HomeMy WebLinkAboutApprove City Council position on legislation pending before (28) RPPROVED 7-0
City of Huntington Beach
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File #: 18-401 MEETING DATE: 10/15/2018
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Fred A. Wilson, City Manager
PREPARED BY: Antonia Graham, Assistant to the City Manager
Subiect:
Approve City Council position on legislation pending before the State Legislature and
Congress as recommended by the City Council Intergovernmental Relations Committee (IRC);
and, authorize City staff and the City's State Advocate to work with State legislators and
County of Orange staff on crafting potential legislative language to examine the State's
property tax apportionment system
Statement of Issue:
On September 26, 2018, the Intergovernmental Relations Committee met to discuss Federal and
State legislation. Additionally, a discussion was held on the current property tax apportionment
system and how the City could benefit from changes to the system. This action requests City Council
authorization for the Mayor to sign formal position letters.
Financial Impact:
There is no fiscal impact.
Recommended Action:
A) Approve a City position of support on H.R. 5724 (Rohrabacher) Restoring Community Oversight
of Sober Living Homes Act of 2018; and,
B) Approve a City position of Oppose on recently introduced proposed Bureau of Cannabis Control
Regulations; and,
C) Authorize City staff and the City's State Advocate to work with State legislators and County of
Orange staff on crafting potential legislative language to examine the State's property tax
apportionment system.
Alternative Action(s):
Do not approve the recommended actions and direct staff accordingly.
Analysis:
The Intergovernmental Relations Committee (IRC) met on September 26, 2018, to discuss Federal,
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File #: 18-401 MEETING DATE: 10/15/2018
State, and regional legislative issues. The Committee reviewed the 2108 State Legislative Matrix
provided by the City's State Advocate, Townsend Public Affairs, discussed FCC regulations as they
pertain to small cell siting, and discussed regional issues facing the City. The following is an analysis
of bills/issues that the IRC voted to take a formal position on:
SUPPORT - H.R. 5724 (Rohrabacher) Restoring Community Oversight of Sober Living
Homes Act of 2018 - This bill would assert that no federal law can prohibit state or local
governments from implementing laws that specifically apply to sober living homes in
residential zones, including prohibition of such facilities.
Additionally, this bill would limit eligibility - meaning that sober living homes would be eligible
for funding from federal health programs only if (1) they are compliant with state and local
zoning laws and (2) the relevant local jurisdiction certifies to the United States Department of
Health and Human Services that the facility complies with those laws. This bill seeks to
amend the Fair Housing Act (FHA) and the Americans with Disabilities Act (ADA). This bill is a
step in the right direction and would enable the City to have more control over sober living
facilities in the City.
➢ OPPOSE - Bureau of Cannabis Control Proposed Regulations - In July 2018, the Bureau
of Cannabis Control (BCC) released proposed regulations seeking to codify the emergency
regulations implemented in December 2017. The City opposes two changes that are in direct
conflict with both the language and the intent of Proposition 64 and will undermine our ability
to effectively regulate cannabis at the local level. Section 5416(d), would drastically preempt
local control and regulatory authority by authorizing cannabis delivery anywhere in the State
regardless of conflicting local regulations or bans. Further, Sections 5001(c)(11) and 5002 (c)
(28) undermine the ability of local agencies to ensure community standards are met by
reducing from 60 to 10 days the period to verify if a licensee has obtained necessary local
approvals.
The purpose and intent provisions of Proposition 64 expressly recognize the value of local
control in regulating commercial cannabis activity. In brief, it provides that "it is the intent of
the People in enacting this Act to...[a]llow local governments to ban nonmedical marijuana
businesses." Thus, under existing law - as articulated in Proposition 64, and now, through
these regulations - local governments can adopt and enforce local ordinances to ban or
regulate all commercial cannabis activity, including deliveries, within their borders. Section
5416(d), as proposed, fundamentally alters this pillar of Proposition 64 by implying that
cannabis deliveries are allowed in violation of local ordinances. Further, an influx of
unapproved local cannabis deliveries will decrease transparency of cannabis operations and
increase public safety obligations and costs for local law enforcement agencies. By allowing
deliveries in each jurisdiction in California, the BCC is fundamentally changing Proposition 64,
not simply clarifying existing law.
Property Tax Apportionment System for Orange County
At the IRC meeting, the two members present (Mayor Posey and Council Member Semeta)
discussed the property tax apportionment system for the County. Forty years ago, in 1978, voters
passed Proposition 13 and dramatically altered the course of state and local government finances in
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File #: 18-401 MEETING DATE: 10/15/2018
California. In addition to capping property tax rates at 1 (one) percent, Proposition 13 changed the
method for determining the taxable value of real property. Namely, it replaced the property tax based
on market value with one based on acquisition value.
In 1978, Orange County did not have the real estate development that it has now so the base value
was low and thus categorized as "Rural", thereby reducing the amount of property tax revenue that
came back to its municipalities when compared to other more urbanized counties at the time.
Many scholars have noted the inequity and inefficiency of consequences of Proposition 13. In
response, policymakers and analysts have suggested revisiting the acquisition-based method of
property tax assessment. The Committee voted to work with State legislators and the County to
create a legislative path forward that would revisit this method and bring equity in property tax
revenue apportionments back to Orange County and, thus, the City of Huntington Beach.
Environmental Status:
Not Applicable.
Strategic Plan Goal:
Improve quality of life
Enhance and maintain public safety
Strengthen economic and financial sustainability
Attachment(s):
1. H. R. 5724 (Rohrabacher) Restoring Community Oversight of Sober Living Homes Act of 2018
2. Bureau of Cannabis Control Proposed Text of Regulations
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115 Il CONGRESS
2D SESSION H. R. 7 4
To amend the Nair Housing Act to clarity the applicabilit}r of that Act
to recover;.v facilities, and for other pum1)oses.
IN THE HOUSE OF REPRESENTATIVES
lLvy 9, 2018
Mr. ROHRABACHEH introduced the follow-Ing bill; which xvis referred to the
Committee on the Judiciary, and in addition to the Committee on Fnei-U,
and Commerce, for a period to he suhsequentlt• determined btV the Speak-
er, in each case for consideration of such provisions as fall within the ju-
risdiction of the committee concerned
To amend the Fair Housing Act to cla.r'if�T the applica.bilitAT
11
of that Act to recovery facilities, and for other purposes.
1 Be it enacted b1 the Sensate and Hor.rse of Represevlca-
2 tines of the United States of A tericca in. Ca�nyvess assembled,
3 SECTION 1. SHORT TITLE.
4 This Act rna.�T be cited as the "Restonlig Conunurut)T
5 Oversight of Sober LMng Homes Act of 2018".
6 SEC. 2. ZONING AND LICENSING OF RECOVERY FACILITIES.
7 Section 807 of the Fair Housing Act (42 U.S.C.
8 3607) is amended by adding at the end the folloiving:
162
2 J
1. "(c) Nothing in this title or an,), other Federal lazy
2 relating to protections for those Aith disabilities prohibits
3 aily State or local govermnent from implementing la.ATs,
4 re.gLulations, or ordinances that apply specifieall)T to reeov-
5 er-T facilities located in residentiall.)r zoned areas, including
6 a la-Nv, regulation, or ordinance AThich prohibits recover T
7 facilities in residentially zoned areas.".
8 SEC. 3. FAIR HOUSING ACT DEFINITIONS.
9 Section 802 of the Fair Housing Act (42 U.S.C.
10 3 G 02) is ameundecd-
11 (1) in subsection (b), b.)T inserting before the pe-
12 riod at the end the folloiN ing: ", except that such
13 term sloes not include an-\T building, sti-ticture, or
14 portion thereof that is located in a. residentiall.)T
15 zoned area and is used as a recovery facility", and
16 (2) b,)T adding at the end the follmidng:
17 "(p) 'Recovery fa.cilit.)T' n7eans a building, structure,
18 or portion thereof that is occupied b,)T a. person who is
19 handicapped dice to drug addiction or alcoholism, and for
20 ATlrich a. condition of such occupane)T of such building,
21 structure, or portion thereof is that it remains free of corn-
22 trolled substances and alcohol.".
•HR 5724 IH
163
3
1 SEC. 4. REQUIREMENTS FOR RECOVERY FACILITIES AS A
2 CONDITION FOR CERTAIN FEDERAL FUND-
3 ING.
4 (a.) IN GE�rr:R.i,.—A recovery facility in a residential
5 zone majr not receive direct oi- indirect pa��inents or reim-
6 bursements or other remunerations from a. Federal health
7 case progoni unless-
8 (1) the recovery facility is in compliance with
9 State a.nd local laivs, regulations, or ordinances that
10 apply within the zone ivhere the recovery facility is
11 located; and
12 (2) the local government ivith ,jurisdiction over
13 the zone in Which the recovery facility is located. cer-
14 tifies to the Secretary of Health and Human Serv-
15 ices that the recovery facility is in coznpliance filth
16 State a.nd local laivs, regulations, or ordmi a.nces that
17 apphr 1«thin the zone where the recover— facility is
18 located.
19 (b) DEFINITIONs.—In this section:
20 (1) FEDERAL HEALTH CARE PROGILUH.—The
21 term "Federal health care program" has the mean-
22 ing given such terns in section 1128B(f) of the So-
23 cial Security Act (42 U.S.C. 1320a7b(f)).
24 (2) RECOVERY FACILITY.—The term "recovery
25 facility" has the meaning given such terms in section
•HR 5724 IN
164
4
1 802 of the Fair Housing; Act (42 U.S.C. 3602), as
2 amended by section 3.
3 SEC. 5. REMOVING SUBSTANCE USE DISORDER SERVICES
4 AS AN ESSENTIAL HEALTH BENEFIT.
5 Section 1302(b)(1)(E) of the Patient Protection and
6 Affordable Care Act (42 U.S.C. 18022(b)(1)(E)) is
7 a.iueluled her striking "and substance use disorder".
8 SEC. 6. EFFECTIVE DATE.
9 This Act, and the amendinents made by this Act,
10 shall take effect on the date that is 90 days after the date
11 of the enactment of this Act.
Q
•HR 5724 IH
165
BUREAU OF CANNABIS CONTROL
PROPOSED TEXT OF REGULATIONS
CALIFORNIA CODE OF REGULATIONS
TITLE 16
DIVISION 42. BUREAU OF CANNABIS CONTROL
All of the proposed text sections and documents incorporated by reference are proposed to be
added to the California Code of Regulations under Division 42 of Title 16:
Chapter 1. ALL BUREAU LICENSEES
Article 1. Division Definitions
§ 5000. Definitions
For the purposes of this division, the definitions in this section shall govern the construction of
this division unless otherwise indicated.
(a) "Act"means the Medicinal and Adult-Use Cannabis Regulation and Safety Act.
(b) "Bureau" means the Bureau of Cannabis Control, previously named the Bureau of Marijuana
Control, Bureau of Medical Cannabis Regulation, and Bureau of Medical Marijuana Regulation.
(c) "Cannabis accessories"has the same meaning as in Health and Safety Code section 11018.2.
(d) "Cannabis goods" means cannabis, including dried flower, and products containing cannabis.
(e) "Cannabis waste"means waste that is not hazardous waste, as defined in Public Resources
Code section 40141, and is organic waste, as defined in Public Resources Code section 42649.8
(c), that contains cannabis and that has been made unusable and unrecognizable in the manner
prescribed in.sections 5054 and 5055 of this division.
(0 "Canopy" means the designated area(s) at a licensed premises that will contain mature plants
at any point in time.
(g) "Delivery employee" means an individual employed by a licensed retailer or licensed
microbusiness who delivers cannabis goods from the licensed retailer or licensed nicrobusiness
premises to a customer at a physical address.
(h) "Free cannabis goods" means any amount of cannabis goods provided to any person without
cost or payment or exchange of any other thing of value.
(i) "Kief'means the resinous trichoines of cannabis that have been separated from the cannabis
plant.
(j) "Limited-access area" means an area in which cannabis goods are stored or held and is only
accessible to a licensee and its employees and contractors.
Bureau of Cannabis Control Regular Regulations Text Page 1 of 136
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(k) "Lot number" or"batch number" means a distinctive group of numbers, letters, or symbols or
any combination of these that is unique to a group of cannabis goods.
(1) "Medicinal cannabis patient"includes both a qualified patient as defined in Health and Safety
Code section 11362.7 and, a person in possession of a valid identification card issued under
Health and Safety Code section 11362.71.
(in) "Nonvolatile solvent" means any solvent used in the extraction process that is not a volatile
solvent. For purposes of this division, a nonvolatile solvent includes carbon dioxide (CO?) used
for extraction and ethanol used for extraction or post-extraction processing.
(n) "Package" and"Packaging" means any container or wrapper that may be used for enclosing
or containing any cannabis goods for final retail sale. "Package" and "packaging" does not
include a shipping container or outer wrapping used solely for the transport of cannabis goods in
bulk quantity to a licensee.
(o) "Pre-roll" means any combination of the following rolled in paper: flower, shake, leaf, or kief
that is obtained from accumulation in containers or sifted from loose, dry cannabis flower or leaf
with a mesh screen or sieve.
(p) "Publicly owned land" means any building or real property that is owned by a city, county,
state, federal, or other government entity.
(q) "Residential area" is an area that is within 600 feet of any single-family or multifamily
residence, other than commercial hotels, motels, and similar establishments for temporary
lodging.
(r) "Retail area" means a building, room, or other area that is open to the public, upon the
licensed retailer or licensed microbusiness premises in which cannabis goods are sold or
displayed.
(s) "Sublet" means to lease or rent all or part of a leased or rented property.
(t) "Transport" means the physical movement of cannabis goods from one licensed premises to
another licensed premises.
(u) "Vehicle alarm system" is a device or series of devices installed to discourage theft of the
vehicle or its contents and is intended to summon general attention or to summon law
enforcement as a result of an indication of an attempted breach of the vehicle.
Authority: Section 26013, Business and Professions Code. Reference: Section 26013, Business
and Professions Code.
Article 2. Applications
§ 5004. Temporary License Application Requirements
(a) Temporary license applications may be completed and submitted online at www.bcc.ca.gov
or completed in hard copy and submitted by delivering a printed copy to the Bureau's office(s).
Bureau of Cannabis Control Regular Regulations Text Page 2 of 136
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(b) Applicants who submit their applications online shall first register for a user account. To
register for a user account, the applicant shall do all of the following:
(1) Create a user name,password, and security question and answer;
(2) Provide an email address; and
(3) Provide the owner's first and last name, primary phone number, social security number or
individual taxpayer identification number, date of birth, and mailing address.
(c) An application must be completed by an owner as defined by section 5003 of this division.
An application must be submitted to the Bureau for each temporary license applied for. An
application for a temporary license includes:
(1) The legal business name of the applicant.
(2) The email address of the applicant's business and the telephone number for the premises.
(3) The business' federal employer identification number.
(4) A description of the business organizational structure of the applicant, such as partnership or
corporation.
(5) The commercial cannabis license that the applicant is applying for, and whether the applicant
is requesting that the license be designated as medicinal, adult-use, or both. Testing laboratory
applicants do not have to designate medicinal or adult-use, as testing laboratory licenses allow
the holder to test both medicinal and adult-use cannabis.
(6) The contact information for the applicant's designated primary contact person including the
name, title, phone number, and email address of the individual.
(7) For each owner who meets the criteria of Business and Professions Code section 26001(a]),
the owner's name, title,percentage of ownership, mailing address, telephone number, and email
address if applicable.
(8) The physical address of the premises to be licensed.
(9) Evidence that the applicant has the legal right to occupy and use the proposed location that
complies with section 5007 of this division.
(10) A premises diagram pursuant to section 5006 of this division.
(11) A copy of a valid license,permit, or other authorization issued by a local jurisdiction, that
enables the applicant to conduct commercial cannabis activity at the location requested for the
temporary license. For purposes of this section, "other authorization" shall include, at a
minimum, a written statement or reference that clearly indicates the local jurisdiction intended to
grant pennission for the commercial cannabis activity or to the person to conduct commercial
cannabis activity at the premises. Upon receipt of the application, the Bureau shall contact the
Bureau of Cannabis Control Regular Regulations Text Page 3 of 136
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applicable local jurisdiction to confirm the validity of the authorization. If the local jurisdiction
does not respond within 10 calendar days, the Bureau shall consider the authorization valid.
(12) Attestation to the following statement: Under penalty of perjury, I hereby declare that the
information contained within and submitted with the application is complete, true, and accurate. I
understand that a misrepresentation of fact is cause for rejection of this application, denial of the
license, or revocation of a license issued.
(d) A temporary license is a conditional license that authorizes the licensee to engage in
commercial cannabis activity as would be permitted under the privileges of a non-temporary
license of the same type. A temporary licensee shall follow all applicable rules and regulations as
would be required if the licensee held a non-temporary license of the same type.
(e) A temporary license does not obligate the Bureau to issue a non-temporary license nor does
the temporary license create a vested right in the holder to either an extension of the temporary
license or to the granting of a subsequent non-temporary license.
(f) A temporary license issued under this section shall be valid for 120 days from the effective
date. No temporary license shall be effective prior to January 1, 2018.
(g) A temporary license may be extended by the Bureau for additional 90-day periods if a
complete application for an annual license has been submitted to the Bureau pursuant to section
5002 of this division prior to the initial expiration date of the temporary license.
(h) The Bureau shall not issue any temporary licenses or extensions after December 31, 2018.
Any temporary license issued or extended with an expiration date after December 31, 2018 will
be valid until it expires, but shall not be extended beyond the expiration date.
Authority: Section 26013, Business and Professions Code. Reference: Section 26012 and
26050.1, Business and Professions Code.
§ 5002. Annual License Application Requirements
(a) Applications may be completed and submitted online at www.bcc.ca.gov or completed in hard
copy and submitted by delivering a printed copy to the Bureau's office(s).
(b) Applicants who submit their applications online shall first register for a user account. To
register for a user account, the applicant shall do all of the following:
(1) Create a user name, password, and security question and answer;
(2)Provide an email address; and
(3) Provide the owner's first and last name, primary phone number, social security number or
individual taxpayer identification number, date of birth, and mailing address.
(c) An application must be completed by an owner as defined by section 5003 of this division.
An application must be submitted to the Bureau for each location and each license type. An
application for an annual cannabis license includes the following:
Bureau of Cannabis Control Regular Regulations Text Page 4 of 136
'69
(1) The name of the applicant. For applicants who are individuals, the applicant shall provide
both the first and last name of the individual. For applicants who are business entities, the
applicant shall provide the legal business name of the applicant.
(2) If applicable, the business trade name ("DBA") of the applicant.
(3) The commercial cannabis license that the applicant is applying for, and whether the applicant
is requesting that the license be designated as medicinal, adult-use, or both. Testing laboratory
applicants do not have to designate medicinal or adult-use, as testing laboratory licenses allow
the holder to test both medicinal and adult-use cannabis.
(4) Payment of an application fee pursuant to section 5014 of this division.
(5) Whether the owner is serving or has previously served in the military. Disclosure of military
service is voluntary. An applicant who has served as an active duty member of the Anned Forces
of the United States and was honorably discharged and who can provide evidence of such
honorable discharge shall have his or her application expedited pursuant to Business and
Professions Code section 115.4.
(6) A list of the license types and the license numbers issued from the Bureau and all other state
cannabis licensing authorities that the applicant holds, including the date the license was issued
and the licensing authority that issued the license.
(7) Whether the applicant has been denied a license or has had a license suspended or revoked by
the Bureau or any other state cannabis licensing authority. The applicant shall provide the type of
license applied for, the name of the licensing authority that denied the application, and the date
of denial.
(8) The physical address of the premises. If the Bureau is unable to confirm that the address
provided is valid, then the applicant shall provide a document that confirms the physical address
of the premises. Such a document may include a utility bill, printed information from the county
assessor, deed, or title.
(9) The mailing address for the applicant, if different from the premises address.
(10) The telephone number for the premises.
(11) The website address and email address of the applicant's business.
(12) The business' federal employer identification number.
(13) Contact information for the applicant's designated primary contact person including the
name, title, phone number, and email address of the individual.
(14) A description of the business organizational structure of the applicant, such as partnership or
corporation.
(15) The business-formation documents, which may include, but are not limited to, articles of
incorporation, operating agreements, partnership agreements, and fictitious business name
statements. The applicant shall also provide all documents filed with the California Secretary of
Bureau of Cannabis Control Regular Regulations Text Page 5 of 136
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State, which may include, but are not limited to, articles of incorporation, certificates of stock,
articles of organization, certificates of limited partnership, and statements of partnership
authority. If the commercial cannabis business is held in trust, the applicant shall provide a copy
of the trust.
(16) A list of every fictitious business name the applicant is operating under including the
address where the business is located.
(17) A commercial cannabis business that is a foreign corporation shall include in its application
the certificate of qualification issued by the Secretary of State of California.
(18) The applicant shall supply the following financial information:
(A) A list of funds belonging to the applicant held in savings, checking, or other accounts
maintained by a financial institution. The applicant shall provide, for each account, the financial
institution's name, the financial institution's address, account type, account number, and the
amount of money in the account.
(B) A list of loans made to the applicant. For each loan, the applicant shall provide the amount of
the loan, the date of the loan, terin(s) of the loan, security provided for the loan, and the name,
address, and phone number of the lender.
(C) A list of investments made into the applicant's commercial cannabis business. For each
investment, the applicant shall provide the amount of the investment, the date of the investment,
term(s) of the investment, and the name, address, and phone number of the investor.
(D) A list of all gifts of any kind given to the applicant for its use in conducting commercial
cannabis activity. For each gift, the applicant shall provide the value of the gift or description of
the gift, and the name, address, and phone number of the provider of the gift.
(19) A complete list of every individual who has a financial interest in the commercial cannabis
business as defined in section 5004 of this division, who is not an owner as defined in section
5003(b) of this division.
(20) A complete list of every owner of the applicant as defined in section 5003(b) of this
division. Each individual named on this list shall submit the following information:
(A) The full name of the owner.
(B) The owner's title within the applicant entity.
(C) The owner's date of birth and place of birth.
(D) The owner's social security number or individual taxpayer identification number.
(E) The owner's mailing address.
(F) The owner's telephone number. This may include a number for the owner's home, business,
or mobile telephone.
Bureau of Cannabis Control Regular Regulations Text Page 6 of 136
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(G) The owner's email address.
(H) The owner's current employer.
(I) The percentage of the ownership interest held in the applicant entity by the owner.
(J) Whether the owner has an ownership or a financial interest as defined in sections 5003 and
5004, respectively, of this division in any other commercial cannabis business licensed under the
Act.
(K) A copy of the owner's government-issued identification. Acceptable forms of identification
are a document issued by a federal, state, county, or municipal government that includes the
name, date of birth, height, gender, and picture of the person, such as a driver license.
(L) A detailed description of the owner's convictions. A conviction within the meaning of this
section means a plea or verdict of guilty or a conviction following a plea of nolo contendere.
Convictions dismissed under Penal Code section 1203.4 or equivalent non-California law must
be disclosed. Convictions dismissed under Health and Safety Code section 11361.8 or equivalent
non-California law must be disclosed. Juvenile adjudications and traffic infractions under S300
that did not involve alcohol, dangerous drugs, or controlled substances do not need to be
included. For each conviction, the owner shall provide the following:
(1) The date of conviction.
(ii) Dates of incarceration, if applicable.
(iii) Dates of probation, if applicable.
(iv) Dates of parole, if applicable.
(v) A detailed description of the offense for which the owner was convicted.
(vi) A statement of rehabilitation for each conviction. The statement of rehabilitation is to be
written by the owner and may contain evidence that the owner would like the Bureau to consider
that demonstrates the owner's fitness for licensure. Supporting evidence may be attached to the
statement of rehabilitation and may include, but is not limited to, a certificate of rehabilitation
under Penal Code section 4852.01, and dated letters of reference from employers, instructors, or
professional counselors that contain valid contact information for the individual providing the
reference.
(M) If applicable, a detailed description of any administrative orders or civil judgements for
violations of labor standards, any suspension of a commercial cannabis license, revocation of a
commercial cannabis license, or sanctions for unlicensed commercial cannabis activity by a
licensing authority, local agency, or state agency against the applicant or a business entity in
which the applicant was an owner or officer within the three years immediately preceding the
date of the application.
(N) Attestation to the following statement: Under penalty of perjury, I hereby declare that the
information contained within and submitted with the application is complete, true, and accurate. I
Bureau of Cannabis Control Regular Regulations Text Page 7 of 136
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understand that a misrepresentation of fact is cause for rejection of this application, denial of the
license, or revocation of a license issued.
(21) Evidence that the applicant has the legal right to occupy and use the proposed location that
complies with section 5007 of this division.
(22) Evidence that the proposed premises is in compliance with Business and Professions Code
section 26054(b) and section 5026 of this division.
(23) For an applicant with 20 or more employees, the applicant shall attest that the applicant has
entered into a labor peace agreement and will abide by the terms of the agreement. The applicant
shall submit a copy of the page of the labor peace agreement that contains the signatures of the
union representative and the applicant. For applicants who have not yet entered into a labor
peace agreement, the applicant shall provide a notarized statement indicating that the applicant
will enter into and abide by the terms of a labor peace agreement as soon as reasonably
practicable after licensure.
(24) The applicant shall provide a valid seller's permit number issued by the California
Department of Tax and Fee Administration, if applicable. If the applicant has not yet received a
seller's permit, the applicant shall attest that the applicant is currently applying for a seller's
permit.
(25) A diagram of the premises as required by section 5006 of this division.
(26) Proof of a bond as required by section 5008 of this division.
(27) For testing laboratory applications, the certificate(s) of accreditation as required by section
5702 of this division, or the inforniation required for a provisional license as required by section
5703 of this division.
(28) When an applicant provides a license,permit, or other authorization from the local
jurisdiction where the licensed premises will be or is located, the Bureau will notify the
applicable local jurisdiction to confirm the validity of the authorization. If the local jurisdiction
does not respond within 10 calendar days, the Bureau shall consider the authorization valid.
(29) All licensee applications shall include a detailed description of the applicant's operating
procedures. Applicants shall use and submit to the Bureau the following forms which are
incorporated by reference:
(A) Transportation Procedures, Forrn BCC-LIC-015 (New 7/18)
(B) Inventory Procedures, Forni BCC-LIC-016 (New 7/18)
(C)Non-Laboratory Quality Control Procedures, Fonn BCC-LIC-017 (New 7/18)
(D) Security Procedures, Forin BCC-LIC-018 (New 7/18)
(E) Cannabis Waste Management Procedures, Form BCC-LIC-019 (New 7/18)
(F) Delivery Procedures, Form BCC-LIC-020 (New 7/18)
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(30) For applicants applying for a microbusiness license, the application shall include a detailed
description of the applicant's operating procedures required by this section for each cannabis
activity the applicant intends to engage in.
(31) For applicants applying for a testing laboratory license, in addition to the operating
procedures required under subsection (c)(29) of this section, the standard application shall
include the operating procedures required by chapter 6 of this division.
(32) The limited waiver of sovereign immunity required by section 5009 of this division, if
applicable.
(33) Evidence of exemption from, or compliance with, the California Environmental Quality Act
as required by section 5010 of this division.
Authority: Sections 115.4 and 26013, Business and Professions Code. Reference: Sections 115.4,
144, 26012, 26050, 26051.5, and 26055, Business and Professions Code.
§ 5003. Designation of Owner
(a) All applicants for a commercial cannabis license shall have at a minimum one individual who
meets the definition of"owner" under Business and Professions Code section 26001(al) and who
will submit the information required of owners under section 5002.
(b) "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) The trustee(s) and all persons that have control of the trust and/or the commercial cannabis
business that is held in trust.
(5) An individual who will be participating in the direction, control, or rhanagement of the
person applying for a license. Such an individual includes any of the following:
(A) A general partner of a commercial cannabis business that is organized as a partnership.
(B) A non-member manager or managing member of a commercial cannabis business that is
organized as a limited liability company.
(C) An officer or director of a commercial cannabis business that is organized as a corporation.
(D) Any individual who assumes responsibility for the license.
(c) When an entity has an aggregate ownership interest of 20 percent or more in the commercial
cannabis business, then the chief executive officer and/or members of the board of directors of
the entity shall be considered owners.
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Authority: Section 26013, Business and Professions Code. Reference: Sections 26001, and
26012, Business and Professions Code.
§ 5004. Financial Interest in a Commercial Cannabis Business
(a) A financial interest means an agreement to receive a portion of the profits of a commercial
cannabis business, an investment into a commercial cannabis business, a loan provided to a
commercial cannabis business, or any other equity interest in a commercial cannabis business
except as provided in subsection (c). For the purpose of this section, an interest in a diversified
mutual fund, blind trust, or similar instrument is not a financial interest.
(b) The license application shall include the name, birthdate, and government-issued
identification type and number for all individuals who have a financial interest in a commercial
cannabis business but are not owners as defined in section 5003(b) of this division. These
individuals shall not be required to submit the information required of owners under section
5002(c)(20) of this division.
(c) Notwithstanding subsection (b), the following persons are not required to be listed on an
application for licensure under section 5002(c)(19) of this division:
(1) A bank or financial institution whose interest constitutes a loan;
(2) Persons whose only financial interest in the commercial cannabis business is through an
interest in a diversified mutual fund, blind trust, or similar instrument;
(3) Persons whose only financial interest is a security interest, lien, or encumbrance on property
that will be used by the commercial cannabis business; and
(4) Persons who hold a share of stock that is less than 5 percent of the total shares in a publicly
traded company.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26012 and
26051.5, Business and Professions Code.
§ 5005. Personnel Prohibited from Holding Licenses
(a) A license authorized by the Act and issued by the Bureau may not be held by, or issued to,
any person holding office in, or employed by, any agency of the State of California or any of its
political subdivisions when the duties of such person have to do with the enforcement of the Act
or any other penal provisions of law of this State prohibiting or regulating the sale, use,
possession, transportation, distribution, testing, manufacturing, or cultivation of cannabis goods.
(b) This section applies to, but is not limited to, any person employed in the State of California
Department of Justice as a peace officer, in any district attorney's office, in any city attorney's
office, in any sheriffs office, or in any local police department.
(c) No person listed in subsection (a) or(b) of this section may have any ownership interest,
directly or indirectly, in any business to be operated or conducted under a cannabis license.
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(d) This section does not apply to any person who holds a license in the capacity of executor,
administrator, or guardian.
Authority: Section 26013, Business and Professions Code. Reference: Section 26012, Business
and Professions Code.
§ 5006. Premises Diagram
(a) An applicant shall submit to the Bureau, with the application, a complete and detailed
diagram of the proposed premises. The diagram shall be used by the Bureau to determine
whether the premises meets the requirements under this division and the Act. The Bureau shall
deny an application if the premises does not qualify for licensure pursuant to Business and
Professions Code section 26057.
(b) The diagram shall show the boundaries of the property and the proposed premises to be
licensed, showing all boundaries, dimensions, entrances and exits, interior partitions, walls,
rooms, windows, and doorways, and shall include a brief statement or description of the
principal activity to be conducted therein.
(c) The diagram shall show and identify commercial cannabis activities that will take place in
each area of the premises, and identify limited-access areas. Commercial cannabis activities that
shall be identified on the diagram include the following, if applicable to the business operations:
storage, batch sampling, loading or unloading of shipments, packaging and labeling, customer
sales, loading for deliveries, extraction, cultivation, and processing.
(d) The diagram shall show where all cameras are located and assign a number to each camera
for identification purposes.
(e) The diagram shall be to scale.
(f) The diagram shall not contain any highlighting and the markings on the diagram shall be in
black-and-white print.
(g) If the proposed premises consists of only a portion of a property, the diagram must be labeled
indicating which part of the property is the proposed premises and what the remaining property
is used for.
(h) If the proposed premises consists of only a portion of a property that will contain two or more
licensed premises, the diagram shall clearly show the designated entrances and walls under the
exclusive control of the applicant for the premises, as well as the designated entrances and walls
for each additional premises. The diagram shall also show all proposed common or shared areas
of the property. Such areas may include lobbies, bathrooms, hallways, and breakrooms.
(i) If the proposed premises will be a microbusiness that includes cultivation activities, in
addition to the requirements of subsections (b) through (g) of this section, the premises diagram
shall also include all the required information for a premises diagram under section 5501(d) of
this division.
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(j) If a proposed premises is located on only a portion of a property that also includes a
residence, the diagram shall clearly show the designated buildings for the premises and the
residence.
Authority: Section 26013, Business and Professions Code. Reference: Section 26012 and
26051.5, Business and Professions Code.
§ 5007. Landowner Approval
(a) If the applicant is not the landowner of the real property upon which the premises is located,
the applicant shall provide to the Bureau a document from the landowner or the landowner's
agent that states that the applicant has the right to occupy the property and acknowledges that the
applicant may use the property for the commercial cannabis activity for which the applicant is
applying for licensure. An applicant shall also provide a copy of the rental agreement, as
applicable.
(b) If the applicant is the landowner of the real property upon which the premises is located, the
applicant shall provide to the Bureau a copy of the title or deed to the property.
(c) If the landowner is a trust, the landowner approval shall come from the person that holds
equitable title in the real property.
Authority: Section 26013, Business and Professions Code. Reference: Section 26051.5, Business
and Professions Code.
§ 5007.1. Electronic Signature
The Bureau will accept an electronic signature that complies with Civil Code section 1633.2(h)
on any documents required to be submitted to the Bureau and that are submitted electronically,
except documents that are required to be notarized.
Authority: Section 26013, Business and Professions Code. Reference: Section 26013, Business
and Professions Code.
§ 5008. Bond
An applicant shall provide proof of having obtained a surety bond of at least $5,000 payable to
the State of California to ensure payment of the cost incurred for the destruction of cannabis
goods necessitated by a violation of the Act or the regulations adopted thereunder. All bonds
required under this regulation must be issued by a corporate surety licensed to transact surety
business in the State of California and shall be issued on the Commercial Cannabis Licensee
Bond form under Title 11, California Code of Regulations, Article 56, section 118.1.
Authority: Section 26013, Business and Professions Code. Reference: Section 26051.5, Business
and Professions Code.
§ 5009. Limited Waiver of Sovereign Immunity
(a) Any applicant or licensee that may fall within the scope of sovereign immunity that may be
asserted by a federally recognized tribe or other sovereign entity must waive any sovereign
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immunity defense that the applicant or licensee may have, may be asserted on its behalf, or may
otherwise be asserted in any state administrative or judicial enforcement actions against the
applicant or licensee, regardless of the form of relief sought, whether monetary or otherwise,
under the state laws and regulations governing commercial cannabis activity. The applicant or
licensee must submit a written waiver of sovereign immunity to the Bureau with any license
application or renewal, which is valid for the period of the license. The written waiver shall
include that the applicant or licensee has the lawful authority to enter into the waiver required by
this section, the applicant or licensee hereby waives sovereign immunity, and the applicant or
licensee agrees to do all of the following:
(1) Provide documentation to the Bureau that establishes that the applicant or licensee has the
lawful authority to enter into the waiver required by this section;
(2) Conduct all commercial cannabis activity in full compliance with the state laws and
regulations governing commercial cannabis activity, including submission to all enforcement
provisions thereof,
(3) Allow access as required by state statute or regulation by persons or entities charged with
duties under the state laws and regulations governing commercial cannabis activity to any
licensed premises or property at which the applicant conducts any commercial cannabis activity,
including licensed premises or property where records of commercial cannabis activity are
maintained by or for the applicant or licensee;
(4) Provide any and all records, reports, and other documents as may be required under the state
laws and regulations governing commercial cannabis activity;
(5) Conduct commercial cannabis activity with other state commercial cannabis licensees only,
unless otherwise specified by state law;
(6) Meet all of the requirements for licensure under the state laws and regulations governing the
conduct of commercial cannabis activity, and provide truthful and accurate documentation and
other information of the applicant's qualifications and suitability for licensure as may be
requested; and
(7) Submit to the personal and subject matter jurisdiction of the California courts to address any
matter related to the waiver or the commercial cannabis application, license, or activity, and that
all such matters and proceedings shall be governed, construed and enforced in accordance with
California substantive and procedural law, including but not limited to the Medicinal and Adult-
Use Regulation and Safety Act and the Administrative Procedure Act.
(b) The Bureau shall not approve an application for a state license if approval of the license
would violate the provisions of any local ordinance or regulation adopted in accordance with
Business and Professions Code section 26200 that is issued by the county or, if within a city, the
city, within which the licensed premises is to be located.
(c) Any applicant or licensee must immediately notify the Bureau of any changes that may
materially affect the applicant or licensee's compliance with subsection (a) of this section.
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(d) Any failure by an applicant or licensee to comply with the requirements of subsections (b) or
(c) of this section shall be a basis for denial of an application or renewal or discipline of a
licensee.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26012, 26050
and 26051.5, Business and Professions Code.
§ 5010. Compliance with the California Environmental Quality Act (CEQA)
(a) For purposes of complying with the California Environmental Quality Act (CEQA):
(1) "Project" means the commercial cannabis activity or activities for which an annual license
application is submitted to the Bureau and which requires the Bureau to engage in discretionary
review.
(2) "CEQA Guidelines" means the Guidelines for Implementation of the California
Environmental Quality Act codified at Title 14, California Code of Regulations, sections 15000
et seq.
(3) "Environmental document" has the same meaning as section 15361 of the CEQA Guidelines.
Environmental documents are prepared by the applicant or the local jurisdiction that analyze the
commercial cannabis activity or activities and which assess whether the project has the potential
to generate significant adverse environmental impacts.
(b) An applicant may provide evidence of compliance with CEQA by submitting a copy of an
environmental document previously certified or adopted by the local jurisdiction that evaluated
the project.
(c) If a previously certified or adopted environmental document is not available or does not exist,
and if the Bureau does not determine that the project is exempt from CEQA as provided in
section 5010.2 of this division, the applicant shall provide information to enable the Bureau to
determine what type of environmental document should be prepared. Such information shall
include at least the following:
(1) The project location and surrounding land use, which shall:
(A) Describe the project location including street address, city, county, Assessor's Parcel
Number, major cross streets, general plan designation, zoning designation, and any other
physical description that clearly indicates the project site location;
(B) Describe the surrounding land uses and zoning designations within one-half mile radius of
the project and list of all abutting land uses.
(C) Include a vicinity snap and aerial image to show the project location;
(D) Include photographs, not larger than 8 '/2 by 11 inches, of the of existing visual conditions as
observed from the publicly accessible,vantage point(s);
(2) A project description, which shall:
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(A) Describe the activities included in the project application and identify any other commercial
cannabis activity or activities occurring at the proposed premises;
(B) Quantify the project size (total floor area of the project) in square feet and the lot size on
which the project is located, in square feet;
(C) List and describe any other related public agency pen-nits and approvals, including any
entitlements, required for this project, including those required by a planning commission, local
air district, or regional water board;
(D) Identify whether the applicant is licensed by, or has applied for licensure from, the California
Department of Food and Agriculture or the State Department of Public Health to engage in
commercial cannabis activity at the proposed premises;
(E) Estimate the number of anticipated employees onsite, occupancy during operating hours,
frequency of deliveries or shipments originating from and/or arriving to the project site, describe
the anticipated transportation activity at the project site including the effects of the project related
to public transit, bicycle, or pedestrian facilities;
(F) Identify the location, type, and quantity of hazardous materials, as defined by Health and
Safety Code section 25260, that are stored, used, or disposed of at the project site and a copy of
the Hazardous Material Business Plan (HMBP) prepared for the proposed premises, if any;
(G) Discuss whether the project will increase the quantity and type of solid waste, as defined by
Public Resources Code section 40191, or hazardous waste, as defined by Health and Safety Code
section 25117, that is generated or stored onsite.
(H) Describe the project's anticipated operational energy needs, identify the source of energy
supplied for the project and the anticipated amount of energy per day, and explain whether the
project will require an increase in energy demand and the need for additional energy resources.
(3) The Bureau shall consider, for purposes of evaluating compliance with the CEQA, both the
individual and cumulative impacts of all commercial cannabis activities occurring at the
proposed premises.
Authority: Section 26013, Business and Professions Code. Reference: Section 26055, Business
and Professions Code.
§ 5010.1. Review of Previously Prepared Environmental Documents Pursuant to CEQA
(a) When the project has been evaluated in a previously certified or adopted environmental
document, the Bureau will evaluate the project as a responsible agency as provided in section
15096 of the CEQA Guidelines.
(b) The Bureau may require subsequent environmental review if one or more of the events
outlined in Public Resources Code section 21166 or section 15162 of the CEQA Guidelines
occurs.
Authority: Section 26013, Business and Professions Code. Reference: Section 26055, Business
and Professions Code; Section 21166, Public Resources Code.
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§5010.2 CEQA Exempt Projects.
(a) An applicant may submit documentation to the Bureau demonstrating that the project is
exempt from further environmental review pursuant to CEQA because the project falls within a
class of projects determined not to have significant effect on the environment.
(b) Documentation submitted to the Bureau in support of a determination that the project is
exempt from further environmental review under CEQA shall, at minimum, include the
following information:
(1) Project location and surrounding land use, as required in section 5010 of this division;
(2) Project description as required in section 5010 of this division; and
(3) A written justification to support a determination that the project is categorically exempt. The
written justification shall list the category and class the exemption falls under and shall explain
how the project fits the specified exemption. The justification shall also demonstrate that none
of the exceptions to categorical exemptions described in section 15300.2 of the CEQA
Guidelines apply to the project.
(c) Upon review, if the Bureau determines that the project is exempt from further CEQA review,
and approves an application for annual licensure, the Bureau will file a Notice of Exemption with
the State Clearinghouse within five working days after approval of the project as required by
section 15062(c) of the CEQA Guidelines.
Authority: Section 26013, Business and Professions Code. Reference: Section 26055, Business
and Professions Code.
§5010.3 Preparation of CEQA Environmental Documents by Applicant
If the Bureau determines that a project does not qualify for an exemption, or that the
circumstances described in Public Resources Code section 21166 and 15162 of the CEQA
Guidelines require subsequent environmental review, the Bureau may charge the applicant for
the costs of preparation for any supplemental environmental document as well as the Bureau's
costs for procedures to comply with CEQA, unless the Bureau specifies otherwise.
Authority: Section 26013, Business and Professions Code. Reference: Section 26055, Business
and Professions Code.
§ 5011. Additional Information
The Bureau may request additional information and documents from the applicant. The Bureau
will provide the applicant a deadline for submittal of additional information. The Bureau will
consider the complexity of the information requested and the ease with which the information
can be obtained and transmitted to the Bureau by the applicant in determining the deadline.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26031, 26050
and 26051.5, Business and Professions Code.
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§ 5012. Incomplete Applications
(a) If the Bureau determines that the application is incomplete, the Bureau may provide notice to
the applicant in accordance with Business and Professions Code section 124.
(b) If the Bureau issues a notice pursuant to Business and Professions Code section 124, an
applicant has one year from the date of the notice in subsection (a) of this section to correct all
deficiencies. If the applicant fails to correct the deficiencies within the one-year period and has
not responded to the Bureau's attempts to contact the applicant, the application shall be
considered abandoned under Business and Professions Code section 142.
(c) An applicant may reapply at any time following an abandoned application.
(d) The Bureau will not refund application fees for an incomplete or abandoned application.
Authority: Section 26013, Business and Professions Code. Reference: Sections 124, 142, 26050
and 26051.5, Business and Professions Code.
§ 5013. Withdrawal of Application
(a) An applicant play withdraw an application at any time prior to the Bureau's issuance of a
license or denial of a license.
(b) Requests to withdraw an application must be submitted to the Bureau in writing, dated, and
signed by the applicant.
(c) In accordance with Business and Professions Code section 118, withdrawal of an application
shall not, unless the Bureau has consented in writing to such withdrawal, deprive the Bureau of
its authority to institute or continue a proceeding against the applicant for the denial of the
license upon any ground provided by law or to enter an order denying the license upon any such
Around.
(d) The Bureau will not refund application fees for a withdrawn application.
(e) An applicant may reapply at any time following the withdrawal of an application and will be
required to submit a new application and fee.
Authority: Section 26013, Business and Professions Code. Reference: Sections 118 and 26050,
Business and Professions Code.
Article 3. Licensing
§ 5014. Fees
(a) The application fee for an annual license under section 5002 of this division, a cannabis event
organizer license under section 5600 of this division, a temporary cannabis event license under
section 5601 of this division for each event, and physical modification of the premises under
section 5027 of this division shall be paid by an applicant or licensee as provided by this
division. Applicants and licensees shall pay the appropriate fee as outlined in this section.
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Application Fee Schedule
License Type Fee Per
Application
All Annual Licenses $ 1,000
Cannabis Event Organizer License $ 1,000
Temporary Cannabis Event License 1,000
Physical Modification of Premises S 500
(b) The annual licensing fee for each license shall be paid by an applicant or licensee. After the
Bureau has approved the application. The Bureau shall not issue the license until the annual
licensing fee has been paid.
(c) In determining the appropriate license fee to be charged, each applicant or licensee shall
estimate the maximum dollar value of its planned operation in terms of the value of the product
expected to be tested, distributed, transported, retailed, cultivated and/or manufactured as
determined in assessing the 15% excise tax pursuant to Revenue and Taxation Code section
34011. The applicant or licensee will use the maximum dollar value of its planned operation to
detennine the appropriate fee as outlined in the following fee schedule.
Annual License Fee Schedule
License Type Operations Fee Per
($ Max. Per License) License
Testing Laboratory up to 50 million S 12,500
,greater than 50 million to 400 million S 45,000
greater than 400 million S 90,000
Distributor up to 3 million S 1,200
greater than 3 million to 12 million S 10,000
greater than 12 million to 60 million $ 50,000
greater than 60 million to 120 million $100,000
greater than 120 million $200,000
Distributor Transport Only up to 3 million $500
Self-Distribution greater than 3 million to 12 million $1,500
greater than 12 million $4,000
Distributor Transport Only up to 3 million $1,000
greater than 3 million to 12 million $2,800
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License Type Operations Fee Per
($ Max. Per License) License
greater than 12 million S6,000
Retailer up to 0.75 million $ 4,000
greater than 0.75 million to 2.5 million S 20,000
greater than 2.5 million to 7.5 million S 64,000
greater than 7.5 million $ 120,000
Microbusiness up to 0.75 million S 10,000
greater than 0.75 million to 2.5 million S 30,000
greater than 2.5 million to 7.5 million S 100,000
greater than 7.5 million $ 180,000
(d) Notwithstanding the fees identified above, cannabis event organizers shall pay the
appropriate fee as outlined in this section.
Annual License Fee Schedule for Cannabis Event Organizers
License Type Planned Operations Fee Per
(Number of Operations) License
Event Organizer 1-10 events annually $ 5,000
greater than 10 events annually S 15,000
(e) All fees are nonrefundable.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26012, 26051.5
and 26180, Business and Professions Code.
§ 5015. Payment of Fees
(a) Any fee specified in this division shall be made to the Bureau of Cannabis Control by cash,
check, money order, debit card, or credit card. Check and money order payments may be made
out to the Bureau of Cannabis Control or the Department of Consumer Affairs.
(b) If the fee is paid by debit or credit card:
(1) The payment shall be made through the Bureau's online licensing system; and
(2) The applicant or licensee may be required to pay any associated processing or convenience
fees to the third-party vendor processing the payment on behalf of the Bureau.
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(c) Failure to pay the appropriate licensing fee is grounds for discipline. If the Bureau determines
that the licensee paid an amount less than the appropriate licensing fee under section 5014 of this
division, the licensee will be required to pay the balance of the appropriate fee and a penalty fee
of 50 percent of the appropriate licensing fee. The Bureau in its discretion may waive the penalty
fee.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26012, 26051.5
and 26180, Business and Professions Code
§ 5016. Priority Licensing
(a) Priority licensing is available for annual licenses only, and is not applicable to any temporary
or cannabis event organizer license.
(b) To be eligible for priority licensing, an applicant must be able to demonstrate that the
applicant operated in compliance with the Compassionate Use Act of 1996 and its implementing
laws before September 1, 2016. Eligibility for priority licensing shall be established by one of
the following methods:
(1) The applicant is included on the list provided to the Bureau by the local jurisdiction in
response to the Bureau's request required by Business and Professions Code section 26054.2.
(2) If the local jurisdiction does not provide a list to the Bureau or the applicant's name does not
appear on the list provided to the Bureau, the applicant shall provide to the Bureau evidence of
operation in compliance with the Compassionate Use Act of 1996. Such evidence shall be in the
form of a document issued or signed by the applicant's local jurisdiction that contains the
following:
(A) Name of the applicant;
(B) Address of the premises to be licensed;
(C) License type(s) that the applicant is applying to the Bureau for;
(D) Name of the local jurisdiction;
(E) Name of the local jurisdiction office that is responsible for enforcing compliance with the
Compassionate Use Act of 1996;
(F)Name and contact information for the person authorized by the local jurisdiction to sign on
its behalf,
(G) Signature of the person authorized to sign on behalf of the local jurisdiction; and
(H) A statement to the effect of. "The above—named party is currently conducting commercial
cannabis activity in this jurisdiction and has been operating in compliance with the
Compassionate Use Act of 1996 since before September 1, 2016."
(c) The Bureau shall not provide priority licensing pursuant to this section after December 31,
2019.
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Authority: Section 26013, Business and Professions Code. Reference: Section 26012, 26054.2,
Business and Professions Code.
§ 5017. Substantially Related Offenses and Criteria for Rehabilitation
(a) For the purpose of license denial, convictions that are substantially related to the
qualifications, functions, or duties of the business for which the application is made include:
(1) A violent felony conviction, as specified in Penal Code section 667.5(c).
(2) A serious felony conviction, as specified in Penal Code section 1192.7(c).
(3) A felony conviction involving fraud, deceit, or embezzlement.
(4) A felony conviction for hiring, employing, or using a minor in transporting, carrying, selling, �
giving away, preparing for sale, or peddling, any controlled substance to a minor; or selling,
offering to sell, furnishing, offering to furnish, administering, or giving any controlled substance
to a minor.
(5) A felony conviction for drug trafficking with enhancements pursuant to Health and Safety
Code section l 1370.4 or 11379.8.
(b) Except as provided in subsections (a)(4) and (a)(5) of this section and notwithstanding
Chapter 2 (commencing with Section 480) of Division 1.5 of the Business and Professions Code,
a prior conviction, where the sentence, including any term of probation, incarceration, or
supervised release, is completed, for possession of, possession for sale, sale, manufacture,
transportation, or cultivation of a controlled substance is not considered substantially related, and
shall not be the sole ground for denial of a license. Conviction for any controlled substance
felony subsequent to ]]censure shall be grounds for revocation of a license or denial of the
renewal of a license.
(c) When evaluating whether an applicant who has been convicted of a criminal offense that is
substantially related to the qualifications, functions, or duties of the business for which the
application is made should be issued a license, the Bureau shall consider the following criteria of
rehabilitation:
(1) The nature and severity of the act or offense;
(2) Whether the person has a felony conviction based on possession or use of cannabis or
cannabis products that would not be a felony if the person was convicted of the offense on the
date of the person's application;
(3) The applicant's criminal record as a whole;
(4) Evidence of any act committed subsequent to the act or offense under consideration that
could be considered grounds for denial, suspension, or revocation of a commercial cannabis
activity license;
(5) The time that has elapsed since commission of the act or offense;
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(6) The extent to which the applicant has complied with any terms of parole, probation,
restitution, or any other sanctions lawfully imposed against the applicant;
(7) If applicable, evidence of dismissal under Penal Code sections 1203.4, l 203.4a, 1203.41 or
another state's similar law;
(8) if applicable, a certificate of rehabilitation obtained under Penal Code section 4852.01 or
another state's similar law; and
(9) Other evidence of rehabilitation submitted by the applicant.
(d) If an applicant has been denied a license based on a conviction, the applicant may request a
hearing pursuant to Business and Professions Code section 26058 to determine if the applicant
should be issued a license.
Authority: Section 26013, Business and Professions Code. Reference: Sections 482, 26012, and
26057, Business and Professions Code.
§ 5018. Additional Grounds for Denial of a License
In addition to the reasons for denial in Business and Professions Code section 26057, a license
may be denied for the following reasons:
(a) The applicant's proposed premises does not fully comply with standards set in regulation.
(b) The applicant's proposed or licensed premises is substantially different from the diagram of
the proposed premises submitted by the applicant, in that the size, layout, location of common
entry,,vays, doorways, or passage ways, means of public entry or exit, or identification of limited-
access areas within the licensed premises is not the same.
(c) The applicant denied the Bureau access to the licensed premises.
(d) The applicant made a material misrepresentation on the application.
(e) The applicant did not correct the deficiencies within the application in accordance with
sections 5002 and 5012 of this division.
(f) The applicant has been denied a license, permit, or other authorization to engage in
commercial cannabis activity by a state or local licensing authority.
(g) The applicant's proposed premises is not in compliance with Division 13 (commencing with
Section 21000) of the Public Resources Code.
(1i) The applicant has failed to remit taxes as required under the Revenue and Taxation Code.
(i) The applicant may be denied a license for any violations of law related to the operations of the
commercial cannabis business or for any violations of law related to licensure.
Authority: Section 26013, Business and Professions Code. Reference: Sections 480, 490, 26012,
26030 and 26050, Business and Professions Code.
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§ 5019. Excessive Concentration
(a) In determining whether to grant, deny, or renew a license for a retail license or microbusiness
license, the Bureau shall consider if an excessive concentration exists in the area where the
licensee will operate. For the purposes of this section "excessive concentration" applies when
either of the following conditions exist:
(1) The ratio of licensees to population within the census tract or census division in which the
applicant premises is located exceeds the ratio of licensees to population in the county in which
the applicant premises is located, unless denial of the application would unduly limit the
development of the legal market so as to perpetuate the illegal market for cannabis goods.
(2) The ratio of retail licenses or microbusiness licenses to the population within the census tract,
census division, or jurisdiction exceeds that allowable by local ordinance adopted under Business
and Professions Code section 26200.
(b) "Population Within the Census Tract or Census Division" as used in this section means the
population as detennined by the most recent United States decennial or special census. Such
population determination shall not operate to prevent an applicant from establishing that an
increase of resident population has occurred within the census tract or census division.
(c) "Population in the County" as used in this section shall be determined by the most recent
annual population estimate for California counties published by the Demographic Research Unit,
State Department of Finance.
(d) Beginning July 1, 2018, the Bureau shall calculate the ratios described in subsection (a) of
this section once every six months using the most current available data. The Bureau's
consideration of whether to grant, deny, or renew a license shall be based upon the most recent
ratio calculated by the Bureau on the date of the Bureau's decision.
(e) The existence of an excessive concentration shall not be considered in determining whether to
grant, deny, or extend a temporary license under Business and Professions Code section 26050.1.
(f) The applicant may provide reliable evidence establishing, to the satisfaction of the Bureau,
that a denial of a license would unduly limit the development of the legal market so as to
perpetuate the illegal market for cannabis goods.
Authority: Section 26013, Business and Professions Code. Reference: Section 26012 and 26051,
Business and Professions Code
§ 5020. Renewal of License
(a) To timely renew a license, a completed license renewal form and annual license fee pursuant
to section 5014 of this division shall be received by the Bureau from the licensee no earlier than
60 calendar days before the expiration of the license and no later than 5:00 p.m. Pacific Time on
the last business day before the expiration of the license if the renewal form is submitted to the
Bureau at its office(s), or no later than 11:59 p.m. on the last business day before the expiration
of the license if the renewal form is submitted to the Bureau through its electronic licensing
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system. Failure to receive a notice for license renewal does not relieve a licensee of the
obligation to renew all licenses as required.
(b) In the event the license is not submitted for renewal prior to the expiration date, the licensee
must not sell, transfer, transport, manufacture, test, or distribute any commercial cannabis goods
until the license is renewed.
(c) A licensee may submit a license renewal form up to 30 calendar days after the license
expires. Any late renewal form will be subject to a late fee equal to 50 percent of the applicable
licensing fee required by subsection (a) of this section.
(d) The license renewal form shall contain the following:
(1) The name of the licensee. For licensees who are individuals, the applicant shall provide both
the first and last name of the individual. For licensees who are business entities, the licensee shall
provide the legal business name of the applicant.
(2) The license number and expiration date.
(3) The licensee's address of record and licensed premises address.
(4) Documentation demonstrating the maximum dollar value of the licensee's operation for the
current licensed period, such as a copy of the licensee's state tax return filed with the California
Department of Tax and Fee Administration.
(5) An attestation that all information provided to the Bureau in the original application under
section 5002 of this division or subsequent notification under sections 5023 and 5024 of this
division is accurate and current.
(6) A limited waiver of sovereign immunity pursuant to section 5009 of this division.
Authority: Section 26013, Business and Professions Code. Reference: Section 26012 and 26050,
Business and ,Professions Code.
§ 5021. Denial of License
(a) The Bureau may deny an application for a new license or a renewal of a license for any
reason specified in Business and Professions Code section 26057 and on any additional grounds
including grounds for denial under section 5018 of this division, and grounds for discipline under
the Act or this division.
(b) Upon denial of an application for a license or renewal of a license, the Bureau shall notify the
applicant in writing of the reasons for denial, and the right to a hearing to contest the denial.
(c) The applicant may request a hearing to contest the denial by submitting a written request to
the Bureau.
(1) The written request for a hearing must be postmarked within 30 calendar days of service of
the notification of denial.
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(2) If the written request for a hearing is not received within the required tinieframe, the
applicant's right to a hearing is waived.
(3) Upon timely receipt of the written request for hearing, the Bureau shall set a date for hearing
to be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of
Division 3 of Title 2 of the Government Code.
Authority: Section 26013, Business and Professions Code; Reference: Sections 26012 and 26057
and 26058, Business and Professions Code.
§ 5022. Cancellation of License
(a) Every licensee who abandons, quits or who closes the licensed premises for a period
exceeding 30 consecutive calendar days, shall request in writing that the Bureau cancel the
license, within 10 business days after closing, quitting, or abandoning the licensed premises. The
Bureau may revoke the license of a licensee who fails to comply with the provisions of this
section. Upon cancellation or revocation of the license, the licensee shall not display and shall
destroy the license certificate.
(b) The Bureau may cancel a license at any time upon request by the licensee if there are no
outstanding fines or fees due to the Bureau and no disciplinary action is pending.
(c) If a licensee must close the licensed premises for a period exceeding 30 consecutive calendar
days to make renovations or repairs, the Bureau may allow the licensee to retain the license if the
licensee complies with section 5027 of this division.
(d) A person whose license has been cancelled or revoked pursuant to subsection (a) of this
section may submit to the Bureau a written request for the license to be reinstated. Any request
shall be submitted to the Bureau prior to the expiration date listed on the cancelled or revoked
license. The written request shall specify the reason the licensee failed to comply with subsection
(a) of this section and why the license should be reinstated r-etumed. The Bureau in its discretion
may reinstate the license.
Authority: Section 26013, Business and Professions Code. Reference: Section 26012 and 26050,
Business and Professions Code.
§ 5023. Business Modifications
Business modifications for any item contained in the application shall be made in accordance
with the following:
(a) Changes to standard operating procedures may be made without providing notification to the
Bureau. Licensees shall maintain a copy of all current and prior operating procedures as required
by section 5037 of this division.
(b) If at the time of licensure, a licensee employed less than 20 employees and later employs 20
or more employees, the licensee shall provide to the Bureau a document attesting that the
licensee has entered into a labor peace agreement and will abide by the terms of the agreement,
as soon as reasonably practicable once employing 20 or more employees. Once the licensee has
entered into the labor peace agreement, the licensee shall provide the Bureau with a copy of the
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page of the labor peace agreement that contains the signatures of the union representative and the
applicant.
(c) Licenses are not transferrable. Changes in ownership shall be made in accordance with the
following:
(1) If one or more of the owners of a license change, a new license application and fee shall be
submitted to the Bureau within 10 business days of the effective date of the ownership change.
The business may continue to operate under the active license while the Bureau reviews the
application if at least one owner is not transferring his or her ownership interest and will remain
as an owner under the new license and ownership structure. If all owners will be transferring
their ownership interest, the business shall not operate under the new ownership structure until
the new license application has been approved by the Bureau.
(A) A change in ownership occurs when a new person meets the definition of owner in section
5003 of this division.
(B) A change in ownership does not occur when one or more owners leave the business by
transferring their ownership interest to the other existing owner(s).
(2) In cases where one or more owners leave the business by transferring their ownership ,interest
to the other existing owner(s), the owner or owners that are transferring their interest shall
provide a signed statement to the Bureau confining that they have transferred their interest.
(d) When there is a change in persons with financial interest(s) in the commercial cannabis
business that do not meet the requirements for a new license application under this section, the
licensee shall submit the information required by sections 5002(c)(19) and 5004 of this division
to the Bureau within 10 business days of the change.
(e) Licensees may request to add an A-designation or M-designation to their license by sending a
notification to the Bureau signed by at least one owner as defined in section 5003 of this
division. A licensee shall not operate under the requested designation until they have received
approval from the Bureau.
(f) Microbusiness licensees may add a commercial cannabis activity to their license or remove a
commercial cannabis activity from their license if doing so is consistent with the requirement set
forth in section 5500(a) of this division that licensees engage in at least three (3) commercial
cannabis activities. Licensees shall request the modification by completing a request to modify
the licensed premises pursuant to section 5027 of this division. A licensee shall not engage in a
new commercial cannabis activity until they have paid for the modification and received
approval from the Bureau.
(g) Licenses may not be transferred from one premises to another. Licensees shall not operate out
of a new premises until they have been issued a new license.
Authority: Section 26013, Business and Professions Code. Reference: Sections 136 and 26012,
Business and Professions Code.
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§ 5024. Death, Incapacity, or Insolvency of a Licensee
(a) In the event of the death, incapacity, receivership, assignment for the benefit of creditors or
other event rendering one or more owners' incapable of perfonning the duties associated with the
license, the owner or owners' successor in interest (e.g., appointed guardian, executor,
administrator, receiver, trustee, or assignee) shall notify the Bureau in writing, within 10
business days.
(b) To continue operations or cancel the existing license, the successor in interest shall submit to
the Bureau the following:
(1) The name of the successor in interest.
(2) The name of the owner(s) for which the successor in interest is succeeding and the license
number;
(3) The phone number, mailing address, and email address of the successor in interest; and
(4) Documentation demonstrating that the owner(s) is incapable of perfonning the duties
associated with the license such as a death certificate; or a court order, and documentation
demonstrating that the person making the request is the owner or owners' successor in interest
such as a court order appointing guardianship, receivership, or a will or trust agreement.
(c) The Bureau may give the successor in interest written approval to continue operations on the
licensed business premises for a period of time specified by the Bureau:
(1) If the successor in interest or another person has applied for a license from the Bureau for the
licensed premises and that application is under review;
(2) If the successor in interest needs additional time to destroy or sell cannabis goods; or
(3) At the discretion of the Bureau.
(d) The successor in interest is held subject to all teens and conditions under which a state
cannabis license is held pursuant to the Act.
(e) The approval creates no vested right to the issuance of a state cannabis license.
Authority: Section 26013, Business and Professions Code. Reference: Section 26012, Business
and Professions Code.
§ 5025. Premises
(a) Each license shall have a designated licensed premises, with a distinct street address and suite
number if applicable, for the licensee's commercial cannabis activity. Each licensed premises
shall be subject to inspection by the Bureau.
(b) The Bureau may allow a licensee to conduct both adult-use and medicinal commercial
cannabis activity on the same licensed premises if all of the following criteria are met:
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(1) The licensee holds both an A-designation and an M-designation on the license for the
identical type of commercial cannabis activity; and
(2) The licensee only conducts one type of commercial cannabis activity on the licensed
premises.
(c) Licensed retailers and licensed microbusinesses shall only serve customers who are within
the licensed premises, or at a delivery address that meets the requirements of this division.
(1) The sale and delivery of cannabis goods shall not occur through a pass-out window or a slide-
out tray to the exterior of the licensed premises.
(2) Licensed retailers or licensed microbusinesses shall not operate as or with a drive-in or drive-
through at which cannabis goods are sold to persons within or about a motor vehicle.
(3)No cannabis goods shall be sold and/or delivered by any means or method to any person
within a motor vehicle.
(d) Alcoholic beverages as defined in Business and Professions Code section 23004 shall not be
stored or consumed on a licensed premises.
(e) Any licensed premises that is adjacent to another premises engaging in manufacturing or
cultivation shall be separated from those premises by walls, and any doors leading to the
cultivation or manufacturing premises shall remain closed.
(f) Cannabis shall not be dispersed in the air throughout the premises or throughout a portion of
the premises by an oil diffuser or any other vaporizing device that is intended to disperse the
vapor throughout the premises or throughout a portion of the premises. This section shall not be
interpreted to prohibit cannabis consumption on the premises of a retailer or microbusiness that
is conducted in accordance with Business and Professions Code section 26200(g).
(g)Notwithstanding subsection (c) of this section, an applicant or licensee may have a drive-in or
drive-through window only if, prior to June 1, 2018:
(1) The licensee or applicant received a license or permit from the local jurisdiction for a
premises including a drive-in or drive-through window which was disclosed on the local
application; or
(2) The licensee or applicant has submitted an application to the local jurisdiction for a license or
permit which, at the time of submission of the application, included information that a drive-in or
drive-through window was already part of, or proposed to be part of, the premises, and after June
1, 2018, the local jurisdiction approves the premises with a drive-in or drive-through window.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26001, 26012,
and 26053, Business and Professions Code.
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§ 5026. Premises Location
(a) A premises licensed under this division shall not be located within a 600-foot radius of a
school providing instruction in kindergarten or any grades 1 through 12, day care center, or
youth center that is in existence at the time the license is issued.
(b) Notwithstanding subsection (a) of this section, if a local jurisdiction has issued a license or
permit to conduct commercial cannabis activity at a premises that is located within a 600-foot
radius of a school providing instruction in kindergarten or any grades 1 through 12, day care
center, or youth center, the Bureau may approve the premises for licensure if the following
conditions are met:
(1) The applicant submits a copy of a valid license or permit from the local jurisdiction with the
application for licensure; and
(2) The local jurisdiction notifies the Bureau that the applicant is in compliance with all
applicable local ordinances and regulations pursuant to Business and Professions Code section
26055(g)(2)(C).
(c) A licensed premises shall not be in a location that requires persons to pass through a business
that sells alcohol or tobacco or a private residence to access the licensed premises, or that
requires persons to pass through the licensed premises to access a business that sells alcohol or
tobacco or a private residence.
(d) A licensed premises shall not be located within a private residence.
(e) Licensees shall ensure that the Bureau has immediate access to their licensed premises. If the
Bureau is denied access to a licensee's premises for any reason, the licensee shall be held
responsible and subject to discipline. If the Bureau is denied access to one licensee's premises
because of another licensee's refusal to grant access when the only access to one licensed
premises is through another licensed premises, all licensees shall be held responsible and subject
to discipline.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26012, 26051.5,
26054 and 26055, Business and Professions Code.
§ 5027. Physical Modification of Premises
(a) A licensee shall not, without the prior written approval of the Bureau, make a physical
change, alteration, or modification of the licensed premises that materially or substantially alters
the licensed premises or the use of the licensed premises from the premises diagram originally
filed with the license application. A licensee whose licensed premises is to be materially or
substantially changed, modified, or altered is responsible for filing a request for premises
modification with the Bureau.
(b) Material or substantial changes, alterations, or modifications requiring approval include, but
are not limited to:
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(1) The removal, creation, or relocation of a common entryway, doorway, passage, or a means of
public entry or exit, when such common entryway, doorway, or passage alters or changes
limited-access areas within the licensed premises;
(2) The removal, creation, or relocation of a wall or barrier; or
(3) Changing the activities conducted in or the use of an area identified in the last premises
diagram provided to the Bureau.
(c) A licensee shall request approval of a physical change, alteration, or modification in writing,
and the request shall include:
(1) A new premises diagram that conforms to requirements in section 5006 of this division; and
(2) A fee pursuant to section 5014 of this division.
(d) A licensee shall provide additional documentation requested by the Bureau to evaluate the
licensee's request to modify the licensed premises.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26012 and
26055, Business and Professions Code
§ 5028. Subletting of Premises
A licensee shall not sublet any area designated as the licensed premises for the licensee's
commercial cannabis activity.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26013 26012 and
26070, Business and Professions Code
§ 5029. [reserved]
§ 5030. Licensee's Responsibility for Acts of Employees and Agents
In construing and enforcing the provisions of the Act and the regulations in this division, the act,
omission, or failure of an agent, officer, representative, or other person acting for or employed by
a licensee, within the scope of his or her employment or office, shall in every case be deemed the
act, omission, or failure of the licensee.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26031 and
26110, Business and Professions Code.
§ 5031. Age Restriction
Employees or persons retained by a licensee to work within or on a licensed premises or to
handle cannabis goods shall be at least 21 years of age.
Authority: Section 26013, Business and Professions Code. Reference: Section 26140, Business
and Professions Code.
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§ 5032. Designated M and A Commercial Cannabis Activity
(a) All commercial cannabis activity shall be conducted between licensees. Retail licensees may
conduct commercial cannabis activity with customers in accordance with chapter 3 of this
division.
(b) Licensees may conduct business with other licensees irrespective of the M-designation or A-
designation on their licenses.
(c) Licensed distributors or licensed microbusinesses shall only transport and sell cannabis goods
designated as "For Medical Use Only," pursuant to the requirements prescribed by the State
Department of Public Health in regulation, to M-designated retailers or M-designated
microbusinesses;
(d) Products designated as "For Medical Use Only,"pursuant to requirements prescribed by the
State Department of Public Health in regulation, shall only be sold to medicinal customers by M-
designated retailers or M-designated microbusinesses.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26001, 26013,
and 26053, Business and Professions Code.
§ 5033. Storage of Inventory
(a) All inventory stored on the licensed premises shall be secured in a limited-access area.
(b) A licensee shall not store cannabis goods outdoors.
(c) Employee break rooms, changing facilities, and bathrooms shall be separated from all storage
areas.
(d) Each location where cannabis goods are stored must be separately licensed.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26012 and
26070, Business and Professions Code.
§ 5034. Significant Discrepancy in Inventory
(a) A significant discrepancy in inventory means a difference in actual inventory compared to
records pertaining to inventory of at least $5,000 or 2 percent of the average monthly sales of the
licensee, whichever is less.
(b) For the purposes of this section, average monthly sales shall be calculated by taking a per
month average of the total sales for the previous 6 months. If the licensee has not been in
operation for at least 6 months, only the months in which the licensee was operating shall be
used in detennining average monthly sales.
(c) For the purposes of this section, the licensee's acquisition price shall be used to determine the
value of cannabis goods in a licensee's inventory.
Authority: Section 26013, Business and Professions Code. Reference: Section 26070, Business
and Professions Code.
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§ 5035. Notification of Criminal Acts, Civil Judgments, Violations of Labor Standards, and
Revocation of a Local License, Permit, or Other Authorization After Licensure
(a) A licensee shall ensure that the Bureau is notified in writing of a criminal conviction of any
owner, either by mail or electronic mail, within 48 hours of the conviction. The written
notification to the Bureau shall include the date of conviction, the court docket number, the name
of the court in which the licensee was convicted, and the specific offense(s) for which the
licensee was convicted.
(b) A licensee shall ensure that the Bureau is notified in writing of a civil penalty or judgment
rendered against the licensee or any owner in their individual capacity, either by mail or
electronic mail, within 48 hours of delivery of the verdict or entry of judgment, whichever is
sooner. The written notification shall include the date of verdict or entry of judgment, the court
docket number, the name of the court in which the matter was adjudicated, and a description of
the civil penalty or judgment rendered against the licensee.
(c) A licensee shall ensure that the Bureau is notified in writing of an administrative order or
civil judgement for violations of labor standards against the licensee or any owner in their
individual capacity, either by mail or electronic mail, within 48 hours of delivery of the order.
The written notification shall include the date of the order,the name of the agency issuing the
order, and a description of the administrative penalty or judgement rendered against the licensee.
(d) A licensee shall ensure that the Bureau is notified in writing of the revocation of a local
license, pennit, or other authorization, either by mail or electronic mail within 48 hours of
receiving notice of the revocation. The written notification shall include the name of the local
agency involved, a written explanation of the proceeding or enforcement action, and the specific
violation(s) that led to revocation.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26030 and
26031, Business and Professions Code.
§ 5036. Notification of Theft, Loss, and Criminal Activity
(a) A licensee shall notify the Bureau and local law enforcement within 24 hours of discovery of
any of the following situations:
(1) The licensee discovers a significant discrepancy, as defined in section 5034 of this division,
in its inventory.
(2) The licensee discovers diversion, theft, loss, or any other criminal activity pertaining to the
operations of the licensee.
(3) The licensee discovers diversion, theft, loss, or any other criminal activity by an agent or
employee of the licensee pertaining to the operations of the licensee.
(4) The licensee discovers loss or unauthorized alteration of records related to cannabis goods,
customers, or the licensee's employees or agents.
(5) The licensee discovers any other breach of security.
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(b) The notification to the Bureau pursuant to subsection (a) of this section shall be in writing
and include the date and time of occurrence of the theft, loss, or criminal activity, the name of
the local law enforcement agency that was notified, and a description of the incident including,
where applicable, the item(s) that were taken or lost.
Authority: Section 26013, Business and Professions Code. Reference: Section 26070, Business
and Professions Code.
§ 5037. Record Retention
(a) Each licensee shall keep and maintain the following records related to commercial cannabis
activity for at least seven years:
(1) Financial records including, but not limited to, bank statements, sales invoices, receipts, tax
records, and all records required by the California Department of Tax and Fee Administration
(fonnerly Board of Equalization) under title 18, California Code of Regulations, sections 1698
and 4901.
(2) Personnel records, including each employee's full name, social security or individual tax
payer identification number, date employment begins, and date of termination of employment if
applicable.
(3) Training records including, but not limited to, the content of the training provided and the
names of the employees that received the training.
(4) Contracts with other licensees regarding commercial cannabis activity.
(5) Permits, licenses, and other local authorizations to conduct the licensee's commercial
cannabis activity.
(6) Security records, except for surveillance recordings required pursuant to section 5044 of this
division.
(7) Records relating to the composting or destruction of cannabis goods.
(8) Documentation for data or information entered into the track and trace system.
(9) All other documents prepared or executed by an owner or their employees or assignees in
connection with the licensed commercial cannabis business.
(b) All required records shall be prepared and retained in accordance with the following
conditions:
(1) Records shall be legible; and
(2) Records shall be stored in a secured area where the records are protected from debris;
moisture; contamination; hazardous waste; fire; and theft.
(c) The Bureau may make any examination of the books and records of any licensee as it deems
necessary to perform its duties under the Act.
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(d) All records are subject to review by the Bureau anytime the licensee is exercising the
privileges of the license or at any other time as mutually agreed to by the Bureau and the
licensee. Prior notice by the Bureau to review records is not necessary. The Bureau may review
records outside of the licensee's standard daily business hours.
(e) Records shall be kept in a manner that allows records to be produced for the Bureau
immediately upon request at the licensed premises in either hard copy or electronic form,
whichever the Bureau requests.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26160 and
26161, Business and Professions Code.
§ 5038. Disaster Relief
(a) If a licensee is unable to comply with any licensing requirements due to a disaster, the
licensee may notify the Bureau of this inability to comply and request relief from the specific
licensing requirement.
(b) The Bureau may exercise its discretion to provide temporary relief from specific regulatory
requirements in this division and from other licensing requirements when allowed by law.
(c) Temporary relief from specific licensing requirements shall be issued for a reasonable
amount of time in order to allow the licensee to recover from the disaster.
(d) The Bureau may require that certain conditions be followed in order for a licensee to receive
temporary relief from specific licensing requirements.
(e)A licensee shall not be subject to an enforcement action for a violation of a licensing
requirement in which the licensee has received temporary relief.
(f)For the purposes of this section, "disaster"means condition of extreme peril to the safety of
persons and property within the state or a county, city and county, or city caused by such
conditions as air pollution, fire, flood, storm, tidal wave, epidemic, riot, drought, terrorism,
sudden and severe energy shortage, plant or animal infestation or disease, Governor's warning of
an earthquake or volcanic prediction, or an earthquake, or similar public calamity, other than
conditions resulting from a labor controversy, for which the Governor has proclaimed a state of
emergency in accordance with Government Code sections 8558 and 8625, or for which a local
governing body has proclaimed a local emergency in accordance with Government Code
sections 8558 and 8630.
(g) A licensed premises that has been vacated by a licensee due to a disaster shall not be deemed
to have been, abandoned, or quit under section 5022 of this division.
(h)Notwithstanding subsection (a) of this section, if a licensee needs to move cannabis goods
stored on the licensed premises to another location immediately to prevent loss, theft, or
degradation of the cannabis goods from the disaster, the licensee may move the cannabis goods
without obtaining prior approval from the Bureau if the following conditions are met:
(1) The cannabis goods are moved to a secure location where access to the cannabis goods can
be restricted to the licensee, its employees, and contractors;
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(2) The licensee notifies the Bureau in writing that the cannabis goods have been moved and that
the licensee is requesting relief from complying with specific licensing requirements pursuant to
subsection (a) of this section within 24 hours of moving the cannabis goods;
(3) The licensee agrees to grant the Bureau access to the location where the cannabis goods have
been moved to for inspection; and
(4) The licensee submits in writing to the Bureau within 10 business days of moving the cannabis
goods a request for temporary relief that clearly indicates what statutory and regulatory sections
relief is requested from, the time period for which the relief is requested, and the reasons relief is
needed for the specified amount of time.
Authority: Section 26013, Business and Professions Code. Reference: Section 26012, Business
and Professions Code.
Article 4. Posting and Advertising
§ 5039. License Posting Requirement
Upon issuance of any license, the licensee shall prominently display the license on the licensed
premises where it can be viewed by state and local agencies. If the licensed premises is open to
the public, the license shall be displayed in an area that is within plain sight of the public.
Authority: Section 26013, Business and Professions Code. Reference: Section 26012, Business
and Professions Code.
§ 5040. Advertising Placement
(a) Any advertising or marketing, as defined in Business and Professions Code section 26150,
that is placed in broadcast, cable, radio, print, and digital communications:
(1) Shall only be displayed after a licensee has obtained reliable up-to-date audience composition
data demonstrating that at least 71.6 percent of the audience viewing the advertising or
marketing is reasonably expected to be 21 years of age or older;
(2) Shall not use any depictions or images of minors under 18 years of age.
(3) Shall not contain the use of objects, such as toys, inflatables, movie characters, cartoon
characters, or include any other display, depiction, or image designed in any manner likely to be
appealing to minors under 18 years of age; and
(4) Shall not advertise free cannabis goods or giveaways of any type of products. This includes
promotions such as:
(A) Buy one product get one free;
(B) Free product with any donation; and
(C) Contests, sweepstakes, or raffles.
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(b) In addition to the requirements for advertising and marketing in subsection (a) of this section,
all outdoor signs, including billboards, must be affixed to a building or permanent structure. All
outdoor advertising must be in compliance with the Outdoor Advertising Act, commencing with
section 5200 of the Business and Professions Code.
(c) For the purposes of this section, "reliable up-to-date audience composition data" means data
regarding the age and location demographics of the audience viewing a particular advertising or
marketing medium. "Reliable up-to-date audience composition data" does not include data from
the most recent United States decennial or special census, or the annual population estimate for
California counties published by the Demographic Research Unit, State Department of Finance.
(d) Immediately upon request, a licensee shall provide to the Bureau audience composition data
as required in subsection (a) of this section for advertising or marketing placed by the licensee.
(e) If the Bureau determines that audience composition data for advertising or marketing
provided by a licensee does not comply with the requirements of subsection (a) of this section, or
the licensee fails to provide audience composition data to the Bureau upon request, the licensee
shall remove the advertising or marketing placement in question.
(f) In construing and enforcing the advertising provisions of the Act and this division, any action,
omission, or failure of an advertising agent, representative, or contractor retained by the licensee,
shall in every case be deemed the act, omission, or failure of the licensee.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26151 and
26152, Business and Professions Code.
§ 5041. Age Confirmation in Advertising
(a) Prior to any advertising or marketing froin the licensee involving direct, individualized
communication or dialogue, the licensee shall use age affinnation to verify that the recipient is
21 years of age or older.
(b) For the purposes of this section, direct, individualized communication or dialogue may occur
through any form of communication, including in-person, telephone, physical mail, or electronic.
(c) A method of age verification is not necessary for a communication if the licensee can verify
that the licensee has previously had the intended recipient undergo a method of age affirmation
and the licensee is reasonably certain that the communication will only be received by the
intended recipient.
(d) A licensee shall use a method of age affirmation before having a potential customer added to
a mailing list, subscribe, or otherwise consent to receiving direct, individualized communication
or dialogue controlled by a licensee.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26151 and
26152, Business and Professions Code.
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Article 5. Security Measures
§ 5042. Limited-Access Areas
(a) Licensees shall ensure that only employees of the licensee and other authorized individuals
access the limited-access areas of the licensed premises.
(b) For the purpose of this section, authorized individuals include individuals employed by the
licensee as well as any outside vendors, contractors, or other individuals conducting business that
requires access to the limited-access areas.
(c) An individual who enters the limited-access area that is not employed by the licensee shall be
escorted by an employee of the licensee at all times while within the limited-access area.
(d) A licensee shall maintain a record of all authorized individuals that are not employees of the
licensee who enter the limited-access areas. The record shall include the name of the individual,
the company the individual works for, the reason the individual entered the limited-access area,
the date, and the times the individual entered and exited the limited-access area. These records
shall be made available to the Bureau immediately upon request.
(e) A licensee shall not receive consideration or compensation for permitting an individual to
enter the limited-access areas.
(f) Entrances to all limited-access areas shall have a solid door and a lock meeting the
requirements of section 5046 of this division. The door shall remain closed when not in use
during regular business hours.
Authority: Section 26013, Business and Professions Code. Reference: Section 26070, Business
and Professions Code.
§ 5043. Licensee Employee Badge Requirement
All agents, officers, or other persons acting for or employed by a licensee shall display a
laminated or plastic-coated identification badge issued by the licensee at all times while
engaging in commercial cannabis activity. The identification badge shall, at a minimum, include
the licensee's "doing business as" name and license number, the employee's first narne, an
employee number exclusively assigned to that employee for identification purposes, and a color
photograph of the employee that clearly shows the full front of the employee's face and that is at
least 1 inch in width and 1.5 inches in height.
Authority: Section 26013, Business and Professions Code. Reference: Section 26070, Business
and Professions Code.
§ 5044. Video Surveillance System
(a) Each licensed premises shall have a digital video surveillance systern with a minimum
camera resolution of 1280 x 720 pixels.
(b) The surveillance-system storage device or the cameras shall be transmission control protocol
(TCP) capable of being accessed through the internet.
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(c) The video surveillance system shall at all times be able to effectively and clearly record
images of the area under surveillance.
(d) Each camera shall be permanently mounted and in a fixed location. Each camera shall be
placed in a location that allows the camera to clearly record activity occurring within 20 feet of
all points of entry and exit on the licensed premises, and allows for the clear and certain
identification of any person and activities in all areas required to be filmed under subsection (e)
of this section.
(e) Areas that shall be recorded on the video surveillance system include the following:
(1) Areas where cannabis goods are weighed, packed, stored, loaded, and unloaded for
transportation, prepared, or moved within the licensed premises;
(2) Limited-access areas;
(3) Security rooms;
(4) Areas storing a surveillance-system storage device with at least one camera recording the
access points to the secured surveillance recording area; and
(5) Entrances and exits to the licensed premises, which shall be recorded from both indoor and
outdoor vantage points.
(f) Licensed retailers and licensed microbusiness shall also record point-of-sale areas and areas
where cannabis goods are displayed for sale on the video surveillance system. At each point-of-
sale location, camera placement must allow for the recording of the facial features of any person
purchasing or selling cannabis goods, or any person in the retail area, with sufficient clarity to
determine identity.
(g) Cameras shall record continuously 24 hours per day and at a minimum of 15 frames per
second (FPS).
(h) The physical media or storage device on which surveillance recordings are stored shall be
secured in a manner to protect the recording from tampering or theft.
(i) Surveillance recordings shall be kept for a minimum of 90 days.
0) Surveillance recordings are subject to inspection by the Bureau, and shall be kept in a manner
that allows the Bureau to view and obtain copies of the recordings at the licensed premises
immediately upon request. The licensee shall also send or otherwise provide copies of the
recordings to the Bureau upon request within the time specified by the Bureau.
(k) Recorded images shall clearly and accurately display the time and date. Time is to be
measured in accordance with the United States National Institute Standards and Technology
standards.
(1) The video surveillance system shall be equipped with a failure notification system that
provides notification to the licensee of any interruption or failure of the video surveillance
system or video surveillance-system storage device.
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(m) If multiple licensed premises are contained within the same building, a single video
surveillance system covering the entire building may be used by all of the licensees under the
following conditions:
(1) Each applicant or licensee shall disclose on their premises diagram where the surveillance
recordings are stored.
(2) Each applicant or licensee shall include in their security operating procedures, submitted with
the application pursuant to section 5002(c)(29)(D) of this division, an explanation of how the
video surveillance system will be shared, including who is responsible for monitoring the video
footage and storing any video recordings.
(3) All licensees shall have immediate access to the surveillance recordings to produce them
pursuant to subsection 0) of this section.
(4) All licensees shall be held responsible and subject to discipline for any violations of the video
surveillance requirements.
Authority: Section 26013, Business and Professions Code. Reference: Section 26070, Business
and Professions Code.
§ 5045. Security Personnel
(a) A retail licensee or microbusiness licensee who is engaged in retail sale shall hire or contract
for security personnel who are at least 21 years of age to provide security services for the
licensed retail premises. All security personnel hired or contracted for by the licensee shall be
licensed by the Bureau of Security and Investigative Services and shall comply with Chapters
11.4 and 11.5 of Division 3 of the Business and Professions Code.
(b)Notwithstanding subsection (a) of this section, a licensed non-storefront retailer or licensed
microbusiness who is not engaged in storefront retail sale is not required to hire or contract for
security personnel.
(c) If multiple licensed premises are contained within the same building, security personnel may
be shared by all of the licensees to cover the entire building under the following conditions:
(1) Each licensee shall include in their security operating procedures, submitted with the
application pursuant to section 5002(c)(29)(D) of this division, an explanation of how security
personnel will be shared, including who is responsible for employing or contracting the security
personnel.
(2) All licensees shall be held responsible and subject to discipline for any violations of the
security personnel requirements.
Authority: Section 26013, Business and Professions Code. Reference: Section 26070, Business
and Professions Code.
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§ 5046. Locks
A licensee shall ensure that the limited-access areas described in section 5042 of this division
can be securely locked using commercial-grade, nonresidential door locks. A licensee shall also
use commercial-grade, nonresidential door locks,on all points of entry and exit to the licensed
premises.
Authority: Section 26013, Business and Professions Code. Reference: Section 26070, Business
and Professions Code.
§ 5047. Alarm System
(a) A licensee shall maintain an alarm system as defined in Business and Professions Code
section 7590.1(n) at the licensed premises.
(b) A licensee shall ensure a licensed alarm company operator or one or more of its registered
alarm agents installs, maintains, monitors, and responds to the alarm system.
(c) Upon request, a licensee shall make available to the Bureau all information related to the
alarn system, monitoring, and alarm activity.
(d) If multiple licensed premises are contained within the same building, a single alarm system
covering the entire building may be used by all of the licensees under the following conditions:
(1) Each licensee shall include in their security operating procedures, submitted with the
application pursuant to section 5002(c)(29)(D) of this division, an explanation of how the alarm
system will be shared, including who is responsible for contracting with the alarm company.
(2) All licensees shall have access to and be able to provide the information under subsection (c)
of this section.
(3) All licensees shall be held responsible and subject to discipline for any violations of the alarm
system requirements.
Authority: Section 26013, Business and Professions Code. Reference: Section 26070, Business
and Professions Code.
Article 6. Track and Trace Requirements ��
§ 5048. Track and Trace System
(a) A licensee shall create and maintain an active and functional account within the track and
trace system prior to engaging in any commercial cannabis activity, including the purchase, sale,
test, packaging, transfer, transport, return, destruction, or disposal, of any cannabis goods.
(b) A licensee shall designate one individual owner as the track and trace system account
manager. The account manager may authorize additional owners or employees as track and trace
system users and shall ensure that each user is trained on the track and trace system prior to its
access or use.
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(1) The account manager shall attend and successfully complete all required track and trace
system training, including any orientation and continuing education.
(2) If the account manager did not complete the required track and trace system training prior to
receiving their annual license, the account manager shall sign up for and complete state
mandated training, as prescribed by the Bureau, within five business days of license issuance.
(c) The account manager and each user shall be assigned a unique log-on, consisting of a
username and password. The account manager or each user accessing the track and trace system
shall only do so under his or her assigned log-on, and shall not use or access a log-on of any
other individual. No account manager or user shall share or transfer his or her log-on, username,
or password, to be used by any other individual for any reason.
(d) The account manager shall maintain a complete, accurate, and up-to-date list of all track and
trace system users, consisting of their full names and usernames.
(e) A licensee shall monitor all compliance notifications from the track and trace system, and
timely resolve the issues detailed in the compliance notification.
(1) A licensee shall keep a record, independent of the track and trace system, of all compliance
notifications received from the track and trace system, and how and when compliance was
achieved.
(2) If a licensee is unable to resolve a compliance notification within three business days of
receiving the notification, the licensee shall notify the Bureau immediately.
(f) A licensee is accountable for all actions its owners or employees take while logged into or
using the track and trace system, or otherwise while conducting track and trace activities.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26067, 26070,
26160 and 26161, Business and Professions Code.
§ 5049. Track and Trace Reporting
(a) A licensee shall record in the track and trace system all commercial cannabis activity,
including:
(1) Packaging of cannabis goods.
(2) Sale and transfer of cannabis goods.
(3) Transportation of cannabis goods to a licensee.
(4) Receipt of cannabis goods.
(5) Return of cannabis goods.
(6) Destruction and disposal of cannabis goods.
(7) Laboratory testing and results.
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(8) Any other activity as required pursuant to this division, or by any other licensing authority.
(b) The following information shall be recorded for each activity entered in the track and trace
system:
(1) Name and type of the cannabis goods.
(2) Unique identifier of the cannabis goods.
(3) Amount of the cannabis goods, by weight or count, and total sale price of the cannabis goods,
as applicable.
(4) Date and time of the activity or transaction.
(5) Name and license number of other licensees involved in the activity or transaction.
(6) If the cannabis goods are being transported:
(A) The licensee shall transport pursuant to a shipping manifest generated through the track and
trace system, that includes items (1) through (5) of this subsection, as well as:
(1) The name, license number, and premises address of the originating licensee.
(ii) The name, license number, and licensed premises address of the licensee transporting the
cannabis goods.
(Ili) The name, license number, and licensed premises address of the destination licensee
receiving the cannabis goods into inventory or storage.
(iv) The date and time of departure from the licensed premises and approximate date and time of
departure from each subsequent licensed premises, if any.
(v) Arrival date and estimated time of arrival at each licensed premises.
(vi) Driver license number of the personnel transporting the cannabis goods, and the make,
model, and license plate number of the vehicle used for transport.
(B) Upon pick-up or receipt of cannabis goods for transport, storage, or inventory, a licensee
shall ensure that the cannabis goods received are as described in the shipping manifest, and shall
record acceptance and acknowledgment of the cannabis goods in the track and trace system.
(C) If there are any discrepancies between the type or quantity specified in the shipping manifest
and the type or quantity received by the licensee, the licensee shall record and document the
discrepancy in the track and trace system and in any relevant business record.
(7) If cannabis goods are being destroyed or disposed of, the licensee shall record in the track
and trace system the following additional information:
(A) The name of the employee performing the destruction or disposal.
(B) The reason for destruction or disposal.
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(C) The name of the entity being used to collect and process cannabis waste, pursuant to section
5055 of this division.
(8) Description for any adjustments made in the track and trace system, including, but not limited
to:
(A) Spoilage or fouling of the cannabis goods.
(B) Any event resulting in exposure or compromise of the cannabis goods.
(9) Any other information as required pursuant to this division, or by any other applicable
licensing authorities.
(c) Unless otherwise specified, all transactions must be entered into the track and trace system
within 24 hours of occurrence.
(d) Licensees shall only enter and record complete and accurate information into the track and
trace system, and shall correct any known errors entered into the track and trace system
immediately upon discovery.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26067, 26070,
and 26160, Business and Professions Code.
§ 5050. Loss of Access
(a) If at any point a licensee loses access to the track and trace system for any reason, the
licensee shall prepare and maintain comprehensive records detailing all commercial cannabis
activities that were conducted during the loss of access.
(b) The licensee shall both document and notify the Bureau immediately:
(1) When access to the system is lost;
(2) When access to the system is restored; and
(3) The cause for the loss of access.
(c) Once access is restored, all corn mercial cannabis activity that occurred during the loss of
access shall be entered into the track and trace system within three business days of access being
restored.
(d) A licensee shall not transport, transfer, receive, or deliver any cannabis goods until such time
as access is restored and all information recorded in the track and trace system.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26067, 26070,
and 26160, Business and Professions Code.
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§ 5051. Track and Trace System Reconciliation
(a) In addition to other inventory reconciliation requirements under this division, a licensee shall
reconcile the physical inventory of cannabis goods at the licensed premises with the records in
the track and trace database at least once every 14 calendar days.
(b) If a licensee finds a discrepancy between its physical inventory and the track and trace system
database, the licensee shall conduct an audit, and notify the Bureau of any reportable activity
pursuant to section 5036 of this division.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26067, 26070,
and 26160, Business and Professions Code.
§ 5052. Temporary Licenses; Licensees in Operation at Time of Licensure
(a) A licensee operating under a temporary license issued pursuant to section 5001 of this
division is not required to record commercial cannabis activity in the track and trace system as
otherwise required by this article.
(b) Temporary licensees shall track and record all cannabis commercial activities and
information required pursuant to this division and any other provision of law, at a minimum, on
paper receipts, invoices, or manifests.
(c) Any commercial cannabis activity conducted between annual license holders shall be
recorded in the track and trace system.
(d) Any licensee in operation at the time the annual license is issued shall enter all inventory into
the track and trace system no later than 30 calendar days after the track and trace system account
manager attends the training required pursuant to section 5048 of this division.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26050.1, 26067,
26070, and 26160, Business and Professions Code.
Article 7. Returns and Destruction
§ 5052.1. Acceptance of Shipments
(a) Licensees shall accept or reject in whole shipments of cannabis goods.
(b)Notwithstanding subsection (a) of this section, if a licensee receives a shipment containing
cannabis goods that differ from those listed on the sales invoice or receipt, the licensee shall
reject the portion of the shipment that is not accurately reflected on the sales invoice or receipt.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26013, 26070
and 26161, Business and Professions Code.
§ 5053. Returns Between Licensees
(a) if a licensee discovers that a manufactured cannabis good that was purchased from another
licensee is defective, the purchasing licensee may return the cannabis good to the selling licensee
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only in exchange for a non-defective version of the same type of cannabis good or in exchange
for a cannabis good of equal value.
(b) Except as provided in subsection (a) of this section, a licensee shall not return cannabis goods
purchased from another licensee.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26013 and
26070, .Business and Professions Code.
§ 5054. Destruction of Cannabis Products Prior to Disposal
(a) Licensees shall not dispose of cannabis goods, unless disposed of as cannabis waste, defined
under section 5000(e) of this division.
(b) In order to be disposed of as cannabis waste, cannabis goods must first be destroyed, which at
a minimum, includes removing the cannabis goods from any packaging and rendering it
unrecognizable and unusable.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26013 and
26070, Business and Professions Code.
§ 5055. Cannabis Waste Management
(a) A licensee may not sell, transfer, donate, or give away cannabis waste..., unless in accordance
with this section.
(b) Licensees shall comply with all applicable waste management laws including, but not limited
to, Division 30 of the Public Resources Code.
(c) For the purpose of this section, the following shall apply:
(1) A "third-party waste hauler" means any of the following:
(A) The local agency;
(B) A waste hauler franchised or contracted by the local agency; or
(C) A private waste hauler permitted by the local agency.
(2) A "solid waste facility" means any of the following:
(A) A manned, fully permitted solid waste landfill or transformation facility;
(B) A manned, fully permitted composting facility or manned composting operation;
(C) A manned, fully permitted in-vessel digestion facility or manned in-vessel digestion
operation;
(D) A manned, fully permitted transfer processing facility or manned transfer/processing
operation; or
(E) A manned, fully permitted chip and grind facility or manned chip and grind operation.
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I
(3) "Secured waste receptacle" or "secured area" means a receptacle area where physical access
is restricted to the licensee, its employees, and third-party waste hauler, and public access, or any
other access, to the designated receptacle or area is prohibited.
(d) A licensee shall dispose of cannabis waste in a secured waste receptacle or in a secured area
on the licensed premises, until it can be collected by the licensee or a third-party waste hauler,
and processed at a solid waste facility.
(e) A licensee shall have a cannabis waste management plan in place that identifies one or more
of the following methods for managing cannabis waste:
(1) If licensee is composting cannabis waste on a licensed premises, a licensee shall do so in
compliance with title 14, California Code of Regulations, Chapter 3.1 (commencing with Section
17850).
(2) If a licensee is self-hauling cannabis waste to a solid waste facility, a licensee shall do all of
the following:
(A) Obtain from the solid waste facility for each delivery of cannabis waste, a copy of a certified
weight ticket or receipt documenting delivery.
(B) Only the licensee or its employees may transport self-hauled cannabis waste.
(3) If the licensee is using a third-party waste hauler to collect and process cannabis waste, a
licensee shall do all the following:
(A) A licensee shall maintain the following information for any third-party waste hauler who will
collect and process the licensee's cannabis waste and shall provide the information to the Bureau
immediately upon request:
(1) Name of local agency providing waste hauler services, if applicable;
(ii) Company name and business address, of the waste hauler franchised or contracted by the
local agency, or private waste hauler permitted by the local agency, if applicable; and
(iii) Name and phone number of the primary contact person at the company.
(B) Obtain documentation from the entity hauling the waste that indicates the date and time of
each collection of cannabis waste at the licensed premises; and
(C) Obtain a copy of the certified weight ticket or other documentation prepared by the entity
hauling the waste that confirms receipt of the cannabis waste at the solid waste facility.
Authority: Section 26013, Business and Professions Code. Reference: Section 26070, Business
and Professions Code.
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Chapter 2. DISTRIBUTORS
§ 5300. Distribution Activities
A licensed distributor shall distribute only cannabis goods, cannabis accessories, and licensees'
branded merchandise or promotional materials.
Authority: Sections 26013, Business and Professions Code. Reference: Section 26070, Business
and Professions Code.
§ 5301. Storage Services
(a) A licensed distributor may provide storage services, including storage-only services that are
unrelated to the quality assurance and laboratory testing processes, to a licensed cultivator,
licensed manufacturer, licensed microbusiness, licensed retailer, or another licensed distributor.
(b) A licensed distributor may provide storage services to other licensees for only cannabis
goods, cannabis accessories, and licensees' branded merchandise or promotional materials.
(c) Notwithstanding subsection (b) of this section, a licensed distributor shall not store live plants
on the licensed premises.
Authority: Section 26013, Business and Professions Code. Reference: Section 26070, Business
and Professions Code.
§ 5302. Storage of Batches for Testing
(a) A licensed distributor shall ensure that all cannabis goods batches are stored separately and
distinctly from other cannabis goods batches on the licensed distributor's premises.
(b) A licensed distributor shall ensure a label with the following information is physically
attached to each container of each batch:
(1) The name and license number of the manufacturer or cultivator who provided the batch;
(2) The date of entry into the licensed distributor's storage area;
(3) The unique identifiers and batch number associated with the batch;
(4) A description of the cannabis goods with enough detail to easily identify the batch;
(5) The weight of or quantity of units in the batch; and
(6) The best-by, sell-by, or expiration date of the batch, if any.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26110 and
26120, Business and Professions Code.
§ 5303. Packaging and Labeling
(a) A licensed distributor may package, re-package, label, and re-label cannabis, including pre-
rolls, for retail sale.
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(b) A licensed distributor shall not package, re-package, label, or re-label manufactured cannabis
products except when the licensed distributor also holds a manufacturing license and is
packaging, re-packaging, labeling, or re-labeling its own manufactured cannabis products at its
licensed manufacturing premises.
(c) Notwithstanding subsection (b) of this section, licensed distributors may also re-label the
package with the accurate amount of cannabinoids and terpenoids if laboratory testing
determines that the manufactured product is labeled with incorrect amounts. Prior to re-labeling
the package, the licensed distributor shall send the Certificate of Analysis from the licensed
testing laboratory to the licensed manufacturer that manufactured the cannabis goods.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26013 and
26120, Business and Professions Code
§5303.1. Net Weight of Dried Flower
For purposes of this division, the net weight on any package of dried flower shall not be
considered inaccurate if the actual weight is within plus or minus 2.5% of the labeled weight.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26013 and
26120, Business and Professions Code
§ 5304. Testing Arrangements
After taking physical possession of a cannabis goods batch, the licensed distributor shall contact
a testing laboratory and arrange for a laboratory employee to come to the licensed distributor's
licensed premises to select a representative sample for laboratory testing.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26104, 26110,
Business and Professions Code.
§ 5305. Testing Sample
(a) The licensed distributor shall ensure that the batch size from which the sample is taken meets
the requirements of this division.
(b) A licensed distributor or an employee of the licensed distributor shall be physically present to
observe the laboratory employee obtain the sample of cannabis goods for testing and shall ensure
that the increments are taken from throughout the batch.
(c) The sampling shall be video recorded with the batch number stated verbally or in writing on
the video at the beginning of the video and a visible time and date indication on the video
recording footage. The video recordings shall be maintained for 90 days by the licensed
distributor.
(d) After the sample has been selected, both the licensed distributor and the laboratory employee
shall sign and date the chain of custody fore pursuant to section 5706 of this division, attesting
to the sample selection having occurred.
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(e) A licensed distributor shall not assist the laboratory employee nor touch the cannabis goods
or the sampling equipment while the laboratory employee is obtaining the sample.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26104 and
26110, Business and Professions Code.
§ 5306. Laboratory Testing Results
(a) A sample "passes" a laboratory test when the sample meets specifications in chapter 6 of this
division.
(b) When a batch from a manufactured or harvest batch passes, the cannabis goods may be
transported to one or more licensed retailers, licensed distributors, or licensed microbusinesses.
(c) A sample "fails" a laboratory test when the sample does not meet specifications in chapter 6
of this division.
(d) If a failed sample was collected from a batch and the batch could be remediated pursuant to
section 5727 of this division, a licensed distributor may transport or arrange for the
transportation of the batch to a manufacturer for remediation.
(e) A licensed distributor shall destroy a batch that failed laboratory testing and cannot be
remediated pursuant to section 5727 of this division.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26070, 26100,
26104 and 26110, Business and Professions Code.
§ 5307. Quality-Assurance Review
When a licensed distributor receives a certificate of analysis from the licensed testing laboratory
or upon transfer from another licensed distributor stating that the sample meets specifications
required by law, the distributor shall ensure the following before transporting the cannabis goods
to one or more licensed retailers or licensed microbusinesses:
(a) The certificate of analysis for the required testing under section 5714 of this division that the
licensed distributor received from the testing laboratory is the certificate of analysis that
corresponds to the batch;
(b) The label on the cannabis goods is consistent with the certificate of analysis regarding
cannabinoid content and contaminants required to be listed by law;
(c) The packaging and labeling of the cannabis goods complies with Business and Professions
Code Section 26120 and all applicable regulations within this division as well as California Code
of Regulations, Title 3, Division 8 and Title 17, Division 1, Chapter 13, except cannabis goods
are not required to be labeled or otherwise identified as medicinal products prior to retail sale
unless the cannabis goods must be labeled as such pursuant to the requirements prescribed by the
State Department of Public Health in regulation;
(d) The weight or count of the cannabis batch comports with that in the track and trace system. A
licensed distributor shall use scales as required by the Act; and
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(e) All events prior to receipt have been entered into the track and trace system.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26070, 26110
and 26120, Business and Professions Code.
§ 5308. Insurance Requirements
(a) An applicant for a distributor license shall provide the Bureau with a certificate of insurance
that shows the types of insurance coverage and minimum amounts that have been secured as
required by this section, and documentation establishing compliance with subsection (d) of this
section.
(b) A distributor licensee shall at all times carry and maintain commercial general liability
insurance in the aggregate in an amount no less than $2,000,000 and in an amount no less than
$1,000,000 for each loss.
(c) A distributor licensee shall maintain the insurance required in subsection (b) of this section
from an insurance company that is:
(1) A non-admitted insurer that meets the requirements of Insurance Code section 1765.1 or
1765.2, and the insurance is placed pursuant to Insurance Code section 1763 and through a
surplus line broker licensed under Insurance Code section 1765;
(2) An insurer qualified to do business in California by the Secretary of State and authorized by
the Insurance Commissioner to write the liability and property classes of insurance as defined by
Insurance Code sections 102, 103, 107, 114, 108, and 120; or
(3) A registered risk retention group compliant with the California Risk Retention Act of 1991.
(See California Insurance Code sections 125-140.)
(d) Admitted insurers and risk retention groups must show proof of capitalization in the amount
of at least $10,000,000.
(e) A distributor licensee shall notify the Bureau in writing within 10 calendar days of a lapse in
insurance.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26070 and
26051.5, Business and Professions Code.
§ 5309. Inventory Reconciliation
(a) A licensed distributor shall reconcile all inventories of cannabis goods at least once every 14
calendar days.
(b) A licensed distributor shall keep an inventory log containing the following information for
each batch:
(1) The name and license number of the manufacturer or cultivator who provided the batch;
(2) The date of entry into the licensed distributor's storage area;
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(3) The unique identifiers and batch number associated with the batch;
(4) A description of the cannabis goods with enough detail to easily identify the batch;
(5) The weight of or quantity of units in the batch;
(6) The best-by, sell-by, or expiration date of the batch, if any; and
(7) Where on the licensed premises the batch is kept.
(c) If a licensed distributor finds a discrepancy between the inventory of stock and the inventory
log or track and trace system that is outside of normal weight loss caused by moisture loss, the
licensed distributor shall commence a full audit of the batch in which the discrepancy was found.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26070 and
26160, Business and Professions Code.
§ 5310. Records
In addition to the records required by section 5037 of this division, a licensed distributor shall
maintain the following records:
(a) Records relating to branding, packaging and labeling;
(b) Inventory logs and records;
(c) Transportation bills of lading and shipping manifests for completed transports and for
cannabis goods in transit;
(d) Vehicle and trailer ownership records;
(e) Quality-assurance records;
(f) Records relating to destruction of cannabis goods;
(g) Laboratory-testing records;
(h) Warehouse receipts;
(1) Records relating to tax payments collected and paid under Revenue and Taxation Code
sections 34011 and 34012.
Authority: Section 26013, Business and Professions Code. Reference: Section 26160, Business
and Professions Code.
§ 5311. Requirements for the Transportation of Cannabis Goods
The following requirements apply when transporting cannabis goods between licensees or
licensed premises:
(a) Transportation shall only be conducted by persons holding a distributor license under the Act,
or employees of those persons.
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(b) Prior to transporting any cannabis goods, the licensed distributor shall have a completed sales
invoice or receipt that meets the requirements of Business and Professions Code section 26161.
The licensed distributor shall only transport cannabis goods listed on the sales invoice or receipt.
The sales invoice or receipt may not be altered or changed once transport begins.
(c) All vehicles transporting cannabis goods for hire shall be required to have a motor carrier
permit pursuant to Chapter 2 (commencing with Section 34620) of Division 14.85 of the Vehicle
Code.
(d) Transportation by means of aircraft, watercraft, drone, rail, human powered vehicle, and
unmanned vehicle is prohibited.
(e) Cannabis goods shall only be transported inside of a vehicle or trailer and shall not be visible
or identifiable from outside of the vehicle or trailer.
(f) Cannabis goods shall be locked in a box, container, or cage that is secured to the inside of the
vehicle or trailer. For purposes of this section, the inside of the vehicle includes the trunk.
(g) While left unattended, vehicles and trailers shall be locked and secured.
(h) A licensed distributor shall not leave a vehicle or trailer containing cannabis goods
unattended in a residential area or parked overnight in a residential area.
(i) At a minimum, a licensed distributor shall have a vehicle alarm system on all transport
vehicles and trailers. Motion detectors,pressure switches, duress, panic, and hold-up alarms may
also be used.
0) Packages or containers holding cannabis goods shall not be tampered with, or opened, during
transport.
(k) A licensed distributor transporting cannabis goods shall only travel between licensees
shipping or receiving cannabis goods and its own licensed premises when engaged in the
transportation of cannabis goods. The licensed distributor may transport multiple shipments of
cannabis goods at once in accordance with applicable laws. A licensed distributor shall not
deviate from the travel requirements described in this section, except for necessary rest, fuel, or
vehicle repair stops.
(1) Under no circumstances may non-cannabis goods, except for cannabis accessories and
licensees' branded merchandise or promotional materials be transported with cannabis goods.
(nn)Vehicles and trailers transporting cannabis goods are subject to inspection by the Bureau at
any licensed premises or during transport at any time.
(n)Notwithstanding subsections (d) and (e) of this section, if it is not operationally feasible to
transport cannabis goods inside of a vehicle or trailer because the licensed premises that the
cannabis goods will be transported from and the licensed premises that will be receiving the
cannabis goods are located within the same building or on the same parcel of land, the cannabis
goods may be transported by foot, hand truck, fork lift, or other similar means. A shipping
manifest that complies with this division is required when transporting cannabis goods pursuant
to this subsection.
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Authority: Section 26013, Business and Professions Code. Reference: Section 26070, Business
and Professions Code.
§ 5312. Required Transport Vehicle Information
(a) In addition to the information required in section 5314 of this division, any licensed
distributor who will be or is transporting cannabis goods shall provide the following information
to the Bureau:
(1) Proof that the licensed distributor owns or holds a valid lease for each vehicle and trailer used
to transport cannabis goods;
(2) The year, make, model, license plate number, and numerical Vehicle Identification Number
(VIN) for each vehicle and trailer used to transport cannabis goods; and
(3) Proof of insurance for each vehicle and trailer used to transport cannabis goods.
(b) The licensed distributor shall provide the Bureau with the information required by this
section in writing for any new vehicle or trailer that will be used to transport cannabis goods
prior to using the vehicle or trailer to transport cannabis goods.
(c) The licensed distributor shall provide the Bureau with any changes to the information
required by this section in writing within 30 calendar days.
Authority: Section 26013, Business and Professions Code. Reference: Section 26070, Business
and Professions Code.
§ 5313. Transport Personnel Requirements
(a) No person under the age of 21 years old shall be in a commercial vehicle or trailer
transporting cannabis goods; and
(b) Only a licensee, an employee of the licensed distributor, or security personnel that meets the
requirements of section 5045 of this division, shall be in a vehicle while transporting cannabis
goods.
Authority: Section 26013, Business and Professions Code. Reference: Section 26070, Business
and Professions Code.
§ 5314. Shipping Manifest
(a)Prior to transporting cannabis goods, a licensed distributor shall generate a shipping manifest
through the track and trace system for the following activities:
(1) Testing and sampling;
(2) Sale of cannabis goods to a licensee;
(3) Destruction or disposal of cannabis goods; and
(4) Any other activity, as required pursuant to this division, or by any other licensing authority.
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(b) The licensed distributor shall transmit the shipping manifest to the Bureau and the licensee
that will receive the cannabis goods prior to transporting the cannabis goods.
(c) The licensed distributor shall ensure and verify that the cannabis goods being taken into
possession for transport at the originating licensed premises are as described and accurately
reflected in the shipping manifest. For purposes of this section, the licensed distributor may
verify that the cannabis goods are accurately reflected in the shipping manifest by confirming
that the number of boxes of cannabis goods, type of cannabis goods, weight and or units of
cannabis goods, matches the label on the boxes containing the cannabis goods.
(1) The licensed distributor shall not take into possession or transport:
(A) Any cannabis goods that are not on the shipping manifest; or
(B) Any cannabis goods that are less than or greater than the amount reflected on the shipping
manifest.
(2) The licensed distributor is responsible for any discrepancies between the shipping manifest
and the cannabis goods in its possession during transport, and subject to any enforcement or
disciplinary action related to such discrepancy.
(3) A licensed distributor shall not void or change a slipping manifest after departing from the
originating licensed premises.
(d) A shipping manifest shall accompany every transport of cannabis goods.
(e) Notwithstanding subsection (a) of this section, if a transporting licensed distributor has not
obtained access to the track and trace system, the licensed distributor shall complete the shipping
manifest outside of the track and trace system and transmit it to the Bureau and the licensee
receiving the shipment by electronic mail.
(f) If the transporting licensed distributor has access to the track and trace system and the
licensee receiving the shipment has not obtained access to the track and trace system, the
licensed distributor shall complete the shipping manifest in the track and trace system and
transmit it to the Bureau. However, the licensed distributor shall send a copy to the licensee
receiving the shipment by electronic mail.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26067 and
26070, Business and Professions Code
§ 5315. Distributor Transport Only License
(a) A licensed distributor transport only licensee may transport cannabis goods between
licensees; however, they shall not transport any cannabis goods except for immature cannabis
plants and seeds to a licensed retailer or licensed microbusiness.
(b) A complete application for a distributor transport only license shall include all the
information required in an application for a distributor license.
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(c) The licensing fee for a distributor transport only license will be based in part upon whether
the licensee intends to transport only cannabis goods that the licensee has cultivated or
manufactured (self-distribution), or whether the licensee intends to transport cannabis goods
cultivated or manufactured by other licensees.
(d) A.distributor transport only licensee shall comply with all of the requirements for a holder of
a distributor license, except for those related to quality assurance and testing.
(e) A distributor transport only licensee shall not hold title to any cannabis goods unless the
licensee also holds a state-issued cultivation, manufacturing, retailer, or microbusiness license.
(0 Holding a distributor transport only license shall not authorize a licensee to:
(1) Engage in the delivery of cannabis goods as defined in Business and Professions Code
section 26001(p);
(2) Engage in the wholesale, destruction, packaging, labeling, or storing of cannabis goods; or
(3) Arrange for the testing of cannabis goods by a testing laboratory.
(g)Notwithstanding subsection (e) of this section, a distributor transport only licensee who is
licensed to engage in self-distribution and whose licensed premises will be on the same property
as their licensed cultivation or manufacturing premises shall not be required to comply with the
security provisions contained in Article 5 of this division.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26012 and
26070, Business and Professions Code.
Chapter 3. RETAILERS
§ 5400. Access to Retailer Premises
(a) Access to the licensed premises of a retailer with only an A-designation shall be limited to
individuals who are at least 21 years of age.
(b) Access to a licensed premises with only an M-designation shall be limited to individuals who
are at least 18 years of age and have a valid physician's recommendation for medicinal cannabis.
(c) Access to a licensed premises with both an A-designation and an M-designation-may include
persons identified in subsections (a) and (b) of this section.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26070 and
26140, Business and Professions Code.
§ 5401. [reserved]
§ 5402. Customer Access to the Retail Area
(a) Individuals shall be granted access to the retail area to purchase cannabis goods only after the
licensed retailer or an employee of the licensed retailer has confirmed the individual's age and
identity pursuant to section 5404 of this division.
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(b) The licensed retailer or at least one employee shall be physically present in the retail area at
all times when individuals who are not employees of the licensed retailer are in the retail area.
(c) All sales of cannabis goods, with the exception of cannabis goods sold through delivery, must
take place within the retail area of the retailer's licensed premises.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26070 and
26140, Business and Professions Code.
§ 5403. Hours of Operation
A licensed retailer shall sell and deliver cannabis goods only between the hours of 6:00 a.m.
Pacific Time and 10:00 p.m. Pacific Time.
Authority: Section 26013, Business and Professions Code. Reference: Section 26070, Business
and Professions Code
§ 5403.1 Requirements While Not Open for Business
At any time the licensed premises is not open for retail sales, a licensed retailer shall ensure that:
(a) The licensed premises is securely locked with commercial-grade, nonresidential door locks as
defined in section 5046 of this division;
(b) The licensed premises is equipped with an active alarm system pursuant to section 5047 of
this division, which shall be activated when the licensed retailer or its employees are not on the
licensed premises; and
(c) Only employees of the licensee and other authorized individuals are allowed access to the
licensed premises. For the purposes of this section, authorized individuals include individuals
employed by the licensee as well as any outside vendors, contractors, or other individuals
conducting business that requires access to the licensed premises.
Authority: Section 26013, Business and Professions Code. Reference: Section 26070, Business
and Professions Code
§ 5404. Retail Customers
(a) A licensed retailer shall only sell adult-use cannabis goods to individuals who are at least 21
years of age after confirming the customer's age and identity by inspecting a valid form of
identification provided by the customer as required by subsection (c) of this section.
(b) A licensed retailer shall only sell medicinal cannabis goods to individuals who are at least 18
years of age and possesses a valid physician's recommendation after confirming the customer's
age, identity, and physician's recommendation as required by subsection (c) of this section.
(c) Acceptable forms of identification include the following:
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(1) A document issued by a federal, state, county, or municipal government, or a political
subdivision or agency thereof, including, but not limited to, a valid motor vehicle operator's
license, that contains the name, date of birth, height, gender, and photo of the person;
(2) A valid identification card issued to a member of the Armed Forces that includes the person's
name, date of birth, and photo; or
(3) A valid passport issued by the United States or by a foreign government.
Authority: Section 26013, Business and Professions Code. Reference: Section 26140, Business
and Professions Code.
§ 5405. Cannabis Goods Display
(a) Cannabis goods for inspection and sale shall only be displayed in the retail area.
(b) Cannabis goods may be removed from their packaging and placed in containers to allow for
customer inspection. The containers shall not be readily accessible to customers without
assistance of retailer personnel. A container must be provided to the customer by the licensed
retailer or its employees, who shall remain with the customer at all times that the container is
being inspected by the customer.
(c) Cannabis goods removed from their packaging for display shall not be sold, shall not be
consumed, and shall be destroyed pursuant to section 5054 of this division when the cannabis
goods are no longer used for display.
Authority: Section 26013, Business and Professions Code. Reference: Section 26070, Business
and Professions Code
§ 5406. Cannabis Goods for Sale
A licensed retailer shall not make any cannabis goods available for sale or delivery to a customer
unless:
(a) The cannabis goods were received by the retail licensee from a licensed distributor or
licensed microbusiness;
(b) The licensed retailer has verified that the cannabis goods have not exceeded their expiration
or sell-by date if one is provided;
(c) In the case of manufactured cannabis products, the product complies with all requirements of
Business and Professions Code section 26130 and and California Code of Regulations, Title 3,
Division 8 and Title 17, Division 1, Chapter 13;
(d) The cannabis goods have undergone laboratory testing as required by the Act and Chapter 6
of this division;
(e) The packaging and labeling of the cannabis goods complies with Business and Professions
Code Section 26120 and all applicable regulations within this division as well as California Code
of Regulations, Title 3, Division 8 and Title 17, Division 1, Chapter 13; and
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(f) The cannabis goods comply with all applicable requirements found in the Act and applicable
regulations.
Authority: Section 26013, Business and Professions Code. Reference: Section 26070 and 26120,
Business and Professions Code.
§ 5407. Sale of Non-Cannabis Goods on Premises
In addition to cannabis goods, a licensed retailer may sell only cannabis accessories and any
licensee's branded merchandise or promotional materials.
Authority: Section 26013, Business and Professions Code. Reference: Section 26070, Business
and Professions Code.
§ 5408. Sale of Live Plants and Seeds
(a) A licensed retailer shall only sell live, immature cannabis plants and cannabis seeds if all of
the following requirements are met:
(1) The plant is not flowering;
(2) The plant or seed originated from a nursery that holds a valid license from the Department of
Food and Agriculture or a licensed microbusiness; and
(3) A label is affixed to the plant or package containing any seeds which states "This product has
not been tested pursuant to the Medicinal and Adult-Use Cannabis Regulation and Safety Act."
(b) A licensed retailer may not sell any other live plants.
(c) A licensed retailer shall not apply nor use any pesticide, nor cause any pesticide to be applied
nor used, on live plants.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26070 and
26100, Business and Professions Code
§ 5409. Daily Limits
(a) A licensed retailer shall not sell more than the following amounts to a single adult-use
cannabis customer in a single day:
(1) 28.5 grams of non-concentrated cannabis.
(2) 8 grams of concentrated cannabis as defined in Business and Professions Code section 26001,
including concentrated cannabis contained in cannabis products.
(3) 6 immature cannabis plants.
(b) A licensed retailer shall not sell more than the following amounts to a single medicinal
cannabis patient, or to a patient's primary caregiver purchasing iedicinal cannabis on behalf of
the patient, in a single day:
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(1) 8 ounces of medicinal cannabis in the form of dried mature flowers or the plant conversion as
provided in Health and Safety Code section 11362.77.
(2) 12 immature cannabis plants.
(c)Notwithstanding subsection (b) of this section, if a medicinal cannabis patient's valid
physician's recommendation contains a different amount than the limits listed in this section, the
medicinal cannabis patient may purchase an amount of medicinal cannabis consistent with the
patient's needs as recommended by a physician and documented in the physician's
recommendation.
(d) The limits provided in subsection (a) and subsection (b) of this section shall not be combined
to allow a customer to purchase cannabis goods in excess of any of the limits provided in this
section.
Authority: Section 26013, Business and Professions Code. Reference: Section 26012, Business
and Professions Code; and Sections 11362.1 and 11362.77, Health and Safety Code.
§ 5410. Customer Return of Cannabis Goods
(a) For the purposes of this section, "customer return"means a customer's return of cannabis
goods that were purchased from a licensed retailer, back to the licensed retailer the cannabis
goods were purchased from.
(b) A licensed retailer may accept customer returns of cannabis goods that were previously sold
to a customer.
(c) A licensed retailer shall not resell cannabis goods that have been returned.
(d) A licensed retailer shall treat any cannabis goods abandoned on the licensed retailer premises
as a customer return.
(e) A licensed retailer shall destroy all cannabis goods that have been returned to the licensed
retailer by a customer, in accordance with sections 5054 and 5055 of this division.
Authority: Section 26013, Business and Professions Code. Reference: Section 26011.5, 26012,
and 26070, Business and Professions Code
§ 5411. Free Cannabis Goods
(a) A licensed retailer shall not provide free cannabis goods to any person. A licensed retailer
shall not allow individuals who are not employed by the licensed retailer to provide free cannabis
goods to any person on the licensed premises.
(b) Notwithstanding subsection (a) of this section, in order to provide access to medicinal
cannabis patients who have difficulty accessing medicinal cannabis goods, a licensee who holds
an M-Retailer license, an M-Retailer Non-storefront license, or an M-Microbusiness license that
is authorized for retail sales may provide free medicinal cannabis goods if all of the following
criteria are met:
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(1) Free cannabis goods are provided only to a medicinal cannabis patient or primary caregiver
for the patient in possession identification card issued under Section 11362.71 of the Health and
Safety Code.
(2) The cannabis goods comply with all applicable laboratory testing requirements under this
division.
(3) Prior to being provided to the patient or primary caregiver, the cannabis goods have been
properly recorded in the track and trace system as belonging to the licensed retailer.
(4) The cannabis goods shall not leave the licensed premises unless placed in a resealable child-
resistant opaque package as required for purchased cannabis goods under Business and
Professions Code section 26070.1.
(5) The cannabis goods shall be applied toward the daily purchase limit for a medicinal cannabis
customer pursuant to section 5409 of this division.
(6) The event shall be properly recorded in the licensed retailer's inventory records and the track
and trace system.
(c) In addition to the provision of free cannabis goods in subsection (b) of this section, a licensee
may donate cannabis goods and the use of equipment in compliance with any compassionate use,
equality, or other similar program administered by a local jurisdiction. The licensee shall ensure
that all cannabis goods provided pursuant to this subsection comply with subsections (b)(2) and
(b)(6) of this section.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26013, 26153
and 26160, Business and Professions Code.
§ 5412. Prohibition on Packaging and Labeling by a Retailer
(a) A licensed retailer shall not accept, possess, or sell cannabis goods that are not packaged as
they will be sold at final sale, in compliance with this division.
(b) A licensed retailer shall not package or label cannabis goods.
(c) A licensed retailer who also holds a distribution, manufacturing, or cultivation license may
package and label cannabis goods as allowed by the distribution, manufacturing, or cultivation
license at their licensed distribution, manufacturing, or cultivation premises.
Authority: Section 26013, Business and Professions Code. Reference: Section 26120, Business
and Professions Code
§ 5413. Exit Packaging
Cannabis goods purchased by a customer shall not leave the licensed retailer's premises unless
the goods are placed in a resealable child-resistant opaque exit package.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26070.1 and
26120, Business and Professions Code.
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§ 5414. Non-Storefront Retailer
(a) A non-storefront retailer licensee shall be authorized to conduct retail cannabis sales
exclusively by delivery as defined in Business and Professions Code section 26001(p).
(b) A complete application for a non-storefront retailer license shall include all the information
required in an application for a retailer license.
(c) A Non-Storefront Retailer licensee shall comply with all the requirements applicable to
retailer licensees, except for those provisions related to public access to the licensed premises..
and the retail area.
(d) The licensed premises of a non-storefront retailer licensee shall be closed to the public.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26012 and
26070, Business and Professions Code.
§ 5415. Delivery Employees
(a) All deliveries of cannabis goods shall be performed by a delivery employee that is directly
employed by a licensed retailer.
(b) Each delivery employee of a licensed retailer shall be at least 21 years of age.
(c) All deliveries of cannabis goods shall be made in person. A delivery of cannabis goods shall
not be made through the use of an unmanned vehicle.
(d) The process of delivery begins when the delivery employee leaves the retailer's licensed
premises with the cannabis goods for delivery. The process of delivering ends when the delivery
employee returns to the retailer's licensed premises after delivering the cannabis goods to the
customer(s). During the process of delivery, the retailer's delivery employee may not engage in
any activities except for cannabis goods delivery and necessary rest, fuel, or vehicle repair stops.
(e) A delivery employee of a licensed retailer shall, during deliveries, carry a copy of the
retailer's current license, the employee's government-issued identification, and an identification
badge provided by the employer pursuant to section 5043 of this division.
(t) Prior to providing cannabis goods to a delivery customer, a delivery employee shall confirm
the identity and age of the delivery customer as required by section 5404 of this division, and
place the cannabis goods in a resealable child-resistant opaque exit package.
(g) A licensed retailer shall maintain an accurate list of the retailer's delivery employees and
shall provide the list to the Bureau upon request.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26070 and
26090, Business and Professions Code.
§ 5416. Delivery to a Physical Address
(a) A delivery employee may only deliver cannabis goods to a physical address in California.
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(b) A delivery employee shall not leave the State of California while possessing cannabis goods.
(c) A delivery employee shall not deliver cannabis goods to an address located on publicly
owned land or any address on land or in a building leased by a public agency. This prohibition
applies to land held in trust by the United States for a tribe or an individual tribal member unless
the delivery is authorized by and consistent with applicable tribal law.
(d) A delivery employee may deliver to any jurisdiction within the State of California.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26070 and
26090, Business and Professions Code.
§ 5417. Delivery Vehicle Requirements
(a) A retailer's delivery employee, carrying cannabis goods for delivery, shall only travel in an
enclosed motor vehicle. Any vehicle used in the delivery of cannabis goods shall be operated by
a delivery employee of the licensee. Only the licensee or an employee of the retailer licensee for
whom delivery is being performed shall be in the delivery vehicle.
(b) While carrying cannabis goods for delivery, a retailer's delivery employee shall ensure the
cannabis goods are not visible to the public. Cannabis goods shall be locked in a box, container,
or cage that is secured on the inside of the vehicle. For purposes of this section, the inside of the
vehicle includes the trunk.
(c) A retailer's delivery employee shall not leave cannabis goods in an unattended motor vehicle
unless the motor vehicle is locked and equipped with an active vehicle alarm system.
(d) A vehicle used for the delivery of cannabis goods shall be outfitted with a dedicated Global
Positioning System (GPS) device for identifying the geographic location of the delivery vehicle.
A dedicated GPS device must be owned by the licensee and used for delivery only. The device
shall be either permanently or temporarily affixed to the delivery vehicle and shall remain active
and inside of the delivery vehicle at all times during delivery. At all times, the licensed retailer
shall be able to identify the geographic location of all delivery vehicles that are making
deliveries for the licensed retailer and shall provide that information to the Bureau upon request.
(e) Upon request, a licensed retailer shall provide the Bureau with information regarding any
motor vehicle used for the delivery of cannabis goods, including the vehicle's make, model,
color, Vehicle Identification Number, license plate number and Department of Motor Vehicles
registration information.
(f) Any motor vehicle used by a licensed retailer to deliver cannabis goods is subject to
inspection by the Bureau. Vehicles used to deliver cannabis goods may be stopped and inspected
by the Bureau at any licensed premises or during delivery.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26070 and
26090, Business and Professions Code.
§ 5418. Cannabis Goods Carried During Delivery
(a) A retailer's delivery employee shall not carry cannabis goods in the delivery vehicle in excess
of$10,000 at any time. The value of cannabis goods shall be determined using the current retail
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rice of all cannabis goods carried b , or within the deliver vehicle of, the retailer's deliver
p g Y Y Y
employee.
(b) A delivery employee may only carry cannabis goods in the delivery vehicle and may only
perform deliveries for one licensed retailer at a time. A delivery employee must depart and return
to the same licensed premises before taking possession of any cannabis goods from another
licensee to perform deliveries.
(c) A retailer's delivery employee shall not leave the licensed premises with cannabis goods
without at least one delivery order that has already been received and processed by the licensed
retailer.
(d) Before leaving the licensed premises, the retailer's delivery driver must have a delivery
inventory ledger of all cannabis goods provided to the retailer's delivery driver. For each
cannabis good, the delivery inventory ledger shall include the type of good, the brand, the retail
value, the track and trace identifier, and the weight, volume or other accurate measure of the
cannabis good. After each customer delivery, the delivery inventory ledger must be updated to
reflect the current inventory in possession of the retailer's delivery driver.
(e) The retailer's delivery driver shall maintain a log that includes all stops from the time the
retailer's delivery driver leaves the licensed premises to the time that the retailer's delivery driver
returns to the licensed premises, and the reason for each stop. The log shall be turned in to the
retailer when the retailer's delivery driver returns to the licensed premises. The licensed retailer
must maintain the log as a commercial cannabis activity record as required by this division.
(0 Prior to arrival at any delivery location, the licensed retailer must have received a delivery
request from the customer and provided the delivery request receipt to the retailer's delivery
driver electronically or in hard copy. The delivery request receipt provided to the retailer's
delivery driver shall contain all of the information required in section 5420 of this division,
except for the date and time the delivery was made, and the signature of the customer.
(g) Immediately upon request by the Bureau or any law enforcement officer, the retailer's
delivery driver shall provide:
(1) All delivery inventory ledgers from the tune the retailer's delivery driver left the licensed
premises up to the time of the request;
(2) All delivery request receipts for cannabis goods carried by the driver, in the delivery vehicle,
or any deliveries that have already been made to customers; and
(3) The log of all stops from the time the retailer's delivery driver left the licensed premises up to
the time of the request.
(h) If a retailer's delivery driver does not have any delivery requests to be performed for a 30-
minute period, the retailer's delivery driver shall not make any additional deliveries and shall
return to the licensed premises. Required meal breaks shall not count toward the 30-minute
period.
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(1) Upon returning to the licensed premises, all undelivered cannabis goods shall be returned to
inventory and all necessary inventory and track-and-trace records shall be updated as appropriate
that same day.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26070 and
26090, Business and Professions Code.
§ 5419. Cannabis Consumption During Delivery
A retailer's delivery employees shall not consume cannabis goods while delivering cannabis
goods to customers.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26070 and
26090, Business and Professions Code.
§ 5420. Delivery Request Receipt
A licensed retailer shall prepare a hard copy or electronic delivery request receipt for each
delivery of cannabis goods.
(a) The delivery request receipt shall contain the following:
(1) The name and address of the licensed retailer;
(2) The first name and employee number of the retailer's delivery employee who delivered the
order;
(3) The first name and employee number of the retailer's employee who prepared the order for
delivery;
(4) The first name of the customer and a retailer-assigned customer number for the person who
requested the delivery;
(5) The date and time the delivery request was made;
(6) The delivery address;
(7) A detailed description of all cannabis goods requested for delivery. Tile description shall
include the weight, volume, or any other accurate measure of the amount of all cannabis goods
requested;
(8) The total amount paid for the delivery, including any taxes or fees, the cost of the cannabis
goods, and any other charges related to the delivery; and
(9) Upon delivery, the date and time the delivery was made, and the handwritten or electronic
signature of the customer who received the delivery.
(b) At the time of the delivery, the delivery employee of the retailer shall provide the customer
who placed the order with a hard or electronic copy of the delivery request receipt. The delivery
employee shall retain a hard or electronic copy of the signed delivery request receipt for the
licensed retailer's records.
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(c) For the purposes of this section, an employee number is a distinct number assigned by a
licensed retailer to their employees that would allow the licensed retailer to identify the
employee on documents or records using the employee number rather than the employee's full
name. A licensed retailer shall be able to identify the employee associated with each employee
number upon request from the Bureau.
(d) For the purposes of this section, a customer number is a distinct number assigned by a
licensed retailer to a customer that would allow the licensed retailer to identify the customer in
documents or records using the customer number rather than the customer's full name. A
licensed retailer shall be able to identify the customer associated with each customer number
upon request from the Bureau.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26070, 26090,
and 26160, Business and Professions Code.
§ 5421. Delivery Route
While making deliveries of cannabis goods, a retailer's delivery employee shall only travel from
the retailer's licensed premises to the delivery address; from one delivery address to another
delivery address; or from a delivery address back to the retailer's licensed premises. A delivery
employee of a retailer shall not deviate from the delivery path described in this section, except
for necessary rest, fuel, or vehicle repair stops, or because road conditions make continued use of
the route unsafe, impossible, or impracticable.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26070 and
26090, Business and Professions Code.
§ 5422. Receiving Shipments of Inventory
(a) A licensed retailer shall receive a shipment of cannabis goods only from a licensed distributor
or licensed nlicrobusiness.
(b) A licensed retailer shall accept shipments of cannabis goods only between the hours of 6:00
a.m. Pacific Time and 10:00 p.m. Pacific Time.
(c) During business hours, shipments of cannabis goods shall not enter the licensed premises
through an entrance or exit that is available for use by the public.
Authority: Section 26013, Business and Professions Code. Reference: Section 26070, Business
and Professions Code.
§ 5423. Inventory Documentation
A licensed retailer shall maintain an accurate record of its inventory. A licensed retailer shall
provide the Bureau with the record of inventory immediately upon request. A licensed retailer
shall keep a record of the following information for all cannabis goods the licensed retailer has in
its inventory:
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(a) A description of each item such that the cannabis goods can easily be identified;
(b) An accurate measurement of the quantity of the item;
(c) The date and time the cannabis goods were received by the licensed retailer;
(d) The sell-by or expiration date provided on the package of cannabis goods, if any;
(e) The name and license number of the licensed distributor or licensed microbusiness that
transported the cannabis goods to the licensed retailer; and
(f) The price the licensed retailer paid for the cannabis goods, including taxes, delivery costs, and
any other costs.
Authority: Section 26013, Business and Professions Code. Reference: Section 26160, Business
and Professions Code.
§ 5424. Inventory Reconciliation
(a) A licensed retailer shall perform a reconciliation of its inventory at least once every 14
calendar days.
(b) hn conducting an inventory reconciliation, a licensed retailer shall verify that the licensed
retailer's physical inventory is consistent with the licensed retailer's records pertaining to
inventory.
(c) The result of inventory reconciliation shall be retained in the licensed retailer's records and
shall be made available to the Bureau upon request.
(d) If a licensed retailer identifies any evidence of theft, diversion, or loss, the licensed retailer
shall notify the Bureau and law enforcement pursuant to section 5036 of this division.
(e) If a significant discrepancy as defined in section 5034 of this division is discovered between a
licensed retailer's physical inventory and the licensed retailer's inventory records, the licensed
retailer shall notify the Bureau and law enforcement pursuant to section 5036 of this division.
Authority: Section 26013, Business and Professions Code. Reference: Section 26160, Business
and Professions Code.
§ 5425. Record of Sales
(a) A licensed retailer shall maintain an accurate record of sale for every sale made to a
customer.
(b) A record of cannabis goods sold to a customer shall contain the following information:
(1) The first name and employee number of the retailer employee who processed the sale;
(2) The first name and the retailer-assigned customer number for the customer who made the
purchase;
(3) The date and time of the transaction;
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(4) A list of all the cannabis goods purchased, including the quantity purchased; and
(5) The total amount paid for the sale including the individual prices paid for each cannabis good
purchased and any amounts paid for taxes.
(c) For the purposes of this section, an employee number is a distinct number assigned by a
licensed retailer to their employees that would allow the licensed retailer to identify the
employee on documents or records using the employee number rather than the employee's full
name. A licensed retailer shall be able to identify the employee associated with each employee
number upon request from the Bureau.
(d) For the purposes of this section, a customer number is a distinct number assigned by a
licensed retailer to a customer that would allow the licensed retailer to identify the customer in
documents or records using the customer number rather than the customer's full name. A
licensed retailer shall be able to identify the customer associated with each customer number
upon request from the Bureau.
Authority: Section 26013, Business and Professions Code. Reference: Section 26160, Business
and Professions Code.
§ 5426. Records
All licensed retailer-specific records in this chapter shall be maintained in accordance with
section 5037 of this division.
Authority: Section 26013, Business and Professions Code. Reference: Section 26160, Business
and Professions Code.
§ 5427. Retailer Premises to Retailer Premises Transfer
(a) A licensee who holds multiple retail licenses may arrange for the transfer of cannabis goods
from one licensed retail premises to another licensed retail premises if both retail licenses are
held under the same ownership.
(b) Cannabis goods transferred to a licensed retail premises under subsection (a) of this section
may be sold by the licensed retailer receiving the cannabis goods only if the cannabis goods
comply with all requirements found in the Act and this division.
(c) The transportation of cannabis goods under this section must comply with all requirements
found within the Act and this division.
(d) Any movement of cannabis goods under this section shall be properly entered into the state
track and trace system.
Authority: Section 26013, Business and Professions Code. Reference: Section 26070, Business
and Professions Code.
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Chapter 4. MICROBUSINESS
§ 5500. Microbusiness
(a) In order to hold a microbusiness license, a licensee must engage in at least three (3) of the
following commercial cannabis activities: cultivation, manufacturing, distribution, and retail
sale. License types created by the California Department of Food and Agriculture or the State
Department of Public Health in regulation shall not be considered qualifying commercial
cannabis activities for purposes of obtaining a microbusiness license.
(b) An applicant for a microbusiness license shall indicate on the application for licensure which
commercial cannabis activities the applicant intends to engage in.
(c) An application for a microbusiness license shall include:
(1) For an application indicating that the applicant intends to engage in cultivation under the
microbusiness license all the required information under sections 5002, 5501, 5502 and 5503 of
this division.
(2) For an application indicating that the applicant intends to engage in manufacturing under the
microbusiness license all the required information under sections 5002 and 5504 of this division.
(3) For an application indicating that the applicant intends to engage in distribution under the
microbusiness license all the required information for an application seeking a distributor
license.
(4) For an application indicating that the applicant intends to engage in distribution, transport-
only under the microbusiness license, all the required information for an application seeking a
distributor, transport-only license.
(5) For an application indicating that the applicant intends to engage in retail sale under the
microbusiness license, all the required information for an application seeking a retailer license.
(6) For an application indicating that the applicant intends to engage in non-storefront retail sale
under the microbusiness license, all the required information for an application seeking a non-
storefront retailer license.
(d) All cultivation, manufacturing, distribution, and retail activities performed by a licensee
under a microbusiness license shall occur on the same licensed premises.
(e) A holder of a microbusiness license shall comply with the following:
(1) A holder of a microbusiness license engaged in cultivation shall comply with all the rules and
requirements applicable to the cultivation license type suitable for the cultivation activities of the
licensee.
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(2) A holder of a microbusiness license engaged in manufacturing shall comply with all the rules
and requirements applicable to a Manufacturer 1 license in Division 1 of Title 17 of the
California Code of Regulations.
(3) A holder of a microbusiness license engaged in distribution shall comply with all the rules
and requirements applicable to a distributor license in this division.
(4) A holder of a microbusiness license engaged in retail sale shall comply with all the rules and
requirements applicable to a retailer license, or a non-storefront retailer license if retail sales are
conducted by delivery only in this division.
(f) A holder of a microbusiness license may only engage in the commercial cannabis activity
requested in the license application and approved by the Bureau at the time the license is issued.
If the holder of a microbusiness license wants to engage in an additional commercial cannabis
activity after the license is issued, the licensee shall submit a request for a modification of the
licensed premises pursuant to section 5027 of this division.
(g) A holder of a microbusiness license shall comply with all the security rules and requirements
applicable to the corresponding license type suitable for the activities of the licensee.
(h) Areas of the licensed premises for manufacturing and cultivation shall be separated from the
distribution and retail areas by a wall and all doors between the areas shall remain closed when
not in use.
(1) A suspension or revocation of a microbusiness licensee shall affect all commercial cannabis
activities allowed pursuant to that license.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26012 and
26070, Business and Professions Code.
§ 5501. Microbusiness Applications Including Cultivation Activities
In addition to the information required in section 5002 of this division, an application for a
microbusiness license to engage in cultivation shall include the following:
(a) Evidence of enrollment with the applicable Regional Water Quality Control Board or State
Water Resources Control Board for water quality protection programs or written verification
from the appropriate Board that enrollment is not necessary.
(b) Evidence that the applicant has conducted a hazardous materials record search of the
EnviroStor database for the proposed premises. If hazardous sites were encountered, the
applicant shall provide documentation of protocols implemented to protect employee health and
safety.
(c) For indoor and mixed-light cultivation, identification of all power sources for cultivation
activities, including, but not limited to: illumination, heating, cooling, and ventilation.
(d) A premises diagram pursuant to section 5006 of this division that shall also include:
(1) All roads and water crossings on the property.
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(2) If the applicant is proposing to use a diversion from a waterbody, groundwater well, or rain
catchment system as a water source for cultivation, the following locations on the property
diagram with locations also provided as coordinates in either latitude and longitude or the
California Coordinate System:
(A) Sources of water used, including the location of waterbody diversion(s), pump location(s),
and distribution system; and
(B) Location, type, and capacity of each storage unit to be used for cultivation.
(e) A proposed cultivation plan pursuant to section 5502 of this division.
(f) Identification of all water sources used for cultivation activities and the applicable
supplemental information for each source as required by section 5503 of this division:
(1) A retail water supplier;
(2) A groundwater well;
(3) A rainwater catchment system; or
(4) A diversion from a surface waterbody or an underground stream flowing in a known and
definite channel.
(g) A copy of any final lake or streambed alteration agreement issued by the California
Department of Fish and Wildlife, pursuant to Fish and Game Code sections 1602 and 1617, or
written verification from the California Department of Fish and Wildlife that a lake and
streambed alteration agreement is not required.
(h) An attestation that the applicant entity is an "agricultural employer" as defined by the
Alatorre-Zenovich-Dunlap-Berman Agricultural Labor Relations Act of 1975; Division 2, Part
3.5 (commencing with Section 1140) of the Labor Code.
(1) An attestation that the local fire department has been notified of the cultivation site if the
applicant entity is an indoor license type.
0) An acknowledgement that the applicant understands that the information provided in the
application that is relevant to the cultivation operation may be shared with the Department of
Food and Agriculture for purposes of evaluating the applicant's qualifications for]]censure. If
the Department of Food and Agriculture corresponds directly with the applicant on matters
related to the application, the applicant shall agree to cooperate. The applicant shall further agree
that the Department of Food and Agriculture may conduct inspections on the areas of the
premises related to their respective oversight authority.
(k) If applicable, a detailed description of any fines or penalties for cultivation or production of a
controlled substance on public or private land pursuant to Fish and Game Code section 12025 or
12025.1 against the applicant or a business entity in which the applicant was an owner or officer
within 3 years preceding the date of application.
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Authority: Section 26013, Business and Professions Code. Reference: Sections 26012, 26050,
26051.5 and 26070, Business and Professions Code.
§ 5502. Cultivation Plan Requirements
A cultivation plan shall include all of the following:
(a)A detailed premises diagram showing all cultivation activity areas,boundaries, and dimensions
in feet. The total area of the following cultivation activity areas shall be less than 10,000 square
feet as provided in Business and Professions Code section 26070.
(1) Canopy area(s) (which shall contain mature plants, at any point in time), including aggregate
square footage if the canopy areas are noncontiguous;
(2) Area(s) outside of the canopy where only immature plants shall be maintained, if applicable;
(3) Designated pesticide and other agricultural chemical storage area(s);
(4) Designated processing area(s) if the licensee will process on site;
(5) Designated packaging area(s) if the licensee will package products on site;
(6) Designated composting area(s) if the licensee will compost plant or cannabis waste on site;
(7) Designated secured area(s) for cannabis waste if different than subsection (a)(6) of this
section;
(8) Designated area(s) for harvested cannabis storage;
(9) Designated research and development area(s) which may contain mature plants for nursery
only;
(10) Designated seed production area(s) which may contain mature plants for nursery only; and
(b) For purposes of subsection(a)(1) in this section, canopy shall be calculated in square feet and
measured using clearly identifiable boundaries of all areas(s) that will contain mature plants at
any point in time, including all of the space(s) within the boundaries. Canopy may be
noncontiguous, but each unique area included in the total canopy calculation shall be separated
by an identifiable boundary which include, but are not limited to: interior walls, shelves,
greenhouse walls, hoop house walls, garden benches, hedgerows, fencing, garden beds, or garden
plots. If mature plants are being cultivated using a shelving system, the surface area of each level
shall be included in the total canopy calculation.
(c) For indoor and mixed-light cultivation, a lighting diagram with the following information
shall be included:
(1) Location of all lights in the canopy area(s); and
(2) Maximum wattage, or wattage equivalent, of each light.
(d) A pest management plan which shall include, but not be limited to, the following:
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(1) Product name and active ingredient(s) of all pesticides to be applied to cannabis during any
stage of plant growth; and
(2) Integrated pest management protocols including chemical, biological and cultural methods
the applicant anticipates using to control or prevent the introduction of pests on the cultivation
site.
(e) Cannabis waste procedures meeting the requirements of section 5002(c)(29)(E) of this
division.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26050, 26051.5
and 26070, Business and Professions Code.
§ 5503. Supplemental Water Source Information
The following information shall be provided for each water source identified by the applicant:
(a) Retail water supply sources:
(1) If the water source is a retail water supplier, as defined in Water Code section 13575,
identify the retail water supplier.
(2) If the water source is a small retail water supplier, such as a delivery service, and is subject
to Business and Professions Code section 26060.1(a)(1)(13):
(A) If the retail water supplier contract is for delivery or pickup of water from a surface water
body or an underground stream flowing in a known and definite channel, provide all of the
following:
(1)The name of the retail water supplier under the contract;
(ii) The geographic location coordinates in either latitude and longitude or the California
Coordinate System of any point of diversion used by the retail water supplier to divert water
delivered to the applicant under the contract;
(iii) The authorized place of use of any water right used by the retail water supplier to divert
water delivered to the applicant under the contract; and
(iv) The maximum amount of water delivered to the applicant for cannabis cultivation in any
year.
(B) If the retail water supplier contract is for delivery or pickup of water from a groundwater
well, provide all of the following:
(1) The name of the retail water supplier;
(ii) The geographic location coordinates for any groundwater well used to supply water delivered
to the applicant, in either latitude and longitude or the California Coordinate System;
(iii) The maximum amount of water delivered to the applicant for cannabis cultivation in any
year; and
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(iv) A copy of the well log filed with the Department of Water Resources pursuant to Water
Code section 13751 for each percolating groundwater well used to divert water delivered to the
applicant. If no well log is available, the applicant shall provide evidence from the Department of
Water Resources indicating that the Department of Water Resources does not have a record of
the well log. When no well log is available, the State Water Resources Control Board may
request additional information about the well.
(b) If the water source is a groundwater well:
(1) The groundwater well's geographic location coordinates in either latitude and longitude or
the California Coordinate System; and
(2) A copy of the well log filed with the Department of Water Resources pursuant to Water Code
section 13751. If no well log is available, the applicant shall provide evidence from the
Department of Water Resources indicating that the Department of Water Resources does not
have a record of the well log. If no well log is available, the State Water Resources Control
Board may request additional information about the well.
(c) If the water source is a rainwater catchment system:
(1) The total square footage of the catchment footprint area(s);
(2) The total storage capacity, in gallons, of the catchment system(s); and
(3) A detailed description of the type, nature, and location of each catchment surface. Examples
of catchment surfaces include a rooftop and greenhouse.
(d) If the water source is a diversion from a waterbody, provide any applicable statement,
application, permit, license, or small irrigation use registration identification number(s); and
either:
(1) A copy of any applicable registrations, permits, or licenses or proof of a pending application,
issued under Part 2 (commencing with Section 1200) of Division 2 of the Water Code as
evidence of approval of a water diversion by the State Water Resources Control Board;
(2) A copy of any statements of diversion and use filed with the State Water Resources Control
Board before October 31, 2017, detailinc,the water diversion and use; or
(3) A copy of documentation submitted to the State Water Resources Control Board before
October 31, 2017, demonstrating that the diversion is authorized under a riparian right and that
no diversion occurred in any calendar year between January 1, 2010, and January 1, 2017.
(4) If the applicant has claimed an exception from the requirement to file a statement of diversion
and use;pursuant to Water Code section 5101 the applicant shall provide a copy of the
documentation submitted to the State Water Resources Control Board before January 1, 2019,
demonstrating that the diversion is subject to Water Code section 5101, subdivision (a), (c), (d),
or(e).
Authority: Section 26013, Business and Professions Code. Reference: Sections 26050, 26051.5
and 26070, Business and Professions Code; and Section 13149, Water Code.
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§ 5504. License Issuance in an Impacted Watershed
If the State Water Resources Control Board or the Department of Fish and Wildlife finds, based
on substantial evidence, that a microbusiness' cannabis cultivation is causing significant adverse
impacts on the environment in a watershed or other geographic area, the Bureau shall not issue
new microbusiness licenses that include cultivation activities or increase the total number of
plant identifiers within that watershed or area.
Authority: Section 26013, Business and Professions Code. Reference: Section 26011.5, 26055,
26070, Business and Professions Code.
§ 5505. Cultivation Records for Licensees Engaging in Cultivation Activities
In addition to the records required by section 5037 of this division, a microbusiness engaging in
cultivation activities shall maintain the following records:
(a) Cultivation plan(s);
(b) All records evidencing compliance with the environmental protection measures required in
sections 5501, 5502, 5503, and 5504 of this division; and
(c) All unique identifiers (UID) assigned to product in inventory and all unassigned U IDs. UIDs
associated with product that has been retired from the track and trace system must be retained for
six (6) months after the date the tags were retired.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26069, 26160
and 26161, Business and Professions Code.
§ 5506 Microbusiness Applications Including Manufacturing Activities
In addition to the information required in section 5002 of this division, an application for a
microbusiness license that engages or will engage in manufacturing, shall include the following:
(a) The type of activity conducted at the premises (extraction, infusion, packaging, and/or
labeling);
(b) The types of products that will be manufactured, packaged, or labeled;
(c) The name, title and phone number of the on-site individual who manages the operation of the
premises;
(d) The name, title and phone number of an alternate contact person for the premises;
(e) The number of employees at the premises;
(1) The following information:
(1) A description of inventory control procedures sufficient to demonstrate how the applicant
will comply with the requirements of Section 40282 of Title 17 of the California Code of
Regulations, or a copy of the standard operating procedure addressing inventory control;
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(2) A description of quality control procedures sufficient to demonstrate how the applicant will
comply with all of the applicable requirements specified in Sections 40232-40268 of Title 17 of
the California Code of Regulations or a copy of the standard operating procedure addressing
quality control;
(3) A description of security procedures sufficient to demonstrate how the applicant will comply
with the requirements of Section 40200 of Title 17 of the California Code of Regulations, or a
copy of the standard operating procedure addressing security procedures;
(4) A description of the waste disposal procedures sufficient to demonstrate how the applicant
will comply with the requirements of Section 40290 of Title 17 of the California Code of
Regulations, or a copy of the standard operating procedure addressing waste management.
(g) Any manufacturer submitting operating procedures and protocols to the Department pursuant
to the Act and this chapter may claim such information as a trade secret or confidential by clearly
identifying such information as "confidential" on the document at the time of submission. Any
claim of confidentiality by a manufacturer must be based on the manufacturer's good faith belief
that the information marked as confidential constitutes a trade secret as defined in Civil Code
section 3426.1(d) or is otherwise exempt from public disclosure under the California Public
Records Act in Government Code section 6250 et seq.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26012, 26050,
26051.5, 26055, and 26070, Business and Professions Code.
§ 5507 Microbusiness Records for Licensees Engaging in Manufacturing Activities
In addition to the records required by section 5037 of this division, a microbusiness engaging in
manufacturing activities shall maintain the following records:
(a) Records related to quality of raw materials and ingredients, per section 40252 of Title 17 of
the California Code of Regulations.
(b) Records related to manufacturing operations, per section 40254 of Title 17 of the California
Code of Regulations.
(c) Records related to written hazard analysis, per section 40256 of Title 17 of the California
Code of Regulations.
(d) Records related to preventative controls, per section 40258 of Title 17 of the California Code
of Regulations.
(e) Records related to the master manufacturing protocol, per section 40262 of Title 17 of the
California Code of Regulations.
(f) Batch production record, per section 40264 of Title 17 of the California Code of Regulations.
(g) Records related to product complaints, per section 40266 of Title 17 of the California Code
of Regulations.
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(h) Records related to recalls, per section 40268 of Title 17 of the California Code of
Regulations.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26160, Business
and Professions Code.
Chapter 5. CANNABIS EVENTS
§ 5600. Cannabis Event Organizer License
(a) To obtain a temporary cannabis event license, the event organizer must first apply for and
obtain a cannabis event organizer license.
(b) Cannabis event organizers licensed under this section shall comply with chapter 1 of this
division except for sections 5001-5002, 5006-5008, 5010, 5016, 5019, 5025-5029, 5032-5034,
and 5042-5044, and 5046-5055.
(c) A cannabis event organizer licensee is not authorized or licensed to cultivate, distribute,
manufacture, or retail cannabis or cannabis products without first obtaining the appropriate
licenses or authorizations to engage in such commercial cannabis activities.
(d) A cannabis event organizer shall comply with the records retention provisions of section
5037 of this division. Records shall be kept by the cannabis event organizer in a manner that
allows the records to be produced for the Bureau in either hard copy or electronic form,
whichever the Bureau requests. Failure to produce records upon the Bureau's request may result
in disciplinary action against the cannabis event organizer license and/or denial of a temporary
cannabis event license.
(e) Cannabis event organizer applications may be completed online at www.bcc.ca.gov or by
delivering a printed copy to the Bureau's office(s).
(f) Applicants who submit their applications online shall first register for a user account as
provided by section 5002(b) of this division.
(g) An application must be completed by an owner as defined by Business and Professions Code
section 26001(al). An application for cannabis event organizer licensure includes the following:
(1) The name of the applicant. For applicants who are individuals, the applicant shall provide
both the first and last name of the individual. For applicants who are business entities, the
applicant shall provide the legal business name of the applicant.
(2) If applicable, the business trade name ("DBA") of the applicant.
(3) Payment of an application fee pursuant to section 5014 of this division.
(4) Whether the owner is serving or has previously served in the military. Disclosure of military
service is voluntary. An applicant who has served as an active duty member of the Armed Forces
of the United States and was honorably discharged and who can provide evidence of such
honorable discharge shall have his or her application expedited pursuant to Business and
Professions Code section 115.4.
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(5) A list of the license types and the license numbers issued from the Bureau and all other state
cannabis licensing authorities that the applicant holds, including the date the license was issued
and the licensing authority that issued the license.
(6) Whether the applicant has been denied a license or has had a license suspended or revoked by
the Bureau or any other state cannabis licensing authority. The applicant shall provide the type of
license applied for, the name of the licensing authority that denied the application, and the date
of denial.
(7) The mailing address for the applicant.
(8) The telephone number for the applicant.
(9) The website address of the applicant's business, if applicable.
(10) The email address for the applicant's business.
(1 1) Contact information for the applicant's designated primary contact person including the
name, title, phone number, and email address of the individual.
(12) The federal employer identification number for the applicant's business.
(1')) A description of the business organizational structure of the applicant, such as partnership or
corporation.
(14) The business-formation documents, which may include, but are not limited to, articles of
incorporation, operating agreements, partnership agreements, and fictitious business name
statements. The applicant shall also provide all documents filed with the California Secretary of
State, which may include, but are not limited to, articles of incorporation, certificates of stock,
articles of organization, certificates of limited partnership, and statements of partnership
authority. If the commercial cannabis business is held in trust, the applicant shall provide a copy
of the trust.
(15) A list of every fictitious business name the applicant is operating under including the
address where the business is located.
(16) An applicant that is a foreign corporation shall include in its application the certificate of
qualification issued by the California Secretary of State under Corporations Code section 2105.
(17) The applicant shall supply the following financial information:
(A) A list of funds belonging to the applicant's cannabis event organizing business held in
savings, checking, or other accounts maintained by a financial institution. The applicant shall
provide, for each account, the financial institution's name, the financial institution's address,
account type, account number, and the amount of money in the account.
(B) A list of loans made to the applicant for its use in cannabis event organizing activities. For
each loan, the applicant shall provide the amount of the loan, the date of the loan, tern(s) of the
loan, security provided for the loan, and the name, address, and phone number of the lender.
(C) A list of investments made into the applicant's cannabis event organizing activities. For each
investment, the applicant shall provide the amount of the investment, the date of the investment,
tern(s) of the investment, and the name, address, and phone number of the investor.
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(D) A list of all gifts of any kind given to the applicant for its use in cannabis event organizing
activities. For each gift, the applicant shall provide the value of the gift or description of the gift,
and the name, address, and phone number of the provider of the gift.
(18) A complete list of every individual that has a financial interest in the cannabis event
organizing business as defined in section 5004 of this division, who is not an owner as defined in
Business and Professions Code section 26001(al).
(19) A complete list of every owner of the applicant as defined in Business and Professions Code
section 26001(al). Each individual named on this list shall submit the following information:
(A) The full name of the owner.
(B) The owner's title within the applicant entity.
(C) The owner's date of birth and place of birth.
(D) The owner's social security number or individual taxpayer identification number.
(E) The owner's mailing address.
(F) The owner's telephone number. This may include a number for the owner's home, business,
or mobile telephone.
(G) The owner's email address.
(H) The owner's current employer.
(I) The percentage of the ownership interest held in the applicant entity by the owner.
(J) Whether the owner has an ownership or a financial interest as defined in sections 5003 and
5004, respectively, of this division in any other commercial cannabis business licensed under the
Act.
(K) A copy of the owner's government-issued identification. Acceptable forms of identification
are a document issued by a federal, state, county, or municipal government that includes the
name, date of birth, height, gender, and picture of the person, such as a driver license.
(L) A detailed description of the owner's convictions. A conviction within the meaning of this
section means a plea or verdict of guilty or a conviction following a plea of polo contendere.
Convictions dismissed under Penal Code section 1203.4 or equivalent non-California law must
be disclosed. Convictions dismissed under Health and Safety Code section 1 1361.8 or equivalent
non-California law must be disclosed. Juvenile adjudications and traffic infractions under S300
that did not involve alcohol, dangerous drugs, or controlled substances do not need to be
included. For each conviction, the owner shall provide the following:
(1) The date of conviction.
(ii) Dates of incarceration, if applicable.
(iii) Dates of probation, if applicable.
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(iv) Dates of parole, if applicable.
(v) A detailed description of the offense for which the owner was convicted.
(vi) A statement of rehabilitation for each conviction. The statement of rehabilitation is to be
written by the owner and may contain evidence that the owner would like the Bureau to consider
that demonstrates the owner's fitness for licensure. Supporting evidence may be attached to the
statement of rehabilitation and may include, but is not limited to, a certificate of rehabilitation
under Penal Code section 4852.01, and dated letters of reference from employers, instructors, or
professional counselors that contain valid contact information for the individual providing the
reference.
(M) If applicable, a detailed description of any administrative orders or civil judgements for
violations of labor standards, any suspension of a commercial cannabis license, revocation of a
commercial cannabis license, or sanctions for unlicensed commercial cannabis activity by a
licensing authority, local agency, or state agency against the applicant or a business entity in
which the applicant was an owner or officer within the three years immediately preceding the
date of the application.
(N) Attestation to the following statement: Under penalty of perjury, I hereby declare that the
information contained within and submitted with the application is complete, true, and accurate. I
understand that a misrepresentation of fact is cause for rejection of this application, denial of the
license, or revocation of a license issued.
(20) For an applicant with 20 or more employees, the applicant shall attest that the applicant has
entered into a labor peace agreement and will abide by the terms of the agreement. The applicant
shall submit a copy of the page of the labor peace agreement that contains signatures of the union
representative and the applicant. For applicants who have not yet entered into a labor peace
agreement, the applicant shall provide a notarized statement indicating the applicant will enter
into and abide by the terms of a labor peace agreement as soon as reasonably practicable after
licensure.
(21) The limited waiver of sovereign immunity required by section 5009 of this division, if
applicable.
Authority: Sections 115.4 and 26013, Business and Professions Code. Reference: Sections 115.4,
144, 26012, and 26200, Business and Professions Code.
§ 5601. Temporary Cannabis Event License
(a) A temporary cannabis event license authorizes a licensed cannabis event organizer to hold a
temporary cannabis event where the onsite sale and consumption of cannabis goods is authorized
at the location indicated on the license during the dates indicated on the license.
(b) A temporary cannabis event license shall only be issued to a person who holds a cannabis
event organizer license issued by the Bureau.
(c) Violations of the requirements applicable to temporary cannabis events may result in
disciplinary action against the cannabis event organizer license or any other licenses held by a
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licensee participating in the temporary cannabis event and responsible for the violation under
Business and Professions Code section 26070.5.
(d) A temporary cannabis event license shall only be issued for a single day or up to 4
consecutive days. No temporary cannabis event license will be issued for more than 4 days.
(e) An application for a temporary cannabis event license shall be submitted to the Bureau no
less than 60 days before the first day of the temporary cannabis event.
(f) A temporary cannabis event may only be held on the grounds of a county fair or district
agricultural association. Temporary cannabis events are not required to take place on the same
dates as the county fairs or district agricultural association events at these locations.
(g) A temporary cannabis event license shall not be issued for a premises that is licensed for the
sale of alcohol or tobacco.
(h) An application for a temporary cannabis event license shall include the following:
(1) The name of the applicant. For applicants who are individuals, the applicant shall provide
both the first and last name of the individual. For applicants who are business entities, the
applicant shall provide the legal business name of the applicant.
(2) The license number for each state cannabis license held by the applicant.
(3) The address of the location where the temporary cannabis event will be held.
(4) The name of the temporary cannabis event.
(5) A diagram of the physical layout of the temporary cannabis event. The diagram shall clearly
indicate where the temporary cannabis event will be taking place on the location grounds, all
entrances and exits that will be used by participants during the event, all cannabis consumption
areas, and all retail areas where cannabis goods will be sold. The hours during which cannabis
goods will be sold shall be noted on the diagram. The diagram shall also clearly indicate the area
where cannabis waste will be stored, all areas where cannabis goods will be stored, and the
specific location of each cannabis licensee who will be participating in the event. Each cannabis
licensee participating in the event shall be identified with an assigned temporary cannabis event
location number. The diagram shall not contain highlighting and the markings on the diagram
shall be in black-and-white print.
(6) The dates and hours of operation for which the temporary cannabis event license is being
sought. A temporary event license is required for any date in which the applicant engages in
onsite cannabis sales or allows onsite cannabis consumption.
(7) Contact information for the applicant's designated primary contact person regarding the
temporary event license, including the name, title, address, phone number, and email address of
the individual.
(8) Contact information for a designated contact person(s) who shall be onsite at the event and
reachable by telephone at all times that the event is occurring.
(9) A cannabis waste management plan in accordance with section 5002(c)(29)(E) of this
division.
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(10) Written approval from the local jurisdiction authorizing the applicant to engage in onsite
cannabis sales to, and onsite consumption by, persons 21 years of age or older at the temporary
cannabis event.
(11) A list of all licensees and employees that will be providing onsite sales of cannabis goods at
the temporary cannabis event.
(12) Attestation to the following statement: Under penalty of perjury, I hereby declare that the
infonnation contained within and submitted with the application is complete, true, and accurate. I
understand that a misrepresentation of fact is cause for rejection of this application, denial of the
license, or revocation of a license issued.
(i) If the list of licensees and employees participating in the temporary cannabis event changes
after the application is submitted or after the license is issued, the applicant shall submit an
updated list and an updated diagram, as required in subsection (f)(5) of this section, to the
Bureau no less than 72 hours before the event. Licensees not on the list submitted to the Bureau
shall not participate in the temporary cannabis event.
0) The event organizer shall hire or contract for security personnel to provide security services at
the licensed temporary cannabis event. All security personnel hired or contracted for by the
licensee shall be at least 21 years of age, licensed by the Bureau of Security and Investigative
Services, and comply with Chapters 11.4 and 11.5 of Division 3 of the Business and Professions
Code. Security personnel shall be present on the licensed premises at all times cannabis goods
are available for sale and/or cannabis consumption is allowed on the licensed premises.
(k) A cannabis event organizer shall maintain a clearly legible sign, not less than 7" x I I" in size
reading, "No Persons Under 21 Allowed" at or near each public entrance to any area where the
sale or consumption of cannabis goods is allowed. The lettering of the sign shall be no less than
1 inch in height.
(1) All cannabis waste generated at a temporary cannabis event shall be collected and disposed of
in accordance with the requirements of sections 5054 and 5055 of this division. The cannabis
event organizer may contract or arrange for the collection and disposal of cannabis waste
generated during the temporary cannabis event.
(nn) A cannabis event organizer and all other licensees participating in a temporary cannabis
event are required to comply with section 5037 of this division and all other applicable
requirements in the Act and this division pertaining to record keeping.
Authority: Section 26013, Business and Professions Code. Reference: Section 26012 and 26200,
Business and Professions Code.
§ 5602. Temporary Cannabis Event Sales
(a) Only persons age 21 or older may purchase and consume cannabis goods at a temporary
cannabis event. Prior to selling cannabis goods to a customer, the licensee making the sale shall
confirm, using valid identification as specified in section 5404 of this division, the age and
identity of the customer.
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(b) All sales of cannabis goods at a temporary cannabis event must occur in a retail area as
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designated in the premises diagram pursuant to section 5601(h)(5) of this division.
(c) Each sale at a temporary cannabis event shall be performed by a licensed retailer or licensed
microbusiness. The cannabis event organizer may also sell cannabis goods at the temporary
cannabis event if the organizer separately holds a license authorizing the retail sale of cannabis
goods.
(1) Licensed retailers or licensed microbusinesses shall only conduct sales activities within their
specifically assigned area, identified in the diagram of the physical layout of the temporary
cannabis event.
(2)Mobile sales activities via wagon, cart, or similar means are prohibited at the temporary
cannabis event site.
(d) Licensed retailers or licensed microbusinesses must prominently display their temporary
cannabis event location number and state license within plain sight of the public.
(e) All sales at a temporary cannabis event shall occur on the dates stated on the license and shall
occur at the location stated on the license. All onsite sales of cannabis goods must comply with
the hours of operation requirements of section 5403 of this division.
(f) Sale of alcohol or tobacco shall not be allowed on the licensed temporary cannabis event
premises.
(g) The cannabis goods sold onsite at a temporary cannabis event shall be transported by a
licensed distributor or licensed microbusiness in compliance with the Act and this division. All
shipments of cannabis and non-cannabis goods intended for sale at a temporary cannabis event
must be checked by the temporary cannabis event organizer staff to prevent prohibited items,
such as alcohol and tobacco, from entering the licensed premises.
(h) Except small amounts of cannabis goods used for display, all cannabis goods for sale at a
temporary cannabis event shall be stored in a secure, locked container that is not accessible to the
public. Cannabis goods being stored by a licensee at a temporary cannabis event shall not be left
unattended. Licensees may share the secure, locked container; however, each licensee using the
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container shall be held responsible for any violations of this section and subject to disciplinary
action.
(1) All cannabis goods at a cannabis event shall comply with all requirements cannabis goods for
retail sale within the Act and section 5406 of this division.
(j) All cannabis goods at a temporary cannabis event shall comply with all track and trace
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requirements within the Act and this division.
(k) All cannabis goods used for display at a temporary cannabis event shall comply with the
requirements of section 5405 of this division.
(1) All cannabis goods sold at a temporary cannabis event shall be placed in an exit package
pursuant to section 5413 of this division.
(m) All customer returns of cannabis goods at a temporary cannabis event shall comply with
section 5410 of this division.
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(n) The daily sales limits under section 5409 of this division apply to all sales made at a
temporary cannabis event.
(o) A licensed retailer shall only provide free cannabis goods to a person at a temporary cannabis
event if the licensed retailer complies with all requirements of section 5411 of this division.
(p) The cannabis event organizer shall be responsible for ensuring that all rules and requirements
for the onsite sale of cannabis goods are followed.
(q) Any compensation paid from a licensed retailer to a cannabis event organizer for
participation in a temporary cannabis event shall not be detennined based on, or be contingent
on, the sale of cannabis goods.
Authority: Section 26013, Business and Professions Code. Reference: Section 26070 and 26200,
Business and Professions Code.
§ 5603. Temporary Cannabis Event Consumption
(a) Access to the area where cannabis consumption is allowed shall be restricted to persons 21
years of age or older.
(b) The event organizer licensee shall ensure that cannabis consumption is not visible from any
public place or non-age-restricted area.
(c) Consumption of alcohol or tobacco shall not be allowed on the licensed premises.
(d) All requirements for onsite cannabis consumption imposed by the relevant local jurisdiction
shall be followed and smoking of cannabis goods shall be prohibited in any areas where smoking
is prohibited by law.
(e) The cannabis event organizer, who holds the temporary cannabis event license, shall be
responsible for ensuring that all rules and requirements for the onsite consumption of cannabis
'goods are followed.
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(f) A cannabis event organizer and all other licensees participating in a temporary cannabis event
are required to follow all applicable requirements in this division pertaining to record keeping
and waste management.
(hg) Any compensation paid from a licensed retailer to a cannabis event organizer for
participation in a temporary cannabis event shall not be detennined based on, or tied to, the sale
of cannabis goods.
Authority: Section 26013, Business and Professions Code. Reference: Section 26200, Business
and Professions Code.
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Chapter 6. TESTING LABORATORIES
Article 1. Chapter Definitions
§ 5700. Definitions
In addition to the definitions in section 5000 of this division, the following definitions apply to
this chapter.
(a) "Acceptance criteria" means the specified limits placed on the characteristics of an item or
method that are used to determine data quality.
(b) "Accredited college or university" means a college or university accredited by a regional or
national accrediting agency that is an accreditor recognized by the Secretary of the US
Department of Education.
(c) "Accreditation body" means an impartial non-profit organization that operates in
conformance with the International Organization for Standardization (ISO) /International
Electrotechnical Commission (IEC) standard 17011 and is a signatory to the International
Laboratory Accreditation Cooperation (ILAC) Mutual Recognition Arrangement(MRA) for
Testing.
(d) "Action level" means the threshold value that provides the criterion for determining whether
a sample passes or fails an analytical test.
(e) "Analyte" means a chemical, compound, element, bacteria, yeast, fungus, or toxin to be
identified or measured.
(f) "Analytical batch"means a set of no more than 20 samples that is prepared together for the
same analysis and are prepared with laboratory quality control (LQC) samples.
(g) "Analytical method" means a technique used qualitatively or quantitatively to detennine the
composition of a sample or a microbial contamination of a sample.
(h) "Analytical sequence" means a group of samples that are analyzed sequentially using the
same instrument calibration curve.
(i) "Cannabinoid" means a class of diverse chemical compounds derived from a cannabis plant.
0) "CAS number" means the unique numerical identifier assigned to every chemical substance
by Chemical Abstracts Service, a division of the American Chemical Society.
(k) "CBD" means cannabidiol, CAS number 13956-29-1.
(1) "CBDA" means cannabidiolic acid, CAS number 1244-58-2.
(m) "CBG" means cannabigerol, CAS number 25654-31-3.
(n) "CBN" means cannabinol, CAS number 521-35-7.
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(o) "Certificate of accreditation" means a document issued by an accreditation body that attests
to the laboratory's competence to carry out specific testing analysis.
(p) "Certificate of analysis" (COA) means the report prepared by the laboratory about the
analytical testing performed and results obtained by the laboratory.
(q) "Certified reference material" means a reference material prepared by a certifying body or a
party independent of the laboratory with ISO/IEC 17034 accreditation.
(r) "Chain of Custody" (COC) means the chronological documentation that records the sequence
of custody, control, transfer, analysis, and disposal of a sample.
(s) "Coefficient of Determination" (commonly denoted as ,r2") means a statistical measure that
determines how well the regression approximates the actual data points in the calibration curve,
with a regression of 1 being a perfect fit.
(t) "Continuing calibration verification" (CCV) means a type of quality control sample that is a
mid-range calibration standard which checks the continued validity of the initial calibration of
the instrument.
(u) "Corrective action" means an action taken by the laboratory to resolve, and prevent from
recurrence, a problem with the technical operations of the laboratory.
(v) "Exclusivity" means the specificity of tlne-test method for validating microbial testing
methods. It evaluates the ability of the method to distinguisli the target organisms from similar
but genetically distinct non-target organisms.
(w) "Foreign material" means any filthy, putrid, or decomposed substance including hair, insects,
excreta, or related adulterant that may be hazardous or cause illness or injury to the consumer.
(x) "Frequency"means the number of items occurring in each category. Frequency may be
determined by analytical method or laboratory specific requirements for accuracy, precision of
the analysis, or statistical calculation.
(y) "Inclusivity" means, related to microbiological method validation, the sensitivity of the test
method. It evaluates the ability of the test method to detect a wide range of target organisms by a
defined relatedness.
(z) "Inhalable" means consumable in gaseous or vapor form through the lungs.
(aa) "Initial Calibration Verification" (ICV) means a solution of targeted method analytes of
known concentration that is obtained from a source external to the laboratory and different from
the source of calibration standards.
(bb) "ISO/IEC" means the joint technical committee of the International Organization for
Standardization (ISO) and the International Electrotechnical Commission (IEC).
(cc) "ISO/IEC 17025" means the general requirements specified by the ISO/IEC for the
competence of testing and calibration laboratories.
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(dd) "ISOJEC 17034" means the general requirements established by the ISOJEC for the
competence of reference material producers.
(ee) "ISOJEC 17043" means the general requirements established by the ISOJEC for
proficiency testing.
(ff) "Laboratory" means "testing laboratory" as defined at Business and Professions Code section
26001(at).
(gg) "Laboratory Control Sample" (LCS) means a blank matrix to which known concentrations
of the target method analytes are added. The LCS is analyzed in the same manner as the
representative sample.
(hh) "Laboratory replicate sample" means a sub-sample taken of the representative sample used
for laboratory quality control purposes to demonstrate reproducibility. It is prepared and
analyzed in the identical manner as the representative sample. The results from replicate analyses
are used to evaluate analytical precision.
(ii) "Laboratory employee" means any person directly employed by the laboratory for wages,
salary, barter, or trade by the laboratory and who is not employed by any other licensee under the
Act except for another testing laboratory. Laboratory employee does not mean independent
contractor, third party entity or any other entity acting on behalf of the laboratory.
Oj) "Laboratory quality assurance" means the set of operating principles that enable laboratories
to produce defensible data of known accuracy and precision and includes employee training,
equipment preventative maintenance procedures, calibration procedures, and quality control
testing, among other things.
(kk) "Limit of detection" (LOD) means the lowest quantity of a substance or analyte that can be
distinguished from the absence of that substance within a stated confidence limit.
(11) "Limit of quantitation" (LOQ) means the minimum concentration of an analyte in a specific
matrix that can be reliably quantified while also meeting predefined goals for bias and
imprecision.
(mm) "Matrix"means the substances that are present in a sample except for the analyte(s) of
interest.
(nn) "Matrix spike sample"means a sample prepared by adding a known quantity of the target
analyte to a sample matrix or to a matrix that is as closely representative of the matrix being
analyzed as possible.
(oo) "Method blank" means an analyte free matrix to which all reagents are added in the same
volumes or proportions as used in the sample preparation and is processed in exactly the same
manner as the samples.
(pp) "Moisture content" means the percentage of water in a sample,by weight.
(qq) "Non-target organism"means an organism that the test method or analytical procedure is
not testing for and can be used in evaluating the specificity of a test method.
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(rr) "Percent recovery" means the percentage of a measured concentration relative to the added
(spiked) concentration in a reference material or matrix spike sample. A laboratory shall
calculate the percent recovery by dividing the sample result by the expected result then
multiplying the quotient by 100.
(ss) "Practical experience" means experience performing scientific analytical tests in a laboratory
setting using equipment, instruments, kits, and materials routinely found in a laboratory.
Practical experience includes experience in any type of laboratory setting and is not limited to
cannabis-specific laboratories.
(tt) "Proficiency test" means an evaluation of a laboratory's performance against pre-established
criteria by means of interlaboratory comparisons of test measurements.
(uu) "Proficiency test sample" means a sample that is prepared by a party independent of the
testing laboratory with the ISO/IEC 17043 accreditation, where the concentration and identity of
an analyze that is known to the independent party, but is unknown to the testing laboratory and
testing laboratory employees.
(vv) "Quality control"means the set of measures implemented within an analytical procedure to
ensure that the measurement system is operating in a state of statistical control for which errors
have been reduced to acceptable levels.
(ww) "Quality control sample"means a sample that is produced and used by a laboratory for the
purpose of assuring the quality of the data and results. Quality control samples include blank
samples, matrix spike samples, laboratory control samples, replicate samples, and reference
material samples.
(xx) "Reagent" means a compound or mixture added to a system to cause a chemical reaction or
test if a reaction occurs. A reagent may be used to tell whether a specific chemical substance is
present by causing a reaction to occur with the chemical substance.
(yy) "Reference material" means material containing a known concentration of an analyze of
interest that is in solution or in a homogeneous matrix.
(zz) "Reference method" means the method by which the performance of an alternate method is
measured or evaluated.
(aaa) "Relative percent difference"means the comparative statistic that is used to calculate
precision or random error. RPD is calculated using the following equation:
RPD = I (representative sample measurement—replicate sample measurement) /
([representative sample measurement +replicate sample measurement] /2) x 100%
(bbb) "Relative standard deviation" means the standard deviation expressed as a percentage of
the means recovery. RSD is calculated using the following equation:
RSD = (s/ x) x 100%; where s = standard deviation and x=mean
(ccc) "Representative"means a small quantity of the batch whose characteristics represent, as
accurately as possible, the entire batch, thus allowing the results to be generalized.
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(ddd) "Representative sample" means a sample that is comprised of several increments of either
cannabis goods that are collected from a batch for testing.
(eee) "Requester" means the person who submits a request to the laboratory for testing of
cannabis goods from an entity licensed under this division.
(fff) "Reserve sample" means any portion of a representative sample that was not used in the
testing process.
(ggg) "Sample" means a representative part of, or a single item from, a batch which is comprised
of several sample increments.
(hhh) "Sample increment" means a portion of a batch that, together with other increments, makes
up the sample.
(iii) "Sampler" means the laboratory employee responsible for obtaining samples of cannabis
goods from a licensed distributor or licensed microbusiness.
(jjj) "Sanitize" means to sterilize, disinfect, or make hygienic.
(kkk) "Scope of accreditation" means the tests or types of tests performed, materials or products
tested, and the methods used for testing cannabis or cannabis products for which the
accreditation has been granted.
(111) "Standard operating procedure" (SOP) means a written document that provides detailed
instructions for the performance of all aspects of an analysis, operation, or action.
(mmm) "Tamper-evident" means a one-time-use security tape or seal that is affixed to the
opening of a package, allowing a person to recognize whether the package has been opened.
(nnn) "Target organism" means an organism that is being tested for in an analytical procedure or
test method.
(000) "THC" and "delta-9 THC" means tetrahydrocannabinol, CAS number 1972-08-3.
(ppp) "THCA" means tetrahydrocannabinolic acid, CAS number 23978-85-0.
(qqq) "Validation" means the confirmation by examination and objective evidence that the
requirements for a specific intended use or analytical method are fulfilled.
(nT) "Water activity"means the measure of the quantity of water in a product that is available
and therefore capable of supporting bacteria, yeasts, and fungi and which is reported in units A,,,.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26013 and
26100, Business and Professions Code.
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Article 2. Laboratory License
§ 5701. General Laboratory License Requirements
(a) A licensed laboratory shall maintain ISO/IEC 17025 accreditation for the testing of the
following:
(1) Cannabinoids;
(2) Heavy metals;
(3) Microbial impurities;
(4) Mycotoxins;
(5) Residual pesticides;
(6) Residual solvents and processing chemicals; and
(7) If tested, terpenoids.
(b) Each testing laboratory licensed premises shall have ISO/IEC 17025 accreditation.
(c) A licensed laboratory shall retain, and make available to the Bureau upon request, all records
associated with the licensee's ISO/IEC 17025 certificate of accreditation.
Authority: Section 26013, Business and Professions Code. Reference: Section 26100, Business
and Professions Code
§ 5702. Laboratory License Application
In addition to the information required in section 5002 of this division, an application for a
testing laboratory license includes the following:
(a) A valid certificate of accreditation, issued by an accreditation body, that attests to the
laboratory's competence to perform testing, including all the required analytes for the following
test methods:
(1) Cannabinoids;
(2) Heavy metals;
(3) Microbial impurities;
(4) Mycotoxins;
(5) Residual pesticides;
(6) Residual solvents and processing chemicals; and
(7) If tested, terpenoids.
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(b) Standard operating procedures for the following testing methods:
(1) Cannabinoids;
(2) Heavy metals;
(3) Microbial impurities;
(4) Moisture content and water activity;
(5) Mycotoxins;
(6) Residual pesticides;
(7) Residual solvents and processing chemicals; and
(8) If tested, teipenoids.
(c) Method validation report for the following testing methods:
(1) Cannabinoids;
(2) Foreign material;
(3) Heavy metals;
(4) Microbial impurities;
(5) Moisture content and water activity;
(6) Mycotoxins;
(7) Residual pesticides;
(8) Residual solvents and processing chemicals; and
(9) If tested, terpenoids.
(d) Standard operating procedures for the sampling of cannabis goods.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26012, 26050,
26051.5, 26055, 26102 and 26104, Business and Professions Code
§ 5703. Provisional Testing Laboratory License
(a) A laboratory may apply for a provisional license prior to receiving ISO/IEC 17025
accreditation provided that the applicant meets all other licensure requirements for a testing
laboratory and submits to the Bureau an application in compliance with section 5002 of this
division and an attestation that the applicant has or intends to seek ISO/IEC 17025 accreditation
for all testing methods required by this division.
(b) A provisional testing laboratory license shall be valid for 12 months. The annual license fee
for a provisional license shall be determined pursuant to section 5014 of this division.
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(c) To timely renew a provisional license, a completed license renewal form and the annual
renewal license fee pursuant to section 5014 of this division shall be received by the Bureau from
the licensee no earlier than 60 calendar days before the expiration of the license and no later than
5:00 p.m. Pacific Time on the last business day before the expiration of the license if the renewal
form is submitted to the Bureau at its office(s), or no later than 11:59 p.m. on the last business
day before the expiration of the license if the renewal form is submitted to the Bureau through its
electronic licensing system. Failure to receive a notice for license renewal does not relieve a
licensee of the obligation to renew a provisional license as required.
(d) In the event the license is not renewed prior to the expiration date, the licensee must not test
any commercial cannabis goods until the license is renewed.
(e) A licensee may submit a license renewal form up to 30 calendar days after the license
expires. Any late renewal form will be subject to a late fee equal to 50 percent of the applicable
licensing fees required by subsection (c) of this section.
(0 The license renewal application shall contain the following:
(1) The name of the licensee. For licensees who are individuals, the applicant shall provide both
the first and last name of the individual. For licensees who are business entities, the licensee shall
provide the legal business name of the applicant;
(2) The license number and expiration date;
(3) The licensee's address of record and licensed premises address; and
(4) An attestation that all information provided to the Bureau in the original application under
section 5002 of this division or subsequent notification under section 5023 of this division is
accurate and current.
(g) The Bureau may renew a provisional license for an initial renewal period of 12 months.
(h) After one renewal, the Bureau may renew the provisional license for additional 12-month
periods. if the licensee has submitted an application for the ISO/IEC 17025 accreditation. In
addition to the information required for a renewal form pursuant to subsection (f) of this section,
any renewal request pursuant to this section shall also include an attestation that the licensee's
application for each ISO/IEC 17025 is pending with the accrediting body, the name of the
accrediting body, and the date the application was submitted to the accrediting body.
(1) The licensee shall notify the Bureau if the application for each ISO/IEC 17025 accreditation is
granted or denied within 5 business days of receiving the decision from the accrediting body. If
the accrediting body grants or denies the licensee's application for any ISO/IEC 17025
accreditation before the expiration of the provisional license, the Bureau may terminate the
provisional license at that time.
0) The Bureau may revoke a provisional license at any time.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26012, 26031,
and 26050, Business and Professions Code.
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Article 3. Sampling Cannabis and Cannabis Products
§ 5704. Sampling Standard Operating Procedures
(a) The laboratory shall develop and implement a sampling standard operating procedure (SOP)
that describes the laboratory's method for obtaining representative samples of cannabis goods.
The laboratory shall use and submit to the Bureau Sampling— Standard Operating Procedures,
Form BCC-LIC-021 (New 7/18), which is incorporated herein by reference.
(b) The laboratory shall retain a copy of the sampling SOP on the licensed laboratory premises
and ensure that the sampling SOP is accessible to the sampler during sampling.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26102,
26104 and 26110, Business and Professions Code.
§ 5705. General Sampling Requirements
(a) The laboratory that obtains a representative sample from a licensed distributor or licensed
microbusiness shall perform all the required testing at one licensed laboratory premises.
(b) The laboratory may obtain and analyze samples only from batches in final form as required
by Business and Professions Code section 26100.
(c) The laboratory sampler shall collect a representative sample following the procedures
specified in the laboratory's sampling standard operating procedure(s).
(d) The laboratory shall collect a representative sample from each batch.
(e)The laboratory shall ensure that the sample is transported and subsequently stored at the
laboratory in a manner that prevents degradation, contamination, commingling, and tampering. If
the cannabis good specifies on the label how the cannabis good shall be stored, the laboratory
shall store the sample as indicated on the label.
(f) The laboratory shall complete a chain of custody form for each sample that the laboratory
collects and analyzes.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104
and 26110, Business and Professions Code.
§ 5706. Chain of Custody (COC)
(a) The laboratory shall develop and implement a COC protocol to ensure accurate
documentation is recorded for the transport, handling, storage, and destruction of samples.
(b) The COC protocol shall require the use of a COC fonn. The sampler shall use a COC to
record the following information for each sampled batch:
(1) Laboratory's name, physical address, and license number;
(2) Date and time sampling started and ended;
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(3) Licensed distributor or licensed microbusiness' name, physical address, and license number;
(4) Licensed cultivator's, licensed manufacturer's, or licensed microbusiness' name, physical
address, and license number;
(5) Batch number of the batch from which the representative sample was obtained and assigned
unique sample identifier;
(6) Sample matrix;
(7) Total batch size, by weight, or unit count;
(8) Total weight, or unit count of the representative sample;
(9) Sampling conditions or problems encountered during the sampling process, if any.
(10)Printed name and signature of the licensed distributor or licensed microbusiness' employee;
and
(11)Printed name and signature of the sampler;
(c) Each time the sample changes custody between licensees, is transported, or is destroyed, the
date, time, and the names and signatures of persons involved in these activities shall be recorded
on the COC form.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26102,
26104 and 26110, Business and Professions Code.
§ 5707. Harvest Batch Sampling
(a) The sampler shall obtain a representative sample from each prepacked or unpacked harvest
batch. The representative sample must NveiQh 0.35% of the total harvest batch weight.
(b) A sampler may collect greater than 0.35% of a prepacked or unpacked harvest batch if
necessary to perform the required testing or to ensure that the samples obtained are
representative.
(c) The prepacked or unpacked harvest batch from which a sample is obtained shall weigh no
more than 50.0 pounds. Laboratory analyses of a sample collected from a harvest batch weighing
more than 50.0 pounds shall be deemed invalid and the harvest batch from which the sample was
obtained may not be released for retail sale.
(d) When the sampler obtains a representative sample from an unpacked harvest batch, the
sampler shall do all the following:
(1) Collect the number of increments relative to the unpacked harvest batch size as listed in the
following table;
(2) Obtain increments from random and varying locations of the unpacked harvest batch, both
vertically and horizontally. To the extent practicable, the increments obtained from an unpacked
harvest batch shall be of equal weight; and
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(3) To the extent practicable, collect an equal number of increments from each container if the
unpacked harvest batch is stored in multiple containers.
Unpacked Harvest Batch Size Number of Increments
(pounds) (per sample)
< 10.0 8
10.1 —20.0 16
20.1 — 30.0 23
30.1 40.0 29
40.1 — 50.0 34
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104
and 26110, Business and Professions Code.
§ 5708. Cannabis Product Batch and Pre-Roll Sampling
(a) The sampler shall obtain a representative sample from each cannabis product batch or pre-roll
batch.
(b) The sampler may collect a greater number of increments if necessary to perform the required
testing or to ensure that the samples obtained are representative.
(c) The cannabis product batch or pre-roll batch from which a representative sample is obtained
shall contain no more than 150,000 units. Laboratory analyses of a sample collected from a
cannabis product batch containing more than 150,000 units shall be deemed invalid and the
cannabis product batch or pre-roll batch from which the representative sample was obtained may
not be released for retail sale.
(d) The sampler shall obtain a representative sample of cannabis product or pre-roll batch by
collecting, at minimum, the number of increments relative to the batch size as listed in the
following table. Each increment consists of 1 packaged unit.
Cannabis Product or Pre-roll Number of Increments
Batch Size (per sample)
(units)
< 50 2
51 — 150 3
151 — 500 5
501 — 1,200 8
1,201 —3,200 13
3,201 — 10,000 20
10,001 —35,000 32
35,001 — 150,000 50
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Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104
and 26110, Business and Professions Code.
§ 5709. Laboratory Transportation of Cannabis Goods Samples
(a) The following requirements apply when a licensed testing laboratory transports cannabis
goods samples:
(1) Cannabis goods shall only be transported inside of a vehicle or trailer and shall not be visible
or identifiable from outside of the vehicle or trailer. For purposes of this section, the inside of the
vehicle includes the trunk.
(2) The laboratory shall ensure cannabis goods samples are stored in a locked box, a locked
container, or a locked cage that is secured to the inside of the vehicle or trailer during transport.
(3) While left unattended, vehicles, and trailers shall be locked and secured.
(4) The laboratory shall not leave a vehicle or trailer containing cannabis goods samples
unattended in a residential area or parked overnight in a residential area.
(5) The laboratory shall ensure that any vehicle or trailer transporting cannabis goods samples
has a vehicle alann system.
(6) The laboratory shall ensure that packages or containers holding cannabis goods samples are
neither tampered with, nor opened during transport.
(7) The laboratory transporting cannabis goods samples shall only travel between licensees for
whom the laboratory is conducting compliance testing or quality assurance testing for, and the
laboratory's licensed premises when engaged in the transportation of cannabis goods. A
laboratory shall not deviate from the travel requirements described in this section, except for
necessary rest, fuel, or vehicle repair stops.
(8) The laboratory may transport multiple cannabis goods samples obtained from multiple
licensees at once.
(9) Vehicles or trailers transporting cannabis goods samples are subject to inspection by the
Bureau at any licensed premises or during transport at any time.
(10)No person under the age of 21 years old shall be in a vehicle or trailer transporting cannabis
goods samples.
(11) Only an employee of the laboratory, or security personnel who meets the requirement of
section 5045 of this division shall be in a vehicle while transporting cannabis goods samples.
(b) The laboratory shall provide the following required transport vehicle infornnation to the
Bureau:
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(1) Proof that the laboratory owns or holds or a valid lease for each vehicle used to transport
cannabis goods samples;
(2) The year, make, model, license plate number, and numerical Vehicle Identification Number
(VIN) for each vehicle or trailer used to transport cannabis goods samples; and
(3) Proof of insurance for each vehicle used to transport cannabis goods samples.
(c) The laboratory shall provide the Bureau with the information required by this section in
writing for any new vehicle or trailer that will be used to transport cannabis goods samples prior
to using the vehicle or trailer.
(d) The laboratory shall provide the Bureau with any changes to the information required by this
section in writing within 30 calendar days.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26102,
26104 and 26110, Business and Professions Code.
§ 5710. Laboratory Receipt of Samples Obtained from a Distributor or Microbusiness
(a) The laboratory may accept and analyze a sample from a licensed distributor or licensed
microbusiness for the required testing under section 5714 of this division only if there is an
accompanying COC form for the sample.
(b) The laboratory employee who receives the sample shall date, print, and sign their name on
the accompanying sample COC.
(b) (c) The laboratory shall not analyze a sample obtained from a licensed distributor or licensed
microbusiness, and the batch from which the sample was obtained may not be released for retail
sale, if the any of the following occur:
(1) The sample is received at the laboratory without the requisite COC form;
(2) The tamper-evident material is broken prior to the sample being received at the laboratory; or
(3) There is evidence of sample commingling, contamination, degradation, or a related
occurrence rendering the sample unusable for analytical testing when the sample is received at
the laboratory.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104
and 26110, Business and Professions Code.
Article 4. Standard Operating Procedures
§ 5711. Laboratory Analyses Standard Operating Procedures
The laboratory shall develop, implement, and maintain written standard operating procedures
(SOP) for sample preparation and each required test method. The laboratory shall use and submit
to the Bureau the following forms which are incorporated by reference:
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(a) Sample Preparation— Standard Operating Procedures, Form BCC-LIC-022 (New 7/18),
which is incorporated herein by reference; and
(b) Test Methods— Standard Operating Procedures, Form BCC-LIC-023 (New 7/18), which is
incorporated herein by reference.
(c) The laboratory shall keep each SOP at the licensed laboratory premises and ensure that each
SOP is accessible to laboratory employees during operating hours.
(d) The laboratory shall make each SOP available for inspection by the Bureau upon request, as
well as any other SOPs associated with the licensee's ISO/IEC 17025 certificate of accreditation.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26012, 26100,
26102, 26104 and 26110, Business and Professions Code
§ 5712. Test Methods
(a) The laboratory shall develop, implement, and validate test methods for the analyses of
samples as required under this division.
(b) To the extent practicable, the laboratory test methods shall comport with the following
guidelines:
(1) US Food and Drug Administration's Bacterial Analytical Manual, 2016;
(2) AOAC International's Official Methods of Analysis for Contaminant Testing ofAOAC
International, 20th .Edition, 2016; and
(3) United States Pharmacopeia and the National Formulary's Methods ofAnalysis for
Contaminant Testing, 2016.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104
and 26110, Business and Professions Code.
§ 5713. Validation of Test Methods
(a) The laboratory may use a nonstandard, amplified, or modified test method or a method that is
designed or developed by the laboratory to validate the methods for analyses of samples.
(b) The laboratory shall follow the guidelines set forth in the US Food and Drug
Administration's Guidelines for the Validation of Analytical Methods for the Detection of
Microbial Pathogens in Foods and Feeds, 2nd Edition, April 2015, incorporated herein by
reference, to validate test methods for the microbial analysis of samples.
(1) The laboratory shall include and address the criteria listed in the following table when
validating test methods for microbial analyses of samples.
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Criteria Requirement
Number of target organisms; inclusivity 5
Number of non-target organisms; exclusivity 5
Number of analyte levels per matrix: Qualitative methods 3 levels: high and low
inoculum levels and 1
uninoculated level
Number of analyte levels per matrix: Quantitative methods 4 levels: low, medium and
high inoculum levels and 1
uninoculated level
Replicates per food at each level tested 2 or more replicates per level
(c) The laboratory shall follow the guidelines set forth in the US Food and Drug
Administration's Guidelines for the Validation of Chemical Methods for the FDA FVM
Prograin, 2nd Edition, April 2015, incorporated herein by reference, to validate test methods for
chemical analysis of samples.
(1) The laboratory shall include and address the following criteria to validate test methods for
chemical analyses of samples:
(A) Accuracy;
(B) Precision;
(C) Linearity and range;
(1) The Coefficient of Determination (r2) for all calibration curves shall be greater than or equal
to 0.99.
(ii) LOQ for analytes tested shall be within the linear range of the calibration curve.
(D) Calibration standard;
(1)For calibration curves, there shall be a minimum of five calibration standards, not including
zero; and
(ii) Each calibration curve must include an Initial Calibration Verification (ICV).
(E) Sensitivity and selectivity;
(F) Limit of detection and limit of quantitation;
(G) Recovery,
(H) Reproducibility; and
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(I) Robustness.
(2) The laboratory shall use certified reference materials, to validate the following chemical
analyses. The test method used for analysis is valid if the percent recovery of the certified
reference material is between 80% to 120% for all required analytes.
(A) Cannabinoids, if available;
(B) Heavy metals;
(C) Microbial impurities;
(D) Mycotoxins;
(E) Residual pesticides;
(F) Residual solvents and processing chemicals; and
(G) Terpenoids, if available.
(d) The laboratory shall generate a validation report for each test method. Each validation report
shall include the following information:
(1) Instrument calibration data, if any;
(2)Raw data, including instrument raw data, for each test method, if any;
(3) Cannabis reference materials or certified reference material results;
(4) Data and calculations pertaining to LOD and LOQ determinations, if any;
(5) LQC report, as described in this chapter, for the validation of each method; and
(6) Worksheets, forms,pictures, or copies of laboratory notebook pages and any other
documentation necessary to meet the requirements described in subsections (b) and (c) of this
section.
(7) The supervisory or management laboratory employee shall review, approve, sign, and date
the validation report for each test method.
(8) Upon new test methods or altered test methods being used in the laboratory, the new
validation report shall be submitted to the Bureau within 5 business days.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26012, 26100,
26104 and 26110, Business and Professions Code.
Article 5. Laboratory Testing and Reporting
§ 5714. Required Testing
(a) The laboratory shall test each representative sample for the following:
(1) Cannabinoids;
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(2) Foreign material;
(3) Heavy metals;
(4) Microbial impurities;
(5) Mycotoxins;
(6) Moisture content and water activity;
(7) Residual pesticides;
(8) Residual solvents and processing chemicals; and
(9) If applicable, terpenoids.
(b) The laboratory shall report the results of each analysis performed by the laboratory on the
certificate of analysis.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104
and 26110, Business and Professions Code.
§ 5715. Phase-In of Required Laboratory Testing
(a) Cannabis goods shall not be sold or transferred to a licensed retailer or licensed
microbusiness, or released for retail sale, unless a representative sample of the cannabis goods
has undergone and passed all testing as required by this section.
(b) All cannabis harvested on or after January 1, 2018, and all cannabis products manufactured
on or after January 1, 2018, shall be tested for the following analytes, if applicable:
(1) Cannabinoids as required in section 5724 of this division;
(2) Moisture content as required in section 5717 of this division;
(3) Category II Residual Solvents and Processing Chemicals as required in section 5718 of this
division;
(4) Category I Residual Pesticides as required in section 5719 of this division; and
(5) Microbial Impurities as required in section 5720 of this division.
(c) In addition to the requirements of subsection (b) of this section, all cannabis harvested on or
after July 1, 2018, and all cannabis products manufactured on or after July 1, 2018, shall be
tested for the following analytes, if applicable:
(1) Category I Residual Solvents and Processing Chemicals as required in section 5718 of this
division;
(2) Category 11 Residual Pesticides as required in section 5719 of this division; and
(3) Foreign Material as required in section 5722 of this division.
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(d) In addition to the requirements in subsections (b) and (c) of this section, all cannabis
harvested on or after December 31, 2018, and all cannabis products manufactured on or after
December 31, 2018, shall be tested for the following analytes, if applicable:
(1) Terpenoids as required in section 5725 of this division;
(2) Mycotoxins as required in section 5721 of this division;
(3) Heavy Metals as required in section 5723 of this division; and
(4) Water Activity as required in section 5717 of this division.
(e) Licensees may have a sample of cannabis goods tested for analytes that are not yet required
to be tested. However, if the sample fails any additional test(s) not required pursuant to this
section on the date of testing, the batch from which the sample was collected fails testing and
shall not be released for retail sale.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100 and
26104, Business and Professions Code.
§ 5716. [reserved]
§ 5717. Moisture Content and Water Activity Testing
(a) The laboratory shall analyze at minimum 0.5 grams of the representative sample of dried
flower to detennine the level of water activity and the percentage of moisture content.
(1) The dried flower sample, including pre-rolls, shall be deemed to have passed water activity
testing if the water activity does not exceed 0.65 A,. The laboratory shall report the result of the
water activity test on the certificate of analysis (COA) and indicate "pass" or "fail" on the COA.
(2) The laboratory shall report the result of the moisture content test on the COA as a percentage.
(b) The laboratory shall analyze at least 0.5 grams of the representative sample of solid edible
cannabis products to determine the level of water activity. A solid edible cannabis product shall
be deemed to have passed water activity testing if the water activity does not exceed 0.85 AV.
The laboratory shall report the result of the water activity test on the COA and indicate "pass" or
"fail" on the COA.
(c) If the sample fails water activity testing, the batch from which the sample was collected fails
water activity testing and shall not be released for retail sale.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104
and 26110, Business and Professions Code.
§ 5718. Residual Solvents and Processing Chemicals Testing
(a) The laboratory shall analyze at minimum 0.5 grams of the representative sample of cannabis
product or pre-rolls to determine whether residual solvents or processing chemicals are present.
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(b) The laboratory shall report the result of the residual solvents and processing chemicals testing
in unit micrograms per gram (µg/g) on the COA and indicate "pass" or "fail" on the COA.
(c) The laboratory shall establish a limit of quantification (LOQ) of 1.0 µg/g or lower for all
Category I Residual Solvents or Processing Chemicals.
(d) The sample shall be deemed to have passed the residual solvents and processing chemicals
testing if both of the following conditions are met:
(1) The presence of any residual solvent or processing chemical listed in the following tables in
Category I is not detected, and
(2) The presence of any residual solvent or processing chemical listed in the following tables in
Category II does not exceed the indicated action levels.
(A)Notwithstanding subsection (d)(2) of this section the limit for ethanol does not apply to
cannabis goods that are intended to be tinctures and meet the definition of tincture, as defined by
the State Department of Public Health in regulation.
Category I
Residual Solvent or CAS No.
Processing Chemical
1,2-Dichloroethane 107-06-2
Benzene 71-43-2
Chloroform 67-66-3
Ethylene oxide 75-21-8
Methylene chloride 75-09-2
Trichloroethylene 79-01-6
Category II
Residual Solvent or CAS No. Cannabis Product or
Processing Chemical Pre-roll Action Level
(µgig)
Acetone 67-64-1 1000
Acetonitri le 75-05-8 80
Butane 106-97-8 1000
Ethanol 64-17-5 1000
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Ethyl acetate 141-78-6 1000
Ethyl ether 60-29-7 1000
Heptane 142-82-5 1000
Hexane 1 l 0-54-3 60
Isopropyl alcohol 67-63-0 1000
Methanol 67-56-1 600
Pentane 109-66-0 1000
Propane 74-98-6 1000
Toluene 108-88-3 180
Total xylenes (ortho-, meta-,para-) l 330-20-7 430
(e) If the sample fails residual solvents and processing chemicals testing, the batch from which
the sample was collected fails residual solvents and processing chemicals testing and shall not be
released for retail sale.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104
and 26110, Business and Professions Code.
§ 5719. Residual Pesticides Testing
(a) The laboratory shall analyze at minimum 0.5 grams of the representative sample of cannabis
goods to determine whether residual pesticides are present.
(b) The laboratory shall report whether any Category I Residual Pesticides are detected above the
limit of detection (LOD) and shall report the result of the Category II Residual Pesticides testing
in unit micrograms per gram (µg/g) on the COA. The laboratory shall indicate "pass" or "fail" on
the COA.
(c) The laboratory shall establish a limit of quantification (LOQ) of 0.10 µg/g or lower for all
Category I Residual Pesticides.
(d) The sample shall be deemed to have passed the residual pesticides testing if both of the
following conditions are met:
(1) The presence of any residual pesticide listed in the following tables in Category I are not
detected, and
(2) The presence of any residual pesticide listed in the following tables in Category II does not
exceed the indicated action levels.
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28
Category I CAS No.
Residual Pesticide
Aldicarb 116-06-3
Carbofuran 1563-66-2
Chlordane 57-74-9
Chlorfenapyr 122453-73-0
Chlorpyrifos 2921-88-2
Coumaphos 56-72-4
Daminozide 1596-84-5
DDVP (Dichlorvos) 62-73-7
Dimethoate 60-51-5
Ethoprop(hos) 13194-48-4
Etofenprox 80844-07-1
Fenoxycarb 72490-01-8
Fipronil 120068-37-3
Imazalil 35554-44-0
Methiocarb 2032-65-7
Methyl parathion 298-00-0
Mevinphos 7786-34-7
Paclobutrazol 76738-62-0
Propoxur 114-26-1
Spiroxamine 118134-30-8
Thiacloprid 1 1 1 988-49-9
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Action Level (µg/g)
Category II CAS No.
Residual Pesticide Inhalable Cannabis
Other Cannabis Goods
Goods
Abamectin 71751-41-2 0.1 0.3
Acephate 30560-19-1 0.1 5
Acequinocyl 57960-19-7 0.1 4
Acetamiprid 135410-20-7 0.1 5
Azoxystrobin 131860-33-8 0.1 40
Bifenazate 149877-41-8 0.1 5
Bifenthrin 82657-04-3 3 0.5
Boscalid 188425-85-6 0.1 10
Captan 133-06-2 0.7 5
Carbaryl 63-25-2 0.5 0.5
Chlorantraniliprole 500008-45-7 10 40
Clofentezine 74115-24-5 0.1 0.5
Cyfluthrin 68359-37-5 2 1
Cypermethrin 52315-07-8 1 1
Diazinon 333-41-5 0.1 0.2
Dimethomorph 110488-70-5 2 20
Etoxazole 153233-91-1 0.1 1.5
Fenhexamid 126833-17-8 0.1 10
Fenpyroximate 111812-58-9 0.1 2
Flonicamid 158062-67-0 0.1 2
Fludioxonil 131341-86-1 0.1 30
Hexythiazox 78587-05-0 0.1 2
Imidacloprid 138261-41-3 5 3
Kresox i m-m ethyl 143390-89-0 0.1 1
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Action Level (µglg)
Category II CAS No.
Residual Pesticide Inhalable Cannabis Other Cannabis Goods
Goods
Malathion 121-75-5 0.5 5
Metalaxyl 57837-19-1 2 15
Methomyl 16752-77-5 1 0.1
Myclobutanil 88671-89-0 0.1 9
Naled 300-76-5 0.1 0.5
Oxamyl 23135-22-0 0.5 0.2
Pentachloronitrobenzene 82-68-8 0.1 0.2
Permethrin 52645-53-1 0.5 20
Phosmet 732-11-6 0.1 0.2
Piperonylbutoxide 51-03-6 3 8
Prall ethrin 23 031-3 6-9 0.1 0.4
Propiconazole 60207-90-1 0.1 20
Pyrethrins 8003-34-7 0.5 1
Pyridaben 96489-71-3 0.1 3
187166-15-0,
Spinetoram 0.1 3
187166-40-1
131929-60-7,
Spinosad 0.1 3
131929-63-0
Spiromesifen 283594-90-1 0.1 12
Spirotetramat 203313-25-1 0.1 13
Tebuconazole 107534-96-3 0.1 2
Thiamethoxam 153719-23-4 5 4.5
Trifloxystrobin 141517-21-7 0.1 30
(e) If the sample fails residual pesticides testing, the batch from which the sample was collected
fails pesticides testing and shall not be released for retail sale.
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Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104
and 26110, Business and Professions Code.
§ 5720. Microbial Impurities Testing
(a) The laboratory shall analyze a at minimum 1.0 grams of the representative sample of
cannabis goods to determine whether microbial impurities are present.
(b) The laboratory shall report the result of the microbial impurities testing by indicating"pass"
or "fail" on the COA.
(c) The sample of inhalable cannabis goods shall be deemed to have passed the microbial
impurities testing if all of the following conditions are met:
(1) Shiga toxin—producing Escherichia coli is not detected in 1 gram;
(2) Salmonella spp. is not detected in 1 gram; and
(3) Pathogenic Aspergillus species A.fumigatus,A.flavus,A. niger, and A. terreus are not
detected in 1 gram.
(d) The sample of non-inhalable cannabis goods shall be deemed to have passed the microbial
impurities testing if both the following conditions are met:
(1) Shiga toxin—producing Escherichia coli is not detected in 1 gram, and
(2)Salmonella spp. is not detected in 1 gram.
(e) If the sample fails microbial impurities testing, the batch from which the sample was
collected fails microbial impurities testing and shall not be released for retail sale.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104
and 26110, Business and Professions Code.
§ 5721. Mycotoxin Testing
(a) The laboratory shall analyze at minimum 0.5 grams of the representative sample of cannabis
goods to determine whether mycotoxins are present.
(b) The laboratory shall report the result of the mycotoxins testing in unit micrograms per
kilograms (µg/kg) on the COA and indicate "pass" or"fail" on the COA.
(c) The sample shall be deemed to have passed mycotoxin testing if both the following
conditions are met:
(1) Total of aflatoxin B 1, B2, G I, and G2 does not exceed 20 µg/kg of substance, and
(2) Ochratoxin A does not exceed 20 µg/kg of substance.
(d) If the sample fails mycotoxin testing, the batch from which the sample was collected fails
mycotoxin testing and shall not be released for retail sale.
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Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104
and 26110, Business and Professions Code.
§ 5722. Foreign Material Testing
(a) The laboratory shall analyze the representative sample of cannabis goods to determine
whether foreign material is present.
(b) The laboratory shall report the result of the foreign material test by indicating "pass" or"fail"
on the COA.
(c) The laboratory shall perform foreign material testing on the total representative sample prior
to sample homogenization.
(d) When the laboratory performs foreign material testing, at minimum, the laboratory shall do
all of the following:
(1) Examine both the exterior and interior of the dried flower sample, and
(2) Examine the exterior of the cannabis product sample.
(e) The sample shall be deemed to have passed the foreign material testing if the presence of
foreign material does not exceed:
(1) 1/4 of the total sample area covered by sand, soil, cinders, or dirt;
(2) 1/4 of the total sample area covered by mold;
(3) 1 insect fragment, 1 hair, or 1 count mammalian excreta per 3.0 grams; or
(4) 1/4 of the total sample area covered by an imbedded foreign material.
(f) If the sample fails foreign material testing, the batch from which the sample was collected
fails foreign material testing and shall not be released for retail sale.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104
and 26110, Business and Professions Code.
§ 5723. Heavy Metals Testing
(a) The laboratory shall analyze at minimum 0.5 grams of the representative sample of cannabis
goods to determine whether heavy metals are present.
(b) The laboratory shall report the result of the heavy metals test in micrograms per gram (µg/g)
on the COA and indicate "pass" or "fail" on the COA.
(c) The sample shall be deemed to have passed the heavy metals testing if the presence of heavy
metals does not exceed the action levels listed in the following table.
(d) If the sample fails heavy metals testing, the batch from which the sample was collected fails
heavy metals testing and shall not be released for retail sale.
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Action Level (µg/g)
Heavy Metal Inhalable Cannabis Other Cannabis
Goods Goods
Cadmium 0.2 0.5
Lead 0.5 0.5
Arsenic 0.2 1.5
Mercury 0.1 3.0
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104
and 26110, Business and Professions Code.
§ 5724. Cannabinoid Testing
(a) The laboratory shall analyze at minimum 0.5 grams of the representative sample of cannabis
goods to determine whether the cannabinoid profile of the sample conforms to the labeled
content of each cannabinoid such as THC; THCA; CBD; CBDA; CBG; and CBN.
(b) The laboratory shall report the result of the cannabinoid testing on the COA both as a
percentage and in milligrams per gram (mg/g) if by dry-weight or milligrams per milliliter
(mg/mL) if by volume. The laboratory shall verify that the cannabis goods label conforms with
the cannabinoid profile test results and indicate "pass" or"fail" on the COA...
(1) If the laboratory reports the result of the cannabinoid testing on the COA in dry-weight
percent, they shall use the following equation:
Dry-weight percent cannabinoid= wet-weight percent cannabinoid / (1 —percent
moisture/ 100)
(c) If the labeled content of any one cannabinoid is expressed as a total concentration of the
cannabinoid, the laboratory shall calculate the total cannabinoid concentration as follows:
(1) For concentration expressed in weight:
Total cannabinoid concentration (mg/g) = (cannabinoid acid form concentration (mg/g) x
0.877) + cannabinoid concentration (mg/g)
(2) For concentration expressed in volume:
Total cannabinoid concentration (mg/mL) = (cannabinoid acid form concentration
(mg/mL) x 0.877) + cannabinoid concentration (mg/mL)
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(d) The sample shall be deemed to have passed the cannabinoid testing if the concentration of
any one cannabinoid, claimed to be present at 5% or greater of the total cannabinoid profile, does
not exceed the labeled content of the cannabinoid.
(1) For edible cannabis products with a cannabinoid serving size greater than 5.1 mg, and for all
cannabis goods, the concentration of any one cannabinoid shall not exceed the labeled content of
the cannabinoid, plus or minus 10%.
(2) For edible cannabis products with a cannabinoid serving size of 2.1 mg to 5.0 mg, the
concentration of any one cannabinoid shall not exceed the labeled content of the cannabinoid,
plus or minus 15%.
(3) For edible cannabis products with a cannabinoid serving size of less than or equal to 2.0 mg,
the concentration of any one cannabinoid shall not exceed the labeled content of the cannabinoid,
plus or minus 25%.
(e) If the sample fails cannabinoid testing, the batch from which the sample was collected fails
cannabinoid testing and shall not be released for retail sale.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104
and 26110, Business and Professions Code.
§ 5725. Terpenoid Testing
(a) The laboratory shall analyze at minimum 0.5 grams of the representative sample of cannabis
goods to determine whether the terpenoid profile of the sample conforms to the labeled content
of terpenoids.
(b) The laboratory shall report the result of the terpenoid testing on the COA both as a
percentage and in either milligrams per gram (mg/g) if by weight or milligrams per milliliter
(mg/mL) if by volume. The laboratory shall verify that the cannabis goods label conforms with
the terpenoid profile test results and indicate "pass" or "fail" on the COA.
(c) The sample shall be deemed to have passed the terpenoid testing if the concentration of any
one terpenoid, claimed to be present at 5% or greater of the total terpenoid profile, does not
exceed the labeled content of the terpenoids, plus or minus 10%.
(d) If the sample fails terpenoid testing, the batch from which the sample was collected fails
terpenoid testing and shall not be released for retail sale.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104
and 26110, Business and Professions Code.
§ 5726. Certificate of Analysis (COA)
(a) The laboratory shall generate a COA for each representative sample that the laboratory
analyzes.
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(b) The laboratory shall ensure that the COA contains the results of all required analyses
performed for the representative sample.
(c) The laboratory shall, within 1 business day of completing analyses of a sample, both upload
the COA into the track and trace system and simultaneously provide a copy of the COA to the
Bureau via email at bcc@dca.ca.gov and other requesters, if any.
(d) The COA shall contain, at minimum, the following information:
(1) Laboratory's name, physical address, and license number;
(2) Licensed distributor or licensed microbusiness' name, physical address, and license number;
(3) Licensed cultivator's, licensed manufacturer's, or licensed microbusiness' name, physical
address, and license number;
(4) Batch number of the batch from which the sample was obtained;
(5) Sample identifying information, including matrix type and unique sample identifiers;
(6) Sample history, including the date collected, the date received by the laboratory, and the
date(s) of sample analyses and corresponding testing results;
(7) A picture of the cannabis goods, including packaging, if applicable;
(8) For dried flower samples, the total weight of the batch, in grams or pounds, and the total
weight of the representative sample in grams:
(9) For cannabis product or pre-rolls samples, the total unit count of both the representative
sample and the total batch size;
(10) Measured density of the cannabis goods;
(1 1) The analytical methods, analytical instrumentation used, and corresponding Limits of
Detection (LOD) and Limits of Quantitation (LOQ);
(12) An attestation on the COA from the laboratory supervisory or management employee that
all LQC samples required by section 5730 of this division were perfonned and met the
acceptance criteria; and
(13) Analytes detected during the analyses of the sample that are unknown, unidentified, or
injurious to human health if consumed, if any.
(e) The laboratory shall report test results for eacli representative sample on the COA as follows:
(I) Indicate an overall "pass" or "fail" for the entire batch;
(2) When reporting qualitative results for each analyte, the laboratory shall indicate "pass" or
"fail";
(3) When reporting quantitative results for each analyte, the laboratory shall use the appropriate
units of measurement as required under this chapter;
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(4) When reporting results for each test method, the laboratory shall indicate"pass" or "fail",
(5) For representative samples obtained from a cannabis goods batch to which a content label is
affixed at the time of sampling, the laboratory shall report the following on the COA:
(A) The cannabinoid content and terpenoid content as printed or written on the label that is
affixed to the cannabis goods batch;
(B) The cannabinoid profile and the terpenoid profile of the representative sample as determined
by the laboratory as required under section 5724 and section 5725 of this division, respectively;
and
(C) The difference, in percentage, between the cannabinoid content and terpenoid content as
printed or written on the label and the cannabinoid profile and the terpenoid profile of the
representative sample, if any, as determined by the laboratory.
(6) When reporting results for any analytes that were detected below the analytical method LOQ,
indicate "<LOQ";
(7) When reporting results for any analytes that were not detected or detected below the LOD,
indicate "ND", and
(8) Indicate "NT" for any test that the laboratory did not perform.
(f) The laboratory supervisory or management employee shall validate the accuracy of the
information contained on the COA and sign and date the COA.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104
and 26110, Business and Professions Code.
Article 6. Post Testing Procedures
§ 5727. Remediation and Retesting
(a) A cannabis goods batch that has been additionally processed after failed testing must be
retested and successfully pass all the analyses required under this chapter. An edible cannabis
product batch shall not be additionally processed after a failed testing.
(b) A cannabis goods batch that failed testing only because of nonconformance with the labeled
content may be relabeled so that the batch conforns with the labeled content. Retesting is not
required if the relabeling is performed at the licensed distributor or licensed microbusiness
premises. An edible cannabis product batch that failed cannabinoid or terpenoid testing may only
be remediated by relabeling.
(c) The licensed distributor or licensed microbusiness shall arrange for remediation of a failed
cannabis goods batch. If the batch cannot be remediated, the batch shall be destroyed by the
licensed distributor or licensed microbusiness.
(d)If a batch is not remediated or reprocessed in any way it cannot be retested. Any subsequent
COAs produced without remediation or reprocessing of the failed batch will not supersede the
initial regulatory compliance testing COA.
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(e) A cannabis goods batch may only be remediated twice. If the batch fails after the second
remediation attempt and the second retesting, the entire batch shall be destroyed.
(f) Within l business day of completing the required analyses of a representative sample
obtained from a remediated cannabis goods batch the laboratory shall upload the COA
inforination into the track and trace system. If the licensee does not yet have access to the track
and trace system, it shall be emailed to the Bureau.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104
and 26110, Business and Professions Code.
§ 5728. Post Testing Sample Retention
(a) The laboratory shall retain the reserve sample, consisting of any portion of a sample that was
not used in the testing process. The reserve sample shall be kept, at minimum, for 45 business
days after the analyses, after which time it may be destroyed and denatured to the point the
material is rendered unrecognizable and unusable.
(b) The laboratory shall securely store the reserve sample in a manner that prohibits sample
degradation, contamination, and tampering.
(c) The laboratory shall provide the reserve sample to the Bureau upon request.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104
and 26110, Business and Professions Code.
Article 7. Laboratory Quality Assurance and Quality Control
§ 5729. Laboratory Quality Assurance (LQA) Program
(a) The laboratory shall develop and implement a LQA program to assure the reliability and
validity of the analytical data produced by the laboratory. The LQA program shall, at minimum,
include a written LQA manual that addresses the following:
(1) Quality control procedures;
(2) Laboratory organization and employee training and responsibilities;
(3) LQA objectives for measurement data;
(4) Traceability of data and analytical results;
(5) Instrument maintenance, calibration procedures, and frequency;
(6)Performance and system audits;
(7) Corrective action procedures;
(8) Steps to change processes when necessary;
(9) Record retention and document control;
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(10) Test procedure standardization; and
(11) Method validation.
(b) The supervisory or management laboratory employee shall annually review, amend if
necessary, and approve the LQA program and manual both when they are created and when there
is a change in methods, laboratory equipment, or the supervisory or management laboratory
171
employee.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104
and 26110, Business and Professions Code.
§ 5730. Laboratory Quality Control (LQC) Samples
(a) The laboratory shall use LQC samples in the performance of each analysis according to the
following specifications.
(b) The laboratory shall analyze LQC samples in the same manner as the laboratory analyzes
cannabis goods samples.
(c) The laboratory shall use at least one negative and one positive control in each analytical batch
for each target organism during microbial testing. If one of the controls produces unexpected
results, the samples shall be re-prepped and reanalyzed with a new set of controls.
(d) If the result of the microbial analyses is outside the specified acceptance criteria in the
following table, the laboratory shall determine the cause and take steps to remedy the problem
until the result is within the specified acceptance criteria.
Laboratory Quality Acceptance Criteria Corrective Action
Control Sample
Positive control Produces expected Re-prep and reanalyze the entire
result, positive result analytical batch, once. If problem persists,
locate and remedy the source of
unexpected result, then re-prep samples
and reanalyze witli a new set of controls.
Negative control Produces expected Re-prep and reanalyze the entire
result, negative result analytical batch, once. If problem persists,
locate and remedy the source of
unexpected result, then re-prep samples
and reanalyze with a new set of controls.
Laboratory replicate Sample results must Reanalyze sample and associated replicate
sample concur sample once. If problem persists re-prep
samples and reanalyze.
(e) The laboratory shall prepare and analyze at least one of each of the following LQC samples
for each analytical batch:
(1) Method blank;
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(2) Laboratory control sample (LCS); and
(3) Laboratory replicate sample or matrix spike sample.
(f) The laboratory shall analyze, at minimum, a continuing calibration verification (CCV) sample
at the beginning of each analytical sequence and every 10 samples thereafter.
(g) If the result of the chemical analyses is outside the specified acceptance criteria in the
following table, the laboratory shall detennine the cause and take steps to remedy the problem
until the result is within the specified acceptance criteria.
Laboratory Quality Acceptance Criteria Corrective Action
Control Sample
Method blank sample Not to exceed LOQ Reanalyze entire analytical batch once. If
method blank is still greater than the LOQ
for any analyte, locate the source of
contamination then re-prep samples and
reanalyze.
LCS Percent recovery 70% - Reanalyze the entire analytical batch,
130% once. If problem persists, re-prep samples
and reanalyze or re-run the initial
calibration curve.
Laboratory replicate RPD <30% Reanalyze sample and associated replicate
sample sample once. If problem persists re-prep
sample and reanalyze.
Matrix spike sample Percent recovery Reanalyze sample and associated matrix
between 70% to 130% spike sample once. If problem persists re-
prep samples and reanalyze.
CCV Percent recovery Reanalyze all samples that followed the
between 70% to 130% last CCV that met the acceptance criteria.
If CCV still fails, re-run the initial
calibration curve and all samples in the
analytical sequence.
(h) If any analyte is detected above any action level, as described in this chapter, the sample shall
be re-prepped and reanalyzed in replicate within another analytical batch.
(1)For quantitative analyses, the re-prepped sample and its associated replicate must meet the
acceptance criteria of RPD <30%.
(2) For qualitative analyses, the re-prepped sample and its associated replicate results must
concur.
(i) If any LQC sample produces a result outside of the acceptance criteria the laboratory cannot
report the result and the entire batch cannot be released for retail sale. The laboratory shall
detennine the cause and take steps to remedy the problem until the result is within the specified
acceptance criteria.
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(j) If the laboratory determines that the result is a false-positive or a false-negative, The Bureau
may request the laboratory to re-sample or re-test.
(k) The laboratory shall compile and generate one LQC sample report for each analytical batch
that includes LQC acceptance criteria, measurements, analysis date, and matrix.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104
and 26110, Business and Professions Code.
§ 5731. Limits of Detection (LOD) and Limits of Quantitation (LOQ) for Quantitative
Analyses
(a) The laboratory shall calculate the LOD for chemical method analyses according to any of the
following methods:
(l) Signal-to-noise ratio of between 3:1 and 2:1;
(2) Standard deviation of the response and the slope of calibration curve using a minimum of 7
spiked blank samples calculated as follows;
LOD = (3.3 x standard deviation of the response) / slope of the calibration curve; or
(3) A method published by the United States Food and Drug Administration (USFDA) or the
United States Environmental Protection Agency (USEPA).
(b) The laboratory shall calculate the LOQ for chemical method analyses according to any of the
following methods:
(1) Signal-to-noise ratio of 10:1, at minimum;
(2) Standard deviation of the response and the slope using a minimum of 7 spiked blank samples
calculated as follows:
LOQ = (10 x standard deviation of the response) / slope of the calibration curve; or
(3) A method published by the USFDA or the USEPA.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104
and 26110, Business and Professions Code.
§ 5732. Data Package
(a) The laboratory shall compile and generate one data package for each representative sample
that the laboratory analyzes. At a minimum, the data package shall contain the following:
(1) The name, physical address, and license number of the laboratory that performed the
analytical procedures;
(2) The name(s), title(s), and signature(s) of the laboratory employee(s) that performed the
sample preparation, analyses, data review, and final approval;
(3) All batch sample results and batch LQC sample results;
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(4) Date stamped raw data, including instrument raw data, such as chromatograms for each
sample, if any;
(5) Instrument test method with parameters, if any;
(6) Instrument tune report, if any;
(7) Instrument calibration data, if any;
(8) LQC sample report that includes LQC acceptance criteria, measurements, analysis date, and
matrix;
(9) Worksheets, forms, pictures, or copies of laboratory notebook pages and any other pertinent
documentation related to the identification and traceability of all reagents, reference materials,
and standards used for analysis;
(10) Analytical sequence, if any;
(11) Shipping manifest, as required under this division;
(12) The COC form; and
(13) The COA created as required under this chapter.
(b) After the data package is compiled, and prior to the release of the COA, the supervisory or
management laboratory employee shall do the following:
(1) Review the analytical results for technical correctness and completeness;
(2) Verify that the results of each analysis carried out by the laboratory are reported accurately,
clearly, unambiguously, and objectively; and
(3) Approve the laboratory results by signing and dating the data package.
(c) The data package shall be kept for a minimum of 7 years and shall be made available upon
request by the Bureau.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100, 26104,
26110 and 26160, Business and Professions Code.
§ 5733. Required Proficiency Testing
(a) The laboratory shall participate in a proficiency testing program provided by an organization
that operates in conformance with the requirements of ISOJEC 17043, at least once every six
months.
(b) The laboratory shall annually, successfully participate in a proficiency testing program for
each of the following test methods:
(1) Cannabinolds;
(2) Heavy metals;
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(3) Microbial impurities;
(4) Mycotoxins;
(5) Residual pesticides;
(6) Residual solvents and processing chemicals; and
(7) If tested, terpenoids.
(c) The laboratory shall report all analytes available by the proficiency testing program provider
and for which the licensee is required to test as required under this chapter.
(d) The laboratory shall participate in the proficiency testing program by following the
laboratory's existing SOPs for testing cannabis goods.
(e) The laboratory shall rotate the proficiency testing program among the,laboratory employees
who perform the test methods.
(f) Laboratory employees who participate in a proficiency testing program shall sign the
corresponding analytical reports or attestation statements to certify that the proficiency testing
program was conducted in the same manner as the laboratory tests of cannabis goods.
(g) A supervisory or management laboratory employee shall review and verify the accuracy of
results reported for all proficiency testing program samples analyzed.
(h) The laboratory shall request the proficiency testing program provider to send results
concurrently to the Bureau, if available, or the laboratory shall provide the PT program results to
the Bureau within 3 business days after the laboratory receives notification of their test results
from the proficiency testing program provider.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100 and
26110, Business and Professions Code.
§ 5734. Satisfactory and Unsatisfactory Proficiency Test Performance
(a) The laboratory shall be deemed to have successfully participated in a proficiency testing
program for an analyte tested in a specific method if the test results demonstrate a "satisfactory"
or otherwise proficient performance determination by the proficiency testing program provider.
(b) The laboratory may not report test results for analytes that are deemed by the proficiency
testing program provider as "unacceptable," "questionable," "unsatisfactory", or otherwise
deficient.
(c) The laboratory may resume reporting test results for analytes that were deemed
"unacceptable," "questionable," "unsatisfactory", or otherwise deficient, only if both of the
following conditions are met:
(1) The laboratory satisfactorily remedies the cause of the failure for each analyte; and
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(2) The laboratory submits, to the Bureau, a written corrective action report demonstrating how
the laboratory has fixed the cause of the failure.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100 and
26110, Business and Professions Code.
§ 5735. Laboratory Audits
(a) The laboratory shall conduct an internal audit at least once per year or in accordance with the
ISO/IEC 17025 accrediting body's requirement, whichever is more frequent.
(b) The internal audit must include all of the components required by the ISO/IEC 17025
internal-audit standards.
(c) Within 3 business days of completing the internal audit, the laboratory shall submit the results
of the internal audit to the Bureau.
(d) Within 3 business days of receiving the Accrediting Body on-site audit findings the
laboratory shall submit the results to the Bureau.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26100 and
26104, Business and Professions Code.
Article 8. Laboratory Employee Qualifications
§ 5736. General Laboratory Employee Qualifications
(a) The laboratory may only employ persons who are at least 21 years of age.
(b) The laboratory shall develop and implement an employee training program to ensure
competency of laboratory employees for their assigned functions.
(c) The laboratory shall ensure and document that each laboratory employee meets the employee
qualifications.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26102 and
26104, Business and Professions Code.
§ 5737. Supervisor or Management Responsibilities and Qualifications
(a) The laboratory shall employ a supervisor or management employee who must be responsible
for:
(1) Overseeing and directing the scientific methods of the laboratory;
(2) Ensuring that the laboratory achieves and maintains a laboratory quality assurance program
as required by section 5729 of this division; and
(3) Providing ongoing and appropriate training to laboratory employees.
(b) To be considered qualified, the supervisor or management employee must have at minimum:
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(1) A doctoral degree in biological, chemical, agricultural, environmental, or related sciences
from an accredited college or university;
(2) A master's degree in biological, chemical, agricultural, environmental, or related sciences
from an accredited college or university, plus at least 2 years of full-time practical experience;
(3) A bachelor's degree in biological, chemical, agricultural, environmental, or related sciences
from an accredited college or university, plus at least 4 years of full-time practical experience; or
(4) A bachelor's degree in any field from an accredited college or university, plus at least 8 years
of full-time practical experience, 4 years of which must have been in a supervisory or
management position.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26102 and
26104, Business and Professions Code.
§ 5738. Analyst and Sampler Qualifications
(a) The laboratory shall employ an analyst who, at minimum, must have either:
(1) Earned a master's degree or a bachelor's degree in biological, chemical, agricultural,
environmental, or related sciences from an accredited college or university; or
(2) Completed 2 years of college or university education that included coursework in biological,
chemical, agricultural, environmental, or related sciences from an accredited college or
university, plus at least 3 years of full-time practical experience.
(b) The laboratory shall employ a sampler who, at minimum, must have either:
(1) Completed 2 years college or university education; or
(2) Earned a High School Diploma or passed a General Educational Development or High
School Equivalency exam, plus at least 1 year of full-time practical experience.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26102 and
26104, Business and Professions Code.
Article 9. Record Retention
§ 5739. Records
All laboratory records described in this chapter shall be maintained in accordance with section
5037 of this division.
Authority: Section 26013, Business and Professions Code. Reference: Section 261.60, Business
and Professions Code.
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Chapter 7. ENFORCEMENT
§ 5800. Right of Access
(a) The Bureau, and its authorized representatives, shall have full and immediate access to
inspect and:
(1) Enter onto any premises licensed by the Bureau.
(2) Test any vehicle or equipment possessed by, in control of, or used by a licensee or their
agents and employees for the purpose of conducting commercial cannabis activity.
(3) Test any cannabis goods or cannabis-related materials or products possessed by, in control of,
or used by a licensee or their agents and employees for the purpose of conducting commercial
cannabis activity.
(4) Copy any materials, books, or records of any licensee or their agents and employees.
(b) Failure to cooperate with and participate in any Bureau investigation pending against the
licensee may result in a licensing violation subject to discipline. This subsection shall not be
construed to deprive a licensee of any privilege guaranteed by the Fifth Amendment to the
Constitution of the United States, or any other constitutional or statutory privileges. This
subsection shall not be construed to require a licensee to cooperate with a request that would
require the licensee to waive any constitutional or statutory privilege or to comply with a request
for information or other matters within an unreasonable period of time in light of the time
constraints of the licensee's business. Any constitutional or statutory privilege exercised by the
licensee shall not be used against the licensee in a regulatory or disciplinary proceeding against
the licensee.
(c) The Bureau, and its authorized representatives, shall have the rights of immediate access
under subsection (a) of this section, during any inspection, investigation, review, or audit, or as
otherwise allowed by law.
(d) Prior notice of an inspection, investigation, review, or audit is not required.
(e) Any inspection, investigation, review, or audit of a licensed premises shall be conducted
anytime the licensee is exercising privileges under the license, or as otherwise agreed to by the
Bureau and the licensee or its agents, employees, or representatives.
(f) If the licensed premises is not accessible because access is only available by going through
another licensed premises and the licensee occupying the other licensed premises denies the
Bureau access, the licensees shall both be held responsible and subject to discipline.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26012, 26015
and 26160, Business and Professions Code; and Section 11181, Government Code.
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§ 5801. Notice to Comply
(a) The Bureau may issue a notice to comply to a licensee for violation(s) of the Act or
regulations observed during an inspection.
(b) The notice to comply shall be in writing and describe the nature and facts of each violation,
including a reference to the statute or regulation violated, and may indicate the manner in which
the licensee must correct the violation(s) to achieve compliance.
(c) The Bureau will serve the notice to comply prior to leaving the licensed premises after the
inspection on any licensee, employee, agent, or person delegated by any of the aforementioned
persons, to facilitate the inspection or accept such notice, or will mail the notice to comply within
15 calendar days of the last date of inspection.
(d) The notice to comply shall inform the licensee that the licensee may, within 15 calendar days
from the date of personal service or mailing of the notice to comply, sign and return the notice to
comply declaring under penalty of perjury that each violation was corrected and describing how
compliance was achieved.
(e) Failure to correct the violation(s) in the notice to comply may result in a disciplinary action.
Authority: Section 26013, Business and Professions Code; Reference: Sections 26012 and
26018, Business and Professions Code.
§ 5802. Citations; Orders of Abatement; Administrative Fines
(a) The Bureau may issue citations containing orders of abatement and fines against a licensee,
or an unlicensed person, for any acts or omissions which are in violation of any provision of the
Act or any regulation adopted pursuant thereto, or for any violation of state law or regulations
applicable to cannabis licensees, including but not limited to state labor law.
(b) The Bureau may issue a citation under this section to a licensee for a violation of a term or
condition contained in a decision placing that licensee on probation.
(c) Each citation:
(1) Shall be in writing.
(2) Shall describe with particularity the nature of the violation, including a reference to the law
or regulation deternined to have been violated.
(3) May contain an assessment of an administrative fine of up to $5,000, and/or an order of
abatement fixing a reasonable time for abatement of the violation;
(4) Shall be served personally or by certified mail; and
(5) Shall inform the licensee or person that he or she may request an informal conference, or
contest the citation, or both, pursuant to section 5803 of this division.
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(d) Failure to pay a fine within 30 calendar days of the date of assessment, unless the citation is
being contested, may result in further action being taken by the Bureau including, but not limited
to, suspension or revocation of a license. If a citation is not appealed and the fine is not paid, the
full amount of the assessed fine shall be added to the fee for renewal of the license. A license
shall not be renewed without the payment of the renewal fee and fine.
(e) The amount of any fine to be levied by the Bureau shall take into consideration the factors
listed in Business and Professions Code section 125.9(b)(3).
(f)Nothing in this section shall be deemed to prevent the Bureau from filing an accusation to
suspend or revoke a license where grounds for such suspension or revocation exist.
Authority: Sections 125.9 and 26013, Business and Professions Code. Reference: Sections 125.9,
148, 149 and 26012, Business and Professions Code.
§ 5803. Contesting Citations
(a) A cited licensee or person may, within 30 calendar days of service of the citation, contest the
citation by requesting a hearing in writing to the Bureau or such hearing is waived. The hearing
shall be conducted in accordance with Chapter 5 (cornmencing with Section 1 1500) of Part I of
Division 3 of the Government Code.
(b) In addition to requesting a hearing provided for in subsection (a) of this section, the cited
licensee or person may, within 15 calendar days after service of the citation, submit a written
request for an informal conference with the Bureau regarding the acts or omissions charged in
the citation.
(c) The Bureau shall, within 15 calendar days from receipt of the written request, hold an
informal conference with the licensee or person cited, and/or his or her legal counsel or
authorized representative.
(d) At the conclusion of the informal conference, the Bureau may affirm, modify, or dismiss the
citation, including any fines levied or orders of abatement issued. A written decision stating the
reasons for the decision shall be mailed to the cited licensee or person and his or her legal
counsel, if any, within 15 calendar days from the date of the informal conference. This decision
shall be deemed to be a final order with regard to the citation issued, including the levied fine
and the order of abatement, if any.
(e) If the citation is dismissed, any request for a hearing shall be deemed withdrawn. If the
citation is affirmed or modified, the cited licensee or person may, in his or her discretion,
withdraw the request for a hearing or proceed with the administrative hearing process.
(f) If the citation, including any fine levied or order of abatement, is modified, the citation
originally issued shall be considered withdrawn and new citation issued. If a hearing is requested
for the subsequent citation, it shall be requested within 30 calendar days in accordance with
Business and Professions Code section 125.9(b)(4).
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Authority: Section 26013, Business and Professions Code. Reference: Sections 125.9, 26012 and
26016, Business and Professions Code.
§ 5804. Citation Compliance
(a) The time to abate or collect a violation as provided for in an order of abatement may be
extended for good cause. If a cited licensee or person who has been issued an order of abatement
is unable to complete the correction within the time set forth in the citation because of conditions
beyond his or her control after the exercise of reasonable diligence, the licensee or person cited
may request an extension of time from the Bureau in which to complete the correction. Such a
request shall be in writing and shall be made within the time set forth for abatement.
(b) When a citation is not contested, or if it is appealed and the person cited does not prevail,
failure to abate the violation within the time allowed or pay a fine that was unposed shall
constitute a violation and a failure to comply with the citation or order of abatement.
(c) Failure to timely comply with an order of abatement or pay a fine that was imposed may
result in further action being taken by the Bureau, including, but not limited to, suspension or
revocation of a license, or further administrative or civil proceedings.
Authority: Section 26013, Business and Professions Code. Reference: Sections 125.9 and 26012,
Business and Professions Code.
§ 5805. Minor Decoys
(a) Peace officers may use a person under 21 years of age to attempt to purchase cannabis goods,
for the purposes of enforcing the Act, and to apprehend licensees, employees, or agents of
licensees who sell cannabis goods to minors. For purposes of this section, a "minor" is a person
under 21 years of age.
(b) The following minimum standards shall apply to the use of a minor decoy:
(1) At the time of the operation, the decoy shall be less than 20 years of age.
(2) A decoy shall either carry his or her own identification showing the decoy's correct date of
birth, or carry no identification. A decoy who carries identification shall present it upon request
to any seller of cannabis goods.
(3) A decoy shall answer truthfully any questions about his or her age.
(4) Following any completed sale, but not later than the time a citation, if any, is issued, the
peace officer directing the decoy shall make a reasonable attempt to enter the licensed premises
or respond to the location where the licensee is located and have the minor decoy who purchased
cannabis goods identify the alleged seller of the cannabis goods.
Authority: Sections 26013 and 26140, Business and Professions Code. Reference: Section
26140, Business and Professions Code.
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§ 5806. Attire and Conduct
No license shall allow the following:
(a) Employment or use of any person in the sale or service of cannabis goods in or upon the
licensed premises while such person is unclothed or in such attire, costume, or clothing as to
expose to view any portion of the male or female breast below the top of the areola or of any
portion of the pubic hair, anus, cleft of the buttocks, vulva, or genitals.
(b) Employment or use of the services of any host or other person to mingle with the patrons
while such hostess or other person is unclothed or in such attire, costume, or clothing as
described in subsection (a)(1) of this section.
(c) Encouraging or permitting any person on the licensed premises to touch, caress, or fondle the
breasts, buttocks, anus, or genitals of any other person.
(d) Permitting any employee or person to wear or use any device or covering, exposed to view,
which simulates the breast, genitals, anus, pubic hair, or any portion thereof.
Authority: Section 26013, Business and Professions Code. Reference: 26011.5, Business and
Professions Code.
§ 5807. Entertainers and Conduct
(a) Live entertainment is permitted on a licensed premises, except that no licensee shall permit
any person to perform acts of or acts that simulate:
(1) Sexual intercourse, masturbation, sodomy, bestiality, oral copulation, flagellation, or any
sexual acts that are prohibited by law.
(2) Touching, caressing, or fondling of the breast, buttocks, anus, or genitals.
(3) Displaying of the buttocks, breasts, pubic hair, anus, vulva, or genitals.
(b) No licensee shall permit any person to use artificial devices or inanimate objects to depict any
of the prohibited activities described above.
(c) No licensee shall permit any person to remain in or upon the licensed premises who exposes
to public view any portion of his or her breast, buttocks, genitals, or anus.
Authority: Section 26013, Business and Professions Code. Reference: 2601 1.5, Business and
Professions Code.
§ 5808. Additional Grounds for Discipline
The following include, but are not limited to, additional grounds that constitute a basis for
disciplinary action:
(a) Failure to pay a fine imposed by the Bureau or agreed to by the licensee.
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(b) Failure to take reasonable steps to correct objectionable conditions on the licensed premises,
including the immediately adjacent area that is owned, leased, or rented by the licensee, that
constitute a nuisance, within a reasonable time after receipt of notice to make those corrections,
under Penal Code section 373a.
(c) Failure to take reasonable steps to correct objectionable conditions that occur during
operating hours on any public sidewalk abutting a licensed premises and constitute a nuisance,
within a reasonable time after receipt of notice to correct those conditions from the Bureau. This
subsection shall apply to a licensee only upon written notice to the licensee from the Bureau. The
Bureau shall issue this written notice upon its own determination, or upon a request from the
local law enforcement agency in whose jurisdiction the licensed premises is located, that is
supported by substantial evidence that persistent objectionable conditions are occurring on the
public sidewalk abutting the licensed premises. For purposes of this subsection:
(1) "Any public sidewalk abutting a licensed premises" means the publicly owned, pedestrian-
traveled way, not more than 20 feet from the licensed premises, that is located between a
licensed premises, including any immediately adjacent area that is owned, leased, or rented by
the licensee, and a public street
(2) "Objectionable conditions that constitute a nuisance"means disturbance of the peace,public
intoxication, drinking alcoholic beverages in public, smoking or ingesting cannabis or cannabis
products in public, harassment of passersby, gambling,prostitution, loitering,public urination,
lewd conduct, drug trafficking, or excessive loud noise.
(3) "Reasonable steps" means all of the following:
(A) Calling the local law enforcement agency. Timely calls to the local law enforcement agency
that are placed by the licensee, or his or her agents or employees, shall not be construed by the
Bureau as evidence of objectionable conditions that constitute a nuisance.
(B) Requesting those persons engaging in activities causing objectionable conditions to cease
those activities, unless the licensee, or his or her agents or employees, feel that their personal
safety would be threatened in making that request.
(C) Making good faith efforts to remove items that facilitate loitering, such as furniture, except
those structures approved or permitted by the local jurisdiction. The licensee shall not be liable
for the removal of those items that facilitate loitering.
(4) When determining what constitutes "reasonable steps," the Bureau shall consider site
configuration constraints related to the unique circumstances of the nature of the business.
(d)Notwithstanding that the licensee corrects the objectionable conditions that constitute a
nuisance, the licensee has a continuing obligation to meet the requirements of subsections (a) and
(b) of this section, and failure to do so shall constitute grounds for disciplinary action.
(e) If a licensee has knowingly permitted the illegal sale, or negotiations for the sales, of
controlled substances or dangerous drugs upon his or her licensed premises. Successive sales, or
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negotiations for sales, over any continuous period of time shall be deemed evidence of
permission. As used in this section, "controlled substances" shall have the same meaning as is
given that term in Article 1 (commencing with Section 11000) of Chapter 1 of Division 10 of the
Health and Safety Code, and "dangerous drugs" shall have the same meaning as is given that
term in Article 2 (commencing with Section 4015) of Chapter 9 of Division 2 of the Business
and Professions Code.
(f) If the licensee has employed or permitted any persons to solicit or encourage others, directly
or indirectly, to buy such persons cannabis goods in the licensed premises under any
commission, percentage, salary, or other profit-sharing plan, scheme, or conspiracy.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26011.5 26012,
26030, and 26031, Business and Professions Code.
§ 5809. Disciplinary Actions
(a) When an accusation recommending disciplinary action against a license has been filed
pursuant to Business and Professions Code section 26031, the accusation shall be served on the
licensee in accordance with Government Code section 11505.
(b) A hearing shall be conducted in accordance with the provisions of Chapter 5 (commencing
with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code to determine if
cause exists to take action against the licensee. At such a hearing, the Bureau shall have all the
powers granted therein and by the Business and Professions Code.
(c) If a hearing on an accusation against a licensee results in a finding that the licensee has
committed any of the acts or omissions constituting grounds for disciplinary action, the Bureau
may order the license revoked, suspended outright for a specified period of time, or suspended
on probationary restriction for a specified period of time on such terms and conditions of
probation as in its judgment are supported by its findings, impose a fine, or any combination
thereof. The Bureau may also issue such other lawful orders it considers to be appropriate on the
basis of its findings.
(d) An accusation may be terminated by written stipulation at any time prior to the conclusion of
the hearing on the accusation. If a licensee submits a proposed stipulation to the Bureau for its
consideration and the Bureau subsequently declines to accept the proposed stipulation, the
Bureau shall not thereafter be disqualified from hearing evidence on the accusation and taking
action thereon as authorized in this section.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26012, 26031
and 26034, Business and Professions Code.
§ 5810. Interim Suspension
(a) Pursuant to Business and Professions Code section 494, the Bureau may petition for an
interim order to suspend any license or impose licensing restrictions upon any licensee, if:
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(1) The licensee has engaged in acts or omissions constituting a violation of the Business and
Professions Code or this division, or been convicted of a crime substantially related to the
licensed activity, and
(2)Permitting the licensee to continue to engage in the licensed activity would endanger the
public health, safety, or welfare.
(b) An interim order for suspension or restrictions may issue with notice, as follows:
(1) The Bureau shall provide the licensee with at least 15 days' notice of the hearing on the
petition for an interim order.
(2) The notice shall include documents submitted in support of the petition.
(c) An interim order for suspension or restrictions may issue without notice to the licensee, as
follows:
(1) If it appears from the Bureau's petition and supporting documents that serious injury would
result to the public before the matter could be heard on notice.
(2) The Bureau shall provide the licensee with a hearing on the petition within 20 days after
issuance of the initial interim order.
(3)Notice of the hearing shall be provided within two days after issuance of the initial interim
order.
(d) The Bureau shall file an accusation, pursuant to Chapter 5 (commencing with Section 11500)
of Part I of Division 3 of Title 2 of the Government Code, within 15 calendar days of the
issuance of the interim order.
Authority: Section 26013, Business and Professions Code; Reference: Sections 494, 26011.5,
26012 and 26031, Business and .Professions Code.
§ 5811. Posting of Notice of Suspension
(a) A licensee whose license has been suspended shall conspicuously and continuously display a
notice on the exterior of the licensee's premises for the duration of the suspension.
(b) The notice shall be two feet in length and 14 inches in width. The notice shall read:
NOTICE OF SUSPENSION
The Bureau of Cannabis Control License(s)
Issued For This Premises Has Been Suspended
For Violation of State Law
(c) Advertising or posting signs to the effect that the licensed premises has been closed or that
business has been suspended for any reason other than the reason provided in the decision
suspending the license, shall be deemed a violation of this section.
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(d)Failure to display the notice as required in this section or removal of the notice prior to the
expiration of the suspension shall be a violation of this section and may result in additional
disciplinary action.
(e) A licensee shall notify the Bureau within 24 hours of discovering that the notice under
subsection (b) of this section has been removed or damaged to an extent that makes the notice
illegible.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26011.5 and
26012, Business and Professions Code.
§ 5812. Posting of Notice of Revocation
(a) A licensee whose license has been revoked shall conspicuously display a notice on the
exterior of the licensee's premises indicating that the license has been revoked. The notice shall
remain continuously on the licensed premises for at least 15 calendar days.
(b) The notice shall be two feet in length and 14 inches in width. The notice shall read:
NOTICE OF REVOCATION
The Bureau of Cannabis Control License(s)
Issued For This Premises Has Been Revoked
For Violation of State Law
(c) Advertising or posting signs to the effect that the licensed premises has been closed or that
business has been suspended for any reason other than the reason provided in the decision
revoking the license shall be deemed a violation of this section.
(d) If the Bureau revokes a license at a licensed premises that has one or more licenses at the
location that will remain active after the revocation, the revocation notice shall remain posted for
a period of at least 15 calendar days.
(e) Failure to display for the time required in this section shall be a violation of this section and
may result in additional disciplinary action.
(f) A licensee shall notify the Bureau within 24 hours of discovering that the notice under
subsection (b) of this section has been removed or damaged to an extent that makes the notice
illegible.
Authority: Section 26013, Business and Professions Code. Reference: Sections 26011.5 and
26012, Business and Professions Code.
§ 5813. Enforcement Costs
(a) In any order in resolution of a disciplinary proceeding for suspension or revocation of a
license, the Bureau may request the administrative law judge to direct a licensee found to have
committed a violation or violations of the Act, or any regulation adopted pursuant to the Act, to
pay a sum not to exceed the reasonable costs of the investigation and enforcement of the case.
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(b) A certified copy of the actual costs, or a good faith estimate of costs where actual costs are
not available, signed by the Bureau's designated representative shall be prima facie evidence of
reasonable costs of investigation and prosecution of the case. The costs shall include the amount
of investigative and enforcement costs up to the date of the hearing, including, but not limited to,
charges imposed by the Attorney General.
(c) The administrative law j udge shall make a proposed finding of the amount of reasonable
costs of investigation and prosecution of the case when requested pursuant to subsection (a). The
Bureau may reduce or eliminate the cost award, or remand to the administrative law judge where
the proposed decision fails to make a finding on costs requested pursuant to subsection (a).
(d) Where an order for recovery of costs is made and timely payment is not made as directed in
the decision, the Bureau may enforce the order for repayment in any appropriate court. This right
of enforcement shall be in addition to any other rights the Bureau may have as to any licensee to
pay costs.
(e) In any action for recovery of costs, proof of the decision shall be conclusive proof of the
validity of the order of payment and the terns for payment.
(f) Except as provided in subsection (g) of this section, the Bureau shall not renew or reinstate
any license of any licensee who has failed to pay all of the costs ordered wider this division.
(g)Notwithstanding subsection (f) of this section, the Bureau may, in its discretion, conditionally
renew or reinstate for a maximum of one year the license of any licensee who demonstrates
financial hardship and who enters into a formal agreement with the Bureau for reimbursement
within that one-year period for the unpaid costs.
(h) Nothing in this section shall preclude the Bureau from including the recovery of the costs of
investigation and enforcement of a case in any stipulated settlement.
Authority: Section 26013, Business and Professions Code; Reference: Sections 125.3, 26012,
and 26031, Business and Professions Code
§ 5814. Disciplinary Guidelines
In reaching a decision on a disciplinary action under the Act and the Administrative Procedures
Act(Govt. Code section 11400 et seq.), the Bureau shall consider the disciplinary guidelines
entitled "Bureau of Cannabis Control Disciplinary Guidelines November 2017," which are
hereby incorporated by reference. Deviation from these guidelines and orders, including the
standard tens of probation, is appropriate where the Bureau in its sole discretion detennines that
the facts of the particular case warrant such a deviation, e.g., the presence of mitigating factors,
the age of the case, or evidentiary problems.
Authority: Section 26013, Business and Professions Code; Reference: Section 26012, 26031,
Business and Professions Code.
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§ 5815. Emergency Decision and Order
(a) The Bureau may issue an emergency decision and order for temporary, interim relief to
prevent or avoid immediate danger to the public health, safety, or welfare. Such circumstances
include, but are not limited to, the following:
(1) The Bureau has information that cannabis goods at a licensee's premises have a reasonable
probability of causing serious adverse health consequences or death.
(2) To prevent the sale, transfer, or transport of contaminated or illegal cannabis goods in
possession of the licensee.
(3) The Bureau observes or has information that conditions at the licensee's premises exist that
present an immediate risk to worker or public health and safety.
(4) To prevent illegal diversion of cannabis goods, or other criminal activity at the licensee's
premises.
(5) To prevent the destruction of evidence related to illegal activity or violations of the Act.
(6) To prevent misrepresentation to the public, such as selling untested cannabis goods,
providing inaccurate information about the cannabis goods, or cannabis goods that have been
obtained from an unlicensed person.
(b) Temporary, interim relief, may include a suspension or administrative hold by one or more of
the following:
(1) The temporary suspension of a license.
(2) An order to segregate or isolate specific cannabis goods.
(3) An order prohibiting the movement of cannabis goods to or from the premises.
(4) An order prohibiting the sale of specific cannabis goods.
(5) An order prohibiting the destruction of specific cannabis goods.
(c) The emergency decision and order issued by the Bureau shall include a brief explanation of
the factual and legal basis of the emergency decision that justify the Bureau's determination that
emergency action is necessary, and the specific actions ordered. The emergency decision and
order shall be effective when issued or as otherwise provided by the decision and order.
(d) To issue an administrative hold which prohibits activity related to specified cannabis goods,
the Bureau shall comply with the following:
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1
(1) The notice of the administrative hold shall include a description of the cannabis goods subject
to the administrative hold.
(2)Following notice, the Bureau shall identify the cannabis goods subject to the administrative
hold in the track and trace system.
(e) A licensee subject to an administrative hold shall comply with the following:
(1) Within 24 hours of receipt of the notice of administrative hold, physically segregate all
designated cannabis goods in a limited access area of the licensed premises. The licensee shall
ensure that all cannabis goods subject to the administrative hold are safeguarded and preserved in
a manner that prevents tampering, degradation, or contamination.
(2) While the administrative hold is in effect, the licensee shall not sell, donate, transfer,
transport, gift, or destroy the cannabis goods subject to the hold.
(3) A microbusiness licensee subject to an administrative hold may continue to cultivate any
cannabis subject to an administrative hold. If the cannabis subject to the hold must be harvested,
the licensee shall place the harvested cannabis into separate batches.
(4) A licensee may voluntarily surrender cannabis goods that are subject to an administrative
hold. The licensee shall identify the cannabis goods being voluntarily surrendered in the track
and trace system. Voluntary surrender shall not be construed to waive the right to a hearing or
any associated rights.
(f) To issue a temporary suspension the Bureau shall specify in the order that the licensee shall
immediately cease conducting all commercial cannabis activities under its license, unless
otherwise specified in the order.
(g) A microbusiness licensee subject to a temporary suspension may continue to cultivate
cannabis at the licensed premises only as prescribed by the Bureau in the order. If the order
permits the cannabis to be harvested, the licensee shall place the harvested cannabis into separate
batches.
(h) The emergency decision and order for temporary, interim relief shall be issued in accordance
with the following procedures:
(1) The Bureau shall give notice of the emergency decision and order and an opportunity to be
heard to the licensee prior to the issuance, or effective date, of the emergency decision and order,
if practicable.
(2)Notice and hearing under this section may be oral or written and may be provided by
telephone, personal service, mail, facsimile transmission, electronic mail, or other electronic
means, as the circumstances permit.
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(3)Notice may be given to the licensee, any person meeting the definition of owner for the
license, or to the manager or other personnel at the premises.
(4) Upon receipt of the notice, the licensee may request a hearing within three (3) business days
by submitting a written request for hearing to the Bureau through electronic mail, facsimile
transmission, or other written means. The hearing shall commence within five (5) business days
of receipt of the written request for hearing, unless a later time is agreed upon by the Bureau and
the licensee.
(5) The hearing may be conducted in the same manner as an informal conference under section
5803 of this division however, the timeframes provided in section 5803 shall not apply to a
hearing under this section. Pre-hearing discovery or cross-examination of witnesses is not
required under this section.
(6) Following the hearing, the emergency decision and order shall be affirmed, modified, or set
aside as determined appropriate by the Bureau within five (5) business days of the hearing.
(1) Within ten (10) days of the issuance or effective date of the emergency decision and order for
temporary, interim relief, the Bureau shall commence adjudicative proceedings in accordance
with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the
Government Code to resolve the underlying issues giving rise to the temporary, interim relief,
notwithstanding the pendency of proceedings for judicial review of the emergency decision as
provided in subsection (k).
0) After formal proceedings pursuant to subsection (1) of this section are held, a licensee
aggrieved by a final decision of the Bureau may appeal the decision to the Cannabis Control
Appeals Panel pursuant to Section 26043 of the Act.
(k)Notwithstanding administrative proceedings commenced pursuant to subsection (1), the
licensee may obtain judicial review of the emergency decision and order pursuant to section
1094.5 of the Code of Civil Procedure in the manner provided in Section 11460.80 of the
Government Code without exhaustion of administrative remedies.
(1) The Bureau's authority provided by this section may be used in addition to any civil, criminal,
or other administrative remedies available to the Bureau.
Authority: Section 26013, Business and Professions Code and Section 1 1460.30, Government
Code. Reference: Section 26012, Business and Professions Code, Sections 11460.10, 11460.20,
11460.30, 11460.40, 11460.50, 11460.60, 11460.70, 11460.80, Government Code.
Chapter 8. OTHER PROVISIONS
Article 1. Research Funding
§ 5900. Eligibility
(a) Only public universities in California shall be eligible to be selected to receive funds
disbursed pursuant to Revenue and Taxation Code section 34019(b).
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(b) Subject to available funding, the amounts to be disbursed to the university or universities will
not exceed the sum of ten million dollars (Sl 0,000,000) for each fiscal year, ending with the
2028-2029 fiscal year.
Authority: Section 26013, Business and Professions Code and Section 34019, Revenue and
Taxation Code; Reference: Section 34019, Revenue and Taxation Code.
§ 5901. Request for Proposals
A Request for Proposal (RFP) is the document issued by the Bureau, which notifies all eligible
fund recipients of the following, at a minimum:
(a) The funding available for research related to the Act or regulations adopted pursuant thereto,
(b) Disbursement of funds to eligible applicants through a review and selection process,
including the criteria that will be used for review and selection;
(c) The specified timeframes for the proposal review and selection process, including the
deadline for submission of proposals.
(d) Proposal requirements, including necessary documentation;
(e) Any priorities or restrictions imposed upon the use of the funds;
(f) The governing statutes and regulations; and
(g) The name, address, and telephone number of a contact person within the Bureau, who can
provide further information regarding the process for submission of proposals.
Authority: Section 26013, Business and Professions Code and Section 34019, Revenue and
Taxation Code; Reference: Section 34019, Revenue and Taxation Code.
§ 5902. Selection Process and Criteria
(a) The selection process shall involve eligible proposals timely received by the Bureau, in
response to an applicable RFP, or similar notice.
(b) The Bureau \vill consider only one proposal per applicant for a given research project.
Applicants may submit more than one proposal if the proposals are for separate and distinct
research projects or activities.
(c) The Bureau will make a selection for funding, based on criteria, including but not limited to:
(1) The extent to which the proposed project is designed to achieve objectives as specified in
Revenue and Taxation Code section 34019(b).
(2) The extent to which the proposed project is designed to achieve measurable outcomes, and
the clarity of the measures for success.
(3) The extent to which the proposed project is feasible, demonstrated by:
(A) A timeline for project completion, including readiness; and
(B) Budget detail.
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(4) Qualifications of the staff who will be assigned or working on the proposed project.
(5) Any other criteria to detennine the proposed project's efficacy in evaluating the
implementation and effect of the Act.
(d) Applicants selected for funding will be notified ill writing, along with the amount of the
proposed funding.
(e) The Bureau's selection decision is final and not subject to appeal.
Authority: Section 26013, Business and Professions Code and Section 34019, Revenue and
Taxation Code; Reference: Section 34019, Revenue and Taxation Code.
§ 5903. Release of Funds
(a) The Bureau shall not cause funds to be disbursed until the Applicant has executed a Grant
Agreement, and any other required documents.
(b) Selected recipients shall receive a single disbursement of funds for the duration of the
research project.
(c) Funds released to the recipient that will be used for the purchase of any equipment related to
the research project, shall at a minimum, meet the following conditions:
(1) Prior to the purchase of any equipment, the recipient shall obtain written approval from the
Bureau.
(2) Receipts or other documentation for the purchase of any equipment shall be provided to the
Bureau immediately upon purchase and request, and retained pursuant to section 5904 of this
division.
(d) Any funds that are not used prior to the completion of the research project shall be forfeited.
Authority: Section 26013, Business and Professions Code and Section 34019, Revenue and
Taxation Code; Reference: Section 34019, Revenue and Taxation Code.
§ 5904. Reports and Records
(a) The recipient of funds shall provide regular performance reports to the Bureau.
(1) Performance reports shall be provided to the Bureau in the following manner:
(A) At monthly intervals for research projects with an estimated completion time not exceeding
one year.
(B) At quarterly intervals for research projects with an estimated completion time exceeding one
year.
(2) Perfonnance reports shall include, at a minimum:
(A) A detailed, estimated time schedule of completion for the research project;
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(B) Description of any measurable outcomes, results achieved, or other completed objectives of
the research project;
(C) Description of remaining work to be completed,
(D) Summary of the expenditures of the funds, and whether the research project is meeting the
proposed budget, and if not, the reasons for any discrepancies and what actions will be taken to
ensure the research project will be completed; and
(E) Any changes to the information provided in the proposal, including, but not limited to,
change in staff.
(b) Recipients shall publish annual reports on their findings, and upon the completion of their
research project, and make such reports available to the public. Prior to publishing any reports,
the recipient shall provide a copy to the Bureau, at least 30 days prior to the release or publishing
of the report.
(c) Recipients shall retain all research and financial data necessary to substantiate the purposes
for which the funds were spent, for the duration of the funding, and for a period of seven years
after completion of the research project. Recipients shall provide such documentation to the
Bureau upon request.
Authority: Section 26013, Business and Professions Code and Section 34019, Revenue and
Taxation Code; Reference: Section 34019, Revenue and Taxation Code.
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