Section § 26301

Explanation

This law allows the Governor of California to make agreements with other states to permit the sale and transport of medicinal or adult-use cannabis between licensed businesses. These agreements are only possible if the activities are legal in the other state and both states regulate the transport properly. Transporting cannabis through states where it's illegal is prohibited. Additionally, these agreements are not considered projects under California's environmental review laws, so they are not subject to those requirements.

(a)CA Business & Professions Code § 26301(a) The Governor may enter into an agreement with another state or states authorizing medicinal or adult-use commercial cannabis activity, or both, between entities licensed under the laws of the contracting state and entities operating with a state license, provided that both of the following criteria are met:
(1)CA Business & Professions Code § 26301(a)(1) The commercial cannabis activities are lawful and subject to licensure under the laws of the contracting state.
(2)CA Business & Professions Code § 26301(a)(2) With respect to the interstate transportation of cannabis or cannabis products, the agreement prohibits both of the following:
(A)CA Business & Professions Code § 26301(a)(2)(A) The transportation of cannabis and cannabis products by any means other than those authorized under both the laws of the contracting state and the regulations of the department.
(B)CA Business & Professions Code § 26301(a)(2)(B) The transportation of cannabis and cannabis products through the jurisdiction of a state, district, commonwealth, territory, or possession of the United States that does not authorize that transportation.
(b)CA Business & Professions Code § 26301(b) Notwithstanding any other law, the execution of, and compliance with the terms of, an agreement does not constitute a project for purposes of the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code).

Section § 26302

Explanation

This California law allows foreign entities with cannabis licenses to conduct business with California cannabis licensees. However, these foreign licensees can't operate within California or its local areas without first obtaining the appropriate state and local permits. Additionally, foreign licensees are subject to California's rules and penalties if they break any cannabis-related laws here.

(a)CA Business & Professions Code § 26302(a) Notwithstanding any other law, a foreign licensee may engage in commercial cannabis activity with a state licensee and a state licensee may engage in commercial cannabis activity with a foreign licensee, subject to the requirements and limitations set forth in this chapter.
(b)CA Business & Professions Code § 26302(b) A foreign licensee shall not engage in commercial cannabis activity within the boundaries of this state without a state license, or engage in commercial cannabis activity within a local jurisdiction without a license, permit, or other authorization issued by the local jurisdiction.
(c)CA Business & Professions Code § 26302(c) A foreign licensee shall be subject to the jurisdiction of this state for the purpose of actions taken for violation of California commercial cannabis laws and regulations.

Section § 26303

Explanation

This law requires that any state entering into an agreement to sell cannabis products in California must ensure their foreign licensees adhere to California's strict cannabis standards. This includes maintaining public health and safety standards, participating in a state-run tracking system for cannabis products, and meeting quality assurance requirements. The foreign licensees must also follow California's rules on testing, packaging, labeling, marketing, and advertising of cannabis products. Additionally, there must be procedures to identify and destroy misbranded or adulterated cannabis products. The contracting state must impose advertising and sales restrictions that are at least as strict as those in California.

(a)CA Business & Professions Code § 26303(a) An agreement shall require that the contracting state impose requirements on foreign licensees with regard to cannabis and cannabis products to be sold or otherwise transferred or distributed within this state that meet or exceed the requirements applicable to state licensees, including all of the following:
(1)CA Business & Professions Code § 26303(a)(1) Enforceable public health and safety standards that are equivalent to the requirements of this division.
(2)CA Business & Professions Code § 26303(a)(2) Mandatory participation in a system administered by the state to regulate and track the cultivation, manufacturing, distribution, transportation, sale, and destruction of cannabis and cannabis products from seed to sale.
(3)CA Business & Professions Code § 26303(a)(3) Standards for the testing of cannabis or cannabis products that meet or exceed the standards applicable to testing laboratories licensed under this division.
(4)CA Business & Professions Code § 26303(a)(4) Requirements for the packaging and labeling of cannabis and cannabis products that meet or exceed the packaging and labeling requirements established pursuant to Chapter 12 (commencing with Section 26120).
(5)CA Business & Professions Code § 26303(a)(5) Requirements for quality assurance and inspection of cannabis or cannabis products that meet or exceed the requirements applicable to cannabis or cannabis products cultivated, manufactured, or sold by state licensees.
(6)CA Business & Professions Code § 26303(a)(6) Restrictions on marketing, labeling, and advertising within this state by foreign licensees that meet or exceed the restrictions on state licensees established in Section 26063 and Chapter 15 (commencing with Section 26150).
(7)CA Business & Professions Code § 26303(a)(7) A process for the identification of adulterated or misbranded cannabis products, and the destruction of those products, using standards that meet or exceed the standards and procedures established pursuant to this division.
(b)CA Business & Professions Code § 26303(b) An agreement shall require that the contracting state impose restrictions upon advertising, marketing, labeling, or sale within the contracting state that meet or exceed the restrictions established in Section 26063.

Section § 26304

Explanation

This section explains how agreements between California and other states should handle public health emergencies and regulatory compliance related to cannabis. It requires mechanisms for dealing with emergencies like contaminated cannabis, and it outlines mutual cooperation for investigating compliance issues. Both California and the other state are obligated to assist each other in investigating license holders to ensure they follow cannabis regulations.

(a)CA Business & Professions Code § 26304(a) An agreement shall include provisions requiring the department and the appropriate regulatory authorities of the contracting state to address public health and welfare emergencies concerning cannabis or cannabis products that are sold or intended for sale within this state, including for the prompt recall or embargo of adulterated or misbranded cannabis or cannabis products.
(b)CA Business & Professions Code § 26304(b) An agreement shall include provisions requiring the appropriate regulatory authorities of each state to investigate instances of alleged noncompliance with the commercial cannabis regulatory programs upon request by the other state and in accordance with mutually agreed-upon procedures. An agreement shall include provisions requiring the contracting state to reasonably cooperate with California investigations concerning foreign licensees, and requiring the department to reasonably cooperate with investigations by the contracting state concerning persons or entities holding state licenses.

Section § 26305

Explanation

This law requires any agreement to have clauses that encourage involving and supporting people and communities that were harmed the most by past cannabis laws.

An agreement shall include provisions determined by the Governor to promote the inclusion and support of individuals and communities in the cannabis industry who are linked to populations or neighborhoods that were negatively or disproportionately impacted by cannabis criminalization.

Section § 26306

Explanation

This law requires that any agreement must include terms for collecting all relevant taxes.

An agreement shall provide for collection of all applicable taxes.

Section § 26307

Explanation

This law allows the Governor to bypass normal rulemaking processes when making agreements but sets out specific requirements to maintain transparency and oversight. Before finalizing any agreement, the Governor must present it to a legislative budget committee, which has 60 days to review and suggest changes. If the Governor chooses not to follow any of those suggestions, they must explain why. Additionally, the proposed agreement must be made available online for 30 days to allow for public comment, which the Governor should take into account.

The Governor is exempt from the rulemaking procedures and requirements of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) when entering into agreements or amendments to agreements, provided that prior to execution of an agreement or amendment to an agreement, the Governor shall do both of the following:
(a)CA Business & Professions Code § 26307(a) Submit the proposed agreement or amendment to the Joint Legislative Budget Committee for review and comment. The committee shall have 60 days to review the proposed agreement or amendment and to submit written recommendations to the Governor. The committee shall only submit a recommendation to the Governor if a majority of the members agree to that recommendation. The Governor shall consider all recommendations submitted by the committee and may revise the proposed agreement or amendment to incorporate the recommendations. If the Governor does not incorporate any recommendation submitted by the committee, the Governor shall set forth, in writing, the reasons for not incorporating that recommendation.
(b)CA Business & Professions Code § 26307(b) Post the proposed agreement or amendment on the department’s internet website for public comment for 30 days. The comments received shall be considered by the Governor.

Section § 26308

Explanation

This law section states that an agreement related to cannabis commerce in this chapter won't take effect unless certain conditions are met. These include changes to federal law that either allow or do not impede interstate cannabis transfers, or if a legal opinion or memorandum is issued that suggests tolerance for such transfers. Additionally, a legal opinion from the Attorney General confirming that cross-state cannabis activity won't pose major legal risks to California must be given. If any of these conditions happen, the department must notify the Governor and relevant legislative committees and post this information online.

(a)CA Business & Professions Code § 26308(a) An agreement entered into pursuant to this chapter shall not take effect unless one of the following occurs:
(1)CA Business & Professions Code § 26308(a)(1) Federal law is amended to allow for the interstate transfer of cannabis or cannabis products between authorized commercial cannabis businesses.
(2)CA Business & Professions Code § 26308(a)(2) Federal law is enacted that specifically prohibits the expenditure of federal funds to prevent the interstate transfer of cannabis or cannabis products between authorized commercial cannabis businesses.
(3)CA Business & Professions Code § 26308(a)(3) The United States Department of Justice issues an opinion or memorandum allowing or tolerating the interstate transfer of cannabis or cannabis products between authorized commercial cannabis businesses.
(4)CA Business & Professions Code § 26308(a)(4) The Attorney General issues a written opinion, through the process established pursuant to Section 12519 of the Government Code, that state law authorization, under an agreement pursuant to this chapter, for medicinal or adult-use commercial cannabis activity, or both, between foreign licensees and state licensees will not result in significant legal risk to the State of California under the federal Controlled Substances Act, based on review of applicable law, including federal judicial decisions and administrative actions.
(b)CA Business & Professions Code § 26308(b) The department shall notify the Governor and the appropriate policy committees of the Legislature upon the occurrence of an event described in subdivision (a), and shall post the notification on the department’s internet website.