Retailers, Distributors, Microbusinesses, And Combined Activities - Cannabis - Business & Professions - CA

Section § 26070

This law outlines the licensing and regulations for the cannabis industry in California, specifically regarding retailers, distributors, microbusinesses, and combined activities. Retailers need a physical location for cannabis sales, though they can sell exclusively via delivery. Distributors must be bonded and insured, and both must meet specific security and transportation requirements. All transportation of cannabis must be done by authorized, licensed personnel and must follow strict documentation and reporting procedures. Security measures are mandatory to prevent unauthorized access and theft at these licensed locations. Any discrepancies or criminal activities must be reported promptly to authorities and the department.

Retailers, Distributors, Microbusinesses, and Combined Activities.

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

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

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

(3)

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

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

(b) The department shall establish minimum security and transportation safety requirements for the commercial distribution and delivery of cannabis and cannabis products. Except as provided in subdivision (d) of Section 26110, the transportation of cannabis and cannabis products shall only be conducted by licensed persons authorized to engage in distribution under this division or employees of those persons. Transportation safety standards established by the department shall include, but not be limited to, minimum standards governing the types of vehicles in which cannabis 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, microbusinesses, and combined activities, and licensed nonprofits under Section 26070.5, shall implement security measures reasonably designed to prevent unauthorized entrance into areas containing cannabis 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.

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Section § 26070.1

When a customer buys cannabis or cannabis products from a licensed store, the items must be put in a non-see-through package before they can be taken out of the store.

Cannabis or cannabis products purchased by a customer shall not leave a licensed retail premises unless they are placed in an opaque package.

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Section § 26070.2

If you have a license to sell cannabis, you cannot sell any cannabis product that also contains alcohol, like a drink mixed with cannabis or cannabinoids from industrial hemp.

A licensee shall not sell, offer, or provide a cannabis product that is an alcoholic beverage, including, but not limited to, an infusion of cannabis or cannabinoids derived from industrial hemp into an alcoholic beverage.

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Section § 26070.3

This law requires the creation of a brochure by January 1, 2025, detailing safer cannabis use. The brochure must include information on cannabis effects and risks such as high potency products, mental health impacts, and use by minors, pregnant or breastfeeding individuals. It should be easily readable in at least 12-point font. Cannabis retailers and delivery services must display and offer this brochure to customers starting March 1, 2025. Furthermore, the brochure's content will be reviewed and updated every five years to reflect new cannabis health information.

(a)

(1) On or before January 1, 2025, the department, in consultation with the State Department of Public Health, shall create and post for public use a single-page flat or folded brochure that includes steps for safer use of cannabis, including, but not limited to, both of the following:

(A) Information about the pharmacological effects of cannabis use.

(B) Information on the implications and risks associated with, but not limited to, all of the following:

(i) High potency cannabis products.

(ii) The potential for THC to exacerbate certain mental health conditions.

(iii) Cannabis use by minors.

(iv) Cannabis use by pregnant and breastfeeding persons.

(2) The brochure shall be printed in a type size not smaller than 12 points. Printing and distribution shall be the responsibility of the licensee.

(3) On or before January 1, 2030, and every five years thereafter, the department shall either recertify the information in the brochure or provide updated language that accurately reflects the state of the evolving science on cannabis health effects and safer use of cannabis. The review of the brochure shall be done in conjunction with the review required in Section 26121.

(b) On and after March 1, 2025, a retailer or microbusiness selling, or person delivering, cannabis or cannabis products to a consumer shall prominently display the brochure, including printed copies, at the point of sale or final delivery in person and online at time of online purchases, and offer each new consumer a copy of the brochure created pursuant to subdivision (a) at the time of first purchase or delivery.

safer cannabis use cannabis brochure high potency cannabis ...

Section § 26070.5

This law requires the Bureau of Cannabis Control to explore the possibility of nonprofit cannabis licenses by January 1, 2020. They must consult with local agencies about which nonprofits should get special privileges, like being tax-exempt or receiving services at reduced costs. The law also allows local governments to issue temporary licenses to nonprofits providing cannabis products to low-income individuals, but these can only make up to $2 million dollars annually. These temporary licenses last for 12 months and can be renewed, but they'll be phased out once state nonprofit licenses are determined feasible or begin to be issued.

(a) The Bureau of Cannabis Control shall, by January 1, 2020, investigate the feasibility of creating one or more classifications of nonprofit licenses under this section. The feasibility determination shall be made in consultation with the relevant licensing agencies and representatives of local jurisdictions which issue temporary licenses pursuant to subdivision (b). The Bureau of Cannabis Control shall consider factors, including, but not limited to, the following:

(1) Should nonprofit licensees be exempted from any or all state taxes, licensing fees, and regulatory provisions applicable to other licenses in this division?

(2) Should funding incentives be created to encourage others licensed under this division to provide professional services at reduced or no cost to nonprofit licensees?

(3) Should nonprofit licenses be limited to, or prioritize those, entities previously operating on a not-for-profit basis primarily providing whole-plant cannabis and cannabis products and a diversity of cannabis strains and seed stock to low-income persons?

(b) Any local jurisdiction may issue temporary local licenses to nonprofit entities primarily providing whole-plant cannabis and cannabis products and a diversity of cannabis strains and seed stock to low-income persons so long as the local jurisdiction does all of the following:

(1) Confirms the license applicant’s status as a nonprofit entity registered with the California Attorney General’s Registry of Charities and Fundraisers and that the applicant is in good standing with all state requirements governing nonprofit entities.

(2) Licenses and regulates any such entity to protect public health and safety, and so as to require compliance with all environmental requirements in this division.

(3) Provides notice to the department of any such local licenses issued, including the name and location of any such licensed entity and all local regulations governing the licensed entity’s operation.

(4) Certifies to the department that any such licensed entity will not generate annual gross revenues in excess of two million dollars ($2,000,000).

(c) Temporary local licenses authorized under subdivision (b) shall expire after 12 months unless renewed by the local jurisdiction.

(d) The department may impose reasonable additional requirements on the local licenses authorized under subdivision (b).

(e)

(1) New temporary local licenses shall not be issued pursuant to this section after the date the Bureau of Cannabis Control determines that creation of nonprofit licenses under this division is not feasible, or if the Bureau of Cannabis Control determines that creation of nonprofit licenses under this division is feasible, after the date a licensing agency commences issuing state nonprofit licenses.

(2) If the Bureau of Cannabis Control determines that creation of nonprofit licenses under this division is feasible, no temporary license issued under subdivision (b) shall be renewed or extended after the date on which a licensing agency commences issuing state nonprofit licenses.

(3) If the Bureau of Cannabis Control determines that creation of nonprofit licenses under this division is not feasible, the Bureau of Cannabis Control shall provide notice of this determination to all local jurisdictions that have issued temporary licenses under subdivision (b). The department may, in its discretion, permit any such local jurisdiction to renew or extend on an annual basis any temporary license previously issued under subdivision (b).

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Section § 26071

This section allows licensed cannabis retailers in California to provide free medicinal cannabis to patients who have trouble accessing it, under specific conditions. The free cannabis can only be given to eligible patients or their caregivers, and the retailer must verify the prescribing doctor's credentials. The cannabis must follow all legal requirements, and donations must be properly recorded in an official tracking system. There's also a limit on how much cannabis can be given out per day. Retailers can partner with others to distribute free cannabis, even through delivery services. Finally, this provision is linked to a specific tracking system that needs to be in place before it becomes fully operational.

(a) To provide access to medicinal cannabis patients who have difficulty accessing cannabis or cannabis products, a licensee that is authorized to make retail sales may provide free cannabis or cannabis products if all of the following criteria are met:

(1) Free cannabis or cannabis products are provided only to a medicinal cannabis patient or the patient’s primary caregiver. For purposes of this section, “medicinal cannabis patient” includes a qualified patient, as defined under Section 11362.7 of the Health and Safety Code, or a person in possession of a valid identification card issued under Section 11362.71 of the Health and Safety Code.

(2)

(A) A licensed retailer providing medicinal cannabis or medicinal cannabis products pursuant to this section to a qualified patient, as defined under Section 11362.7 of the Health and Safety Code, that possesses a valid physician’s recommendation, shall ensure that the physician is in good standing by following the procedures described in subparagraph (B) before providing the qualified patient with any medicinal cannabis or medicinal cannabis products that a cultivator certified were for donation pursuant to Section 34012.1 of the Revenue and Taxation Code or that are exempt from the use tax pursuant to Section 6414 of the Revenue and Taxation Code.

(B) In order to verify the physician’s recommendation, the licensed retailer shall do all of the following:

(i) Verify with the Medical Board of California, the Osteopathic Medical Board of California, and the California Board of Podiatric Medicine that the attending physician has a license in good standing to practice medicine or osteopathy in the state.

(ii) Keep a copy of the patient’s or primary caregiver’s driver’s license or other government issued identification.

(3) Except as provided for under Section 34012.1 of the Revenue and Taxation Code, the cannabis or cannabis products comply with all applicable requirements for cultivation, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery, or donation under this division.

(4) A licensee intending to donate the cannabis or cannabis products shall designate the cannabis or cannabis products for donation in the track and trace system. If a cultivator certified that the cannabis or cannabis products are designated for donation to medicinal cannabis patients pursuant to Section 34012.1 of the Revenue and Taxation Code, a licensee shall not change that designation pursuant to subdivision (b) of Section 34012.1 of the Revenue and Taxation Code.

(5) Before being provided to the patient or primary caregiver, the cannabis or cannabis products have been properly recorded in the track and trace system as belonging to the retailer.

(6) The cannabis or cannabis products provided to a medicinal cannabis patient or the primary caregiver of the patient in a single day shall not exceed the possession limits prescribed by Section 11362.77 of the Health and Safety Code.

(7) The event shall be properly recorded in the retailer’s inventory records and the track and trace system. The retailer shall include in its inventory records for each medicinal cannabis patient the number of an identification card issued pursuant to Article 2.5 (commencing with Section 11362.7) of Chapter 6 of Division 10 of the Health and Safety Code or a copy of the physician’s recommendation for no less than four years. If the medicinal cannabis patient is a qualified patient, as defined under Section 11362.7 of the Health and Safety Code, that possesses a valid physician’s recommendation, the retailer shall certify in writing that they verified the recommendation pursuant to paragraph (2) and shall keep a copy of that certification for no less than seven years.

(8) A licensed retailer that donates medicinal cannabis or medicinal cannabis products shall note the donation in their sales invoice or receipt pursuant to Section 26161 of the Business and Professions Code.

(b) In addition to the provision of free cannabis or cannabis products in subdivision (a), a licensee that is authorized to make retail sales may donate cannabis or cannabis products and the use of equipment in compliance with any compassionate use, equity, or other similar program administered by a local jurisdiction.

(c) A licensee that is authorized to make retail sales may contract with an individual or organization to coordinate the provision of free medicinal cannabis or medicinal cannabis products on the retailer’s premises. Licensed retailers that are solely authorized to engage in retail sales by means of delivery may provide free medicinal cannabis or medicinal cannabis products by means of delivery.

(d) This section shall become operative upon completion of the necessary changes to the track and trace program in order to implement the act adding this section, as determined by the Department of Food and Agriculture, or on March 1, 2020, whichever occurs first.

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Cannabis

CannabisRetailers, Distributors, Microbusinesses, and Combined Activities

Section § 26070

Section § 26070.1

Section § 26070.2

Section § 26070.3

Section § 26070.5

Section § 26071

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