By Shay Aaron Gilmore | The Law Office of Shay Aaron Gilmore | May 13, 2026
Five rulemakings. Three agencies. One two-year countdown. That is the administrative law landscape facing California cannabis and hemp operators right now, in May 2026.
Two DCC rulemaking proceedings just closed their public comment windows — one on pesticide residue testing, one on multipack cannabis goods — and are moving through the final OAL review stage before becoming binding law. A third, on cultivation requirements, takes effect July 1. A December 2025 court ruling that the DCC’s own METRC tracking system “does not comply” with California law has put a fourth rulemaking effectively in motion. And two more — the AB 8 implementation framework and on-site consumption standards — are expected to emerge before the end of the year or in early 2027, both carrying serious operational consequences for operators who are not tracking them.
None of this is litigation. The value an administrative law attorney delivers to cannabis and hemp operators is upstream of a courtroom: in comment letters that reshape regulatory text before it takes effect, in compliance structures built around rules as they actually read, and in license defense that begins at first contact with the agency — before any record is built. This post covers each active and anticipated proceeding in depth, because the operators who benefit most from this moment are the ones paying attention to it.
How California Rulemaking Works — and Why It Matters to You
Under the California Administrative Procedure Act (APA), the DCC must publish proposed regulatory text in the Notice Register, accept written public comments for at least 45 days, respond to every substantive comment received, and submit the final package to the Office of Administrative Law (OAL) for independent review before any rule takes effect. [1] If major changes are made after the first comment period, a second 45-day window opens. If the changes are substantial but sufficiently related to the original notice, a 15-day window follows. [1]
This is not a formality — it is the structure through which operators can materially influence the regulations they will live under. California has over 200 agencies, departments, boards, and commissions that shape public policy through their rulemaking authority. [2] Cannabis operators interact with several simultaneously. An attorney who monitors DCC, CDFA, CDPH, and OAL proceedings as part of regular practice — not as a reactive exercise, but as a standing workflow — gives operators the ability to engage rulemaking processes before deadlines arrive, frame comments in terms the agency will find responsive to its own stated policy goals, and anticipate compliance requirements before the final rule is filed. [3] [1]
Active Rulemakings: The Three That Are Already Running
DCC-2026-01-R: Multipack Cannabis Goods
On February 27, 2026, the DCC issued a formal Notice of Proposed Rulemaking to create an entirely new product category — multipack cannabis goods — with associated testing, labeling, and METRC-tracking requirements. [4] The written comment period closed April 13, 2026, and a virtual public hearing was held the following day. [5] [6]
The proceeding is now in the agency response and OAL review phase. The DCC must prepare a written response to every substantive comment before the record goes to OAL. [1] Final adoption is expected Q3 2026. Operators in packaging, manufacturing, and distribution should be reviewing the proposed text now to ensure compliance structures are in place before the rule takes effect — and those who submitted comments that the DCC declines to incorporate have options, including petitioning the OAL during its review or the DCC after adoption.
DCC-2025-03-R: Pesticide Residue Testing
The DCC’s proposed pesticide rulemaking expands the mandatory testing panel from 66 to 80 analytes, adding 14 new pesticides. [7] The public comment window closed May 5, 2026 — just days ago. [8] The proceeding is now in the same post-comment phase, with OAL review to follow, and final adoption likely later this year.
This rulemaking matters beyond lab fees. California requires testing for both “Category I” banned pesticides and a set of threshold-based compounds. [9] Adding 14 analytes means cultivators and manufacturers need to evaluate whether their current inputs, soil amendments, and pest-management programs create new failure risk under the expanded panel. [7] Identifying those gaps before the final rule publishes — not after the first test under the new standard — is exactly the kind of proactive administrative compliance work that generates real business value.
Comments grounded in operational specifics and factual data are more likely to produce favorable adjustments than generalized objections. [1] The agency’s written responses to the public comments received will themselves be publicly available once filed, and will signal how the DCC intends to interpret the new standards — worth reading carefully even if you did not submit a comment.
DCC-2025-01-R: Cultivation Requirements (Effective July 1, 2026)
This package clears the calendar and takes effect in six weeks. [6] It removes several redundant provisions — including the requirement for cultivators to contact the County Agricultural Commissioner regarding pesticides (compliance with those obligations continues under other agencies’ authority) — and streamlines energy, air quality, and pest-management recordkeeping that previously overlapped with California Air Resources Board and county requirements. [10]
The streamlining is welcome, but it carries a trap that is easy to miss. When a DCC provision is repealed because it mirrors an obligation under another law, that underlying obligation does not disappear — only the DCC’s restatement of it does. [10] An operator who reads a repealed regulation as eliminating a compliance requirement, without confirming that the requirement itself was not just relocated elsewhere in the regulatory framework, can find themselves out of compliance while believing otherwise. The July 1 effective date is the right moment for a side-by-side review of what changed and what did not.
The METRC Reckoning: A Rulemaking Almost Certainly Coming
In December 2025, an Orange County Superior Court judge issued a writ ruling that the DCC’s current use of METRC “does not comply” with California law. [11] The court found that the system fails to satisfy Business and Professions Code § 26067(b)(2)’s requirement that track-and-trace flag irregularities suggesting possible diversion of legal product to the illicit market — the DCC’s approach of having analysts manually review “mountains of reports” containing raw data, without objective criteria for identifying irregularities, did not meet the statutory standard. [12] [13]
The history of METRC rulemaking makes the likely path forward clear. In early 2024, the DCC attempted to update the METRC transfer-approval process by issuing a direct notice to licensees — skipping formal APA rulemaking. Distributor Kiva Sales & Service challenged the change as an “underground regulation,” filed a petition with the OAL, and the DCC rescinded the requirement. [14] That precedent is controlling: any substantive change to how METRC operates must go through the APA rulemaking process, complete with a public comment period and full operator-participation rights. [14]
A METRC rulemaking is therefore expected in the second half of 2026 or into 2027. It will need to address how the system flags irregularities, what criteria define a reportable discrepancy, and how METRC reporting obligations interact with licensee duties. For context on existing timelines: licensees are currently required to report inventory discrepancies and confirm transfer manifests within 24 hours, correct data entry errors within three calendar days, and complete a full inventory reconciliation at least every 30 days. [15] Any rulemaking in this space will directly affect how those obligations are defined and enforced going forward. Operators — particularly in distribution, retail, and manufacturing where transfer data is most intensive — have a direct stake in shaping those rules, and the time to start tracking this proceeding is now.
AB 8 and SB 378: New Laws, Coming Rulemakings
The Legislative Record — Including the Assembly Judiciary Committee
Last fall, Governor Newsom signed two complementary laws that together restructure the legal framework for cannabis-adjacent hemp products in California. AB 8 was chaptered October 2, 2025; SB 378 (Wiener) followed on October 6, 2025. [16] [17]
SB 378 targets the supply side of the illicit market: starting July 1, 2026, it requires online cannabis marketplaces to disclose in their terms of service whether they permit California users to view advertisements from unlicensed sellers, and whether they verify licenses of advertisers — with mandatory warning graphics for those that do not. [18] It also creates civil liability mechanisms against platforms that profit from or facilitate illicit cannabis and hemp sales. [19] The July 1, 2026 effective date for the online marketplace requirements is less than two months away.
I testified before the California State Assembly Judiciary Committee on behalf of a client during the hearing process for SB 378 — you can watch that testimony here. Legislative advocacy and administrative law practice are different disciplines, but they inform each other: understanding how a statute was debated and what the Legislature intended shapes how an attorney reads the implementing regulations that follow. In this case, both AB 8 and SB 378 are now law, and both will generate implementation rulemakings — the AB 8 framework being by far the more consequential of the two.
AB 8 Phase One: What Is Already in Effect
As of January 1, 2026, the following prohibitions are live:
- Industrial hemp raw extract incorporated into food, beverages, dietary supplements, or processed pet food must have a purity level greater than 99% CBD or CBN and must contain no THC or synthetic cannabinoids, confirmed by a Certificate of Analysis. [20]
- Hemp flower and hemp prerolls may not be sold for consumption within California.
- Inhalable products containing THC derived from industrial hemp are prohibited.
- Synthetic cannabinoids are prohibited entirely, regardless of source.
- IHEO authorization from CDPH remains required for anyone manufacturing industrial hemp products for sale in California. [20]
AB 8 Phase Two: January 1, 2028
Beginning January 1, 2028, the integration of hemp into the licensed cannabis supply chain is complete. Retail of industrial hemp products moves entirely into licensed cannabis channels. Anyone extracting cannabinoids from industrial hemp for sale in California must hold a DCC license. [16] [22] The legal distinction between “cannabis” and “hemp” for purposes of intoxicating cannabinoid products effectively collapses.
Twenty months remain before Phase Two. The DCC’s own budget documents confirm the timeline explicitly: “DCC will begin development of rulemaking to implement AB 8 in 2026–27 with expected completion in 2027–28, prior to the start of hemp retail and licensing requirements.” [23] That means a discussion draft or formal Notice of Proposed Rulemaking will emerge later this year or in early 2027.
The implementing regulations will need to address how the DCC issues licenses or endorsements to hemp extractors currently operating outside the cannabis licensing framework; how hemp-derived products are tested, labeled, and tracked once they enter licensed channels; how AB 8’s definitions interact with existing MAUCRSA license categories; and how CDPH, CDFA, and DCC jurisdictions function as an integrated compliance system rather than three parallel silos. [16] [22] The comment period, when it opens, will be one of the most consequential operator-participation opportunities in the history of California cannabis regulation.
For hemp operators, the path is clear: a DCC initial application requires substantial lead time for entity formation, premises approval, local permitting, and background clearances. [3] Waiting for implementing regulations to be finalized before beginning the licensing process runs the real risk of arriving at the January 2028 deadline without a license in hand. As analyzed in our February 2026 overview of the 2025–2026 legislative session, multiple additional bills currently moving through the Legislature could also reshape the implementing regulatory framework — making it essential to track both tracks simultaneously.
The multi-agency compliance picture adds further complexity. Hemp operations are simultaneously regulated by CDPH (IHEO authorizations and food and beverage standards), CDFA (California Industrial Hemp Program registration under the USDA-approved state plan) [3], and — from 2028 — the DCC. [16] Hemp administrative law counsel who works across all three agencies is, for operators navigating 2026 and 2027, not optional.
On-Site Consumption Endorsements: Regulations Still “Under Development”
AB 1775, effective January 1, 2025, authorized licensed retailers and Type 12 microbusinesses to apply for an On-Site Consumption Endorsement (OCE), permitting customers to consume cannabis on the licensed premises alongside non-cannabis food and nonalcoholic beverages. [24] [25] Local programs are beginning to roll out — Sacramento has an active pilot — and interest from retail operators across the state is significant. [24]
The gap: as of early 2026, the DCC’s state-level regulatory requirements for OCE compliance “remain under development.” [26] The existing DCC regulations do not yet include comprehensive ventilation standards, sanitation requirements, or the full operational parameters for consumption spaces — leaving retailers who have secured or are pursuing local approvals navigating an incomplete compliance framework at the state level. [26] [24] A rulemaking to fill those gaps is expected as on-site consumption programs scale. Operators interested in adding a consumption lounge should be tracking this proceeding and be positioned to engage when the comment period opens.
The Compliance Action Environment
The DCC’s own filings reflect a sustained rise in compliance actions — citations, recalls, and formal enforcement measures — across the licensed market. [23] The agency’s authority under Business and Professions Code § 26030 is broad: suspension, revocation, conditions, and fines are all available, and they are being used.
Enforcement frequently begins not with dramatic violations but with accumulating deficiencies — labeling discrepancies, METRC recordkeeping gaps, packaging issues, or activity outside the authorized scope of a license. A Notice to Comply is often the first formal step: a directive identifying specific violations and setting a correction deadline, with escalation in reserve. The administrative record that matters in any subsequent proceeding begins with that first document.
California’s APA gives licensees procedural rights throughout the enforcement process. Citations and licensing actions can be appealed through an administrative hearing before an OAH Administrative Law Judge, and on the administrative record through the Cannabis Control Appeals Panel (CCAP). [29] [30] The CCAP provides quasi-judicial review with oral argument and briefing based on the underlying evidentiary record. [30] DCC license defense and enforcement counsel who understands how administrative records are constructed — and how they are evaluated — provides value that compounds from the moment of first agency contact, not only once a hearing is scheduled. [3]
Rulemaking Participation as Business Strategy
Most operators experience California cannabis regulations as obligations delivered from above. The APA offers something different: a structured process through which operators can participate in shaping those obligations before they are final.
A well-framed comment submitted during an open rulemaking period can change the text of a regulation. [1] Comments that explain operational impact with specificity — grounded in actual data about cultivation inputs, testing costs, or production workflows — carry weight with agency decision-makers that generalized objections do not. [1] Counsel who has reviewed the full rulemaking file, understands the agency’s stated rationale, and can connect client interests to the DCC’s own policy framework produces comments that have a real chance of moving the needle.
The same logic applies to anticipated proceedings. The AB 8 implementing regulations will be shaped by the record of public comments the DCC receives when that rulemaking opens. The METRC rulemaking will reflect the positions of operators who engaged when the comment window opened — and the assumptions of those who did not. On-site consumption regulations will be written around the realities that retailers and microbusinesses explain to the agency, or around the agency’s internal assumptions. The value of proactive engagement compounds well before any notice of proposed rulemaking is published.
The Work That Prevents the Problem
The most visible cannabis administrative law services — enforcement defense, license appeals, CCAP proceedings — are important. But the highest-value work happens upstream of any adverse action.
For hemp operators, 2026 is a live compliance test under Phase One of AB 8, with a 2028 deadline and DCC licensing rulemaking building in the background. For cannabis licensees, three completed or nearly final rulemakings are reshaping the compliance baseline right now, with METRC reform and OCE regulations to follow. And for any operator receiving DCC correspondence that carries legal significance, the time to engage counsel with administrative practice fluency is at first contact — before any record exists to complicate the outcome.
Administrative law counsel for California cannabis and hemp operators is not fundamentally about adversity. It is about knowing the regulatory environment with enough precision to operate confidently, participate constructively in the shaping of future rules, and protect your license at every stage of your relationship with the agencies that issued it.
The Law Office of Shay Aaron Gilmore provides administrative law counsel to cannabis and hemp operators and investors across California, including DCC license defense and enforcement, cannabis administrative hearings and appeals, and hemp administrative law and CDFA enforcement. To schedule a consultation, visit shaygilmorelaw.com.