Ahead of next week’s deadline to introduce bills in this legislative session, California lawmakers have put forward cannabis law reform measures aimed at online marketplaces, at preventing a looming increase in the cannabis excise tax, and at streamlining the process for local agencies to obtain court judgments to collect fines and penalties assessed for unlicensed commercial cannabis activity, including by lien on the real property where the unlicensed commercial cannabis activity took place.
SB 378 Online marketplaces: illicit cannabis: reporting and liability.
Senator Scott Wiener (San Francisco) has introduced SB 378, which is focused on the online marketplaces that facilitate sales of unlicensed cannabis or intoxicating hemp products. Under this bill, online marketplaces would be required to address in their terms of service whether they permit Californians to view the advertisements and business information of unlicensed sellers of cannabis or cannabis products on their marketplaces and whether the marketplaces verify the licenses of sellers of cannabis or cannabis products whose advertisements and business information are viewable on their marketplaces. The bill would require an online cannabis marketplace that does not verify those licenses to display a graphic that warns consumers about various risks associated with cannabis from unlicensed sellers before the consumer can view or engage with the marketplace. SB 378 would also require online cannabis marketplaces to establish a prominent mechanism within their internet-based services that allows an individual to report to the online cannabis marketplace the display, storing, or hosting on the marketplace of advertisements from, or business information about, an unlicensed seller of cannabis or cannabis products. The bill would also require online hemp marketplaces to establish a prominent mechanism within their internet-based services that allows an individual to report to the online hemp marketplace an advertisement for an intoxicating hemp product on the marketplace. Finally, SB 378 would impose strict liability on: (1) an online marketplace that facilitated the connection between a consumer and an unlicensed seller of cannabis or a cannabis product for damages caused to the consumer by the cannabis or cannabis product, and (2) an online marketplace that facilitated the connection between a consumer and a seller of an intoxicating hemp product for damages caused to the consumer by the intoxicating hemp product. The bill would increase the amount that a prevailing plaintiff may recover depending on what the online marketplace knew or should have known at the time it facilitated the connection and whether the harm was suffered by a child.
AB 632 Local ordinances: administrative fines or penalties.
Existing law authorizes local agencies to, by ordinance, make any violation of an ordinance subject to an administrative fine or penalty, and requires local agencies to set forth, by ordinance, the administrative procedures that govern the imposition, enforcement, collection, and administrative review of those administrative fines or penalties. Introduced by Assemblymember Gregg Hart (Santa Barbara) AB 632 would authorize a local agency to file a final administrative order or decision for payment of fines or penalties related to unlicensed commercial cannabis activity for immediate judgment in the superior court of any county in California. The bill would also authorize a local agency to, by ordinance, establish a procedure to collect administrative fines or penalties by lien upon the parcel of land on which the unlicensed commercial cannabis activity occurred. AB 632 would if enacted specify that the remedies or penalties provided by its provisions are cumulative of the remedies or penalties available under any other law.
AB 564 Cannabis: excise tax: rate increase repeal.
As I blogged about in December, the licensed cannabis industry in California faces an imminent adjustment of the cannabis excise tax rate up to a percentage not to exceed 19% of the gross receipts of retail sale. Introduced by Assemblymember Matt Haney (San Francisco), AB 564 would repeal the requirement that the California Department of Tax and Fee Administration adjust the cannabis excise tax rate, thereby retaining the existing cannabis excise tax rate of 15% of the gross receipts of any retail sale by a cannabis retailer.
AB 686 Cannabis: appointees: prohibited activities.
Existing law prohibits the director of the Department of Cannabis Control (DCC) and any member of the Cannabis Control Appeals Panel from engaging in certain activities, including from receiving any commission or profit whatsoever, directly or indirectly, from any person applying for or receiving any license or permit. Introduced by Assemblymember Marc Berman (Palo Alto), AB 686 would also prohibit individuals appointed by the Governor to specified positions (DCC chief deputy director, deputy director of equity and inclusion, deputy director of legal affairs, and chief counsel) from engaging in those activities.
AB 8 Industrial hemp.
Earlier this month, AB 8, introduced by Assembly Majority Leader Cecilia Aguiar-Curry (Davis), to authorize Department of Cannabis Control licensees to manufacture, distribute, or sell products that contain industrial hemp or cannabinoids, extracts, or derivatives from industrial hemp, and to require out-of-state hemp manufacturers who produce an industrial hemp product that is a food or beverage for sale in this state to register with the Department of Cannabis Control, was referred to the Committee on Business and Professions.
California lawmakers have until next Friday (February 21) to introduce bills for the 2025 Legislative Session.
