Bill Text: CA SB1064 | 2023-2024 | Regular Session | Amended

Bill Title: Cannabis: operator and separate premises license types: excessive concentration of licenses.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed) 2024-05-23 - In Assembly. Read first time. Held at Desk. [SB1064 Detail]

Download: California-2023-SB1064-Amended.html

Amended  IN  Senate  May 16, 2024
Amended  IN  Senate  April 16, 2024
Amended  IN  Senate  March 20, 2024

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill
No. 1064

Introduced by Senator Laird

February 08, 2024

An act to amend, repeal, and add Sections 26001, 26037.5, 26050, 26051, 26051.5, 26053, 26055, 26057, 26058, 26070, 26130, 26151, 26160, 26200, 26223, and 26240 of, to add Section 26057.5 to, and to add and repeal Section 26050.1 of, the Business and Professions Code, relating to cannabis.


LEGISLATIVE COUNSEL'S DIGEST


SB 1064, as amended, Laird. Cannabis: operator and separate premises license types: excessive concentration of licenses.
Existing law, the Control, Regulate and Tax Adult Use of Marijuana Act (AUMA), an initiative measure, authorizes a person who obtains a state license under AUMA to engage in commercial adult-use cannabis activity pursuant to that license and applicable local ordinances. Existing law, the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), among other things, consolidates the licensure and regulation of commercial medicinal and adult-use cannabis activities, and establishes the Department of Cannabis Control to administer and enforce its provisions.
MAUCRSA requires an applicant or licensee to apply for a separate license for each location where it engages in commercial cannabis activity. MAUCRSA sets forth a codified list of license types for different commercial cannabis activities, including, among others, retail sale, distribution, 2 types of manufacturing, laboratory testing, and various kinds and sizes of cultivation activities.
This bill would revise the MAUCRSA licensing scheme for commercial cannabis activities other than cultivation and laboratory testing. Specifically, the bill would consolidate the licensing of those activities under one license type called an operator license, and would require an operator licensee to acquire an additional premises license specific to the activity to be conducted on the premises. The bill would make various conforming changes including by revising and recasting the codified list of license types. In this regard, the bill would list the cultivation and laboratory testing types under the unified license classification, would list the other commercial cannabis activity types under the premises license classification, and would establish the operator license classification as a single license type. The bill, until January 1, 2027, 2029, would deem the holder of an unexpired annual license on January 1, 2026, 2028, to hold, as applicable, either a unified license or both an operator license and the required premises license with the same expiration date as the annual license, as specified.
MAUCRSA requires the department, in determining whether to grant, deny, or renew a specified license, to consider if an excessive concentration, as described, exists in the area where the licensee will operate.
This bill would remove this requirement.
This bill would make its provisions effective on January 1, 2026, 2028, and would make related legislative findings and declarations.
AUMA authorizes the Legislature to amend its provisions with a 2/3 vote of both houses to further its purposes and intent, except as specified.
This bill would declare that its provisions further the purposes and intent of AUMA, as described.
Vote: 2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature finds and declares as follows:
(a) In November 1996, voters approved Proposition 215, which decriminalized the use of medicinal cannabis in California.
(b) In 2015, California enacted three bills—Assembly Bill 243 (Chapter 688 of the Statutes of 2015); Assembly Bill 266 (Chapter 689 of the Statutes of 2015); and Senate Bill 643 (Chapter 719 of the Statutes of 2015)—that collectively established a comprehensive state regulatory framework for the licensing and enforcement of cultivation, manufacturing, retail sale, transportation, storage, delivery, and testing of medicinal cannabis in California. This regulatory scheme is known as the Medical Cannabis Regulation and Safety Act (MCRSA).
(c) In November 2016, voters approved Proposition 64, the Adult Use of Marijuana Act (AUMA). AUMA makes it legal to sell and distribute cannabis for adult use through a regulated business.
(d) In 2017, the Legislature enacted Senate Bill 94 (Chapter 27 of the Statutes of 2017) to merge the regulatory provisions of MCRSA and AUMA and provide for a single regulatory structure for both medicinal and adult-use cannabis. This consolidated regulatory structure is known as the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA).
(e) The intent of MCRSA, AUMA, and MAUCRSA was to ensure a comprehensive regulatory system that takes production and sales of cannabis away from an illegal market and curtails the illegal diversion of cannabis from California into other states or countries, while avoiding duplicative costs and inevitable confusion among licensees, regulatory agencies, and the public and ensuring a regulatory structure that prevents access to minors, protects public safety, public health, and the environment, as well as maintaining local control.
(f) The purpose of this act is to revise the procedures for issuance of state licenses for certain commercial cannabis activities to promote efficiency, avoid overlap with local land use processes while protecting local control, and reduce barriers to entry into the legal, regulated market, in furtherance of the purposes and intent of MCRSA, AUMA, and MAUCRSA.

SEC. 2.

 Section 26001 of the Business and Professions Code is amended to read:

26001.
 (a) For purposes of this division, the following definitions apply:
(1) “A-license” means a state license issued under this division for cannabis or cannabis products that are intended for adults who are 21 years of age and older and who do not possess a physician’s recommendation, or are intended for use on, or consumption by, animals.
(2) “A-licensee” means any person holding a license under this division for cannabis or cannabis products that are intended for adults who are 21 years of age and older and who do not possess a physician’s recommendation, or are intended for use on, or consumption by, animals.
(3) “Animal” does not include a food animal as defined in Section 4825.1 or livestock as defined in Section 14205 of the Food and Agricultural Code.
(4) “Applicant” means an owner applying for a state license pursuant to this division.
(5) “Batch” means a specific quantity of homogeneous cannabis or cannabis product that is one of the following types:
(A) Harvest batch. “Harvest batch” means a specifically identified quantity of dried flower or trim, leaves, and other cannabis plant matter that is harvested at the same time, and, if applicable, cultivated using the same pesticides and other agricultural chemicals.
(B) Manufactured cannabis batch. “Manufactured cannabis batch” means either of the following:
(i) An amount of cannabis concentrate or extract that is produced in one production cycle using the same extraction methods and standard operating procedures.
(ii) An amount of a type of manufactured cannabis produced in one production cycle using the same formulation and standard operating procedures.
(6) “Cannabis” means all parts of the plant Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. “Cannabis” also means the separated resin, whether crude or purified, obtained from cannabis. “Cannabis” does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this division, “cannabis” does not mean “industrial hemp” as defined by Section 11018.5 of the Health and Safety Code.
(7) “Cannabis accessories” has the same meaning as in Section 11018.2 of the Health and Safety Code.
(8) “Cannabis beverage” means a form of edible cannabis product that is intended to be consumed in its final state as a beverage.
(9) “Cannabis concentrate” means cannabis that has undergone a process to concentrate one or more active cannabinoids, thereby increasing the product’s potency. Resin from glandular trichomes from a cannabis plant is a concentrate for purposes of this division. A cannabis concentrate is not considered food, as defined by Section 109935 of the Health and Safety Code, a processed pet food, as defined by Section 113025 of the Health and Safety Code, or a drug, as defined by Section 109925 of the Health and Safety Code.
(10) “Cannabis event organizer” means a person authorized to plan and organize temporary cannabis events as authorized in Section 26200.
(11) “Cannabis products” has the same meaning as in Section 11018.1 of the Health and Safety Code, and includes cannabis products intended for use on, or consumption by, an animal. Cannabis products are not considered food, as defined by Section 109935 of the Health and Safety Code, a drug, as defined by Section 109925 of the Health and Safety Code, or a cosmetic, as defined by Section 109900 of the Health and Safety Code.
(12) “Child resistant” means designed or constructed to be significantly difficult for children under five years of age to open, and not difficult for normal adults to use properly.
(13) “Commercial cannabis activity” includes the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery, or sale of cannabis and cannabis products as provided for in this division, or acting as a cannabis event organizer for temporary cannabis events.
(14) “Cultivation” means any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of cannabis.
(15) “Cultivation site” means a location where cannabis is planted, grown, harvested, dried, cured, graded, or trimmed, or a location where any combination of those activities occurs.
(16) “Customer” means a natural person 21 years of age or older or a natural person 18 years of age or older who possesses a physician’s recommendation, or a primary caregiver.
(17) “Daycare center” has the same meaning as in Section 1596.76 of the Health and Safety Code.
(18) “Delivery” means the commercial transfer of cannabis or cannabis products to a customer. “Delivery” also includes the use by a retailer of any technology platform.
(19) “Department” means the Department of Cannabis Control within the Business, Consumer Services, and Housing Agency.
(20) “Director” means the Director of the Department of Cannabis Control.
(21) “Distribution” means the procurement, sale, and transport of cannabis and cannabis products between licensees.
(22) “Distributor” means a licensee that is authorized to engage in the distribution of cannabis and cannabis products.
(23) “Dried flower” means all dead cannabis that has been harvested, dried, cured, or otherwise processed, excluding leaves and stems.
(24) “Edible cannabis product” means a cannabis product that is intended to be used, in whole or in part, for human or animal consumption, including, but not limited to, chewing gum, but excluding products set forth in Division 15 (commencing with Section 32501) of the Food and Agricultural Code. An edible cannabis product is not considered food, as defined by Section 109935 of the Health and Safety Code, a processed pet food, as defined by Section 113025 of the Health and Safety Code, or a drug, as defined by Section 109925 of the Health and Safety Code.
(25) “Fund” means the Cannabis Control Fund established pursuant to Section 26210.
(26) “Kind” means applicable type or designation regarding a particular cannabis variant, origin, or product type, including, but not limited to, strain name, trademark, or production area designation.
(27) “Labeling” means any label or other written, printed, or graphic matter upon a cannabis product, upon its container or wrapper, or that accompanies any cannabis product.
(28) “Labor peace agreement” means an agreement between a licensee and any bona fide labor organization that, at a minimum, protects the state’s proprietary interests by prohibiting labor organizations and members from engaging in picketing, work stoppages, boycotts, and any other economic interference with the applicant’s business. This agreement means that the applicant has agreed not to disrupt efforts by the bona fide labor organization to communicate with, and attempt to organize and represent, the applicant’s employees. The agreement shall provide a bona fide labor organization access at reasonable times to areas in which the applicant’s employees work, for the purpose of meeting with employees to discuss their right to representation, employment rights under state law, and terms and conditions of employment. This type of agreement shall not mandate a particular method of election or certification of the bona fide labor organization.
(29) “License” means a state license issued under this division, and includes both an A-license and an M-license, as well as a testing laboratory license.
(30) “Licensee” means any person holding a license under this division, regardless of whether the license held is an A-license or an M-license, and includes the holder of a testing laboratory license.
(31) “Licensing authority” means the department and any state agency currently or formerly responsible for the issuance, renewal, or reinstatement of the license, or the state agency authorized to take disciplinary action against the licensee.
(32) “Live plants” means living cannabis flowers and plants, including seeds, immature plants, and vegetative stage plants.
(33) “Local jurisdiction” means a city, county, or city and county.
(34) “Lot” means a batch or a specifically identified portion of a batch.
(35) “M-license” means a state license issued under this division for commercial cannabis activity involving medicinal cannabis.
(36) “M-licensee” means any person holding a license under this division for commercial cannabis activity involving medicinal cannabis.
(37) “Manufacture” means to compound, blend, extract, infuse, package, label, or otherwise make or prepare a cannabis product.
(38) (A) “Medicinal cannabis” or “medicinal cannabis product” means cannabis or a cannabis product, respectively, intended to be sold or donated for use pursuant to the Compassionate Use Act of 1996 (Proposition 215), found in Section 11362.5 of the Health and Safety Code, by a medicinal cannabis patient in California who possesses a physician’s recommendation, or in compliance with any compassionate use, equity, or other similar program administered by a local jurisdiction.
(B) The amendments made to this subdivision by the act adding this paragraph shall become operative upon completion of the necessary changes to the track and trace program in order to implement the act adding this paragraph, as determined by the Department of Food and Agriculture, or on March 1, 2020, whichever occurs first.
(39) “Microbusiness” means a licensee that is authorized to engage in cultivation of cannabis on an area less than 10,000 square feet and to act as a licensed distributor, Level 1 manufacturer, and retailer under this division, provided such licensee can demonstrate compliance with all requirements imposed by this division on licensed cultivators, distributors, Level 1 manufacturers, and retailers to the extent the licensee engages in such activities.
(40) “Nursery” means a licensee that produces only clones, immature plants, seeds, and other agricultural products used specifically for the propagation and cultivation of cannabis.
(41) “Operation” means any act for which licensure is required under the provisions of this division, or any commercial transfer of cannabis or cannabis products.
(42) “Owner” means any of the following:
(A) 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.
(B) The chief executive officer of a nonprofit or other entity.
(C) A member of the board of directors of a nonprofit.
(D) An individual who will be participating in the direction, control, or management of the person applying for a license.
(43) “Package” means any container or receptacle used for holding cannabis or cannabis products.
(44) “Person” includes any individual, firm, partnership, joint venture, association, corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit, and the plural as well as the singular.
(45) “Physician’s recommendation” means a recommendation by a physician and surgeon that a patient use cannabis provided in accordance with the Compassionate Use Act of 1996 (Proposition 215), found at Section 11362.5 of the Health and Safety Code.
(46) “Premises” means the designated structure or structures and land specified in the application that is owned, leased, or otherwise held under the control of the applicant or licensee where the commercial cannabis activity will be or is conducted. The premises shall be a contiguous area and shall only be occupied by one licensee.
(47) “Primary caregiver” has the same meaning as in Section 11362.7 of the Health and Safety Code.
(48) “Processor” means a person authorized to engage in only trimming, drying, curing, grading, packaging, and labeling of cannabis and nonmanufactured cannabis products.
(49) “Purchaser” means the customer who is engaged in a transaction with a licensee for purposes of obtaining cannabis or cannabis products.
(50) “Retailer” means a person authorized to engage in the retail sale and delivery of cannabis or cannabis products to customers.
(51) “Sell,” “sale,” and “to sell” include any transaction whereby, for any consideration, title to cannabis or cannabis products is transferred from one person to another, and includes the delivery of cannabis or cannabis products pursuant to an order placed for the purchase of the same and soliciting or receiving an order for the same, but does not include the return of cannabis or cannabis products by a licensee to the licensee from whom the cannabis or cannabis product was purchased.
(52) “Testing laboratory” means a laboratory, facility, or entity in the state that offers or performs tests of cannabis or cannabis products and that is both of the following:
(A) Accredited by an accrediting body that is independent from all other persons involved in commercial cannabis activity in the state.
(B) Licensed by the department.
(53) “Unique identifier” means an alphanumeric code or designation issued pursuant to the track and trace program established by the department and used for reference to a specific plant on a licensed premises and any cannabis or cannabis product derived or manufactured from that plant.
(54) “Youth center” has the same meaning as in Section 11353.1 of the Health and Safety Code.
(b) This section shall remain in effect only until January 1, 2026, 2028, and as of that date is repealed.

SEC. 3.

 Section 26001 is added to the Business and Professions Code, to read:

26001.
 (a) For purposes of this division, the following definitions apply:
(1) “A-license” means a state license issued under this division for cannabis or cannabis products that are intended for adults who are 21 years of age and older and who do not possess a physician’s recommendation, or are intended for use on, or consumption by, animals.
(2) “A-licensee” means any person holding a license under this division for cannabis or cannabis products that are intended for adults who are 21 years of age and older and who do not possess a physician’s recommendation, or are intended for use on, or consumption by, animals.
(3) “Animal” does not include a food animal as defined in Section 4825.1 or livestock as defined in Section 14205 of the Food and Agricultural Code.
(4) “Applicant” means an owner applying for an operator license or unified license pursuant to this division, or the holder of an operator license applying for a premises license pursuant to this division.
(5) “Batch” means a specific quantity of homogeneous cannabis or cannabis product that is one of the following types:
(A) Harvest batch. “Harvest batch” means a specifically identified quantity of dried flower or trim, leaves, and other cannabis plant matter that is harvested at the same time, and, if applicable, cultivated using the same pesticides and other agricultural chemicals.
(B) Manufactured cannabis batch. “Manufactured cannabis batch” means either of the following:
(i) An amount of cannabis concentrate or extract that is produced in one production cycle using the same extraction methods and standard operating procedures.
(ii) An amount of a type of manufactured cannabis produced in one production cycle using the same formulation and standard operating procedures.
(6) “Cannabis” means all parts of the plant Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. “Cannabis” also means the separated resin, whether crude or purified, obtained from cannabis. “Cannabis” does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this division, “cannabis” does not mean “industrial hemp” as defined by Section 11018.5 of the Health and Safety Code.
(7) “Cannabis accessories” has the same meaning as in Section 11018.2 of the Health and Safety Code.
(8) “Cannabis beverage” means a form of edible cannabis product that is intended to be consumed in its final state as a beverage.
(9) “Cannabis concentrate” means cannabis that has undergone a process to concentrate one or more active cannabinoids, thereby increasing the product’s potency. Resin from glandular trichomes from a cannabis plant is a concentrate for purposes of this division. A cannabis concentrate is not considered food, as defined by Section 109935 of the Health and Safety Code, a processed pet food, as defined by Section 113025 of the Health and Safety Code, or a drug, as defined by Section 109925 of the Health and Safety Code.
(10) “Cannabis event organizer” means the holder of an operator license who plans and organizes temporary cannabis events in accordance with Section 26200.
(11) “Cannabis products” has the same meaning as in Section 11018.1 of the Health and Safety Code, and includes cannabis products intended for use on, or consumption by, an animal. Cannabis products are not considered food, as defined by Section 109935 of the Health and Safety Code, a drug, as defined by Section 109925 of the Health and Safety Code, or a cosmetic, as defined by Section 109900 of the Health and Safety Code.
(12) “Child resistant” means designed or constructed to be significantly difficult for children under five years of age to open, and not difficult for normal adults to use properly.
(13) “Commercial cannabis activity” includes the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery, or sale of cannabis and cannabis products as provided for in this division, or acting as a cannabis event organizer for temporary cannabis events.
(14) “Cultivation” means any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of cannabis.
(15) “Cultivation site” means a location where cannabis is planted, grown, harvested, dried, cured, graded, or trimmed, or a location where any combination of those activities occurs.
(16) “Customer” means a natural person 21 years of age or older or a natural person 18 years of age or older who possesses a physician’s recommendation, or a primary caregiver.
(17) “Daycare center” has the same meaning as in Section 1596.76 of the Health and Safety Code.
(18) “Delivery” means the commercial transfer of cannabis or cannabis products to a customer. “Delivery” also includes the use by a retailer of any technology platform.
(19) “Department” means the Department of Cannabis Control within the Business, Consumer Services, and Housing Agency.
(20) “Director” means the Director of the Department of Cannabis Control.
(21) “Distribution” means the procurement, sale, and transport of cannabis and cannabis products between licensees.
(22) “Distributor” means the holder of a premises license authorizing the licensee to engage in the distribution of cannabis and cannabis products.
(23) “Dried flower” means all dead cannabis that has been harvested, dried, cured, or otherwise processed, excluding leaves and stems.
(24) “Edible cannabis product” means a cannabis product that is intended to be used, in whole or in part, for human or animal consumption, including, but not limited to, chewing gum, but excluding products set forth in Division 15 (commencing with Section 32501) of the Food and Agricultural Code. An edible cannabis product is not considered food, as defined by Section 109935 of the Health and Safety Code, a processed pet food, as defined by Section 113025 of the Health and Safety Code, or a drug, as defined by Section 109925 of the Health and Safety Code.
(25) “Fund” means the Cannabis Control Fund established pursuant to Section 26210.
(26) “Kind” means applicable type or designation regarding a particular cannabis variant, origin, or product type, including, but not limited to, strain name, trademark, or production area designation.
(27) “Labeling” means any label or other written, printed, or graphic matter upon a cannabis product, upon its container or wrapper, or that accompanies any cannabis product.
(28) “Labor peace agreement” means an agreement between a licensee and any bona fide labor organization that, at a minimum, protects the state’s proprietary interests by prohibiting labor organizations and members from engaging in picketing, work stoppages, boycotts, and any other economic interference with the applicant’s business. This agreement means that the applicant has agreed not to disrupt efforts by the bona fide labor organization to communicate with, and attempt to organize and represent, the applicant’s employees. The agreement shall provide a bona fide labor organization access at reasonable times to areas in which the applicant’s employees work, for the purpose of meeting with employees to discuss their right to representation, employment rights under state law, and terms and conditions of employment. This type of agreement shall not mandate a particular method of election or certification of the bona fide labor organization.
(29) “License” or “state license” means a state operator license, state premises license, or state unified license issued under this division, and includes both an A-license and an M-license, as well as a testing laboratory license.
(30) “Licensee” means any person holding a license under this division, regardless of whether the license held is an A-license or an M-license, and includes the holder of a testing laboratory license.
(31) “Licensing authority” means the department and any state agency currently or formerly responsible for the issuance, renewal, or reinstatement of the license, or the state agency authorized to take disciplinary action against the licensee.
(32) “Live plants” means living cannabis flowers and plants, including seeds, immature plants, and vegetative stage plants.
(33) “Local jurisdiction” means a city, county, or city and county.
(34) “Local permit” means a valid, unexpired license, permit, or other authorization to engage in commercial cannabis activities issued by an affirmative act of a local jurisdiction or its duly authorized official in accordance with Section 26200.
(35) “Lot” means a batch or a specifically identified portion of a batch.
(36) “M-license” means a state license issued under this division for commercial cannabis activity involving medicinal cannabis.
(37) “M-licensee” means any person holding a license under this division for commercial cannabis activity involving medicinal cannabis.
(38) “Manufacture” means to compound, blend, extract, infuse, package, label, or otherwise make or prepare a cannabis product.
(39) (A) “Medicinal cannabis” or “medicinal cannabis product” means cannabis or a cannabis product, respectively, intended to be sold or donated for use pursuant to the Compassionate Use Act of 1996 (Proposition 215), found in Section 11362.5 of the Health and Safety Code, by a medicinal cannabis patient in California who possesses a physician’s recommendation, or in compliance with any compassionate use, equity, or other similar program administered by a local jurisdiction.
(B) The amendments made to this subdivision by the act adding this paragraph shall become operative upon completion of the necessary changes to the track and trace program in order to implement the act adding this paragraph, as determined by the Department of Food and Agriculture, or on March 1, 2020, whichever occurs first.
(40) (A) “Microbusiness” means a licensee that engages in at least three of the following commercial cannabis activities:
(i) Cultivation of cannabis on an area less than 10,000 square feet.
(ii) Level 1 manufacturing.
(iii) Licensed distribution.
(iv) Retail.
(B) A microbusiness licensee must demonstrate compliance with all requirements imposed by this division on licensed cultivators, distributors, Level 1 manufacturers, and retailers to the extent the licensee engages in such activities.
(41) “Nursery” means a licensee that produces only clones, immature plants, seeds, and other agricultural products used specifically for the propagation and cultivation of cannabis.
(42) “Operation” means any act for which licensure is required under the provisions of this division, or any commercial transfer of cannabis or cannabis products.
(43) “Operator license” means a state license issued under this division establishing the applicant’s eligibility to engage in commercial cannabis activities, other than the commercial cannabis activities described in paragraph (56). An operator license shall be effective statewide and shall not be specific to any premises. The holder of an operator license shall not engage in commercial cannabis activities without both a local permit and a premises license authorizing commercial cannabis activities at a specific premises.
(44) “Owner” means any of the following:
(A) 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.
(B) The chief executive officer of a nonprofit or other entity.
(C) A member of the board of directors of a nonprofit.
(D) An individual who will be participating in the direction, control, or management of the person applying for a license.
(45) “Package” means any container or receptacle used for holding cannabis or cannabis products.
(46) “Person” includes any individual, firm, partnership, joint venture, association, corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit, and the plural as well as the singular.
(47) “Physician’s recommendation” means a recommendation by a physician and surgeon that a patient use cannabis provided in accordance with the Compassionate Use Act of 1996 (Proposition 215), found at Section 11362.5 of the Health and Safety Code.
(48) (A) “Premises” means either of the following, as applicable:
(i) With respect to commercial cannabis activity described in paragraph (56), “premises” means the designated structure or structures and land specified in the application for a unified license that is owned, leased, or otherwise held under the control of the applicant or licensee where the commercial cannabis activity will be or is conducted.
(ii) With respect to any other commercial cannabis activity, “premises” means the designated structure or structures and land permitted by the local jurisdiction and specified in the application for a premises license that is owned, leased, or otherwise held under the control of the licensee where the commercial cannabis activity will be or is conducted.
(B) The department shall adopt regulations governing the area and occupancy of premises where commercial cannabis activities are conducted.
(49) “Premises license” means a ministerial approval issued by the department to the holder of an operator license for the conduct of commercial cannabis activity, other than commercial cannabis activity described in paragraph (56), at a specific premises for which the local jurisdiction has issued a local permit.
(50) “Primary caregiver” has the same meaning as in Section 11362.7 of the Health and Safety Code.
(51) “Processor” means a person authorized to engage in only trimming, drying, curing, grading, packaging, and labeling of cannabis and nonmanufactured cannabis products.
(52) “Purchaser” means the customer who is engaged in a transaction with a licensee for purposes of obtaining cannabis or cannabis products.
(53) “Retailer” means the holder of a premises license authorizing the licensee to engage in the retail sale and delivery of cannabis or cannabis products to customers.
(54) “Sell,” “sale,” and “to sell” include any transaction whereby, for any consideration, title to cannabis or cannabis products is transferred from one person to another, and includes the delivery of cannabis or cannabis products pursuant to an order placed for the purchase of the same and soliciting or receiving an order for the same, but does not include the return of cannabis or cannabis products by a licensee to the licensee from whom the cannabis or cannabis product was purchased.
(55) “Testing laboratory” means a laboratory, facility, or entity in the state that offers or performs tests of cannabis or cannabis products and that is both of the following:
(A) Accredited by an accrediting body that is independent from all other persons involved in commercial cannabis activity in the state.
(B) Licensed by the department.
(56) “Unified license” means a state license issued under this division authorizing commercial cannabis activity that includes the cultivation or laboratory testing of cannabis or cannabis products.
(57) “Unique identifier” means an alphanumeric code or designation issued pursuant to the track and trace program established by the department and used for reference to a specific plant on a licensed premises and any cannabis or cannabis product derived or manufactured from that plant.
(58) “Youth center” has the same meaning as in Section 11353.1 of the Health and Safety Code.
(b) This section shall become operative January 1, 2026. 2028.

SEC. 4.

 Section 26037.5 of the Business and Professions Code is amended to read:

26037.5.
 (a) A person or entity shall not engage in commercial cannabis activity without a state license issued by the department pursuant to this division.
(b) The requirement to obtain a state license for the cultivation of cannabis pursuant to this division does not apply to the cultivation of cannabis in accordance with Section 11362.1 of the Health and Safety Code or the Compassionate Use Act or to persons or entities licensed under subdivision (b) of Section 26070.5.
(c) This section shall remain in effect only until January 1, 2026, 2028, and as of that date is repealed.

SEC. 5.

 Section 26037.5 is added to the Business and Professions Code, to read:

26037.5.
 (a) (1) A person or entity shall not engage in commercial cannabis activity described in paragraph (56) of subdivision (a) of Section 26001 without a state unified license issued by the department pursuant to this division.
(2) A person or entity shall not engage in any other commercial cannabis activity without a state operator license and one or more premises licenses issued by the department pursuant to this division and a local permit issued in accordance with Section 26200 for each licensed premises.
(b) Except as set forth in the Medicinal Cannabis Patients’ Right of Access Act (Chapter 26 (commencing with Section 26320)), a person or entity shall not engage in commercial cannabis activity in violation of any local law, ordinance, rule, or regulation.
(c) The requirement to obtain a state license for the cultivation of cannabis pursuant to this division does not apply to the cultivation of cannabis in accordance with Section 11362.1 of the Health and Safety Code or the Compassionate Use Act or to persons or entities licensed under subdivision (b) of Section 26070.5.
(d) This section shall become operative January 1, 2026. 2028.

SEC. 6.

 Section 26050 of the Business and Professions Code is amended to read:

26050.
 (a) The license classification pursuant to this division shall, at a minimum, be as follows:
(1) Type 1—Cultivation; Specialty outdoor; Small.
(2) Type 1A—Cultivation; Specialty indoor; Small.
(3) Type 1B—Cultivation; Specialty mixed-light; Small.
(4) Type 1C—Cultivation; Specialty cottage; Small.
(5) Type 2—Cultivation; Outdoor; Small.
(6) Type 2A—Cultivation; Indoor; Small.
(7) Type 2B—Cultivation; Mixed-light; Small.
(8) Type 3—Cultivation; Outdoor; Medium.
(9) Type 3A—Cultivation; Indoor; Medium.
(10) Type 3B—Cultivation; Mixed-light; Medium.
(11) Type 4—Cultivation; Nursery.
(12) Type 5—Cultivation; Outdoor; Large.
(13) Type 5A—Cultivation; Indoor; Large.
(14) Type 5B—Cultivation; Mixed-light; Large.
(15) Type 6—Manufacturer 1.
(16) Type 7—Manufacturer 2.
(17) Type 8—Testing laboratory.
(18) Type 10—Retailer.
(19) Type 11—Distributor.
(20) Type 12—Microbusiness.
(21) Type 13—Cannabis event organizer.
(22) Type 14—Processor.
(b) With the exception of testing laboratory licenses, which may be used to test cannabis and cannabis products regardless of whether they are intended for use by individuals who possess a physician’s recommendation, all licenses issued under this division shall bear a clear designation indicating whether the license is for commercial adult-use cannabis activity as distinct from commercial medicinal cannabis activity by prominently affixing an “A” or “M,” respectively. Examples of such a designation include, but are not limited to, “A-Type 1” or “M-Type 1.” Except as specifically specified in this division, the requirements for A-licenses and M-licenses shall be the same. For testing laboratories, the department shall create a license that indicates a testing laboratory may test both adult-use and medicinal cannabis.
(c) A license issued pursuant to this division shall be valid for 12 months from the date of issuance. The license may be renewed annually.
(d) The department shall establish procedures for the issuance and renewal of licenses.
(e) This section shall remain in effect only until January 1, 2026, 2028, and as of that date is repealed.

SEC. 7.

 Section 26050 is added to the Business and Professions Code, to read:

26050.
 (a) The license classification pursuant to this division shall, at a minimum, be as follows:
(1) Unified license classifications shall include, at a minimum, all of the following:
(A) Type 1—Cultivation; Specialty outdoor; Small.
(B) Type 1A—Cultivation; Specialty indoor; Small.
(C) Type 1B—Cultivation; Specialty mixed-light; Small.
(D) Type 1C—Cultivation; Specialty cottage; Small.
(E) Type 2—Cultivation; Outdoor; Small.
(F) Type 2A—Cultivation; Indoor; Small.
(G) Type 2B—Cultivation; Mixed-light; Small.
(H) Type 3—Cultivation; Outdoor; Medium.
(I) Type 3A—Cultivation; Indoor; Medium.
(J) Type 3B—Cultivation; Mixed-light; Medium.
(K) Type 4—Cultivation; Nursery.
(L) Type 5—Cultivation; Outdoor; Large.
(M) Type 5A—Cultivation; Indoor; Large.
(N) Type 5B—Cultivation; Mixed-light; Large.
(O) Type 8—Testing laboratory.
(P) Type 12-1—Microbusiness license authorizing any commercial cannabis activities described in paragraph (56) of subdivision (a) of Section 26001.

(Q)Type 14—Processor.

(2) Operator license classification shall be a single license type.
(3) Premises license classifications shall include, at a minimum, all of the following:
(A) Type 6—Manufacturer 1.
(B) Type 7—Manufacturer 2.
(C) Type 10—Retailer.
(D) Type 11—Distributor.
(E) Type 12-2—Microbusiness license not authorizing any commercial cannabis activities described in paragraph (56) of subdivision (a) of Section 26001.
(F) Type 14—Processor.
(b) With the exception of testing laboratory licenses, which may be used to test cannabis and cannabis products regardless of whether they are intended for use by individuals who possess a physician’s recommendation, all licenses issued under this division shall bear a clear designation indicating whether the license is for commercial adult-use cannabis activity as distinct from commercial medicinal cannabis activity by prominently affixing an “A” or “M,” respectively. Examples of such a designation include, but are not limited to, “A-Type 1” or “M-Type 1.” Except as specifically specified in this division, the requirements for A-licenses and M-licenses shall be the same. For testing laboratories, the department shall create a license that indicates a testing laboratory may test both adult-use and medicinal cannabis.
(c) A license issued pursuant to this division shall be valid for 12 months from the date of issuance. The license may be renewed annually.
(d) (1) The department shall establish procedures for the issuance and renewal of licenses.
(2) Procedures for the issuance and renewal of premises licenses shall be consistent with Section 26057.5.
(e) The holder of a unified license shall be entitled to exercise all of the rights and privileges of an operator license under this division.
(f) The department may issue a premises license that authorizes one or more of the classifications set forth in paragraph (3) of subdivision (a).

(f)

(g) This section shall become operative January 1, 2026. 2028.

SEC. 8.

 Section 26050.1 is added to the Business and Professions Code, to read:

26050.1.
 (a) The holder of an unexpired annual license authorizing any commercial cannabis activity described in paragraph (56) of subdivision (a) of Section 26001 on January 1, 2026, 2028, shall thereafter be deemed to hold a unified license authorizing that activity at the licensed premises with the same expiration date as the annual license.
(b) (1) The holder of an unexpired annual license authorizing any other commercial cannabis activity on January 1, 2026, 2028, shall thereafter be deemed to hold an operator license and a premises license authorizing that activity at the licensed premises with the same expiration date as the annual license.
(2) If a licensee described in paragraph (1) has not previously provided to the department any item required under Section 26057.5, that item shall be provided as part of the next renewal of the licensee’s premises license.
(c) This section shall become operative January 1, 2026, 2028, shall remain in effect only until January 1, 2027, 2029, and as of that date is repealed.

SEC. 9.

 Section 26051 of the Business and Professions Code is amended to read:

26051.
 (a) The Cartwright Act, the Unfair Practices Act, the Unfair Competition Law, and the other provisions of Part 2 (commencing with Section 16600) of Division 7 apply to all licensees regulated under this division.
(b) It shall be unlawful for any person to monopolize, attempt to monopolize, or combine or conspire with any person or persons to monopolize, any part of the trade or commerce related to cannabis. The Attorney General shall have the sole authority to enforce the provisions of this subdivision.
(c) In determining whether to grant, deny, or renew a retail license, microbusiness license, or a license issued under Section 26070.5, the department shall consider if an excessive concentration exists in the area where the licensee will operate. For purposes of this section, “excessive concentration” applies when either of the following conditions exist: exists:
(1) The ratio of licensees to population in 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 or cannabis products.
(2) The ratio of retail licenses, microbusiness licenses, or licenses under Section 26070.5 to the population in the census tract, census division, or jurisdiction exceeds that allowable by local ordinance adopted under Section 26200.
(d) This section shall remain in effect only until January 1, 2026, 2028, and as of that date is repealed.

SEC. 10.

 Section 26051 is added to the Business and Professions Code, to read:

26051.
 (a) The Cartwright Act, the Unfair Practices Act, the Unfair Competition Law, and the other provisions of Part 2 (commencing with Section 16600) of Division 7 apply to all licensees regulated under this division.
(b) It shall be unlawful for any person to monopolize, attempt to monopolize, or combine or conspire with any person or persons to monopolize, any part of the trade or commerce related to cannabis. The Attorney General shall have the sole authority to enforce the provisions of this subdivision.
(c) This section shall become operative January 1, 2026. 2028.

SEC. 11.

 Section 26051.5 of the Business and Professions Code is amended to read:

26051.5.
 (a) An applicant for a state license issued pursuant to this division to conduct commercial cannabis activity, as defined in Section 26001, shall do all of the following:
(1) Except as provided in subparagraph (G), require that each owner electronically submit to the Department of Justice fingerprint images and related information required by the Department of Justice for the purpose of obtaining information as to the existence and content of a record of state or federal convictions and state and federal arrests, and also information as to the existence and content of a record of state or federal convictions and arrests for which the Department of Justice establishes that the person is free on bail or on their own recognizance pending trial or appeal.
(A) Notwithstanding any other law, the department may obtain criminal history information from the Department of Justice and the Federal Bureau of Investigation for an applicant for any state license under this division, including any license established by a licensing authority, as defined in Section 26001, by regulation pursuant to subdivision (b) of Section 26012.
(B) When received, the Department of Justice shall transmit fingerprint images and related information received pursuant to this section to the Federal Bureau of Investigation for the purpose of obtaining a federal criminal history records check. The Department of Justice shall review the information returned from the Federal Bureau of Investigation and compile and disseminate a response to the licensing authority.
(C) The Department of Justice shall provide a response to the licensing authority pursuant to paragraph (1) of subdivision (p) of Section 11105 of the Penal Code.
(D) The licensing authority shall request from the Department of Justice subsequent notification service, as provided pursuant to Section 11105.2 of the Penal Code, for applicants.
(E) The Department of Justice shall charge the applicant a fee sufficient to cover the reasonable cost of processing the requests described in this paragraph.
(F) Notwithstanding any other law, a licensing authority may request and receive from a local or state agency certified records of all arrests and convictions, certified records regarding probation, and any and all other related documentation needed to complete an applicant or licensee investigation. A local or state agency may provide those records to a licensing authority upon request.
(G) If an owner has previously submitted fingerprint images and related information required by the Department of Justice pursuant to this paragraph in connection with a valid state license issued by a licensing authority, both of the following apply:
(i) The owner shall not be required to submit additional fingerprint images and related information pursuant to this paragraph in connection with a subsequent application for a state license.
(ii) The department shall not consider the owner’s criminal history information obtained from the fingerprint images and related information that were previously submitted pursuant to this paragraph when considering whether to issue a subsequent state license.
(2) Provide evidence of the legal right to occupy and use the proposed location and provide a statement from the landowner of real property or that landowner’s agent where the commercial cannabis activity will occur, as proof to demonstrate the landowner has acknowledged and consented to permit commercial cannabis activities to be conducted on the property by the tenant applicant.
(3) Provide evidence that the proposed location is in compliance with subdivision (b) of Section 26054.
(4) Provide a statement, signed by the applicant under penalty of perjury, that the information provided is complete, true, and accurate.
(5) (A) (i) For an applicant with 20 or more employees, or an applicant with 10 or more employees that submits an application on or after July 1, 2024, provide a notarized statement that the applicant will enter into, or demonstrate that it has already entered into, and will abide by the terms of a labor peace agreement. On and after July 1, 2024, the department shall not renew a license for a licensee with 10 or more employees unless the licensee provides a statement that the licensee has already entered into and will abide by the terms of a labor peace agreement.
(ii) For an applicant with 10 or more employees but less than 20 employees that has not yet entered into a labor peace agreement, provide a notarized statement as a part of its application indicating that the applicant will enter into and abide by the terms of a labor peace agreement within 60 days of employing its 20th employee, or on or before July 1, 2024, whichever is earlier.
(iii) For an applicant with less than 10 employees that has not yet entered into a labor peace agreement, provide a notarized statement as a part of its application indicating that the applicant will enter into and abide by the terms of a labor peace agreement within 60 days of employing its 10th employee, or on or before July 1, 2024, whichever is later.
(iv) Nothing in this paragraph shall be construed to limit the authority of the department to revoke or suspend a license for a violation of this paragraph.
(B) Compliance with the terms of an applicable labor peace agreement is a condition of licensure. A licensee seeking renewal of any license shall attest to the department that it remains in compliance with the terms of any applicable labor peace agreement.
(C) Any labor organization, or any current or former employee of the relevant licensee, may report to the department that a licensee has failed to provide a truthful attestation of compliance with subparagraph (B).
(i) The reporting party shall provide documentation, in a form and manner required by the department, to substantiate their allegation before the department considers it. The department shall collaborate with such agencies as it deems relevant to evaluate the report.
(ii) If the department substantiates the validity of a report made pursuant to this subparagraph, the department may suspend, revoke, place on probation with terms and conditions, or otherwise discipline the license and fine the licensee.
(D) (i) Any labor organization, or any current or former employee of the relevant licensee, may file a complaint with the Agricultural Labor Relations Board that an organization with which a licensee has entered into a labor peace agreement is not a bona fide labor organization.
(ii) The Agricultural Labor Relations Board shall consider all relevant evidence provided or obtained in rendering a decision on whether the entity is a bona fide labor organization and issue a report with its findings no later than 90 days from receiving the complaint.
(iii) If the Agricultural Labor Relations Board determines that the entity is not a bona fide labor organization, the labor peace agreement shall be null and void. The department shall promptly notify all licensees that have signed labor peace agreements with the entity that the entity was found not to be a bona fide labor organization and offer those licensees a reasonable time period, not to exceed 180 days, to enter into a labor peace agreement with a bona fide labor organization. Failure to enter into a labor peace agreement with a bona fide labor organization after that reasonable time period shall be a violation of this section.
(E) For the purposes of this paragraph, all of the following shall apply:
(i) “Employee” does not include a supervisor.
(ii) “Labor organization” means any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists, in whole or in part, for the purpose of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work for employees.
(iii) “Supervisor” means an individual having authority, in the interest of the applicant, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibility to direct them or to adjust their grievances, or effectively to recommend such action, if, in connection with the foregoing, the exercise of that authority is not of a merely routine or clerical nature, but requires the use of independent judgment.
(6) Provide the applicant’s valid seller’s permit number issued pursuant to Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code or indicate that the applicant is currently applying for a seller’s permit.
(7) Provide any other information required by the department.
(8) For an applicant seeking a cultivation license, provide a statement declaring the applicant is an “agricultural employer,” as defined in the Alatorre-Zenovich-Dunlap-Berman Agricultural Labor Relations Act of 1975 (Part 3.5 (commencing with Section 1140) of Division 2 of the Labor Code), to the extent not prohibited by law.
(9) Pay all applicable fees required for licensure by the department.
(10) Provide proof of a bond to cover the costs of destruction of cannabis or cannabis products if necessitated by a violation of licensing requirements.
(11) (A) Provide a statement, upon initial application and application for renewal, that the applicant employs, or will employ within one year of receiving or renewing a license, one supervisor and one employee who have successfully completed a Division of Occupational Safety and Health (OSHA) 30-hour general industry outreach course offered by a training provider that is authorized by an OSHA Training Institute Education Center to provide the course. This paragraph shall not be construed to alter or amend existing requirements for employers to provide occupational safety and health training to employees.
(B) An applicant with only one employee shall not be subject to subparagraph (A).
(C) For purposes of this paragraph “employee” has the same meaning as provided in subparagraph (B) of paragraph (5) and “supervisor” has the same meaning as provided in subparagraph (C) of paragraph (5).
(b) An applicant shall also include in the application a detailed description of the applicant’s operating procedures for all of the following, as required by the department:
(1) Cultivation.
(2) Extraction and infusion methods.
(3) The transportation process.
(4) Inventory procedures.
(5) Quality control procedures.
(6) Security protocols.
(7) For applicants seeking licensure to cultivate, the source or sources of water the applicant will use for cultivation, as provided in subdivisions (a) to (c), inclusive, of Section 26060.1. For purposes of this paragraph, “cultivation” as used in Section 26060.1 shall have the same meaning as defined in Section 26001. The department shall consult with the State Water Resources Control Board and the Department of Fish and Wildlife in the implementation of this paragraph.
(c) The applicant shall also provide a complete detailed diagram of the proposed premises wherein the license privileges will be exercised, with sufficient particularity to enable ready determination of the bounds of the premises, showing all boundaries, dimensions, entrances and exits, interior partitions, walls, rooms, and common or shared entryways, and include a brief statement or description of the principal activity to be conducted therein, and, for licenses permitting cultivation, measurements of the planned canopy, including aggregate square footage and individual square footage of separate cultivation areas, if any, roads, water crossings, points of diversion, water storage, and all other facilities and infrastructure related to the cultivation.
(d) Provide a complete list of every person with a financial interest in the person applying for the license as required by the department. For purposes of this subdivision, “persons with a financial interest” does not include persons whose only interest in a licensee is an interest in a diversified mutual fund, blind trust, or similar instrument.
(e) This section shall remain in effect only until January 1, 2026, 2028, and as of that date is repealed.

SEC. 12.

 Section 26051.5 is added to the Business and Professions Code, to read:

26051.5.
 (a) An applicant for an operator license or a unified license issued pursuant to this division to conduct commercial cannabis activity, as defined in Section 26001, shall do all of the following:
(1) Except as provided in subparagraph (G), require that each owner electronically submit to the Department of Justice fingerprint images and related information required by the Department of Justice for the purpose of obtaining information as to the existence and content of a record of state or federal convictions and state and federal arrests, and also information as to the existence and content of a record of state or federal convictions and arrests for which the Department of Justice establishes that the person is free on bail or on their own recognizance pending trial or appeal.
(A) Notwithstanding any other law, the department may obtain criminal history information from the Department of Justice and the Federal Bureau of Investigation for an applicant for any state license under this division, including any license established by a licensing authority, as defined in Section 26001, by regulation pursuant to subdivision (b) of Section 26012.
(B) When received, the Department of Justice shall transmit fingerprint images and related information received pursuant to this section to the Federal Bureau of Investigation for the purpose of obtaining a federal criminal history records check. The Department of Justice shall review the information returned from the Federal Bureau of Investigation and compile and disseminate a response to the licensing authority.
(C) The Department of Justice shall provide a response to the licensing authority pursuant to paragraph (1) of subdivision (p) of Section 11105 of the Penal Code.
(D) The licensing authority shall request from the Department of Justice subsequent notification service, as provided pursuant to Section 11105.2 of the Penal Code, for applicants.
(E) The Department of Justice shall charge the applicant a fee sufficient to cover the reasonable cost of processing the requests described in this paragraph.
(F) Notwithstanding any other law, a licensing authority may request and receive from a local or state agency certified records of all arrests and convictions, certified records regarding probation, and any and all other related documentation needed to complete an applicant or licensee investigation. A local or state agency may provide those records to a licensing authority upon request.
(G) If an owner has previously submitted fingerprint images and related information required by the Department of Justice pursuant to this paragraph in connection with a valid state license issued by a licensing authority, both of the following apply:
(i) The owner shall not be required to submit additional fingerprint images and related information pursuant to this paragraph in connection with a subsequent application for a state license.
(ii) The department shall not consider the owner’s criminal history information obtained from the fingerprint images and related information that were previously submitted pursuant to this paragraph when considering whether to issue a subsequent state license.
(2) Provide a statement, signed by the applicant under penalty of perjury, that the information provided is complete, true, and accurate.
(3) (A) (i) For an applicant with 20 or more employees, or an applicant with 10 or more employees that submits an application on or after July 1, 2024, provide a notarized statement that the applicant will enter into, or demonstrate that it has already entered into, and will abide by the terms of a labor peace agreement. On and after July 1, 2024, the department shall not renew a license for a licensee with 10 or more employees unless the licensee provides a statement that the licensee has already entered into and will abide by the terms of a labor peace agreement.
(ii) For an applicant with 10 or more employees but less than 20 employees that has not yet entered into a labor peace agreement, provide a notarized statement as a part of its application indicating that the applicant will enter into and abide by the terms of a labor peace agreement within 60 days of employing its 20th employee, or on or before July 1, 2024, whichever is earlier.
(iii) For an applicant with less than 10 employees that has not yet entered into a labor peace agreement, provide a notarized statement as a part of its application indicating that the applicant will enter into and abide by the terms of a labor peace agreement within 60 days of employing its 10th employee, or on or before July 1, 2024, whichever is later.
(iv) Nothing in this paragraph shall be construed to limit the authority of the department to revoke or suspend a license for a violation of this paragraph.
(B) Compliance with the terms of an applicable labor peace agreement is a condition of licensure. A licensee seeking renewal of any license shall attest to the department that it remains in compliance with the terms of any applicable labor peace agreement.
(C) Any labor organization, or any current or former employee of the relevant licensee, may report to the department that a licensee has failed to provide a truthful attestation of compliance with subparagraph (B).
(i) The reporting party shall provide documentation, in a form and manner required by the department, to substantiate their allegation before the department considers it. The department shall collaborate with such agencies as it deems relevant to evaluate the report.
(ii) If the department substantiates the validity of a report made pursuant to this subparagraph, the department may suspend, revoke, place on probation with terms and conditions, or otherwise discipline the license and fine the licensee.
(D) (i) Any labor organization, or any current or former employee of the relevant licensee, may file a complaint with the Agricultural Labor Relations Board that an organization with which a licensee has entered into a labor peace agreement is not a bona fide labor organization.
(ii) The Agricultural Labor Relations Board shall consider all relevant evidence provided or obtained in rendering a decision on whether the entity is a bona fide labor organization and issue a report with its findings no later than 90 days from receiving the complaint.
(iii) If the Agricultural Labor Relations Board determines that the entity is not a bona fide labor organization, the labor peace agreement shall be null and void. The department shall promptly notify all licensees that have signed labor peace agreements with the entity that the entity was found not to be a bona fide labor organization and offer those licensees a reasonable time period, not to exceed 180 days, to enter into a labor peace agreement with a bona fide labor organization. Failure to enter into a labor peace agreement with a bona fide labor organization after that reasonable time period shall be a violation of this section.
(E) For the purposes of this paragraph, all of the following shall apply:
(i) “Employee” does not include a supervisor.
(ii) “Labor organization” means any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists, in whole or in part, for the purpose of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work for employees.
(iii) “Supervisor” means an individual having authority, in the interest of the applicant, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibility to direct them or to adjust their grievances, or effectively to recommend such action, if, in connection with the foregoing, the exercise of that authority is not of a merely routine or clerical nature, but requires the use of independent judgment.
(4) Provide proof of a bond to cover the costs of destruction of cannabis or cannabis products if necessitated by a violation of licensing requirements.
(5) (A) Provide a statement, upon initial application and application for renewal, that the applicant employs, or will employ within one year of receiving or renewing a license, one supervisor and one employee who have successfully completed a Division of Occupational Safety and Health (OSHA) 30-hour general industry outreach course offered by a training provider that is authorized by an OSHA Training Institute Education Center to provide the course. This paragraph shall not be construed to alter or amend existing requirements for employers to provide occupational safety and health training to employees.
(B) An applicant with only one employee shall not be subject to subparagraph (A).
(C) For purposes of this paragraph, “employee” has the same meaning as provided in subparagraph (B) of paragraph (3) and “supervisor” has the same meaning as provided in subparagraph (C) of paragraph (3).
(6) Provide a complete list of every person with a financial interest in the person applying for the license as required by the department. For purposes of this subdivision, “persons with a financial interest” does not include persons whose only interest in a licensee is an interest in a diversified mutual fund, blind trust, or similar instrument.
(7) Provide any other information required by the department.
(8) Pay all applicable fees required for licensure by the department.
(b) An applicant for a unified license shall additionally do all of the following:
(1) Provide evidence of the legal right to occupy and use the proposed location and provide a statement from the landowner of real property or that landowner’s agent where the commercial cannabis activity will occur, as proof to demonstrate the landowner has acknowledged and consented to permit commercial cannabis activities to be conducted on the property by the tenant applicant.
(2) Provide evidence that the proposed location is in compliance with subdivision (b) of Section 26054.
(3) Provide the applicant’s valid seller’s permit number issued pursuant to Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code or indicate that the applicant is currently applying for a seller’s permit.
(4) For an applicant seeking a unified license authorizing commercial cannabis activity that includes cultivation, provide a statement declaring the applicant is an “agricultural employer,” as defined in the Alatorre-Zenovich-Dunlap-Berman Agricultural Labor Relations Act of 1975 (Part 3.5 (commencing with Section 1140) of Division 2 of the Labor Code), to the extent not prohibited by law.
(5) Include in the application a detailed description of the applicant’s operating procedures for the following, as required by the department:
(A) Cultivation.
(B) Extraction and infusion methods.
(C) The transportation process.
(D) Inventory procedures.
(E) Quality control procedures.
(F) Security protocols.
(6) For applicants seeking licensure to cultivate, the source or sources of water the applicant will use for cultivation, as provided in subdivisions (a) to (c), inclusive, of Section 26060.1. For purposes of this paragraph, “cultivation” as used in Section 26060.1 shall have the same meaning as defined in Section 26001. The department shall consult with the State Water Resources Control Board and the Department of Fish and Wildlife in the implementation of this paragraph.
(7) Provide a complete detailed diagram of the proposed premises wherein the license privileges will be exercised, with sufficient particularity to enable ready determination of the bounds of the premises, showing all boundaries, dimensions, entrances and exits, interior partitions, walls, rooms, and common or shared entryways, and include a brief statement or description of the principal activity to be conducted therein, and, for licenses permitting cultivation, measurements of the planned canopy, including aggregate square footage and individual square footage of separate cultivation areas, if any, roads, water crossings, points of diversion, water storage, and all other facilities and infrastructure related to the cultivation.
(c) The department shall prescribe by regulation the criteria for issuance and renewal of operator licenses and unified licenses.
(d) This section shall become operative January 1, 2026. 2028.

SEC. 13.

 Section 26053 of the Business and Professions Code is amended to read:

26053.
 (a) All commercial cannabis activity shall be conducted between licensees, except as otherwise provided in this division.
(b) (1) A person that holds a state testing laboratory license under this division is prohibited from licensure for any other activity, except testing, as authorized under this division. A person that holds a state testing laboratory license shall not employ an individual who is also employed by any other licensee that does not hold a state testing laboratory license.
(2) A person with a financial interest in a state testing laboratory license under this division is prohibited from holding a financial interest in any other type of cannabis license.
(c) Except as provided in subdivision (b), a person may apply for and be issued more than one license under this division.
(d) Each applicant or licensee shall apply for, and if approved, shall obtain, a separate license for each location where it engages in commercial cannabis activity.
(e) This section shall remain in effect only until January 1, 2026, 2028, and as of that date is repealed.

SEC. 14.

 Section 26053 is added to the Business and Professions Code, to read:

26053.
 (a) All commercial cannabis activity shall be conducted between licensees, except as otherwise provided in this division.
(b) (1) A person that holds a state testing laboratory license under this division is prohibited from licensure for any other activity, except testing, as authorized under this division. A person that holds a state testing laboratory license shall not employ an individual who is also employed by any other licensee that does not hold a state testing laboratory license.
(2) A person with a financial interest in a state testing laboratory license under this division is prohibited from holding a financial interest in any other type of cannabis license.
(c) Except as provided in subdivision (b), a person may apply for and be issued more than one license under this division.
(d) (1) Each applicant for, or holder of, a unified license shall apply for, and if approved, shall obtain, a separate unified license for each location where it engages in commercial cannabis activity described in paragraph (56) of subdivision (a) of Section 26001.
(2) Each holder of an operator license shall apply for, and if approved, shall obtain, a separate premises license for each location where it engages in commercial cannabis activity.
(e) This section shall become operative January 1, 2026. 2028.

SEC. 15.

 Section 26055 of the Business and Professions Code is amended to read:

26055.
 (a) The department may issue state licenses only to qualified applicants.
(b) Revocation of a state license issued under this division shall terminate the ability of the licensee to operate pursuant to that license within California until a new license is obtained.
(c) A licensee shall not change or alter the premises in a manner which materially or substantially alters the premises, the usage of the premises, or the mode or character of business operation conducted from the premises, from the plan contained in the diagram on file with the application, unless and until written approval by the department has been obtained. For purposes of this section, material or substantial physical changes of the premises, or in the usage of the premises, shall include, but not be limited to, a substantial increase or decrease in the total area of the licensed premises previously diagrammed, or any other physical modification resulting in substantial change in the mode or character of business operation.
(d) The department shall not approve an application for a state license under this division if approval of the state license will violate the provisions of any local ordinance or regulation adopted in accordance with Section 26200.
(e) An applicant may voluntarily provide proof of a license, permit, or other authorization from the local jurisdiction verifying that the applicant is in compliance with the local jurisdiction. An applicant that voluntarily submits a valid, unexpired license, permit, or other authorization from the local jurisdiction shall be presumed to be in compliance with all local ordinances unless the department is notified otherwise by the local jurisdiction. The department shall notify the contact person for the local jurisdiction of any applicant that voluntarily submits a valid, unexpired license, permit, or other authorization from the local jurisdiction.
(f) (1) A local jurisdiction shall provide to the department a copy of any ordinance or regulation related to commercial cannabis activity and the name and contact information for the person who will serve as the contact for the department regarding commercial cannabis activity within the jurisdiction. If a local jurisdiction does not provide a contact person, the department shall assume that the clerk of the legislative body of the local jurisdiction is the contact person.
(2) Whenever there is a change in a local ordinance or regulation adopted pursuant to Section 26200 or a change in the contact person for the jurisdiction, the local jurisdiction shall provide that information to the department.
(g) (1) The department shall deny an application for a license under this division for a commercial cannabis activity that the local jurisdiction has notified the department is prohibited in accordance with subdivision (f). The department shall notify the contact person for the local jurisdiction of each application denied due to the local jurisdiction’s indication that the commercial cannabis activity for which a license is sought is prohibited by a local ordinance or regulation.
(2) Prior to issuing a state license under this division for any commercial cannabis activity, if an applicant has not provided adequate proof of compliance with local laws pursuant to subdivision (e):
(A) The department shall notify the contact person for the local jurisdiction of the receipt of an application for commercial cannabis activity within their jurisdiction.
(B) A local jurisdiction may notify the department that the applicant is not in compliance with a local ordinance or regulation. In this instance, the department shall deny the application.
(C) A local jurisdiction may notify the department that the applicant is in compliance with all applicable local ordinances and regulations. In this instance, the department may proceed with the licensing process.
(D) If the local jurisdiction does not provide notification of compliance or noncompliance with applicable local ordinances or regulations, or otherwise does not provide notification indicating that the completion of the local permitting process is still pending, within 60 business days of receiving the inquiry from the department submitted pursuant to subparagraph (A), the department shall make a rebuttable presumption that the applicant is in compliance with all local ordinances and regulations adopted in accordance with Section 26200, except as provided in subparagraphs (E) and (F).
(E) At any time after expiration of the 60-business-day period set forth in subparagraph (D), the local jurisdiction may provide written notification to the department that the applicant or licensee is not in compliance with a local ordinance or regulation adopted in accordance with Section 26200. Upon receiving this notification, the department shall not presume that the applicant or licensee has complied with all local ordinances and regulations adopted in accordance with Section 26200, and may commence disciplinary action in accordance with Chapter 3 (commencing with Section 26030). If the department does not take action against the licensee before the time of the renewal of the license, the license shall not be renewed until and unless the local jurisdiction notifies the department that the licensee is once again in compliance with local ordinances.
(F) A presumption by the department pursuant to this paragraph that an applicant has complied with all local ordinances and regulations adopted in accordance with Section 26200 shall not prevent, impair, or preempt the local government from enforcing all applicable local ordinances or regulations against the applicant, nor shall the presumption confer any right, vested or otherwise, upon the applicant to commence or continue operating in any local jurisdiction except in accordance with all local ordinances or regulations.
(3) For purposes of this section, “notification” includes written notification or access by the department to a local jurisdiction’s registry, database, or other platform designated by a local jurisdiction, containing information specified by the department, on applicants to determine local compliance.
(h) Without limiting any other statutory exemption or categorical exemption, Division 13 (commencing with Section 21000) of the Public Resources Code does not apply to the adoption of an ordinance, rule, or regulation by a local jurisdiction that requires discretionary review and approval of permits, licenses, or other authorizations to engage in commercial cannabis activity. To qualify for this exemption, the discretionary review in any such law, ordinance, rule, or regulation shall include any applicable environmental review pursuant to Division 13 (commencing with Section 21000) of the Public Resources Code. This subdivision shall become inoperative on July 1, 2021.
(i) A local or state public agency may charge and collect a fee from a person proposing a project pursuant to subdivision (a) of Section 21089 of the Public Resources Code.
(j) This section shall remain in effect only until January 1, 2026, 2028, and as of that date is repealed.

SEC. 16.

 Section 26055 is added to the Business and Professions Code, to read:

26055.
 (a) (1) The department may issue operator licenses and unified licenses only to qualified applicants.
(2) The department may issue a premises license only to the holder of a current and valid operator license and only for a single premises permitted by the local jurisdiction pursuant to a local permit.
(b) Revocation of a state license issued under this division shall terminate the ability of the licensee to operate pursuant to that license within California until a new license is obtained.
(c) (1) A licensee shall not change or alter the premises in a manner which materially or substantially alters the premises, the usage of the premises, or the mode or character of business operation conducted from the premises, from the plan contained in the diagram on file with the application for a unified license or premises license, as applicable, unless and until written approval by the department has been obtained. For purposes of this section, material or substantial physical changes of the premises, or in the usage of the premises, shall include, but not be limited to, a substantial increase or decrease in the total area of the licensed premises previously diagrammed, or any other physical modification resulting in substantial change in the mode or character of business operation.
(2) The department shall implement a ministerial process using only fixed objective standards for the review and approval of modifications under this subdivision requested by the holder of a premises license.
(d) The department shall not approve an application for a unified license or premises license if approval of the unified license or premises license will violate the provisions of any local ordinance or regulation adopted in accordance with Section 26200.
(e) (1) An applicant for a unified license may voluntarily provide proof of a license, permit, or other authorization from the local jurisdiction verifying that the applicant is in compliance with the local jurisdiction. An applicant for a unified license that voluntarily submits a valid, unexpired license, permit, or other authorization from the local jurisdiction shall be presumed to be in compliance with all local ordinances unless the department is notified otherwise by the local jurisdiction. The department shall notify the contact person for the local jurisdiction of any applicant for a unified license that voluntarily submits a valid, unexpired license, permit, or other authorization from the local jurisdiction.
(2) An applicant for a premises license shall provide proof that the local jurisdiction has issued a local permit authorizing the applicant to engage in the subject commercial cannabis activities at the proposed location in accordance with Section 26200.
(f) (1) A local jurisdiction shall provide to the department a copy of any ordinance or regulation related to commercial cannabis activity and the name and contact information for the person who will serve as the contact for the department regarding commercial cannabis activity within the jurisdiction. If a local jurisdiction does not provide a contact person, the department shall assume that the clerk of the legislative body of the local jurisdiction is the contact person.
(2) Whenever there is a change in a local ordinance or regulation adopted pursuant to Section 26200 or a change in the contact person for the jurisdiction, the local jurisdiction shall provide that information to the department.
(g) (1) (A) The department shall deny an application for a unified license under this division for a commercial cannabis activity that the local jurisdiction has notified the department is prohibited in accordance with subdivision (f). The department shall notify the contact person for the local jurisdiction of each application denied due to the local jurisdiction’s indication that the commercial cannabis activity for which a license is sought is prohibited by a local ordinance or regulation.
(B) The department shall deny an application for issuance or renewal of a premises license if the applicant has not provided proof that the local jurisdiction has issued a local permit authorizing the applicant to engage in the subject commercial cannabis activities at the proposed location.
(2) Prior to issuing a unified license, if an applicant has not provided adequate proof of compliance with local laws pursuant to subdivision (e):
(A) The department shall notify the contact person for the local jurisdiction of the receipt of an application for commercial cannabis activity described in paragraph (56) of subdivision (a) of Section 26001 within their jurisdiction.
(B) A local jurisdiction may notify the department that the applicant is not in compliance with a local ordinance or regulation. In this instance, the department shall deny the application.
(C) A local jurisdiction may notify the department that the applicant is in compliance with all applicable local ordinances and regulations. In this instance, the department may proceed with the licensing process.
(D) If the local jurisdiction does not provide notification of compliance or noncompliance with applicable local ordinances or regulations, or otherwise does not provide notification indicating that the completion of the local permitting process is still pending, within 60 business days of receiving the inquiry from the department submitted pursuant to subparagraph (A), the department shall make a rebuttable presumption that the applicant for a unified license is in compliance with all local ordinances and regulations adopted in accordance with Section 26200, except as provided in subparagraphs (E) and (F).
(E) At any time after expiration of the 60-business-day period set forth in subparagraph (D), the local jurisdiction may provide written notification to the department that the applicant or licensee is not in compliance with a local ordinance or regulation adopted in accordance with Section 26200. Upon receiving this notification, the department shall not presume that the applicant or licensee has complied with all local ordinances and regulations adopted in accordance with Section 26200, and may commence disciplinary action in accordance with Chapter 3 (commencing with Section 26030). If the department does not take action against the licensee before the time of the renewal of the license, the license shall not be renewed until and unless the local jurisdiction notifies the department that the licensee is once again in compliance with local ordinances.
(F) A presumption by the department pursuant to this paragraph that an applicant for a unified license has complied with all local ordinances and regulations adopted in accordance with Section 26200 shall not prevent, impair, or preempt the local government from enforcing all applicable local ordinances or regulations against the applicant, nor shall the presumption confer any right, vested or otherwise, upon the applicant to commence or continue operating in any local jurisdiction except in accordance with all local ordinances or regulations.
(3) For purposes of this section, “notification” includes written notification or access by the department to a local jurisdiction’s registry, database, or other platform designated by a local jurisdiction, containing information specified by the department, on applicants to determine local compliance.
(h) A local or state public agency may charge and collect a fee from a person proposing a project pursuant to subdivision (a) of Section 21089 of the Public Resources Code.
(i) This section shall become operative January 1, 2026. 2028.

SEC. 17.

 Section 26057 of the Business and Professions Code is amended to read:

26057.
 (a) The department shall deny an application if either the applicant, or the premises for which a state license is applied, do not qualify for licensure under this division.
(b) The department may deny the application for licensure or renewal of a state license if any of the following conditions applies:
(1) Failure or inability to comply with the provisions of this division, any rule or regulation adopted pursuant to this division, or any requirement imposed to protect natural resources, including, but not limited to, protections for instream flow, water quality, and fish and wildlife.
(2) Conduct that constitutes grounds for denial of licensure under Chapter 2 (commencing with Section 480) of Division 1.5, except as otherwise specified in this section and Section 26059.
(3) Failure to provide information required by the department.
(4) The applicant, owner, or licensee has been convicted of an offense that is substantially related to the qualifications, functions, or duties of the business or profession for which the application is made, except that if the department determines that the applicant, owner, or licensee is otherwise suitable to be issued a license, and granting the license would not compromise public safety, the department shall conduct a thorough review of the nature of the crime, conviction, circumstances, and evidence of rehabilitation of the applicant or owner, and shall evaluate the suitability of the applicant, owner, or licensee to be issued a license based on the evidence found through the review. In determining which offenses are substantially related to the qualifications, functions, or duties of the business or profession for which the application is made, the department shall include, but not be limited to, the following:
(A) A violent felony conviction, as specified in subdivision (c) of Section 667.5 of the Penal Code.
(B) A serious felony conviction, as specified in subdivision (c) of Section 1192.7 of the Penal Code.
(C) A felony conviction involving fraud, deceit, or embezzlement.
(D) 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.
(E) A felony conviction for drug trafficking with enhancements pursuant to Section 11370.4 or 11379.8 of the Health and Safety Code.
(5) Except as provided in subparagraphs (D) and (E) of paragraph (4) and notwithstanding Chapter 2 (commencing with Section 480) of Division 1.5, a prior conviction, where the sentence, including any term of probation, incarceration, or supervised release, is completed, for possession, 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 licensure shall be grounds for revocation of a license or denial of the renewal of a license.
(6) The applicant, or any of its officers, directors, or owners, has been subject to fines, penalties, or otherwise been sanctioned for cultivation or production of a controlled substance on public or private lands pursuant to Section 12025 or 12025.1 of the Fish and Game Code.
(7) The applicant, or any of its officers, directors, or owners, has been sanctioned by the department, the Bureau of Cannabis Control, the Department of Food and Agriculture, or the State Department of Public Health or a city, county, or city and county for unauthorized commercial cannabis activities, has had a license suspended or revoked under this division in the three years immediately preceding the date the application is filed with the department.
(8) Failure to obtain and maintain a valid seller’s permit required pursuant to Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code.
(9) Any other condition specified in law.
(c) The withdrawal of an application for a license after it has been filed with the department shall not deprive the department 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 ground.
(d) This section shall remain in effect only until January 1, 2026, 2028, and as of that date is repealed.

SEC. 18.

 Section 26057 is added to the Business and Professions Code, to read:

26057.
 (a) The department shall deny an application for an operator license or a unified license if either the applicant, or the premises for which a unified license is applied, do not qualify for licensure under this division.
(b) The department may deny the application for licensure or renewal of a state license if any of the following conditions applies:
(1) Failure or inability to comply with the provisions of this division, any rule or regulation adopted pursuant to this division, or any requirement imposed to protect natural resources, including, but not limited to, protections for instream flow, water quality, and fish and wildlife.
(2) Conduct that constitutes grounds for denial of licensure under Chapter 2 (commencing with Section 480) of Division 1.5, except as otherwise specified in this section and Section 26059.
(3) Failure to provide information required by the department.
(4) The applicant, owner, or licensee has been convicted of an offense that is substantially related to the qualifications, functions, or duties of the business or profession for which the application is made, except that if the department determines that the applicant, owner, or licensee is otherwise suitable to be issued a license, and granting the license would not compromise public safety, the department shall conduct a thorough review of the nature of the crime, conviction, circumstances, and evidence of rehabilitation of the applicant or owner, and shall evaluate the suitability of the applicant, owner, or licensee to be issued a license based on the evidence found through the review. In determining which offenses are substantially related to the qualifications, functions, or duties of the business or profession for which the application is made, the department shall include, but not be limited to, the following:
(A) A violent felony conviction, as specified in subdivision (c) of Section 667.5 of the Penal Code.
(B) A serious felony conviction, as specified in subdivision (c) of Section 1192.7 of the Penal Code.
(C) A felony conviction involving fraud, deceit, or embezzlement.
(D) 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.
(E) A felony conviction for drug trafficking with enhancements pursuant to Section 11370.4 or 11379.8 of the Health and Safety Code.
(5) Except as provided in subparagraphs (D) and (E) of paragraph (4) and notwithstanding Chapter 2 (commencing with Section 480) of Division 1.5, a prior conviction, where the sentence, including any term of probation, incarceration, or supervised release, is completed, for possession, 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 licensure shall be grounds for revocation of a license or denial of the renewal of a license.
(6) The applicant, or any of its officers, directors, or owners, has been subject to fines, penalties, or otherwise been sanctioned for cultivation or production of a controlled substance on public or private lands pursuant to Section 12025 or 12025.1 of the Fish and Game Code.
(7) The applicant, or any of its officers, directors, or owners, has been sanctioned by the department, the Bureau of Cannabis Control, the Department of Food and Agriculture, or the State Department of Public Health or a city, county, or city and county for unauthorized commercial cannabis activities, has had a license suspended or revoked under this division in the three years immediately preceding the date the application is filed with the department.
(8) Failure to obtain and maintain a valid seller’s permit required pursuant to Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code.
(9) Any other condition specified in law.
(c) The withdrawal of an application for a license after it has been filed with the department shall not deprive the department 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 ground.
(d) This section shall become operative January 1, 2026. 2028.

SEC. 19.

 Section 26057.5 is added to the Business and Professions Code, to read:

26057.5.
 (a) An applicant for a premises license issued pursuant to this division shall do all of the following:
(1) Provide proof that the applicant holds a current and valid operator license issued pursuant to Section 26051.
(2) Provide proof that the local jurisdiction has issued a local permit authorizing the applicant to engage in the subject commercial cannabis activities at the proposed location in accordance with Section 26200.
(3) Provide evidence of the legal right to occupy and use the proposed location and provide a statement from the landowner of real property or that landowner’s agent where the commercial cannabis activity will occur, as proof to demonstrate the landowner has acknowledged and consented to permit commercial cannabis activities to be conducted on the property by the tenant applicant.
(4) Provide evidence that the proposed location is in compliance with subdivision (b) of Section 26054.
(5) Provide the applicant’s valid seller’s permit number issued pursuant to Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code or indicate that the applicant is currently applying for a seller’s permit.
(6) Include in the application a detailed description of the applicant’s operating procedures for all of the following, as required by the department:
(A) Extraction and infusion methods.
(B) The transportation process.
(C) Inventory procedures.
(D) Quality control procedures.
(E) Security protocols.
(7) Provide a complete detailed diagram of the proposed premises wherein the license privileges will be exercised, with sufficient particularity to enable ready determination of the bounds of the premises, showing all boundaries, dimensions, entrances and exits, interior partitions, walls, rooms, and common or shared entryways, and include a brief statement or description of the principal activity to be conducted therein, and, for licenses permitting cultivation, measurements of the planned canopy, including aggregate square footage and individual square footage of separate cultivation areas, if any, roads, water crossings, points of diversion, water storage, and all other facilities and infrastructure related to the cultivation.
(8) Provide any other information required by the department.
(9) Pay all applicable fees required for licensure by the department.
(b) The department shall implement a ministerial process using only fixed objective standards for the review and approval of applications for a premises license.
(c) This section shall become operative January 1, 2026. 2028.

SEC. 20.

 Section 26058 of the Business and Professions Code is amended to read:

26058.
 (a) Upon the denial of any application for a license, the department shall notify the applicant in writing. Within 30 days of service of the notice, the applicant may file a written petition for a license with the department. Upon receipt of a timely filed petition, the department shall set the petition for hearing. The hearing shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the director shall have all the powers granted therein. Any appeal from a final decision of the department shall be conducted in accordance with Chapter 4 (commencing with Section 26040).
(b) This section shall remain in effect only until January 1, 2026, 2028, and as of that date is repealed.

SEC. 21.

 Section 26058 is added to the Business and Professions Code, to read:

26058.
 (a) Upon the denial of any application for an operator license or a unified license, the department shall notify the applicant in writing. Within 30 days of service of the notice, the applicant may file a written petition for a license with the department. Upon receipt of a timely filed petition, the department shall set the petition for hearing. The hearing shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the director shall have all the powers granted therein. Any appeal from a final decision of the department shall be conducted in accordance with Chapter 4 (commencing with Section 26040).
(b) This section shall become operative January 1, 2026. 2028.

SEC. 22.

 Section 26070 of the Business and Professions Code is amended to read:

26070.
 Retailers, Distributors, and Microbusinesses.
(a) State licenses to be issued by the department related to the sale and distribution of cannabis and cannabis products are as follows:
(1) A retailer shall have a licensed premises which is a physical location from which commercial cannabis activities are conducted. A retailer’s premises may be closed to the public. A retailer may conduct sales exclusively by delivery.
(2) A distributor licensee shall be bonded and insured at a minimum level established by the department.
(3) (A) Microbusiness licenses that authorize cultivation of cannabis shall include the license conditions described in subdivision (b) of Section 26060.1.
(B)  The department shall establish a process by which an applicant for a microbusiness license can demonstrate compliance with all the requirements under this division for the activities that will be conducted under the license.
(b) The department shall establish minimum security and transportation safety requirements for the commercial distribution and delivery of cannabis and cannabis products. Except as provided in subdivision (d) of Section 26110, the transportation of cannabis and cannabis products shall only be conducted by persons holding a distributor license under this division or employees of those persons. Transportation safety standards established by the department shall include, but not be limited to, minimum standards governing the types of vehicles in which cannabis and cannabis products may be distributed and delivered and minimum qualifications for persons eligible to operate such vehicles.
(c) The driver of a vehicle transporting or transferring cannabis or cannabis products shall be directly employed by a licensee authorized to transport or transfer cannabis or cannabis products.
(d) Notwithstanding any other law, all vehicles transporting cannabis and cannabis products for hire shall be required to have a valid motor carrier permit pursuant to Chapter 2 (commencing with Section 34620) of Division 14.85 of the Vehicle Code. The Department of the California Highway Patrol shall have authority over the safe operation of these vehicles, including, but not limited to, requiring licensees engaged in the transportation of cannabis or cannabis products to participate in the Basic Inspection of Terminals (BIT) program pursuant to Section 34501.12 of the Vehicle Code.
(e) Prior to transporting cannabis or cannabis products, a licensed distributor shall do both of the following:
(1) Complete an electronic shipping manifest as prescribed by the department. The shipping manifest shall include the unique identifier, pursuant to Section 26067, issued by the department for the cannabis product.
(2) Securely transmit the manifest to the department and the licensee that will receive the cannabis product.
(f) During transportation, the licensed distributor shall maintain a physical copy of the shipping manifest and make it available upon request to agents of the department and law enforcement officers.
(g) The licensee receiving the shipment shall maintain each electronic shipping manifest and shall make it available upon request to the department and any law enforcement officers.
(h) Upon receipt of the transported shipment, the licensee receiving the shipment shall submit to the department a record verifying receipt of the shipment and the details of the shipment.
(i) Transporting, or arranging for or facilitating the transport of, cannabis or cannabis products in violation of this chapter is grounds for disciplinary action against the license.
(j) Licensed retailers and microbusinesses, and licensed nonprofits under Section 26070.5, shall implement security measures reasonably designed to prevent unauthorized entrance into areas containing cannabis or cannabis products and theft of cannabis or cannabis products from the premises. These security measures shall include, but not be limited to, all of the following:
(1) Prohibiting individuals from remaining on the licensee’s premises if they are not engaging in activity expressly related to the operations of the retailer.
(2) Establishing limited access areas accessible only to authorized personnel.
(3) Other than limited amounts of cannabis used for display purposes, samples, or immediate sale, storing all finished cannabis and cannabis products in a secured and locked room, safe, or vault, and in a manner reasonably designed to prevent diversion, theft, and loss.
(k) A retailer shall notify the department and the appropriate law enforcement authorities within 24 hours after discovering any of the following:
(1) Significant discrepancies identified during inventory. The level of significance shall be determined by the department.
(2) Diversion, theft, loss, or any criminal activity pertaining to the operation of the retailer.
(3) Diversion, theft, loss, or any criminal activity by any agent or employee of the retailer pertaining to the operation of the retailer.
(4) The loss or unauthorized alteration of records related to cannabis or cannabis products, registered qualifying patients, primary caregivers, or retailer employees or agents.
(5) Any other breach of security.
(l) This section shall remain in effect only until January 1, 2026, 2028, and as of that date is repealed.

SEC. 23.

 Section 26070 is added to the Business and Professions Code, to read:

26070.
 Retailers, Distributors, and Microbusinesses.
(a) State licenses to be issued by the department related to the sale and distribution of cannabis and cannabis products are as follows:
(1) A retailer shall obtain a premises license for a premises which is a physical location from which commercial cannabis activities are conducted. A retailer’s premises may be closed to the public. A retailer may conduct sales exclusively by delivery.
(2) A distributor shall be bonded and insured at a minimum level established by the department.
(3) (A) Microbusiness licenses that authorize cultivation of cannabis shall be unified licenses and shall include the license conditions described in subdivision (b) of Section 26060.1.
(B)  The department shall establish a process by which an applicant for a microbusiness license can demonstrate compliance with all the requirements under this division for the activities that will be conducted under the license.
(b) The department shall establish minimum security and transportation safety requirements for the commercial distribution and delivery of cannabis and cannabis products. Except as provided in subdivision (d) of Section 26110, the transportation of cannabis and cannabis products shall only be conducted by persons holding a Type 11—Distributor license under this division the holder of a distributor license or a microbusiness license authorizing distribution or employees of those persons. Transportation safety standards established by the department shall include, but not be limited to, minimum standards governing the types of vehicles in which cannabis and cannabis products may be distributed and delivered and minimum qualifications for persons eligible to operate such vehicles.
(c) The driver of a vehicle transporting or transferring cannabis or cannabis products shall be directly employed by a licensee authorized to transport or transfer cannabis or cannabis products.
(d) Notwithstanding any other law, all vehicles transporting cannabis and cannabis products for hire shall be required to have a valid motor carrier permit pursuant to Chapter 2 (commencing with Section 34620) of Division 14.85 of the Vehicle Code. The Department of the California Highway Patrol shall have authority over the safe operation of these vehicles, including, but not limited to, requiring licensees engaged in the transportation of cannabis or cannabis products to participate in the Basic Inspection of Terminals (BIT) program pursuant to Section 34501.12 of the Vehicle Code.
(e) Prior to transporting cannabis or cannabis products, a licensed distributor shall do both of the following:
(1) Complete an electronic shipping manifest as prescribed by the department. The shipping manifest shall include the unique identifier, pursuant to Section 26067, issued by the department for the cannabis product.
(2) Securely transmit the manifest to the department and the licensee that will receive the cannabis product.
(f) During transportation, the licensed distributor shall maintain a physical copy of the shipping manifest and make it available upon request to agents of the department and law enforcement officers.
(g) The licensee receiving the shipment shall maintain each electronic shipping manifest and shall make it available upon request to the department and any law enforcement officers.
(h) Upon receipt of the transported shipment, the licensee receiving the shipment shall submit to the department a record verifying receipt of the shipment and the details of the shipment.
(i) Transporting, or arranging for or facilitating the transport of, cannabis or cannabis products in violation of this chapter is grounds for disciplinary action against the license.
(j) Licensed retailers and microbusinesses, and licensed nonprofits under Section 26070.5, shall implement security measures reasonably designed to prevent unauthorized entrance into areas containing cannabis or cannabis products and theft of cannabis or cannabis products from the premises. These security measures shall include, but not be limited to, all of the following:
(1) Prohibiting individuals from remaining on the licensee’s premises if they are not engaging in activity expressly related to the operations of the retailer.
(2) Establishing limited access areas accessible only to authorized personnel.
(3) Other than limited amounts of cannabis used for display purposes, samples, or immediate sale, storing all finished cannabis and cannabis products in a secured and locked room, safe, or vault, and in a manner reasonably designed to prevent diversion, theft, and loss.
(k) A retailer shall notify the department and the appropriate law enforcement authorities within 24 hours after discovering any of the following:
(1) Significant discrepancies identified during inventory. The level of significance shall be determined by the department.
(2) Diversion, theft, loss, or any criminal activity pertaining to the operation of the retailer.
(3) Diversion, theft, loss, or any criminal activity by any agent or employee of the retailer pertaining to the operation of the retailer.
(4) The loss or unauthorized alteration of records related to cannabis or cannabis products, registered qualifying patients, primary caregivers, or retailer employees or agents.
(5) Any other breach of security.
(l) This section shall become operative January 1, 2026. 2028.

SEC. 24.

 Section 26130 of the Business and Professions Code is amended to read:

26130.
 (a) The department shall promulgate regulations governing the licensing of cannabis manufacturers and standards for the manufacturing, packaging, and labeling of all manufactured cannabis products. Licenses to be issued are as follows:
(1) “Manufacturing Level 1,” for sites that manufacture cannabis products using nonvolatile solvents, or no solvents.
(2) “Manufacturing Level 2,” for sites that manufacture cannabis products using volatile solvents.
(b) For purposes of this section, “volatile solvents” shall have the same meaning as in paragraph (3) of subdivision (b) of Section 11362.3 of the Health and Safety Code, unless otherwise provided by law or regulation.
(c) Edible cannabis products shall be:
(1) Not designed to be appealing to children or easily confused with commercially sold candy or foods that do not contain cannabis.
(2) Produced and sold with a standardized concentration of cannabinoids not to exceed 10 milligrams tetrahydrocannabinol (THC) per serving.
(3) Delineated or scored into standardized serving sizes if the cannabis product contains more than one serving and is an edible cannabis product in solid form.
(4) Homogenized to ensure uniform disbursement of cannabinoids throughout the product.
(5) Manufactured and sold under sanitation standards established by the department that are similar to the standards for preparation, storage, handling, and sale of food products.
(6) Provided to customers with sufficient information to enable the informed consumption of the product, including the potential effects of the cannabis product and directions as to how to consume the cannabis product, as necessary.
(7) Marked with a universal symbol, as determined by the department through regulation.
(d) Cannabis, including concentrated cannabis, included in a cannabis product manufactured in compliance with law is not considered an adulterant under state law.
(e) (1) If the cannabis product is intended for therapeutic effect or health supplementation use on, or for consumption by, an animal, the cannabis product shall also conform with any additional relevant standards, including, but not limited to, an alternative standardized concentration, established by the department through regulations.
(2) The department shall promulgate regulations for animal product standards no later than July 1, 2025. Cannabis products shall not be marketed or sold for use on, or consumption by, animals before these regulations for animal standards take effect.
(f) This section shall remain in effect only until January 1, 2026, 2028, and as of that date is repealed.

SEC. 25.

 Section 26130 is added to the Business and Professions Code, to read:

26130.
 (a) The department shall promulgate regulations governing the licensing of cannabis manufacturing and standards for the manufacturing, packaging, and labeling of all manufactured cannabis products. Regulations governing the issuance of premises licenses for premises in which manufacturing activities occur shall be consistent with Section 26057.5. Premises licenses to be issued are as follows:
(1) “Manufacturing Level 1,” for sites that manufacture cannabis products using nonvolatile solvents, or no solvents.
(2) “Manufacturing Level 2,” for sites that manufacture cannabis products using volatile solvents.
(b) For purposes of this section, “volatile solvents” shall have the same meaning as in paragraph (3) of subdivision (b) of Section 11362.3 of the Health and Safety Code, unless otherwise provided by law or regulation.
(c) Edible cannabis products shall be:
(1) Not designed to be appealing to children or easily confused with commercially sold candy or foods that do not contain cannabis.
(2) Produced and sold with a standardized concentration of cannabinoids not to exceed 10 milligrams tetrahydrocannabinol (THC) per serving.
(3) Delineated or scored into standardized serving sizes if the cannabis product contains more than one serving and is an edible cannabis product in solid form.
(4) Homogenized to ensure uniform disbursement of cannabinoids throughout the product.
(5) Manufactured and sold under sanitation standards established by the department that are similar to the standards for preparation, storage, handling, and sale of food products.
(6) Provided to customers with sufficient information to enable the informed consumption of the product, including the potential effects of the cannabis product and directions as to how to consume the cannabis product, as necessary.
(7) Marked with a universal symbol, as determined by the department through regulation.
(d) Cannabis, including concentrated cannabis, included in a cannabis product manufactured in compliance with law is not considered an adulterant under state law.
(e) (1) If the cannabis product is intended for therapeutic effect or health supplementation use on, or for consumption by, an animal, the cannabis product shall also conform with any additional relevant standards, including, but not limited to, an alternative standardized concentration, established by the department through regulations.
(2) The department shall promulgate regulations for animal product standards. Cannabis products shall not be marketed or sold for use on, or consumption by, animals before these regulations for animal standards take effect.
(f) This section shall become operative January 1, 2026. 2028.

SEC. 26.

 Section 26151 of the Business and Professions Code is amended to read:

26151.
 (a) (1) All advertisements and marketing shall accurately and legibly identify the licensee responsible for its content, by adding, at a minimum, the licensee’s license number.
(2) A technology platform shall not display an advertisement by a licensee on an internet website unless the advertisement displays the license number of the licensee.
(3) An outdoor advertising company subject to the Outdoor Advertising Act (Chapter 2 (commencing with Section 5200) of Division 3) shall not display an advertisement by a licensee unless the advertisement displays the license number of the licensee.
(b) Any advertising or marketing placed in broadcast, cable, radio, print, and digital communications shall only be displayed where at least 71.6 percent of the audience is reasonably expected to be 21 years of age or older, as determined by reliable, up-to-date audience composition data.
(c) Any advertising or marketing involving direct, individualized communication or dialogue controlled by the licensee shall utilize a method of age affirmation to verify that the recipient is 21 years of age or older before engaging in that communication or dialogue controlled by the licensee. For purposes of this section, that method of age affirmation may include user confirmation, birth date disclosure, or other similar registration method.
(d) All advertising shall be truthful and appropriately substantiated.
(e) This section shall remain in effect only until January 1, 2026, 2028, and as of that date is repealed.

SEC. 27.

 Section 26151 is added to the Business and Professions Code, to read:

26151.
 (a) (1) All advertisements and marketing shall accurately and legibly identify the licensee responsible for its content, by adding, at a minimum, the licensee’s operator license number or unified license number.
(2) A technology platform shall not display an advertisement by a licensee on an internet website unless the advertisement displays the license number of the licensee.
(3) An outdoor advertising company subject to the Outdoor Advertising Act (Chapter 2 (commencing with Section 5200) of Division 3) shall not display an advertisement by a licensee unless the advertisement displays the license number of the licensee.
(b) Any advertising or marketing placed in broadcast, cable, radio, print, and digital communications shall only be displayed where at least 71.6 percent of the audience is reasonably expected to be 21 years of age or older, as determined by reliable, up-to-date audience composition data.
(c) Any advertising or marketing involving direct, individualized communication or dialogue controlled by the licensee shall utilize a method of age affirmation to verify that the recipient is 21 years of age or older before engaging in that communication or dialogue controlled by the licensee. For purposes of this section, that method of age affirmation may include user confirmation, birth date disclosure, or other similar registration method.
(d) All advertising shall be truthful and appropriately substantiated.
(e) This section shall become operative January 1, 2026. 2028.

SEC. 28.

 Section 26160 of the Business and Professions Code is amended to read:

26160.
 (a) A licensee shall keep accurate records of commercial cannabis activity.
(b) All records related to commercial cannabis activity as defined by the department shall be maintained for a minimum of seven years.
(c) The department may examine the records of a licensee and inspect the premises of a licensee as the department, or a state or local agency, deems necessary to perform its duties under this division. All inspections and examinations of records shall be conducted during standard business hours of the licensed facility or at any other reasonable time. Licensees shall provide and deliver records to the department upon request.
(d) Licensees shall keep records identified by the department on the premises of the location licensed. The department may make any examination of the records of any licensee. Licensees shall also provide and deliver copies of documents to the department upon request.
(e) A licensee, or its agent or employee, that refuses, impedes, obstructs, or interferes with an inspection of the premises or records of the licensee pursuant to this section, has engaged in a violation of this division.
(f) If a licensee, or an agent or employee of a licensee, fails to maintain or provide the records required pursuant to this section, the licensee shall be subject to a citation and fine of up to thirty thousand dollars ($30,000) per individual violation.
(g) This section shall remain in effect only until January 1, 2026, 2028, and as of that date is repealed.

SEC. 29.

 Section 26160 is added to the Business and Professions Code, to read:

26160.
 (a) A licensee shall keep accurate records of commercial cannabis activity.
(b) All records related to commercial cannabis activity as defined by the department shall be maintained for a minimum of seven years.
(c) The department may examine the records of a licensee and inspect any premises of a licensee or an operator license holder’s principal place of business as the department, or a state or local agency, deems necessary to perform its duties under this division. All inspections and examinations of records shall be conducted during standard business hours of the licensed premises or at any other reasonable time. Licensees shall provide and deliver records to the department upon request.
(d) The holder of any unified license or premises license shall keep records identified by the department on the premises of the location licensed. The holder of an operator license who does not also hold a current and valid premises license shall keep records identified by the department at the physical address of the licensee’s principal place of business set forth in the application for licensure under this division. The department may make any examination of the records of any licensee. Licensees shall also provide and deliver copies of documents to the department upon request.
(e) A licensee, or its agent or employee, that refuses, impedes, obstructs, or interferes with an inspection of the premises or records of the licensee pursuant to this section, has engaged in a violation of this division.
(f) If a licensee, or an agent or employee of a licensee, fails to maintain or provide the records required pursuant to this section, the licensee shall be subject to a citation and fine of up to thirty thousand dollars ($30,000) per individual violation.
(g) This section shall become operative January 1, 2026. 2028.

SEC. 30.

 Section 26200 of the Business and Professions Code is amended to read:

26200.
 (a) (1) Except as set forth in the Medicinal Cannabis Patients’ Right of Access Act (Chapter 26 (commencing with Section 26320)), this division shall not be interpreted to supersede or limit the authority of a local jurisdiction to adopt and enforce local ordinances to regulate businesses licensed under this division, including, but not limited to, local zoning and land use requirements, business license requirements, and requirements related to reducing exposure to secondhand smoke, or to completely prohibit the establishment or operation of one or more types of businesses licensed under this division within the local jurisdiction.
(2) Except as set forth in the Medicinal Cannabis Patients’ Right of Access Act (Chapter 26 (commencing with Section 26320)), this division shall not be interpreted to supersede or limit existing local authority for law enforcement activity, enforcement of local zoning requirements or local ordinances, or enforcement of local license, permit, or other authorization requirements.
(b) This division shall not be interpreted to require the department to undertake local law enforcement responsibilities, enforce local zoning requirements, or enforce local licensing, permitting, or other authorization requirements.
(c) A local jurisdiction shall notify the department upon revocation of any local license, permit, or authorization for a licensee to engage in commercial cannabis activity within the local jurisdiction. Within 60 days of being so informed, the department shall begin the process to determine whether a license issued to the licensee should be suspended or revoked pursuant to Chapter 3 (commencing with Section 26030).
(d) For facilities issued a state license that are located within the incorporated area of a city, the city shall have full power and authority to enforce this division and the regulations promulgated by the department, if delegated by the state. Notwithstanding Sections 101375, 101400, and 101405 of the Health and Safety Code or any contract entered into pursuant thereto, or any other law, the city shall assume complete responsibility for any regulatory function pursuant to this division within the city limits that would otherwise be performed by the county or any county officer or employee, including a county health officer, without liability, cost, or expense to the county.
(e) (1) This division does not prohibit the issuance of a state temporary event license to a licensee authorizing onsite cannabis sales to, and consumption by, persons 21 years of age or older at a county fair event, district agricultural association event, or at another venue expressly approved by a local jurisdiction for the purpose of holding temporary events of this nature, provided that the activities, at a minimum, comply with all the following:
(A) The requirements of paragraphs (1) to (3), inclusive, of subdivision (g).
(B) All participants who are engaged in the onsite retail sale of cannabis or cannabis products at the event are licensed under this division to engage in that activity.
(C) The activities are otherwise consistent with regulations promulgated and adopted by the department governing state temporary event licenses, except as otherwise provided in paragraphs (6), (7), and (8).
(D) A state temporary event license shall only be issued in local jurisdictions that authorize such events.
(E) A licensee who submits an application for a state temporary event license shall, 60 days before the event, provide to the department a list of all licensees that will be providing onsite sales of cannabis or cannabis products at the event. If any changes occur in that list, the licensee shall provide the department with a final updated list to reflect those changes. A person shall not engage in the onsite retail sale of cannabis or cannabis products, or in any way participate in the event, who is not included in the list, including any updates, provided to the department.
(2) The department may impose a civil penalty on any person who violates this subdivision, or any regulations adopted by the department governing state temporary event licenses, in an amount up to three times the amount of the license fee for each violation, consistent with Sections 26018 and 26038.
(3) The department may require the event and all participants to cease operations without delay if in the opinion of the department or local law enforcement it is necessary to protect the immediate public health and safety of the people of the state. The department may also require the event organizer to immediately expel from the event any participant selling cannabis or cannabis products without a license from the department that authorizes the participant to sell cannabis or cannabis products. If the unlicensed participant does not leave the event, the department may require the event and all participants to cease operations immediately.
(4) The order by the department for the event to cease operations pursuant to paragraph (3) does not entitle the event organizer or any participant in the event to a hearing or an appeal of the decision. Chapter 3 (commencing with Section 490) of Division 1.5 and Chapter 4 (commencing with Section 26040) of this division shall not apply to the order by the department for the event to cease operations pursuant to paragraph (3).
(5) The smoking of cannabis or cannabis products at temporary events authorized pursuant to this subdivision is prohibited in locations where smoking is prohibited. For purposes of this section, “smoking” has the same meaning as defined in subdivision (c) of Section 22950.5.
(6) (A) All licensees who are issued a state temporary event license allowed pursuant to this subdivision may, upon completion or cessation of the temporary event, reconcile unsold inventory of cannabis or cannabis products and return it to the licensee’s retail premises.
(B) All unsold inventory of cannabis or cannabis products from the temporary event shall be noted in track and trace prior to transport.
(C) All unsold inventory of cannabis or cannabis products from the temporary event shall be in its original packaging in which it was placed pursuant to Chapter 12 (commencing with Section 26120).
(7) The inventory of cannabis or cannabis products authorized to be sold by a state temporary event license pursuant to this subdivision shall only be transported to and from the temporary event by a licensed distributor or licensed microbusiness.
(8) The department shall not deny an application for a state temporary event license pursuant to this subdivision solely on the basis that there is a license issued pursuant to the Alcoholic Beverage Control Act (Division 9 (commencing with Section 23000)) for the proposed premises of the event. Furthermore, the Department of Alcoholic Beverage Control shall not take any disciplinary action against a person licensed pursuant to the Alcoholic Beverage Control Act on the basis of a state temporary event license issued by the department to a licensee pursuant to this subdivision that utilizes the same premises as the person licensed pursuant to the Alcoholic Beverage Control Act.
(A) All on- and off-sale privileges of alcoholic beverages at the venue shall be suspended for the day of the event and shall not resume until 6 a.m. on the day after the event has ended.
(B) Alcohol consumption on the venue premises shall be strictly prohibited for the day of the event and shall not resume until 6 a.m. on the day after the event has ended.
(f) This division, or any regulations promulgated thereunder, shall not be deemed to limit the authority or remedies of a city, county, or city and county under any provision of law, including, but not limited to, Section 7 of Article XI of the California Constitution.
(g) Notwithstanding paragraph (1) of subdivision (a) of Section 11362.3 of the Health and Safety Code, a local jurisdiction may allow for the smoking, vaporizing, and ingesting of cannabis or cannabis products on the premises of a retailer or microbusiness licensed under this division if all of the following are met:
(1) Access to the area where cannabis consumption is allowed is restricted to persons 21 years of age or older.
(2) Cannabis consumption is not visible from any public place or nonage-restricted area.
(3) Sale or consumption of alcohol or tobacco is not allowed on the premises.
(h) This division shall not be interpreted to supersede Section 6404.5 of the Labor Code.
(i) This section does not alter or affect the prohibition on the sale of alcoholic beverages by a licensee, as provided in Section 26054, on or at a venue premises licensed under this division.
(j) This section shall remain in effect only until January 1, 2026, 2028, and as of that date is repealed.

SEC. 31.

 Section 26200 is added to the Business and Professions Code, to read:

26200.
 (a) (1) Except as set forth in the Medicinal Cannabis Patients’ Right of Access Act (Chapter 26 (commencing with Section 26320)), this division shall not be interpreted to supersede or limit the authority of a local jurisdiction to adopt and enforce local ordinances to regulate businesses licensed under this division, including, but not limited to, local zoning and land use requirements, business license requirements, and requirements related to reducing exposure to secondhand smoke, or to completely prohibit the establishment or operation of one or more types of businesses licensed under this division within the local jurisdiction.
(2) Except as set forth in the Medicinal Cannabis Patients’ Right of Access Act (Chapter 26 (commencing with Section 26320)), this division shall not be interpreted to supersede or limit existing local authority for law enforcement activity, enforcement of local zoning requirements or local ordinances, or enforcement of local license, permit, or other authorization requirements.
(b) This division shall not be interpreted to require the department to undertake local law enforcement responsibilities, enforce local zoning requirements, or enforce local licensing, permitting, or other authorization requirements.
(c) A local jurisdiction shall notify the department upon revocation of any local license, permit, or authorization for a licensee to engage in commercial cannabis activity within the local jurisdiction. Within 60 days of being so informed, the department shall begin the process to determine whether a license issued to the licensee should be suspended or revoked pursuant to Chapter 3 (commencing with Section 26030).
(d) For facilities issued a state license that are located within the incorporated area of a city, the city shall have full power and authority to enforce this division and the regulations promulgated by the department, if delegated by the state. Notwithstanding Sections 101375, 101400, and 101405 of the Health and Safety Code or any contract entered into pursuant thereto, or any other law, the city shall assume complete responsibility for any regulatory function pursuant to this division within the city limits that would otherwise be performed by the county or any county officer or employee, including a county health officer, without liability, cost, or expense to the county.
(e) (1) This division does not prohibit the issuance of a state temporary event license to the holder of an operator license authorizing onsite cannabis sales to, and consumption by, persons 21 years of age or older at a county fair event, district agricultural association event, or at another venue expressly approved by a local jurisdiction for the purpose of holding temporary events of this nature, provided that the activities, at a minimum, comply with all of the following:
(A) The requirements of paragraphs (1) to (3), inclusive, of subdivision (g).
(B) All participants who are engaged in the onsite retail sale of cannabis or cannabis products at the event hold an operator license under this division.
(C) The activities are otherwise consistent with regulations promulgated and adopted by the department governing state temporary event licenses, except as otherwise provided in paragraphs (6), (7), and (8).
(D) A state temporary event license shall only be issued in local jurisdictions that authorize such events.
(E) A licensee who submits an application for a state temporary event license shall, 60 days before the event, provide to the department a list of all licensees that will be providing onsite sales of cannabis or cannabis products at the event. If any changes occur in that list, the licensee shall provide the department with a final updated list to reflect those changes. A person shall not engage in the onsite retail sale of cannabis or cannabis products, or in any way participate in the event, who is not included in the list, including any updates, provided to the department.
(2) The department may impose a civil penalty on any person who violates this subdivision, or any regulations adopted by the department governing state temporary event licenses, in an amount up to three times the amount of the license fee for each violation, consistent with Sections 26018 and 26038.
(3) The department may require the event and all participants to cease operations without delay if in the opinion of the department or local law enforcement it is necessary to protect the immediate public health and safety of the people of the state. The department may also require the event organizer to immediately expel from the event any participant selling cannabis or cannabis products without a license from the department that authorizes the participant to sell cannabis or cannabis products. If the unlicensed participant does not leave the event, the department may require the event and all participants to cease operations immediately.
(4) The order by the department for the event to cease operations pursuant to paragraph (3) does not entitle the event organizer or any participant in the event to a hearing or an appeal of the decision. Chapter 3 (commencing with Section 490) of Division 1.5 and Chapter 4 (commencing with Section 26040) of this division shall not apply to the order by the department for the event to cease operations pursuant to paragraph (3).
(5) The smoking of cannabis or cannabis products at temporary events authorized pursuant to this subdivision is prohibited in locations where smoking is prohibited. For purposes of this section, “smoking” has the same meaning as defined in subdivision (c) of Section 22950.5.
(6) (A) All licensees who are issued a state temporary event license allowed pursuant to this subdivision may, upon completion or cessation of the temporary event, reconcile unsold inventory of cannabis or cannabis products and return it to the licensee’s retail premises.
(B) All unsold inventory of cannabis or cannabis products from the temporary event shall be noted in track and trace prior to transport.
(C) All unsold inventory of cannabis or cannabis products from the temporary event shall be in its original packaging in which it was placed pursuant to Chapter 12 (commencing with Section 26120).
(7) The inventory of cannabis or cannabis products authorized to be sold by a state temporary event license pursuant to this subdivision shall only be transported to and from the temporary event by the holder of a distributor license or a microbusiness license authorizing distribution.
(8) The department shall not deny an application for a state temporary event license pursuant to this subdivision solely on the basis that there is a license issued pursuant to the Alcoholic Beverage Control Act (Division 9 (commencing with Section 23000)) for the proposed premises of the event. Furthermore, the Department of Alcoholic Beverage Control shall not take any disciplinary action against a person licensed pursuant to the Alcoholic Beverage Control Act on the basis of a state temporary event license issued by the department to a licensee pursuant to this subdivision that utilizes the same premises as the person licensed pursuant to the Alcoholic Beverage Control Act.
(A) All on- and off-sale privileges of alcoholic beverages at the venue shall be suspended for the day of the event and shall not resume until 6 a.m. on the day after the event has ended.
(B) Alcohol consumption on the venue premises shall be strictly prohibited for the day of the event and shall not resume until 6 a.m. on the day after the event has ended.
(f) This division, or any regulations promulgated thereunder, shall not be deemed to limit the authority or remedies of a city, county, or city and county under any provision of law, including, but not limited to, Section 7 of Article XI of the California Constitution.
(g) Notwithstanding paragraph (1) of subdivision (a) of Section 11362.3 of the Health and Safety Code, a local jurisdiction may allow for the smoking, vaporizing, and ingesting of cannabis or cannabis products on the premises of a retailer or microbusiness licensed under this division if all of the following are met:
(1) Access to the area where cannabis consumption is allowed is restricted to persons 21 years of age or older.
(2) Cannabis consumption is not visible from any public place or nonage-restricted area.
(3) Sale or consumption of alcohol or tobacco is not allowed on the premises.
(h) This division shall not be interpreted to supersede Section 6404.5 of the Labor Code.
(i) This section does not alter or affect the prohibition on the sale of alcoholic beverages by a licensee, as provided in Section 26054, on or at a venue premises licensed under this division.
(j) This section shall become operative January 1, 2026. 2028.

SEC. 32.

 Section 26223 of the Business and Professions Code is amended to read:

26223.
 (a) Three or more natural persons, who are engaged in the cultivation of any cannabis product, may form an association pursuant to this chapter for the purpose of engaging in any activity in connection with any of the following:
(1) The cultivation, marketing, or selling of the cannabis products of its members.
(2) The growing, harvesting, curing, drying, trimming, packing, grading, storing, or handling of any product of its members.
(3) The manufacturing, selling, or supplying to its members of machinery, equipment, or supplies.
(4) The financing of the activities that are specified by this section.
(b) Members of a cannabis cooperative shall be disclosed to the department before the application is processed.
(c) Members of a cannabis cooperative formed pursuant to this chapter shall be limited to cultivators who only hold a single Type 1 or Type 2 license.
(d) Collectively, members of a cannabis cooperative shall not grow more than four acres of total canopy size of cultivation throughout the state during the period that the respective licensees are valid.
(e) No member of a cooperative formed pursuant to this section shall be licensed to operate a cannabis business in another state or country.
(f) This section shall remain in effect only until January 1, 2026, 2028, and as of that date is repealed.

SEC. 33.

 Section 26223 is added to the Business and Professions Code, to read:

26223.
 (a) Three or more natural persons, who are engaged in the cultivation of any cannabis product, may form an association pursuant to this chapter for the purpose of engaging in any activity in connection with any of the following:
(1) The cultivation, marketing, or selling of the cannabis products of its members.
(2) The growing, harvesting, curing, drying, trimming, packing, grading, storing, or handling of any product of its members.
(3) The manufacturing, selling, or supplying to its members of machinery, equipment, or supplies.
(4) The financing of the activities that are specified by this section.
(b) Members of a cannabis cooperative shall be disclosed to the department before the application is processed.
(c) Members of a cannabis cooperative formed pursuant to this chapter shall be limited to cultivators who only hold a single Type 1 or Type 2 unified license.
(d) Collectively, members of a cannabis cooperative shall not grow more than four acres of total canopy size of cultivation throughout the state during the period that the respective licensees are valid.
(e) No member of a cooperative formed pursuant to this section shall be licensed to operate a cannabis business in another state or country.
(f) This section shall become operative January 1, 2026. 2028.

SEC. 34.

 Section 26240 of the Business and Professions Code is amended to read:

26240.
 For purposes of this chapter, the following definitions apply:
(a) “Eligible local jurisdiction” means a local jurisdiction that demonstrates an intent to develop a local program or that has adopted or operates a local equity program.
(b) “Equity assessment” means an assessment conducted by the local jurisdiction that was used to inform the creation of a local equity program, and that assessment may include the following:
(1) Reference to local historical rates of arrests or convictions for cannabis law violations.
(2) Identification of the impacts that cannabis-related policies have had historically on communities and populations within that local jurisdiction.
(3) Other information that demonstrates how individuals and communities within the local jurisdiction have been disproportionately or negatively impacted by the War on Drugs.
(c) “Local equity applicant” means an applicant who has submitted, or will submit, an application to a local jurisdiction to engage in commercial cannabis activity within the jurisdictional boundaries of that jurisdiction and who meets the requirements of that jurisdiction’s local equity program.
(d) “Local equity licensee” means a person who has obtained a license from a local jurisdiction to engage in commercial cannabis activity within the jurisdictional boundaries of that jurisdiction and who meets the requirements of that jurisdiction’s local equity program.
(e) “Local equity program” means a program adopted or operated by a local jurisdiction that focuses on inclusion and support of individuals and communities in California’s cannabis industry who are linked to populations or neighborhoods that were negatively or disproportionately impacted by cannabis criminalization as evidenced by the local jurisdiction’s equity assessment. Local equity programs may include, but are not limited to, the following types of services:
(1) Small business support services offering technical assistance or professional and mentorship services to those persons from economically disadvantaged communities that experience high rates of poverty or communities most harmed by cannabis prohibition, determined by historically high rates of arrests or convictions for cannabis law violations.
(2) Tiered fees or fee waivers for cannabis-related permits and licenses.
(3) Assistance in paying state regulatory and licensing fees.
(4) Assistance securing business locations prior to or during the application process.
(5) Assistance securing capital investments or direct access to capital.
(6) Assistance with regulatory compliance.
(7) Assistance in recruitment, training, and retention of a qualified and diverse workforce, including transitional workers.
(8) Other services deemed by the Governor’s Office of Business and Economic Development to be consistent with the intent of this chapter.
(f) “Transitional worker” means a person who, at the time of starting employment at the business premises, resides in a ZIP Code or census tract area with higher than average unemployment, crime, or child death rates, and faces at least one of the following barriers to employment: (1) is homeless; (2) is a custodial single parent; (3) is receiving public assistance; (4) lacks a GED or high school diploma; (5) has a criminal record or other involvement with the criminal justice system; (6) suffers from chronic unemployment; (7) is emancipated from the foster care system; (8) is a veteran; or (9) is over 65 years of age and is financially compromised.
(g) This section shall remain in effect only until January 1, 2026, 2028, and as of that date is repealed.

SEC. 35.

 Section 26240 is added to the Business and Professions Code, to read:

26240.
 For purposes of this chapter, the following definitions apply:
(a) “Eligible local jurisdiction” means a local jurisdiction that demonstrates an intent to develop a local program or that has adopted or operates a local equity program.
(b) “Equity assessment” means an assessment conducted by the local jurisdiction that was used to inform the creation of a local equity program, and that assessment may include the following:
(1) Reference to local historical rates of arrests or convictions for cannabis law violations.
(2) Identification of the impacts that cannabis-related policies have had historically on communities and populations within that local jurisdiction.
(3) Other information that demonstrates how individuals and communities within the local jurisdiction have been disproportionately or negatively impacted by the War on Drugs.
(c) “Local equity applicant” means an applicant who has submitted, or will submit, an application to a local jurisdiction to engage in commercial cannabis activity within the jurisdictional boundaries of that jurisdiction and who meets the requirements of that jurisdiction’s local equity program.
(d) “Local equity licensee” means a person who has obtained a local permit from a local jurisdiction to engage in commercial cannabis activity within the jurisdictional boundaries of that jurisdiction and who meets the requirements of that jurisdiction’s local equity program.
(e) “Local equity program” means a program adopted or operated by a local jurisdiction that focuses on inclusion and support of individuals and communities in California’s cannabis industry who are linked to populations or neighborhoods that were negatively or disproportionately impacted by cannabis criminalization as evidenced by the local jurisdiction’s equity assessment. Local equity programs may include, but are not limited to, the following types of services:
(1) Small business support services offering technical assistance or professional and mentorship services to those persons from economically disadvantaged communities that experience high rates of poverty or communities most harmed by cannabis prohibition, determined by historically high rates of arrests or convictions for cannabis law violations.
(2) Tiered fees or fee waivers for cannabis-related permits and licenses.
(3) Assistance in paying state regulatory and licensing fees.
(4) Assistance securing business locations prior to or during the application process.
(5) Assistance securing capital investments or direct access to capital.
(6) Assistance with regulatory compliance.
(7) Assistance in recruitment, training, and retention of a qualified and diverse workforce, including transitional workers.
(8) Other services deemed by the Governor’s Office of Business and Economic Development to be consistent with the intent of this chapter.
(f) “Transitional worker” means a person who, at the time of starting employment at the business premises, resides in a ZIP Code or census tract area with higher than average unemployment, crime, or child death rates, and faces at least one of the following barriers to employment: (1) is homeless; (2) is a custodial single parent; (3) is receiving public assistance; (4) lacks a GED or high school diploma; (5) has a criminal record or other involvement with the criminal justice system; (6) suffers from chronic unemployment; (7) is emancipated from the foster care system; (8) is a veteran; or (9) is over 65 years of age and is financially compromised.
(g) This section shall become operative January 1, 2026. 2028.

SEC. 36.

 The Legislature finds and declares that this act furthers the purposes and intent of the Control, Regulate and Tax Adult Use of Marijuana Act by accomplishing all of the following:
(a) Reducing barriers to entry into the legal, regulated market by making state licensing processes more efficient and avoiding unnecessary overlap with local land use permitting, while protecting local control.
(b) Improving and strengthening California’s comprehensive system to legalize, control, and regulate commercial cannabis activities.
(c) Allowing local governments to enact additional local requirements for adult-use cannabis businesses, and to adopt and enforce other local police power, land use, and business regulations with respect to commercial cannabis activities, but not requiring that they enact cannabis-specific regulations for adult-use cannabis businesses to be issued local permits and state licenses and be legal under state law.
(d) Promoting the strict control of commercial cannabis activities and the prevention of the illegal production or distribution of cannabis and the illegal diversion of cannabis from California to other states or countries or to the illegal market.

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