Provide that weighing or measuring devices used in connection with the sale or distribution of cannabis are required to meet standards equivalent to Division 5 (commencing with Section 12001).

(2) Require that cannabis cultivation by licensees is conducted in accordance with state and local laws.

(3) Prescribe standards for the reporting of information as necessary related to unique identifiers pursuant to Chapter 6.5 (commencing with Section 26067).

(c) The Department of Pesticide Regulation shall develop guidelines for the use of pesticides in the cultivation of cannabis and residue in harvested cannabis.

(d) A cannabis cultivator shall not use any pesticide that has been banned for use in the state. An industrial hemp cultivator shall not transfer or sell industrial hemp to a licensee if a banned pesticide was used in its cultivation.

(e) The regulations adopted by the department under this division shall implement the requirements of subdivision (b) of Section 26060.1.

(f) The Department of Pesticide Regulation shall require that the application of pesticides or other pest control in connection with the indoor, outdoor, nursery, specialty cottage, or mixed-light cultivation of cannabis complies with Division 6 (commencing with Section 11401) of the Food and Agricultural Code and its implementing regulations.

26067.

(a) The department shall establish a track and trace program for reporting the movement of cannabis, industrial hemp, and cannabis products throughout the distribution chain that utilizes a unique identifier and is capable of providing information that captures, at a minimum, all of the following:

(1) The licensee or industrial hemp cultivator from which the cannabis, industrial hemp, or cannabis product originates and the licensee receiving the cannabis, industrial hemp, or cannabis product.

(2) The transaction date.

(3) The unique identifier or identifiers for the cannabis, industrial hemp, or cannabis product.

(4) The date of retail sale to a customer and whether the sale is conducted on the retail premises or by delivery.

(5) Information relating to cannabis, industrial hemp, or cannabis products leaving the licensed premises in a delivery vehicle as determined by regulations adopted pursuant to subdivision (d) of Section 26068.

(6) The destruction of any cannabis, industrial hemp, or cannabis product.

(b) (1) The department, in consultation with the California Department of Tax and Fee Administration, shall create an electronic database containing the electronic shipping manifests to facilitate the administration of the track and trace program, which shall include, but not be limited to, the following information:

(A) The variety and quantity or weight of cannabis, industrial hemp, or cannabis products shipped.

(B) The estimated times of departure and arrival.

(C) The variety and quantity or weight of cannabis, industrial hemp, or cannabis products received.

(D) The actual time of departure and arrival.

(E) A categorization and the unique identifier of the cannabis, industrial hemp, or cannabis product.

(F) The license number issued by the department for all licensees involved in the shipping process, including, but not limited to, cannabis cultivators, manufacturers, distributors, and retailers.

(2) The database shall be designed to flag irregularities for the department to investigate.

(3) The department and state and local agencies may, at any time, inspect shipments and request documentation for current inventory.

(4) The California Department of Tax and Fee Administration shall have read access to the electronic database for the purpose of taxation and regulation of cannabis and cannabis products.

(5) Information received and contained in records kept by the department for the purposes of administering this chapter are confidential and shall not be disclosed pursuant to the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), except as necessary for authorized employees of the State of California or any city, county, or city and county to perform official duties pursuant to this division or a local ordinance.

(6) Upon the request of a state or local law enforcement agency, the department shall allow access to or provide information contained within the database to assist law enforcement in their duties and responsibilities pursuant to this division.

26067.

(a) The department shall establish a track and trace program for reporting the movement of cannabis, industrial hemp, and cannabis products throughout the distribution chain that utilizes a unique identifier and is capable of providing information that captures, at a minimum, all of the following:

(1) The licensee or industrial hemp cultivator from which the cannabis, industrial hemp, or cannabis product originates and the licensee receiving the cannabis, industrial hemp, or cannabis product.

(2) The transaction date.

(3) The unique identifier or identifiers for the cannabis, industrial hemp, or cannabis product.

(4) The date of retail sale to a customer and whether the sale is conducted on the retail premises or by delivery.

(5) Information relating to cannabis, industrial hemp, or cannabis products leaving the licensed premises in a delivery vehicle as determined by regulations adopted pursuant to subdivision (d) of Section 26068.

(6) The destruction of any cannabis, industrial hemp, or cannabis product.

(b) (1) The department, in consultation with the California Department of Tax and Fee Administration, shall create an electronic system containing the electronic shipping manifests to facilitate the administration of the track and trace program, which shall include, but not be limited to, the following information:

(A) The variety and quantity or weight of cannabis, industrial hemp, or cannabis products shipped.

(B) The estimated times of departure and arrival.

(C) The variety and quantity or weight of cannabis, industrial hemp, or cannabis products received.

(D) The actual time of departure and arrival.

(E) A categorization and the unique identifier of the cannabis, industrial hemp, or cannabis product.

(F) The license number issued by the department for all licensees involved in the shipping process, including, but not limited to, cannabis cultivators, manufacturers, distributors, and retailers.

(2) The electronic system shall be designed to flag irregularities for the department to investigate.

(3) The department and state and local agencies may, at any time, inspect shipments and request documentation for current inventory.

(4) The California Department of Tax and Fee Administration shall have read access to the electronic system for the purpose of taxation and regulation of cannabis and cannabis products.

(5) Information received and contained in records kept by the department for the purposes of administering this chapter are confidential and shall not be disclosed pursuant to the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), except as necessary for authorized employees of the State of California or any city, county, or city and county to perform official duties pursuant to this division or a local ordinance.

(6) Upon the request of a state or local law enforcement agency, the department shall allow access to or provide information contained within the electronic system to assist law enforcement in their duties and responsibilities pursuant to this division.

26068.

(a) The department, in consultation with the California Department of Tax and Fee Administration, shall ensure that the track and trace program can also track and trace the amount of the cultivation tax due pursuant to Part 14.5 (commencing with Section 34010) of Division 2 of the Revenue and Taxation Code. The track and trace program shall include an electronic software tracking system to capture data and track movement of cannabis through the commercial supply chain from cultivation to sale.

(b) The department shall ensure that licensees under this division are allowed to use third-party applications, programs, and information technology systems to comply with the requirements of the expanded track and trace program described in subdivision (a) to report the movement of cannabis and cannabis products throughout the distribution chain and communicate the information to licensing agencies as required by law.

(c) Any software, database, or other information technology system utilized by the department to implement the expanded track and trace program shall support interoperability with third-party cannabis business software applications and allow all licensee-facing system activities to be performed through a secure application programming interface (API) or comparable technology that is well documented, bi-directional, and accessible to any third-party application that has been validated and has appropriate credentials. The API or comparable technology shall have version control and provide adequate notice of updates to third-party applications. The system should provide a test environment for third-party applications to access that mirrors the production environment.

(d) (1) The department shall incorporate delivery into the track and trace program no later than January 1, 2023.

(2) Notwithstanding any other law, provisions related to inclusion of information related to delivery in the track and trace system in Sections 26067 and 26090 shall only become effective after the department incorporates delivery into the track and trace program as required by this subdivision.

(3) Notwithstanding any other law, the department may adopt and readopt emergency regulations to implement this subdivision. The provisions of Section 26013 shall be applicable to emergency regulations adopted or readopted pursuant to this section. The emergency regulations authorized by this paragraph shall be deemed an emergency and necessary for the immediate preservation of public peace, health, safety, or general welfare.

26069.

(a) (1) The department shall implement a unique identification program for cannabis and cannabis products.

(2) The unique identification program shall include the identification of permitted quantities of cannabis plants at a cultivation site during the cultivation period, and the identification of harvest batches and manufactured batches, as required by the department. The unique identifier shall be recorded in a manner as determined by the department by regulation.

(b) Unique identifiers shall only be issued to those persons appropriately licensed by this division.

(c) Information associated with the assigned unique identifier and licensee shall be included in the trace and track program specified in Section 26067.

(d) The department may charge a fee to cover the reasonable costs of issuing the unique identifier and monitoring and tracking the movement of cannabis and cannabis products throughout the distribution chain.

(e) The department shall take adequate steps to establish protections against fraudulent unique identifiers and limit illegal diversion of unique identifiers to unlicensed persons.

(f) A city, county, or city and county may administer unique identifiers and associated identifying information but a city, county, or city and county’s identifiers shall not supplant the department’s track and trace program.

(g) This section does not apply to the cultivation of cannabis in accordance with Section 11362.1 of the Health and Safety Code or the Compassionate Use Act.

26070.

Retailers, Distributors, Microbusinesses, and Combined Activities.

(a) State licenses to be issued by the department related to the sale and distribution of cannabis and cannabis products are as follows:

(1) A retailer shall have a licensed premises which is a physical location from which commercial cannabis activities are conducted. A retailer’s premises may be closed to the public. A retailer may conduct sales exclusively by delivery.

(2) A distributor licensee shall be bonded and insured at a minimum level established by the department.

(3) (A) Microbusiness or combined activities licenses that authorize cultivation of cannabis shall include the license conditions described in subdivision (b) of Section 26060.1.

(B) The department shall establish a process by which an applicant for a microbusiness or combined activities license can demonstrate compliance with all the requirements under this division for the activities that will be conducted under the license.

(b) The department shall establish minimum security and transportation safety requirements for the commercial distribution and delivery of cannabis, industrial hemp, and cannabis products. Except as provided in subdivision (e) of Section 26110, the transportation of cannabis, industrial hemp, and cannabis products shall only be conducted by licensed persons authorized to engage in distribution under this division or employees of those persons. Transportation safety standards established by the department shall include, but not be limited to, minimum standards governing the types of vehicles in which cannabis, industrial hemp, and cannabis products may be distributed and delivered and minimum qualifications for persons eligible to operate such vehicles.

(c) The driver of a vehicle transporting or transferring cannabis, industrial hemp, or cannabis products shall be directly employed by a licensee authorized to transport or transfer cannabis, industrial hemp, or cannabis products.

(d) Notwithstanding any other law, all vehicles transporting cannabis, industrial hemp, and cannabis products for hire shall be required to have a valid motor carrier permit pursuant to Chapter 2 (commencing with Section 34620) of Division 14.85 of the Vehicle Code. The Department of the California Highway Patrol shall have authority over the safe operation of these vehicles, including, but not limited to, requiring licensees engaged in the transportation of cannabis, industrial hemp, or cannabis products to participate in the Basic Inspection of Terminals (BIT) program pursuant to Section 34501.12 of the Vehicle Code.

(e) Prior to transporting cannabis, industrial hemp, or cannabis products, a licensed distributor shall do both of the following:

(1) Complete an electronic shipping manifest as prescribed by the department. The shipping manifest shall include the unique identifier, pursuant to Section 26067, issued by the department for the cannabis, industrial hemp, or cannabis product.

(2) Securely transmit the manifest to the department and the licensee that will receive the cannabis, industrial hemp, or cannabis product.

(f) During transportation, the licensed distributor shall maintain a physical copy of the shipping manifest and make it available upon request to agents of the department and law enforcement officers.

(g) The licensee receiving the shipment shall maintain each electronic shipping manifest and shall make it available upon request to the department and any law enforcement officers.

(h) Upon receipt of the transported shipment, the licensee receiving the shipment shall submit to the department a record verifying receipt of the shipment and the details of the shipment.

(i) Transporting, or arranging for or facilitating the transport of, cannabis, industrial hemp, or cannabis products in violation of this chapter is grounds for disciplinary action against the license.

(j) Licensed retailers, microbusinesses, and combined activities, and licensed nonprofits under Section 26070.5, shall implement security measures reasonably designed to prevent unauthorized entrance into areas containing cannabis, industrial hemp, or cannabis products and theft of cannabis, industrial hemp, or cannabis products from the premises. These security measures shall include, but not be limited to, all of the following:

(1) Prohibiting individuals from remaining on the licensee’s premises if they are not engaging in activity expressly related to the operations of the retailer.

(2) Establishing limited access areas accessible only to authorized personnel.

(3) Other than limited amounts of cannabis or cannabis products used for display purposes, samples, or immediate sale, storing all finished cannabis and cannabis products in a secured and locked room, safe, or vault, and in a manner reasonably designed to prevent diversion, theft, and loss.

(k) A retailer shall notify the department and the appropriate law enforcement authorities within 24 hours after discovering any of the following:

(1) Significant discrepancies identified during inventory. The level of significance shall be determined by the department.

(2) Diversion, theft, loss, or any criminal activity pertaining to the operation of the retailer.

(3) Diversion, theft, loss, or any criminal activity by any agent or employee of the retailer pertaining to the operation of the retailer.

(4) The loss or unauthorized alteration of records related to cannabis, industrial hemp, or cannabis products, registered qualifying patients, primary caregivers, or retailer employees or agents.

(5) Any other breach of security.

26070.2.

A person shall not sell, offer, or provide a product in the state that is any of the following:

(a) An alcoholic beverage that contains cannabinoids, including, but not limited to, an infusion of cannabis or cannabinoids derived from industrial hemp into an alcoholic beverage.

(b) An inhalable cannabis product containing tetrahydrocannabinols derived from industrial hemp.

(c) Hemp flower or a pre-roll that contains hemp flower or hemp-derived cannabinoids, whether infused or not.

(d) A product containing synthetic cannabinoids.

(e) A cannabis product manufactured outside the licensed market.

26080.

(a) Except as provided in this section and in Chapter 25 (commencing with Section 26300), this division does not authorize or permit a licensee to transport or distribute, or cause to be transported or distributed, cannabis or cannabis products outside the state.

(b) A local jurisdiction shall not prevent transportation of cannabis or cannabis products on public roads by a licensee transporting cannabis or cannabis products in compliance with this division.

(c) This division does not prohibit industrial hemp or cannabis products derived exclusively from industrial hemp from either of the following:

(1) Being continuously transported through California without entering the licensed market, provided they are not sold in California.

(2) Being shipped out of California by a licensee.

26100.

(a) Except as otherwise provided by law, cannabis, industrial hemp, or cannabis products shall not be sold pursuant to a license provided for under this division unless a representative sample of the cannabis, industrial hemp, or cannabis products has been tested by a licensed testing laboratory.

(b) Upon entry into the licensed market, industrial hemp shall be held in quarantine by the distributor and tested by a licensed testing laboratory to confirm it meets the definition of industrial hemp contained in Section 26001 before transfer to another licensee or incorporation into a cannabis product. Quarantined plant material that is determined not to be industrial hemp shall be destroyed.

(c) The department shall develop criteria to determine which batches shall be tested. All testing of the samples shall be performed on the final form in which the cannabis or cannabis product will be consumed or used, unless otherwise specified in this division.

(d) Testing of batches to meet the requirements of this division shall only be conducted by a licensed testing laboratory.

(e) For each batch tested, the testing laboratory shall issue a certificate of analysis for selected lots at a frequency determined by the department with supporting data, to report both of the following:

(1) Whether the chemical profile of the sample conforms to the labeled content of compounds, including, but not limited to, all of the following, unless limited through regulation by the department:

(A) Tetrahydrocannabinol (THC).

(B) Tetrahydrocannabinolic Acid (THCA).

(C) Cannabidiol (CBD).

(D) Cannabidiolic Acid (CBDA).

(E) The terpenes required by the department in regulation.

(F) Cannabigerol (CBG).

(G) Cannabinol (CBN).

(H) Other compounds or contaminants required by the department.

(2) That the presence of contaminants does not exceed the levels established by the department. In establishing the levels, the department shall consider the American Herbal Pharmacopoeia monograph, guidelines set by the Department of Pesticide Regulation pursuant to subdivision (c) of Section 26060, and any other relevant sources. For purposes of this paragraph, “contaminants” includes, but is not limited to, all of the following:

(A) Residual solvent or processing chemicals.

(B) Foreign material, including, but not limited to, hair, insects, or similar or related adulterant.

(C) Microbiological impurities as identified by the department in regulation.

(3) For edible cannabis products, that the milligrams per serving of THC does not exceed 10 milligrams per serving, plus or minus 12 percent. After January 1, 2022, the milligrams of THC per serving shall not deviate from 10 milligrams by more than 10 percent.

(4) Notwithstanding paragraph (3), the department shall establish regulations to adjust testing variances for edible cannabis products that include less than five milligrams of THC in total.

(f) A testing laboratory may amend a certificate of analysis to correct minor errors, as defined by the department.

(g) (1) Standards for residual levels of volatile organic compounds shall be established by the department.

(2) On or before January 1, 2023, the department shall establish a standard cannabinoids test method, including standardized operating procedures, that shall be utilized by all testing laboratories. The department may establish more than one method for use by testing laboratories and these standards may be developed through a reference laboratory.

(h) The testing laboratory shall conduct all testing required by this section in a manner consistent with general requirements for the competence of testing and calibrations activities, including sampling and using verified methods.

(i) All testing laboratories performing tests pursuant to this section shall obtain and maintain ISO/IEC 17025 accreditation as required by the department in regulation.

(j) (1) If a test result falls outside the specifications authorized by law or regulation, the testing laboratory shall follow a standard operating procedure to confirm or refute the original result.

(2) If a test result falls outside the specifications authorized by law or regulation, the testing laboratory may retest the sample if both of the following occur:

(A) The testing laboratory notifies the department, in writing, that the test was compromised due to equipment malfunction, staff error, or other circumstances allowed by the department.

(B) The department authorizes the testing laboratory to retest the sample.

(k) A testing laboratory shall destroy the remains of the sample of cannabis, industrial hemp, or cannabis product upon completion of the analysis, as determined by the department through regulations.

(l) Presale inspection, testing transfer, or transportation of cannabis or cannabis products pursuant to this section shall conform to a specified chain of custody protocol and any other requirements imposed under this division.

(m) This division does not prohibit a licensee from performing testing on the licensee’s premises for the purposes of quality control of the product in conjunction with reasonable business operations. This division also does not prohibit a licensee from performing testing on the licensee’s premises of cannabis or cannabis products obtained from another licensee. Onsite testing by the licensee shall not be certified by the department and does not exempt the licensee from the requirements of compliance testing at a testing laboratory pursuant to this section.

26110.

(a) Cannabis and cannabis product batches are subject to quality assurance standards and testing prior to sale at a retailer, microbusiness, or nonprofit licensed under Section 26070.5, except for immature cannabis plants and seeds, as provided for in this division.

(b) A licensee that holds a valid distributor license may act as the distributor for the licensee’s cannabis, industrial hemp, and cannabis products.

(c) The distributor shall store, as determined by the department, the cannabis and cannabis product batches on the premises of the distributor before testing and continuously until either of the following occurs:

(1) The batch passes the testing requirements pursuant to this division and is transported to a licensed retailer or to another licensed distributor.

(2) The batch fails the testing requirements pursuant to this division and is destroyed or transported to a manufacturer for remediation as allowed by the department.

(d) Industrial hemp is subject to quality assurance standards and testing upon entry into the licensed market. The distributor shall store each batch of industrial hemp until either of the following occurs:

(1) The batch passes the testing requirements pursuant to this division and is transported to a licensed manufacturer or to another licensed distributor.

(2) The batch fails the testing requirements pursuant to this division and is destroyed.

(e) The distributor shall arrange for a testing laboratory to obtain a representative sample of each cannabis, industrial hemp, and cannabis product batch at the distributor’s licensed premises. After obtaining the sample, the testing laboratory representative shall maintain custody of the sample and transport it to the testing laboratory.

(f) Upon issuance of a certificate of analysis by the testing laboratory that the cannabis and cannabis product batch has passed the testing requirements pursuant to this division, the distributor shall conduct a quality assurance review before distribution to ensure the labeling and packaging of the cannabis and cannabis products conform to the requirements of this division.

(g) (1) There shall be a quality assurance compliance monitor who is an employee or contractor of the department and who shall not hold a license in any category or own or have an ownership interest in a licensee or the premises of a licensee.

(2) The quality assurance compliance monitor shall conduct random quality assurance reviews at a distributor’s licensed premises before distribution to ensure the labeling and packaging of the cannabis and cannabis products conform to the requirements of this division.

(3) The quality assurance compliance monitor shall have access to all records and test results required of a licensee by law in order to conduct quality assurance analysis and to confirm test results. All records of inspection and verification by the quality assurance compliance monitor shall be provided to the department. Failure to comply shall be noted by the quality assurance compliance monitor for further investigation. Violations shall be reported to the department. The quality assurance compliance monitor shall also verify the tax payments collected and paid under Sections 34011 and 34012 of the Revenue and Taxation Code are accurate. The monitor shall also have access to the inputs and assumptions in the track and trace system and shall be able to verify their accuracy and that they are commensurate with the tax payments.

(h) After testing, all cannabis and cannabis products fit for sale may be transported only from the distributor’s premises to the premises of another licensed distributor for further distribution, or to a licensed retailer, microbusiness, or nonprofit for retail sale.

(i) A licensee is not required to sell cannabis or cannabis products to a distributor and may directly contract for sale with a licensee authorized to sell cannabis and cannabis products to purchasers.

(j) A distributor performing services pursuant to this section may collect a fee from the licensee for the services provided. The fee may include, but is not limited to, the costs incurred for laboratory testing. A distributor may also collect applicable state or local taxes and fees.

(k) This section does not prohibit a licensee from performing testing on the licensee’s premises for the purposes of quality control of the product in conjunction with reasonable business operations. The testing conducted on the licensee’s premises by the licensee does not meet the testing requirements pursuant to this division.

26152.

A person engaged in commercial cannabis activity, whether licensed or unlicensed, shall not do any of the following:

(a) Advertise or market in a manner that is false or untrue in any material particular, or that, irrespective of falsity, directly, or by ambiguity, omission, or inference, or by the addition of irrelevant, scientific, or technical matter, tends to create a misleading impression.

(b) Publish or disseminate advertising or marketing containing any statement concerning a brand or product that is inconsistent with any statement on the labeling thereof.

(c) Publish or disseminate advertising or marketing containing any statement, design, device, or representation which tends to create the impression that the cannabis or industrial hemp originated in a particular place or region, unless the label of the advertised product bears an appellation of origin, and such appellation of origin appears in the advertisement.

(d) Advertise or market on a billboard or similar advertising device located on an interstate highway or on a state highway which crosses the California border.

(e) Advertise or market cannabis or cannabis products in a manner intended to encourage persons under 21 years of age to consume cannabis or cannabis products.

(f) Publish or disseminate advertising or marketing that is attractive to children.

(g) Advertise or market cannabis or cannabis products on an advertising sign within 1,000 feet of a daycare center, school providing instruction in kindergarten or any of grades 1 to 12, inclusive, playground, or youth center.

(h) Publish or disseminate advertising or marketing for unlicensed commercial cannabis activity or for licensed commercial cannabis activity while the licensee’s license is suspended.

26200.

(a) (1) Except as set forth in the Medicinal Cannabis Patients’ Right of Access Act (Chapter 26 (commencing with Section 26320)), this division shall not be interpreted to supersede or limit the authority of a local jurisdiction to adopt and enforce local ordinances to regulate businesses licensed under this division, including, but not limited to, local zoning and land use requirements, business license requirements, and requirements related to reducing exposure to secondhand smoke, or to completely prohibit the establishment or operation of one or more types of businesses licensed under this division within the local jurisdiction.

(2) Except as set forth in the Medicinal Cannabis Patients’ Right of Access Act (Chapter 26 (commencing with Section 26320)), this division shall not be interpreted to supersede or limit existing local authority for law enforcement activity, enforcement of local zoning requirements or local ordinances, or enforcement of local license, permit, or other authorization requirements.

(b) This division shall not be interpreted to require the department to undertake local law enforcement responsibilities, enforce local zoning requirements, or enforce local licensing, permitting, or other authorization requirements.

(c) A local jurisdiction shall notify the department upon revocation of any local license, permit, or authorization for a licensee to engage in commercial cannabis activity within the local jurisdiction. Within 60 days of being so informed, the department shall begin the process to determine whether a license issued to the licensee should be suspended or revoked pursuant to Chapter 3 (commencing with Section 26030).

(d) For facilities issued a state license that are located within the incorporated area of a city, the city shall have full power and authority to enforce this division and the regulations promulgated by the department, if delegated by the state. Notwithstanding Sections 101375, 101400, and 101405 of the Health and Safety Code or any contract entered into pursuant thereto, or any other law, the city shall assume complete responsibility for any regulatory function pursuant to this division within the city limits that would otherwise be performed by the county or any county officer or employee, including a county health officer, without liability, cost, or expense to the county.

(e) (1) This division does not prohibit the issuance of a state temporary event license to a licensee authorizing onsite cannabis sales to, and consumption by, persons 21 years of age or older at a county fair event, district agricultural association event, or at another venue expressly approved by a local jurisdiction for the purpose of holding temporary events of this nature, provided that the activities, at a minimum, comply with all the following:

(A) The requirements of subparagraphs (A) to (C), inclusive, of paragraph (2) of subdivision (g).

(B) All participants who are engaged in the onsite retail sale of cannabis or cannabis products at the event are licensed under this division to engage in that activity.

(C) The activities are otherwise consistent with regulations promulgated and adopted by the department governing state temporary event licenses, except as otherwise provided in paragraphs (6), (7), and (8).

(D) A state temporary event license shall only be issued in local jurisdictions that authorize such events.

(E) A licensee who submits an application for a state temporary event license shall, 60 days before the event, provide to the department a list of all licensees that will be providing onsite sales of cannabis or cannabis products at the event. If any changes occur in that list, the licensee shall provide the department with a final updated list to reflect those changes. A person shall not engage in the onsite retail sale of cannabis or cannabis products, or in any way participate in the event, who is not included in the list, including any updates, provided to the department.

(2) The department may impose a civil penalty on any person who violates this subdivision, or any regulations adopted by the department governing state temporary event licenses, in an amount up to three times the amount of the license fee for each violation, consistent with Sections 26018 and 26038.

(3) The department may require the event and all participants to cease operations without delay if in the opinion of the department or local law enforcement it is necessary to protect the immediate public health and safety of the people of the state. The department may also require the event organizer to immediately expel from the event any participant selling cannabis or cannabis products without a license from the department that authorizes the participant to sell cannabis or cannabis products. If the unlicensed participant does not leave the event, the department may require the event and all participants to cease operations immediately.

(4) The order by the department for the event to cease operations pursuant to paragraph (3) does not entitle the event organizer or any participant in the event to a hearing or an appeal of the decision. Chapter 3 (commencing with Section 490) of Division 1.5 and Chapter 4 (commencing with Section 26040) of this division shall not apply to the order by the department for the event to cease operations pursuant to paragraph (3).

(5) The smoking of cannabis or cannabis products at temporary events authorized pursuant to this subdivision is prohibited in locations where smoking is prohibited. For purposes of this section, “smoking” has the same meaning as defined in subdivision (c) of Section 22950.5.

(6) (A) All licensees who are issued a state temporary event license allowed pursuant to this subdivision may, upon completion or cessation of the temporary event, reconcile unsold inventory of cannabis or cannabis products and return it to the licensee’s retail premises.

(B) All unsold inventory of cannabis or cannabis products from the temporary event shall be noted in track and trace prior to transport.

(C) All unsold inventory of cannabis or cannabis products from the temporary event shall be in its original packaging in which it was placed pursuant to Chapter 12 (commencing with Section 26120).

(7) The inventory of cannabis or cannabis products authorized to be sold by a state temporary event license pursuant to this subdivision shall only be transported to and from the temporary event by a licensed distributor or licensed microbusiness.

(8) The department shall not deny an application for a state temporary event license pursuant to this subdivision solely on the basis that there is a license issued pursuant to the Alcoholic Beverage Control Act (Division 9 (commencing with Section 23000)) for the proposed premises of the event. Furthermore, the Department of Alcoholic Beverage Control shall not take any disciplinary action against a person licensed pursuant to the Alcoholic Beverage Control Act on the basis of a state temporary event license issued by the department to a licensee pursuant to this subdivision that utilizes the same premises as the person licensed pursuant to the Alcoholic Beverage Control Act.

(A) All on- and off-sale privileges of alcoholic beverages at the venue shall be suspended for the day of the event and shall not resume until 6 a.m. on the day after the event has ended.

(B) Alcohol consumption on the venue premises shall be strictly prohibited for the day of the event and shall not resume until 6 a.m. on the day after the event has ended.

(f) This division, or any regulations promulgated thereunder, shall not be deemed to limit the authority or remedies of a city, county, or city and county under any provision of law, including, but not limited to, Section 7 of Article XI of the California Constitution.

(g) (1) Notwithstanding paragraph (1) of subdivision (a) of Section 11362.3 of the Health and Safety Code, if all of the conditions in paragraph (2) are met, a local jurisdiction may allow for any of the following:

(A) Smoking, vaporizing, and ingesting of cannabis or cannabis products on the premises of a retailer or microbusiness licensed under this division that has been granted authority by a local jurisdiction to engage in onsite cannabis consumption.

(B) Preparation or sale of noncannabis food or beverage products in compliance with all applicable provisions of the California Retail Food Code (Chapter 1 (commencing with Section 113700) of Part 7 of Division 104 of the Health and Safety Code) by a retailer or microbusiness licensed under this division in the area where the consumption of cannabis is allowed.

(C) Live musical or other performances on the premises of a retailer or microbusiness licensed under this division in the area where the consumption of cannabis is allowed, and the sale of tickets for those performances.

(2) A local jurisdiction may allow any of the activities provided in paragraph (1) if all of the following conditions are met:

(A) Access to the area where cannabis consumption is allowed is restricted to persons 21 years of age or older and each entrance to the area prominently posts a warning that cannabis consumption, including smoking of cannabis, is permitted inside.

(B) Cannabis consumption is not visible from any public place or nonage-restricted area.

(C) Sale or consumption of alcohol or tobacco is not allowed on the premises.

(D) Noncannabis food or beverage products are not contaminated by or commingled with any cannabis products sold or served on the premises where the consumption of cannabis or cannabis products is allowed.

(E) (i) Smoking or vaporizing of any cannabis or cannabis product by an employee or customer is not allowed in the food preparation, food storage, or warewashing area of a food facility located on the premises.

(ii) For purposes of this subparagraph, the following definitions apply:

(I) “Food facility” has the same meaning as that term is defined in Section 113789 of the Health and Safety Code.

(II) “Warewashing” has the same meaning as that term is defined in Section 113940 of the Health and Safety Code.

(F) The local jurisdiction considers whether to require adequate ventilation and filtration systems.

(i) Ventilation and filtration systems are considered adequate for the purpose of this subparagraph if they prevent smoke and odors from migrating to any other part of the building hosting the consumption lounge or any neighboring building or grounds.

(ii) Nothing in this subparagraph prohibits a local jurisdiction from allowing one or more forms of cannabis consumption on the premises of a retailer or microbusiness licensed under this division, including smoking, vaporizing, and ingesting of cannabis or cannabis products, while prohibiting other forms of cannabis consumption on the premises of a retailer or microbusiness licensed under this division.

(G) (i) Employees are permitted at their discretion and without penalty or sanction to wear a mask for respiration, including N95 and NIOSH N95 rated masks in any area where cannabis is smoked.

(ii) Employers are required to pay for the mask.

(H) When hired, employees who will be working where cannabis or cannabis product are smoked shall be provided in writing the Department of Public Health or its successor’s guidance regarding secondhand cannabis smoke.

(I) A cannabis consumption lounge that offers on-site consumption of cannabis products shall include secondhand smoke in their analysis of potential work hazards for purposes of their injury and illness prevention programs required by Section 3203 of Title 8 of the California Code of Regulations.

(J) Loitering in or around the business is prohibited, and the retailer or microbusiness shall ensure the absence of loitering.

(h) This division shall not be interpreted to supersede Section 6404.5 of the Labor Code.

(i) This section does not alter or affect the prohibition on the sale of alcoholic beverages by a licensee, as provided in Section 26054, on or at a venue premises licensed under this division.

(j) If a retailer or microbusiness license issued under this division is suspended, the licensee shall not engage in activities authorized under subdivision (g) for the duration of the license suspension.

(k) All noncannabis food and beverages present, pursuant to this section, on the premises of a retailer or microbusiness licensed under this division shall be stored and displayed separately and distinctly from all cannabis and cannabis products present on the premises.

(l) Subdivision (g) does not authorize a retailer or microbusiness licensed under this division to prepare or sell industrial hemp or any products containing industrial hemp.

11006.5.

(a) Before January 1, 2026, “concentrated cannabis” means the separated resin, whether crude or purified, obtained from cannabis.

(b) Beginning on January 1, 2026, and until January 1, 2028, “concentrated cannabis” or “cannabis concentrate” means cannabis that has undergone a process to concentrate one or more active cannabinoids, thereby increasing potency, and includes extracts, oils, hash, dab, shatter, rosin, wax, and the separated resin, whether crude or purified.

(c) Beginning on January 1, 2028, the following apply:

(1) “Concentrated cannabis” or “cannabis concentrate” means cannabis or industrial hemp that has undergone a process to concentrate one or more active cannabinoids, thereby increasing potency, and includes extracts, oils, hash, dab, shatter, rosin, wax, and the separated resin, whether crude or purified.

(2) “Cannabis concentrate” does not include CBD isolate, as defined in Section 26001 of the Business and Professions Code.

11018.

“Cannabis” means all parts of the plant Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin from glandular trichomes or extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds or resin. It does not include either of the following:

(a) Industrial hemp, as defined in Section 11018.5.

(b) The weight of any other ingredient combined with cannabis to prepare topical or oral administrations, food, drink, or other product.

11018.1.

(a) “Cannabis products” means a product containing cannabis or cannabis concentrate and includes, but is not limited to, edible, topical, and inhaled products, and products intended for use on, or consumption by, an animal.

(b) It shall be presumed that a product intended for human or animal consumption that contains or purports to contain any tetrahydrocannabinol is a cannabis product, regardless of the nature or source of the cannabinoids. This presumption may be rebutted by evidence showing that the product complies with Chapter 9 (commencing with Section 111920) of Part 5 of Division 104 and any regulations promulgated pursuant to that chapter.

11018.5.

(a) (1) “Industrial hemp” or “hemp” means types of the plant Cannabis sativa Linnaeus or any part of that plant with a total tetrahydrocannabinol concentration of no more than 0.3 percent on a dry weight basis and is limited to only agricultural products, including seeds, propagated plant material, immature or mature plants, harvested plants, mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, or any preparation that does not contain cannabinoids.

(2) Total tetrahydrocannabinol concentration includes both delta-9 tetrahydrocannabinol and tetrahydrocannabinolic acid, and shall be calculated using the following equation: Total THC concentration (mg/g) +/- the measurement of uncertainty, as defined by the Department of Food and Agriculture.

(b) Industrial hemp shall not be subject to the provisions of this division or of Division 10 (commencing with Section 26000) of the Business and Professions Code, except upon entry into the California licensed market under that division, and shall be regulated by the Department of Food and Agriculture in accordance with the provisions of Division 24 (commencing with Section 81000) of the Food and Agricultural Code, inclusive.

(c) The sale or delivery of hemp flower and hemp prerolls within the state is prohibited.

11357.5.

(a) Every person who sells, dispenses, distributes, advertises through labeling or marketing, furnishes, administers, or gives, or offers to sell, dispense, distribute, furnish, administer, or give, or possesses for sale any synthetic cannabinoid compound, or any synthetic cannabinoid derivative, to any person, is guilty of a misdemeanor, punishable by imprisonment in a county jail not to exceed six months, or by a fine not to exceed one thousand dollars ($1,000), or by both that fine and imprisonment.

(b) Every person who uses or possesses any synthetic cannabinoid compound, or any synthetic cannabinoid derivative, is guilty of a public offense, punishable as follows:

(1) A first offense is an infraction punishable by a fine not exceeding two hundred fifty dollars ($250).

(2) A second offense is an infraction punishable by a fine not exceeding two hundred fifty dollars ($250) or a misdemeanor punishable by imprisonment in a county jail not exceeding six months, a fine not exceeding five hundred dollars ($500), or by both that fine and imprisonment.

(3) A third or subsequent offense is a misdemeanor punishable by imprisonment in a county jail not exceeding six months, or by a fine not exceeding one thousand dollars ($1,000), or by both that fine and imprisonment.

(c) As used in this section, the term “synthetic cannabinoid compound” refers to any of the following substances or an analog of any of the following substances:

(1) Adamantoylindoles or adamantoylindazoles, which includes adamantyl carboxamide indoles and adamantyl carboxamide indazoles, or any compound structurally derived from 3-(1-adamantoyl)indole, 3-(1-adamantoyl)indazole, 3-(2-adamantoyl)indole, N-(1-adamantyl)-1H-indole-3-carboxamide, or N-(1-adamantyl)-1H-indazole-3-carboxamide by substitution at the nitrogen atom of the indole or indazole ring with alkyl, haloalkyl, alkenyl, cyanoalkyl, hydroxyalkyl, cycloalkylmethyl, cycloalkylethyl, 1-(N-methyl-2-piperidinyl)methyl, 2-(4-morpholinyl)ethyl, or 1-(N-methyl-2-pyrrolidinyl)methyl, 1-(N-methyl-3-morpholinyl)methyl, or (tetrahydropyran-4-yl)methyl group, whether or not further substituted in the indole or indazole ring to any extent and whether or not substituted in the adamantyl ring to any extent, including, but not limited to, 2NE1, 5F-AKB-48, AB-001, AKB-48, AM-1248, JWH-018 adamantyl carboxamide, STS-135.

(2) Benzoylindoles, which includes any compound structurally derived from a 3-(benzoyl)indole structure with substitution at the nitrogen atom of the indole ring with alkyl, haloalkyl, cyanoalkyl, hydroxyalkyl, alkenyl, cycloalkylmethyl, cycloalkylethyl, 1-(N-methyl-2-piperidinyl)methyl, 2-(4-morpholinyl)ethyl, or 1-(N-methyl-2-pyrrolidinyl)methyl, 1-(N-methyl-3-morpholinyl)methyl, or (tetrahydropyran-4-yl)methyl group, whether or not further substituted in the indole ring to any extent and whether or not substituted in the phenyl ring to any extent, including, but not limited to, AM-630, AM-661, AM-679, AM-694, AM-1241, AM-2233, RCS-4, WIN 48,098 (Pravadoline).

(3) Cyclohexylphenols, which includes any compound structurally derived from 2-(3-hydroxycyclohexyl)phenol by substitution at the 5-position of the phenolic ring by alkyl, haloalkyl, cyanoalkyl, hydroxyalkyl, alkenyl, cycloalkylmethyl, cycloalkylethyl, 1-(N-methyl-2-piperidinyl)methyl, 2-(4-morpholinyl)ethyl, or 1-(N-methyl-2-pyrrolidinyl)methyl, 1-(N-methyl-3-morpholinyl)methyl, or (tetrahydropyran-4-yl)methyl group, whether or not further substituted in the cyclohexyl ring to any extent, including, but not limited to, CP 47,497, CP 55,490, CP 55,940, CP 56,667, cannabicyclohexanol.

(4) Cyclopropanoylindoles, which includes any compound structurally derived from 3-(cyclopropylmethanoyl)indole, 3-(cyclopropylmethanone)indole, 3-(cyclobutylmethanone)indole or 3-(cyclopentylmethanone)indole by substitution at the nitrogen atom of the indole ring, whether or not further substituted in the indole ring to any extent, whether or not substituted on the cyclopropyl, cyclobutyl, or cyclopentyl rings to any extent.

(5) Naphthoylindoles, which includes any compound structurally derived from 3-(1-naphthoyl)indole or 1H-indol-3-yl-(1-naphthyl)methane by substitution at the nitrogen atom of the indole ring by alkyl, haloalkyl, cyanoalkyl, hydroxyalkyl, alkenyl, cycloalkylmethyl, cycloalkylethyl, 1-(N-methyl-2-piperidinyl)methyl, 2-(4-morpholinyl)ethyl group, 1-(N-methyl-2-pyrrolidinyl)methyl, 1-(N-methyl-3-morpholinyl)methyl, or (tetrahydropyran-4-yl)methyl group, whether or not further substituted in the naphthyl ring to any extent, including, but not limited to, AM-678, AM-1220, AM-1221, AM-1235, AM-2201, AM-2232, EAM-2201, JWH-004, JWH-007, JWH-009, JWH-011, JWH-015, JWH-016, JWH-018, JWH-019, JWH-020, JWH-022, JWH-046, JWH-047, JWH-048, JWH-049, JWH-050, JWH-070, JWH-071, JWH-072, JWH-073, JWH-076, JWH-079, JWH-080, JWH-081, JWH-082, JWH-094, JWH-096, JWH-098, JWH-116, JWH-120, JWH-122, JWH-148, JWH-149, JWH-164, JWH-166, JWH-180, JWH-181, JWH-182, JWH-189, JWH-193, JWH-198, JWH-200, JWH-210, JWH-211, JWH-212, JWH-213, JWH-234, JWH-235, JWH-236, JWH-239, JWH-240, JWH-241, JWH-242, JWH-258, JWH-262, JWH-386, JWH-387, JWH-394, JWH-395, JWH-397, JWH-398, JWH-399, JWH-400, JWH-412, JWH-413, JWH-414, JWH-415, JWH-424, MAM-2201, WIN 55,212.

(6) Naphthoylnaphthalenes, which includes any compound structurally derived from naphthalene-1-yl-(naphthalene-1-yl) methanone with substitutions on either of the naphthalene rings to any extent, including, but not limited to, CB-13.

(7) Naphthoylpyrroles, which includes any compound structurally derived from 3-(1-naphthoyl)pyrrole by substitution at the nitrogen atom of the pyrrole ring by alkyl, haloalkyl, cyanoalkyl, hydroxyalkyl, alkenyl, cycloalkylmethyl, cycloalkylethyl, 1-(N-methyl-2-piperidinyl)methyl, 2-(4-morpholinyl)ethyl, or 1-(N-methyl-2-pyrrolidinyl)methyl, 1-(N-methyl-3-morpholinyl)methyl, or (tetrahydropyran-4-yl)methyl group, whether or not further substituted in the pyrrole ring to any extent and whether or not substituted in the naphthyl ring to any extent, including, but not limited to, JWH-030, JWH-031, JWH-145, JWH-146, JWH-147, JWH-150, JWH-156, JWH-243, JWH-244, JWH-245, JWH-246, JWH-292, JWH-293, JWH-307, JWH-308, JWH-309, JWH-346, JWH-348, JWH-363, JWH-364, JWH-365, JWH-367, JWH-368, JWH-369, JWH-370, JWH-371, JWH-373, JWH-392.

(8) Naphthylmethylindenes, which includes any compound containing a naphthylideneindene structure or which is structurally derived from 1-(1-naphthylmethyl)indene with substitution at the 3-position of the indene ring by alkyl, haloalkyl, cyanoalkyl, hydroxyalkyl, alkenyl, cycloalkylmethyl, cycloalkylethyl, 1-(N-methyl-2-piperidinyl)methyl, 2-(4-morpholinyl)ethyl, or 1-(N-methyl-2-pyrrolidinyl)methyl, 1-(N-methyl-3-morpholinyl)methyl, or (tetrahydropyran-4-yl)methyl group, whether or not further substituted in the indene ring to any extent and whether or not substituted in the naphthyl ring to any extent, including, but not limited to, JWH-171, JWH-176, JWH-220.

(9) Naphthylmethylindoles, which includes any compound structurally derived from an H-indol-3-yl-(1-naphthyl) methane by substitution at the nitrogen atom of the indole ring by alkyl, haloalkyl, cyanoalkyl, hydroxyalkyl, alkenyl, cycloalkylmethyl, cycloalkylethyl, 1-(N-methyl-2-piperidinyl)methyl, 2-(4-morpholinyl)ethyl, or 1-(N-methyl-2-pyrrolidinyl)methyl, 1-(N-methyl-3-morpholinyl)methyl, or (tetrahydropyran-4-yl)methyl group, whether or not further substituted in the indole ring to any extent and whether or not substituted in the naphthyl ring to any extent, including, but not limited to, JWH-175, JWH-184, JWH-185, JWH-192, JWH-194, JWH-195, JWH-196, JWH-197, JWH-199.

(10) Phenylacetylindoles, which includes any compound structurally derived from 3-phenylacetylindole by substitution at the nitrogen atom of the indole ring with alkyl, haloalkyl, cyanoalkyl, hydroxyalkyl, alkenyl, cycloalkylmethyl, cycloalkylethyl, 1-(N-methyl-2-piperidinyl)methyl, 2-(4-morpholinyl)ethyl, or 1-(N-methyl-2-pyrrolidinyl)methyl, 1-(N-methyl-3-morpholinyl)methyl, or (tetrahydropyran-4-yl)methyl group, whether or not further substituted in the indole ring to any extent and whether or not substituted in the phenyl ring to any extent, including, but not limited to, cannabipiperidiethanone, JWH-167, JWH-201, JWH-202, JWH-203, JWH-204, JWH-205, JWH-206, JWH-207, JWH-208, JWH-209, JWH-237, JWH-248, JWH-249, JWH-250, JWH-251, JWH-253, JWH-302, JWH-303, JWH-304, JWH-305, JWH-306, JWH-311, JWH-312, JWH-313, JWH-314, JWH-315, JWH-316, RCS-8.

(11) Quinolinylindolecarboxylates, which includes any compound structurally derived from quinolin-8-yl-1H-indole-3-carboxylate by substitution at the nitrogen atom of the indole ring with alkyl, haloalkyl, benzyl, halobenzyl, alkenyl, haloalkenyl, alkoxy, cyanoalkyl, hydroxyalkyl, cycloalkylmethyl, cycloalkylethyl, (N-methylpiperidin-2-yl)alkyl, (4-tetrahydropyran)alkyl, or 2-(4-morpholinyl)alkyl, whether or not further substituted in the indole ring to any extent, whether or not substituted in the quinoline ring to any extent, including, but not limited to, BB-22, 5-Fluoro-PB-22, PB-22.

(12) Tetramethylcyclopropanoylindoles, which includes any compound structurally derived from 3-tetramethylcyclopropanoylindole, 3-(1-tetramethylcyclopropyl)indole, 3-(2,2,3,3-tetramethylcyclopropyl)indole or 3-(2,2,3,3-tetramethylcyclopropylcarbonyl)indole with substitution at the nitrogen atom of the indole ring by an alkyl, haloalkyl, cyanoalkyl, hydroxyalkyl, alkenyl, cycloalkylmethyl, cycloalkylethyl, 1-(N-methyl-2-piperidinyl)methyl, 2-(4-morpholinyl)ethyl, 1-(N-methyl-2-pyrrolidinyl)methyl, 1-(N-methyl-3-morpholinyl)methyl, or (tetrahydropyran-4-yl)methyl group whether or not further substituted in the indole ring to any extent and whether or not substituted in the tetramethylcyclopropanoyl ring to any extent, including, but not limited to, 5-bromo-UR-144, 5-chloro-UR-144, 5-fluoro-UR-144, A-796,260, A-834,735, AB-034, UR-144, XLR11.

(13) Tetramethylcyclopropane-thiazole carboxamides, which includes any compound structurally derived from 2,2,3,3-tetramethyl-N-(thiazol-2-ylidene)cyclopropanecarboxamide by substitution at the nitrogen atom of the thiazole ring by alkyl, haloalkyl, benzyl, halobenzyl, alkenyl, haloalkenyl, alkoxy, cyanoalkyl, hydroxyalkyl, cycloalkylmethyl, cycloalkylethyl, (N-methylpiperidin-2-yl)alkyl, (4-tetrahydropyran)alkyl, or 2-(4-morpholinyl)alkyl, whether or not further substituted in the thiazole ring to any extent, whether or not substituted in the tetramethylcyclopropyl ring to any extent, including, but not limited to, A-836,339.

(14) Unclassified synthetic cannabinoids, which includes all of the following:

(A) AM-087, (6aR,10aR)-3-(2-methyl-6-bromohex-2-yl)-6,6,9-t rimethyl-6a,7,10,10a-tetrahydrobenzo[c]chromen-1-ol.

(B) AM-356, methanandamide, including (5Z,8Z,11Z,14Z)-–[ (1R)-2-hydroxy-1-methylethyl]icosa-5,8,11,14-tetraenamide and arachidonyl-1'-hydroxy-2'-propylamide.

(C) AM-411, (6aR,10aR)-3-(1-adamantyl)-6,6,9-trimethyl-6 a,7,10,10a-tetrahydrobenzo[c]chromen-1-ol.

(D) AM-855, (4aR,12bR)-8-hexyl-2,5,5-trimethyl-1 ,4,4a,8,9,10,11,12b-octahydronaphtho[3,2-c]isochromen-12-ol.

(E) AM-905, (6aR,9R,10aR)-3-[(E)-hept-1-enyl]-9-(hydroxymethyl)-6,6-dimethyl-6a,7,8,9,10,10a-hexahydrobenzo[c]chromen-1-ol.

(F) AM-906, (6aR,9R,10aR)-3-[(Z)-hept-1-enyl]-9-(hydroxymethyl)-6,6-dimethyl-6a,7,8,9,10,10a-hexahydrobenzo[c]chromen-1-ol.

(G) AM-2389, (6aR,9R,10aR)-3-(1-hexyl-cyclobut-1-yl)-6 a,7,8,9,10,10a-hexahydro-6,6-dimethyl-6H-dibenzo[b,d]pyran-1 ,9 diol.

(H) BAY 38-7271, (-)-(R)-3-(2-Hydroxymethylindanyl-4-o xy)phenyl-4,4,4-trifluorobutyl-1-sulfonate.

(I) CP 50,556-1, Levonantradol, including 9-hydroxy-6-methyl-3 -[5-phenylpentan-2-yl]oxy-5,6,6a,7,8,9,10,10a-octahydrophenant hridin-1-yl]acetate; [(6S,6aR,9R, 10aR)-9-hydroxy-6-methyl-3-[ (2R)-5-phenylpentan-2-yl]oxy-5,6,6a,7,8,9,10,10a-octahydrophenanthridin-1-yl]acetate; and [9-hydroxy-6-methyl-3-[5-phenylpentan-2-yl]oxy-5,6,6a,7,8,9,10,10a-octahydrophenanthridin-1-yl]acetate.

(J) HU-210, including (6aR,10aR)-9-(hydroxymethyl)-6,6-d imethyl-3-(2-methyloctan-2-yl)-6a,7,10,10a-tetrahydrobenzo[c] chromen-1-ol; [(6aR,10aR)-9-(hydroxymethyl)-6,6-dimethyl-3-( 2-methyl octan-2-yl)-6a,7,10,10a-tetrahydrobenzo[c]chromen-1-o l and 1,1-Dimethylheptyl-11-hydroxytetrahydrocannabinol.

(K) HU-211, Dexanabinol, including (6aS, 10aS)-9-(hydroxy methyl)-6,6-dimethyl-3-(2-methyloctan-2-yl)-6a,7,10,10a-t etrahydrobenzo[c]chromen-1-ol and (6aS, 10aS)-9-(hydroxy methyl)-6,6-dimethyl- 3-(2-methyloctan-2-yl)-6a,7,10,10a-t etrahydrobenzo[c]chromen-1-ol.

(L) HU-243, 3-dimethylheptyl-11-hydroxyhexahydrocannabinol.

(M) HU-308, [(91R,2R,5R)-2-[2,6-dimethoxy-4-(2-methyloctan-2 -yl)phenyl]-7,7-dimethyl-4-bicyclo[3.1.1]hept-3-enyl]methanol.

(N) HU-331, 3-hydroxy-2-[(1R,6R)-3-methyl-6-(1-m ethylethenyl)-2-cyclohexen-1-yl]-5-pentyl-2,5-cyclohexadiene-1 ,4-dione.

(O) HU-336, (6aR,10aR)-6,6,9-trimethyl-3-pentyl-6a,7,10,10a-t etrahydro-1H-benzo[c]chromene-1,4(6H)-dione.

(P) JTE-907, N-(benzol[1,3]dioxol-5-ylmethyl)-7-methoxy-2-o xo-8-pentyloxy-1,2-dihydroquinoline-3-carboxamide.

(Q) JWH-051, ((6aR,10aR)-6,6-dimethyl-3-(2-methyloctan-2-y l)-6a,7,10,10a-tetrahydrobenzo[c]chromen-9-yl)methanol.

(R) JWH-057 (6aR,10aR)-3-(1,1-dimethylheptyl)-6a,7,10,10a-t etrahydro-6,6,9-trimethyl-6H-Dibenzo[b,d]pyran.

(S) JWH-133 (6aR,10aR)-3-(1,1-Dimethylbutyl)-6a,7,10,10a-t etrahydro -6,6,9-trimethyl-6H-dibenzo[b,d]pyran.

(T) JWH-359, (6aR,10aR)- 1-methoxy- 6,6,9-trimethyl- 3-[(2R)-1 ,1,2-trimethylbutyl]- 6a,7,10,10a-tetrahydrobenzo[c]chromene.

(U) URB-597 [3-(3-carbamoylphenyl)phenyl]-N-cyclohexylcarb amate.

(V) URB-602 [1,1'-Biphenyl]-3-yl-carbamic acid, cyclohexyl ester; OR cyclohexyl [1,1'-biphenyl]-3-ylcarbamate.

(W) URB-754 6-methyl-2-[(4-methylphenyl)amino]-4H-3,1-b enzoxazin-4-one.

(X) URB-937 3'-carbamoyl-6-hydroxy-[1,1'-biphenyl]-3-yl cyc lohexylcarbamate.

(Y) WIN 55,212-2, including (R)-(+)-[2,3-dihydro-5-methyl-3 -(4-morpholinylmethyl)pyrrolo[1,2,3-de]-1,4-benzoxazin-6-yl]-1 -napthalenylmethanone and [2,3-Dihydro-5-methyl-3-(4-morp holinylmethyl)pyrrolo[(1,2,3-de)-1,4-benzoxazin-6-yl]-1-n apthalenylmethanone.

(Z) Any synthetic cannabinoid, as defined in Section 26001 of the Business and Professions Code.

(d) The substances or analogs of substances identified in subdivision (c) may be lawfully obtained and used for bona fide research, instruction, or analysis if that possession and use does not violate federal law.

(e) As used in this section, “synthetic cannabinoid compound” does not include either of the following:

(1) Any substance for which there is an approved new drug application, as defined in Section 505 of the federal Food, Drug, and Cosmetic Act (21 U.S.C. Sec. 355) or which is generally recognized as safe and effective for use pursuant to Section 501, 502, and 503 of the federal Food, Drug, and Cosmetic Act and Title 21 of the Code of Federal Regulations.

(2) With respect to a particular person, any substance for which an exemption is in effect for investigational use for that person pursuant to Section 505 of the federal Food, Drug, and Cosmetic Act (21 U.S.C. Sec. 355), to the extent that the conduct with respect to that substance is pursuant to the exemption.

11361.

(a) A person 18 years of age or over who hires, employs, or uses a minor in unlawfully transporting, carrying, selling, giving away, preparing for sale, or peddling any cannabis or cannabis product, who unlawfully sells, or offers to sell, any cannabis or cannabis product to a minor, or who furnishes, administers, or gives, or offers to furnish, administer, or give any cannabis or cannabis product to a minor under 14 years of age, or who induces a minor to use cannabis or cannabis product in violation of law shall be punished by imprisonment in the state prison for a period of three, five, or seven years.

(b) A person 18 years of age or over who furnishes, administers, or gives, or offers to furnish, administer, or give, any cannabis or cannabis product to a minor 14 years of age or older in violation of law shall be punished by imprisonment in the state prison for a period of three, four, or five years.

110611.

A dietary supplement, food, or beverage is not adulterated by the inclusion of cannabidiol (CBD) or cannabinol (CBN) isolate derived from industrial hemp, as defined in Section 11018.5, as long as the hemp product does not contain any other cannabinoid or synthetic cannabinoid and meets the requirements established in Chapter 9 (commencing with Section 111920). The sale of a dietary supplement, food, or beverage that includes CBD or CBN isolate derived from industrial hemp shall not be restricted or prohibited based solely on the inclusion of CBD or CBN.

111691.

A cosmetic is not adulterated because it includes industrial hemp, raw extract, or raw hemp product, as defined in Section 111920, if the industrial hemp, raw extract, or raw hemp product meets the requirements established in Chapter 9 (commencing with Section 111920). The sale of a cosmetic that includes industrial hemp, raw extract, or raw hemp product shall not be restricted or prohibited based solely on the inclusion of industrial hemp provided that the industrial hemp, raw extract, or raw hemp product meets the requirements established in Chapter 9 (commencing with Section 111920).

111920.

For purposes of this chapter, the following definitions apply:

(a) “Department” means the State Department of Public Health.

(b) “Established and approved industrial hemp program” means a program that meets any applicable requirements set forth in federal law regarding the lawful and safe cultivation of industrial hemp.

(c) “Final form product” is a product intended for consumer use to be sold by a retailer.

(d) “Hemp manufacturer” means a processor purchasing or processing industrial hemp raw extract for the purpose of manufacturing a final form product.

(e) “Independent testing laboratory” means a laboratory that meets all of the following requirements:

(1) Does not have a direct or indirect interest in the entity for which testing is being done.

(2) Does not have a direct or indirect interest in a facility that cultivates, processes, distributes, dispenses, or sells raw hemp products in this state or in another jurisdiction.

(3) Does not have a license issued pursuant to Division 10 (commencing with Section 26000) of the Business and Professions Code, other than as a licensed testing laboratory.

(4) Is either of the following:

(A) A testing laboratory licensed pursuant to Division 10 (commencing with Section 26000) of the Business and Professions Code, if the licensed testing lab has notified the Department of Cannabis Control.

(B) Accredited by a third-party accrediting body as a competent testing laboratory pursuant to ISO/IEC 17025 of the International Organization for Standardization.

(f) “Industrial hemp” has the same meaning as in Section 11018.5. “Industrial hemp” does not include synthetic cannabinoids, as defined in Division 10 (commencing with Section 26000) of the Business and Professions Code.

(g) (1) “Industrial hemp product” or “hemp product” means a finished product containing industrial hemp that meets all of the following conditions:

(A) Is a cosmetic, food, food additive, or dietary supplement.

(B) (i) Is for human or animal consumption.

(ii) “Animal” does not include livestock or a food animal as defined in Section 4825.1 of the Business and Professions Code.

(C) (i) Does not include THC.

(ii) Notwithstanding clause (i), a cosmetic that is intended to be applied topically to the skin and is not consumable may contain a THC concentration of not more than an amount determined by the department in regulation, not to exceed 0.3 percent total THC.

(2) “Industrial hemp product” does not include industrial hemp or a hemp product that has been approved by the United States Food and Drug Administration or a hemp product that includes industrial hemp or hemp that has received Generally Recognized As Safe (GRAS) designation. For purposes of nonfood applications, “industrial hemp product” does not include a hemp product that contains derivatives, substances, or compounds derived from the seed of industrial hemp.

(h) (1) “Manufacture” or “manufacturing” means to compound, blend, infuse, or otherwise make or prepare an industrial hemp product.

(2) “Manufacturing” includes all aspects of the infusion process and packaging and labeling processes, including processing, preparing, holding, and storing of industrial hemp products.

(3) “Manufacturing” also includes preparing, holding, or storing hemp components and ingredients.

(4) “Manufacturing” does not include planting, growing, harvesting, drying, curing, grading, trimming, or extraction of a plant or part of a plant.

(i) “Raw extract” or “industrial hemp raw extract” means extract not intended for consumer use and that contains a THC concentration of not more than an amount determined by the department in regulation.

(j) “Raw hemp product” means a product that is derived from industrial hemp that is intended to be included in a food, beverage, dietary supplement, or cosmetic.

(k) “Retail” has the same meaning as in Section 113895 and includes online sales to customers in California.

(l) “THC” or “THC or comparable cannabinoid” means any of the following:

(1) Tetrahydrocannabinolic acid.

(2) Any tetrahydrocannabinol, including, but not limited to, Delta-8-tetrahydrocannabinol, Delta-9-tetrahydrocannabinol, and Delta-10-tetrahydrocannabinol, however derived, except that the department may exclude one or more isomers of tetrahydrocannabinol from this definition under subdivision (a) of Section 111921.7.

(3) Any other cannabinoid, except cannabidiol, that the department determines, under subdivision (b) of Section 111921.7, to cause intoxication.

(m) “THCA” means tetrahydrocannabinolic acid, CAS number 23978-85-0.

(n) “Total THC” means the sum of THC and THCA. Total THC shall be calculated using the following equation: total THC concentration (mg/g) +/- the measurement of uncertainty, as defined by the United States Department of Agriculture.

111921.

An industrial hemp product shall not be distributed or sold in the state except in conformity with all applicable state laws and regulations, including this chapter and any regulations promulgated thereunder, and with documentation that includes both of the following:

(a) A certificate of analysis from an independent testing laboratory that confirms both of the following:

(1) The industrial hemp raw extract, in its final form, does not exceed THC concentration of an amount determined allowable by the department in regulation or as specified in Section 111921.1.

(2) The industrial hemp product was tested for any cannabinoids identified on the product label or in associated advertising in accordance with Section 111926.2.

(b) The industrial hemp product was produced from industrial hemp grown in compliance with Division 24 (commencing with Section 81000) of the Food and Agricultural Code if sourced from within California, or licensed in accordance with United States Department of Agriculture (USDA) requirements if sourced from outside the state.

111921.1.

Industrial hemp raw extract shall not be incorporated into food, food additives, beverages, or dietary supplements unless it meets both of the following:

(a) The raw extract is comprised of cannabidiol (CBD) or cannabinol (CBN) isolate with a purity level greater than 99 percent.

(b) The raw extract does not contain any tetrahydrocannabinols or synthetic cannabinoids.

111921.5.

(a) Unless explicitly approved by the federal Food and Drug Administration, industrial hemp shall not be included in products in any of the following categories:

(1) Medical devices.

(2) Prescription drugs.

(3) A product containing nicotine or tobacco.

(4) An alcoholic beverage.

(b) The department may prohibit the inclusion of industrial hemp in other products when it poses a risk to human or animal health through regulation.

(c) Cannabis and cannabis products are not authorized by this section.

111921.6.

Manufacture or sale of inhalable hemp products is prohibited. Manufacture of inhalable hemp products for the sole purpose of sale in other states is not prohibited.

111921.8.

(a) Except for the amendments specified in subdivision (b),the amendments made to this chapter by the act adding this section shall become operative on January 1, 2028.

(b) The amendments made to Sections 111921.1, 111921.6, and 111925 by the act adding this section shall become operative on January 1, 2026.

111922.3.

(a) A hemp manufacturer who produces industrial hemp products shall comply with this chapter and, to the extent applicable, this part.

(b) A hemp manufacturer who produces processed pet food products shall comply with this chapter and Chapter 10 (commencing with Section 113025) of Part 6 and shall follow good manufacturing practices pursuant to those provisions.

111923.3.

(a) (1) A hemp manufacturer who produces an industrial hemp product that is a food or beverage shall register with the department pursuant to Article 2 (commencing with Section 110460) of Chapter 5.

(2) Sections 110473 and 110474 shall not apply to dietary supplements and food products that include industrial hemp.

(b) Notwithstanding the voluntary nature of registration provided in Section 111795, a hemp manufacturer who produces an industrial hemp product that is a cosmetic shall register pursuant to Article 4 (commencing with Section 111795) of Chapter 7.

(c) A hemp manufacturer who produces an industrial hemp product that is a processed pet food shall obtain a license pursuant to Article 2 (commencing with Section 113060) of Chapter 10 of Part 6.

(d) All hemp manufacturers shall notify the department immediately of any change of information in their application for a license of registration.

111923.9.

(a) A hemp manufacturer or retailer who is operating in conformance with this part and in good faith compliance with their responsibilities under this chapter may manufacture or sell industrial hemp products or raw hemp extract without authorization for three months after the effective date of the act that added this chapter.

(b) This section shall remain in effect only until January 1, 2028, and as of that date is repealed.

111925.

(a) A hemp manufacturer shall meet all of the following testing requirements:

(1) Industrial hemp raw extract shall be tested for cannabinoid content prior to being incorporated into a product.

(2) Testing shall be completed by an independent testing laboratory.

(3) The manufacturer of the industrial hemp product shall be able to prove total THC concentration does not exceed the limits established by this chapter and by the department in regulation. A manufacturer of raw extract shall be able to prove that the THC concentration meets department requirements set forth pursuant to subdivision (a) of Section 111921.

(b) The department may regulate and restrict the cap on extract and may cap the amount of total THC concentration at the product level based on the product form, volume, number of servings, ratio of cannabinoids to THC in the product, or other factors, as needed.

111925.2.

A raw hemp product shall not be distributed or sold in this state without a certificate of analysis from an independent testing laboratory that confirms all of the following:

(a) The raw hemp product is the product of a batch of industrial hemp that was tested by the independent testing laboratory.

(b) A tested representative sample of the batch of industrial hemp contained a total THC concentration that did not exceed 0.3 percent on a dry-weight basis if the product is a topically applied cosmetic, or did not contain THC if the product is a food, food additive, beverage, dietary supplement, or other type of cosmetic.

(c) The tested sample of the batch did not contain contaminants that are unsafe for human or animal consumption.

111926.

(a) A manufacturer, distributor, or seller of an industrial hemp product shall follow packaging, labeling, and advertising laws, including, but not limited to, Chapter 4 (commencing with Section 110290), and federal laws incorporated or applicable in this state, including, but not limited to, Sections 110100, 110340, 110371, 110380, 110382, and 110407 and shall not violate this part.

(b) A manufacturer, distributor, or seller of an industrial hemp product shall not do any of the following:

(1) Directly target advertising or marketing to children or to persons who are pregnant or breastfeeding.

(2) Advertise or market on a billboard or similar advertising device located on an interstate highway or on a state highway that crosses the California border.

(3) Advertise or market industrial hemp products in a manner intended to encourage persons under 21 years of age to consume industrial hemp products.

(4) Publish or disseminate advertising or marketing that is attractive to children.

(5) Advertise or market industrial hemp products on an advertising sign within 1,000 feet of a daycare center, school providing instruction in kindergarten or any of grades 1 to 12, inclusive, playground, or youth center.

(c) Advertising or marketing placed in broadcast, cable, radio, print, or digital communications shall only be displayed where at least 70 percent of the audience is reasonably expected to be 18 years of age or older, as determined by reliable, up-to-date audience composition data.

(d) A violation of this section shall be subject to the requirements, fines, and penalties of Section 26152.2 of the Business and Professions Code.

111926.2.

(a) An industrial hemp product that is a dietary supplement, food, or beverage shall not be distributed or sold in the state without packaging and labeling on the product that includes all of the following information:

(1) A label, scannable barcode, internet website, or quick response (QR) code linked to the certificate of analysis of the final form product batch by an independent testing laboratory that provides all of the following information:

(A) The product name.

(B) The name of the product’s manufacturer, packer, or distributor, and their address and telephone number.

(C) The batch number, which matches the batch number on the product.

(D) The concentration of cannabinoids present in the product batch, including, at minimum, total CBD and any marketed ingredient, as required by the department in regulation.

(E) The levels within the product batch of contaminants, as required in subdivision (c) of Section 111925.2.

(2) The product expiration or best by date, if applicable.

(3) A statement indicating that children or those who are pregnant or breastfeeding should avoid using the product prior to consulting with a health care professional about its safety.

(4) A statement that products containing cannabinoids should be kept out of reach of children.

(5) The following statement, “THE FDA HAS NOT EVALUATED THIS PRODUCT FOR SAFETY OR EFFICACY.”

(b) The requirements of this section shall apply to products manufactured 90 days or more after the enactment of this section.

111926.3.

(a) An industrial hemp product that is a cosmetic shall not be distributed or sold in the state without packaging and labeling on the product that includes all of the following information:

(1) A label, scannable barcode, internet website, or quick response (QR) code linked to the certificate of analysis of the final form extract or the final form product batch by an independent testing laboratory that provides all of the following information:

(A) The product name.

(B) The name of the product’s manufacturer, packer, or distributor, and their address and telephone number.

(C) The batch number, which matches the batch number on the product.

(D) The concentration of cannabinoids present in the product batch, including, at minimum, total CBD and any marketed cannabinoids.

(E) The levels within the product batch of contaminants, as required in subdivision (c) of Section 111925.2.

(2) The product expiration or best by date, if applicable.

(3) The following statement, “THE FDA HAS NOT EVALUATED THIS PRODUCT FOR SAFETY OR EFFICACY.”

(b) The requirements of this section shall apply to products manufactured 90 days or more after the enactment of this section.

111927.2.

(a) In addition to the inspection authority provided elsewhere in this part, the department may inspect financial data, sales data, and personnel data, as needed to enforce this chapter.

(b) State, local, or law enforcement officials may review paperwork from those handling or transporting industrial hemp plant material, raw extract, intermediary industrial hemp product, or final form product and take samples at any point along the supply chain to test that sample for verification.

(c) Upon inspection, if the industrial hemp plant material, raw extract, intermediary industrial hemp product, or final form product violates California law, the state, local, or law enforcement official shall notify the department.

(d) (1) State, local, and law enforcement officials shall immediately notify the department of an arrest made for a violation over which the department has jurisdiction that involves a person authorized pursuant to this chapter.

(2) The department shall promptly investigate whether grounds exist for suspension or revocation of the authorization or if other actions are warranted under this part.

111929.5.

This article shall remain in effect only until January 1, 2028, and as of that date is repealed.

113091.

A processed pet food is not adulterated because it includes cannabidiol (CBD) derived from industrial hemp, as defined in Section 11018.5, if the industrial hemp product does not contain any other cannabinoid or synthetic cannabinoid and meets the requirements established in Chapter 9 (commencing with Section 111920) of Part 5. The sale of processed pet food that includes CBD derived from industrial hemp shall not be restricted or prohibited based solely on the inclusion of CBD.

34010.

(a) This part shall be known, and may be cited, as the “Cannabis Tax Law.”

(b) For purposes of this part:

(1) “2020–21 fiscal year baseline” means the total amount of funds disbursed in the sub-trust accounts in fiscal year 2021–22 for the third allocation of the fiscal year 2020–21 revenue, pursuant to subdivision (f) of Section 34019, as determined by the Department of Finance.

(2) “Arm’s length transaction” shall mean a sale entered into in good faith and for valuable consideration that reflects the fair market value in the open market between two informed and willing parties, neither under any compulsion to participate in the transaction.

(3) “Average market price” shall mean both of the following:

(A) (i) In an arm’s length transaction, the average retail price determined by the wholesale cost of the cannabis or cannabis products sold or transferred to a cannabis retailer, plus a mark-up, as determined by the department on a biannual basis in six-month intervals on or before July 1, 2022.

(ii) Notwithstanding clause (i), the department shall not increase the mark-up amount during the period beginning on and after the operative date of the act amending this section by adding this clause and before July 1, 2021.

(B) In a nonarm’s length transaction, the cannabis retailer’s gross receipts from the retail sale of the cannabis or cannabis products.

(4) “Cannabis” has the same meaning as set forth in Section 11018 of the Health and Safety Code and shall also mean medicinal cannabis.

(5) “Cannabis products” has the same meaning as set forth in Section 11018.1 of the Health and Safety Code and shall also mean medicinal concentrates and medicinal cannabis products.

(6) “Cannabis flowers” means the dried flowers of the cannabis plant as defined by the department.

(7) “Cannabis leaves” means all parts of the cannabis plant other than cannabis flowers that are sold or consumed.

(8) “Cannabis retailer” means a person required to be licensed pursuant to Division 10 (commencing with Section 26000) of the Business and Professions Code as a retailer, non-storefront retailer, microbusiness, or nonprofit, or any other person otherwise authorized under Division 10 (commencing with Section 26000) of the Business and Professions Code to engage in retail sales.

(9) “CBD isolate” has the same meaning as set forth in Section 26001 of the Business and Professions Code.

(10) “Cultivator” means all persons required to be licensed to cultivate cannabis pursuant to Division 10 (commencing with Section 26000) of the Business and Professions Code.

(11) “Department” means the California Department of Tax and Fee Administration or its successor agency.

(12) “Designated for donation” means medicinal cannabis donated by a cultivator to a cannabis retailer for subsequent donation to a medicinal cannabis patient pursuant to Section 26071 of the Business and Professions Code.

(13) “Distributor” means a person required to be licensed as a distributor pursuant to Division 10 (commencing with Section 26000) of the Business and Professions Code.

(14) “Enters the commercial market” means cannabis or cannabis products, except for immature cannabis plants and seeds, that complete and comply with a quality assurance review and testing, as described in Section 26110 of the Business and Professions Code.

(15) “Gross receipts” has the same meaning as set forth in Section 6012.

(16) “Manufacturer” means a person required to be licensed as a manufacturer pursuant to Division 10 (commencing with Section 26000) of the Business and Professions Code.

(17) “Medicinal cannabis patient” means a qualified patient, as defined in Section 11362.7 of the Health and Safety Code, who possesses a physician’s recommendation that complies with Article 25 (commencing with Section 2525) of Chapter 5 of Division 2 of the Business and Professions Code, or a qualified patient or primary caregiver for a qualified patient issued a valid identification card pursuant to Section 11362.71 of the Health and Safety Code.

(18) “Microbusiness” has the same meaning as set forth in Section 26001 of the Business and Professions Code.

(19) “Nonprofit” has the same meaning as set forth in Section 26070.5 of the Business and Professions Code.

(20) “Person” has the same meaning as set forth in Section 6005.

(21) “Retail sale” has the same meaning as set forth in Section 6007.

(22) “Sale” and “purchase” mean any change of title or possession, exchange, or barter, conditional or otherwise, in any manner or by any means whatsoever, for consideration.

(23) “Sub-trust accounts” means the sub-trust accounts created under subdivision (f) of Section 34019.

(24) “Synthetic cannabinoid” has the same meaning as set forth in Section 26001 of the Business and Professions Code.

(25) “Tax fund” means the California Cannabis Tax Fund created by Section 34018.

(26) “Transfer” means to grant, convey, hand over, assign, sell, exchange, or barter, in any manner or by any means, with or without consideration.

(27) “Unprocessed cannabis” includes cannabis flowers, cannabis leaves, or other categories of harvested cannabis, categories for unprocessed or frozen cannabis or immature plants, or cannabis that is shipped directly to manufacturers.

34013.

(a) The department shall administer and collect the taxes imposed by this part pursuant to the Fee Collection Procedures Law (Part 30 (commencing with Section 55001)). For purposes of this part, the references in the Fee Collection Procedures Law to “fee” shall include the taxes imposed by this part, and references to “feepayer” shall include a person required to pay or collect the taxes imposed by this part.

(b) (1) A person licensed to engage in commercial cannabis activity under Division 10 (commencing with Section 26000) of the Business and Professions Code that failed to remit amounts due by means of electronic funds transfer on and after January 1, 2022, and before January 1, 2023, is not subject to or is relieved of any of the penalties imposed by Section 55050 for that failure.

(2) On or after January 1, 2022, subdivision (a) of Section 55050 shall not apply to a person required to pay or collect the taxes imposed by this part on a person licensed to engage in commercial cannabis activity under Division 10 (commencing with Section 26000) of the Business and Professions Code if the department deems it necessary to facilitate the collection of amounts due.

(c) The department may prescribe, adopt, and enforce regulations relating to the administration and enforcement of this part, including, but not limited to, collections, reporting, refunds, and appeals.

(d) The department shall adopt necessary rules and regulations to administer the taxes in this part. Such rules and regulations may include methods or procedures to tag cannabis or cannabis products, or the packages thereof, to designate prior tax payment.

(e) (1) Until January 1, 2024, the department may prescribe, adopt, and enforce any emergency regulations as necessary to implement, administer, and enforce its duties under this division. Any emergency regulation prescribed, adopted, or enforced pursuant to this section shall be adopted in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, and, for purposes of that chapter, including Section 11349.6 of the Government Code, the adoption of the regulation is an emergency and shall be considered by the Office of Administrative Law as necessary for the immediate preservation of the public peace, health and safety, and general welfare. Notwithstanding any other law, the emergency regulations adopted by the department may remain in effect for two years from adoption, and may be readopted in accordance with subdivision (h) of Section 11346.1 of the Government Code.

(2) Until January 1, 2030, the department may prescribe, adopt, and enforce any emergency regulations as necessary to implement, administer, and enforce its duties added to this division by the act adding this subdivision. Any emergency regulation prescribed, adopted, or enforced pursuant to this section shall be adopted in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, and, for purposes of that chapter, including Section 11349.6 of the Government Code, the adoption of the regulation is an emergency and shall be considered by the Office of Administrative Law as necessary for the immediate preservation of the public peace, health and safety, and general welfare. Notwithstanding any other law, the emergency regulations adopted by the department may remain in effect for two years from adoption, and may be readopted in accordance with subdivision (h) of Section 11346.1 of the Government Code.

(f) Any person required to be licensed pursuant to Division 10 (commencing with Section 26000) of the Business and Professions Code who fails to pay the taxes imposed under this part shall, in addition to owing the taxes not paid, be subject to a penalty of at least one-half the amount of the taxes not paid, and shall be subject to having its license revoked pursuant to Section 26031 of the Business and Professions Code.

(g) The department may bring such legal actions as are necessary to collect any deficiency in the tax required to be paid, and, upon the department’s request, the Attorney General shall bring the actions.

34014.

(a) (1) Until January 1, 2023, all distributors must obtain a separate permit from the department pursuant to regulations adopted by the department. No fee shall be charged to any person for issuance of the permit. Any person required to obtain a permit who engages in business as a distributor without a permit or after a permit has been canceled, suspended, or revoked, and each officer of any corporation that so engages in business, is guilty of a misdemeanor.

(2) On and after January 1, 2023, all cannabis retailers shall obtain a separate cannabis tax permit from the department pursuant to regulations adopted by the department. A fee shall not be charged to any person for issuance of the permit. Any person required to obtain a permit who engages in business as a cannabis retailer without a permit or after a permit has been canceled, suspended, or revoked, and each officer of any corporation that so engages in business, is guilty of a misdemeanor.

(b) The department may require every licensed distributor, retailer, cultivator, microbusiness, nonprofit, or other person required to be licensed, to provide security to cover the liability for taxes imposed by state law on cannabis produced or received by the distributor, retailer, cultivator, microbusiness, nonprofit, or other person required to be licensed in accordance with procedures to be established by the department. Notwithstanding anything herein to the contrary, the department may waive any security requirement it imposes for good cause, as determined by the department. “Good cause” includes, but is not limited to, the inability of a distributor, retailer, cultivator, microbusiness, nonprofit, or other person required to be licensed to obtain security due to a lack of service providers or the policies of service providers that prohibit service to a cannabis business.

(c) In fixing the amount of any security required by the department, the department shall give consideration to the financial hardship that may be imposed on licensees as a result of any shortage of available surety providers.

34015.3.

(a) (1) On or after January 1, 2028, any person who possesses, keeps, stores, or retains for the purpose of sale in this state, or sells or offers to sell in this state, any product presumed to be cannabis or a cannabis product, pursuant to Section 34016 or Section 22980.6 of the Business and Professions Code, shall be liable for the cannabis excise tax imposed pursuant to Section 34011.2 as if the person were a purchaser of cannabis or a cannabis product in a retail sale from a cannabis retailer, and for applicable penalties and interest, if any, which shall become immediately due and payable.

(2) The department shall ascertain as best it may the gross receipts, based on any information within the department’s possession or that may come into its possession, of the retail sale of the product presumed to be a cannabis product deemed as purchased from a cannabis retailer as set forth in paragraph (1), and shall determine immediately the tax on that amount, adding to the tax a penalty of 25 percent of the amount of tax or five hundred dollars ($500), whichever is greater, and shall give the person notice of that determination in the same manner as prescribed for service of notice by Section 55061. Sections 55101 and 55102 shall be applicable with respect to the finality of the determination and the right of the person to petition for a redetermination.

(b) Any person seeking to be relieved of the penalty imposed pursuant to paragraph (2) of subdivision (a) shall file with the department a signed statement setting forth the facts upon which they base the claim for relief. Any person who signs a statement pursuant to this section that asserts the truth of any material matter that they know to be false is guilty of a misdemeanor punishable by imprisonment of up to one year in the county jail, or a fine of not more than one thousand dollars ($1,000), or both the imprisonment and the fine.

(c) (1) If the department believes that the collection of any amount of tax required to be paid by any person under this part will be jeopardized by delay, it may make a jeopardy determination pursuant to Article 4 (commencing with Section 55101) of Chapter 3 of Part 30.

(2) In the suit, a copy of the jeopardy determination certified by the department shall be prima facie evidence that the person is indebted to the state in the amount of the tax, penalties, and interest at the modified adjusted rate per month, or fraction thereof, established pursuant to Section 6591.5, from the date the amount, or any portion thereof, should have been reported until the date of payment.

(d) The department may collect the tax, penalty, and interest due from the person by seizure and sale of property in the manner prescribed for the collection pursuant to Section 55181.

(e) The foregoing remedies of the state are cumulative.

(f) No action taken pursuant to this section relieves the person in any way from the penal provisions of this part or the Fee Collection Procedures Law (Part 30 (commencing with Section 55001)).

34016.

(a) Any peace officer or department employee granted limited peace officer status pursuant to paragraph (6) of subdivision (a) of Section 830.11 of the Penal Code, upon presenting appropriate credentials, is authorized to enter any place as described in paragraph (2) and to conduct inspections in accordance with the following paragraphs, inclusive.

(1) Inspections shall be performed in a reasonable manner and at times that are reasonable under the circumstances, taking into consideration the normal business hours of the place to be entered.

(2) Inspections may be at any place at which cannabis or cannabis products are sold to purchasers, cultivated, or stored, at any site where evidence of activities involving evasion of tax may be discovered, or at any place where any package, label, advertisement, or other document or object of any kind bearing the universal symbol as described in paragraph (7) of subdivision (c) of Section 26130 of the Business and Professions Code and any applicable regulations, are sold or stored in violation of Section 26031.6 of the Business and Professions Code.

(3) Inspections shall be conducted no more than once in a 24-hour period.

(b) Any person who fails or refuses to allow an inspection shall be guilty of a misdemeanor. Each offense shall be punished by a fine not to exceed five thousand dollars ($5,000), or imprisonment not exceeding one year in a county jail, or both the fine and imprisonment. The court shall order any fines assessed be deposited in the California Cannabis Tax Fund.

(c) (1) (A) The department or a law enforcement agency may seize cannabis or cannabis products from a person who possesses, stores, owns, or has made a retail sale of those cannabis or cannabis products if any of the following apply:

(i) Until January 1, 2023, the cannabis or cannabis products are without evidence of tax payment.

(ii) The cannabis or cannabis products are not contained in secure packaging.

(iii) The person is an unlicensed person specified in paragraph (1) of subdivision (a) of Section 34015.1.

(iv) The cannabis or cannabis products were not reported in the track and trace system, as specified in subdivision (b) of Section 34015.1.

(v) The product is presumed to be a cannabis product as provided in subparagraph (B) and is possessed, stored, offered for sale, or sold by an unlicensed person or at an unlicensed premises.

(B) (i) For purposes of this section, it shall be presumed that a product that contains or purports to contain a cannabinoid, including a synthetic cannabinoid, is a cannabis product, regardless of the nature or source of the cannabinoid.

(ii) This presumption may be rebutted by evidence showing that the product complies with Chapter 9 (commencing with Section 111920) of Part 5 of Division 104 of the Health and Safety Code, and any regulations promulgated pursuant to that chapter or meets the definition of industrial hemp, as that term is defined in Section 11018.5 of the Health and Safety Code.

(C) The department may seize any package, label, advertisement, or other document or object of any kind bearing the universal symbol or bearing any likeness or simulation of the universal symbol in violation of Section 26031.6 of the Business and Professions Code. Any package, label, advertisement, or other document or object seized by the department pursuant to this paragraph shall be deemed forfeited and the department shall comply with the procedures set forth in Sections 30436 to 30449, inclusive.

(D) Any cannabis or cannabis products seized by a law enforcement agency or the department shall be deemed forfeited and the department shall comply with the procedures set forth in Sections 30436 through 30449, inclusive.

(2) Any seizures authorized pursuant to paragraph (1) of this subdivision are in addition to any criminal or civil penalties that may be imposed by law, including subdivision (e) of this section.

(3) For purposes of this section, “cannabinoid” and “synthetic cannabinoid” shall have the same meaning as provided in Division 10 (commencing with Section 26000) of the Business and Professions Code.

(d) Any person who renders a false or fraudulent report is guilty of a misdemeanor and subject to a fine not to exceed one thousand dollars ($1,000) for each offense.

(e) Any violation of any provisions of this part, except as otherwise provided, is a misdemeanor and is punishable as such.

(f) All moneys remitted to the department under this part shall be credited to the California Cannabis Tax Fund.