General Provisions - Cannabis Cooperative Associations - Business & Professions - CA

Section § 26222

This law is all about making sure that cannabis products are marketed in a smart, efficient way. It aims to reduce waste and unnecessary middlemen by encouraging cooperation. The goal is to make sure the distribution is as direct and straightforward as possible. It's also about keeping the market stable and meeting specific legal requirements.

The purpose of this chapter is to do all of the following:

(a) Promote, foster, and encourage the intelligent and orderly marketing of cannabis product through cooperation.

(b) Eliminate speculation and waste.

(d) Stabilize the marketing of cannabis product.

(e) Satisfy the conditions of Section 26052.

cannabis product marketing intelligent marketing cooperation

Section § 26222.1

This law states that any exemptions granted to cannabis products individually owned or controlled by a grower also apply when those products are delivered by members of a growers' association. So, the same rules for exemptions apply whether the product is with an individual cultivator or the association it belongs to.

An exemption under law that applies to a cannabis product in the possession, or under the control, of the individual cultivator, shall apply similarly and completely to the cannabis product that is delivered by its cultivator members that are in the possession, or under the control, of the association.

cannabis product exemption individual cultivator growers' association

Section § 26222.2

If you're setting up or operating a business in California, you can't use 'cannabis cooperative' in your business name for marketing producers unless you follow the rules in this chapter.

A person, firm, corporation, or association, that is hereafter organized or doing business in this state, may not use the word “cannabis cooperative” as part of its corporate name or other business name or title for producers’ cooperative marketing activities, unless it has complied with this chapter.

cannabis cooperative business name restriction producers' cooperative

Section § 26222.3

This law says that organizations formed under this chapter cannot make agreements to unfairly limit trade, create illegal monopolies, reduce competition, or set prices improperly according to state law.

An association that is organized pursuant to this chapter shall not conspire in restraint of trade, or serve as an illegal monopoly, attempt to lessen competition, or to fix prices in violation of law of this state.

restraint of trade illegal monopoly lessen competition

Section § 26222.4

Marketing contracts and agreements made between a member association and its members must not limit competition or break state laws.

The marketing contracts and agreements between an association that is organized pursuant to this chapter and its members and any agreements authorized in this chapter shall not result in restraint of trade, or violation of law of this state.

marketing contracts agreements member association

Section § 26222.5

This section states that the General Corporation Law also applies to associations formed under this specific chapter. However, if there are any conflicts between the laws, the rules in this chapter take precedence. Also, in associations that don’t have stock, the members are considered 'shareholders' under the General Corporation Law.

The General Corporation Law (Division 1 (commencing with Section 100) of Title 1 of the Corporations Code) applies to each association that is organized pursuant to this chapter, except where those provisions are in conflict with or inconsistent with the express provisions of this chapter. For the purpose of associations organized without shares of stock, the members shall be deemed to be “shareholders” as the term is used in the General Corporation Law.

General Corporation Law associations without shares apply to associations

Section § 26222.6

This law section explains that if a person has a proprietary interest in an association, that interest won't automatically go to the state if it's considered abandoned. Instead, it becomes the association's property, as long as certain conditions are met. Before this happens, the association must notify the member 60 days in advance by mail and public notice. If the person or their heirs do not object in writing, the transfer can proceed. The proprietary interest includes any kind of membership or share with dividends in the association.

(a) Except as provided in subdivision (c), Chapter 7 (commencing with Section 1500) of Title 10 of Part 3 of the Code of Civil Procedure does not apply to a proprietary interest in an association organized in accordance with this chapter. A proprietary interest that would otherwise escheat to the state pursuant to Chapter 7 (commencing with Section 1500) of Title 10 of Part 3 of the Code of Civil Procedure shall instead become the property of the association.

(b) Notwithstanding subdivision (a), no proprietary interest shall become the property of the association under this section unless all of the following requirements are satisfied:

(1) At least 60 days’ prior notice of the proposed transfer of the proprietary interest to the association is given to the affected member by first-class or certified mail to the last address of the member shown on the association’s records, and by publication in a newspaper of general circulation in the county in which the member last resided as shown on the association’s records. Notice given pursuant to this paragraph constitutes actual notice.

(2) No written notice objecting to the transfer is received by the association from the affected member or, if the member is deceased, from the member’s heirs or the executor or executrix of the estate, prior to the date of the proposed transfer.

(c) “Proprietary interest” means and includes any membership, membership certificate, membership share, share certificate, or equity or dividend certificate of any class representing a proprietary interest in, and issued by, the association together with all accrued and unpaid earnings, dividends, and patronage distributions relating thereto.

proprietary interest association ownership escheat